TGIF 12 April 2019: Typo defeats winding up proceedings

This week’s TGIF takes a look at the recent case of Mills Oakley (a partnership) v Asset HQ Australia Pty Ltd [2019] VSC 98, where the Supreme Court of Victoria found the statutory presumption of insolvency did not arise as there had not been effective service of a statutory demand due to a typographical error in the postal address.

What happened?

Mills Oakley brought a winding up application against Asset HQ Australia Pty Ltd (Company) after it allegedly failed to comply with a statutory demand said to have been served by post on the Company at its registered office.

The Company’s registered office was located at an address containing ‘1 Pacific Highway’. The law clerk employed by Mills Oakley’s solicitors made an inadvertent error while typing out the Company’s registered address on the envelope containing the statutory demand, typing “Pacific Way” instead of “Pacific Highway”.

Relevant statutory provisions and presumptions

Under s459C(2)(a) of the Corporations Act 2001 (Cth) a company is presumed insolvent if it has failed to comply with a statutory demand. For there to be a failure to comply, the defendant company must have been served with the statutory demand.

Section 109X of the Corporations Act and s28A of the Acts Interpretation Act 1901 (Cth) provide that a document may be served on a company by posting it to the company’s registered office. Pursuant to section 160(1) of the Evidence Act 2008 (Vic) and section 29 of the Acts Interpretation Act, service of a document which is sent by prepaid post is deemed to be effective on the fourth working day after it is posted unless evidence is raised to the contrary. Importantly, the document or letter effecting service must be properly addressed.

The dispute

Mills Oakley relied on the statutory presumptions of service by post in support of its winding up application. The Company disputed service, presenting evidence that its mailroom never received the statutory demand.

Mills Oakley argued that the statutory demand would have been delivered to the registered office at “Pacific Highway” despite the “immaterial” typo in the address on the envelope. It relied on evidence that Pacific Highway was the only street in that postcode which contained the word “Pacific”. In addition, Australia Post had informed Mills Oakley that if an envelope could not be delivered, it would have been returned to sender. Mills Oakley gave evidence that the envelope was not returned to it.

The Company argued that Mills Oakley had failed to comply with the requirements for service under s109X and s28A, because the statutory demand was not posted to its registered office. The Company also argued that Mills Oakley could not rely on the presumption of service in s29 because the envelope was not “properly addressed”.

Decision

Judicial Registrar Matthews found Mills Oakley could not rely on the deemed service provisions as the statutory demand was not delivered to the registered office in conformity with s109X and s 28A, in particular, because the envelope was not properly addressed. The Registrar cited a number of authorities, including Deputy Commissioner of Taxation v ABW Design and Construction Pty Ltd (2012) 291 ALR 127 and Chen v The College of Building Ltd [2015] ACTSC 19, which clearly state strict compliance with the document being addressed to the registered office is required. The question as to whether there was a material difference between “Pacific Way” and “Pacific Highway” was not to the point – “‘Way’ was not the Registered Office and that is the end of it” [55]. Because service of the statutory demand was not established, the statutory presumption of insolvency did not arise.

Key takeaway

This case highlights the importance of double checking (and triple checking) the address for service when serving documents by post. This is especially important for any circumstances in which a party’s entitlements rely upon effective service of a document. Here, the winding up action hinged on the service of the statutory demand. It must always be kept in mind that even a minor, and seemingly insignificant error during postage can jeopardise an entire proceeding.