10
Apr 2018

Service on a company: when serving documents at the registered office will not be enough

The recent Supreme Court of New South Wales (the Court) decision In the matter of K-Bek Motors Pty Ltd [2017] NSWSC 183 serves as a timely reminder that the service of documents on a company’s registered office may not always suffice.  In circumstances where there is any doubt, the issuing party should make all attempts to bring a document to the company’s attention.

K-Bek Motors Pty Ltd (the Company) was wound up in insolvency by order of the Court, consequent upon its failure to comply with a creditor’s statutory demand (CSD) served on it by the Chief Commissioner of State Revenue (Chief Commissioner), which arose from a land tax assessment in respect of premises on Parramatta Road at Homebush NSW, which the Company operated and continues to operate as a car yard.

The CSD and accompanying affidavit were served by leaving them in the letterbox at 66 Sorrel Street, North Parramatta being the Company’s registered office. The deponent of the affidavit of service stated:

“[a]t the time of service I was advised that the business who previously occupied the address have moved out and that property had been purchased by a family for residential use”.

Upon the Company’s failure to comply with the CSD, the Chief Commissioner commenced proceedings to wind up the Company.  The originating process and supporting affidavits were served by placing the documents at 66 Sorrel Street, North Parramatta.  The deponent of the affidavit of service added:

At the time of the service I had a conversation with a female person in or to the following effect. I asked, “Is this the registered office of K-Bek Motors Pty Limited and will you accept service on their behalf?” The female replied, “No, I bought this place recently.  The accountant’s firm were the previous occupants”.”

In light of the above, and the fact that the Company was in fact solvent, the liquidator of the Company made an application under section 482 of the Corporations Act 2001 (Cth) and alternatively under rule 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) seeking, amongst other things, that the winding up be terminated.

In considering the application, Brereton J opined that at [11]:

“…it will be evident that the company has explained why it did not appear to oppose the winding up application. For that, it bears some responsibility through its failure to update its registered office. On the other hand, it ought to have been evident to the plaintiff Chief Commissioner, from both the affidavits of service to which I have referred, that the statutory demand and the originating process, left as they were at the Sorrell Street address, would not come to the attention of the company. Moreover, the Chief Commissioner had postal addresses at which there had been recent communications with the company, and the business address of the property at Homebush in respect of which the land tax assessment had issued, in respect of which some further enquiries might well have made to ensure that all that was reasonable had been done to bring the proceedings to the company’s attention.”

On this basis, the Court found that neither the CSD nor the originating process in fact came to the notice of the Company, despite being duly served in accordance with the provisions of section 109X of the Corporations Act 2001 (Cth).

The Court ultimately set aside the winding up order under rule 36.16, and as the Company’s solvency had been established, dismissed the winding up application.

The decision serves as a timely reminder of the strict requirements of service of documents on a Company and that, in certain circumstances, a creditor should do more to satisfy itself and the court that relevant documents have been brought to the attention of an opposing party.

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