Passion Projects (Allyouneedislove) Pty Ltd v Concept Moulding Pty Ltd

[2014] NSWCA 415

Court of Appeal

New South Wales

Case Title:

Passion Projects (ALLYOUNEEDISLOVE) Pty Ltd v Concept Moulding Pty Ltd

Medium Neutral Citation:

[2014] NSWCA 415

Hearing Date(s):

28 November 2014

Decision Date:

28 November 2014

Before:

McColl JA at [1] and [11];
Leeming JA at [2]

Decision:

The summons for leave to appeal is refused, with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

APPEAL - application for leave - refusal to set aside statutory demand - no question of general principle - reasonably clear injustice not shown - leave refused

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 58, 60
Corporations Act 2001 (Cth), s 459G
Supreme Court Act 1970 (NSW), s 101

Cases Cited:

Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265

Category:

Principal judgment

Parties:

Passion Projects (ALLYOUNEEDISLOVE) Pty Ltd (Applicant)
Concept Moulding Pty Ltd (Respondent)

Representation

- Counsel:

Counsel:
S Bogan (Applicant)
J Giles (Respondent)

- Solicitors:

Solicitors:
Charles G. Roth (Applicant)

File Number(s):

2014/98283

Decision Under Appeal

- Before:

Black J

- Date of Decision: 

27 March 2014

- Citation:

[2014] NSWSC 345

- Court File Number(s):

2013/294464

JUDGMENT

1. McCOLL JA: I will ask Leeming JA to deliver the first reasons.

2. LEEMING JA: By reserved decision delivered on 27 March 2014 of 27 pages, the primary judge set aside one of two statutory demands which had been issued against the applicant. His Honour varied the other, reducing it to the amount of $25,993.12. No issue arises in relation to the first statutory demand. Nor does any issue arise in relation to the finding by the primary judge that there was a genuine dispute in respect of $4,500 which had comprised part of the second statutory demand (which had originally claimed an amount of $30,493.12). However, the applicant seeks leave to appeal from that part of the decision of the primary judge upholding the balance of the second statutory demand against it. In the meantime, it obtained, on 3 April 2014, an extension of time to comply with the demand until 7 days after the determination of its application for leave to appeal.

3. Leave to appeal is required for two reasons. First, s 101(2)(q) of the Supreme Court Act 1970 (NSW) imposes a requirement for leave in all cases challenging an order on an application under s 459G of the Corporations Act 2001 (Cth). That reflects a policy discouraging appeals in relation to statutory demands, which is consistent with what was said as to the "quick resolution of the issue of insolvency and the determination of whether a company should be wound up without the interposition of disputes about debts, unless they are raised promptly": David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 270.

4. Secondly, leave is required by reason of the fact that the statutory demand (as varied) is in an amount considerably less than the $100,000 threshold set by s 101(2)(r), or, alternatively, as Mr Bogan who appeared for the applicant contended, because the judgment was interlocutory.

5. It is not necessary for the purposes of this application to express a view as to which of those provisions requiring the further grant of leave is applicable. Either way, given the amount of the statutory demand, the considerations governing the grant of leave identified in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[39] are engaged. Those principles include:

   (a)The applicant for leave must demonstrate something more than that the trial judge was arguably wrong.

   (b)It is important that there be early finality in cases where the costs involved are likely to swamp the money sum involved in the dispute.

   (c)Ordinarily it will be appropriate to grant leave only in matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable.

   (d)Regard is to be had, by reason of s 58 of the Civil Procedure Act 2005 (NSW) to "the degree of injustice that would be suffered by the respective parties as a consequence", and, by reason of s 60, to the obligation upon a court to implement its practice and procedure with the object of resolving the issues in such a way that the costs to the parties is proportionate to the importance and complexity of the subject matter in dispute.

6. Those considerations are especially apt here, because (as was put by the respondent opposing leave to appeal):

   "The order refusing to set aside a statutory demand does not result in the merger of the underlying defence or cause of action (if any), with a judgment. If the applicant pays the debt, it is able to sue the respondent, should it have an arguable claim, for the amount paid, or the amount of the alleged off-setting claim."

7. In the present case, there is no question of general principle. Nor is it necessary to repeat the facts, which are addressed in ample detail in the reasons of the primary judge.

8. There are two grounds of appeal which are proposed. Taking the applicant's case at its highest, there is a question whether reliance on a consent judgment obtained by the respondent following the compromise of earlier proceedings and held by it as a form of security for the performance of obligations under the settlement agreement was properly available. To that dispute, the primary judge applied uncontroversial principles of contractual construction.

9. It was the second proposed ground of appeal which was at the forefront of oral submissions for the applicant. That concerns whether representations by a man who was an officer of both of the companies which had issued statutory demands gave rise to an off-setting claim against both of those companies. The primary judge held that there was such a claim in relation to the first statutory demand, but not in relation to the second. It was put orally that part of the evidence put forward by the applicant was materially misstated in the reasons of the primary judge. I do not consider this to be a fair criticism of those reasons.

10. It is quite plain that neither proposed ground of appeal gives rise to any question of general principle. Nor is a case made out of reasonably clear injustice. There is no evidence at all of the likely financial consequences to the applicant in the event that the statutory demand is not set aside. Further, it is also quite plain that the costs of the leave application, and of any appeal if leave be granted, would rapidly approach and exceed the claimed amount under the statutory demand. In accordance with ss 58 and 60 of the Civil Procedure Act and the principles identified in Be Financial, leave to appeal should in my opinion be refused and the applicant should pay the respondent's costs.

11. McCOLL JA: I agree with Leeming JA. The orders of the Court are as his Honour proposed.

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