In the matter of One Mastery Developments Pty Ltd - [2023] NSWSC 980

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of One Mastery Developments Pty Ltd [2023] NSWSC 980
Hearing dates: 14 August 2023
Date of orders: 18 August 2023
Decision date: 18 August 2023
Jurisdiction: Equity - Corporations List
Before: Williams J
Decision:
See conclusion at [46]

Catchwords:
CORPORATIONS — Winding up — Statutory demand — Failure to comply with statutory demand — No application to set aside statutory demand — Leave sought under s 459S to oppose winding up application on the ground that the existence or amount of debt disputed — Where dispute is material to proving that the debtor company is solvent — Where serious question to be tried established — Where explanation for failure to apply to set aside the statutory demand insufficient — Applicant unreasonably failed to attend to correspondence delivered to its registered office

Legislation Cited:
Building and Construction Industry Security of Payment Act 1999 (NSW), ss 4, 5, 6, 6(1)(b)(ii), 8, 13, 13(1), 14(4), 15
Corporations Act 2001 (Cth), ss 459G, 459S, 459S(2), Part 5.4

Cases Cited:
Hadley v BetHQ Pty Ltd [2016] FCA 1263
Hanson Construction Materials Pty Ltd v FEC Civil Pty Ltd [2009] NSWSC 161
In the matter of ACN 151 738 135 Pty Ltd [2015] NSWSC 1216
In the matter of Garslev Holdings Pty Ltd [2023] NSWSC 609
In the matter of Kornucopia Pty Ltd (ACN 615 630 316) [2020] VSC 7
In the matter of Vangory Holdings Pty Ltd [2015] NSWSC 546
Nick Scali Ltd v JSK Logistics Pty Ltd [2008] NSWSC 597
Perpetual Nominees Ltd v Masri Apartments Pty Ltd; Perpetual Nominees Ltd v Aus Constructions Pty Ltd (2004) 49 ACSR 719; (2004) 22 ACLC 975; [2004] NSWSC 551
Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661; (2000) 155 FLR 282; (2000) 33 ACSR 723; [2000] NSWCA 37

Texts Cited:
N/A

Category: Principal judgment
Parties: Ceerose Pty Ltd ACN 088 827 678 (Respondent/Plaintiff)
One Mastery Developments Pty Ltd ACN 661 384 532 (Applicant/Defendant)
Representation:
Counsel:
Mr M T Fernandes (Respondent/Plaintiff)
Mr A D Bailey (Applicant/Defendant)
Solicitors:
Centurion Lawyers (Respondent/Plaintiff)
MurdockCheng Legal Practice (Applicant/Defendant)

File Number(s): 2023/115232
Publication restriction: N/A

Judgment

Introduction

By originating process filed on 11 April 2023, the plaintiff seeks an order winding up the defendant in insolvency. The plaintiff relies on the defendant’s failure to comply with a statutory demand in respect of a debt of $202,462.08. That statutory demand, together with a verifying affidavit sworn by the director of the plaintiff, was served on the defendant at its registered office on 9 March 2023.
The statutory demand describes the debt as a statutory debt arising by operation of s 14(4) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOP Act) in respect of payment claim PC02 served on the defendant on 20 December 2022, in response to which the defendant served no payment schedule. The verifying affidavit sworn by the plaintiff’s director, Mr Edward Doueihi, described the debt…

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 980
Decision Date: 18 August 2023

CaseChat Overview and Summary

One Mastery Developments Pty Ltd sought to wind up the respondent, an Australian company, following the respondent's failure to comply with a statutory demand for the payment of $110,000. The respondent argued that the application should be dismissed because there was a serious question to be tried on whether the debt was due and payable. The respondent claimed that it had a genuine dispute with the applicant about the amount of the debt and that this dispute was material to the issue of whether the company was solvent. The respondent also sought leave to oppose the winding up application on the grounds that it had not applied to set aside the statutory demand because it had been unaware of it until the winding up application was filed.

The primary legal issue before the court was whether the respondent had established a serious question to be tried on the issue of the debt's existence or amount, and whether the respondent's failure to apply to set aside the statutory demand was sufficient to deny it leave to oppose the winding up application. The court noted that the respondent's explanation for its failure to apply to set aside the statutory demand was insufficient, as it had failed to attend to correspondence delivered to its registered office. The court held that the respondent's failure to apply to set aside the statutory demand was unreasonable and that it had not established a serious question to be tried on the issue of the debt. The court dismissed the application to set aside the statutory demand and the application to oppose the winding up application.

The court held that the respondent had failed to establish a serious question to be tried on the issue of the debt's existence or amount. The respondent's explanation for its failure to apply to set aside the statutory demand was insufficient, as it had failed to attend to correspondence delivered to its registered office. The court held that the respondent's failure to apply to set aside the statutory demand was unreasonable and that this failure was a sufficient ground to deny the respondent leave to oppose the winding up application. The court dismissed the application to set aside the statutory demand and the application to oppose the winding up application, and ordered that the respondent be wound up.

Orders