Marshin Motors Pty Ltd v W & S Xuereb Motorcycles Pty Ltd trading as Hawkesbury Dirt Bikes & Motorcycles

Marshin Motors Pty Ltd, the plaintiff, sought to wind up W & S Xuereb Motorcycles Pty Ltd trading as Hawkesbury Dirt Bikes & Motorcycles, the defendant, by issuing a statutory demand. The defendant applied to the Federal Circuit Court to set aside the statutory demand under section 459G of the Corporations Act 2001 (Cth). The primary dispute centred on whether a debt existed which justified the statutory demand and the subsequent winding up application.

The court had to determine whether there was a genuine dispute about the existence or the amount of the debt. The crux of the matter was whether the moneys paid by the defendant to the plaintiff constituted a debt or an advance payment for future selection of stock. The court examined the terms of the agreement between the parties and the nature of the transaction. The court needed to ascertain whether there was an express or implied term that the moneys were repayable by the defendant to the plaintiff upon demand or at a future date.

The court found that there was no express or implied term in the agreement that the moneys were repayable by the defendant to the plaintiff upon demand or at a future date. The court concluded that the moneys paid by the defendant were an advance payment for stock to be chosen by the defendant in the future, and not a loan. Therefore, there was no debt due and payable by the defendant to the plaintiff. The court set aside the statutory demand. The court ordered that the statutory demand be set aside and that the plaintiff pay the defendant’s costs of the application.