Momtan Pty Ltd v Foster

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MOMTAN PTY LTD -v- FOSTER [2025] WASC 135

CORAM:   GETHING J

HEARD:   8 APRIL 2025

DELIVERED          :   24 APRIL 2025

FILE NO/S:   COR 189 of 2024

BETWEEN:   MOMTAN PTY LTD

Plaintiff

AND

JILL LOUISE FOSTER

Defendant

FILE NO/S:   COR 191 of 2024

BETWEEN:   FOUR LITTLE GIRLS

Plaintiff

AND

JILL LOUISE FOSTER

Defendant

FILE NO/S:   COR 192 of 2024

BETWEEN:   HARVEY RIVER ESTATE PTY LTD

Plaintiff

AND

JILL LOUISE FOSTER

Defendant


Catchwords:

Corporations - Debt - Statutory demand - Whether applicants have an offsetting claim - Whether there is some other reason why the statutory demand should be set aside

Legislation:

Corporations Act 2001 (Cth) s 459H, s 459G, s 459J
Foreign Judgments Act 1991 (Cth) s 6

Result:

Applications to set aside statutory demands granted

Category:    B

Representation:

COR 189 of 2024

Counsel:

Plaintiff : Mr D P H Engelter
Defendant : Mr G J Radcliff

Solicitors:

Plaintiff : Williams & Hughes
Defendant : Christopher Hannay Legal Solutions

COR 191 of 2024

Counsel:

Plaintiff : Mr D P H Engelter
Defendant : Mr G J Radcliff

Solicitors:

Plaintiff : Williams & Hughes
Defendant : Christopher Hannay Legal Solutions

COR 192 of 2024

Counsel:

Plaintiff : Mr D P H Engelter
Defendant : Mr G J Radcliff

Solicitors:

Plaintiff : Williams & Hughes
Defendant : Christopher Hannay Legal Solutions

Case(s) referred to in decision(s):

Apex Gold Pty Ltd v Atlas Copco Australia Pty Ltd [2011] WASC 49

Black v S Freedman & Co (1910) 12 CLR 105

Blue Mirror Pty Ltd v Tan & Tan Australia Pty Ltd (in liq) [2024] NSWCA 253

CA & Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31

Complete Hire and Sales Pty Ltd v Terra Firma Constructions Pty Ltd [No 2] [2018] WASCA 111

Diploma Construction (WA) Pty Ltd v Consummo Painting Pty Ltd [2017] WASC 31

Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91

Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296

Hoare Bros Pty Ltd v Deputy Commissioner of Taxation (1996) 62 FCR 302; (1996) 135 ALR 677

JJMMR Pty Ltd v LG International Corp [2003] QCA 519

Kiewit Australia Pty Ltd v New Energy Corp Pty Ltd [2018] WASCA 180

Knox v Gye (1872) LR5HL 656

Mackinnon as plaintiff representative of 153 plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as 'STC Sports Trading Club' (No 7) [2019] NSWSC 103

Madden v Kirkegard Ellwood and Partners [1975] Qd R 363

Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24; (2005) 53 ACSR 229

Midas v Equator [2007] NSWSC 759

MNWA Pty Ltd v Deputy Commissioner of Taxation [2016] FCAFC 154

Portrait Express (Sales) Pty Ltd v Kodak (Australasia) Pty Ltd (1996) 20 ACSR 746

Professional Services of Australia Pty Ltd v Lean [2018] WASC 28

Re Haidi Holdings Pty Ltd [2023] VSC 739

Re Mio Amico Pty Ltd [2013] NSWSC 1292

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Details
Case
[2025] WASC 135
Decision Date

