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Createc Pty Ltd v Design Signs Pty Ltd

Createc Pty Ltd v Design Signs Pty Ltd

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Case Copied 12 May 2009 29 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: CREATEC PTY LTD -v- DESIGN SIGNS PTY LTD [2009] WASCA 85

CORAM: MARTIN CJ
OWEN JA
MILLER JA

HEARD: 16 FEBRUARY 2009

DELIVERED : 12 MAY 2009

FILE NO/S: CACV 53 of 2008

BETWEEN: CREATEC PTY LTD (ACN 094 263 537)
Appellant
AND
DESIGN SIGNS PTY LTD (ACN 084 384 798)
Respondent

ON APPEAL FROM:
For File No              :  CACV 53 of 2008
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :DESIGN SIGNS PTY LTD -v- CREATEC PTY LTD [2008] WASC 94
File No  :COR 28 of 2008

Catchwords:

Corporations law - Statutory demand - Application to set aside statutory demand - Genuine dispute - Test to be applied to determine if there is a genuine dispute - Function of the court in respect of determining whether there is a genuine dispute - Abuse of process - Court's residual jurisdiction to restrain reliance on statutory demand procedure on the ground of abuse of process - Criteria for determining if there has been an abuse of process - Turns on its own facts

Costs - Indemnity costs

Legislation:

Corporations Act 2001 (Cth), s 459H
Sale of Goods Act 1895 (WA), s 28
Trade Practices Act 1974 (Cth), s 52, s 53

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr J P Cook
Respondent: Mr K G Robson

Solicitors:

Appellant: Mendelawitz Morton
Respondent: HFM Legal

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

David Grant & Co Pty Ltd v Westpac Banking Corp [1995] HCA 43; (1995) 184 CLR 265
Drewniak v Air Rubber Pty Ltd [2002] SASC 319; (2002) 84 SASR 302
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 21 ACSR 527
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290
Old Kiama Wharf Co Pty Ltd v Deputy Commissioner of Taxation [2005] NSWSC 929; (2005) 55 ACSR 223
Polaroid Australia Pty Ltd v Minicomp Pty Ltd (1998) 16 ACLC 529
Roberts v Wayne Roberts Concrete Constructions Pty Ltd [2004] NSWSC 734; (2004) 50 ACSR 204
SMEC International Pty Ltd v CEMS Engineering Inc [2001] NSWSC 459; (2001) 38 ACSR 595
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452; (1997) 15 ACLC 1001
State Bank of New South Wales v Tela Pty Ltd (No 2) [2002] NSWSC 20
Turner Corp (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294
Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509

MARTIN CJ:

Summary

The appellant, Createc Pty Ltd (Createc) appeals from the decision of the master setting aside a statutory demand served by Createc on Design Signs Pty Ltd (Design Signs) pursuant to the provisions of the Corporations Act 2001 (Cth). The appeal is hopeless and should never have been brought. The evidence before 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: [2009] WASCA 85
Decision Date: 12 MAY 2009

CaseChat Overview and Summary

Createc Pty Ltd sought to set aside a statutory demand issued by Design Signs Pty Ltd, which claimed payment of a debt. The matter was heard in the Supreme Court of New South Wales. The central issue before the court was whether there existed a genuine dispute concerning the debt claimed, and if not, whether there had been an abuse of process justifying the setting aside of the statutory demand. The court also needed to determine the appropriate costs order.

The court held that the test for determining whether a genuine dispute exists involves considering the merits of the dispute, not just the formal validity of the demand. The function of the court is to assess the substance of the dispute to ensure it is not a sham. The court noted that the statutory demand procedure is not to be abused, and the threshold for showing abuse of process is high. The criteria for abuse of process include improper use of the statutory demand procedure, which the court found was not met in this instance. The court also examined whether the demand was made in bad faith or for an improper purpose, which it did not find to be the case.

In this instance, the court found that there was a genuine dispute concerning the debt claimed, and therefore, the statutory demand was not to be set aside. The appeal by Createc Pty Ltd was dismissed, and the court ordered that indemnity costs be paid by Createc Pty Ltd to Design Signs Pty Ltd. The court's decision highlighted that while the statutory demand process is a useful tool, it must be used appropriately, and the courts retain a residual jurisdiction to prevent its abuse.

Orders

Orders of the court

Appeal dismissed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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