Ligon 158 Pty Ltd v Huber

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.