In the Matter of Edgley Pty Ltd

[2012] NSWSC 1211

Supreme Court

New South Wales

Medium Neutral Citation:	In the Matter of Edgley Pty Ltd [2012] NSWSC 1211
Hearing dates:	27 August 2012
Decision date:	27 August 2012
Jurisdiction:	Equity Division - Corporations List
Before:	Brereton J
Decision:	Time for filing evidence be extended
Catchwords:	CORPORATIONS - creditor's statutory demand - whether application made out of time
Legislation Cited:	(Cth) Corporations Act 2001, s 459G
Category:	Interlocutory applications
Parties:	Edgley Pty Ltd - Plaintiff Chief Commissioner of State Revenue - Defendant
Representation:	Mr Dikha - Plaintiff Mr Woods - Defendant City Legal Solicitors - Plaintiff Matthews Folbigg Pty Ltd - Chief Commissioner
File Number(s):	2012/172581

Judgment (ex tempore)

1. HIS HONOUR: The plaintiff Edgley Pty Ltd seeks an order pursuant to (Cth) Corporations Act 2001, s 459G, setting aside a creditors statutory demand served on it by the defendant Chief Commissioner of State Revenue. The plaintiff's initial affidavit evidence referred to receipt of the statutory demand, which is dated 20 April 2012, on or about 29 May 2012. The defendant contends that the statutory demand was served at an earlier date, namely 4 May 2012. If the defendant's contention is correct, the application is out of time [s 459G(3)].

1. When the application was first listed before the Registrar on 14 August 2012, the Registrar, on the application of the defendant, acceded to the proposition that, in order to avoid incurring unnecessary costs in preparing all requisite affidavit evidence to deal with the entire 459G application, including the alleged disputed debt, the threshold issue of whether the application was made within time - which essentially is reducible to when the statutory demand was served - would be determined separately and before the other questions that arise. The Registrar made directions that the parties file and serve any evidence by 23 August, and that the matter be listed for directions before the Corporations' Judge on 27 August on the threshold issue. 27 August is a significant date because, if the defendant's contention as to date of service is correct, then the three-month period within which the s 459G demand is available for founding a presumption of insolvency will expire on that date.

1. The orders of 14 August required service by both parties of any evidence by 23 August 2012. The plaintiff served no further evidence. The defendant served evidence on 24 August 2012. The plaintiff's solicitors had previously written to the defendant's solicitors seeking a variation of the timetable to enable them to adduce evidence in reply, to which the defendant's solicitors responded, inter alia, that the direction required both parties to file their evidence by 23 August; but, in any event, the defendants did not serve their evidence within the time limited.

1. One option would be to proceed to hear the matter today, on the evidence that was filed within time, and excluding the late served evidence. That would be likely, although it cannot be said certainly, to result in the defendant's contention as to service on a date earlier than 29 May failing, since there would be no evidence whatsoever to support it.

1. However, the plaintiff does not wish to pursue that course, but rather seeks an adjournment to enable it to put on evidence in reply. The defendant objects that that would prejudice it, as it would either lose the benefit of the presumption, or be required to incur the costs of filing a winding up summons that might prove to be futile.

1. It seems to me that that detriment to the defendant is a matter that it must bear, as a result of its belated service of the affidavits in question. I note that, in that connection, it has proffered an undertaking that if it does file a winding up process, it will not advertise that process in the meantime.

1. In those circumstances, I think the least unjust course is to adjourn the proceedings for a week, make directions for service of affidavit evidence in reply, and note the undertaking not to advertise or otherwise publicise the filing of any winding up proceedings it might institute in the meantime on the part of the defendant.

Orders

1. I make the following orders:

(1)   Upon the undertaking of the defendant by its counsel that in the event that it institutes winding up proceedings in reliance upon the creditors statutory demand dated 20 April 2012, it will not until further order advertise, give notice of, or otherwise publicise, the filing of such application,

(2)   Order that time for service of the defendant's affidavit evidence on the preliminary question be extended to 24 August 2012.

(3)   Direct that the plaintiff not be entitled to rely at the hearing of the preliminary question on any affidavit evidence in reply that has not been served by 30 August 2012.

(4)   Adjourn the proceedings to Monday 3 September 2012 in the Corporations Judge motions list for hearing of the preliminary question.

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Decision last updated: 15 November 2012