Entech-Renewable Energy Solutions Pty Ltd v POLYTEK-WEARNES Engineering Sdn BHD - [2010] WASC 354

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ENTECH-RENEWABLE ENERGY SOLUTIONS PTY LTD -v- POLYTEK-WEARNES ENGINEERING SDN BHD [2010] WASC 354

CORAM: MASTER SANDERSON

HEARD: 1 NOVEMBER 2010

DELIVERED : 30 NOVEMBER 2010

FILE NO/S: COR 122 of 2010

BETWEEN: ENTECH-RENEWABLE ENERGY SOLUTIONS PTY LTD
Plaintiff
AND
POLYTEK-WEARNES ENGINEERING SDN BHD
Defendant

Catchwords:

Corporation law - Application to set aside statutory demand - Sufficiency of affidavit in support of application - Relevancy of later affidavit - Principles to be applied

Legislation:

Nil

Result:

Remand set aside

Category: A

Representation:

Counsel:

Plaintiff: Mr P T Arns
Defendant: Mr J C Vaughan

Solicitors:

Plaintiff: Arns & Associates
Defendant: Jackson McDonald

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

71 Paisley Street Footscray Pty Ltd v Vineyards Estate Pty Ltd (Unreported, FCA, 18 August 1995)
Ainslie v Ainslie (1927) 39 CLR 381
Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd (2005) 23 ACLC 1266
Energy Equity Corporation Ltd v Sinedie Pty Ltd [2001] WASCA 419
Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
Jadd Projects Pty Ltd v Muldoon Tiles Supply & Fix Pty Ltd [2004] WASCA 180
Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360

MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The application is brought pursuant to s 459G of the Corporations Act 2001 (Cth) (the Act). The plaintiff alleges there is a genuine dispute as to the debt the subject of the demand. It says the demand ought be set aside under s 459H(1). In support of its application the plaintiff relies on an affidavit of Neil Robbie Martin sworn 3 July 2010. Mr Martin is the sole director of the plaintiff. Appearing as annexure NRM-01 to the affidavit is a copy of the statutory demand. Appearing in the schedule to the demand under the heading 'description of debt' there appears the following:
Judgment debt in favour of the creditor on judgment granted against the debtor on 4 March 2010 by the High Court of Malaysia at Kuala Lumpur (Commercial Division) under Civil Suit Number D-22NCC-568-2009.
The amount of the debt is said to be 'RM 6,251,323.21'. No where is that Malaysian currency amount converted into Australian dollars.
Appearing as annexure NRM-02 to Mr Martin's affidavit is a copy of the affidavit accompanying the statutory demand. It was sworn by one Mun How Keat who says he is the general manager of the defendant. Mr Keat says on an unspecified date the defendant commenced proceedings against the plaintiff in the High Court of Malaya at Kuala Lumpur. He also says the plaintiff did not defend the proceedings. Accordingly default judgment was granted against the plaintiff in favour of the defendant. There is no further explanation provided by Mr Keat as to how the debt arose, when the proceedings were served or what…

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: [2010] WASC 354
Decision Date: 30 NOVEMBER 2010

CaseChat Overview and Summary

Entech-Renewable Energy Solutions Pty Ltd brought an application to set aside a statutory demand issued by POLYTEK-WEARNES Engineering Sdn BHD. The application hinged on the sufficiency of the affidavit in support of the application under section 459G(3)(a) of the relevant Corporations Act. The central legal issue was whether the affidavit provided sufficient information to demonstrate a genuine dispute over the debt claimed in the statutory demand.

The court had to determine whether the affidavit sufficiently disclosed facts to show a genuine dispute over the debt. The starting point for this determination was the principle laid down by Sundberg J in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund. According to this principle, an affidavit must disclose facts showing there is a genuine dispute between the parties. A mere assertion that there is a genuine dispute is not enough, and a bare claim that the debt is disputed is also insufficient. The court also considered the more detailed analysis provided by Parker J in Financial Solutions Australasia Pty Ltd v Predella Pty Ltd, where it was held that a statement of a "genuine bona fide belief" that the deed of assignment "may be void and of no legal force or effect" was sufficient to dispute liability.

The court found that the affidavit in question did not provide sufficient information to show a genuine dispute over the debt. It merely asserted that the debt was disputed without providing any factual basis or detail to support this claim. Therefore, the affidavit was insufficient to meet the requirements of section 459G(3)(a) of the Corporations Act.

The court dismissed the application to set aside the statutory demand due to the insufficiency of the affidavit. The statutory demand remained in place.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The submissions of the defendant raise again the question of what is a sufficient affidavit for the purposes of s 459G(3)(a) of the Act. The starting pointing considering this question is the decision of Sundberg J in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452. The facts in the case were as follows. The statutory demand asserted the respondent owed the applicant an amount of $127,500 being the amount of an alleged judgment debt. The respondent filed a brief affidavit in support of its application to have the demand set aside. The affidavit in support provided in part:The Respondent agreed to a compromise, a terms payment and to forbear to sue in relation to the alleged debt, which is disputed. I verily believe judgment was entered erroneously and have given instructions for an application to be made to set aside the judgment. His Honour referred to a number of decisions particularly the judgment of Olney J in 71 Paisley Street Footscray Pty Ltd v Vineyards Estate Pty Ltd (Unreported, FCA, 18 August 1995). His Honour then said:In order to be a 'supporting affidavit', an affidavit must say something that promotes the company's case. An affidavit which merely says 'I am a director of the company but am too busy at present to make a full affidavit, and I will do so later' would not support the application. It would in no way advance, further or assist the company's cause, which is to have the notice set aside. At the other extreme, the affidavit need not detail, in admissible form, all the evidence that supports the contention of a genuine dispute ... .In a s 459H(1)(a) case, the affidavit must in my view disclose facts showing there is a genuine dispute between the parties. A mere assertion that there is a genuine dispute is not enough. Nor is a bare claim that the debt is disputed sufficient. The statement of principle by Sundberg J has been almost universally accepted and applied both in first instance and by appellate courts. So far as appellate courts are concerned most of the decisions have originated in this jurisdiction: see Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360; Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306; Energy Equity Corporation Ltd v Sinedie Pty Ltd [2001] WASCA 419; and Jadd Projects Pty Ltd v Muldoon Tiles Supply & Fix Pty Ltd [2004] WASCA 180. Of these decisions the judgment of Parker J in Financial Solutions Australasia v Predella perhaps offers the most detailed analysis of the applicable principles. In that decision, in a concurring judgment, Anderson J made some brief comments which are relevant to this application. His Honour said:As to the sufficiency of the affidavit in support of the application to set aside the statutory demand, I must say I do not see why a debtor faced with a statutory demand from a stranger who claims to be an assignee does not sufficiently dispute liability to the stranger by stating a 'genuine bona fide belief' that the deed of assignment 'may be void and of no legal force or effect', which is the statement made by Mr Farbenbloom in his supporting affidavit of 14 December 2000. That is more than a mere assertion that there is a genuine dispute. It states the basis of the dispute. A little more might have been required had the debtor been in possession of the deed of assignment. So far as appears, neither Mr Farbenbloom nor the debtor Predella Pty Ltd was in possession of the deed of assignment. The affidavit is to be understood as saying 'the assignment is unenforceable. Particulars will be given after discovery'. That would be a good pleading, disclosing a good defence in the sense that it is more than a bare denial.