NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd

NA Investments Holdings Pty Ltd (the applicant) sought to set aside a statutory demand issued by Perpetual Nominees Ltd (the respondent). The applicant was a guarantor of money owing by its subsidiary to the respondent. The core of the dispute concerned whether a limitation on the applicant's guarantor liability, referencing certain assets, meant that the statutory demand for the entire amount owing was invalid. The matter came before the Court of Appeal of New South Wales.

The court was required to determine several legal issues. Firstly, it had to consider whether the limitation provision in the guarantee meant that the applicant did not owe a debt due and payable for the whole of the money claimed in the statutory demand. Secondly, the court needed to ascertain who bore the onus of proving whether the limitation provision was enlivened – the creditor or the guarantor company. Finally, the court had to decide whether an affidavit annexing the guarantee contract, but not specifically drawing attention to the limitation provision within it, satisfied the requirements of section 459(3) of the *Corporations Act 2001* (Cth).

The Court of Appeal dismissed the applicant's appeal. The court reasoned that the limitation provision did not operate to reduce the amount of the debt itself, but rather affected the circumstances in which the creditor could enforce that debt against the guarantor. Therefore, the debt remained due and payable in its entirety, even if its recovery was subject to certain conditions. The court also held that the onus was on the applicant to demonstrate that the limitation provision had been enlivened, thereby affecting the debt. Furthermore, the court found that annexing the contract to the affidavit was sufficient for the purposes of section 459(3), even if the specific limitation clause was not explicitly highlighted.

Consequently, the application for leave to appeal was dismissed with costs.