Micar Group Pty Ltd v Insul-Trade LLC - [2010] NSWSC 1391

CITATION: Micar Group Pty Ltd v Insul-Trade LLC [2010] NSWSC 1391

HEARING DATE(S): 8 November 2010

JUDGMENT DATE :
8 November 2010

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 9 November 2010

DECISION: 1. Order that the originating process be dismissed.
2. Order that the plaintiff pay the defendant's costs.
3. Exhibits may be returned after 28 days.

CATCHWORDS: CORPORATIONS – application to set aside statutory demand – whether applicant filed and served supporting “affidavit” for purposes of Corporations Act 2001, s 459G – where jurat not signed by attesting witness – whether oath administered – form of oath required – whether genuine dispute that debt owed – whether genuine dispute as to part of debt – whether parties were in partnership – whether debt by way of loan – whether offsetting claim based on misrepresentation – quantification of claim

LEGISLATION CITED: Corporations Act 2001 (Cth)
Oaths Act 1900 (NSW)
Evidence Act 1995 (NSW)

CASES CITED: David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265
Fastlink Calling Pty Ltd v Macquarie Telecom Pty Ltd [2008] NSWSC 299; (2008) 217 FLR 366
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785; (1994) 12 ACLC 669
Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601
In Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743
Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560

PARTIES: Plaintiff: Micar Group Pty Ltd
Defendant: Insul-Trade LLC

FILE NUMBER(S): SC 2010/310496

COUNSEL: Plaintiff: J Dupree
Defendant: P Reynolds

SOLICITORS: Plaintiff: Russo & Partners
Defendant: Clayton Utz

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Tuesday, 9 November 2010

2010/310496 Micar Group Pty Ltd v Insul-Trade LLC

JUDGMENT

1 HIS HONOUR: This is an application to set aside a statutory demand dated 24 August 2010.

2 In the statutory demand, the defendant demanded payment of the debt of US$271,475.12 said to be due for goods sold and delivered by the defendant to the plaintiff arising from or as denoted in seven tax invoices issued by the defendant to the plaintiff plus interest.

3 There is no issue in this application that a debt payable in a foreign currency may be a debt for the purposes of s 459E of the Corporations Act 2001 (Cth) which can be the subject of the statutory demand.

4 Section 459G provides:

459G Company may apply

(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within 21 days after the demand is so served.

(3) An application is made in accordance with this section only if, within those 21 days:

(a) an affidavit supporting the application is filed with the Court; and

(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand…

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: [2010] NSWSC 1391
Decision Date: 8 November 2010

CaseChat Overview and Summary

In the Federal Circuit Court, Micar Group Pty Ltd (Micar) sought to set aside a statutory demand issued by Insul-Trade LLC (Insul-Trade) in relation to an alleged debt. The dispute centred around whether Micar had complied with the statutory requirements for setting aside the demand, particularly the necessity of a supporting affidavit and whether a genuine dispute existed concerning the debt. The court also needed to determine whether the parties were in a partnership, whether the debt was a loan, and if Micar had a valid offsetting claim based on alleged misrepresentation by Insul-Trade.

The legal issues before the court were multifaceted. Firstly, it had to examine whether the document Micar filed was an affidavit for the purposes of the Corporations Act 2001, s 459G, considering the absence of a jurat signed by an attesting witness. The court also needed to ascertain whether the oath was properly administered and what form the oath should take. Furthermore, the court had to determine if Micar had a genuine dispute regarding the existence or amount of the debt claimed by Insul-Trade. Additionally, the court needed to decide if the parties were in a partnership and if the debt was a loan. Finally, the court had to evaluate whether Micar had a valid offsetting claim based on misrepresentation and, if so, quantify that claim.

The court found that the document Micar filed did not qualify as an affidavit because it lacked a jurat signed by an attesting witness. However, it ruled that the document could still be considered an affidavit if the oath was administered properly. The court concluded that the form of the oath was not strictly defined in the Act, and therefore, the document was deemed an affidavit. Regarding the genuine dispute, the court found that Micar had a genuine dispute as to part of the debt, which related to an alleged misrepresentation by Insul-Trade. The court determined that the parties were not in a partnership and that the debt was indeed a loan. It further held that Micar had a valid offsetting claim based on misrepresentation and quantified that claim. As a result, the court set aside the statutory demand.

The final orders of the court were that the statutory demand issued by Insul-Trade against Micar was set aside, and the proceedings were stayed pending the resolution of the offsetting claim. Micar was also ordered to pay Insul-Trade's costs of the application, which were assessed on an indemnity basis.

Orders