Olga Investments Pty Ltd v Citipower Ltd
[1995] FCA 365
•31 May 1995
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No VG 3178/95
IN THE MATTER OF:
OLGA INVESTMENTS PTY LTD
(ACN 004 957 984)
BETWEEN:
OLGA INVESTMENTS PTY LTD
Applicant
-and-
CITIPOWER LIMITED
Respondent
Coram: Olney J
Place: Melbourne
Date: 31 May 1995
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The application filed herein on 4 April 1995 be dismissed.
The applicant pay the respondent's costs of and incidental to the application including any reserved costs.
NOTE:Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No VG 3178/95
IN THE MATTER OF:
OLGA INVESTMENTS PTY LTD
(ACN 004 957 984)
BETWEEN:
OLGA INVESTMENTS PTY LTD
Applicant
-and-
CITIPOWER LIMITED
Respondent
Coram: Olney J
Place: Melbourne
Date: 31 May 1995
REASONS FOR JUDGMENT
This is an application pursuant to s 459G of the Corporations Law to set aside a statutory demand dated 9 March 1995 which the respondent served on the applicant on 21 March 1995. The demand was accompanied by an affidavit of Jennien Carren Vaughan sworn 9 March 1995.
The notice and affidavit (omitting formal and irrelevant parts) are set out below:
THE NOTICE
TO:OLGA INVESTMENTS PTY LTD (ACN 004 957 984) C/- N C Gregoriades & Assoc, First Floor, 19-21 Lonsdale Street, Melbourne, Victoria, 3000 ("the Company")
The Company owes CITIPOWER LIMITED of 15 William Street, Melbourne, Victoria ("the Creditor") the amount of $70,116.63, being the amount of the debt described in the Schedule.
Attached is the affidavit of Jennien Vaughan, dated 9 March 1995, verifying that the amount is due and payable by the Company.
The Creditor requires the Company, within 21 days after service on the Company of this demand:
(a)to pay to the Creditor the amount of the debt; or
(b)to secure or compound for the amount of the debt to the Creditor's reasonable satisfaction.
...
...
...
SCHEDULE
Description of Debt Amount of Debt
This debt is due pursuant to an order of $70,116.63
the County Court of Victoria made on
1 February 1995 by which the Company was
ordered to pay the Creditor $70,116.63 and
pursuant to statute by virtue of which
interest accrues on Court orders presently
at a rate of 13.2 per cent per annum (being
$25.02 per day from and including 1 February
1995).
THE AFFIDAVIT
On 9 March 1995, I JENNIEN CARREN VAUGHAN of Council House, 200 Little Collins Street, Melbourne in the State of Victoria, Credit Control Officer for Citipower Limited, SAY ON OATH;
To my knowledge, the amount of $70,116.63 is due and payable by the Debtor to the Creditor.
The said sum is due to the Creditor pursuant to an order of the County Court of Victoria made on 1 February 1995 that the Debtor pay to the Creditor $69,190.89 and pursuant to statute which entitles the Creditor to interest on the said order at the rate of 13.2 per cent per annum, which interest on this day amounts to $925.74.
THE APPLICATION
The application was filed on 4 April 1995. An affidavit supporting the application sworn by Stellios Antoniou on 31 March 1995 was filed with the application.
The applicant says that there is a genuine dispute between it and the respondent about the existence or amount of the debt
to which the demand relates and further calls in aid both arms of s 459J(1) asserting that because of a defect in the demand substantial injustice will be caused unless the demand is set aside and further it is said there is some other reason (notably an appeal against the judgment referred to in the demand) why the demand should be set aside.
THE FACTS
In May 1988 the City of Melbourne commenced proceedings in the County Court at Melbourne to recover $83,940.52 and interest or alternatively $47,393.80 and interest from the applicant for electricity supplied to premises in Lonsdale Street. Various causes of action were pleaded and it appears that the alternative claim was made in recognition of the possibility that the Limitation of Actions Act may apply to part of the sum claimed. On 3 October 1994 the rights of the City of Melbourne associated with the claim vested in the present respondent pursuant to s 139 of the Electricity Industry Act 1993 and on 14 November 1994 the respondent was substituted as the plaintiff in the action. On 1 February 1995, after trial of the action, judgment was given for the respondent in the sum of $35,000 together with interest of $34,190.89 and costs. Enforcement of the judgment was stayed for 28 days. The applicant gave notice of appeal to the Supreme Court on 23 February 1995 and the respondent filed a cross-appeal on 14 March 1995. In the appeal proceedings the applicant seeks to have the County Court judgment set aside and to have judgment in its own favour whereas the respondent seeks to have the amount of the judgment increased to $47,392.80 and interest, or alternatively to $83,940.52 and interest. On 28 February 1995, on the eve of the expiration of the stay granted by the County Court, the respondent's solicitors wrote to the applicant's solicitors enquiring as to whether the applicant intended to pay the amount of the judgment voluntarily. They indicated that if nothing was heard by 4.00pm on 3 March 1995 their client would have little option but to take steps to enforce the judgment. Not having had a reply to their letter of 28 February 1995, the respondent's solicitors wrote again on 8 March 1995 advising that they had instructions to take steps to enforce the judgment. They said that they would shortly be serving the applicant with "a winding up notice". The second letter drew a response from the applicant's solicitors who wrote:
We refer to your letter dated 8 March 1995 received by facsimile transmission.
We write to request that no steps be taken to enforce the Judgment prior to the outcome of our client company's Appeal herein on the basis of an undertaking hereby personally given by the Directors of our client company to pay any amount as ordered to be paid together with relevant costs in the event that our client company is not successful in its Appeal herein.
