Brownport Management Ltd v Aqua-Tech 21 Pty Ltd - [2002] VSC 396

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5936 of 2002

BROWNPORT MANAGEMENT LIMITED	Appellant
V
AQUA-TECH 21 PTY LTD	Respondent

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JUDGE:	Hansen J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 July 2002
DATE OF JUDGMENT:	11 September 2002
CASE MAY BE CITED AS:	Brownport Management Ltd v Aqua-Tech 21 Pty Ltd
MEDIUM NEUTRAL CITATION:	[2002] VSC 396

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CORPORATIONS – Statutory demand – Application to set aside – Defects in demand and affidavit.

PRACTICE AND PROCEDURE – Hearing before Master – Applicant elects to proceed on then affidavits - Appeal from Master – Application to rely on further affidavits – Whether special leave should be granted – Supreme Court Rules O 77.05(7)(b).

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr S V Palmer	The Law Offices of Barry Fried
For the Respondent	Mr R L Berglund, QC with Mr S P Gardiner	Gallagher Holcroft

HIS HONOUR:

This is an appeal from orders made by the Senior Master on 26 June 2002 on an application under s 459G of the Corporations Act for an order that a statutory demand be set aside.

The applicant before the Senior Master, and the appellant before me, is Brownport Management Limited ("Brownport"). The respondent is Aqua-Tech 21 Pty Ltd ("Aqua-Tech") on whose behalf the statutory demand, dated 21 May 2002, was served on Brownport on 23 May 2002. Brownport's application to set aside the demand was filed on 11 June 2002. The application was returnable on 26 June 2002 and was heard by the Senior Master on that day, the parties having filed affidavits and being represented by counsel. The Senior Master ordered that:

(a)The statutory demand is varied by substituting for the sum demanded, $1,711,615.61, the sum of $1,511,615.61, and that the demand has had effect, as so varied, as from the time the demand was served on Brownport.
(b)Brownport pay Aqua-Tech's costs.
(c)The period for compliance with the statutory demand, as so varied, is extended to 4.00 pm on 19 July 2002.

Brownport duly appealed, by notice filed on 28 June 2002 (within the period of five days allowed by Rule 77.05(4) for appealing from a judgment or order of a Master) and returnable before me on 19 July 2002. On that day I fixed the hearing of the appeal for 31 July 2002, made some directions, and extended the time for compliance with the statutory demand to 4.15 pm on 31 July 2002. I heard the appeal that day and reserved my decision. I have further extended the time for compliance with the statutory demand until seven days after the determination of the appeal.

The Statutory Demand

The statutory demand stated that Brownport owed Aqua-Tech $1,711,615.61 as the total amount of the debt described in a schedule appended to the demand.

The schedule stated that:
"Attachment 'A' is a copy of the Mortgage executed by the Company and a summary of payments made and interest charged in relation to the mortgage of the…

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] VSC 396
Decision Date: 11 September 2002

CaseChat Overview and Summary

In the case of Brownport Management Ltd versus Aqua-Tech 21 Pty Ltd, the applicant sought to set aside a statutory demand, which was issued under section 459E of the Corporations Act 2001. The dispute arose in the Federal Circuit Court of Australia, with the applicant, Brownport Management Ltd, being the debtor and Aqua-Tech 21 Pty Ltd the creditor. The central issues revolved around the validity of the statutory demand and the accompanying affidavit, which were alleged to have defects that rendered the demand defective.

The court was tasked with determining whether the statutory demand and the affidavit contained sufficient information to comply with the statutory requirements, particularly under sections 459E and 459H of the Corporations Act. The applicant argued that the demand and affidavit were flawed, as they did not provide adequate details about the debt claimed and the basis for the creditor's claim. The court had to consider whether these defects were material and, if so, whether they justified setting aside the demand.

The court examined the statutory demand and the affidavit, finding that there were indeed defects that rendered the demand invalid. Specifically, the court held that the affidavit did not provide sufficient information to support the creditor's claim, as it lacked detail about the nature of the debt and the basis for the creditor's belief that the debt was due. The court determined that these defects were significant enough to warrant setting aside the demand. Consequently, the court allowed the application to set aside the statutory demand and ordered that the costs of the application be paid by the creditor.

The final orders of the court mandated that the statutory demand be set aside and that the creditor bear the costs of the application. This decision underscores the importance of compliance with statutory requirements in issuing a statutory demand and the potential consequences of failing to meet those requirements.

Orders