Nationwide Pacific NL v Range Resources Ltd
[2001] WASC 82
NATIONWIDE PACIFIC NL -v- RANGE RESOURCES LTD [2001] WASC 82
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 82 | |
| Case No: | COR:13/2001 | 21 MARCH 2001 | |
| Coram: | MASTER SANDERSON | 29/03/01 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Remand set aside | ||
| PDF Version |
| Parties: | NATIONWIDE PACIFIC NL (ACN 003 283 378) RANGE RESOURCES LTD (ACN 002 522 009) PACIFIC ISLANDS GOLD NL (ACN 003 144 670) |
Catchwords: | Corporations Law Application to set aside statutory demand Turns on own facts |
Legislation: | Corporations Law, s 459H(1)(a) |
Case References: | Classic Ceramic Importers v Ceramica Antiga SA (1994) 12 ACLC 334 Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 Clearance Nominees Pty Ltd v Discount Acceptance Corporation Pty Ltd, unreported; SCt of WA; Library No 970593; 7 November 1997 Edge Technology Pty Ltd v Lite-On Technology Corporation (2000) NSWSC 471 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669 First State Computing Pty Ltd v Kyling (1995) 13 ACLC 939 Four Seasons Construction Pty Ltd [2000] WASC 277 Gray Winter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund [1996] ACLC 1703 Haynes v Hirst (1927) 27 SR(NSW) 480 Immer (No 145) Pty Ltd v The Uniting Church of Australia Property Trust (NSW) (1993) 182 CLR 26 Jarpab Pty Ltd v Mark Winter (t/a Bolden Haulage) (1994) 12 ACLC 688 John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716 Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 12 ACLC 391 Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062 NQEA Australia Pty Ltd v ADI Ltd (1999) 17 ACLC 927 Re Morris Catering (Australia) Pty Ltd (1993) 11 ACLC 919 Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 137 ALR 47 Rohalo Pharmaceutical Pty Ltd v RP Scherer SpA (1995) 13 ACLC 94 Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACLC 111 Sharyn Developments v The Official Receiver (1980) 5 ACLR 1 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 15 ACLC 1001 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
BETWEEN : NATIONWIDE PACIFIC NL (ACN 003 283 378)
- Plaintiff
AND
RANGE RESOURCES LTD (ACN 002 522 009)
Defendant
BETWEEN : PACIFIC ISLANDS GOLD NL (ACN 003 144 670)
- Plaintiff
AND
RANGE RESOURCES LTD (ACN 002 522 009)
Defendant
(Page 2)
Catchwords:
Corporations Law - Application to set aside statutory demand - Turns on own facts
Legislation:
Corporations Law, s 459H(1)(a)
Result:
Remand set aside
Representation:
COR 13 of 2001
Counsel:
Plaintiff : Mr M J Buss QC & Ms K H L Sutherland
Defendant : Mr P G Clifford
Solicitors:
Plaintiff : Corrs Chambers Westgarth
Defendant : Pullinger Readhead Stewart
COR 14 of 2001
Counsel:
Plaintiff : Mr M J Buss QC & Ms K H L Sutherland
Defendant : Mr P G Clifford
Solicitors:
Plaintiff : Corrs Chambers Westgarth
Defendant : Pullinger Readhead Stewart
Case(s) referred to in judgment(s):
Classic Ceramic Importers v Ceramica Antiga SA (1994) 12 ACLC 334
(Page 3)
Case(s) also cited:
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37
Clearance Nominees Pty Ltd v Discount Acceptance Corporation Pty Ltd, unreported; SCt of WA; Library No 970593; 7 November 1997
Edge Technology Pty Ltd v Lite-On Technology Corporation (2000) NSWSC 471
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669
First State Computing Pty Ltd v Kyling (1995) 13 ACLC 939
Four Seasons Construction Pty Ltd [2000] WASC 277
Gray Winter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund [1996] ACLC 1703
Haynes v Hirst (1927) 27 SR(NSW) 480
Immer (No 145) Pty Ltd v The Uniting Church of Australia Property Trust (NSW) (1993) 182 CLR 26
Jarpab Pty Ltd v Mark Winter (t/a Bolden Haulage) (1994) 12 ACLC 688
John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716
Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd (1994) 12 ACLC 391
Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062
NQEA Australia Pty Ltd v ADI Ltd (1999) 17 ACLC 927
Re Morris Catering (Australia) Pty Ltd (1993) 11 ACLC 919
Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 137 ALR 47
Rohalo Pharmaceutical Pty Ltd v RP Scherer SpA (1995) 13 ACLC 94
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACLC 111
Sharyn Developments v The Official Receiver (1980) 5 ACLR 1
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 15 ACLC 1001
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
(Page 4)
1 MASTER SANDERSON: This is the return of two applications by separate and distinct companies seeking to set aside statutory demands which have been issued by the same defendant. In large measure the issues raised by both applications are identical. For that reason the applications were heard together and it is appropriate that this single judgment cover both applications. For the sake of convenience I will deal with the originating process issued by Nationwide Pacific NL and being COR 13 of 2001.
