Cremona Bros Pty Ltd v Chris Antico Pty Ltd

[2009] NSWSC 390

CITATION:	Cremona Bros Pty Ltd v Chris Antico Pty Ltd [2009] NSWSC 390 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	08/05/2009
JUDGMENT DATE :	8 May 2009
JURISDICTION:	Equity
JUDGMENT OF:	Bryson AJ
DECISION:	(1) Order that the creditor's statutory demand for payment of an asserted debt of Cremona Bros Pty Ltd to Chris Antico Pty Ltd dated 4 September 2008 and served on 9 September 2008 be set aside. (2) Order that the defendant pay the plaintiff's costs of these proceedings. Costs are to be assessed on the indemnity basis.
CATCHWORDS:	CORPORATIONS – winding up – Statutory Demand – Demand of 98 pages made demand with different amount and supporting information to that put forward in earlier communications between parties – extreme complexity and ordinary accounting practices not followed – creditor’s evidence conceded some excesses and if brought forward further claims said to show Demand was too low – found, the Demand was prepared for calculated purpose of swamping the recipient with information that could not be well dealt with in the time available, was an abuse of the statutory process and grossly unfair – Statutory Demand set aside
PARTIES:	Cremona Bros Pty Ltd (Plaintiff) Chris Antico Pty Ltd (Defendant
FILE NUMBER(S):	SC 4995/08
COUNSEL:	D.J. Jarrett (Plaintiff) A. Tsekouras (Defendant
SOLICITORS:	Nemes Thomas (Plaintiff) Abadee Dresdner & Freeman (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

FRIDAY 8 MAY 2009

4995/08 - CREMONA BROS PTY LTD v CHRIS ANTICO PTY LTD

JUDGMENT

1 HIS HONOUR: The plaintiff seeks an order setting aside a creditor's statutory demand served on it on behalf of the defendant on 9 September 2008. The statutory demand, which I am told contains 98 pages, contains an extremely complex narration, not in accordance with ordinary accounting practices, which is said to show that $144,497.62 was due from the plaintiff to the defendant upon a complete accounting for a very great number of transactions which had involved mutual debts from dealings between the parties, many purchases, credits, contras and other arrangements.

2 The statutory demand purports to explain the amount owing but the explanation is extremely complex and could not be followed without recourse to many papers, long consideration and probably further communication.

3 Before the statutory demand there had been communication between the parties about what sum was due upon a true accounting. Those communications too did not follow ordinary accounting practices and they are expressed in documents which cannot be readily comprehended. Whatever those communications did, they did not pursue matters to a point where before the statutory demand was served, the defendant asserted that the sum of $144,497.62 was owing, or gave any explanation supporting that amount.

4 Mr. Cremona on behalf of the plaintiff asserts, not unreasonably, that without the invoices on which the defendant relies, he was not in a position to evaluate and conclude what parts of the demand were justified. He takes the position that none of it is, although there is no detailed exposition of the basis for this.

5 After the statutory demand was served, Mr. Cremona, through his solicitor, asked for invoices and was provided with about 328 pages and as he said in the affidavit he made within the period available for compliance with the statutory demand or application to set it aside, he had not yet had the opportunity to fully analyse the invoices or check the invoices against records. It sufficiently appears from the plaintiff's evidence, in particular Mr Cremona's affidavit of 30 September 2008 that the defendant's claim in the statutory demand is disputed in details which it would be difficult to identify or state within the time available.

6 The statutory demand is a document of studied complexity, as is illustrated by the 13 explanatory notes which follow the lengthy calculation sheet leading to the asserted debt of $144,497.62. The documents accompanying the statutory demand include Statements of 17 pages dated 3 September 2008 which had not been delivered to the plaintiff in the course of the earlier exchanges.

7 There is a further mass of what may be supporting documents. It would be a lengthy accounting exercise to ascertain whether they are what they purport to be and whether they produce the asserted result.

8 In my opinion it is to be inferred from the terms of the statutory demand itself that it has been prepared with a calculated purpose of swamping the recipient with information which cannot be well grasped or dealt with within the time available, an abuse of the opportunity offered by the statute to serve a statutory demand. It would be grossly unfair to allow it to go any further.

9 I am satisfied from the course of events before the statutory demand was made and from the evidence tendered on behalf of the plaintiff that the plaintiff takes a reasonable position in asserting that it disputes the end result.

10 The parties are in a dispute which obviously cannot be fairly dealt with by a statutory demand or under the processes available to deal with one. I am unable to understand why if such a comprehensive explanation of the defendant's final position was appropriate, the explanation was not delivered before the statutory procedure was invoked. Indeed, it is clear from the affidavit material read on behalf of the defendant that there were errors in the calculations proffered. The defendant's evidence suggests that there were errors both ways and that the correct debt is higher than that in the demand. A clearer demonstration that it ought to be set aside would be difficult to devise.

11 Orders:

(1) The creditor's statutory demand for payment of an asserted debt of Cremona Bros Pty Ltd to Chris Antico Pty Ltd dated 4 September 2008 and served on 9 September 2008 be set aside.

(2) The defendant pay the plaintiff's costs of these proceedings. Costs are to be assessed on the indemnity basis.

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13/05/2009 - Lower Court - Not applicable in catchwords - Paragraph(s) none