The Victorian Court of Appeal in Imagebuild Group Pty Ltd v Fokust Pty Ltd [2017] VSCA 131 has held that an affidavit alleged to be an affidavit supporting an application to set aside a creditor’s statutory demand under s 459G of the Corporations Act 2001 (Cth) was not a supporting affidavit but merely one explaining delay in the swearing, filing and serving of what was to be the supporting affidavit.
Section 459G of the Corporations Act requires that a supporting affidavit be filed and served within 21 days after the statutory demand is served. The affidavit in question had been sworn by the practice manager of the solicitors’ firm acting on behalf of the company seeking to set aside the statutory demand. The affidavit was sworn, filed and served on the last day of the 21 day time period. It:
- referred to the service of the statutory demand on the company;
- stated that the solicitors had prepared the originating process and the supporting affidavit of a named deponent who was a director of the company, to accompany the application to set aside the statutory demand;
- said that the originating process and a true copy of the supporting affidavit (unsworn) would be filed with the Supreme Court that day and that the deponent was not available to attend at the solicitors’ offices on that day because he was working in the country and, due to computer issues, would not be able to send a sworn copy until a date which was 3 days later; and
- exhibited what was described as “a copy of the unsworn supporting affidavit” of the deponent and said that it was expected that the original sworn affidavit of the deponent in support of the company’s application would be filed on that later date.
The exhibited supporting affidavit (unsworn) addressed issues which were said to reduce the amount being sought by the creditor and exhibited a draft writ which made certain claims as against the creditor.
The Victorian Court of Appeal was constituted by two judges of appeal. Whelan JA (with whom Almond AJA agreed) made the following points (at [19]-[25]).
- The affidavit in question was not an affidavit supporting the application to set aside the statutory demand. Rather, it was an affidavit explaining the delay in the swearing, filing and service of what was to be the supporting affidavit.
- The High Court had held in David Grant & Co Pty Limited v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265 that the requirement that a supporting affidavit be filed and served within the specified 21 day period defined the jurisdiction of the Court under s 459G.
- The High Court had also held in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corp Ltd [2008] HCA 9; (2008) 232 CLR 314 that there was no power to extend time after the 21 day period had elapsed.
- An affidavit filed and served within the specified time which asserted that a supporting affidavit would be sworn, or may be sworn, but not within time, and which explained the delay, was not itself a supporting affidavit.
- There could be cases where an affidavit directed at explaining delay could nevertheless be sufficient to constitute a supporting affidavit, for example, where the affidavit verified, on the basis of instructions or otherwise, the contents of the affidavit which was proposed to be sworn. The affidavit in question, however, did not purport to do this. It did no more than foreshadow what the practice manager expected would be sworn and explained why that had not been done within the 21 day time period.
- The fact that the foreshadowed as yet unsworn affidavit, if it had been sworn and served within the 21 day time period, could have been sufficient to constitute a supporting affidavit was not to the point.
- If an affidavit of the nature of the affidavit in question was held to be sufficient, it would be tantamount to permitting extensions of the 21 day time period which the High Court had made clear was not permitted.
Other cases
For some other cases which deal with the requirements of the supporting affidavit under s 459G, see the following on this website:
- “Whether there is a ‘genuine dispute’ for the purposes of s 459H(1)(a) – relevant principles”, 2 December 2016.
- “Graywinter principle found to preclude reliance upon a ground first raised after the 21 day period”, 24 February 2016.
- “The Graywinter principle – quantification of an offsetting claim is not necessary”, 2 December 2014.
See also K Ottesen, “Setting aside a statutory demand – an update on Graywinter” (2013) BCLB [455].
