Ina Settlers Co Pty Ltd v SVPL Pty Ltd (in liq)
[2014] WASC 236
•3 JULY 2014
INA SETTLERS CO PTY LTD -v- SVPL PTY LTD (in liq) [2014] WASC 236
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 236 | |
| Case No: | COR:54/2014 | 24 JUNE 2014 | |
| Coram: | MASTER SANDERSON | 3/07/14 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Demand set aside | ||
| B | |||
| PDF Version |
| Parties: | INA SETTLERS CO PTY LTD (ACN 124 498 442) SVPL PTY LTD (in liq) (ACN 067 056 599) |
Catchwords: | Corporations law Application to set aside statutory demand Turns on own facts |
Legislation: | Nil |
Case References: | Apex Gold Pty Ltd v Atlas Copco Australia Pty Ltd [2011] WASC 49 Carob Industries Pty Ltd (in liq) v Simto Pty Ltd [2000] WASCA 362; (2000) 23 WAR 515 Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 Delnorth Pty Ltd v State Bank of New South Wales (1995) 17 ACSR 379 Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410 South Coast Aboriginal Cultural Centre Ltd v Commonwealth of Australia [2008] NSWSC 1000 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
SVPL PTY LTD (in liq) (ACN 067 056 599)
Defendant
Catchwords:
Corporations law - Application to set aside statutory demand - Turns on own facts
Legislation:
Nil
Result:
Demand set aside
Category: B
Representation:
Counsel:
Plaintiff : Mr B D Campbell
Defendant : Mr D P H Engelter
Solicitors:
Plaintiff : Mony de Kerloy Barristers and Solicitors
Defendant : Williams & Hughes
Case(s) referred to in judgment(s):
Apex Gold Pty Ltd v Atlas Copco Australia Pty Ltd [2011] WASC 49
Carob Industries Pty Ltd (in liq) v Simto Pty Ltd [2000] WASCA 362; (2000) 23 WAR 515
Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423
Delnorth Pty Ltd v State Bank of New South Wales (1995) 17 ACSR 379
Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410
South Coast Aboriginal Cultural Centre Ltd v Commonwealth of Australia [2008] NSWSC 1000
1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. A copy of the statutory demand appears as attachment TMB1 to the affidavit of Tania Maree Betts sworn 20 March 2014 and filed in support of this application. In the schedule to the statutory demand under the heading 'Description of the debt' there appears the following:
Sums payable by the Company to the Creditor pursuant to a written agreement between the Creditor, the Company and Settlers Lakeside Village Fund Pty Ltd (ACN 086 285 305) undated but executed in 2007 and being an amount payable in respect of:
ILU Lot No. 47
ILU Lot No. 48
2 The amount of the demand is $188,970. It was agreed between the parties there was an error in the demand. Instead of a reference to Lot No 47 there should be a reference to Lot No 8. No injustice was occasioned by this error - all parties knew the point at issue. The mistake did not in and of itself warrant the statutory demand being set aside.
3 The background facts can be summarised in this way. In or around April 2007 the plaintiff entered into arrangements to acquire a number of retirement villages. These arrangements involved the defendant and two other entities - SLVF Pty Ltd (SLVF) and Retraite (a Partnership) (Retraite). The sale of the retirement villages and the related agreements were documented in three key documents. The first was a Business Sale Agreement, the second was what is known as the 'Side Agreement' and the third was a Management Services Agreement. Pursuant to the Business Sale Agreement the plaintiff took control of a fund in an amount of $3,527,715.23.
4 The fund arose in connection with liabilities under promissory notes, and, pursuant to cl 18(b) of the Business Sale Agreement the plaintiff assumed SLVF's obligations under the promissory notes. Pursuant to cl 18(c) of the Business Sale Agreement SLVF indemnified the plaintiff in relation to obligations under the promissory notes.
5 In the Side Agreement the parties confirmed that the fund was repayable to the defendant. The Side Agreement also provided an assignment by SLVF to the defendant of any rights it may have in respect of the fund. Pursuant to cl 2 of the Side Agreement the plaintiff was obliged to repay the fund in the specified manner. There were to be two lump sum payments, the first payable immediately following the execution of the Side Agreement, the second following payment of certain loans. Then pursuant to cl 2(b)(iii) further instalments were to be paid 'as soon as practicable following receipt by the Buyer of the GLL Purchase Price in relation to the RLL Lot for which the corresponding RLL Premium is payable'.
6 The Management Services Agreement between the plaintiff and Retraite was also executed. That agreement provided that Retraite would be appointed to manage the retirement villages being acquired by the plaintiff.
7 At or about the same time a fourth agreement was entered into between the defendant, SLVF and Retraite. It is important to note the plaintiff was not a party to this agreement. The agreement was not a part of the business sale. The plaintiff was however notified of the agreement around the time that it was signed. This agreement effected a further assignment of future repayments of the fund. At the heart of this dispute is cl 4 of that agreement. Under the heading 'SVPL Consent' there appears the following:
SVPL:
(a) consents and agrees to the terms of, and the arrangement effected by, this agreement; and
(b) assigns any rights it may have in respect of the Actual Fund Amount to Retraite on the following terms:
(i) The amount of $788,567 shall not be assigned; and
(ii) Any instalment amounts received by SVPL up until 30 June 2008 shall not be assigned; and
(iii) Any and all future amounts received not included in the above shall be assigned in full.
