Austurban Construction Pty Ltd v The Zaikos Group Pty Ltd
[2016] WASC 129
•3 MAY 2016
AUSTURBAN CONSTRUCTION PTY LTD -v- THE ZAIKOS GROUP PTY LTD [2016] WASC 129
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 129 | |
| Case No: | COR:3/2016 | 15 APRIL 2016 | |
| Coram: | MASTER SANDERSON | 3/05/16 | |
| 4 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | AUSTURBAN CONSTRUCTION PTY LTD THE ZAIKOS GROUP PTY LTD |
Catchwords: | Corporations law Application to set aside statutory demand Turns on own facts |
Legislation: | Nil |
Case References: | Clarke & Walker Pty Ltd v Thew (1967) 116 CLR 465 Mala Pty Ltd v Johnston (1994) 13 ACLC 100 St George Bank - A Division of Westpac Banking Corporation v Active Property Investment Pty Ltd [2010] NSWSC 736 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
THE ZAIKOS GROUP PTY LTD
Defendant
Catchwords:
Corporations law - Application to set aside statutory demand - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr A J Aristei
Defendant : Mr G R Dean
Solicitors:
Plaintiff : Irdi Legal
Defendant : Richard Rowick Lawyers
Case(s) referred to in judgment(s):
Clarke & Walker Pty Ltd v Thew (1967) 116 CLR 465
Mala Pty Ltd v Johnston (1994) 13 ACLC 100
St George Bank - A Division of Westpac Banking Corporation v Active Property Investment Pty Ltd [2010] NSWSC 736
1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The amount of the demand is $113,600.64. In the schedule to the statutory demand under the heading 'Description of the debt' there appears the following cryptic entry: 'A loan from the Creditor to the Debtor'.
2 In support of its application to set aside the statutory demand the plaintiff filed an affidavit of Kristen James McGillivray sworn 5 January 2016. Based upon the uncontested evidence in that affidavit in or about June 2010 Mr McGillivray entered into an agreement with Mr George Petrou to fund the plaintiff in constructing a display home - the plaintiff being a home builder. Mr Petrou loaned the money through the defendant. The parties recorded their agreement in a document which appears as attachment KJM-4 to Mr McGillivray's affidavit. It was not drawn by a lawyer - and it shows.
3 For present purposes it is cl 1.9 and cl 1.14 of the written agreement which are relevant. They are in the following terms:
1.9 There is no set term for the loan as the Parties agree that working capital requirements and the requirements of the Builder's Warranty Insurer will be ongoing during the Company's start-up and growth stages. The loan may be repaid in full or by irregular instalments as the Company's cash flow allows. Such repayment shall be determined by the Company Directors. A set term may be incorporated into this Agreement if further agreed in writing by the Parties.
...
1.14 The directors jointly and severally agree that they will not make demand on the Company for repayment of the loan through legal action unless the Company becomes subject to or takes advantage of the laws for the time being in relation to bankruptcy or insolvency.
4 It is not easy to ascertain just what is intended by cl 1.9. But I think properly construed it is to the effect that there is no set term for the loan. That is the first phrase of the first sentence and although the rest of the paragraph conditions that first phrase it does not alter the fact that the loan has no set term. There is no suggestion in the evidence that 'working capital requirements' or the obligations to an insurer mean that the loan is not presently repayable. It is also common ground that no set term was agreed in writing by the parties.
5 The argument put by the plaintiff was to the effect the clause was ambiguous and it would be necessary to establish all of the surrounding circumstances leading to the parties entering into the loan agreement before it could be said the loan was presently repayable.
6 In answer to that counsel for the defendant pointed out the plaintiff had ample opportunity in the affidavit material to demonstrate there were surrounding circumstances which would make it arguable repayment was not due. Counsel submitted the plaintiff had singularly failed to establish any fact let alone any group of facts which required further investigation.
7 On balance I am satisfied the defendant has made good its argument. In a confused situation it does not appear there is any matter raised by the plaintiff which would counter the defendant's argument the loan was repayable upon demand. Both parties were agreed the test to be applied was whether or not there was a plausible contention requiring further examination. In my view there is not and there is no basis disclosed upon which the statutory demand could be set aside.
8 There was one further argument which requires brief attention. It was submitted - it must be said without much enthusiasm - by counsel for the plaintiff, that issuing a statutory demand amounted to a demand for repayment of the loan through legal action, something which was not permitted under cl 1.14. There appears to be no doubt issuing a statutory demand is not 'legal process'. That I think is consistent with the High Court authority of Clarke & Walker Pty Ltd v Thew (1967) 116 CLR 465. It also accords with the views of Barrett J in St George Bank - A Division of Westpac Banking Corporation v Active Property Investment Pty Ltd [2010] NSWSC 736. Against that position there is the decision of Master Adams in Mala Pty Ltd v Johnston (1994) 13 ACLC 100. The learned master's decision does not refer to Clarke & Walker Pty ltd v Thew and it may well be the case was not cited to him. In any event the learned master's decision does not in my view represent the state of the law. Accordingly the issue of a statutory demand does not fall foul of cl 1.14.
9 For these reasons I would dismiss the application to set aside the statutory demand. The plaintiff should pay the defendant's costs of the application including reserved costs.
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