Dasford Holdings Pty Ltd v O'Connor
[1999] WASC 239
•22 NOVEMBER 1999
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: DASFORD HOLDINGS PTY LTD -v- O'CONNOR & ANOR [1999] WASC 239
CORAM: MASTER SANDERSON
HEARD: 22 NOVEMBER 1999
DELIVERED : 22 NOVEMBER 1999
FILE NO/S: COR 268 of 1999
MATTER :Section 459G of the Corporations Law of Western Australia
BETWEEN: DASFORD HOLDINGS PTY LTD
Applicant
AND
BRIAN VINCENT O'CONNOR
COLLEEN JOYCE O'CONNOR
Respondents
Catchwords:
Corporations law - Application to set aside a statutory demand - Claim of lack of authority in agent issuing demand - Whether money owing to respondents - Turns on its own facts
Legislation:
Corporations Law, s 459G
Result:
Application dismissed
Representation:
Counsel:
Applicant: Mr D M Meagher
Respondents : Mr N D Paterson
Solicitors:
Applicant: Meagher & Co
Respondents : Birman & Ride
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
MASTER SANDERSON: I am not convinced the statutory demand in this case ought be set aside and I have reached that conclusion for the following reasons. The statutory demand itself, which is annexed to the affidavit of the Thurston Saulsman sworn 22 September 1999 is dated 23 August 1999. The demand itself seeks repayment of what is described as principal loaned under a mortgage document of $25,000, together with five interest payments totalling $1458.35.
It is apparent from the papers supporting the application that what occurred was that a mortgage broking firm of Blackburne and Dixon Pty Ltd arranged with a group of lenders to advance to the applicant a sum of just over $1,000,000. That sum was advanced by a number of people as specified on page 2 of the mortgage which is to be found on page 11 of Mr Saulsman's affidavit. The amount advanced by the present respondents was $25,000.
A notice of default was issued under the mortgage on 30 April 1999. That notice of default is in the names of all of the mortgagors and demands repayment of all moneys lent to the applicant. By the statutory demand the respondents sought only repayment of the amount of money that they had advanced which was in turn combined with money advanced by others and loaned to the applicant.
The applicant raises two principal objections to the statutory demand which, it is said, give rise to a genuine dispute. First, the validity of the demand is challenged. It is submitted that the evidence doesn't disclose that Blackburne and Dixon had the authority of the lenders to issue the statutory demand.
First it is said that there is no evidence before the Court that authority was given to Blackburne and Dixon to issue demand and, second, it is said that as a mortgage broker the power to issue a statutory demand doesn't fall within the ostensible authority of the firm.
The position with respect to the actual authority to issue a demand is somewhat unclear. There is an affidavit of Mr O'Brien sworn 13 October in opposition to the application. Mr O'Brien sets out the form of document which was sent to the respondents which contained authority to do certain things in relation to the mortgage. However, the copy of the document which appears as Annexure "KO1" isn't signed by the respondents.
However, it would seem to me that the way in which the arrangement was structured with Blackburne and Dixon suggests and suggests very strongly that the O'Connors gave Blackburne and Dixon the authority to manage the mortgage on their behalf. Indeed the very nature of the mortgage suggests that it couldn't be otherwise.
In my view the evidence establishes the actual authority in Blackburne and Dixon to act on behalf of the O'Connors, the respondents, with respect to this mortgage and I am not satisfied that there is a genuine dispute on that issue. The further question is what entitlement the O'Connors might have in relation to the principal sum. This is a question which is not without its difficulties and the difficulties arise by the very nature of the mortgage which was obtained.
As I have indicated, a group of people came together and lent a sum of money to the applicant. The applicant had an obligation to comply with the terms of the mortgage and in the face of the notice of default had an obligation to repay the principal.
In my view there was no obligation to repay each of the lenders a specified sum of money. However, once demand is made each of the lenders is entitled, in my view, to seek repayment of the whole of the principal sum. If one of the lenders was paid the whole of the principal sum, then that individual would be liable to account to other members of the syndicate for the amount that he or she had received. That I think is a consequence of the way the mortgage is structured. But be that as it may, all that does is to allow each individual member of the syndicate to make a statutory demand for the whole of the sum which they would be entitled to receive on repayment of the mortgage.
The fact that the respondents have chosen only to demand the amount they advanced does not in any way affect the validity of the statutory demand. A statutory demand which overstates the amount that the parties owed may be subject to amendment and may for various other reasons fail as an effective statutory demand. But, as I understand it, there is no authority for the proposition that a statutory demand that seeks less than the entitlement is bad.
In all the circumstances I am satisfied that the amount demanded is owing, or perhaps put more correctly, that there is no genuine dispute as to the amount of the statutory demand or the entitlement of the respondents to receive that amount. In all the circumstances I am not satisfied that the requirements of s 459G have been satisfied and I would dismiss the application.
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