Crema Pty Ltd v Land Mark Property Developments Pty Ltd

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 6250 of 2006

CREMA (VIC) PTY LTD (ACN 005 668 011)	Plaintiff
v
LAND MARK PROPERTY DEVELOPMENTS (VIC) PTY LTD (ACN 097 107 250)	Defendant

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JUDGE:	DODDS-STREETON J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 August 2006
DATE OF JUDGMENT:	15 September 2006
CASE MAY BE CITED AS:	Land Mark Property Development Pty Ltd
MEDIUM NEUTRAL CITATION:	[2006] VSC 338

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Corporations – Insolvency – Application to wind up company in insolvency – Non-compliance with statutory demand – No application made to set aside statutory demand – Whether statutory demand a nullity because specified debt not due and payable – Statutory demand not signed by creditor or its solicitor and failure to attach or explain the invoices referred to – Whether s 459S of the Corporations Act 2001 (Cth) applied – Whether supporting creditor’s debt due and payable – Whether company discharged onus of demonstrating solvency – Whether Court should exercise its discretion to adjourn hearing to permit company to refinance.

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APPEARANCES:	Counsel	Solicitors
Plaintiff/ Respondent	Mr A. Kirby	Comlaw
Defendant/ Appellants	Mr J.I. Fajgenbaum QC Mr H.A. Aizen Mr K. Baker	Paul Egan & Associates
The Supporting Creditor	Mr P.G. Cawthorn	Gadens Lawyers

TABLE OF CONTENTS

THE APPEAL...................................................................................................................................... 2

SUMMARY OF FACTS AND EVIDENCE................................................................................... 3

THE LEGISLATION....................................................................................................................... 14

THE APPELLANTS’ ARGUMENTS............................................................................................ 18

WHETHER STATUTORY DEMAND A NULLITY.................................................................. 19

SOLVENCY....................................................................................................................................... 31

DISCRETION NOT TO MAKE WINDING UP ORDER........................................................ 39

CONCLUSION................................................................................................................................. 40

HER HONOUR:

THE APPEAL

1. By Notice of Appeal filed 23 August 2006, the appellants, Land Mark Property Developments (Vic) Pty Ltd (“Land Mark”) and its director, Mr John Grezos, appeal pursuant to Rule 77.05(1) of the Supreme Court Rules against the order of Master Efthim made 2 August 2006 that:

1.the company should be wound up in insolvency under the Corporations Act;

2.Paul Vastelas of BK Taylor & Co, an official liquidator, be appointed the liquidator of the company;

3.the plaintiffs and the supporting creditors’ costs including reserved costs, be taxed and reimbursed out of the property of the company in accordance with 446(2) of the Corporations Act.

4.Orders 1, 2 and 3 of the Order be stayed until 4.00pm on Friday, 25 August 2006 or until further order.

1. The plaintiff below and the respondent to the appeal is Crema (Vic) Pty Ltd (“Crema”), a building company, which applied to wind Land Mark up on the basis of its non‑compliance with a statutory demand.  The application to wind the company up is supported by a supporting creditor, the Public Trustee of Queensland as custodian for City Pacific Limited.

1. By Rule 77.05(7) of the Supreme Court Rules, an appeal from a Master is by way of a rehearing de novo and by Rule 77.05(7)(a), each party may, subject to objection, rely on the affidavits and evidence used or given before the Master.

1. The principal affidavits relied on by Land Mark before the Master are:

1.The first affidavit of John Grezos sworn…