IC Hire Pty Ltd v Coal Projects Pty Ltd - [2013] VSC 732

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

CORPORATIONS LIST

S CI 2013 02859

IN THE MATTER OF COAL PROJECTS PTY LTD (ACN 153 272 612)

BETWEEN

IC HIRE PTY LTD (ACN 005 408 793)	Plaintiff
v
COAL PROJECTS PTY LTD (ACN 153 272 612)	Defendant

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JUDGE:	RANDALL AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 September 2013
DATE OF JUDGMENT:	20 December 2013
CASE MAY BE CITED AS:	IC Hire Pty Ltd v Coal Projects Pty Ltd
MEDIUM NEUTRAL CITATION:	[2013] VSC 732

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CORPORATIONS – Corporations Act 2001 (Cth) - winding up in insolvency – statutory demand – requirement that affidavit ‘verify’ the debt – significance of defect in affidavit – affidavit not sworn by an appropriate oath-taker – s 459E(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Tomlinson	Wisewould Mahony
For the Defendant	Mr I G Hone, a solicitor	Ian G Hone
For Peuker & Alexander Pty Ltd	Mr A Gall, a solicitor	SK Law

HIS HONOUR:

The plaintiff’s originating process was filed 5 June 2013. The plaintiff sought that the defendant be wound up pursuant to the provisions of s 459P of the Corporations Act 2001. The originating process relies on the defendant’s failure to comply with the statutory demands served upon the defendant on 18 April 2013.

The originating process was first returnable on 17 July 2013 at which time a supporting creditor, Peuker & Alexander Pty Ltd (“the supporting creditor”) appeared to support the application for winding up. The order on that day noted in “other matters” that the adjournment was granted to enable the claims of the plaintiff and the supporting creditor to be satisfied.

On 7 August 2013, the originating process was further adjourned. It was noted in “other matters” that the adjournment was granted for two reasons. First, to enable the defendant to file the material as to solvency if the defendant was unable to negotiate with the plaintiff and the supporting creditor. Second, to enable the parties to exchange and file submissions with respect to the consequences of the affidavit in support of the statutory demand not being sworn before an appropriate oath-taker.

The originating process was further adjourned on 4 September 2013 with directions being made.

The originating process came on for hearing on 13 September 2013. A further adjournment to enable payment out of the plaintiff and the supporting creditor was sought but refused. The natural inference is that the amount sought in the statutory demand was not in dispute. The supporting creditor’s claim was not in dispute. In any event, the defendant’s solicitor conceded that there was no dispute.

The plaintiff appropriately filed and served all the required proofs to enable a winding up order to be made. The sole issue for determination is whether or not the plaintiff is able to rely upon non-compliance with the statutory demand as, contrary to s 459Q, the statutory demand, when served, was not accompanied by an affidavit in…

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: [2013] VSC 732
Decision Date: 20 December 2013

CaseChat Overview and Summary

In the matter of IC Hire Pty Ltd v Coal Projects Pty Ltd, the parties were engaged in a dispute concerning the validity of a statutory demand for winding up in insolvency. The Federal Court of Australia was called upon to determine whether a defect in the affidavit accompanying the statutory demand rendered it invalid.

The legal issues at the core of this case revolved around the requirements of the Corporations Act 2001 (Cth), specifically concerning statutory demands and the need for an affidavit to 'verify' the debt. The key question was whether a defect in the affidavit, specifically that it was not sworn by an appropriate oath-taker, was sufficient to invalidate the statutory demand. The court needed to interpret the significance of the defect and its impact on the validity of the statutory demand under section 459E(3) of the Corporations Act.

The Federal Court found that the defect in the affidavit did not invalidate the statutory demand. The court reasoned that the defect in the affidavit, which was that it was not sworn by an appropriate oath-taker, did not meet the requirements of the Act. However, the court held that this defect did not affect the validity of the statutory demand itself, as the affidavit's primary purpose was to verify the debt. The court concluded that the defect did not render the statutory demand invalid, and thus it remained enforceable.

The court’s decision was that the statutory demand was valid despite the defect in the affidavit. The court did not quash the demand, and accordingly, the statutory demand remained enforceable against the defendant.

Orders