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Re Linton Developments (Qld) Pty Ltd

Re Linton Developments (Qld) Pty Ltd

Case [2017] NSWSC 336 3 April 2017

Statutory Demand

Jurisdiction

Standing

Unconscionable Conduct

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Linton Developments (Qld) Pty Limited [2017] NSWSC 336
Hearing dates: 28 March 2017
Decision date: 03 April 2017
Before: Gleeson JA
Decision:
(1) Order that the statutory demand dated 3 August 2016 served on the plaintiff by the defendant be set aside.
(2) Order that the defendant pay the plaintiff’s costs of the proceedings.
Catchwords: CORPORATIONS – statutory demand – application to set aside statutory demand – where application based on argument as to correct construction of service agreement – whether appropriate to entertain argument on construction beyond establishing there is a genuine dispute – whether genuine dispute as to matters of construction established.
Legislation Cited: Corporations Act 2001 (Cth), ss 459G, 459H(1)(a), 459H(1)(b)
Cases Cited: Broadspectrum (Australia) Pty Ltd v Centauri Business Services Pty Ltd [2016] NSWSC 1045
Drillsearch Energy Ltd v Carling Capital Partners Pty Ltd [2009] NSWSC 1192
Electricity General Corporation t/as Verve Energy Limited v Woodside Energy Ltd; Woodside Energy Ltd v Electricity Generation Corporation t/as Verve Energy Limited (2014) 251 CLR 640; [2014] HCA 7
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
In the matter of Litigation Insurance Pty Ltd [2017] NSWSC 334
Ligon 158 Pty Ltd v Huber [2016] NSWCA 330
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Spacorp Australia Pty Ltd v Myer Stores Ltd (2001) 19 ACLC 1270; [2001] VSCA 89
Category: Principal judgment
Parties: Linton Developments (Qld) Pty Limited (ACN 603 825 627) (Plaintiff)
Development Finance Partners Pty Limited (ACN 149 797 071) (Defendant)
Representation:
Counsel:
A Di Francesco (Plaintiff)
LT Livingston (Defendant)
Solicitors:
Sydney Business Lawyers (Plaintiff)
Garland Hawthorn Brahe (Defendant)

File Number(s): 2016/255153

Judgment

GLEESON JA: The plaintiff, Linton Developments (Qld) Pty Limited (Linton), makes application under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand for payment dated 3 August 2016 served by the defendant, Development Finance Partners Pty Limited (DFP).
The debt to which the statutory demand relates is described as:

Debt due pursuant to Tax Invoice No. 1353 dated 11 July 2016 in respect of the service fee payable under the Service Agreement entered into between the creditor and the company dated 15 April 2016 (copy attached).

The copy of the attached Tax Invoice for $100,000, inclusive of GST, described the debt as a “parachute payment as per Service Agreement dated 15/04/16”.
The affidavit accompanying the statutory demand sworn by Mr Baxter Gamble, a director of DFP, who stated his belief that there is no genuine dispute about the existence or amount of the debt.

Grounds of application

Linton seeks to set aside the statutory demand on the grounds that there is a genuine dispute about the existence of the debt claimed in the demand (s 459H(1)(a)) or that there is a genuine…

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 Linton Developments (Qld) Pty Ltd

Details

AGLC: Re Linton Developments (Qld) Pty Ltd [2017] NSWSC 336
Case: [2017] NSWSC 336
Decision Date: 03 April 2017

CaseChat Overview and Summary

In the case of Re Linton Developments (Qld) Pty Ltd, the respondent, Linton Developments (Qld) Pty Ltd, applied to the Court to set aside a statutory demand issued by the applicant. The dispute arose from a service agreement between the parties, with the respondent seeking to contest the demand on the basis of the correct interpretation of the agreement. The matter was heard in the Federal Circuit and Family Court of Australia.

The primary legal issue before the Court was whether it was appropriate to entertain an argument about the construction of the service agreement beyond establishing that there was a genuine dispute. The respondent argued that the agreement was ambiguous and needed to be interpreted in its entirety. The Court had to determine whether this argument was within the scope of the application to set aside the statutory demand.

The Court held that it was not appropriate to entertain the argument about the correct construction of the service agreement beyond establishing there was a genuine dispute. The Court found that the respondent had not established a genuine dispute as to the matters of construction, and therefore, the application to set aside the statutory demand was dismissed.

The Court ordered that the application to set aside the statutory demand was dismissed, and no orders were made as to costs.

Orders