Freihart v Dexplain - [2001] NSWSC 137

CITATION: FREIHART v DEXPLAIN [2001] NSWSC 137

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4708/2000

HEARING DATE(S): 27/02/2001

JUDGMENT DATE:
8 March 2001

PARTIES :

Freihart Pty Limited v Dexplain Pty Limited

JUDGMENT OF: Master Macready at 1

COUNSEL : D. Ryan SC & P.I. Bambagoitti for plaintiff
D.L. Warren for defendant

SOLICITORS: JDK Legal for plaintiff
Garry Cassim & Associates for devendant

CATCHWORDS: Corporations Law. Commencement of proceedings to set aside statutory demand by Notice of Motion in proceedings already in existence between the same two parties. Factual background of proceedings similar to background of debt claimed in demand. - Held proceedings could be commenced by Notice of Motion and that motion substantially complied with Form 3 of the Corporations Law Rules. Considerations of whether proceedings final or interlocutory.

CASES CITED: Mibor Investments Pty Limited v Commonwealth Bank [1993] 11 ACLC 1062
Graywinter v Gas and Fuel Corporation [1996] 21 ACSR 581
Olney J in 71 Paisley Street Footscray Pty Ptd v Vineyards Estate Pty Ltd (unreported 18.8.95)
Eyota Pty Limited v Hanave Pty Limited [1994] 12 ACLC 669
Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (No2) 1994 12 ACLC 490
Joshua Corporation Pty Limited v KTX Technology Pty Limited, 3 April 1998
A-Pak Plastics v Merhone (1995) 13 ACLC 896
David Grant & Co Pty Ltd (Receiver and Manager Appointed) v Westpac Banking Corporation (1995) 184 CLR 265

DECISION: Para 23

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

Thursday 8 March 2001

4708 of 2000 FREIHART PTY LTD v DEXPLAIN PTY LTD

1 MASTER: This is the hearing of an oral application by way of motion by the defendant seeking that a Notice of Motion filed by the plaintiff on 25 January 2001 be struck out pursuant to Part 13 Rule 5 of the Supreme Court Rules.

2 The principal proceedings were commenced on 22 November 2000 by a Summons and concerned the lease of the Royal Britannia Hotel and an adjacent house. Declarations are sought as to the existence of a lease and a claim is made for rectification of a lease.

3 On 4 January 2001 the defendant executed a statutory demand claiming the sum of $80,659.01 being arrears of rent, rates and land tax in respect of the premises and other amounts. The demand was served on 8 January 2001 and on 25 January 2001the plaintiff filed a Notice of Motion in these proceedings which is the subject of the oral application, for strike out. The Notice of Motion sought three substantive orders, namely:-

“1. An order that the statutory demand served by the defendant on the plaintiff dated 4 January 2001 be set aside pursuant to section 459G Corporations Law.

2. Alternatively that the Court calculate the substantiated part of the demand pursuant to section 459H Corporations Law.

3. That the plaintiff be granted leave to amend the summons herein in accordance with annexure “A” hereto.”

4 When the matter was before…

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.

Continue reading Freihart v Dexplain

Details

AGLC: Freihart v Dexplain [2001] NSWSC 137
Case: [2001] NSWSC 137
Decision Date: 8 March 2001

CaseChat Overview and Summary

Freihart and Dexplain were parties to a litigation matter before the court, with Freihart seeking to set aside a statutory demand issued by Dexplain. The statutory demand was a formal written request for payment of a debt, made under the Corporations Act, which could lead to the winding up of a company if not paid within 21 days. The Federal Court of Australia was tasked with determining whether Freihart's commencement of proceedings to set aside the statutory demand, by way of a Notice of Motion, was valid and whether the motion substantially complied with the requirements of Form 3 of the Corporations Law Rules.

The court had to decide whether the procedural method employed by Freihart to initiate the proceedings was appropriate and whether the motion complied with the relevant legal forms. Specifically, the court examined whether the Notice of Motion was sufficient to commence the proceedings and whether it adhered to the prescribed format of Form 3. The court also needed to consider the nature of the proceedings, whether they were final or interlocutory, which would affect the timelines and procedural requirements.

The court ruled that Freihart's use of a Notice of Motion was an acceptable method to initiate the proceedings to set aside the statutory demand, despite the ongoing litigation between the same parties. The court found that the motion substantially complied with Form 3 of the Corporations Law Rules, despite some minor discrepancies. The court noted that the considerations of whether the proceedings were final or interlocutory did not impact the validity of the motion. The court concluded that the motion met the necessary standards and could proceed, thereby allowing the proceedings to continue.

The court did not make any specific final orders in this decision but allowed the proceedings to continue on the basis that the motion substantially complied with the relevant legal requirements.

Orders