Central City Pty Ltd v Montevento Holdings Pty Ltd - [2010] WASC 133

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CENTRAL CITY PTY LTD -v- MONTEVENTO HOLDINGS PTY LTD [2010] WASC 133

CORAM: MASTER SANDERSON

HEARD: 11 MARCH & 22 APRIL 2010

DELIVERED : 11 JUNE 2010

FILE NO/S: COR 46 of 2009

BETWEEN: CENTRAL CITY PTY LTD
Plaintiff
AND
MONTEVENTO HOLDINGS PTY LTD
Defendant

Catchwords:

Corporations law - Application to set aside statutory demand - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr C M Slater
Defendant: Ms K A Vernon

Solicitors:

Plaintiff: Oldfield Legal
Defendant: Butcher Paull & Calder

Case(s) referred to in judgment(s):

Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
Maria Scaffidi (by her next friend The Public Trustee) v Scaffidi Holdings Pty Ltd [2010] WASC 29

MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The first affidavit in support of the application was sworn by Giuseppe Diego Scaffidi on 12 March 2009. Appearing as annexure GDS1 to that affidavit is a copy of the statutory demand. The amount demanded is $1,439,010. Attached to the demand is an affidavit sworn 20 February 2009 by of Mr Eugenio Scaffidi who is the director of the defendant and the brother of Mr Giuseppe Scaffidi. In his affidavit Mr Eugenio Scaffidi explains that on or about 19 March 2005 the defendant lent to the plaintiff the sum of $1,800,000. There has been repayment of part of that sum but according to Mr Eugenio Scaffidi the amount of the demand remains outstanding.
There is nothing in the affidavit which suggests the original loan was evidenced in writing. Nor is there any reference to any terms as to repayment of the loan either written or oral. However, Mr Eugenio Scaffidi's affidavit does say that the defendant is trustee of the Scaffidi Family Trust. He also says that at the time the loan was made it was made by Scaffidi Holdings Pty Ltd which at that stage was the trustee of the Scaffidi Family Trust He also annexes to his affidavit a copy of the Scaffidi Trust Financial Statements for the years ended 30 June 2006 and 30 June 2007. In these financial statements the amount of the demand is shown as being due and payable by the debtor to the creditor.
In his affidavit Mr Giuseppe Scaffidi offers three reasons why the amount demanded is not payable. First, he says the defendant is not in fact the trustee of the Scaffidi Family Trust. He alleges the defendant was not properly appointed as trustee. Second, he says the money advanced by the Scaffidi Family Trust to the defendant was not a loan but was an equity contribution. He says pursuant to the terms upon which the equity contribution was made there is presently no obligation on the plaintiff to repay the Scaffidi Family Trust. Thirdly, he says there are defects in the demand which should lead to the demand being set aside.
It is convenient to deal first with the second of these complaints. Mr Giuseppe Scaffidi deals with this issue at pars 22 ‑ 24 of his affidavit. He says first the noting of the payment in the records of the Scaffidi Family Trust as a receivable asset is an 'incorrect characterisation'. He says it was an equity contribution. In par 24 he explains the position as follows:
24.The agreement between the relevant parties (being Lisa Scaffidi, Scaffidi Holdings as Trustee for the Family Trust and Central City) regarding monies advanced to Central City was as follows:
24.1Lisa Scaffidi would obtain a personal loan secured over her property at 32 Henry Lawson Walk in the sum of $1.725 million;
24.2Lisa Scaffidi would lend this amount to Scaffidi Holdings as Trustee for the Scaffidi Family Trust to enable Scaffidi Holdings to make an equity contribution as a member and shareholder of Central City;
24.3Scaffidi Holdings as Trustee for the Scaffidi Family Trust would make an equity contribution to Central City in the sum of approximately $1,800,000 to be repaid upon the realisation of the entire project or through the sale of the Trust's shares ('the Equity Contribution Agreement');
24.4The Equity Contribution Agreement was an oral agreement; and
24.5The entire project has not been realised nor have the Trust's shares been sold.
