In the matter of Geitonia Pty Ltd

Geitonia Pty Ltd was the plaintiff in an application for the winding up of a corporation. The application was made under sections 459H and 459J of the Corporations Act 2001 (Cth) and sought to set aside a statutory demand issued by the defendant. The defendant held both a first and a second mortgage over a property belonging to the plaintiff. The debt specified in the statutory demand related to the first mortgage. The plaintiff argued that there was a genuine dispute over the existence of the debt and that there was an offsetting claim because the defendant was obliged to apply the proceeds from the sale of the mortgaged property to the debt of the first mortgage rather than the second mortgage. The plaintiff further argued that the statutory demand should be set aside because the affidavit accompanying the demand was sworn by the defendant’s solicitor, who did not have sufficient personal knowledge of the matters stated in the affidavit.

The court needed to decide whether the defendant’s solicitor had sufficient personal knowledge to swear the affidavit accompanying the statutory demand, whether the principle from Graywinter applied to restrict the matters that could be relied upon in the affidavit, and whether the statutory demand should be set aside. The court also needed to consider the plaintiff’s arguments regarding the genuine dispute over the existence of the debt and the offsetting claim based on the obligation to apply the proceeds of sale to the first mortgage debt.

The court found that the defendant’s solicitor did not have sufficient personal knowledge to swear the affidavit accompanying the statutory demand, and therefore the affidavit was defective. The court held that the Graywinter principle applied and restricted the matters that could be relied upon in the affidavit. Consequently, the court set aside the statutory demand. The court also considered the plaintiff’s argument about the genuine dispute over the existence of the debt and the offsetting claim, but found that these arguments were not sufficient to prevent the setting aside of the statutory demand due to the defective affidavit.

The court ordered that the statutory demand be set aside. The court found that the affidavit accompanying the demand was defective as the defendant’s solicitor did not have sufficient personal knowledge of the matters stated in the affidavit. The court also found that the principle from Graywinter applied, restricting the matters that could be relied upon in the affidavit. The court set aside the statutory demand and made no order as to costs.