Granview Holdings Pty Ltd v Coxon - [2010] WASC 134

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: GRANVIEW HOLDINGS PTY LTD -v- COXON [2010] WASC 134

CORAM: MASTER SANDERSON

HEARD: 8 JUNE 2010

DELIVERED : 11 JUNE 2010

FILE NO/S: COR 6 of 2010

BETWEEN: GRANVIEW HOLDINGS PTY LTD
Plaintiff
AND
ANNA LOUISE COXON
Defendant

Catchwords:

Corporations law - Application to set aside statutory demand - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr C Lockhart
Defendant: Mr G R Donaldson SC

Solicitors:

Plaintiff: Maxim Litigation Consultants
Defendant: Park Legal Solutions

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

Nil

MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The amount demanded is $475,685. However, all parties agree an amount of $25,000 has been repaid, leaving an adjusted amount of $450,685. The plaintiff says there is a genuine dispute as to whether or not it is indebted to the defendant for that amount.
There were eight affidavits filed in relation to this matter, running to many hundreds of pages. As these reasons will show, the dispute between the parties is of very narrow compass. The affidavits themselves contain a large amount of hearsay and other evidence which is entirely irrelevant to the dispute between the parties. Neither counsel sought to strike out sections of their opponent's affidavits. Perhaps they were wise not to do so ‑ the task of striking out parts of the affidavits probably would have taken longer than the argument on the central issues. In any event, the state of the evidence was most unsatisfactory.
The affidavit filed with the application to set aside a statutory demand was sworn by John Leonard Woodward and filed on 12 January 2010. Mr Woodward identifies himself as the sole director of the plaintiff. The plaintiff trades as Freedom Marine from premises in Fremantle. As the name suggests, the business sells new and used boats and provides related marine services.
Mr Woodward says in or about early 2007 he agreed with a Mr Teague Damian Czislowski they would purchase the Freedom Marine business. Mr Czislowski is the husband of the defendant. The defendant was at all relevant times was the trustee of the Czislowski Trust. The proceedings are issued against her in this capacity.
It is common ground between the parties that from time to time both Mr Woodward and the defendant advanced funds to the plaintiff to allow it to conduct the Freedom Marine business. It is the defendant's position that the $450,685 she now demands be repaid was a loan which was repayable on demand. As demand has been made, repayment is now due. It is the plaintiff's position there was, indeed, a loan and it agrees the amount of the loan. But it says there was an agreement between Mr Woodward on behalf of the plaintiff and Mr Czislowski on behalf of the defendant the loan would not be repayable until the plaintiff made a profit ‑ in fact, on the plaintiff's case, the loan was to be repaid out of the profits made by the plaintiff.
Mr Woodward's evidence on this issue is found primarily in par 12 of his first affidavit. That paragraph is in the following terms:
There was never any discussion between myself and Teague [Czislowski] about when our respective contributions were to be repaid. No mention was ever made between us that each of our respective contributions was repayable on demand. To make them repayable on demand would defeat their very purpose which was to keep the plaintiff's business as a going concern. From a pragmatic commercial perspective, I understood our contributions would be repaid if and when the business started to make a profit. As it turned out the business never made a profit.
That truly is a remarkable paragraph. It says nothing more than there was no agreement between the parties as to when the loan would be repayable. It contains irrelevant material about what Mr Woodward thought might be the arrangement and argument about the commercial necessity of the arrangement Mr Woodward envisaged. But in no sense could it be said this paragraph sets out the facts which could give rise to a meeting of the minds between Mr Woodward and Mr Czislowski leading to some contractual arrangement. The affidavit contains nothing further by way of detail about the alleged agreement.
Mr Woodward swore a further affidavit on 25 March 2010. In par 11 of that affidavit reference is made to the 'Freedom Marine Agreement'. This expression seems to cover all matters allegedly agreed between Mr Woodward and Mr Czislowski to do with the purchase of the Freedom Marine business. In par 19 of the affidavit Mr Woodward says:
… At no stage did Czislowski advise me that the funds advanced by me or the Defendant (whom I always understood and still understand to be Czislowski's nominee for the purposes of the implementation of the Freedom Marine Agreement) to Granview would be repayable on demand. Had he said that to me I would not have agreed, and I would have taken steps to prevent that, and I would have instructed Czislowski on behalf of Granview to draft the necessary documents to reflect the Freedom Marine Agreement, because to have shareholder loans repayable on demand would have threatened the commercial viability that was Granview.
Still there is no direct evidence of what transpired between Mr Woodward and Mr Czislowski which could be said to constitute an agreement between the plaintiff and the defendant.
On behalf of the defendant it was submitted there was, in an affidavit of Mr Czislowski sworn 17 February 2010, an admission some of the funds advanced were by way of capital payments ‑ presumably payment for the purchase of shares. Paragraph 3 of Mr Czislowski's affidavit is in the following terms:
I refer to par 8 of the Affidavit of John Leonard Woodward Affidavit (sic) sworn in these proceedings 4 February 2008 (sic). I did not agree to contribute to the Plaintiff by way of capital payments. As a director of the Plaintiff I understood that the shareholders contributed equally to the purchase of the business by way of capital payments with all other funding for the business by the shareholders to be by way of advancement of funds.
It is not entirely clear what that paragraph means. But it is not relevant to the present dispute. The allegation by the defendant is the plaintiff is presently liable to repay loan funds. The plaintiff admits there was a loan, admits the amount of the loan and says it is not presently repayable on the basis of the Freedom Marine Agreement. The problem for the plaintiff is there is simply nothing in the evidence which could constitute an agreement. It is not difficult to imagine how such evidence could have been produced. If Mr Woodward had recited the conversations which took place between him and Mr Czislowski which could be said to constitute an oral agreement, there would be a genuine dispute. Alternatively, Mr Woodward could have outlined the factual situation and the circumstances in which the loan was made available so it was reasonable to assume an agreement had been reached. Then there may have been the prospect of implying a term in that agreement about the repayment of the loan. The plaintiff's case here fails for want of evidence ‑ there is just not evidentiary material which would allow me to conclude there is a genuine dispute between the parties as to whether or not the loan was presently repayable.
All parties agree a loan is repayable on demand unless there is a term of the loan to opposite effect. As the plaintiff in this case has not offered any evidence there was agreement to do otherwise than repay on demand, the application to set aside the demand ought be dismissed.
The plaintiff ought pay the defendant's costs of the application including the reserved costs.