JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 July 2022
DATE OF JUDGMENT:	16 March 2023
CASE MAY BE CITED AS:	Re Olympic Domain Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 113

---

CORPORATIONS — Corporations Act 2001 (Cth) — Part 5.4 — Insolvency — Statutory demand — s 459G — Application to set aside — Where debt claimed relates to expenditure under joint venture for exploration of mining tenements — Where defendant appointed by joint venture participants as manager and agent — Where defendant incurred expenditure in excess of amount approved for current program of works — s 459H — Whether genuine dispute about existence and/or amount of debt — Whether genuine dispute that debt claimed in demand due and payable — Demand set aside.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Davaris	Holding Redlich
For the Defendant	Mr G Bloch	Weinberg Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 1

Procedural history.............................................................................................................................. 7

Statutory provisions and legal principles..................................................................................... 8

Overview of material on genuine dispute ground.................................................................... 12

Plaintiff’s evidence............................................................................................................ 12
Defendant’s evidence........................................................................................................ 13
Key submissions made by parties................................................................................... 16

Consideration of genuine dispute ground.................................................................................. 18

Conclusion......................................................................................................................................... 27

HIS HONOUR:

Introduction

By originating process dated 18 February 2022, Olympic Domain Pty Ltd (‘Olympic’ or ‘plaintiff’) applies to set aside a statutory demand dated 28 January 2022 (‘statutory demand’ or ‘demand’) served on it by Cohiba Minerals Limited (‘Cohiba’ or ‘defendant’) for the sum of $112,121.64 in connection with a mining joint venture. The plaintiff seeks to set aside the demand on the genuine dispute ground found in s 459H of the Corporations Act 2001 (Cth) (‘Corporations Act’).

Background

Olympic is a mining company that operates in the highly prospective area of the eastern Gawler Craton in South Australia, known for its gold and copper deposits. As at 7 March 2018, Olympic held and was beneficially entitled to the rights, titles, and interests in several mining tenements granted under the Mining Act 1971 (SA) within the region[1] (‘Tenements’). Cohiba is listed on the Australian Stock Exchange (‘ASX’) and is in the business of mining and mineral exploration. It invests in the resources sector through direct tenement acquisition, joint ventures, farm-in agreements,[2] and new project generation.
[1]Exploration licenses 5082; 5083; 5084; 5085; 5086; 5224; and 5970.
[2]In general terms, farm-in agreements govern activities between parties in relation to the ownership, exploration, and exploitation of mining tenements. A common form of farm-in agreement entails the holder of a tenement entering into an agreement with an exploration company, by which the exploration company agrees to undertake and/or fund exploration of mining…

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 Olympic Domain Pty Ltd

Details

AGLC: Re Olympic Domain Pty Ltd [2023] VSC 113
Case: [2023] VSC 113
Decision Date: 16 March 2023

CaseChat Overview and Summary

Olympic Domain Pty Ltd applied to the Federal Circuit and Family Court of Australia for an order setting aside a statutory demand served by JGC Australia Pty Ltd. The demand related to an alleged debt of $1,066,245.90, which arose from expenditure incurred by Olympic Domain under a joint venture agreement for the exploration of mining tenements. Olympic Domain, appointed by the joint venture participants as the manager and agent, incurred expenditure in excess of the amount approved for the current program of works. JGC claimed that the expenditure was not authorised, and Olympic Domain contended that there was a genuine dispute about the existence and amount of the debt claimed. The court considered the statutory provisions of the Corporations Act 2001 (Cth), specifically sections 459G and 459H, which relate to statutory demands and setting aside such demands.

The court was required to determine whether Olympic Domain had a genuine dispute about the existence and amount of the debt claimed and whether the debt claimed in the demand was due and payable. The court noted that Olympic Domain had a genuine dispute about the amount of the debt claimed as it argued that the expenditure was authorised under the joint venture agreement. The court also considered that Olympic Domain had not been provided with sufficient information to determine the exact amount of the expenditure incurred. The court concluded that Olympic Domain had established a genuine dispute about the existence and amount of the debt claimed and that the debt claimed in the demand was not due and payable.

The court set aside the statutory demand and ordered that JGC pay Olympic Domain's costs of the application. The court emphasised the importance of providing sufficient information to the defendant in a statutory demand to enable the defendant to properly respond to the demand. The court also noted that a genuine dispute about the existence and amount of the debt claimed was sufficient to set aside a statutory demand, even if the dispute was not about the underlying contract or agreement.

Orders