2 The statutory demand the subject of this application is dated 2 January 2001 and was served on the plaintiff on that date. The amount claimed in the statutory demand is $1,225,000. The facts which give rise to the claim found in the demand are not in dispute. They are set out in an affidavit of Jerome Gino Vitale, sworn 16 January 2001, and filed in support of the application to set aside the statutory demand. Rather than attempt to summarise the facts and the nature of what the plaintiff says is a genuine dispute between the parties I will simply quote certain paragraphs of Mr Vitale's affidavit (omitting reference to various annexures):
"A INTRODUCTION
1. I am a director of the plaintiff, Nationwide Pacific NL ('Nationwide Pacific'), and I am authorised to make this affidavit on its behalf.
2. I am also a director of Pacific Islands Gold NL ('PIG') and Mount Kasi Limited ('Mt Kasi').
3. Mt Kasi is a wholly owned subsidiary of PIG. PIG is a wholly owned subsidiary of Nationwide Pacific.
…
B BACKGROUND FACTS
9. Mt Kasi was incorporated on 2 April 1986 in Fiji. Mt Kasi's principal business activity was prospecting and gold mining. The Mt Kasi mine commenced operations in April 1996 and ceased in June 1998.
10. Prior to December 1990, Range Resources owned the share capital of Mt Kasi. Range Resources had made
(Page 5)
- inter-company loans to Mt Kasi of approximately $1,850,000 (the 'Outstanding Loans').
- 1990 Agreement
11. Under a share acquisition agreement dated 7 December 1990, PIG and Nationwide Pacific purchased from Range Resources the entire share capital of Mt Kasi ('1990 Agreement').
12. …
13. The 1990 Agreement included the following relevant terms:
(a) Under clauses 7.1(a) and (b), Nationwide Pacific was required to provide Mt Kasi with funds to make two preliminary payments to Range Resources which would have the effect of reducing the Outstanding Loans. Those preliminary payments were made.
(b) Clause 7.1 then provided that Nationwide Pacific would cause Mt Kasi to repay to Range Resources the balance of the Outstanding Loans being $1,400,000 ('Balance of Outstanding Loans') by Mt Kasi delivering to Range Resources 2,800 ounces of gold, after certain conditions were satisfied.
1997 Agreement
14. In September 1997, the payment of the Balance of the Outstanding Loans was renegotiated. Range Resources, Nationwide Pacific and PIG entered into a 'share acquisition agreement - amendment agreement' dated 1 September 1997 ('1997 Agreement').
15. …
16. The 1997 Agreement included the following relevant terms:
(Page 6)
- (a) Range Resources acknowledged that it had received preliminary payments of $455,000 in reduction of the Outstanding Loans.
(b) PIG and Nationwide Pacific agreed to cause Mt Kasi to repay to Range Resources the Balance of the Outstanding Loans. However, according to clause 3.3, the method of payment of the Balance of the Outstanding Loans was rescheduled and was dependent upon gold production reaching certain levels.
(c) Clause 3.6 provides as follows:
'If due to failure to meet the conditions in Clauses 3.3.1 or 3.3.2 there is any amount of the One Million Four Hundred Thousand Dollars ($1,400,000) Outstanding Loan still due but unpaid as at 31st December, 1999, then all of the balance of the monies still owing and unpaid must be paid by PIG and the Purchaser [Nationwide Pacific] to the Vendor [Range Resources] on or before 1st January, 2000 PROVIDED THAT if the Gold Production from the Tenement is suspended due to economics or plant upgrade at the Mt Kasi Mine then the said last day for payment of any unpaid amount of the Outstanding Loan may be postponed until Gold Production re-commences or until 1st January, 2001 whereupon the balance of the said monies must be paid.'
- Scheme of Arrangement
17. In 1998, Mt Kasi experiences serious financial difficulties.
18. By mid 1998, Mt Kasi resolved to enter into a scheme of arrangement with its unsecured creditors under which, subject to two payments being made to unsecured creditors totalling 12 cents in the dollar, all rights and remedies in respect of any claims that unsecured creditors may have had against Mt Kasi were to be forever barred and extinguished and the creditors would receive instead
(Page 7)
- a contractual entitlement to a royalty calculated pursuant to a formula contained in the scheme.
- 19. Mt Kasi sent to its creditors, including the defendant, a document setting out the proposed scheme of arrangement or compromise with various creditors, who were defined in the document as 'Scheme Creditors' ('Scheme Document').
20. …
21. On 23 December 1998 the High Court of Fiji sanctioned a scheme of arrangement in the terms set out in the Scheme Document ('Scheme').
