FEDERAL COURT OF AUSTRALIA

H Lal & Associates Pty Limited v Patel, in the matter of H Lal & Associates Pty Limited [2009] FCA 1551

IN THE MATTER OF H LAL & ASSOCIATES PTY LIMITED (ACN 076 408 412)

H LAL & ASSOCIATES PTY LIMITED (ACN 076 408 412) v JENNY (OFFICIAL NAME JASWANTI) PATEL

NSD 1060 of 2009

LINDGREN J

11 DECEMBER 2009

SYDNEY

IN THE MATTER OF H LAL & ASSOCIATES PTY LIMITED (ACN 076 408 412)

THE COURT ORDERS THAT:

1.         The motion brought by notice of motion filed on 4 December 2009 be dismissed.

2.         The plaintiff pay the defendant’s costs of that motion on the indemnity basis.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE MATTER OF H LAL & ASSOCIATES PTY LIMITED (ACN 076 408 412)

REASONS FOR JUDGMENT

1                                             On 30 October 2009 District Registrar Wall, in the absence of the plaintiff, dismissed the application to set aside a statutory demand that the plaintiff had brought.  By notice of motion the plaintiff now seeks review of the Registrar’s decision under s 35A(5) and (6) of the Federal Court of Australia Act 1976 (Cth).  The Registrar’s order has been entered and the plaintiff invokes O 35, r 7(2)(a) of the Federal Court Rules.

2                                             There is a simple answer to the motion.  It is to be found in s 459G(2) and (3) of the Corporations Act 2001 (Cth).  Those two subsections provide as follows:

(2)   An application [to set aside] may only be made within 21 days after the demand is [served on the company].

             (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.

3                                             According to an affidavit read on behalf of the plaintiff, the statutory demand was served on the plaintiff on 2 September 2009.  More precisely, according to the affidavit the statutory demand was noticed in the “mail box” of the deponent on that date.  It is therefore possible that the statutory demand was in fact served earlier than 2 September 2009.

4                                             The period of 21 days from 2 September 2009 expired on 23 September 2009.  The application to set aside and the supporting affidavit were filed on 24 September 2009 – one day late.  It is not necessary to note, but it is the fact of course, that the documents referred to in subsection (3) of section 459G must also have been served outside the 21 day time limit.

5                                             As I noted in Carinda Homes Pty Ltd v Highlands Austral Pty Ltd, in the matter of Carinda Homes Pty Ltd [2003] FCA 275 at [6] (Carinda Homes), the time limit fixed by subss (2) and (3) of s 459G has been recognised by the High Court as a condition of the existence of the jurisdiction to set aside a statutory demand:  see David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 276-277 (David Grant)..

6                                             For the above reason the application to set aside was incompetent and the order of the Registrar should remain.

7                                             I have not found it necessary to deal with other submissions that were made.

8                                             The defendant seeks indemnity costs on the motion.  In Carinda Homes I ordered payment of costs on the indemnity basis.  In the present case, whatever the position was previously, when Mr Lal made his affidavit on 3 December 2009 and filed it and the notice of motion on the following day, it was clear to all that the proceeding had been commenced outside the 21 day time limit which was made mandatory by the statutory provision as recognised in David Grant.

9                                             In these circumstances, it is appropriate that costs be ordered on the indemnity basis.

10                                          There will be orders accordingly.

Associate:

Dated:         21 December 2009