Case: Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9 ; (2008) 243 ALR 207
Outcome: cited
The short point raised in this matter is whether Dromana's failure to comply with a stale statutory demand without more can found Mr Gryst's application to have it wound up in insolvency under Ch 5 Pt 5.4 of the Corporations Act . The provisions of that Part have been the subject of considerable judicial attention most recently by the High Court in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9 ; (2008) 243 ALR 207. To foreshadow what I have to say, central to the scheme of that Part is the device of the statutory demand the failure to comply with which, unless successfully challenged, gives rise both to a basis for winding up a company in insolvency and the s 459C(2)(a) presumption of insolvency. 9 By way of background s 459F and s 459G of the Act provide: 459F(1) If, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period. 459F(2) The period for compliance with a statutory demand is: (a) if the company applies in accordance with section 459G for an order setting aside the demand: (i) if, on hearing the application under section 459G, or on an application by the company under this paragraph, the Court makes an order that extends the period for compliance with the demand the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or (ii) otherwise the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or (b) otherwise 21 days after the demand is served. SECTION 459G COMPANY MAY APPLY 459G(1) A company may apply to the Court for an order setting aside a statutory demand served on the company. 459G(2) An application may only be made within 21 days after the demand is so served. 459G(3) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company. 10 The two noteworthy aspects of these provisions for present purposes are, first, that the s 459F(2) period for compliance with a statutory demand turns in the first instance on whether or not a company has applied "in accordance with section 459G" to set aside the demand and, secondly, it will only have so applied in accordance with that section if it complies with the dual requirements of filing and service specified in s 459G(3)(a) and (b) within 21 days of the service of the demand. 11 It is now well settled that, if a s 459G application and affidavit are not filed and served within the time so specified, the Court has no power to extend the period for the making of such an application: see Aussie Vic Plant Hire at [3]; David Grant &amp; Co Pty Limited (rec apptd) v Westpac Banking Corporation (1995) 184 CLR 265. In the present matter, the statutory demand was served on Dromana on 29 November 2007. The application to set it aside was filed in the Supreme Court of Victoria on 20 December 2007. It was not served on Mr Gryst until 21 December 2007. In consequence, that application was not one made "in accordance with section 459G" of the Act. The emphatic language of s 459G(3) admits of no other conclusion: see Pinn v Barroleg Pty Ltd (1997) 138 FLR 417; Deputy Commissioner of Taxation v Tixana Pty Ltd (2003) 202 ALR 401 ; Hardel Property Holdings Pty Ltd v Allmark Property Management Pty Ltd (2008) 26 ACLC 122 at [1]. While counsel for the plaintiff has sought to avoid this conclusion by recourse to "purposive legislation", the Parliament, in my view, has spoken on this matter with unmistakeable clarity.