Infact Consulting Pty Ltd v Kyle House Pty Ltd - [2007] NSWSC 56

CITATION: Infact Consulting Pty Ltd v Kyle House Pty Ltd [2007] NSWSC 56

HEARING DATE(S): 13/11/06, 16/11/06

JUDGMENT DATE :
9 February 2007

JURISDICTION: Equity Division

JUDGMENT OF: White J

DECISION: 1. Order that the originating process be dismissed; 2. order that the plaintiff pay the defendant’s costs.

CATCHWORDS: CORPORATIONS – Winding-up – Winding-up in insolvency – Statutory demand – Application to set aside statutory demand – For defect or some other reason – Defendant served plaintiff with statutory demand – Statutory demand described relevant debts as judgment debts and was not accompanied by affidavit verifying amounts due – Plaintiff claimed that relevant debts were not judgment debts because of small disconformities between amounts claimed as judgment debts and amounts in certificates of costs determination which constituted judgment debts – Whether statutory demand liable to be set aside pursuant to s 459J(1)(b) Corporations Act 2001 (Cth) – Where plaintiff failed to delineate s 459J(1)(b) claim in affidavit in support of originating process – Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 considered – Application dismissed.

LEGISLATION CITED: Corporations Act 2001 (Cth)
Legal Profession Act 2004 (NSW)

CASES CITED: Portrait Express (Sales) Pty Ltd v Kodak (Australasia) Pty Ltd (1996) 132 FLR 300; 20 ACSR 746
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
Energy Equity Corporation Ltd v Sinedie Pty Ltd (2001) 166 FLR 179
Process Machinery Australia Pty Ltd v ACN 057 260 590 Pty Ltd [2002] NSWSC 45
Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560
Anderson Formrite Pty Ltd v CASC Hire Pty Ltd (2005) 147 FLR 379; (2006) 24 ACLC 154
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Tuta Healthcare v Nipro Asia Pty Ltd [2005] NSWSC 664
Condor Asset Management Ltd v Excelsior Eastern Ltd (2005) 56 ACSR 223
Callite Pty Ltd v Peter John Adams & 3 Ors [2001] NSWSC 52
Michael Davies Associates Pty Ltd v Wollacott Hale Corlett & Jumikis Consulting Engineers Pty Ltd [2002] NSWSC 472

PARTIES: Infact Consulting Pty Ltd
v
Kyle House Pty Ltd

FILE NUMBER(S): SC 4887/06

COUNSEL: Plaintiff: D Knaggs (solr)
Defendant: R Parsons

SOLICITORS: Plaintiff: Douglas Knaggs Lawyers
Defendant: Norbert Lipton & Co

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Friday, 9 February 2007

4887/06 Infact Consulting Pty Ltd v Kyle House Pty Ltd

JUDGMENT

1 HIS HONOUR: This is an application under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand of 28 August 2006.

2 The statutory demand claimed $25,134.79. This sum was described as the total amount of the debts described in the schedule to the demand. The schedule was in the following terms:

“ Amount payable pursuant to judgment entered
on 25 August 2006 on filing of Certificate of
Determination of Costs issued 11 May 2006 $24,460.50
Amount payable pursuant to judgment entered
on 25…

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: [2007] NSWSC 56
Decision Date: 9 February 2007

CaseChat Overview and Summary

In the matter of Infact Consulting Pty Ltd v Kyle House Pty Ltd, the Federal Court was presented with an application by the respondent, Kyle House Pty Ltd, to set aside a statutory demand issued by the applicant, Infact Consulting Pty Ltd. The dispute centred around the validity of the statutory demand, which the respondent sought to have dismissed on the basis that it contained defects and other reasons as permitted by the Corporations Act 2001 (Cth). Specifically, the respondent argued that the demand was defective because it described the relevant debts as judgment debts without being accompanied by an affidavit verifying the amounts due. Furthermore, the respondent contended that the amounts claimed as judgment debts did not align precisely with the amounts stated in the certificates of costs determination which formed the basis of the judgment debts, thus questioning the accuracy of the demand.

The legal issues that arose in this case were twofold: whether the statutory demand could be set aside due to its description of the debts as judgment debts without the requisite affidavit, and whether the slight discrepancies between the amounts claimed as judgment debts and the amounts in the certificates of costs determination warranted setting aside the demand. The court had to consider the provisions of section 459J(1)(b) of the Corporations Act, which allows for the setting aside of a statutory demand on various grounds, including if the demand is for a debt that is not a judgment debt or if there is some other reason why the demand should not be enforced.

The court ultimately determined that the statutory demand was not liable to be set aside. The respondent had not sufficiently outlined its claim under section 459J(1)(b) in the affidavit in support of the originating process, and thus, the application was dismissed. The court found the case of Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 to be instructive, as it emphasised the importance of compliance with procedural requirements when making an application to set aside a statutory demand. The respondent's failure to properly delineate its claims in the affidavit was a critical factor in the court's decision.

In conclusion, the court dismissed the application to set aside the statutory demand, upholding the validity of the demand issued by Infact Consulting Pty Ltd against Kyle House Pty Ltd. The respondent was not successful in its attempt to have the demand dismissed on the grounds raised.

Orders