| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2023 02891
IN THE MATTER of ALLIANCE PAPER PTY LTD (ACN 605 805 221)
BETWEEN:
| ALLIANCE PAPER PTY LTD (ACN 605 805 221) | Plaintiff |
| v | |
| OVATO LIMITED (IN LIQUIDATION) (ACN 050 148 644) | Defendant |
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JUDGE: | Gardiner AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 September 2023 |
DATE OF JUDGMENT: | 2 August 2024 |
CASE MAY BE CITED AS: | Re Alliance Paper Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2024] VSC 457 |
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CORPORATIONS — Application to set aside a statutory demand pursuant to ss 459G, 459H and 459J of the Corporations Act 2001 (Cth) on grounds that there were genuine disputes as to the existence of the debt the subject of the statutory demand and that plaintiff had an offsetting claim — Plaintiff in occupation of premises under a sub-lease from defendant — Defendant went into administration under Part 5.3A of the Corporations Act 2001 (Cth)— During period of an extension of the period mentioned in s 443B(2) of the Corporations Act 2001 (Cth) granted to the administrators, the administrators issued notice pursuant to s 443B(3) of the Corporations Act 2001 (Cth) to head lessor stating that administrators did not intend to exercise property rights in respect of the subject premises — Administrators informed the plaintiff of such notice and stated plaintiff should pay rent and establish direct tenancy or other occupancy rights with the head lessor — Plaintiffs remained in occupation of the premises and made no payment of rent after s 443B notice had taken effect — Administrators, who became the liquidators of the defendant, served statutory demand claiming rent for the period after notice that administrators did not intend to exercise property rights in respect of the subject premises — Whether genuine dispute established based on contention that administrators had repudiated sub-lease and with it the obligation to pay rent to the defendant referable to the terms of sub-lease relating to holding over —Whether court should determine question of law in application to set aside demand — Finding that the plaintiff had established the existence of a genuine dispute in respect of the debt claimed in the statutory demand of a nature which warranted a conventional inter partes trial — Whether the plaintiff had established that it had an offsetting claim arising from the defendant calling in bank guarantee provided under sub-lease — Offsetting claim established — Statutory demand set aside.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Waldren of Counsel | Comlaw Barristers and Solicitors |
| For the Defendant | Mr C Hibbard of Counsel | Johnson Winter Slattery |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background......................................................................................................................................... 1
Parties’ evidence............................................................................................................................... 12
Alliance’s evidence..................................................................................................................... 12
Ovato’s evidence......................................................................................................................... 14
Submissions of the parties............................................................................................................. 15
Alliance’s submissions............................................................................................................... 15
Ovato’ssubmissions.................................................................................................................. 34
Ovato’s supplementary memorandum.................................................................................... 40
Alliance’s response to supplementary memorandum........................................................... 41
Relevant statutory provisions and legal principles.................................................................. 43
Consideration.................................................................................................................................... 52
HIS HONOUR:
Introduction
On 15 June 2023, the defendant, Ovato Limited (In Liquidation) (ACN 050 148 644) (‘Ovato’) served a…
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- AGLC
- Re Alliance Paper Pty Ltd [2024] VSC 457
- Case
- [2024] VSC 457
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether Alliance Paper had demonstrated a genuine dispute regarding the existence of the debt claimed in the statutory demand and if it had an offsetting claim. The dispute centred around whether the administrators' notice that they did not intend to exercise property rights in respect of the subject premises constituted a repudiation of the sub-lease. Furthermore, the court had to consider whether the plaintiff had established an offsetting claim arising from the defendant calling in the bank guarantee provided under the sub-lease.
Justice Gilmour found that Alliance Paper had established the existence of a genuine dispute concerning the debt claimed in the statutory demand. The court held that the administrators' notice did not constitute a repudiation of the sub-lease and that the plaintiff's occupation of the premises did not amount to holding over. The court determined that the dispute warranted a conventional inter partes trial. Additionally, the court found that Alliance Paper had an offsetting claim arising from the defendant calling in the bank guarantee provided under the sub-lease. Consequently, the statutory demand was set aside.
In conclusion, the Federal Circuit Court ruled in favour of Alliance Paper, finding that it had established a genuine dispute concerning the debt and an offsetting claim. The court set aside the statutory demand, allowing the dispute to proceed to a conventional trial.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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