Indaba Pty Ltd v Home Building Society Ltd
[2000] WASC 38
•23 FEBRUARY 2000
INDABA PTY LTD -v- HOME BUILDING SOCIETY LTD [2000] WASC 38
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 38 | |
| Case No: | COR:7/2000 | 16 FEBRUARY 2000 | |
| Coram: | MASTER SANDERSON | 23/02/00 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | INDABA PTY LTD (ACN 009 294 697) HOME BUILDING SOCIETY LTD |
Catchwords: | Corporations law Statutory demand Issue of two statutory demands Whether demand should be set aside as abuse of process Discretion to set aside demand if oppressive |
Legislation: | Corporations Law, s 459G, s 459H and s 459J(1)(b) |
Case References: | Sentinel Financial Management Pty Ltd v Entercorp Finance Pty Ltd (1997) 15 ACLC 201 Aspermont v Robash (1998) 16 ACLC 485 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
HOME BUILDING SOCIETY LTD
Respondent
Catchwords:
Corporations law - Statutory demand - Issue of two statutory demands - Whether demand should be set aside as abuse of process - Discretion to set aside demand if oppressive
Legislation:
Corporations Law, s 459G, s 459H and s 459J(1)(b)
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Applicant : Mr T Darbyshire
Respondent : Mr T O Coyle
Solicitors:
Applicant : Kott Gunning
Respondent : Phillips Fox
Case(s) referred to in judgment(s):
Sentinel Financial Management Pty Ltd v Entercorp Finance Pty Ltd (1997) 15 ACLC 201
Case(s) also cited:
Aspermont v Robash (1998) 16 ACLC 485
(Page 3)
1 MASTER SANDERSON: This is an application to set aside a statutory demand. It raises a short but important practical point to do with the statutory demand procedure.
2 The facts are uncontroversial. On 14 December 1999 the solicitors for the respondent forwarded a statutory demand to the applicant. The demand was unsigned. On 16 December 1999 the respondent's solicitors served a statutory demand in the proper form to the applicant. On 5 January 2000 an application was made to set aside the unsigned statutory demand (COR 1 of 2000). On 10 January 2000 the applicant's solicitors received correspondence from the respondent's solicitors dated 7 January 2000 advising them of the second statutory demand. This letter appears as Annexure "TD2" to the affidavit of Thomas Darbyshire sworn 10 January 2000 and filed in support of this application. The respondent's solicitors letter acknowledges receipt of the application to set aside the unsigned statutory demand and continues:
"The application and supporting affidavit refer to an unsigned statutory demand served by post on 14 December 1999. We became aware of this defect and therefore served Indaba Pty Ltd with a signed, but otherwise identical, statutory demand 2 days later, by post on 16 December 1999. Had you corresponded with us prior to filing this application, we would have notified you of our actions and obviated your application. We will not agree to pay your client's costs of the application. Accordingly our client consents to the setting aside of the unsigned statutory demand with each party to bear its own costs."
- In fact, the unsigned statutory demand was set aside by consent and the respondent was ordered to pay the applicant's costs of the application. It is now contended by the applicant that the issue of two statutory demands, both of which were on foot at the same time, is oppressive, runs counter to the clear intent of the statutory demand procedure and, as a consequence, the presently subsisting statutory demand ought be set aside under the provisions of s 459J(1)(b).
3 In his submissions, counsel for the applicant relied heavily on the decision of Senior Master Mahoney in Sentinel Financial Management Pty Ltd v Entercorp Finance Pty Ltd (1997) 15 ACLC 201. The facts in this case can be conveniently taken from the headnote:
"A creditor served a number of statutory demands (for different alleged debts) on a company. The company sought an order that the demands be set aside under sec 459J(1)(b). It said that
(Page 4)
- the service of multiple demands on it, instead of one demand for all of the debts alleged to be owing, constituted an abuse of the statutory procedure with respect to demands. It argued that sec 459E(1), which provided that a creditor 'may' serve a demand relating to 'a single debt' or to 'two or more debts', required a creditor to serve no more than one demand in respect of multiple alleged debts.
The creditor argued that sec 459E(1) was expressed in permissive terms. It was said that this meant that a creditor was at liberty to serve multiple demands provided that each was for 'a single debt'."
4 The respondent in this case had issued seven separate demands over a 12 month period. The learned Senior Master observed that under the provisions of s 459G(1) the applicant was required to issue separate proceedings to set aside each of the statutory demands. The learned Master then went on to conclude that what the statutory demand procedure contemplated was one statutory demand for a single debt. If the single debt was made up of a number of amounts which became due and payable from time to time, there was still to be only one demand. A multiplicity of demands was not permitted. The learned Master concluded that the issue of the multiple demands was oppressive and all the demands should be set aside. The Master considered the possibility of setting aside all the demands save one and allowing the respondent to proceed on that demand. He rejected that as an option and said (at 204):
"The remedy to which the applicants are entitled ought be informed by consideration of the gravity of the vice giving rise to the need for the remedy. This may be measured by considering the example of a company on the border of insolvency but genuinely disputing its liability for every debt made the subject of multiple demands. The sheer weight of costs and fees required to commence multiple proceedings may suffice to prevent its being heard at all. Contemplation of that consequence suffices to convince that the answer to this variety of prejudice and oppression is not 'an appropriate order for costs'."
5 The situation in this case, as counsel for the applicant acknowledged, is somewhat different. Two demands were issued and they were issued with respect to the same debt. The demands were issued within two days of one another. There is no suggestion by the applicant that it has any
(Page 5)
- basis for setting aside the second statutory demand, either because there is a bona fide dispute as to the debt or because the applicant has an offsetting claim. Essentially, the applicant submits that the statutory demand should be set aside because it amounts to an abuse of process.
6 During the course of argument a question arose as to whether or not there were in fact two statutory demands validly on foot. It was submitted on behalf of the respondent that as the first statutory demand was unsigned it was not valid and therefore not a statutory demand at all: see Aspermont v Robash (1998) 16 ACLC 485. It was submitted that the first statutory demand being invalid could not have formed the basis for a winding up order against the applicant and therefore there was no need to apply to set aside the statutory demand. Whatever may be the strength of that argument, the applicant did apply to set aside the statutory demand and the respondent consented to the application. Furthermore, it would be a brave company indeed which decided simply to ignore the unsigned statutory demand and trust to luck that no adverse consequences would follow. In the context of this case the applicant behaved reasonably in applying to set aside the first statutory demand and the second statutory demand must be seen in the light of that fact.
7 In my view s 459J(1)(b) provides the court with a discretion to set aside a statutory demand in circumstances where not to do so would be oppressive. But each case must be looked at on its merits. In my view this case involved little or no prejudice to the applicant. The debt on which the statutory demand was based was not contested. No confusion of any moment arose as a consequence of the service of the two demands. Furthermore, the applicant was awarded its costs in relation to the application to set aside the first statutory demand. While the service of the unsigned statutory demand was unfortunate, it led only to minor confusion and did not prejudice the applicant to any significant extent. That being the case, I am not satisfied that it would be appropriate to set aside the statutory demand. To do so would not achieve any real purpose.
8 I will hear the parties as to the precise form of orders and as to costs.
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