CaseChat Overview and Summary

Momtan Pty Ltd and others brought an application against Ms Foster for a declaration that she and others had no interest in certain funds held in a bank account. The application was brought in the Supreme Court of New South Wales. Ms Foster sought to have the statutory demand set aside, claiming that there were offsetting claims against Momtan Pty Ltd and that there were other reasons why the statutory demand should be set aside. The court needed to decide whether Ms Foster had an offsetting claim and whether there was some other reason why the statutory demand should be set aside. The court found that Ms Foster had no offsetting claim as her claim was unfunded and she did not have legal representation in the Cayman Islands. The court also found that there was no other reason why the statutory demand should be set aside as the Cayman Damages Judgment and the Cayman Costs Judgment were final and could not be appealed. The court dismissed Ms Foster's application and ordered her to pay the costs of the application.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In October 2021, Ms Foster applied to be joined as a party to the Cayman Action. This was to seek orders that a certain bank account in the name of Arabella was always hers, having been lawfully assigned to her before the commencement of the Cayman Action. There followed some settlement negotiations between Ms Foster's lawyers and Harneys. Ms Foster's application was heard on 2 December 2021. Prior to the hearing, Harneys advised Ms Foster's lawyers that they did not have instructions to attend the hearing on 2 December 2021, and did not do so. At the hearing on 2 December 2021, the court made the orders sought by Ms Foster including an order for the costs of the application to vary the injunction. Harneys did not take any steps on behalf of the Cayman Applicants in relation to the assessment of the costs. The costs were fixed using a process referred to as a 'default costs certificate' on 30 March 2022 in the amount of USD $32,956.63 (Cayman Costs Judgment). In May 2023, Ms Foster brought a summons in the Cayman Action for an assessment of damages which she claimed pursuant to the undertaking as to damages given by the Cayman Applicants to support the injunction. Ms Foster's application was heard on 5 March 2024. Prior to this, on 27 February 2024 Harneys had been removed from the record as the lawyers for the Cayman Applicants. On 14 March 2024, the court assessed damages in favour of Ms Foster and awarded her judgment in terms of the assessment in the amount of USD $227,710.78 together with interest and costs of USD $81,515.86, totalling USD $309,226.64, being what I have defined in [1] as the Cayman Damages Judgment. Mr Hannay deposes that he has been in contact with Ms Foster's lawyer in the Cayman Islands, Mr John Harris. Mr Hannay deposes that he has been informed by Mr Harris and verily believes:(a)although Harneys has been removed as the attorney of record for the Cayman Applicants, the firm had continued to correspond and the court has ordered substituted service could be effected on the Cayman Applicants through that firm;(b)as at 6 January 2025, no steps have been taken by Harneys nor any of their clients since 'final orders were granted on 29 May 2024' (which appears from Ms Foster's affidavits to be an order for substituted service);(c)it is extremely unlikely that the court would entertain any application to seek orders setting aside either the Cayman Damages Judgment or the Cayman Costs Judgment; and(d)the time limits for any appeal to the Cayman Islands Court of Appeal has long passed and, in terms of applications out of time, 'the prospects of expunging the judgments of the Grand Court of the Cayman Islands ... [are] almost impossible'. In relation to the Cayman Action, Ms Batavia deposes:[12]I dispute various of the allegations Jill Foster made in the Cayman Islands in her applications to be joined to the proceedings, discharge the injunction, and claim loss and damage, including Jill Foster's assertations:(a)she was beneficially entitled to the funds due to a valid assignment of those funds by Arabella Foster to her;(b)Arabella Foster's trustees in bankruptcy accepted the (purported) assignment was valid and did not challenge Jill Foster's right to the funds;(c)Jill Foster lost her rental accommodation because she failed to pay rent as a result of the bank account being frozen.Unfortunately, the 'plaintiff group's' lawyers in the Cayman Islands were unfunded and thus would not represent the plaintiffs in actively opposing Jill Foster's applications. As mere members of a group, and not the lead plaintiff in any of the proceedings, we did not at the time have sufficient information or personal advice and representation in the Cayman Islands.[12] Batavia Affidavit, pars 24 and 25.

Ratio Decidendi

Legal Principle Established

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