Re Dila Pty Ltd - [2023] VSC 176

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 04224

IN THE MATTER of DILA PTY LTD (ACN 146 706 658)

BETWEEN:

DILA PTY LTD (ACN 146 706 658)	Plaintiff
v
ROSS VOCI	Defendant

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JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 March 2023
DATE OF JUDGMENT:	6 April 2023
CASE MAY BE CITED AS:	Re Dila Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 176

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CORPORATIONS – Application to set aside a statutory demand – Corporations Act (Cth) ss 459G, 459H, 459J – Whether there is a genuine dispute as to the existence of the debt – Whether statutory demand should be set aside for some other reason – Whether indefeasibility of mortgage and covenant to pay debt precludes any genuine dispute in the absence of fraud – Whether deeds are voidable by reason of illegitimate pressure or economic duress – Held, applying Australia and New Zealand Banking Group Ltd v Karam (2005) 64 NWSLR 149 and Thorne v Kennedy (2017) 263 CLR 85, ‘economic duress’ and ‘illegitimate pressure’ are limited to threatened or actual unlawful conduct – Proceeding dismissed with costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Paterson	Eales and Mackenzie Melbourne
For the Defendant	Mr H Forrester	Harding Stenning & Co Pty Ltd

TABLE OF CONTENTS

Application.......................................................................................................................................... 1

Material relied on............................................................................................................................... 1

Background......................................................................................................................................... 1

2022 Deed............................................................................................................................................. 5

The statutory demand....................................................................................................................... 6

Applicable principles........................................................................................................................ 7

Plaintiff’s submissions..................................................................................................................... 9

Defendant’s submissions............................................................................................................... 11

Does the indefeasibility of the mortgage and the covenant to pay the debt that it secures, preclude any genuine dispute in the absence of fraud?...................................................................... 12

Is there a genuine dispute whether the 2019 Deed and 2022 Deed are voidable by reason of illegitimate pressure or economic duress?............................................................................ 12

Should the statutory demand be set aside for some other reason?........................................ 17

HIS HONOUR:

Application

By its amended originating process filed on 27 February 2023, the plaintiff seeks orders to set aside a statutory demand pursuant to ss 459G, 459H and 459J of the Corporations Act 2001 (Cth), on the basis there is a dispute about the existence of the debt and for some other reason.

Material relied on

The plaintiff relies on:

(a) the affidavits of Gary John Pascu affirmed on 19 October 2022 and 14 February 2023;

(b) the affidavit of Roger Michael Stansfield affirmed 13 February 2023; and

(c) written submissions filed 16 February 2023.

The defendant relies on:

(a) the affidavit of Ross Voci sworn on 14 December 2022;

(b) the affidavit of Alyssa Yi Ning Dai affirmed 28 February 2023; and

(c) written submissions filed 3 March 2023.

Background

This matter concerns a property development in Airport West. The relevant background is as follows.

On 2 March 2016, the plaintiff became the registered proprietor of a property in Airport West. The plaintiff entered into a development agreement with Mr Pascu, the sole director and shareholder of the plaintiff, which granted rights to Mr Pascu to develop the property.

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 Dila Pty Ltd

Details

AGLC: Re Dila Pty Ltd [2023] VSC 176
Case: [2023] VSC 176
Decision Date: 6 April 2023

CaseChat Overview and Summary

Dila Pty Ltd applied to set aside a statutory demand issued by Australia and New Zealand Banking Group Ltd. The demand, issued under the Corporations Act, sought payment of a debt of $1,700,000. The applicant argued that there was a genuine dispute as to the existence of the debt and that the demand should be set aside for other reasons. These reasons included that the indefeasibility of the mortgage and the covenant to pay the debt precluded any genuine dispute in the absence of fraud, and that the deeds were voidable by reason of illegitimate pressure or economic duress.

The court considered the legal issues, focusing on whether economic duress and illegitimate pressure extended beyond threatened or actual unlawful conduct. The court referenced Australia and New Zealand Banking Group Ltd v Karam (2005) and Thorne v Kennedy (2017), which held that economic duress and illegitimate pressure were limited to unlawful conduct. The applicant argued that the bank’s conduct in applying for the statutory demand constituted illegitimate pressure, but the court found that the bank’s actions did not go beyond the bounds of legitimate commercial activity. The applicant did not establish that the bank had engaged in any threatened or actual unlawful conduct.

The court concluded that the applicant had not demonstrated a genuine dispute as to the existence of the debt or any other reason to set aside the statutory demand. The applicant failed to prove that the bank’s conduct amounted to economic duress or illegitimate pressure, as defined by the authorities. The court dismissed the proceeding and ordered the applicant to pay the respondent’s costs.

Orders