In response to Mr Giuseppe Scaffidi's affidavit the defendant filed an affidavit of Cornelius Jan Van Maanen sworn 1 April 2009. Mr Van Maanen identifies himself as the accountant for the Scaffidi Family Trust and says he has acted in that position since the trust's establishment. He then deals with elements of the equity contribution agreement. In particular he says he was not aware of any such agreement. He says he prepared financial statements for Scaffidi Holdings Pty Ltd for the year ended June 2005 and for Scaffidi Family Trust for the years ended June 2006 and June 2007. When these accounts were prepared Scaffidi Holdings Pty Ltd was trustee of the Scaffidi Family Trust. The directors of Scaffidi Holdings Pty Ltd were Giuseppe and Eugenio Scaffidi. In all of these accounts the sum of $1,433,010 is showing as a debt owed by the plaintiff to Scaffidi Holdings Pty Ltd as trustee of the Scaffidi Family Trust. The accounts have been signed off by both Mr Giuseppe Scaffidi and Mr Eugenio Scaffidi. In other words these accounts signed as they are by Mr Giuseppe Scaffidi are directly at odds with what Mr Giuseppe Scaffidi says in his affidavit was the equity contribution agreement.
Clearly this all calls for an explanation.
On 9 February 2010 Mr Giuseppe Scaffidi swore a further affidavit. He explains that for some years Scaffidi Holdings Pty Ltd was the owner of a property known as the Railway Hotel site in Barrack Street. Mr Giuseppe Scaffidi and his father intended to develop a hotel on the site. However the site was not large enough and it was necessary to acquire adjoining parcels of land on Barrack Street. This was done and the project was known as Barrack Plaza. Eventually the plaintiff became the registered proprietor of all the land on which the Barrack Plaza development was to be constructed.
Mr Giuseppe Scaffidi then goes on to explain how finance for the development was provided. At par 27 of this affidavit he detailed how a loan of $1.5 million was provided by the Scaffidi Family Trust to the plaintiff. There is no mention anywhere in the affidavit of the equity contribution agreement. In fact what the affidavit does is detail a loan agreement. Implicitly, but not explicitly, Mr Giuseppe Scaffidi is conceding there was no equity contribution agreement.
It is axiomatic that a deponent to an affidavit must tell the truth. By signing the jurat he swears that he has done so. From time to time errors occur. A deponent has an obligation to correct those errors and in my view an obligation to explain how and why the error occurred. In this case there has been no such explanation. The result is the destruction of the deponent's credibility. Even without the benefit of cross‑examination I can say I am not prepared to accept the evidence of Mr Giuseppe Scaffidi in these circumstances.
In his second affidavit Mr Giuseppe Scaffidi goes on to explain how the debt now characterised as a loan is not due and payable. He gives evidence of an oral agreement that the loan will not be repayable until the project is completed. That evidence is at odds with both the evidence of Mr Van Maanen and the accounts which Mr Giuseppe Scaffidi signed. It should be rejected. I am satisfied there was no equity contribution agreement and there is no term of any loan agreement which would preclude it being recovered by the plaintiff.
There remains then two grounds upon which it is said the statutory demand ought be set aside. Each can be disposed of in short order. There is no question but that the defendant is the trustee of the Scaffidi Family Trust. That question has already been determined in proceedings in this court. In Maria Scaffidi (by her next friend The Public Trustee) v Scaffidi Holdings Pty Ltd [2010] WASC 29, EM Heenan J determined a number of issues. His Honour set these issues out in this way:
There are two originating summonses before the court seeking relief concerning the control and administration of what is known as the Scaffidi Family Trust. The first in time is CIV 1450 of 2009, which is instituted by the Public Trustee as the next friend of Mrs Maria Scaffidi. The first defendant is Scaffidi Holdings Pty Ltd, a one-time trustee of the Scaffidi Family Trust. The second defendant is Mr Giuseppe Diego Scaffidi, one of the sons of Mrs Maria Scaffidi and a director of Scaffidi Holdings Pty Ltd. The third defendant is his brother Mr Eugenio Scaffidi, a co‑director of Scaffidi Holdings Pty Ltd. The fourth defendant is a company, Montevento Holdings Pty Ltd, of which Mr Eugenio Scaffidi is the sole director and shareholder.
In those proceedings the Public Trustee on behalf of Mrs Maria Scaffidi is seeking orders that the Public Trustee on behalf of Mrs Maria Scaffidi should be appointed as trustee of the Scaffidi Family Trust in lieu of whomever is the current trustee. It had been envisaged that there was some doubt as to whether the current trustee is Scaffidi Holdings Pty Ltd or Montevento Holdings Pty Ltd, which claims to be the current trustee. For reasons which I will address a little later, the Public Trustee does not now wish to proceed with that application.
