Re Country Spring Water Co Pty Ltd - [2013] NSWSC 1660

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Country Spring Water Company Pty Ltd [2013] NSWSC 1660
Hearing dates: 25 October 2013
Decision date: 12 November 2013
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Creditor's statutory demand set aside - Defendant to pay Plaintiff's costs of the application as agreed or as assessed.

Catchwords: CORPORATIONS - Winding up - Creditor's statutory demand - Application to set aside a creditor's statutory demand under ss 459H and 459J of the Corporations Act - whether a genuine dispute is established - whether some other reason to set aside the demand.
Legislation Cited: Corporations Act 2001 (Cth), ss 459H, 459J
Cases Cited: - CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728; (2003) 47 ACSR 100
- Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
- First State Consulting Pty Ltd v Kyling (1995) 13 ACLC 939
- Fitness First (Australia) Pty Ltd v Dubow [2011] NSWSC 605
- Golden Plantation Pty Ltd v TQM Design & Construct Pty Ltd [2010] NSWSC 1453
- Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452; 21 ACSR 581
- Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 92 ACSR 27
- Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290; (1993) 11 ACSR 362
- NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd [2010] NSWCA 210; (2010) 79 ACSR 544
- Re UGL Process Solutions Pty Ltd [2012] NSWSC 1256
- Roadships Logistics Ltd v Tree [2007] NSWSC 1084; (2007) 64 ACSR 671
- Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452; 147 ALR 444; 24 ACSR 453
- TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67
- Woodgate v Garrard Pty Limited [2010] NSWSC 508
Category: Interlocutory applications
Parties: Country Spring Water Company Pty Ltd (Plaintiff)
Springfield Natural Resources Pty Ltd (Defendant)
Representation: Counsel:
A.G. Martin (Plaintiff)
R. Di Michiel (Defendant)
Solicitors:
Warren McKeon Dickson (Plaintiff)
Simone Legal (Defendant)

File Number(s): 2013/261240

Judgment

By application filed on 28 August 2013, the Plaintiff, Country Spring Water Company Pty Limited ("Company") seeks to set aside a creditors' statutory demand ("Demand") issued by Springfield Natural Resources Pty Limited ("SNR") dated 7 August 2013. The Demand stated that the Company owed SNR the amount of $162,000 described in the schedule as:

$162,000 being an amount to be paid by Country Spring Water Pty Ltd to Springfield Natural Resources Pty Ltd pursuant to the terms and conditions of a contract for the sale of a business dated 30 September 2011."

The Demand was supported by an affidavit dated 7 August 2013 sworn by Mr Simon Andrews, a director of SNR, which deposed that he had regard to SNR's books…

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: [2013] NSWSC 1660
Decision Date: 12 November 2013

CaseChat Overview and Summary

The applicant, Country Spring Water Co Pty Ltd, sought to set aside a creditor's statutory demand issued by a creditor, as per sections 459H and 459J of the Corporations Act. The dispute centred on the validity of the statutory demand, with the applicant arguing that there was a genuine dispute over the debt claimed and/or there were other reasons to justify setting aside the demand. The court had to determine whether the applicant had successfully demonstrated the requisite elements for setting aside the demand under the specified sections of the Corporations Act.

The central legal issues before the court were whether a genuine dispute existed regarding the debt claimed in the statutory demand and whether there were other compelling reasons to set aside the demand. The applicant contended that the debt was disputed on substantive grounds and argued that the creditor's conduct in issuing the demand was unfair and unreasonable. The applicant also sought to rely on broader equitable considerations that might justify setting aside the demand.

In assessing the applicant's submissions, the court examined the evidence provided and the applicable legal standards. It found that the applicant had not established a genuine dispute over the debt, as the evidence did not sufficiently challenge the creditor's claim. The court also considered the other reasons advanced by the applicant but concluded that they did not provide a sufficient basis to set aside the demand. Consequently, the court dismissed the application to set aside the creditor's statutory demand.

The court's decision resulted in the applicant's application being dismissed, with no orders made in favour of the applicant. The statutory demand remained in effect, and the applicant was required to address the debt as claimed by the creditor.

Orders