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Brown v Bluestone Property Services Pty Ltd

Brown v Bluestone Property Services Pty Ltd

Case [2010] NSWSC 869 4 August 2010

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CITATION: Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869

HEARING DATE(S): 04/08/10

JUDGMENT DATE :
4 August 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 4 August 2010

DECISION: 1. I make a declaration in terms of paragraph 1 of the notice of motion filed on 15 June 2010.
2. I order that the plaintiffs as respondents to the interlocutory process pay the costs of the defendant as applicant under the interlocutory process.
3. I grant leave to the plaintiffs to file a notice of discontinuance of the winding up proceedings.

CATCHWORDS: CORPORATIONS - winding up - application for winding up order based on alleged insolvency - plaintiff seeks to rely on presumption of insolvency arising from non-compliance with statutory demand - defendant seeks declaration that demand not served - PROCEDURE - service - service by post - need for proof of various acts culminating in depositing of addressed and stamped or franked envelope into the post - only evidence is that identified document "was forwarded by mail to the defendant" - hearsay - no evidence of acts of deponent - no evidence of existence, addressing or stamping of any envelope - no evidence of deposit into post

LEGISLATION CITED: Corporations Act 2001 (Cth), ss 109X(1)(a), 459A, 459C(2)(c), 459E(3)
Evidence Act 1995, s 59

CATEGORY: Principal judgment

CASES CITED: Dwyer v Canon Australia Pty Ltd [2007] SASC 100
Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262
Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216
Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126

PARTIES: Justin John Brown - First Plaintiff
Brooke Brown - Second Plaintiff
Sharlotte Pty Ltd - Third Plaintiff
Abadeen Group Pty Ltd - Fourth Plaintiff
Southern Cross Constructions (NSW) Pty Ltd - Fifth Plaintiff
Bluestone Property Services Pty Limited - Defendant

FILE NUMBER(S): SC 2010/135825

COUNSEL: Mr D E Baran - Plaintiffs
Mr T D F Hughes - Defendant

SOLICITORS: Burkett & Taylor Lawyers - Plaintiffs
G H Healey & Co - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY 4 AUGUST 2010

2010/135825 JUSTIN BROWN & 4 ORS v BLUESTONE PROPERTY SERVICES PTY LIMITED

JUDGMENT

1 These are winding up proceedings brought by the plaintiffs under s 459A of the Corporations Act 2001 (Cth). The plaintiffs allege that the defendant is insolvent and claim a winding up order on that ground.

2 In pursuing their application, the plaintiffs seek to rely on a presumption of insolvency under s 459C(2)(c) of the Corporations Act arising from the defendant’s failure to comply with a statutory demand dated 18 February 2010 served on it by the plaintiffs.

3 The defendant has filed an interlocutory process (styled notice of motion) by which it puts in issue the question whether the statutory demand on which the plaintiffs rely was, as the plaintiffs allege, served on the defendant. Service of a statutory…

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.

Continue reading Brown v Bluestone Property Services Pty Ltd

Details

AGLC: Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869
Case: [2010] NSWSC 869
Decision Date: 4 August 2010

CaseChat Overview and Summary

In the matter of Brown v Bluestone Property Services Pty Ltd, the plaintiff sought a winding up order against the defendant on the basis of alleged insolvency. The defendant disputed the validity of the statutory demand that precipitated the application, arguing that it had not been properly served. The dispute was heard by the Federal Circuit Court of Australia.

The court needed to determine whether the statutory demand was effectively served on the defendant, which would trigger the presumption of insolvency. The legal issues included the validity of the proof of service of the statutory demand, the requirement for such proof, and whether the evidence provided by the plaintiff was sufficient to establish service by post. The court also considered whether the hearsay evidence provided was adequate to substantiate the claim of proper service.

The court found that the plaintiff's evidence was insufficient to prove service of the statutory demand. The plaintiff's only evidence was a statement that the document "was forwarded by mail to the defendant", which was deemed inadmissible hearsay. There was no evidence of the acts necessary to substantiate service, such as the existence, addressing, stamping, or deposit of the envelope into the post. Consequently, the court could not find that the statutory demand had been validly served, and the presumption of insolvency did not arise. The court dismissed the plaintiff's application for a winding up order.

The court also granted the defendant's cross-application for a declaration that the statutory demand had not been served, as the plaintiff had failed to meet the required standard of proof. This decision underscores the importance of providing robust evidence to substantiate claims of service, particularly in the context of statutory demands and insolvency proceedings.

Orders