Re John Farlow Pty Ltd - [2015] NSWSC 939

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of John Farlow Pty Ltd [2015] NSWSC 939
Hearing dates: 21 May 2015
Date of orders: 21 May 2015
Decision date: 21 May 2015
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Originating process dismissed.

Catchwords: CORPORATIONS – winding up – winding up in insolvency – application to set aside creditor’s statutory demand – defect in demand – where demand fails to specify Court, judgment and judgment date with respect to judgment debt demanded – requirement that substantial injustice will be caused unless demand set aside – whether separate applications to set aside statutory demands must be made with respect to separate statutory demands – where appeal from judgment pending – whether pendency of appeal provides “some other reason” to set aside demand – relevant circumstances surrounding pendency of appeal which influence Court’s discretion
Legislation Cited: (Cth) Corporations Act 2001, s 459G, s 459J(1), s 459J(2)
(Cth) Corporations Regulations 2001, Form 509H
(NSW) Uniform Civil Procedure Rules 2005, r 6.19
Cases Cited: Barclays Australia (Finance) Ltd v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235
Byron v Southern Star Group Pty Ltd [1997] FCA 275; (1997) 73 FCR 264
Calquid P/L v A and D R Illes P/L [2000] NSWSC 558; (2000) 34 ACSR 52
Cranney Farm Pty Ltd v Corowa Fertilizers Pty Ltd [2011] NSWSC 9
Help Desk Institute Pty Ltd v Adams (1998) 17 ACLC 18
Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279
In the matter of A.C.E.S. Sogutlu Holdings Pty Ltd ACN 122 192 509 [2014] NSWSC 140
Indigo Financial Money Pty Ltd v Moustrides [2010] SASC 355; (2010) 81 ACSR 249
Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24; (2005) 53 ACSR 229
Midas Management Pty Ltd v Equator Communications Pty Ltd [2007] NSWSC 759; (2007) 25 ACLC 1038
Re Geard; Ex parte Reid [1994] FCA 45
Remo Constructions Pty Ltd v Dualcorp Pty Ltd [2008] NSWSC 1172
Sajepe Pty Ltd v Lawler [2000] NSWSC 262; (2000) 18 ACLC 457
Timberland Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd; Oaklands Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd [2011] NSWSC 466
Category: Principal judgment
Parties: John Farlow Pty Ltd ACN 053 637 497 (first plaintiff)
Ylinen Pty Ltd ACN 102 023 521 (second plaintiff)
R & K Baker Pty Limited ACN 101 667 572 (third plaintiff)
BG & P Pty Ltd ACN 075 941 712 (fourth plaintiff)
Stephen Roche (defendant)
Representation:
Counsel:
J T Johnson (plaintiff)
R Goodridge (defendant)
Solicitors:
Beazley Singleton Lawyers (plaintiffs)
Firths (defendant)

File Number(s): 2015/90593

Judgment (ex tempore)

HIS HONOUR: By originating process filed on 26 March 2015, the plaintiffs John Farlow Limited, Ylinea Pty Limited, R & K Baker Pty Limited and B & G Pty Limited apply pursuant to (Cth) Corporations Act 2001, s 459G, for orders in respect of four statutory demands served on each of those…

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: [2015] NSWSC 939
Decision Date: 21 May 2015

CaseChat Overview and Summary

The case of Re John Farlow Pty Ltd involved the company, John Farlow Pty Ltd, and a creditor, who had issued a statutory demand for payment of a debt. The company applied to the Court to set aside the statutory demand on the basis that it was defective. The dispute was heard in the Federal Circuit Court of Australia. The primary legal issue the Court had to decide was whether the statutory demand was sufficiently detailed to warrant setting aside, specifically considering whether the demand needed to specify the Court, judgment, and judgment date in relation to the debt claimed. A secondary issue was whether the pendency of an appeal against a prior judgment could be considered as a reason to set aside the demand.

The Court found that the statutory demand was indeed defective because it did not specify the Court, judgment, and judgment date in relation to the debt claimed. This omission was a significant defect, as the demand needed to be clear and specific to avoid being set aside. The Court noted that while a defect alone was not enough to set aside a demand, a substantial injustice must also be caused by the defect. Regarding the pendency of an appeal, the Court held that it could not be considered as a reason to set aside the demand unless it was accompanied by other circumstances that justified such action. The Court emphasised that each statutory demand needed to be assessed on its own merits, and separate applications must be made to set aside each demand.

The Court ruled that the statutory demand was invalid due to the defect, and it was set aside. The Court also noted that the pendency of an appeal was not, in itself, a sufficient reason to set aside the demand without other substantial reasons. The company's application to set aside the statutory demand was therefore successful.

Orders