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In the case of Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Limited [2008] HCA 9, handed down on 26 March 2008, the High Court confirmed that Courts do not have the power to extend time for compliance with a statutory demand after the period for compliance with the demand has expired.
Section 459F(2)(a)(i) of the Corporations Act 2001 (Cth) provides that if an application is made by a company for an order setting aside a statutory demand, the period for compliance with the demand is the time stipulated in any resulting order made by the Court.
The facts of this case required the High Court to consider the meaning of this provision. Esanda served a statutory demand on Aussie Vic Plant Hire alleging that Aussie owed it more than $400,000. Aussie applied to the Supreme Court of Victoria for an order setting the demand aside. Master Efthim dismissed Aussie’s application on 20 June 2006, but ordered that the time for compliance with the demand be extended to 4 July 2006.
Aussie appealed against the orders made by Master Efthim to a single judge of the Supreme Court of Victoria. The time for compliance with the statutory demand expired before the appeal came up for hearing so Aussie also applied to the court for an order further extending the time for compliance with the statutory demand. His Honour Whelan J dismissed Aussie’s appeal and its application for a further extension on the basis that the extension contemplated by section 459F(2)(a)(i) had already been granted.
Aussie sought to appeal this decision to the Court of Appeal of the Supreme Court of Victoria. The Court dismissed Aussie’s appeal.
Aussie then sought leave to appeal to the High Court. In its decision, the High Court confirmed that the Corporations Act does not permit the making of an order extending the time for compliance a statutory demand where the period for compliance contemplated by section 459F(2)(a)(i) has expired. The Court dismissed Aussie’s appeal.
This case illustrates, once again, the importance of the strict compliance with all rules relating to statutory demand procedures.
For more information regarding this article, please contact Rocco Russo on 07 3231 2444.
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