Hills Motorway Ltd v UBS AG - [2005] NSWSC 1086

CITATION:
Hills Motorway Ltd v UBS AGHills Motorway Management Ltd v UBS AG [2005] NSWSC 1086

HEARING DATE(S): 17/06/05

JUDGMENT DATE :

28 October 2005

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF:
White J

DECISION:
Plaintiffs' counsel to bring in short minutes in accordance with reasons.

CATCHWORDS:
CORPORATIONS - Application to set aside statutory demand - Where two demands for half the debt each were served on parties jointly liable for the debt - Whether a ground for setting aside the demands is that demands were in terms that debtors are severally liable as opposed to jointly - Where affidavit amending amount of claimed offset filed after 21 days - Corporations Act ss 459G, 459F, 459J - Held that claiming less than the actual debt is not a defect justifying the setting aside of a demand - Claimed offset is too small and does not affect demands - Affidavit filed after 21 days falls foul of principle in Graywinter - Payment of amount claimed in one demand will satisfy both.

LEGISLATION CITED:
Corporations Act 2001 (Cth)

CASES CITED:
Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452
Energy Equity Corporation Ltd v Sinedie Pty Ltd (2001) 166 FLR 179
Process Machinery Australia Pty Ltd v ACN 057 260 590 Pty Ltd [2002] NSWSC 45
Duck v Mayeu [1892] 2 QB 511
Barclays Australia (Finance) Ltd v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235
Elm Financial Services Pty Ltd v Macdougal [2004] NSWSC 560

PARTIES:
The Hills Motorway Ltd v UBS AG
Hills Motorway Management Ltd v UBS AG

FILE NUMBER(S):
SC 3641/05; 3642/05

COUNSEL:
Plaintiffs: D P Robinson SC, W George
Defendant: C R C Newlinds SC, A Lo Surdo

SOLICITORS:
Plaintiff: Holding Redlich
Defendant: Allens Arthur Robinson

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Friday, 28 October 2005

3641/05 The Hills Motorway Ltd v UBS AG
3642/05 Hills Motorway Management Ltd v UBS AG

JUDGMENT

1 HIS HONOUR: These proceedings were heard together. Each plaintiff applies under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a creditor’s statutory demand. Hills Motorway Management Ltd (“Hills Management”) is the responsible entity of the Hills Motorway trust.

2 In January 2005, shares in the Hills Motorway Ltd (“Hills”) and units in the Hills Motorway trust were jointly quoted as stapled securities on the Australian Stock Exchange. On 31 January 2005, Transurban Investments Pty Ltd announced a takeover offer for all of the stapled securities in Hills Motorway Group. Transurban offered 1.47 Transurban stapled securities for each Hills stapled security.

3 The defendant, UBS AG was engaged to provide advice and assistance to Hills and Hills Motorway Trust. On 4 March 2005, it entered into an agreement with the plaintiffs which set out the terms on which it would act. The first paragraph of the letter provided:

The purpose of this letter is to set out the terms…

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: [2005] NSWSC 1086
Decision Date: 28 October 2005

CaseChat Overview and Summary

Hills Motorway Ltd and UBS AG were involved in a legal dispute concerning a statutory demand issued by the plaintiff against the defendants. The crux of the matter was the validity of the statutory demand in light of certain procedural irregularities and the defendants' contention that the demand incorrectly identified the nature of their liability. The case was heard in the Federal Circuit Court of Australia.

The primary legal issue was whether the statutory demand could be set aside due to procedural errors, specifically regarding the manner in which the debt was claimed and the timing of an affidavit related to an offset. The court needed to determine if the demand was defective because it was made against the defendants as if they were severally liable, rather than jointly liable. Another point of contention was whether an affidavit seeking to amend the amount of the claimed offset, filed after the 21-day period allowed by the Corporations Act, could be considered.

The court found that the statutory demand was not defective on the basis that it was made against the defendants as severally liable. The court reasoned that the demand was still valid as the defendants, being jointly liable, would be satisfied by the payment of the amount claimed in one of the demands. Furthermore, the court held that a claim for less than the actual debt did not constitute a defect that would justify setting aside the demand. The court also found that the affidavit, which was filed beyond the 21-day period, did not affect the validity of the demands because the claimed offset was too small to have any significant impact. The court relied on the principle from Graywinter that such late amendments do not provide grounds for setting aside a demand.

The final orders of the court were that the application to set aside the statutory demands was dismissed. The court held that the statutory demands remained valid and enforceable against the defendants, Hills Motorway Ltd and UBS AG.

Orders