Business Structures Pty Ltd v D'Amico - [2012] VSC 146

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST

S CI 2012 01000

BUSINESS STRUCTURES PTY LTD (ACN 090 706 540)	Plaintiff
v
GIUSEPPE D'AMICO (trading as D'Amico Steel Works)	Defendant

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 April 2012
DATE OF JUDGMENT:	20 April 2012
CASE MAY BE CITED AS:	Business Structures Pty Ltd v D'Amico
MEDIUM NEUTRAL CITATION:	[2012] VSC 146	Revised 26 April 2012

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CORPORATIONS – External administration – Application to set aside statutory demand – Demand claimed sums in excess of judgment the subject of the demand and was not accompanied by affidavit required under Section 459E(3) – Demand set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Fried (Solicitor)	The Law Offices of Barry Fried
For the Defendant	Mr M Sanger	Hassell’s Litigation Service

HIS HONOUR:

The plaintiff makes application by an originating process filed 24 February 2012 to set aside a statutory demand dated 2 February 2012. The demand was served on the plaintiff by the defendant on 6 February 2012.

The schedule to the demand states as follows:

Schedule

Description of the Debt

Amount of the Debt

Judgment registered in the Magistrates’ Court of Victoria at Moorabbin in Case No. B11896191 on 11 July 2011 in respect to VCAT Tribunal Case No. D84/2010 orders made 13 May 2011.

$34,618.65

Interest from 14 May 2011 to 2 February 2012 and being 264 days at statutory prescribed rate of 10.5% per annum

$2,629.12

$37,247.77

The demand was not accompanied by an affidavit verifying it pursuant to s 459E(3) of the Corporations Act2001.

In associated proceedings, the plaintiff, by an originating motion, sought judicial review of the VCAT order described in the schedule. However, on 18 April 2012, Randall AsJ dismissed the plaintiff’s application for an extension of time to commence those proceedings.

Because of that dismissal, the VCAT order, which was filed in the Magistrates’ Court pursuant to s 121 of the Victorian Civil and Administrative Tribunal Act 1998 on 11 July 2011, is enforceable as a monetary order and there can be no genuine dispute that it is due and payable.[1]
[1]Farid Assaf, Statutory Demands Law and Practice (1^st ed, 2008), [5.24] and the cases cited at footnote 114.

There remains an issue arising from the fact that the defendant, as can been seen from the schedule extracted above, has claimed interest from 14 May 2011 (the day after VCAT made the order) to 2 February 2012 (the day that the statutory demand was issued). The plaintiff accepts that the order made by VCAT on 13 May 2011 is enforceable as a monetary order by reason that the defendant has complied with s 121 of the VCAT Act and that, had the defendant issued a statutory demand for that amount alone, it would not have been required to verify it by an accompanying affidavit under s 459E(3) of the Corporations Act 2001 (Cth) (“the Act”). However, 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.

Continue reading Business Structures Pty Ltd v D'Amico

Details

AGLC: Business Structures Pty Ltd v D'Amico [2012] VSC 146
Case: [2012] VSC 146
Decision Date: 20 April 2012

CaseChat Overview and Summary

In the case of Business Structures Pty Ltd v D'Amico, the dispute arose from an application to set aside a statutory demand. Business Structures Pty Ltd sought to have a statutory demand set aside, arguing that the demand was invalid. The demand was issued by D'Amico, claiming sums that exceeded the judgment which formed the basis of the demand. Furthermore, the demand was not accompanied by an affidavit as required by section 459E(3) of the Corporations Act 2001 (Cth). The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue before the court was whether the statutory demand was validly issued. This hinged on two aspects: whether the sums claimed in the demand exceeded the judgment on which it was based, and whether the demand was accompanied by the necessary affidavit. The court was required to interpret section 459E(3) of the Corporations Act and assess the validity of the statutory demand in light of these provisions. The court also needed to consider the implications of any invalidity on the proceedings.

In delivering its judgment, the court found that the statutory demand was indeed invalid. The demand claimed sums that exceeded the judgment upon which it was based, rendering it void under the Corporations Act. Additionally, the demand was not accompanied by the required affidavit, further invalidating it. The court noted that the statutory demand must comply strictly with the legislative requirements to be valid. Given these findings, the court set aside the statutory demand. The court's decision emphasised the importance of adhering to statutory requirements when issuing statutory demands.

As a result of the court's decision, the statutory demand issued by D'Amico was set aside. This ruling had significant implications for the proceedings, effectively nullifying the demand and preventing it from being used as a basis for further legal action. The court's decision underscored the necessity for strict compliance with statutory provisions when issuing statutory demands, highlighting the consequences of non-compliance.

Orders