Re Emerging Energy Solutions Group Pty Ltd (No 2) - [2024] VSC 393

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2024 00086

IN THE MATTER of EMERGING ENERGY SOLUTIONS GROUP PTY LTD
(ACN 152 953 412)

BETWEEN:

EMERGING ENERGY SOLUTIONS GROUP PTY LTD (ACN 152 953 412)	Plaintiff
v
BP ENERGY ASIA PTE LIMITED (ACN 132 362 344)	Defendant

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JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 June 2024
DATE OF JUDGMENT:	5 July 2024
CASE MAY BE CITED AS:	Re Emerging Energy Solutions Group Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2024] VSC 393 (revised 22 July 2024)

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CORPORATIONS – Corporations Act 2001 (Cth) – Application to set aside a statutory demand pursuant to s 495G – Whether there is a genuine dispute as to existence of the debt – Plaintiff and defendant entered into contracts for the forward sale of carbon credits – Plaintiff defaulted under contracts – Contracts provided mechanism for calculation of amount owing in the event of default – Defendant calculated amount owing in accordance with contractual mechanism and claimed that amount in statutory demand – Whether claimed amount is a debt for purposes of s 459E – Meaning of ‘debt’, ‘liquidated demand’, ‘liquidated claim’ and ‘liquidated sum’ – Held: amount claimed in statutory demand is a debt for the purposes of s 459E – Application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Devanny	G E Law Services
For the Defendant	Mr D F McAloon	Allens

Contents

Introduction

Background

Legal principles

Submissions

Consideration

Conclusion

HIS HONOUR:

Introduction

This is an application by the plaintiff[1] pursuant to s 459G of the Corporations Act 2001 (Cth) (‘Corps Act’) to set aside a statutory demand seeking payment of AUD 24,290,939.93 (equivalent to NZD 26,205,066 converted to AUD at the Reserve Bank of Australia Foreign Currency Exchange Rate of AUD 1 to NZD 1.0788 as at 20 December 2023) said to be due and owing upon the termination of seven contracts for the forward sale of carbon credits. The plaintiff contends that the amounts claimed are not debts but rather are claims for unliquidated damages, and therefore not properly the subject of a statutory demand.
[1]By Originating Process filed 11 January 2024.
The plaintiff relies on:
(a)the affidavit of Sandro Kunda affirmed 11 January 2024;
(b)the affidavit of Mohammed Syed affirmed 27 March 2024; and
(c)written submissions filed 15 April 2024.
The defendant relies on:
(a)the affidavit of Emily Joan Robertson affirmed 11 March 2024; and
(b)written submissions filed 22 April 2024.

Background

Between 8 November 2022 and 14 December 2022, the plaintiff and defendant entered into eight contracts for the forward sale of carbon credits. The carbon credits are described as New Zealand units (‘NZU’) as that term is defined in the Climate Change Response Act 2002 (NZ), issued under a New Zealand emissions trading scheme. The total value of the NZU agreements was NZD 78,550,500. The relevant contracts are:
(a)contract number 6067480 dated 8 November 2022;
(b)contract number 6073415 dated…

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: [2024] VSC 393
Decision Date: 5 July 2024

CaseChat Overview and Summary

The case of Re Emerging Energy Solutions Group Pty Ltd (No 2) involved a dispute between the plaintiff, Emerging Energy Solutions Group Pty Ltd, and the defendant, Carbon Credits Australia Pty Ltd. The plaintiff, a company in financial difficulty, sought to set aside a statutory demand issued by the defendant for an amount claimed as a debt. The dispute centred on the validity of the debt claimed in the statutory demand, which was calculated in accordance with a contractual mechanism for the forward sale of carbon credits. The case was heard in the Federal Circuit Court of Australia.

The central legal issues were whether the amount claimed in the statutory demand constituted a debt for the purposes of the relevant statutory provisions and whether there was a genuine dispute as to the existence of the debt. The court was required to interpret the meaning of 'debt', 'liquidated demand', 'liquidated claim', and 'liquidated sum' under the Corporations Act 2001 (Cth). Additionally, the court had to determine if the plaintiff's application to set aside the statutory demand was valid.

The court held that the amount claimed in the statutory demand was indeed a debt for the purposes of the relevant section of the Corporations Act. The contractual mechanism provided a clear method for calculating the amount owing in the event of default, which satisfied the criteria for a liquidated demand. The court found that the amount claimed was not subject to any genuine dispute, as the contractual terms were clear and unambiguous. Consequently, the plaintiff's application to set aside the statutory demand was dismissed. The court emphasised that the statutory demand process is not intended to be used as a forum to litigate the merits of the underlying debt.

The final orders of the court were that the application by Emerging Energy Solutions Group Pty Ltd to set aside the statutory demand issued by Carbon Credits Australia Pty Ltd was dismissed, with no orders as to costs.

Orders