Re Sceam Construction Pty Ltd

Case [2021] VSC 437


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2021 01294

IN THE MATTER of SCEAM CONSTRUCTION PTY LTD (ACN 141 136 816)

SCEAM CONSTRUCTION PTY LTD (ACN 141 136 816) Plaintiff
v 
OWNERS CORPORATION NO.  711686W Defendant

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JUDGE:

Hetyey AsJ

WHERE HELD:

Melbourne

DATE OF HEARING:

6 July 2021

DATE OF JUDGMENT:

6 July 2021 (given ex tempore, revised)

CASE MAY BE CITED AS:

Re Sceam Construction Pty Ltd

MEDIUM NEUTRAL CITATION:

[2021] VSC 437

(First Revision: 2 September 2021 [19])

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CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4 – Insolvency – Statutory demand – s 459G – Application to set aside demand – New grounds sought to be advanced – Whether precluded by ‘Graywinter principle’ – Where defects not referred to in s 459G affidavit but apparent from face of documents annexed – s 459H – Whether genuine dispute about existence and/or amount of debt – s 459J(1)(a) – Where alleged defects in statutory demand – No substantial injustice arising – s 459J(1)(b) – Whether some other reason to set aside statutory demand – Whether order of Victorian Civil and Administrative Tribunal due and payable – Where affidavit accompanying statutory demand predates demand – Whether there is an affidavit which verifies the statutory demand for purposes of s 459E(3) – Statutory demand set aside.

PRACTICE AND PROCEDURE – Costs – Discretion – Plaintiff ultimately successful in setting aside defendant’s statutory demand – Successful ground only referred to day prior to hearing – Order that plaintiff pay portion of defendant’s costs.

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr T W J Greenway SLF Lawyers
For the Defendant Mr M-Q T Nguyen Walpole Menzies

TABLE OF CONTENTS

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

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

Statutory provisions and legal principles..................................................................................... 4

Genuine dispute................................................................................................................................. 9

Section 459J grounds....................................................................................................................... 10

Initial grounds raised by the director of the plaintiff............................................................ 10

Whether the VCAT order is a debt due and payable?........................................................... 11

Supporting affidavit pre-dates statutory demand................................................................. 14

Conclusion and costs....................................................................................................................... 16

HIS HONOUR:

Introduction

  1. In this proceeding, the plaintiff, Sceam Construction Pty Ltd, seeks to set aside a statutory demand issued on 1 April 2021 by the defendant, Owners Corporation No. 711686W (‘the statutory demand’ or ‘the demand’). The statutory demand is sought to be set aside under s 459H of the Corporations Act 2001 (Cth) (‘the Act’) on the ground that there is a genuine dispute about the existence of the debt the subject of the demand. In addition, it is argued there are defects and other reasons to justify the setting aside of the demand under s 459J of the Act.

Background

  1. The statutory demand is for a sum of $60,787.00 and relates to an order made by the Victorian Civil and Administrative Tribunal (‘VCAT’) dated 8 December 2020 (‘the VCAT order’) and an accompanying finding that the plaintiff was liable for damages for breach of the statutory warranty under s…

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AGLC
Re Sceam Construction Pty Ltd [2021] VSC 437
Case
[2021] VSC 437
Decision Date

CaseChat Overview and Summary

The case involved Sceam Construction Pty Ltd, the plaintiff, and another party, the defendant. The dispute was centred around the setting aside of a statutory demand issued by the defendant against the plaintiff. The matter was heard in the Federal Circuit Court of Australia. The plaintiff sought to set aside the statutory demand on the grounds that it was frivolous or vexatious. The defendant argued that the plaintiff should pay a portion of their costs due to the timing of the grounds raised by the plaintiff.

The primary legal issue before the court was whether the plaintiff's grounds for setting aside the statutory demand, which were only raised the day before the hearing, warranted an order for the plaintiff to pay a portion of the defendant's costs. The court had to balance the plaintiff's ultimate success in setting aside the demand against the lateness of the grounds presented. The court also needed to consider the principles of discretion in awarding costs, particularly the factors relevant to the timing and nature of the grounds raised by the plaintiff.

The court found that the plaintiff's grounds were ultimately successful, but the timing of their presentation was problematic. Despite the plaintiff's success, the court determined that the plaintiff's failure to raise the grounds earlier justified an order for the plaintiff to pay a portion of the defendant's costs. The court emphasised that the lateness of the grounds significantly impacted the defendant's ability to prepare for the hearing, thereby affecting the overall proceedings. Consequently, the court exercised its discretion to order the plaintiff to pay part of the defendant's costs.

The final orders of the court were that the statutory demand issued by the defendant against the plaintiff was set aside. Additionally, the plaintiff was ordered to pay a specified portion of the defendant's costs due to the lateness of the grounds raised for setting aside the demand. The court's decision underscored the importance of timely presentation of grounds in legal proceedings and the court's discretion in awarding costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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