Lieu Investments Pty Ltd v Big Country Developments Pty Ltd

[1996] FCA 719

IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )    No. NG 3310 of 1996
GENERAL DIVISION                 )

BETWEEN:LIEU INVESTMENTS PTY LIMITED

Applicant

AND:BIG COUNTRY DEVELOPMENTS PTY LIMITED

Respondent

CORAM:    SHEPPARD J

PLACE:    SYDNEY

DATE:     5 JULY 1996

REASONS FOR JUDGMENT

HIS HONOUR:   On 24 May last there was filed in this court an application said to be made under either s.459G or s.459J of the Corporations Law seeking an order pursuant to either of those sections setting aside a statutory demand served on the applicant by the respondent on or about 17 May.  Alternatively an order was sought pursuant to s.459F(2) of the Law extending the period for compliance with the statutory demand served on the applicant.

The application was supported by the affidavit of Mr Paul Lieu also filed on 24 May.  He said that he was a director of the applicant and that he received a statutory demand dated 13 May by post on or about 17 May.  A copy of the demand is exhibited to the affidavit.  It is in the usual form and states that Lieu Investments Pty Limited owes the applicant
the sum of $104,640.16, being the amount of the debt described in the schedule to the notice.  There is then a statement that the amount is due and payable and that the creditor, that is to say the respondent in these proceedings, requires Lieu Investments within 21 days to pay the amount of the debt or to secure or compound for the debt to the respondent's satisfaction.

The schedule shows that the debt comprises a judgment recovered in the District Court of New South Wales on 21 March 1996 in the sum of $131,850.  Credit is given for two amounts received leaving a balance owing which is said to be $104,640.16.  No other evidence was filed in support of the application.  There is on the file an affidavit by Mr Stephen Lewis who is the respondent's solicitor.  It deals with the history of the matter and I have paid general regard to it.

It would appear to be common ground that the respondent sued the applicant, Lieu Investments Pty Limited, in the District Court and recovered a judgment by consent in the sum of $131,850 - the amount mentioned in the schedule to the demand.  The respondent went into liquidation on 10 November 1992.  The liquidation was terminated by order of the Supreme Court on 19 March 1993.  The order of the Supreme Court which was made on 19 March 1993 provided that the winding up of the defendant, that is to say the present respondent was terminated and that the appointment of the liquidator Mr Brien was also terminated.
     For reasons which are not apparent, the order, although made on 19 March 1993, was not entered until 16 May 1996.  The solicitor for the applicant, that is to say Lieu Investments, has referred me to provisions of the Supreme Court Rules which say in effect that an order which has not been entered does not take effect.  In other words, orders do not take effect until they are entered.  Nevertheless the same rules provide that orders once entered take effect from their date.  So this order took effect on 19 March 1993 notwithstanding that it was not entered until 16 May 1996.

The point which was attempted to be made was that the judgment in the District Court which was entered on 21 March 1996 was entered at a time when the respondent was still technically in liquidation, the order for the termination of the liquidation not then having been taken out.  This was said to be as I understand it an irregularity.  The judgment as I say was entered by consent.  There were apparently terms of settlement signed on behalf of the parties.  No application is to be made by the applicant seeking an order setting aside the judgment in the District Court.

I asked the solicitor for the applicant whether his client denied owing the debt - not as a judgment debt but as a debt agreed to be paid in the terms of settlement which led to the judgment in the District Court being entered.  As I understood his response, which was to a degree somewhat opaque, no such denial was to be made.
     In applications of this kind it is usual for applicants to put on the evidence upon which they rely at the time that their applications are filed or shortly thereafter.  If the evidence were left as it is the applicant would not have a basis upon which it could succeed in this application.  Even upon the basis of the matter upon which the applicant wishes to rely to which I have referred, it could not succeed in my opinion in having the notice set aside because at the heart of the matter is the debt.  It does not matter whether it is a judgment debt or not, it is a debt which on the face of the evidence I have is owing.  The statutory demand therefore was properly based.

I was asked for an adjournment.  The point of the adjournment was not apparent to me and I did not regard the matter in the state in which it was as one appropriate for an adjournment.  The adjournment was therefore refused.

In my opinion the applicant has not made out a case for the setting aside of the statutory demand.  The application will be dismissed.  I order the applicant to pay the respondent's costs of the application.

I certify that this and the three (3) preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Sheppard.

Associate

Dated

APPEARANCES

Solicitor for the Applicant:     Mr Scroope,
  McBride Harle & Martin

Solicitor for the Respondent:        Mr Lewis,
  Denes Ebner

Date of Hearing:                 5 July 1996

Place of Hearing:                Sydney

Date of Judgment:                5 July 1996