New Energy Minerals Ltd v Arena Structured Private Investments (Cayman) LLC

The case of New Energy Minerals Ltd v Arena Structured Private Investments (Cayman) LLC was before the Supreme Court of Western Australia. The plaintiff, New Energy Minerals Ltd, sought to set aside a statutory demand issued by the defendant, Arena Structured Private Investments (Cayman) LLC. The dispute hinged on whether the defendant had applied illegitimate pressure to induce the plaintiff to enter into an amendment deed, potentially constituting economic duress.

The court was tasked with determining whether the defendant had exercised illegitimate pressure that amounted to economic duress. Both parties acknowledged the principles set out in the decision of McLure P in Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd. The defendant argued that there was no evidence of illegitimate pressure, pointing to an email from the plaintiff proposing amendments that resulted in the Amendment Deed, and the recitals in the Deed itself, which noted that the parties wished to amend the convertible note deed. However, the plaintiff presented evidence that the defendant had threatened to breach its contractual obligations, specifically refusing to take up Tranche 2 of the investment, which was a contractual obligation.

The court found that the evidence supported the plaintiff's claim of economic duress. The threat by the defendant to breach its contractual obligations and the resulting financial difficulty for the plaintiff constituted illegitimate pressure. Consequently, the court concluded that the plaintiff had raised a plausible contention requiring further examination, which warranted setting aside the statutory demand. The court ordered the statutory demand be set aside and the defendant pay the plaintiff's costs of the application, including reserved costs.