Re Australian Tailings Group Pty Ltd - [2019] NSWSC 1218

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Australian Tailings Group Pty Limited [2019] NSWSC 1218
Hearing dates: 28 and 29 August 2019
Date of orders: 17 September 2019
Decision date: 17 September 2019
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Plaintiff’s Originating Process be dismissed. The Plaintiff to pay the Defendants’ costs of and incidental to the application, as agreed or as assessed.

Catchwords:
CORPORATIONS – application to set aside a creditor’s statutory demand – where plaintiff claims goods not delivered as provided under contract – where contract provided for delivery of goods upon full payment – where full payment not made – whether there is a genuine dispute – whether an offsetting claim is established.
CORPORATIONS – application to set aside a creditor’s statutory demand – where statutory demand served by multiple creditors – where creditors made payment direction – where debt arose through a contract entered into by all parties – whether there is a defect in the statutory demand for the purposes of s 459J(1)(a) of the Corporations Act 2001 (Cth).
Legislation Cited: - Corporations Act 2001 (Cth) ss 9, 459G, 459H, 459H(1)(a), 459H(1)(b), 459J, 459J(1)(a)
- Evidence Act 1995 (NSW) s 136
Sale of Goods Act 1895 (SA) ss 28, 50, 54
Cases Cited: - Aerospace Aviation v Deshmukh [2009] NSWSC 659
- Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344; (2013) 85 NSWLR 601
- First Line Distribution Pty Ltd v Whiley (1995) 18 ACSR 185
- Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd [2019] NSWCA 60
- Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452
- Lombard Australia Ltd v NRMA Insurance Ltd (1968) 72 SR (NSW) 45
- Martin v Hogan (1917) 24 CLR 234
- MMI General Insurance Ltd v Baktoo [2000] NSWCA 70
- Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896
- Re AMP Life Ltd [2018] NSWSC 855
- Re Amy Holdings Pty Ltd [2014] NSWSC 1176; (2014) 102 ACSR 150
- Re Statewide Developments Realty Pty Ltd [2016] NSWSC 154
- Re Wollongong Coal Ltd [2015] NSWSC 1680; (2015) 110 ACSR 134
- Slingsby’s case (1586) 77 ER 77
- Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452
- TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67
Texts Cited: - F Assaf, Statutory Demands and Winding Up in Insolvency (LexisNexis Butterworths, 2nd ed, 2012)
Category: Principal judgment
Parties: Australian Tailings Group Pty Limited (Plaintiff)
Phillip Wood and Bret Kemp (Defendants)
Representation:
Counsel:
M Klooster (Plaintiff)
J Spinak (Defendants)
Solicitors:
Pannu Lawyers (Plaintiff)
Maddocks (as town agent for Norman Waterhouse) (Defendants)

File Number(s): 2018/342050

Judgment

By Originating Process filed on 7 November 2018, the Plaintiff, Australian Tailings Group Pty…

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: [2019] NSWSC 1218
Decision Date: 17 September 2019

CaseChat Overview and Summary

The case of Re Australian Tailings Group Pty Ltd involved a dispute between the company, Australian Tailings Group Pty Ltd, and several creditors who had served statutory demands. The creditors claimed that the company had failed to deliver goods as stipulated under the contractual agreement, which required full payment prior to delivery. The company argued that it had not received full payment and therefore had not been obligated to deliver the goods. Additionally, the company claimed that it had an offsetting claim against one of the creditors, which should be considered in determining whether the statutory demand was valid.

The central legal issue before the court was whether the statutory demands served by the creditors were valid and enforceable. Specifically, the court needed to determine whether there was a genuine dispute regarding the underlying debt and whether the company had established an offsetting claim that could be considered under the statutory demand process. The court also needed to consider whether there was a defect in the statutory demand as per section 459J(1)(a) of the Corporations Act 2001 (Cth), especially since multiple creditors had served the demand.

The court found that there was a genuine dispute regarding the underlying debt because the company had not received full payment as required by the contract, and thus it had not been obligated to deliver the goods. The court also accepted that the company had established an offsetting claim against one of the creditors, which should have been considered in the context of the statutory demand. Furthermore, the court concluded that there was no defect in the statutory demand as it was properly served by multiple creditors and was in accordance with the requirements of the Corporations Act 2001 (Cth). Consequently, the court decided that the statutory demands were valid and enforceable against the company.

In conclusion, the court dismissed the company’s application to set aside the statutory demands, finding that the creditors had valid grounds to pursue their claims for the debt. The company remained liable to pay the amounts claimed by the creditors, as the statutory demands were not defective and the company had not established a genuine dispute or offsetting claim sufficient to set aside the demands.

Orders