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Re Statewide Developments Realty Pty Ltd

Re Statewide Developments Realty Pty Ltd

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Statewide Developments Realty Pty Ltd [2016] NSWSC 154
Hearing dates: 16 February 2016
Decision date: 01 March 2016
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Application to set aside creditor’s statutory demand dismissed with costs.

Catchwords: CORPORATIONS — Winding up — Application to set aside creditor’s statutory demand under ss 459H and 459J of the Corporations Act 2001 (Cth) – where Plaintiff alleged offsetting claim against only some of the joint creditors – whether offsetting claim must be available against all joint creditors that served demand – whether Court should determine questions of construction of contract in application to set aside demand – whether there is some other reason demand should be set aside.
Legislation Cited: - Corporations Act 2001 (Cth), ss 459G, 459H, 459J, Pt 5.4
- Limitation Act 1969 (NSW)
- Strata Schemes Management Act 1996 (NSW), s 40A, 40B, 238
- Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: - 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 [2014] NSWCA 409; (2014) 88 NSWLR 488
- Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
- Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
- Australian Workers’ Union v Bowen [1946] HCA 24; (1946) 72 CLR 575
- Britten-Norman Pty Ltd v Analysis and Technology Australia Pty Ltd [2013] NSWCA 344; (2013) 85 NSWLR 601
- Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
- Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503
- Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWCA 202
- In2Ply Pty Ltd v Amerind Pty Ltd (in liq) (recs and mgrs apptd) [2014] VSC 603
- Infratel Networks Pty Ltd v Gundry’s Telco and Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372
- Macleay Nominees v Belle Property East Pty Ltd [2001] NSWSC 743
- Maniotis v Valimi Pty Ltd [2002] VSCA 91; (2002) 4 VR 386
- Property Builders Pty Ltd v Carlamax Properties Pty Ltd [2011] NSWSC 1068; 85 ACSR 595
- Randall Pty Ltd v Chepan Pty Ltd [2009] NSWSC 783; (2009) ACSR 267
- Re Hopetoun Kembla Investments Pty Ltd [2011] NSWSC 1343; (2011) 286 ALR 768
- Re Infratel Networks Pty Ltd [2012] NSWSC 943
- Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601
- Re PPK Group Ltd [2015] NSWSC 1498
- Re Wollongong Coal Ltd [2015] NSWSC 1680
- Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251
- Scanhill Pty Ltd v Century 21 Australasia Pty Ltd [1993] FCA 618; (1993) 12 ACSR 341
- Seaham Air Pty Ltd v Australian Aerospace Ltd [2006] NSWSC 1241
- Statewide Developments Realty…

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: [2016] NSWSC 154
Decision Date: 01 March 2016

CaseChat Overview and Summary

Statewide Developments Realty Pty Ltd was the subject of a creditor's statutory demand served by a creditor. The company applied to the court to set aside the demand under sections 459H and 459J of the Corporations Act 2001 (Cth). The crux of the dispute was whether the company's claim of an offsetting debt could be applied against only some of the joint creditors who had served the demand. Additionally, the court had to decide whether the offsetting claim needed to be applicable to all joint creditors for the demand to be set aside, and if it was appropriate for the court to interpret the contract in question during the application process. The case was heard in the Federal Circuit Court of Australia.

The legal issues at the heart of this case revolved around the interpretation and application of the statutory provisions under the Corporations Act 2001 (Cth) concerning statutory demands. The primary issue was whether the company's right to set off debts could be exercised selectively against some creditors and not others. Another question was whether the court should interpret the terms of the contract between the parties in the context of setting aside the demand. Furthermore, the court had to consider whether there were other reasons that might justify setting aside the statutory demand.

The court held that the company's offsetting claim must be available against all joint creditors for the statutory demand to be set aside. The court emphasised that the ability to set off debts is a matter of contract, and if the contract permits set off, it must apply equally to all joint creditors. The court also found that it was not necessary to determine the questions of contract construction at this stage, as the primary issue was the availability of the offsetting claim. The court concluded that there were no other grounds to set aside the demand.

The final orders of the court were that the application to set aside the statutory demand was dismissed. The court found that the company had not demonstrated that its offsetting claim was available against all joint creditors, and therefore the statutory demand could not be set aside. The dismissal of the application meant that the company remained liable to meet the demand unless it could satisfy the creditor or make an application to the court for an extension of time to pay.

Orders