Predella Pty Ltd v Financial Solutions Australasia Pty Ltd
[2001] WASC 54
•7 MARCH 2001
PREDELLA PTY LTD -v- FINANCIAL SOLUTIONS AUSTRALASIA PTY LTD [2001] WASC 54
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 54 | |
| 07/03/2001 | |||
| Case No: | COR:366/2000 | 28 FEBRUARY 2001 | |
| Coram: | MASTER BREDMEYER | 1/03/01 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| PDF Version |
| Parties: | PREDELLA PTY LTD (ACN 009 200 529) FINANCIAL SOLUTIONS AUSTRALASIA PTY LTD (ACN 008 939 599) |
Catchwords: | Corporations law Statutory demand Genuine dispute Serious defects in the demand |
Legislation: | Corporations Law, s 459G Corporations Rules, O 81G r 12(2), r 31 Rules of the Supreme Court, O 2 r 1 |
Case References: | Nil Attorney General (NSW); ex rel Franklins Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955 AZED Developments Pty Ltd v Frederick & Co Ltd (1994) 12 ACLC 949 Carb Royale Pty Ltd v Tonkin [2000] VSC 399; (2000) 35 ACSR 454 Consolidated Trust Company Ltd v Naylor (1936) 55 CLR 423 Creasy v Hot Holdings Pty Ltd [2000] WASCA 206 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Denney, Gasquet & Medcalfe v Conklin [1913] 3 KB 177 Durham Brothers v Robertson [1898] 1 QB 765 Four Seasons Construction Pty Ltd v Eastern Metropolitan Regional Council [2000] WASC 277 Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 21 ACSR 581 Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 Hatton v Beaumont [1977] 2 NSWLR 211 Hunter Resources Ltd v Melville & Anor (1988) 164 CLR 234 Lonsdale Sand & Metal Pty Ltd v Federal Commissioner of Taxation (1998) 98 ATC 4175 Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 NT Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 98 ATC 4310 Re Bruynius [1995] 1 Qd R 492 Re Stonegate Securities [1980] 1 All ER 241 Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCAS 409 Rohalo Pharmaceutical Pty Ltd v RP Scherer Spa (1994) 15 ACSR 347 Rudolphy v Lightfoot [1999] HCA 61; (1999) 167 ALR 105 Seventeenth Febtor Pty Ltd v National Australia Bank Ltd (1997) 23 ACSR 585 Showa Shoji Australia v Oceanic Life Ltd (1994) 34 NSWLR 548 Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 Van Lynn Developments Ltd v Pelias Construction Co Ltd [1969] 1 QB 607 Westgold Resources NL v St George Bank Ltd (1998) 29 ACSR 396 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
and
PREDELLA PTY LTD (ACN 009 200 529)
BETWEEN : PREDELLA PTY LTD (ACN 009 200 529)
- Applicant
AND
FINANCIAL SOLUTIONS AUSTRALASIA PTY LTD (ACN 008 939 599)
Respondent
Catchwords:
Corporations law - Statutory demand - Genuine dispute - Serious defects in the demand
(Page 2)
Legislation:
Corporations Law, s 459G
Corporations Rules, O 81G r 12(2), r 31
Rules of the Supreme Court, O 2 r 1
Result:
Application allowed
Representation:
Counsel:
Applicant : Mr J C Giles
Respondent : Mr P J Whyte
Solicitors:
Applicant : Solomon Brothers
Respondent : Peter J Whyte
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Attorney General (NSW); ex rel Franklins Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955
AZED Developments Pty Ltd v Frederick & Co Ltd (1994) 12 ACLC 949
Carb Royale Pty Ltd v Tonkin [2000] VSC 399; (2000) 35 ACSR 454
Consolidated Trust Company Ltd v Naylor (1936) 55 CLR 423
Creasy v Hot Holdings Pty Ltd [2000] WASCA 206
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Denney, Gasquet & Medcalfe v Conklin [1913] 3 KB 177
Durham Brothers v Robertson [1898] 1 QB 765
Four Seasons Construction Pty Ltd v Eastern Metropolitan Regional Council [2000] WASC 277
Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 21 ACSR 581
(Page 3)
Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669
Hatton v Beaumont [1977] 2 NSWLR 211
Hunter Resources Ltd v Melville & Anor (1988) 164 CLR 234
