JSBG Developments Pty v Kozlowski - [2010] NSWSC 97

CITATION: JSBG Developments Pty v Kozlowski [2010] NSWSC 97

HEARING DATE(S): 18 February 2010

JUDGMENT DATE :
18 February 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Palmer J

EX TEMPORE JUDGMENT DATE: 18 February 2010

DECISION: Application dismissed. Plaintiff to pay Defendant’s costs on indemnity basis.

CATCHWORDS: CORPORATIONS – STATUTORY DEMAND – Application to set aside a Statutory Demand – whether Demand can be set aside for “substantial injustice” or “some other reason” – whether defects including omission of required warning produced injustice or “some other reason” to set aside Demand – whether defects amounted to “mere defect” for s 459J(2). - COSTS – INDEMNITY BASIS – Whether Plaintiff should bear costs of the proceedings on the indemnity basis where application had no prospects of success.

LEGISLATION CITED: - Building and Construction Industry Payments Act 2004 (Qld) – s 29, s 31
- Corporations Act 2001 (Cth) – s 459E, s 459G, s 459J, s 509H

CATEGORY: Principal judgment

CASES CITED: - B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1994) 15 ACSR 433
- JSBG Developments Pty Ltd v Kozlowski (2009) 74 ACSR 531
- Kezarne Pty Ltd v Sydney Asbestos Removal Services Pty Ltd (1998) 29 ACSR 11
- Randall Pty Ltd v Chepan Pty Ltd (2009) NSWSC 783

PARTIES: JSBG Developments Pty Ltd (Plaintiff)
Wlodzimierz Antoni Kozlowski (Defendant)

FILE NUMBER(S): SC 2009/00290481

COUNSEL: G.S. McDonald (Plaintiff)
T.O. Bland (Defendant)

SOLICITORS: B.R. Golledge (Director of Plaintiff)
Lou Baker & Assoc (Defendant)

2009/00290481 JSBG Developments Pty v Kozlowski

JUDGMENT – Ex tempore

18 February, 2010

Introduction

1 This is an application under s 459G of the Corporations Act 2001 (Cth) to set aside a Statutory Demand. The Demand was served on or about 24 August 2009. An Originating Process was filed on 10 September 2009 and it was supported by an affidavit of a director and shareholder of the Plaintiff, Mr Golledge.

2 Mr Golledge, after deposing that he is a director and shareholder of the company and authorised to swear the affidavit on behalf of the Plaintiff, gives the basis for setting aside the Statutory Demand in his affidavit as follows:

“6. I say that the Demand is defective for many reasons, including:

a. Paragraph 459E(2)(e) was amended in 2006 as part of amendments of the Corporations Regulations 2001.

b. The correct Form 509H was not used by the Defendant.

c. The Demand does not contain the warning prescribed by the regulations to be on the Form.

d. The Supporting Affidavit does not contain reference to the complete Adjudication Decision including Additional Comments by the Adjudicator.

e. The assertion the Adjudication Application was Unchallenged is Incorrect 2.(c)

f. The names of the second and third defendants are incorrectly spelt in the certificate of search and accompanying application form from the Supreme Court of Queensland.

7. In addition to the defects in the Statutory Demand, I dispute that any debt is due by the Plaintiff to the Defendant.

8. As a director of…

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

AGLC: JSBG Developments Pty v Kozlowski [2010] NSWSC 97
Case: [2010] NSWSC 97
Decision Date: 18 February 2010

CaseChat Overview and Summary

JSBG Developments Pty Ltd sought to set aside a statutory demand issued by Kozlowski, which required payment of a debt. The Federal Circuit and Family Court of Australia presided over the proceedings. The primary legal issue was whether the statutory demand could be set aside due to a "substantial injustice" or "some other reason" as per the relevant statute. Additionally, the court needed to determine if the defects, including the omission of a required warning, constituted a "substantial injustice" or "some other reason" to set aside the demand. Another issue was whether these defects amounted to a "mere defect" under s 459J(2).

The court examined the statutory framework and found that the omission of the required warning did not constitute a "substantial injustice" or "some other reason" to set aside the demand. The court concluded that the defects were minor and did not affect the validity of the demand. Regarding the costs, the court held that the plaintiff should bear the costs of the proceedings on an indemnity basis due to the lack of prospects of success in setting aside the demand.

The court dismissed the application to set aside the statutory demand and ordered that the plaintiff bear the costs of the proceedings on an indemnity basis.

Orders