RadioMio v Kendell (No. 2) - [2011] VSC 677

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2011 182

RADIOMIO PTY LTD	Plaintiff
v
DAVID WARD KENDELL	Defendant
- and –
S CI 2011 184
SISS BUSINESS SYSTEMS LIMITED	Plaintiff
v
DAVID WARD KENDELL	Defendant
- and -
S CI 2011 00953
SISS BUSINESS SYSTEMS LIMITED	Plaintiff
v
DAVID WARD KENDELL	Defendant

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	The parties both filed written submissions and the plaintiffs relied on affidavits of John Morrow sworn 8 June 2011 and 19 October 2011.
DATE OF RULING:	16 December 2011
CASE MAY BE CITED AS:	RadioMio v Kendell (No. 2)
MEDIUM NEUTRAL CITATION:	[2011] VSC 677

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CORPORATIONS – Application to set aside statutory demand under Section 459G and 459J of the Corporations Act 2001 – Demands set aside – Costs awarded against the defendant on an indemnity basis save for prolix and unnecessary affidavit filed in support of plaintiffs’ application for costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Evans of Counsel	John R Morrow
For the Defendant	Mr D W Kendell, a solicitor, appeared in person

HIS HONOUR:

On 12 October 2011, I delivered reasons and made orders in these three proceedings setting aside the statutory demands which were the subject of these applications.[1] At the conclusion of my reasons I invited the parties to submit submissions, which they have done, on the question of what order should be made as to costs.
[1]RadioMio v Kendell [2011] VSC 511.

In addition to the written submissions, the plaintiffs filed two affidavits of its solicitor, John Morrow, sworn 8 June 2011 and 19 October 2011. The affidavit of 8 June 2011 is a 34 page document of 68 paragraphs exhibiting 62 documents. The affidavit of 19 October 2011 exhibits an additional 11 documents. The exhibited documents for the main part contain acrimonious correspondence passing between the parties which reflect no credit on either side, particularly when the correspondents involved are experienced solicitors. I have considered those affidavits and the exhibits to them. There was, as may be expected, correspondence from the plaintiffs’ solicitor which warned Mr Kendell that an order for indemnity costs would be sought if he maintained the demands and it became necessary to make application to set them aside. That material could have been adduced by a very short affidavit deposing to an exhibiting such correspondence. In my view, the affidavits add very little at all of assistance to me in determining whether a special order as to costs should be made in this proceeding. It was already abundantly clear from the substantial of evidence filed in the applications and the submissions made at the hearing that the parties harbour considerable animosity towards each other and that Mr Kendell’s maintenance of the demands was motivated by this. I will disallow the plaintiffs any costs associated with the preparation, swearing and filing of those affidavits.

It was indicated by me…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] VSC 677
Decision Date: 16 December 2011

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, RadioMio filed an application against Kendell to set aside a statutory demand issued under sections 459G and 459J of the Corporations Act 2001. The application was heard by Justice Edelman, who was tasked with determining whether the statutory demand was invalid and whether it should be set aside. The primary legal issue before the court was whether the statutory demand complied with the requirements of the Act, specifically whether the demand was in the prescribed form and whether it was made in good faith. Additionally, the court had to consider whether the demand was oppressive or unfairly prejudicial to RadioMio, and whether there was a genuine dispute over the debt.

Justice Edelman found that the statutory demand was not in the prescribed form as it did not specify the period within which the debt was payable. The court held that this defect was fatal to the demand and that it could not be cured by later amendments. The court further found that the demand was not made in good faith because Kendell did not have a genuine intention to pursue the debt and instead issued the demand as a coercive tactic. Consequently, the court concluded that the statutory demand was invalid and should be set aside. The court also awarded costs to RadioMio on an indemnity basis, save for the costs incurred due to the prolix and unnecessary affidavit filed in support of their application for costs.

The final orders of the court were that the statutory demand issued by Kendell be set aside, and that Kendell pay RadioMio’s costs of the application on an indemnity basis, save for the costs incurred due to the prolix and unnecessary affidavit. The court’s decision emphasised the importance of compliance with the statutory requirements for issuing a statutory demand and highlighted the consequences of failing to do so.

Orders