Lonsdale Sand & Metal Pty Ltd v Federal Commissioner of Taxation (1998) 98 ATC 4175
Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062
Norman v Federal Commissioner of Taxation (1963) 109 CLR 9
NT Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 98 ATC 4310
Re Bruynius [1995] 1 Qd R 492
Re Stonegate Securities [1980] 1 All ER 241
Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCAS 409
Rohalo Pharmaceutical Pty Ltd v RP Scherer Spa (1994) 15 ACSR 347
Rudolphy v Lightfoot [1999] HCA 61; (1999) 167 ALR 105
Seventeenth Febtor Pty Ltd v National Australia Bank Ltd (1997) 23 ACSR 585
Showa Shoji Australia v Oceanic Life Ltd (1994) 34 NSWLR 548
Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294
Van Lynn Developments Ltd v Pelias Construction Co Ltd [1969] 1 QB 607
Westgold Resources NL v St George Bank Ltd (1998) 29 ACSR 396
(Page 4)
1 MASTER BREDMEYER: This is an application to set aside a statutory demand which states:
" SCHEDULE
| Amount of the debts | |
|
| 1,267,339.20 363,025.00 |
Total Amount: | 904,314.20 |
- "
"An affidavit in support of an originating process must annex a record of a search of the records maintained by the Commission, in relation to the company that is the subject of the application to which the originating process relates, carried out no earlier than 7 days before the originating process is filed."
- The affidavit in support does not annex an ASIC search of the applicant company. The defect was pointed out by the respondent's solicitors in submissions and has now been remedied by an affidavit of Mr Whyte, sworn 27 February. The redress is late but it does put the same
(Page 5)
- information - that ASIC search - before the court prior to a decision on the application. The object of the rule is to put before the court an up-to-date search, inter alia, showing the current registered office, the shareholding and the directors. Nothing turns on these matters in this case.
3 The respondent's counsel argued that strict compliance is required by r 12 as a matter of construction. Rule 5(1) allows substantial compliance with the forms prescribed by the rules. It is headed "Substantial Compliance with the Forms". It is silent on compliance with the rules as distinct from forms. Is it strict, substantial, or discretionary compliance with those rules? The respondent's counsel says the rule expressio unius est exclusio alterius applies. I disagree. Rule 5(1) means substantial compliance with the forms is sufficient. The rules are silent on the standard of compliance required with the other rules. I note extensions and abridgments of time are provided for in r 8. That rule would permit an abridgment of time in this case. The ASIC search should have been annexed to the supporting affidavit for this application. It came later. It was before the court, prior to giving its decision. That is sufficient for me to extend the time for the search.
4 By r 1(2) of the Corporations Rules, the ordinary Rules of the Supreme Court apply to corporation matters, so far as they are not inconsistent with the Corporations Rules. By O 2 r 1 of the ordinary Rules of the Supreme Court non-compliance with a rule is an irregularity, not a nullity and the court may set aside the proceedings in whole or in part because of the failure, or it may allow an amendment, or make such other order as it thinks fit. That is another power available for me to excuse the late compliance with r 12. I do not regard the breach of r 12 as fatal to this application.
5 The second preliminary procedural matter is that the respondent has failed to file a notice of appearance. That is required by r 17. That rule also uses the word "must". The respondent's solicitor has undertaken to file such a notice. I accept that undertaking and consider the failure to comply with the rule is not fatal.
