In the matter of World Marketing Pty Limited

[2014] NSWSC 981

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of World Marketing Pty Limited [2014] NSWSC 981
Hearing dates:	21 July 2014
Date of orders:	21 July 2014
Decision date:	21 July 2014
Jurisdiction:	Equity Division - Corporations List
Before:	Brereton J
Decision:	Creditor’s statutory demand varied
Catchwords:	CORPORATIONS – winding up – insolvency – statutory demand – setting aside statutory demand – whether demand defective for misnomer of company in affidavit verifying – where most of debt claimed paid after issue of demand - where defendant does not appear to contest genuine dispute in respect of balance
Legislation Cited:	(Cth) Corporations Act 2001, s 459E(2), s 459G, s 459H(4), s 459J
Category:	Principal judgment
Parties:	World Marketing Pty Ltd (plaintiff) Incentive Destinations Pvt Ltd (defendant)
Representation:	Counsel: J R Dupree (plaintiff) Solicitors: Corporate Network Legal (plaintiff) Dunn Legal (defendant)
File Number(s):	2014/166398

Judgment (ex tempore)

1. HIS HONOUR: On 15 May 2014 the defendant Incentive Destinations PVT Ltd served on the plaintiff World Marketing Pty Ltd a creditor's statutory demand addressed to "World Marketing Pty Ltd", asserting that it owed the defendant the amount of $50,010 being the total amount of the debts described in the schedule and attaching an affidavit of Betsy Emanuel sworn 14 May 2014 which was said to verify that the amount was due and payable to the company. The schedule described the debt as $50,010 being the balance outstanding to be paid of the invoice number 183-13-14 as annexed to the said affidavit of Betsy Emanuel. That invoice was addressed to Ms Lindy Dupree, World Marketing Travel Tours Australia.

2. The accompanying affidavit of Betsy Emanuel verifying the demand was entitled "Incentive Destinations Pvt Ltd" as creditor and “World Marketing Travel Pty Ltd trading as World Marketing Travel and Tours” as debtor company. Paragraph 4 deposed that the debt was due and payable by the debtor company and paragraph 5 that the deponent believed that there was no genuine dispute about the existence or amount of the debt.

3. Since the demand was served, the plaintiff has paid the defendant $20,000 on 22 May 2014, a further $24,000 on 22 May 2014 and $880 on 26 May 2014. By originating process filed on 3 June 2014 the plaintiff seeks a declaration that the notice does not comply with (Cth) Corporations Act, s 459E(2), and alternatively an order pursuant s 459G setting aside the demand.

4. The originating process was first returnable on 20 June, when it was adjourned to 21 July 2014. On 20 June 2014, the morning of the first return date, the solicitors then acting for the defendant, whose office was the nominated address for service on the statutory demand, informed the plaintiff's solicitors by e-mail that, noting that since service of the demand a total of $45,944 had been paid, reducing the balance of the outstanding debt to $4,066, and without abandoning the argument that there was no genuine dispute, it was not commercial to continue to resist the application and they were, therefore, not instructed to incur further costs or to appear in the proceedings.

5. In those circumstances, it seems to me that I should accept that there is a genuine dispute as to the remaining $4,066, but in circumstances where the demand has to the extent of $45,944 being satisfied, it does not seem to me that there could conceivably be said to be a genuine dispute to that extent.

6. The plaintiff's primary submission was that the notice should be declared not compliant on the basis that it was not verified by an affidavit as defined by s 459E(3), because the verifying affidavit verifies a debt due not to the plaintiff but to World Marketing Travel Pty Ltd.

7. The notice itself is addressed correctly to the plaintiff. The verifying affidavit does not bear and/or does not use an ACN to identify the debtor company. The invoice it attaches is addressed to Ms Dupree at World Marketing Travel and Tours, which is a business name used by the plaintiff. Ms Dupree is a director of the plaintiff. In her affidavit, Ms Dupree says that she does not know who or what World Marketing Travel Pty Ltd is, and does not know of that company trading as "World Marketing Travel and Tours".

8. It seems to me that any recipient of the statutory demand and the affidavit accompanying it would, in these circumstances, notwithstanding the misnomer of the debtor company in the affidavit, have readily recognised that it was a misnomer and was intended to verify the debt due by the plaintiff. I do not accept, therefore, that the demand was defective for want of proper verification. Even if that did amount to a defect in the demand, it is not one that would have caused substantive injustice for the purposes of section 459J(i)(a) unless set aside.

9. For those reasons, I am not prepared to make a declaration that the demand was not a valid demand. I am not prepared to set aside the demand in toto, because it seems to me that there was no genuine dispute as to the sum of approximately $45,000 to which I have referred. However. there is a genuine dispute as to the remaining amount of $4,066.

10. The Court, therefore, orders that:

1. Pursuant to Corporations Act, s 459H(4) the creditor's statutory demand dated 14 May 2014 served by the defendant on the plaintiff on 15 May 2014 be varied by substituting for the amount of the demand, the amount of $45,944, and declares that the demand as so varied has and has had effect as from when the demand was served on the company.

The Court notes that:

2. The demand as so varied has been satisfied.

11. The Court orders that the defendant pay the plaintiff's costs assessed in the sum of $5,000.

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Decision last updated: 18 February 2015