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Not opening your emails? That is not an excuse to avoid valid service!

By Chloe Howard of Matthews Folbigg Lawyers, a lawyer in our Insolvency, Restructuring and Debt Recovery Group

A recent Supreme Court matter has determined that service of an application to set aside a statutory demand was validly served in time, even though the solicitor in question did not open the email serving the application until the expiration date for service had passed.

In March 2019, the plaintiff’s solicitor and the defendant’s solicitor commenced communicating in an attempt to facilitate a resolution of the dispute between their respective clients. The communications predominantly took place by email.

On 11 September 2019, the defendant issued on the plaintiff a statutory demand. The statutory demand was served on the plaintiff initially by email from the defendant’s solicitor.

On 27 September 2019, the defendant’s solicitor sent an email to the plaintiff’s solicitor enclosing a letter which advised that they held instructions to accept any application to set aside the statutory demand.
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Preventing a Service Fail – A Tale of Email v. Snail Mail?

 

In one of our recent matters, a client instructed us to bring winding up proceedings against four companies with the same sole director. The total debt across the four companies was over $300,000.00. Whilst there were four applications before the Court, one common issue was whether the companies had been properly served with the statutory demands relating to the debt owed.

On 11 April 2019, statutory demands were sent to all four companies, with the demands posted to the registered offices of the defendants according to the records of ASIC. Unbeknownst to the creditor, the director had vacated the registered premises of two of the companies over a year earlier, but had failed to update ASIC’s records in respect of this change, and had not put in place a mail-forwarding system. The demands addressed to the other two companies were sent to the office of the director’s solicitor.

No application to set aside the statutory demands was filed by any of the 4 companies. Therefore winding up proceedings were filed against the companies on 28 May 2019. The Originating Processes in respect of the winding up applications were served at the same addresses that the statutory demands had been sent.
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How to serve a statutory demand

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In earlier articles, we highlighted the problems that arise when serving a Creditor’s Statutory Demand by post: see You’ve been served! and It Serves You Right?.

This issue reared its head again two weeks ago in winding up proceedings in the Supreme Court of NSW in which we acted for the creditor. The Court was satisfied with all but one element of the evidence required to make the winding up order. The Court did not accept that the statutory demand had been properly posted (even though there was evidence of postage).

The statutory demand had been ‘posted’ by an Australia Post employee attending and collecting it from the office premises rather than the statutory demand being placed into a post box. The Court was not prepared to accept that the statutory demand had been posted because it was unfamiliar with this practice. The Court was more familiar with posting a statutory demand by placing the document into a post box or directly with an Australia Post outlet.
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A matter of some interest…

By Jeff Brown, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

A recent Supreme Court decision serves as a timely reminder of the care to be employed when deciding whether a statutory demand requires a verifying affidavit.

Merlo Group Australia Pty Ltd (“MGA”) obtained a judgment in the District Court against GTH Equipment Pty Ltd (“GTH”). A judgment/order was entered by the Court, recording that “[MGA’s] motion for summary judgment is granted so far as the claim for $143,000 is concerned. Judgment in favour of [MGA] in the sum of $143,000 together with interest under the contract from 3 February 2015.” (Emphasis added).

The claim arose under a contract which included a term that GTH would pay interest at the rate of 15% on all overdue accounts.

A couple of months after judgment was entered, GTH sent to MGA a cheque in the amount of $143,000. Just prior to receiving the cheque, MGA instructed its solicitors to issue a statutory demand in the amount of $198,425.23 comprising the judgment sum plus an amount calculated as interest at the rate of 15% per annum up to the date of the statutory demand.
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