22. …
23. Pursuant to orders made by the High Court of Fiji, the dates of payment under the Scheme of the:
(a) First Payment was extended to 5 May 1999; and
(b) Second Payment was extended to 5 December 1999.
24. The First and Second Payments were made to Scheme Creditors (including Range Resources) on or by the extended dates for payment.
C TERMS AND EFFECT OF THE SCHEME
25. The 'Scheme Creditors' the subject of the Scheme are defined in the Scheme Document to mean all creditors other than:
(a) the government of Fiji;
(b) preferred creditors (that is, those creditors entitled to priority pursuant to s312 of the Company's Act (Fiji)); and
(c) secured creditors owing to the extent of their security.
26. At all relevant times, Range Resources was neither a secured creditor nor a preferred creditor. Accordingly,
(Page 8)
- Range Resources was a Scheme Creditor within the meaning of the Scheme and is bound by the terms of the Scheme.
- 27. Clause 7.1 of the Scheme provides:
'Upon the Commencement Date, the claims of all Scheme Creditors against the Company and all rights and remedies in respect thereof shall be stayed subject to the payment of the First Payment and thereafter to the Second Payment.
… In the event that the First Payment and the Second Payment are made the claims of all Scheme Creditors against the Company and all rights and remedies in respect thereof shall be forever barred and extinguished and shall instead become an entitlement to the Royalty [as defined in the Scheme Document] and no Scheme Creditor shall commence or continue any action,proceeding, suit or arbitration against the Company or take any step to wind up the Company or to have an official manager thereof appointed.'
28. Clause 7.2 of the Scheme provides:
'Provided the First Payment and the Second Payment are made, then upon the termination of this Scheme, no matter how terminated, Participating Creditors shall accept such payment or payments, if any, as have been made to them pursuant to the provisions of this Scheme in full and final satisfaction of their claims against the Company and/or pursuant to the Scheme.'
29. The 'Commencement Date' is defined in the Scheme Document as the date upon which a certified copy of an order of the High Court of Fiji approving the Scheme is delivered to the Registrar of Companies for Fiji.
30. I am informed by Munro Leys, solicitors acting for Mt Kasi in Fiji, that a certified copy of an order of the High Court of Fiji approving the Scheme was delivered to the Registrar of Companies for Fiji on 8 February 1999.
(Page 9)
- 31. The First Payment and Second Payment were made in accordance with the provisions of the Scheme on or about 5 May 1999 and 5 December 1999 respectively.
…"
3 It is the plaintiff's contention that consequent upon Mt Kasi entering into the Scheme of Arrangement, Range Resources' claims were "forever barred and extinguished". It followed therefore that as from the date of the approval for the Scheme no money could be said to be "still due but unpaid" under the provisions of cl 3.6 of the 1997 Agreement. At the very least, the plaintiff submitted, there was a genuine dispute about whether any money was payable by the plaintiff to the defendant pursuant to cl 3.6 and the statutory demand ought therefore be set aside.
4 For the defendant it was submitted that cl 3.6, properly considered in the context of the 1997 Agreement, imposed upon the plaintiff a primary obligation to repay the $1,400,000, if that amount had not been repaid as at 31 December 1999. Counsel for the defendant emphasised that the proper interpretation of cl 3.6 rendered the obligation to pay any outstanding amount as a primary liability of the plaintiff. Thus, it was argued, the fact that the liability of Mt Kasi to the defendant was or might be extinguished was of no consequence.
5 It is plain that there is a genuine dispute between the parties as to the proper interpretation of cl 6.3. The defendant submitted that it was simply a question of interpretation of the clause in the context of facts which were not in dispute. It was submitted that in the circumstances of this case I could effectively deal with the matters at issue and not leave the parties to raise precisely the same issue in some other proceedings.
6 What is required by s 459H(1)(a) is that the court determine whether there is a genuine dispute between the parties. There is no remit in that section for determining the dispute. Furthermore, the authorities make it plain that it is inappropriate to attempt to determine the dispute: see Classic Ceramic Importers v Ceramica Antiga SA (1994) 12 ACLC 334 per Young J at 339. It is perhaps enough then if I say that in the context of this application I regard the arguments put by the plaintiff as highly persuasive.
7 There was a further matter raised by the plaintiff and this had to do with the question of whether or not the submission of a proof of debt by the defendant under the Scheme of Arrangement, albeit that the proof was lodged under protest, amounted to an election such that the defendant was
(Page 10)
precluded from relying upon the terms of cl 3.6. This aspect of the plaintiff's claim was not argued as I indicated to the parties that I was satisfied there was a genuine dispute as to the proper interpretation of cl 3.6. In the absence of argument it is not appropriate that I express any view one way or the other as to this aspect of the plaintiff's application.
8 In the circumstances then I am satisfied that there is a genuine dispute in relation to the debt and I would set aside the statutory demand. I will hear the parties as to the precise form of order and as to costs.
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