If the above offer is not accepted, our instructions are to apply for a stay of execution and if necessary, to apply for an Instalment Order and this letter will be produced on question of costs.
The respondent did not accept the applicant's proposal. Nor did the applicant seek a stay of execution or apply for an instalment order as foreshadowed. The appeal and cross-appeal are still pending in the Supreme Court.
In the affidavit in support of the application the deponent said at paragraph 9:
There is a genuine dispute as to the debt allegedly owing. First, the amount of the debt has not yet been finally ascertained or ascertained at all. The debt may increase or decrease. The status of the debt is uncertain at this stage. If the appeal of the company succeeds it will not owe the debt.
After canvassing the merits of one of the grounds of appeal the deponent said in respect of that ground "the appeal is almost certain to succeed". And at paragraph 10 he said:
Further, the creditors statutory demand does not demand a single debt that is due and payable since it asks for payment of an alleged debt plus interest.
DEFECT IN THE DEMAND
As the provisions of s 459H have effect "subject to s 459J" (s 459H(6)) it is convenient to deal first with the questions which arise under s 459J before turning to the question of whether there is a genuine dispute between the parties about the existence or amount of a debt to which the demand relates. The first issue to address is whether because of a defect in the demand, substantial injustice will be caused unless the demand is set aside.
The demand is in the statutory form. It contains in paragraph 1 an assertion that the applicant is indebted to the respondent in the sum of $70,116.63. The schedule to the demand is misleading in that it asserts incorrectly that on 1 February 1995 the applicant was ordered to pay $70,116.20. Reference is made to interest accruing "pursuant to statute" but the amount of interest said to be due and payable is not quantified. However, in the schedule, the amount of the debt is shown in the second column as $70,116.63.
The affidavit which accompanied the demand, correctly stated the facts. It said that the amount of $70,116.63 was due and payable and that this sum was made up of $69,190.89 being the amount of the judgment of 1 February 1995 and interest thereon which to the date of the affidavit (being the same date as the date of the demand) amounted to $925.74. The amount of the judgment and the amount of the interest add up to $70,116.63, the amount referred to in paragraph 1 of the affidavit and the amount referred to in both paragraph 1 and the schedule of the demand.
Section 459E(2) provides that if a demand relates to 2 or more debts the demand must specify the total of the amounts of the debts. In my opinion the demand relates to a single debt being the amount of the County Court judgment to which an interest component was added in accordance with statute. Although the debt was a judgment debt and thus there was no need for it to be accompanied by an affidavit verifying the debt (s 459E(3)) it was nevertheless appropriate that particulars be given of the calculation of interest.
To the extent that the schedule to the demand suggested that the order made on 1 February 1995 by the County Court was for the payment of $70,116.63, it can fairly be said that there was a defect in the demand, but on any reading of the demand, there could be no doubt that the amount of which payment was demanded was $70,116.63 which was the amount verified in the affidavit which accompanied the demand. No attack has been made on the accuracy of any statement contained in the affidavit.
In the circumstances, notwithstanding the defect in the demand, it was not one which was capable of misleading the applicant either as to the nature or amount of the debt said to be due and payable and in my opinion the defect was incapable of causing substantial injustice. There is therefore no basis upon which to set aside the demand pursuant to s 459J(1)(a).
SOME OTHER REASON
The "other reason" relied upon by the applicant as the basis for the setting aside of the demand pursuant to s 459J(1)(b) is the fact that an appeal against the County Court judgment is presently pending in the Supreme Court.
An appeal does not operate as a stay of proceedings on a County Court judgment (County Court Act 1958 (Vic) s 74(4)) although the Full Court or a Judge of the Supreme Court does have power to order a stay (SCR O 54 r 18). Despite the applicant's threat to seek a stay, it has not done so. It is not necessary to speculate on the reason for its failure to make such an application. The fact is that the applicant has not sought a stay and accordingly all of the usual processes for enforcement of the judgment debt remain available to the respondent. There is therefore no substance in the claim that the filing of an appeal provides a basis upon which to set the demand aside pursuant to s 459J(1)(b). The contrary may have been so if proceedings on the judgment had been stayed pending the hearing and determination of the appeal.
A GENUINE DISPUTE ABOUT THE EXISTENCE OR AMOUNT OF THE DEBT
The respondent has a judgment against the applicant in the County Court for $69,190.89. There is no dispute as to either the fact of the judgment or as to the amount.
The respondent claims that the sum of $925.74 accrued for interest on the judgment debt from the date of judgment to the date of the demand thus increasing the amount of the judgment debt to $70,116.63 as at the date of the demand. There is no dispute either as to the statutory provision by which interest has accrued on the judgment debt or as to the amount of the additional liability as at the date of the demand.
In a case in which the judgment was obtained after a trial of the issues, it is not appropriate for this Court on an application pursuant to s 459G to attempt to either retry the action or to predict the outcome of the appeal. So long as the County Court judgment stands it represents a debt due and payable by the applicant to the respondent. In my opinion
there is no genuine dispute between the applicant and the respondent about the existence or amount of the debt to which the demand relates. There is no basis upon which to set the demand aside.
CONCLUSION
The applicant has not established any ground to justify the Court setting aside the demand.
The application will be dismissed with costs.
I certify that this and the preceding 8 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney
Associate:
Dated:
Heard: 24 May 1995
Place: Melbourne
Judgment: 31 May 1995
Appearances:
Ms J. Davies (instructed by Anthony & Warden) appeared for the applicant.
Mr A. Flower (instructed by Mallesons Stephen Jaques) appeared for the respondent.
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