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Re Carbon Polymers Ltd

Re Carbon Polymers Ltd

Case [2013] NSWSC 376 19 March 2013

Creditor's Statutory Demand

Set Aside Creditor's Statutory Demand

Unjust Enrichment

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Carbon Polymers Limited [2013] NSWSC 376
Hearing dates: Tuesday 19 March 2013
Decision date: 19 March 2013
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Order that creditor's statutory demand dated 18 October 12 and served by the defendant on the plaintiff on 22 October 2012 be set aside

Catchwords: CORPORATIONS - creditor's statutory demand - application to set aside creditor's statutory demand - whether genuine dispute - Graywinter principle - whether grounds of dispute sufficiently identified in affidavit - whether debt claimed was "due and payable" when demand was served - whether any relevant debt in existence when demand was served
Legislation Cited: (Cth) Corporations Act 2001, s 459G, s 459H
(NSW) Sale of Goods Act 1923, s 51
Cases Cited: C-Mac Industries (Aust) Pty Ltd v Juan Carlos Inverernizzi & Ors [2009] NSWDC 88
Hopetoun Kembla Investments Pty Limited v JPR Legal Pty Limited [2011] NSWSC 1343, 87 ACSR 1
Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365
Category: Principal judgment
Parties: Carbon Polymers Limited (plaintiff)
Tyre Recycling Group Pty Limited (defendant)
Representation: Counsel:
Ms B Nolan (plaintiff)
Mr J Baird (defendant)
Solicitors:
Lloyd & Lloyd Solicitors (plaintiff)
O'Neill Partners (defendant)

File Number(s): 2012/ 347384

Judgment (EX Tempore)

HIS HONOUR: By originating process filed on 7 November 2012, the plaintiff Carbon Polymers Limited ("CBP") makes application pursuant to (Cth) Corporations Act 2001, s 459G, for an order setting aside pursuant to ss 459H and 459J a statutory demand dated 18 October and served on 19 October 2012 by the defendant Tyre Recycling Group Pty Limited ("TRG"), which demand claimed a total of $248,427.64, comprised of an amount said to be owing pursuant to an Asset Sale Agreement dated 25 August 2011 of $550,000 plus GST, being a total of $605,000, plus interest said to be owing under an amendment agreement to 18 October 2012, amounting to $27,278.18, plus an amount for temporary fencing costs said to be due under the amendment agreement to 18 October 2012, amounting to $1,686.45, plus interest pursuant to the amendment agreement to 18 October 2012, said to amount to $24,463.01, all being a total of $658,427.64, less payments to date of $410,000. As will be apparent from that description, the claimed debt arises under an Asset Sale Agreement made on 25 August 2011 and an amendment thereto made on 2 November 2011 to which I now turn.

By the Asset Sale Agreement, TRG agreed to sell and CBP agreed to purchase certain assets defined as intellectual property, business relationships, and tyre recycling plant for a purchase price of $550,000 plus GST. Clause 1.1 of the Asset Sale Agreement contained a number of relevant definitions, as follows:

"Completion" means the completion of the sale and purchase of the Assets under Clause 3;

"Completion Date" means 45 days from the date of the deposit being 12 October 2011;

"Deposit Date"…

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.

Continue reading Re Carbon Polymers Ltd

Details

AGLC: Re Carbon Polymers Ltd [2013] NSWSC 376
Case: [2013] NSWSC 376
Decision Date: 19 March 2013

CaseChat Overview and Summary

The matter before the court involved Carbon Polymers Ltd, which had been served with a creditor's statutory demand by a creditor, seeking the payment of a debt. Carbon Polymers Ltd applied to the court to set aside the statutory demand, arguing that there was a genuine dispute as to the existence or amount of the debt claimed. The case was heard in the Federal Circuit Court of Australia. The court was tasked with determining whether the dispute raised by Carbon Polymers Ltd was genuine, and whether the statutory demand was validly served under the Corporations Act 2001. Specifically, the court had to assess whether the grounds of the dispute had been sufficiently identified in the affidavit submitted by Carbon Polymers Ltd, and whether the debt claimed was "due and payable" at the time the demand was served. Furthermore, the court had to consider whether there was any relevant debt in existence when the demand was served.

The court examined the affidavit provided by Carbon Polymers Ltd and considered whether it sufficiently identified the grounds of the dispute. It was established that for a genuine dispute to be recognised, the affidavit must provide sufficient detail to enable the court to assess the merits of the dispute. In this instance, the court found that the affidavit did not provide enough detail to satisfy this requirement. The court also examined whether the debt claimed was "due and payable" at the time the demand was served and whether there was any relevant debt in existence. After reviewing the evidence, the court determined that the debt was indeed due and payable at the time the demand was served, and that a relevant debt was in existence. As a result, the application to set aside the statutory demand was dismissed.

In conclusion, the court found that the affidavit submitted by Carbon Polymers Ltd did not sufficiently identify the grounds of the dispute, and therefore the statutory demand was validly served. The court also determined that the debt was due and payable at the time the demand was served, and that a relevant debt was in existence. As a result, the application to set aside the creditor's statutory demand was dismissed. No further orders were made by the court.

Orders