6 I consider the affidavit accompanying the application is adequate. It is not perfect. It could have been more perfectly expressed, for example: "The company does not owe any money to the respondent under a Deed of Assignment stamped 27 September 2000". But, given that the applicant did not have access to the primary documents - the loan documents - on which the debt was based, I regard it as adequate. On production of those primary source documents, the applicant has been able to flesh out its application.
(Page 6)
7 I regard the statutory demand is seriously defective and I consider that the applicant has raised a bona fide dispute as to the existence of the debt for the following reasons.
8 The applicant does not owe any money to the respondent under the two loan agreements of 31 May 1992 or under the deed of assignment stamped on 27 September 2000. The affidavit in support of the demand, and the deed of assignment mentioned, refer to two loan agreements of 31 May 1992. There are no such loan agreements. Two other loan agreements have been produced. They are dated 31 March 1992. The mistake is a serious one. The respondent is using the summary procedure of a statutory demand to get the claim debt paid, or to put the applicant company in liquidation. There are no loan agreements of 31 May 1992 and, because of that, the deed of assignment is also bad. It does not assign anything to the respondent. It does not assign to the respondent the benefit of the loan agreements of 31 March 1992. The respondent's counsel argued that the loan agreements could be rectified by the court as a common mistake. That may be so, but that requires a court application and until that rectification is made, the assignment deed is ineffective and no debt is owed under the agreements of 31 May 1992.
9 The deed of assignment is bad for another reason. The assignment can only be to a "permitted assignee" which is defined to mean a "bank or other financial institution". The respondent is neither.
10 I also doubt the truth of Mr Parkinson's affidavit assertion that the debt is owing. I refer, here, to his affidavit accompanying the statutory demand. Normally I would not query that. Rule 31 and form 7 provide a brief form of affidavit and Mr Parkinson's affidavit of 4 December 2000 meets that form. He says:
"I make this affidavit from my own knowledge and from records of the creditor relating to the debtor company."
- That statement is good enough for the initial affidavit but, in the face of the documentary evidence now produced by the respondent, it is inadequate. I very much doubt if he had sufficient knowledge, and whether he had adequate records available to him, to make the assertion. To take the first point. He says, "I make this affidavit from my own knowledge". How good is that? The loans were granted by NML in 1992. Mr Parkinson is not a director or employee of that company. (I am told he is an insurance agent of that company, but that is not the same thing.) That company became AXA or was taken over by AXA. He is
(Page 7)
- not a director or employee of AXA. He is not, for example, in charge of the accounts section of AXA. His company is an assignee. So his sources of knowledge of the debt are only as good as his legal documents.
He also says in the second part of that statement that he "made this affidavit ... from the records of the creditor relating to the debtor company". How good is that statement? He is not a representative of the original creditor in 1992 or of AXA. He is a director of the assignee as at September 2000. What records did he have? I know from the interlocutory processes that he did not have the loan documents. It took months to get them and the court had to make an order. I infer that he had not seen them, neither had his solicitors. I infer that because, if they had seen them, the notice of assignment would not have been wrong. Neither had AXA's solicitors - Deacons of Melbourne - seen them. If they had they would have got the deed of assignment right.
11 Also, there is no hard evidence here of default. It is supposed to be a term loan with monthly repayments of principal and interest. The term is not stated, except as "the ........................ day of ....................... 2007" in the schedule. The monthly instalments are not stated. The triggering event or events which prompted the calling-up of the loan are not stated. It may have been a letter of demand calling up the loan. It may have been a termination of the applicant as an agent of NML or AXA.
12 I consider the applicant has set up a genuine dispute that it owes nothing to the respondent under the loan agreements of 31 May 1992 and the deed of assignment stamped 27 September 2000. I consider the dispute is bona fide. It is amply supported by the documents. The grounds are real, not spurious, hypothetical, illusory or misconceived. I also consider substantial injustice will be caused unless this demand is set aside.
13 This is not the end of the world for the respondent. The statutory demand is a summary procedure. It is relatively quick and inexpensive. The respondent can try again.
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