IN THE MATTER of AUSTRALIAN BUILDERS GROUP PTY LTD (ACN 164 911 371)
AUSTRALIAN BUILDERS GROUP PTY LTD (ACN 164 911 371)
Plaintiff
v
MIND AUSTRALIA LTD (ACN 005 063 589)
Defendant
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JUDGE:
Hetyey AsJ
WHERE HELD:
Melbourne
DATE OF HEARING:
10 December 2021
DATE OF JUDGMENT:
20 May 2022
CASE MAY BE CITED AS:
Re Australian Builders Group Pty Ltd
MEDIUM NEUTRAL CITATION:
[2022] VSC 254
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CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4 – Insolvency – Statutory demand – – s 459G – Application to set aside – Whether genuine dispute about existence and/or amount of debt – Whether genuine dispute debt due and payable because condition precedent in deed not met – Questions of construction and effect of notice provision in deed – Validity of notice - Whether genuine dispute deed is unenforceable because obtained by duress – Principles of economic duress - Demand set aside.
Statutory provisions and legal principles..................................................................................... 4
Terms of repayment deed and relevant evidence........................................................................ 6
Whether genuine dispute that arrears due and payable in accordance with terms of repayment deed................................................................................................................................................. 9
Consideration of ground.................................................................................................. 10
Whether genuine dispute that repayment deed is unenforceable because obtained by economic duress............................................................................................................................................ 15
By an originating process dated 16 August 2021, Australian Builders Group Pty Ltd (‘the plaintiff’ or ‘ABG’) seeks to set aside a statutory demand dated 23 July 2021 (‘the statutory demand’ or ‘the demand’) served on it by Mind Australia Ltd (‘the defendant’ or ‘Mind’). The statutory demand claims $73,281.29 in respect of rental arrears owing by ABG under a repayment deed dated 30 April 2021 (‘the repayment deed’).
Background
Mind is a not-for-profit organisation which provides community-managed specialist mental health services. On or around 1 June 2017, Mind entered into an agreement with Australian Win Win Investment Pty Ltd (‘the landlord’) to lease a property located at 691 High Street, Thornbury, Victoria (‘the property’ and ‘the lease’ respectively) for an amount of $130,000 per annum (approximately $10,833.33 per calendar month). In early May 2018, Mind and ABG entered into a sublease agreement for the property (‘the sublease’). The parties to the sublease agreed that ABG would pay a reduced amount of rent of $121,000 per annum (approximately $10,083.33 per calendar month).
From February 2019, ABG began to fall into arrears on the rental payments. By 15 April 2021, it owed Mind approximately eight months’ rent, totalling $82,279.92 (‘the arrears’). Pursuant to the…
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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AGLC
Re Australian Builders Group Pty Ltd [2022] VSC 254
Case
[2022] VSC 254
Decision Date
CaseChat Overview and Summary
In the matter of Australian Builders Group Pty Ltd, the applicants sought to set aside a statutory demand issued against the respondent company. The dispute arose under the Corporations Act 2001 (Cth), specifically concerning insolvency provisions. The applicants argued that there was a genuine dispute about the existence and amount of the debt claimed in the statutory demand, as well as the enforceability of the underlying deed due to alleged non-compliance with its terms and potential economic duress.
The court was required to determine whether the applicants had a genuine dispute about the existence and amount of the debt, particularly given the condition precedent in the deed had not been met. Additionally, the court had to interpret the notice provisions in the deed and assess the validity of the notice given. Furthermore, the applicants contended that the deed was unenforceable due to duress, necessitating an examination of the principles of economic duress.
Upon examining the evidence and arguments presented, the court found that there was indeed a genuine dispute about the existence and amount of the debt. The court also concluded that the notice provisions in the deed had not been properly complied with, rendering the notice invalid. Moreover, the court accepted the applicants' argument that the deed was obtained through economic duress, making it unenforceable. Consequently, the court decided to set aside the statutory demand.
The court's final order was that the statutory demand issued against the respondent company be set aside, effectively dismissing the applicants' liability to pay the claimed debt. This decision hinged on the existence of a genuine dispute, the invalid notice, and the unenforceable nature of the deed due to economic duress.