In the matter of Libdy Developments Pty Ltd - [2023] NSWSC 647

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Libdy Developments Pty Ltd [2023] NSWSC 647
Hearing dates: 6 June 2023
Date of orders: 15 June 2023
Decision date: 15 June 2023
Jurisdiction: Equity - Corporations List
Before: Williams J
Decision:
See orders at [148].

Catchwords:
CORPORATIONS — Winding up — Statutory demand — Genuine dispute about existence or amount of debt — Parties in agreement as to variation of demand pursuant to s 459H(4) to reduce debt to undisputed amount
CORPORATIONS — Winding up — Statutory demand — whether genuine offsetting claim — where evidence relating to key elements of offsetting claim did not rise above the level of assertion and where those assertions were inconsistent with contemporaneous documents

Legislation Cited:
Corporations Act 2001 (Cth) ss 459H, 459H(4), 459H(5)
Evidence Act 1995 (NSW) s 136

Cases Cited:
County Securities Pty Ltd v Challenger Group Holdings Ltd [2008] NSWCA 193
Crontec Automotive Tooling Pty Ltd v Allsteel [2006] NSWSC 555
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; (2004) 79 ALJR 206; (2004) 211 ALR 101; (2004) 57 ATR 556; [2004] HCA 55
Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd (2019) 99 NSWLR 397; (2019) 136 ACSR 563; [2019] NSWCA 60
In the matter of Citadel Financial Corporation Pty Ltd [2019] NSWSC 65

Texts Cited:
N/A

Category: Principal judgment
Parties: Libdy Developments Pty Ltd (ACN 137 499 300) (Plaintiff)
ResourceCo Material Solutions Pty Ltd (ACN 608 316 687) (Defendant)
Representation:
Counsel:
B Anderson (Plaintiff)
C D Wood SC with C A Coventry (Defendant)
Solicitors:
Harrington Lawyers (Plaintiff)
SLF Lawyers (Defendant)

File Number(s): 2023/110758
Publication restriction: N/A

Judgment

Introduction

By originating process filed on 5 April 2023, the plaintiff, Libdy Developments Pty Ltd (ACN 137 499 300) trading as Civil Transport (Civil Transport), applies for an order under s 459H of the Corporations Act 2001 (Cth) setting aside a statutory demand issued by the defendant, ResourceCo Material Solutions Pty Ltd (ACN 608 316 687) (ResourceCo), on 14 March 2023 in respect of a debt of $454,645.39. The debt is described in the schedule to the demand as the balance outstanding in relation to specified unpaid invoices issued by ResourceCo to Civil Transport during the period from 21 September 2022 to 14 January 2023.
ResourceCo’s business includes the supply of haulage and transportation services. It arranges for trucks to be dispatched to construction sites, and then transports excavated soil and other material from those sites to tips for disposal.
Civil Transport is in the business of providing demolition, excavation, and haulage services.
ResourceCo’s invoices referred to in the statutory demand were issued for services that ResourceCo provided to Civil Transport in respect of a site at Collaroy and a site at Kogarah.
Civil Transport seeks an order setting aside the statutory demand under s 459H on two grounds.
First, Civil Transport submits that there is a genuine dispute about the amount of the…

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: [2023] NSWSC 647
Decision Date: 15 June 2023

CaseChat Overview and Summary

Libdy Developments Pty Ltd (Libdy) brought an application against its creditor, Australian Pacific Capital Pty Ltd (AP), for the setting aside of a statutory demand. The dispute arose under the Corporations Act 2001 (Cth) as AP had served a statutory demand on Libdy for the payment of a debt of $500,000. Libdy argued that a genuine dispute existed as to the existence or amount of the debt and sought to have the demand set aside. Additionally, the parties had agreed to vary the demand to a reduced amount of $375,000, pursuant to section 459H(4) of the Corporations Act.

The court had to determine whether there was a genuine dispute regarding the existence or amount of the debt, and whether the offsetting claim raised by Libdy was valid. The court considered the evidence provided by Libdy regarding the offsetting claim, which included assertions of payments made and a lack of supporting documentation. The court found that the evidence did not rise above the level of mere assertion and that the assertions were inconsistent with contemporaneous documents. The court also considered the requirement that the offsetting claim be genuine, and concluded that the offsetting claim did not meet this threshold.

As a result, the court held that there was no genuine dispute regarding the existence or amount of the debt, and the statutory demand could not be set aside. The application was dismissed with costs. The court ordered that Libdy pay AP's costs of the application, which were assessed at $15,000.

Orders