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31
Aug 2017

What constitutes a “supporting affidavit” under S 459G of the Corporations Act 2001 (Cth)?

In the recent decision of Imagebuild Group Pty Ltd v Fokust Pty Ltd [2017] VSCA 131, the Victorian Court of Appeal determined whether a “supporting affidavit” had been filed within the 21 day time limit prescribed by s459G of the Corporations Act 2001(Cth) (the Act).

Facts

On 30 January 2017 Fokust Pty Ltd (Fokust) secured judgment against Imagebuild Group Pty Ltd (Imagebuild) in the sum of $540,453.86.

On 10 February 2017 Fokust served a statutory demand (Demand) under s459E of the Act.

On 3 March 2017 Imagebuild filed an originating process seeking an order setting aside the Demand under s459G of the Act. In support of the originating process Imagebuild filed an affidavit sworn on 3 March 2017 by its practice manager, Joshua Watson (Watson affidavit).

The Watson affidavit did not contain any substantive evidence in support of Imagebuild’s application to set aside the demand. The Watson affidavit stated, inter alia:

I expect to file the original affirmed affidavit of the deponent in support of the Plaintiff’s application on or before 4:00 pm on 6 March 2017. The period for compliance with the statutory demand ends on 3 March 2017.

On 24 May 2017 Associate Justice Efthim dismissed Imagebuild’s application because he determined that the Watson affidavit was not a supporting affidavit within the meaning of s 459G and therefore no supporting affidavit had been filed within the 21 day period.

Decision

The Court of Appeal upheld the decision of the Associate Judge and determined that:

…the Watson affidavit is not an affidavit supporting the application to set aside the statutory demand. What it is is an affidavit explaining the delay in the swearing, filing and service of what was to be the supporting affidavit.

An affidavit filed and served within the specified time which asserts that a supporting affidavit will be sworn, or may be sworn, but not within time, and which explains the delay, is not itself a supporting affidavit.

If an affidavit of the nature of the Watson affidavit were held to be sufficient, in my view it would be tantamount to permitting extensions of the statutory 21 day time period which the High Court has made clear that the Act does not allow.

Take away point

Never rush. Always diarise (and set numerous reminders) to ensure you do not miss the 21 day time limit. If you allow sufficient time to prepare, file and serve your client’s supporting affidavit then you will avoid being confronted by the problem encountered by Imagebuild.

For further information, please contact ERA Legal.