Re A.C.E.S. Sogutlu Holdings Pty Ltd - [2014] NSWSC 140

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of A.C.E.S. Sogutlu Holdings Pty Ltd A.C.N. 122 192 509 [2014] NSWSC 140
Hearing dates: 25 February 2014
Decision date: 25 February 2014
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Originating process dismissed with costs

Catchwords: CORPORATIONS - winding up - winding up in insolvency - application to set aside two statutory demands - where the judgment debt on which each demand was founded was the subject of a pending appeal - the Court will at least ordinarily require either that a stay have been granted, or that the moneys be paid into Court pending the outcome of the appeal - originating process dismissed
Legislation Cited: Corporations Act 2001, s 459G, s 459J
Uniform Civil Procedure Rules r 7.1(2), r 7.1(3)
Cases Cited: Barclays Australia (Finance) Limited v Mike Gaffikin Marine Pty Limited (1996) 21 ACSR 235
Commonwealth Bank of Australia v ACES Sogutlu Holdings Pty Ltd and Ors [2013] NSWSC 1184
Cranney Farm Pty Limited v Corowa Fertilizers Pty Limited [2011] NSWSC 9
Indigo Financial Money Pty Limited v Moustrides & Moustrides [2010] SASC 355
Meehan v Glazier Holdings Pty Limited [2005] NSWCA 24; (2005) 53 ACSR 229
Midas Management Pty Limited v Equator Communications Pty Limited [2007] NSWSC 759
Sajepe Pty Limited v Lawler (2000) 18 ACLC 457; [2000] NSWSC 262
Timberland Property Holdings Pty Limited v Schindler Lifts Australia Pty Limited [2011] NSWSC 466
Category: Principal judgment
Parties: A.C.E.S. Sogutlu Holdings Pty Ltd A.C.N. 122 192 509 (first plaintiff)
Ceyser Pty Ltd A.C.N. 082 916 078 (second plaintiff)
Commonwealth Bank of Australia A.C.N. 123 123 124 (defendant)
Representation: Counsel:
J Charara (in person) (plaintiffs)
D Villa (defendant)
Solicitors:
Gadens Lawyers (defendant)

File Number(s): 2013/337734

Judgment

HIS HONOUR: Following a hearing on 27 and 28 May 2013 and 6 June 2013, Young AJ, as the former Chief Judge in Equity and Judge of Appeal had become, gave judgment [Commonwealth Bank of Australia v ACES Sogutlu Holdings Pty Ltd and Ors [2013] NSWSC 1184] in proceedings brought by the present defendant Commonwealth Bank of Australia against the present plaintiffs A.C.E.S. Sogutlu Holdings Pty Ltd and Ceyser Pty Ltd and two other defendants. His Honour's reasons for judgment concluded as follows (at [74]):

It follows that the cross-claim wholly fails, the defence wholly fails and there must be a verdict for the Bank. As at 1 May 2013 I was informed that with interest what was due was $132,858.18. There will be further interest from that day so that I will find a verdict for the plaintiff for that sum plus interest at the rate referred to in the Statement of Claim from 1 May 2013 to today. Order that the cross claim be dismissed. Order that the defendants and cross claimants pay the costs of the plaintiff and order that the exhibits may be returned after 28 days.

Pursuant to those reasons, judgment was formally entered on 6 September 2013 as follows:

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: [2014] NSWSC 140
Decision Date: 25 February 2014

CaseChat Overview and Summary

The case involved an application by Sogutlu Holdings Pty Ltd to set aside two statutory demands made against it, which were based on judgments that were currently under appeal. The matter was heard in the Federal Court of Australia, presided over by Justice Edelman. The primary issue before the court was whether the statutory demands could be set aside in light of the ongoing appeal against the underlying judgments.

The legal issue at the heart of this case was whether the Court should set aside the statutory demands despite the appeal against the judgments being pending. Sogutlu Holdings argued that the statutory demands should be set aside because the appeals were still being determined. The court needed to consider whether the Court should ordinarily require either a stay of the demand or the payment of the moneys into Court before setting aside the statutory demand. The court explored the balance between the rights of creditors to enforce their judgments and the protections afforded to debtors who are appealing those judgments.

Justice Edelman held that, at least ordinarily, the Court should require either that a stay of the statutory demand be granted or that the moneys be paid into Court pending the outcome of the appeal. The court found that setting aside the statutory demands without these conditions could potentially prejudice the creditors' rights to enforce their judgments. The court dismissed the application to set aside the statutory demands, noting that no stay had been granted and no funds had been paid into Court. Consequently, the originating process was dismissed with costs.

Orders