9 The defendant was deregistered on 31 March 2012 and was reinstated in November 2013. A liquidator was immediately appointed to the defendant. In December 2013 the defendant, through the liquidator, wrote to the plaintiff asserting a right to the fund payments and in particular a right to payment in relation to Lots 47 and 8.
10 Based upon those background facts the plaintiff puts its position this way. In order to be effective at law any assignment of debt or chose in action must comply with s 20 of the Property Law Act 1969 (WA). This requires that any assignment must:
(a) be absolute;
(b) be in writing under the hand of the assignor;
(c) not purport to be by way of charge;
(d) involve a debt or chose in action;
(e) give express notice in writing to the creditor; and
(f) be for the whole or part of any debt or chose in action.
11 The plaintiff points out this assignment appears to be absolute. In order to be absolute a legal assignment cannot be conditional and must show an immediate intention on the part of the assignor to divest itself of all ownership of the relevant debt or chose in action. The assignor cannot simultaneously assign and retain the debt: see for example Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410.
12 Further this assignment appears to be 'express'. A legal assignment requires clear and explicit notice. No particular form is required but a clear statement that an assignment has been effected is necessary. Implication, operation of law or constructive notice is not sufficient: see Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423, 438 - 439. From the date of the notice of the assignment the assignee acquires all legal rights to the debt: Carob Industries Pty Ltd (in liq) v Simto Pty Ltd [2000] WASCA 362; (2000) 23 WAR 515 [27]. From the time of the legal assignment any action must be brought in the name of the assignee and not in the name of the assignor.
13 Thus the plaintiff says everything which needs to be done has been done, the debt has been assigned and Retraite is entitled to be paid pursuant to the Assignment Agreement. Further there can be no suggestion the debt has somehow been reassigned from Retraite to the plaintiff. The legal requirements of such an assignment have not been met. It cannot be the case there has been an assignment in equity. At the very least the plaintiff would have had to have notice of the assignment. Nothing in the correspondence alerts the plaintiff to any reassignment.
14 The defendant answers these arguments by pointing out the dispute between the parties relates to the proper interpretation of the Assignment Agreement and means the defendant is entitled to the debt. Counsel in his submissions conceded as a general rule where there was a dispute between the parties as to the proper interpretation of a deed that meant there was a genuine dispute and the statutory demand would be set aside. However counsel drew attention to a limited number of cases where when there was a short point at issue the court would determine that issue in the context of deciding whether there was a genuine dispute. This line of authority seems to have begun with Delnorth Pty Ltd v State Bank of New South Wales (1995) 17 ACSR 379 through to South Coast Aboriginal Cultural Centre Ltd v Commonwealth of Australia [2008] NSWSC 1000. Over time various judges have warned about the risks inherent in adopting that course. In this court Pritchard J made the point in Apex Gold Pty Ltd v Atlas Copco Australia Pty Ltd [2011] WASC 49 [43].
15 The defendant framed its argument in this way. By cl 2(a)(i) of the Assignment Agreement it was acknowledged that the fund was repayable to SVPL. It was further acknowledged by cl 2(b) that the fund would be repaid by Settlers to SVPL by way of an initial tranche of $788,567 and a secondary amount of $257,783.69 and then the rollover instalments thereafter. By cl 2(c) it was acknowledged that Settlers would give SVPL notice of an event giving rise to a liability by Settlers to pay a rollover instalment to SVPL. Clause 4(b)(iii) then provided that the initial tranche and any rollover instalments received by SVPL up to 30 June would not be assigned but 'any and all future amounts received not included in the above shall be assigned in full' (emphasis added). The defendant maintains the word 'received' by SVPL is the key. The Assignment Agreement expressly provided for SVPL to remain as the recipient of the repayments of the fund from Settlers. What was assigned to Retraite was a right to future property (that is, property once received by SVPL). The plaintiff maintains that interpretation of the clause is consistent with other terms of the agreement.
16 In my view this is not an issue which can be resolved on an application to set aside a statutory demand. It is not for me to say which of the two competing interpretations of the Assignment Agreement are correct. All I have to determine is whether or not the plaintiff's position is arguable. It clearly is. Once that point is reached there is a genuine dispute and the statutory demand ought be set aside.
17 I will make the following orders (order 1 is necessary as the plaintiff needs leave to proceed against a company in liquidation):
1. Leave be granted pursuant to s 451B of the Corporations Act 2001 (Cth) to bring these proceedings.
2. The statutory demand dated 26 February 2014 served by the defendant on the plaintiff on 28 February be set aside.
3. The defendant pay the costs of the application, to be taxed if not agreed.
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