The second proceeding is CIV 1487 of 2009 in which Montevento Holdings Pty Ltd is the plaintiff, asserting its rights as the present trustee of the Scaffidi Family Trust. The first defendant is the alleged former trustee, Scaffidi Holdings Pty Ltd. The second defendant is Mr Giuseppe Diego Scaffidi. The third defendant is Mrs Maria Scaffidi by her guardian ad litem, the Public Trustee [1] ‑ [3].
His Honour then dealt in some detail with the history of the Scaffidi Family Trust and its various trustees. He also dealt with the assets of the trust - what the trust presently held and how it was acquired. His Honour then said:
Essentially, he [Giuseppe Scaffidi] is opposed to Montevento Holdings Pty Ltd acting as the trustee of the family trust. Initially, his position was that he sought to oppose Montevento Holdings Pty Ltd being appointed to that position, but that stance did not recognise the efficacy of the appointments by deed which I have already described. When it was pointed out that those documents established, at least at a prima facie level, that Montevento Holdings Pty Ltd was the duly appointed trustee and that his brother, Mr Eugenio Scaffidi, was now the appointor, his position altered to indicate that he foreshadowed an application in which he desired to challenge the effectiveness and the suitability of the appointment of Montevento Holdings Pty Ltd to that position. There is no evidence to support any of these allegations but the contention effectively was that the disability which led to Mrs Maria Scaffidi having the Public Trustee appointed to represent her interests in November 2008 was also present and operative at the time when she appointed his brother as appointor and when his brother removed Scaffidi Holdings Pty Ltd and appointed Montevento Holdings Pty Ltd as the trustee by deed of 18 February 2009.
I hasten to add that there is no evidence to support that allegation and the Public Trustee, who initially sought the removal of Montevento Holdings Pty Ltd on behalf of Mrs Maria Scaffidi, expressly did not adopt that contention or submission and, on its counsel being directly asked this question, indicated that the considered decision of the Public Trustee was that there were no grounds to challenge the validity of the appointment of Montevento Holdings Pty Ltd [31] ‑ [32].
That then is the end of the matter. His Honour's decision was delivered on 13 January 2010 with written reasons being provided on 18 February 2010. I would accept then when Mr Giuseppe Scaffidi swore his first affidavit on 12 March 2009 there was still an issue as to whether the defendant was the trustee of the Scaffidi Family Trust. But by the time of Mr Giuseppe Scaffidi's second affidavit on 9 February 2010 that had ceased to be an issue - albeit his Honour's written reasons had not then been published. It is perhaps forgivable no mention was made by Mr Giuseppe Scaffidi in his second affidavit of his Honour's decision. But it is, and remains a mystery, as to why counsel presumably congnisant of his Honour's decision would have run this argument. There can surely be no question of a genuine dispute when there has been judicial determination of the question and no appeal.
Finally, there is the allegation the demand is in some way defective. As I understand the argument it is said the amount in the demand is inconsistent with the correspondence annexed to the supporting affidavit which shows a different amount. This is said constitutes 'some other reason' why the demand ought be set aside under s 459J(1)(b) of the Corporations Act 2001 (Cth). With respect there is no substance in that argument. The correct amount is stated in the demand and the plaintiff could be under no illusion as to what the defendant says was owing. This provides no basis for setting the demand aside.
Subsequent to the filing of the application to set aside the demand and the initial affidavit in support of that application the plaintiff purported to raise an argument there was an off‑setting claim. In Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 Sundberg J made it plain any argument to support a plaintiff's position must be put in the initial affidavit in support of the application. It is not open to a plaintiff to raise the matter in a subsequent affidavit. That is what has been done here. It is impermissible. Any alleged off‑setting claim cannot be the basis of setting aside this statutory demand.
The plaintiff's application ought be dismissed. I will hear the parties as to costs.