Ligon 158 Pty Ltd v Huber

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Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Ligon 158 Pty Ltd v Huber [2016] NSWCA 330
Hearing dates:4 November 2016
Date of orders: 28 November 2016
Decision date: 28 November 2016
Before: McColl JA at [1]
Meagher JA at [2]
Barrett AJA at [3]
Decision:

1. Appeal allowed.

 

2. Set aside orders (1) and (2) made in Equity Division proceedings 2015/254776 on 6 May 2016 and in lieu thereof order as follows:

 

(a) Order that the statutory demand dated 7 August 2015 served on the plaintiff by the defendant on 10 August 2015 be set aside.

 

(b) Order that the defendant pay the plaintiff’s costs of the proceedings.

 

3. Order that the sum of $410,000 paid into court by the appellant be paid out to the appellant.

 4. Order that the respondent pay the appellant’s costs of the proceedings in this Court.
Catchwords: CORPORATIONS – winding up – statutory demand – application for order setting aside – primary judge dismissed such application based on finding of lack of genuine dispute about the existence of the debt the subject of the demand – creditor alleged indebtedness arising from payment by way of loan – company alleged a different characterisation of the payment – where the primary judge regarded company’s contention as to characterisation as inherently implausible – several considerations identified in support of that conclusion – whether all such matters so devoid of plausibility as to require no further investigation
Legislation Cited: Supreme Court Act 1970 (NSW), s 75A
Corporations Act 2001 (Cth), ss 459G, 459H
Cases Cited: Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Britten-Norman Pty Ltd v Analysis and Technology Australia Pty Ltd (2013) 85 NSWLR 601; [2013] NSWCA 344
Browne v Dunn (1893) 6 R 67
Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5; (2011) 29 ACLR 11-011
CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728; (2003) 47 ACSR 100
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers (Aust) Pty Ltd (1994) 13 ACSR 34
Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452; [1996] FCA 822
House v The King (1936) 55 CLR 499; [1936] HCA 40
Infratel Networks Pty Ltd v Gundry’s Telco & Rigging Pty Ltd [2012] NSWCA 368; (2012) 297 ALR 372
Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290; (1993) 11 ACSR 362
MNWA Pty Ltd v Deputy Commissioner of Taxation [2016] FCAFC 1540
Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896
Powerhouse Australasia Pty Ltd v Viarc Pty Ltd [2006] VSC 508
Re UGL Process Solutions…
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Details
Case
[2016] NSWCA 330
Decision Date

CaseChat Overview and Summary

Ligon 158 Pty Ltd (the company) appealed to the Court of Appeal of New South Wales against an order of the primary judge dismissing its application to set aside a statutory demand issued by Huber (the creditor). The dispute concerned the characterisation of a payment made by the creditor to the company, with the creditor alleging it was a loan and the company asserting it was not. The primary judge had found that the company's contention regarding the characterisation of the payment was inherently implausible, leading to the dismissal of the application.

The Court of Appeal was required to determine whether the primary judge erred in finding that there was no genuine dispute about the existence of the debt. Specifically, the court had to consider whether the matters relied upon by the primary judge to conclude that the company's contention was inherently implausible were so devoid of plausibility as to warrant dispensing with further investigation into the nature of the transaction.

The Court of Appeal allowed the appeal, finding that the primary judge had erred in dismissing the company's application. The court reasoned that while the primary judge identified several considerations supporting the conclusion of inherent implausibility, these considerations did not, in their totality, remove the existence of a genuine dispute requiring further investigation. The court concluded that the company had raised a sufficient question about the characterisation of the payment to warrant setting aside the statutory demand.

Consequently, the Court of Appeal set aside the orders of the primary judge and ordered that the statutory demand be set aside. The court also ordered that the creditor pay the company's costs of the proceedings in both the primary court and the Court of Appeal, and that a sum paid into court by the company be paid out to it.

Orders

Orders of the court

1. Appeal allowed.

2. Set aside orders (1) and (2) made in Equity Division proceedings 2015/254776 on 6 May 2016 and in lieu thereof order as follows:

(a) Order that the statutory demand dated 7 August 2015 served on the plaintiff by the defendant on 10 August 2015 be set aside.

(b) Order that the defendant pay the plaintiff’s costs of the proceedings.

3. Order that the sum of $410,000 paid into court by the appellant be paid out to the appellant.

4. Order that the respondent pay the appellant’s costs of the proceedings in this Court.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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