Re O'Brien Real Estate Pty Ltd - [2020] VSC 697

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2020 03175

O’BRIEN REAL ESTATE PTY LTD (ABN 39 144 978 692)	Plaintiff
v
DMITRI VORONTSOV	Defendant

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JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 October 2020
DATE OF JUDGMENT:	13 October 2020 (ex tempore); revised 19 October 2020
CASE MAY BE CITED AS:	Re O’Brien Real Estate Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 697

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CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4 – Insolvency – Statutory demand – s 459G – Application to set aside – s 459H(1)(a) – Whether genuine dispute about existence of debt – Where plaintiff had underlying default judgment set aside and obtained summary judgment against the defendant – s 459E(2)(e) – Overseas address for service – Failure to comply with prescribed form – s 459J(1)b) – Some other reason to set demand aside – Abuse of statutory demand procedure – Underlying default judgment set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Holmes	Terill & Holmes
For the Defendant	No appearance

HIS HONOUR:

Introduction

This is an application by O’Brien Real Estate Pty Ltd (‘O’Brien’ or ‘the plaintiff’) pursuant to s 459G of the Corporations Act 2001 (Cth) (‘the Corporations Act’) to set aside a statutory demand issued by Mr Dmitri Vorontsov (‘the defendant’) on 25 May 2020 for the sum of $56,942. O’Brien’s originating process was filed on 4 August 2020 and is principally supported by the affidavit of Mr Michael Holmes, solicitor, sworn on 5 August 2020. The plaintiff’s application was amended by leave of the Court on 21 August 2020 to include s 459J as an alternative ground for setting aside the statutory demand. The plaintiff also relies on the affidavits of Mr Holmes sworn on 3 September 2020, 17 September 2020 and a further supplementary affidavit of Mr Holmes provided to the Court this afternoon.[1]
[1]The plaintiff relied upon the unsworn affidavit of Mr Michael Holmes provided to the Court on 13 October 2020 in accordance with s 49F of the Oaths and Affirmations Act 2018 (Vic). The deponent undertook to formally swear and file the affidavit when circumstances allowed. A sworn version of the affidavit was then filed on 14 October 2020 (‘Holmes affidavit of 14 October 2020’).

There are two salient features of this case. Firstly, the defendant’s statutory demand was predicated upon a default judgment obtained by the defendant against the plaintiff in circumstances where the plaintiff had a pending application for summary judgment against the defendant in the same proceeding. That default judgment was later set aside and summary judgment granted in favour of the plaintiff against the defendant. Secondly, in non-conformity with the prescribed form, the statutory demand specifies the defendant’s address for service as being an address in Delaware, United States of America.

Procedural history

The matter was first returnable before the Court on 19 August 2020. There was no…

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: [2020] VSC 697
Decision Date: 13 October 2020 (ex tempore); revised 19 October 2020

CaseChat Overview and Summary

Re O'Brien Real Estate Pty Ltd was a case in which the defendant company sought to set aside a statutory demand issued by a creditor under section 459G of the Corporations Act 2001 (Cth). The matter was heard in the Federal Circuit Court of Australia. The dispute centred around whether the statutory demand should be set aside, with the defendant arguing that there was a genuine dispute about the existence of the debt and that the statutory demand procedure had been abused. The plaintiff had previously obtained a default judgment against the defendant, which was subsequently set aside. The plaintiff then secured a summary judgment against the defendant.

The primary legal issues the court had to address were whether there was a genuine dispute about the existence of the debt, and whether there were any other reasons under section 459H(1) of the Corporations Act to set aside the statutory demand. Specifically, the court needed to consider whether the statutory demand was invalid due to non-compliance with the prescribed form under section 459J(1)(b), and whether the statutory demand procedure had been abused given the underlying default judgment was set aside. The court also considered whether the plaintiff's overseas address for service was appropriate and whether it had complied with the requirements of the Act.

The court held that the statutory demand should be set aside. It found that there was a genuine dispute about the existence of the debt as the underlying default judgment had been set aside, and the subsequent summary judgment did not resolve the issue of the debt's existence. Additionally, the court found that the statutory demand procedure had been abused given the circumstances. The court further noted that the plaintiff's failure to provide a local address for service and non-compliance with the prescribed form under section 459J(1)(b) of the Act were additional reasons to set aside the statutory demand. Consequently, the court granted the defendant's application to set aside the statutory demand.

Orders