Judge Not So Subtley Blasts “Defective Processes” in Registry

Statutory Demands have a notoriously strict timeline imposed by the Corporations Act. But what on earth happens when the Court registry doesn’t issue your documents in time and the deadline lapses…..well, read on.

In Adhesive Pro P/L -v- Blackrook Supplies P/L the Court was pretty scathing of the turnaround time of the registry but didn’t recognise the set aside application despite the position of the plaintiff that it had been lodged within the 21 days.

To avoid confusion, the Plaintiff in Adhesive is the Debtor and the Defendant the Creditor.

The 21 day period was set to expire on 28 August 2014. On the 27th a solicitor for the plaintiff filed the originating application with the registry and was told that no service copy was available that day. The solicitor who lodged the application informed the registry that a copy was required that day. Signed, unsealed copies were served later that day. Sealed copies were served on the defendant’s solicitors on 31 August (day 24) and on the defendant’s registered office on 2 Sept (day 26).

s459G of the Corps Act requires that a copy of the set aside application must be served within the 21 day period.

There was extensive discussion on the authorities that explain what a “copy” of a document is as well as the differences between filing and lodging, noticeably how the Federal Court distinguishes but the ACT definitions do not make that distinction. [21]

The Court decided that it was unnecessary to decide on what constitutes service and what is a copy as the statutory provisions were intended to operate definitely without much room for interpretation. The Court noted that it did not need to rule on the position but if required it was inclined to agree with the position of Stanley J in Craneford Nominees Pty Ltd v VGC Co-Operative Ltd (2012) 262 FLR 283:

An analysis of the authorities demonstrates that a document will satisfy the definition of a “copy of the application” where:

(1) the copy document reflects the form of the originating process accepted by the court within the 21 day period;

(2) the copy document evidences the fact of the court’s acceptance, and hence, the fact that proceedings have been commenced, by some mark, whether it is the seal of the court, the Registrar’s signature, or some other authenticating mark such as the court stamp or action number; and

(3) the copy document records the important fact of the return date of the application.

“Acceptance” by the Court does not immediately occur upon the registry accepting the documents for consideration as they still hold the right to reject the documents under rule 6140. The proceedings were ultimately dismissed for lack of jurisdiction arising from the fact that a valid application had not been made in accordance with the Corporations Act, as adopted in Schedule 6 of the Supreme Court Act.

The Court had some sympathy towards the Plaintiff and all but directed the registry to refund the filling fee under the Court Procedures (Fees) Determination 2015 (ACT).

I am somewhat less sympathetic (in general, but also specifically). Everyone who has dealt with the ACT Court Registry understands that they can be frustrating at times but that it is completely normal for there to be a delay in returning documents sealed. Ultimately the solicitors for the plaintiff should have been aware that waiting until the 20th day of the 21 day period may result in an unfavourable outcome. Alternatively if the client waited that long to approach the solicitors then they will simply have to wear the consequences of that. Simply, do not delay on anything involving a statutory demand.