Aero Marine Logistics v Kapur - [2013] VSC 217

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IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST
CORPORATIONS LIST

S CI 2012 7208

AERO MARINE LOGISTICS PTY LTD (ACN 106 516 741)	Plaintiff
v
NARENDRA KAPUR	Defendant

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	17 April 2013
DATE OF JUDGMENT:	10 May 2013
CASE MAY BE CITED AS:	Aero Marine Logistics v Kapur
MEDIUM NEUTRAL CITATION:	[2013] VSC 217

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CORPORATIONS – External administration – Application to set aside statutory demand pursuant to Section 459G of the Corporations Act 2001 (Cth) on bases of genuine dispute and “some other reason” within the meaning of Section 459J(1)(b) of the Act by reason that affidavit accompanying demand failing to aver that subject debt was due and payable as required by Section 459E(3) – Demand set aside pursuant to Section 459J(1)(b) and by reason of finding that there is a genuine dispute as to debt the subject of the demand.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Kohn	Vernon da Gama & Associates
For the Defendant	Mr G. Moffatt	Pasha Legal

HIS HONOUR:

The plaintiff, Aero Marine Logistics Pty Ltd (“AML”) makes application by originating process filed 27 December 2012 to set aside a statutory demand dated 4 December 2012 which was served on it by the defendant, Mr Kapur (who is also known as Kapsy), on 7 December 2012.

The schedule to the demand describes the debt as “monies due and owing pursuant to agreement between the creditor and the debtor” and claims the sum of $71,356.26.

The demand was accompanied by an affidavit of Mr Kapur. That affidavit does not follow Form 7 of the Supreme Court (Corporations) Rules 2003. While it sets out in somewhat detailed terms how it is alleged the debt is owing, the affidavit does not aver that the debt is due and payable as Form 7 requires.

AML seeks to set aside the demand on the grounds that there is a genuine dispute as to the debt and that there is “some other reason” within the meaning of that expression as it is found in s 459J(1)(b) of the Corporations Act 2001 (“the Act”). The second ground has its basis on the fact that the affidavit accompanying the demand does not, as observed, depose that the debt claimed is due and payable.

Should the demand be set aside for “some other reason”

I turn first to the question of whether the absence of the averment in the affidavit accompanying the demand that the debt claimed is due and payable warrants the setting aside of the demand under s 459J.

Section 459E(3) of the Act provides:

Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:
(a)verifies that the debt, or the total amount of the debts, is due and payable by the company; and
(b)complies with the Rules.

Section 459J provides:

(1)On an application under s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 217
Decision Date: 10 May 2013

CaseChat Overview and Summary

Aero Marine Logistics, a logistics company, filed a statutory demand against Kapur, an individual, seeking payment of a debt. The dispute was heard and determined by the Federal Circuit Court of Australia. The central issue before the court was whether the statutory demand should be set aside under Section 459J of the Corporations Act 2001, specifically on the grounds of a genuine dispute regarding the debt and some other reason as outlined in Section 459J(1)(b) of the Act. The court needed to decide if the affidavit accompanying the statutory demand properly averred that the debt was due and payable, as required by Section 459E(3) of the Act.

The court examined the statutory demand and the affidavit provided by Aero Marine Logistics. It found that the affidavit did not adequately establish that the debt was due and payable, as it did not specifically address the requirements of Section 459E(3). This omission led the court to conclude that the statutory demand was defective. Furthermore, the court found that Kapur had a genuine dispute about the amount of the debt claimed. Given these findings, the court was satisfied that the statutory demand should be set aside not only because of the procedural defect in the affidavit but also due to the genuine dispute over the debt.

In light of these conclusions, the court ordered the statutory demand to be set aside. This decision effectively nullified the demand and relieved Kapur from the liability to pay the debt as claimed by Aero Marine Logistics. The court's ruling ensured that proper procedural requirements were met and that Kapur's rights to dispute the debt were upheld.

Orders