JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	3 June 2014
DATE OF JUDGMENT:	13 June 2014
CASE MAY BE CITED AS:	IMO Speedy Loans Pty Ltd
MEDIUM NEUTRAL CITATION:	[2014] VSC 273

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CORPORATIONS — Application to set aside statutory demand by incorporated solicitor for legal fees by reason of non-disclosure under Legal Profession Act 2004 — Demand set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr St. John Hibble	Piper Alderman
For the Defendant	Mr J. Bowers-Taylor (solicitor)	JBT Lawyers

HIS HONOUR:

On 12 March 2014, the defendant, JBT Lawyers Pty Ltd (JBT), an incorporated legal practice, served a statutory demand on the plaintiff Speedy Loans Pty Ltd (Speedy Loans), claiming that the sum of $36,105.89 was owing for the provision of legal services. The demand was accompanied by an affidavit of JBT’s director, Jonathan Bowers‑Taylor sworn 11 March 2014, as required by s 459E(3) of the Corporations Act 2001 (Cth) (the Act).

The schedule to the demand described the debt as follows:

Date

Invoice No

Description

Amount

14 May 2013

001255

General File

$727.87

28 May 2013

001269

General File

$261.03

13 March 2013

001141

General File

$930.38

12 June 2013

001293

Speedy Loans Pty Ltd v Jelbro Nominees Pty Ltd

$50,263.01

21 June 2013

001297

Speedy Loans Pty Ltd v Jelbro Nominees Pty Ltd

$1,913.93

25 June 2013

001307

Speedy Loans Pty Ltd v Jelbro Nominees Pty Ltd

$300.00

2 July 2013

001283

Speedy Loans Pty Ltd v Jelbro Nominees Pty Ltd

$7,689.83

25 September 2013

001412

Speedy Loans Pty Ltd v Jelbro Nominees Pty Ltd

$939.12

1 October 2013

001425

Speedy Loans Pty Ltd v Slaviero

$7,009.75

31 October 2013

Less payment

-$25,000.00

14 February 2014

Less payment

-$8,929.03

Total Amount of Debt

$36,105.89

On 2 April 2014, Speedy Loans made application by originating process for an order that the statutory demand be set aside by reason of the existence of alleged genuine disputes and offsetting claims. It also contended that the demand should be set aside for “some other reason” pursuant to s 459J(1)(b) of the Act by reason that the description of the debt in the schedule to the demand gave rise to a substantial injustice. In support of the application, Speedy Loans relies on affidavits of George Petselis sworn 2 April 2014 and 28 May 2014, and Nathan Brunt sworn 29 April 2014 and 27 May 2014.

JBT opposes the application and relies on affidavits of Mr Bowers‑Taylor sworn 21 May 2014 and 2 June 2014, and an affidavit of Clare Long sworn 2 June 2014.

As shown above, the schedule to the demand contends…

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 Speedy Loans Pty Ltd

Details

AGLC: IMO Speedy Loans Pty Ltd [2014] VSC 273
Case: [2014] VSC 273
Decision Date: 13 June 2014

CaseChat Overview and Summary

The case of Re Speedy Loans Pty Ltd involved Speedy Loans, the debtor, and the respondent, an incorporated solicitor, who issued a statutory demand for unpaid legal fees. The dispute was heard in the Federal Circuit Court of Australia. The incorporated solicitor sought to enforce a statutory demand under the Corporations Act 2001, which Speedy Loans contested on the basis that the solicitor had not disclosed the true nature of the debt in contravention of the Legal Profession Act 2004.

The central legal issue the court had to decide was whether the statutory demand should be set aside due to the solicitor's non-disclosure under the Legal Profession Act 2004. The court had to consider whether the non-disclosure was a material factor in the demand and if it affected the fairness of the statutory demand process.

The court determined that the non-disclosure by the solicitor was indeed material, as it pertained to the nature of the debt which was central to the statutory demand. The court found that the solicitor's failure to disclose the true nature of the debt undermined the fairness of the statutory demand process, and thus, the demand was set aside. The court emphasised the importance of compliance with the Legal Profession Act 2004, particularly in relation to the disclosure obligations that are intended to protect the debtor.

In conclusion, the court set aside the statutory demand issued by the incorporated solicitor against Speedy Loans Pty Ltd due to the non-disclosure of the true nature of the debt. The decision underscores the necessity for incorporated solicitors to adhere to disclosure requirements to maintain the integrity of the statutory demand process.

Orders