Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd

Broke Hills Estate Pty Ltd applied for an order to set aside a statutory demand issued by Oakvale Wines Pty Ltd. The dispute between the two companies centred on the validity of the statutory demand and the sufficiency of the affidavit in support of the offsetting claim. The matter was heard in the Supreme Court of New South Wales. The primary legal issues the court had to resolve were whether the affidavit incorporated into the originating process was sufficient, whether hearsay evidence was admissible without a statement of its source, and whether the court could dispense with the rule under the Supreme Court Act 1970. Furthermore, the court had to determine the minimum requirements for an affidavit in support of an offsetting claim under the Corporations Act 2001 and whether the evidence provided as to the quantum of the offsetting claim was admissible.

The court held that the affidavit incorporated into the originating process was sufficient to support the statutory demand, as it was accompanied by a statement of truth and contained sufficient information for the defendant to respond. The court found that the hearsay evidence was admissible under s 95 of the Evidence Act 1995, as it was not used to prove the truth of the matters asserted in the affidavit. The court also determined that it could exercise its discretion to dispense with the rule under s 82(1)(a) of the Supreme Court Act 1970, given the circumstances of the case. However, the court found that the affidavit in support of the offsetting claim did not meet the minimum requirement under s 459H(1)(b) of the Corporations Act 2001, as there was no evidence of the quantum of the offsetting claim. Additionally, the court held that evidence as to the quantum of the offsetting claim, which was provided outside the 21-day period, was inadmissible.

In light of the court's findings, Broke Hills Estate Pty Ltd's application to set aside the statutory demand was dismissed. The court held that the statutory demand was valid and the affidavit in support of the offsetting claim was insufficient, resulting in the defendant's inability to offset the debt. The final order was that Broke Hills Estate Pty Ltd pay Oakvale Wines Pty Ltd the sum of $138,880.51, along with interest and costs.