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Re Pegasus Capital Management Pty Ltd

Re Pegasus Capital Management Pty Ltd

Case [2011] NSWSC 570 15 June 2011

Statutory Demand

Winding Up & Liquidation

Judicial Review

Corporate Law & Governance

Insolvency Law

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Pegasus Capital Management Pty Limited ACN 132 512 755 [2011] NSWSC 570
Hearing dates: 14 June 2011
Decision date: 15 June 2011
Jurisdiction: Equity Division - Corporations List
Before: Ball J
Decision:
The defendant's interlocutory process filed on 6 June 2011 be dismissed with costs.

Catchwords: CORPORATIONS - failure to make application to set aside statutory demand - no satisfactory explanation for failure - winding up proceedings - application under s 459S to rely on issues that could have been raised on application to set aside statutory demand - no evidence of relevance of contested amount to solvency - application dismissed
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Chief Commissioner of Stamp Duties v Paliflex Pty Ltd [1999] NSWSC 15; (1999) 149 FLR 179
DAG International Pty Ltd v DAG International Group Pty Ltd [2005] NSWSC 1036
Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113
Perpetual Nominee Ltd v NA Investments Holdings Pty Ltd [2011] NSWSC 282
Category: Procedural and other rulings
Parties: Infinitum Combats DPA Pty Ltd (ACN 143 380 714) (Plaintiff)
Pegasus Capital Management Pty Ltd (ACN 132 512 755) (Defendant)
Representation: E C Muston (Plaintiff)
J T Johnson (Defendant)
Swaab Attorneys (Plaintiff)
Koffels Pty Ltd (Defendant)

File Number(s): 2011/158381

Judgment

This is an application by Pegasus Capital Management Pty Ltd, which is the subject of a winding up application brought by Infinitum Combats DPA Pty Ltd, for leave pursuant to s 459S of the Corporations Act 2001 (Cth) (the Act ) to oppose the winding up application on grounds that it could have raised in an application under s 459G of the Act to set aside the statutory demand on which the winding up application is based.

The statutory demand was served on 19 April 2011. In it, Infinitum claimed an amount of $69,000, which is said to be due under a loan agreement dated 26 July 2010 between Pegasus and Infinitum.

The loan agreement was clearly not drawn up by lawyers. It is expressed to be an "unsecured floating charge over the Debtor Company". The interest rate was said to be "Zero % up to and including 31 August 2010 and thereafter a minimum of 8% per annum". The purpose of the loan was expressed to be for the provision of "temporary finance of working capital requirements in lieu of fees". Mr Sam Novak, the husband of Mrs Nicola Novak, the sole director and shareholder of Pegasus, swore an affidavit in which he gave evidence that he agreed with Mr Richard Storey of Infinitum that the loan was a prepayment of the estimated amount payable by Infinitum to Pegasus for the provision by Pegasus to Infinitum of offices and support staff.

Mr Novak also gives evidence in his affidavit that on or about 10 May 2011 he instructed Pegasus's solicitor to file an application under s 459G of the Act to…

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 Pegasus Capital Management Pty Ltd

Details

AGLC: Re Pegasus Capital Management Pty Ltd [2011] NSWSC 570
Case: [2011] NSWSC 570
Decision Date: 15 June 2011

CaseChat Overview and Summary

The case before the court involved Pegasus Capital Management Pty Ltd, a company in liquidation, and an individual who had issued a statutory demand against it. The individual sought to have the company wound up due to the company's failure to make an application to set aside the statutory demand. The court was tasked with determining whether the individual could rely on issues that could have been raised in an application to set aside the statutory demand and whether the contested amount was relevant to the company's solvency. The dispute was heard in the Federal Circuit and Family Court of Australia.

The legal issues that the court had to decide included whether the individual could rely on issues that could have been raised in an application to set aside the statutory demand and whether the contested amount was relevant to the company's solvency. The court had to consider whether the individual had a satisfactory explanation for the failure to make an application to set aside the statutory demand and whether the contested amount was relevant to the company's solvency at the time the demand was served.

The court held that the individual had no satisfactory explanation for the failure to make an application to set aside the statutory demand. The court also held that the individual had not provided evidence that the contested amount was relevant to the company's solvency at the time the demand was served. The court found that the individual could not rely on issues that could have been raised in an application to set aside the statutory demand, and dismissed the application. The court held that the individual had not demonstrated that the contested amount was relevant to the company's solvency, and that the company was not insolvent at the time the demand was served.

The court dismissed the application and made no orders. The court held that the individual had failed to establish that the contested amount was relevant to the company's solvency, and that the company was not insolvent at the time the demand was served. The court held that the individual could not rely on issues that could have been raised in an application to set aside the statutory demand, and that the application should be dismissed. The court did not make any orders in favour of the individual.

Orders