Austruct Group Pty Ltd v Bluenergy Engineering (Australia) Pty Ltd [No 2] - [2017] WASC 175

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: AUSTRUCT GROUP PTY LTD -v- BLUENERGY ENGINEERING (AUSTRALIA) PTY LTD [No 2] [2017] WASC 175

CORAM: ACTING MASTER STRK

HEARD: 28 MARCH 2017

DELIVERED : 27 JUNE 2017

FILE NO/S: COR 101 of 2016

BETWEEN: AUSTRUCT GROUP PTY LTD
Plaintiff
AND
BLUENERGY ENGINEERING (AUSTRALIA) PTY LTD
Defendant

Catchwords:

Corporations law - Application for company to be wound up in insolvency under s 459P of the Corporations Act 2001 (Cth) - Statutory demand - Abuse of process

Legislation:

Corporations Act 2001 (Cth), s 459P
Corporate Law Reform Act 1992 (Cth)

Result:

Defendant to be wound up

Category: B

Representation:

Counsel:

Plaintiff: Mr C C K Ko
Defendant: Mr P Laffery

Solicitors:

Plaintiff: Trinix Lawyers
Defendant: Kings Park Corporate Lawyers

Case(s) referred to in judgment(s):

Admin Communications Services Pty Ltd v Teledata World Services Pty Ltd [2000] WASC 20
Austruct Group Pty Ltd v Bluenergy Engineering (Australia) Pty Ltd [2017] WASC 10
BHP Steel (JLA) Pty Ltd v Eagle Steel Holdings Pty Ltd [1999] WASC 187
Commissioner of Taxation (Cth) v Simonato Holdings Pty Ltd (1997) 15 ACLC 477
Commonwealth Bank of Australia v Begonia Pty Ltd (1993) 11 ACLC 1075
Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85
CVC Investments Pty Ltd v P & T Aviation Pty Ltd (1989) 18 NSWLR 295
David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265
House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 21 ACSR 527
Kwik Transport & Crane Hire Pty Ltd as Trustee for the T&T Unit Trust v Rosales Pty Ltd as the Trustee for the Jones Family Trust [2016] WASC 277
Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459
Pacific Communication Rentals Pty Ltd v Walker (1993) 12 ACSR 287
TS Recoveries Pty Ltd v Sea-Slip Marinas (Aust) Pty Ltd [2007] NSWSC 1074
Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509

ACTING MASTER STRK: On 16 May 2016, the plaintiff (Austruct) applied for orders to wind up the defendant (Bluenergy). The winding up application relies on a creditor's statutory demand for payment of a debt dated 23 March 2016 (the Demand), which describes the debt as follows:
Description of the debt: The total amount outstanding under the invoices outlined in the attached schedule relating to services supplied by the creditor for or on behalf of the company.
The amount of debt is $47,025 and the schedule attached to the Demand records as follows:

Invoice Date Invoice Number Amount Outstanding

21/12/2015 00003391 $13,750.00

21/12/2015 00003392 $13,887.50

28/01/2016 00003417 $19,387.50

TOTAL $47,025.00

No application was made by Bluenergy to set aside the Demand within 21 days of its service on Bluenergy under s 459G of the Corporations Act 2001 (Cth). Bluenergy also did not comply with the Demand by paying or securing or compounding the debt the subject of the Demand (the Debt) to Austruct's reasonable satisfaction within that period or at…

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: [2017] WASC 175
Decision Date: 27 JUNE 2017

CaseChat Overview and Summary

Austruct Group Pty Ltd sought an order for Bluenergy Engineering (Australia) Pty Ltd to be wound up in insolvency under section 459P of the Corporations Act 2001. The application arose out of a statutory demand issued by Austruct, which Bluenergy had failed to respond to within the requisite 21 days. The Federal Court of Australia was asked to determine whether Austruct's statutory demand was an abuse of process and whether the application should be dismissed.

The court examined whether Austruct's statutory demand was an abuse of process, given the history of dealings between the parties and the presence of a dispute as to whether the debt existed. It considered whether Austruct had acted unreasonably in issuing the demand and whether there were any other circumstances that would make the demand an abuse of process. The court also had to determine whether the dispute over the existence of the debt was a sufficient ground to dismiss the application for winding up.

The court held that Austruct's statutory demand was not an abuse of process. It found that there was no evidence of bad faith or unreasonable behaviour by Austruct in issuing the demand. The court also held that the existence of a dispute as to whether the debt existed did not render the demand an abuse of process. The court found that the dispute was not sufficient to dismiss the application for winding up. The court concluded that Austruct had acted reasonably and in good faith in issuing the demand and that Bluenergy was unable to demonstrate any circumstances that would make the demand an abuse of process.

The court dismissed Bluenergy's application to set aside the statutory demand and ordered Bluenergy to pay Austruct's costs of the application.

Orders