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Re Jana Pty Ltd

Re Jana Pty Ltd

Case [2022] NSWSC 112 15 February 2022

Statutory Demand

Jurisdiction

Unconscionable Conduct

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Jana Pty Ltd [2022] NSWSC 112
Hearing dates: 14 February 2022
Date of orders: 14 February 2022
Decision date: 15 February 2022
Jurisdiction: Common Law
Before: Williams J
Decision:
Statutory demand set aside and the defendant to pay the plaintiff’s costs (see paragraph [63])

Catchwords:
CORPORATIONS – statutory demand – application to set aside statutory demand – whether there is a genuine dispute as to whether debt was due and payable – whether there is a genuine dispute as to the correct construction of deed – whether demand should be set aside for some other reason

Legislation Cited:
Corporations Act 2001 (Cth), ss 459E, 459G, 459H, 459J

Cases Cited:
Creata (Aust) Pty Ltd v Faull (2017) 125 ACSR 212; [2017] NSWCA 300
In the matter of Essential Media and Entertainment Pty Ltd [2020] NSWSC 990
In the matter of JF Essential Power Pty Limited [2018] NSWSC 435
In the matter of Savemore Wholesale Pty Ltd [2021] NSWSC 307
Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330

Category: Principal judgment
Parties: Jana Pty Ltd (Plaintiff)
Allspec Constructions and Project Management Pty Ltd (Defendant)
Representation:
Counsel:
Mr J Bennett (Plaintiff)
Mr L Katsinas (Defendant)
Solicitors:
Optic Lawyers (Plaintiff)
JK Solicitors (Defendant)

File Number(s): 21/279991
Publication restriction: N/A

Judgment

Introduction

By originating process filed on 1 October 2021, Jana Pty Ltd ACN 158 982 122 (Jana) applies pursuant to s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand issued to it on 13 September 2021 by the defendant, Allspec Constructions and Project Management ACN 617 645 799 (ACPM) (the demand).
Paragraph 1 of the demand states that Jana owes ACPM “the amount of $481,865.51 being the total of the amount of the debt described in the Schedule”. The Schedule describes the debt as follows:

“The Debtor Company, Jana Pty Ltd as Guarantor, Guaranteed payment of the Acknowledgement of Debt of $481,865.51 and the terms and conditions set out in the Deed dated 19 January 2021 as annexed and marked ‘A’”.

I will return to the provisions of the deed dated 19 January 2021 later in these reasons (the Deed).
It is common ground that Jana’s application to set aside the statutory demand was made within the statutory period in s 459G(2) of the Corporations Act.
Jana applies to set aside the demand on two grounds.
First, Jana contends the demand should be set aside pursuant to s 459H(1)(a) of the Corporations Act because there is a genuine dispute about the existence of the debt to which the demand relates. The dispute concerns:

whether, on the proper construction of the Deed, Jana was a guarantor in respect of the amount of $481,865.51; and

if Jana was a guarantor (which is disputed), whether the amount of $481,865.51 was a debt that was due and payable by Jana as at the date of issue of…

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 Jana Pty Ltd

Details

AGLC: Re Jana Pty Ltd [2022] NSWSC 112
Case: [2022] NSWSC 112
Decision Date: 15 February 2022

CaseChat Overview and Summary

The case of Re Jana Pty Ltd involved the applicant, Jana Pty Ltd, and the respondent, a creditor, who had issued a statutory demand against the applicant for a debt. The matter was heard in the Federal Circuit and Family Court of Australia. The applicant sought to set aside the statutory demand on several grounds, primarily arguing that there was a genuine dispute over whether the debt was due and payable, the correct construction of a relevant deed, and whether the demand should be set aside for other reasons.

The primary legal issues before the court were whether there was a genuine dispute regarding the debt and the interpretation of the relevant deed. The court was required to assess whether the applicant had demonstrated a real prospect of successfully defending the statutory demand by showing a genuine dispute over the debt and its construction. The court also had to consider if there were other grounds for setting aside the demand, such as procedural irregularities or unfairness.

In its reasoning, the court found that the applicant had indeed raised a genuine dispute over the debt and the correct interpretation of the deed. The court was satisfied that the applicant's evidence demonstrated a plausible case for the defence of the statutory demand. Furthermore, the court considered the procedural fairness and did not find any irregularities that would warrant setting aside the demand. Consequently, the court concluded that the statutory demand should be set aside due to the genuine dispute over the debt and its interpretation.

The final orders of the court were to set aside the statutory demand issued by the respondent against Jana Pty Ltd. The court determined that the applicant had shown a genuine dispute as to the debt and its construction, and there were no other grounds for setting aside the demand. This decision allowed the applicant to pursue its defence in the original proceeding without the immediate pressure of the statutory demand.

Orders