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Braams Group Pty Ltd v Miric

Braams Group Pty Ltd v Miric

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Reported Decision:
(2003) 44 ACSR 124

New South Wales

Court of Appeal

CITATION: Braams Group Pty Ltd v Miric [2002] NSWCA 417

FILE NUMBER(S): CA 40701/01

HEARING DATE(S): 29 November 2002

JUDGMENT DATE:
20 December 2002

PARTIES :

Braams Group Pty Limited (Appellant)
Peter Miric (Respondent)

JUDGMENT OF: Mason P at 1; Stein JA at 2; Ipp JA at 66

LOWER COURT JURISDICTION : Supreme Court

LOWER COURT
FILE NUMBER(S) : SC 3393/01

LOWER COURT
JUDICIAL OFFICER : Young CJ in Eq

COUNSEL: C Stevens QC/K Eassie (Appellant)
T G R Parker (Respondent)

SOLICITORS: Etheringtons (Appellant)
Boskovitz & Associates (Respondent)

CATCHWORDS: CORPORATIONS LAW 2001, Part 5.4 - winding up in insolvency - statutory demand pertaining to disputed judgment debt - effect of failure to lodge application to set aside within prescribed time limit - no abuse of process for creditor to exploit rebuttable presumption of insolvency to recover disputed debt under current statutory scheme - ND

LEGISLATION CITED: Corporations Law 2001, Pt 5.4, ss 459C(2)(a), P, G, S

CASES CITED:
Audio Acoustics Pty Ltd v Pioneer Electronic Australia Pty Ltd (1982) 7 ACLR 180
Chief Commissioner of Stamp Duties v Paliflex Pty Ltd (1999) 17 ACLC 467
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
De Montfort v Southern Cross Exploration NL (1987) 5 ACLC 709
House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 14 ACLC 1536
House v The King (1936) 55 CLR 499
Pacific Communication Rentals Pty Ltd v Walker (1993) 12 ACSR 287
Redglove Holdings Pty Ltd v GNE & Associates Pty Ltd [2001] NSWSC 867
Re J & E Holdings Pty Limited (1995) 36 NSWLR 541
State Bank v Tela Pty Ltd (No 2) [2002] NSWSC 20
Texel Pty Ltd v Commonwealth Bank (1993) 11 ACSR 535
Williams v Spautz (1992) 174 CLR 509

DECISION: Appeal dismissed with costs

CA 40701/01
SC 3392/01

MASON P
STEIN JA
IPP JA
Friday, 20 December 2002

BRAAMS GROUP PTY LTD v Peter MIRIC

Facts:

Mr Miric, an alleged creditor of Braams Pty Ltd, served a statutory demand on the company relying on a judgment debt. The company failed to either satisfy the demand or apply to have the demand set aside within the 21-day time limit specified in s 459 G of the Corporations Law.

The judgment debt of $744, 792.30 was awarded by Foster AJ in proceedings in the Supreme Court. After winding up proceedings had been initiated in accordance with s 459P of the Corporations Law the appellant sought a stay in the proceedings pending the determination of an appeal against the decision of Foster AJ. Young CJ in Eq held that the Pt 5.4 of the Corporations Law was structured so as to inhibit him from granting a stay in the circumstances. While Young CJ in Eq was in no doubt about the inherent power in the Court to regulate its own processes, he found that the company had failed to rebut the presumption of insolvency.…

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: [2002] NSWCA 417
Decision Date: 20 December 2002

CaseChat Overview and Summary

Braams Group Pty Ltd (the applicant) sought to set aside a statutory demand issued by Miric (the respondent) on the basis that the demand related to a disputed judgment debt. The matter came before the Court of Appeal of New South Wales.

The primary legal issue before the court was whether the applicant had failed to lodge an application to set aside the statutory demand within the prescribed time limit, and if so, what the consequences of that failure were. The court also considered whether it was an abuse of process for a creditor to exploit the rebuttable presumption of insolvency, which arises from the failure to comply with a statutory demand, to recover a disputed debt under the current statutory scheme.

The court reasoned that the applicant had not lodged its application to set aside the statutory demand within the time prescribed by the Corporations Act 2001 (Cth). It held that the statutory scheme, as currently constituted, permits a creditor to issue a statutory demand for a debt that is the subject of a dispute, including a disputed judgment debt. The court found that the failure to comply with the time limit for setting aside the demand meant that the presumption of insolvency was engaged, and it was not an abuse of process for the creditor to rely on this presumption to pursue recovery of the debt. The court noted that the applicant had not demonstrated any grounds for setting aside the demand that would overcome the consequences of the late filing.

The appeal was dismissed, and the applicant was ordered to pay the respondent's costs.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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CITATION:	Braams Group Pty Ltd v Miric [2002] NSWCA 417
FILE NUMBER(S):	CA 40701/01
HEARING DATE(S):	29 November 2002
JUDGMENT DATE:	20 December 2002
PARTIES :	Braams Group Pty Limited (Appellant) Peter Miric (Respondent)
JUDGMENT OF:	Mason P at 1; Stein JA at 2; Ipp JA at 66

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	SC 3393/01
LOWER COURT JUDICIAL OFFICER :	Young CJ in Eq

COUNSEL:	C Stevens QC/K Eassie (Appellant) T G R Parker (Respondent)
SOLICITORS:	Etheringtons (Appellant) Boskovitz & Associates (Respondent)
CATCHWORDS:	CORPORATIONS LAW 2001, Part 5.4 - winding up in insolvency - statutory demand pertaining to disputed judgment debt - effect of failure to lodge application to set aside within prescribed time limit - no abuse of process for creditor to exploit rebuttable presumption of insolvency to recover disputed debt under current statutory scheme - ND
LEGISLATION CITED:	Corporations Law 2001, Pt 5.4, ss 459C(2)(a), P, G, S
CASES CITED:	Audio Acoustics Pty Ltd v Pioneer Electronic Australia Pty Ltd (1982) 7 ACLR 180 Chief Commissioner of Stamp Duties v Paliflex Pty Ltd (1999) 17 ACLC 467 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 De Montfort v Southern Cross Exploration NL (1987) 5 ACLC 709 House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 14 ACLC 1536 House v The King (1936) 55 CLR 499 Pacific Communication Rentals Pty Ltd v Walker (1993) 12 ACSR 287 Redglove Holdings Pty Ltd v GNE & Associates Pty Ltd [2001] NSWSC 867 Re J & E Holdings Pty Limited (1995) 36 NSWLR 541 State Bank v Tela Pty Ltd (No 2) [2002] NSWSC 20 Texel Pty Ltd v Commonwealth Bank (1993) 11 ACSR 535 Williams v Spautz (1992) 174 CLR 509
DECISION:	Appeal dismissed with costs