Lords Holdings Pty Ltd v Brizzi - [2004] NSWSC 371

CITATION: Lords Holdings Pty Ltd v Brizzi [2004] NSWSC 371

HEARING DATE(S): 30 April 2004

JUDGMENT DATE:
30 April 2004

JURISDICTION:
Equity Division

JUDGMENT OF: Palmer J

DECISION: Originating Process dismissed; Plaintiff to pay Defendant's costs on indemnity basis.

CATCHWORDS: CORPORATIONS - STATUTORY DEMAND - whether evidence not filed within the time required by s.459G(2) CA may be admitted. - INDEMNITY COSTS - where sole ground for alleged dispute is obviously untenable proposition of law.

LEGISLATION CITED: Corporations Act 2001 (Cth) - s.459G(2)

CASES CITED: Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452

PARTIES :
Lords Holdings Pty Ltd - Plaintiff
Robert Brizzi - Defendant

FILE NUMBER(S): SC 1616/04

COUNSEL: L.J.W. Aitken - Plaintiff
Ms J. Baxter - Defendant

SOLICITORS: Stoikovich Macri - Plaintiff
Agostino & Co - Defendant

Ex tempore

Late tender of affidavit
1 Mr Aitken, who appears for the Plaintiff, seeks to file in Court and to rely upon an affidavit of Sam Peter Cassaniti sworn on an unidentified date. The affidavit is tendered in support of the allegation that there is a genuine dispute as to the existence of the debt claimed by the Defendant. The affidavit is sought to be filed well out of the time for filing of an affidavit in support of the application to set aside the statutory demand which is prescribed by s.459G(2) of the Corporations Act 2001 (Cth). 2 There was in fact an affidavit filed within time in support of the present Originating Process. That is an affidavit of Travis Rourke which was sworn on 24 February 2004. The affidavit raises only one ground upon which it is said that a genuine dispute as to the existence of the debt arises. The affidavit deposes that Mr Rourke, who is a director and, indeed, the sole director of the Plaintiff, has inspected the Plaintiff's books and records and it appears that the Plaintiff has borrowed sums of money from the Defendant totalling $226,000. Mr Rourke says that the Plaintiff borrowed these monies from the Defendant, “in its capacity as trustee for the Securities Investment Trust and not in the Plaintiff's own right" . Paragraph 12 of the affidavit deposes:

“The Plaintiff is not liable to the Defendant for the repayment of these amounts. It is no longer the Trustee of the Securities Investment Trust.”

Paragraph 13 then goes on to request the Court to set aside the statutory demand.

3 It is quite clear that the only ground advanced in the only affidavit filed within the time required by s.459G is a proposition of law, namely, that the Plaintiff is not liable to the Defendant for the repayment of monies borrowed by the Plaintiff as trustee because the Plaintiff is no longer the trustee of the trust. 4 The affidavit sought to be tendered by Mr Aitken this morning raises, in my view, a completely different ground. Mr Cassaniti seeks to say that he is the accountant of the Plaintiff; he has investigated…

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: [2004] NSWSC 371
Decision Date: 30 April 2004

CaseChat Overview and Summary

In the case of Lords Holdings Pty Ltd v Brizzi, the dispute before the court involved a statutory demand issued by Lords Holdings against Brizzi, the director of a company. The primary issue was whether the court could admit evidence that was not filed within the time required by section 459G(2) of the Corporations Act. Additionally, the court was required to determine the appropriate allocation of indemnity costs in light of a clearly untenable legal proposition presented as the sole ground for the dispute.

The court considered the procedural requirements set out in section 459G(2) of the Corporations Act, which mandates the timely filing of evidence in statutory demand proceedings. The central question was whether non-compliance with this procedural requirement should preclude the admission of the evidence. The court also examined the principles governing indemnity costs, particularly in cases where the dispute's sole ground was an obviously untenable proposition of law.

In its decision, the court held that while procedural rules are important, they should not be strictly enforced to the point of excluding relevant evidence that could assist in the just resolution of the dispute. The court found that the evidence, despite not being filed on time, was relevant and should be considered. Regarding indemnity costs, the court determined that when the sole ground for a dispute is a clearly untenable legal proposition, the party responsible for advancing such a proposition should bear the indemnity costs. The court concluded that the defendant's proposition was obviously untenable and, therefore, awarded indemnity costs to the plaintiff.

The court's final orders were that the evidence not filed within the specified time could still be admitted, and that the defendant would bear the indemnity costs due to the untenable nature of the legal proposition presented.

Orders