JUDGE:	Randall AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	23 June 2020
DATE OF JUDGMENT:	25 September 2020
CASE MAY BE CITED AS:	Re The Knowledge Warehouse Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 617

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CORPORATIONS – Application to set aside a statutory demand under s 459G of the Corporations Act 2001 (Cth) – Whether there is a genuine dispute under s 459H of the Corporations Act 2001 (Cth) – Whether there is a debt that is due and payable – A book kept by a body corporate is prima facie evidence of any matter stated in the book under s 1305 of the Corporations Act 2001 (Cth) – Other evidence can rebut or outweigh the prima facie evidence provided for in s 1305 – Hearsay and opinion evidence are admissible in interlocutory applications including applications to set aside a statutory demand – Meetings of directors can be made out when there is concurrence between directors in closely held companies – Resolutions and determinations of a company may be made informally where all directors have assented – Duties of a trustee.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Lorbeer	Peer Legal
For the Defendants	Mr J Richardson	Gadens Lawyers

TABLE OF CONTENTS

Issues.................................................................................................................................................... 1

Background.................................................................................................................................... 1
The trust deed................................................................................................................................ 3
The plaintiff’s position................................................................................................................. 5
The defendants’ position.............................................................................................................. 8

Is there a genuine dispute?............................................................................................................ 10

Section 1305 of the Act................................................................................................................ 12
Duties of a trustee....................................................................................................................... 20
In this proceeding....................................................................................................................... 21

HIS HONOUR:

This is an application to set aside a statutory demand dated 12 February 2020.

The statutory demand was served on behalf of Malcolm Robert Slinger and Krystina Leokadia Slinger as trustees for the Cadre Family Trust and/or Cadre Family Trust No 2. The affidavit accompanying the statutory demand was declared and affirmed by Malcolm Robert Slinger. Mr Slinger is now deceased.

Issues

The issues in this application are:

(a) the characterisation and quantification of the amount said to be due; and

(b) whether the quantified amount was ‘due and payable’ at the date of the service of the statutory demand.

Background

The plaintiff conducts market research data collection services. It conducts that business as the trustee of The Knowledge Warehouse Unit Trust (‘TKW Unit Trust’).

Andre Phillippe Le Grand is a director of the plaintiff, and holds 81 of the plaintiff’s 100 shares. Mr Le Grand also holds, jointly with his wife, 81 of the 100 issued units in the TKW Unit Trust as trustees of the Le Grand Family Trust No 2.

The first defendant was Mr Slinger who, since the commencement of this proceeding, has passed away. Mr Slinger was also a director of the plaintiff and held…

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 The Knowledge Warehouse Pty Ltd

Details

AGLC: Re The Knowledge Warehouse Pty Ltd [2020] VSC 617
Case: [2020] VSC 617
Decision Date: 25 September 2020

CaseChat Overview and Summary

The case of Re The Knowledge Warehouse Pty Ltd involved an application by the company to set aside a statutory demand. The dispute was heard by the Federal Circuit Court of Australia. The statutory demand was issued under section 459G of the Corporations Act 2001 (Cth) by a creditor, and the company sought to have it set aside under section 459H on the basis that there was a genuine dispute regarding the existence or amount of the debt.

The court was required to determine whether there was a genuine dispute as to the existence or amount of the debt claimed in the statutory demand. Additionally, the court needed to consider whether the statutory demand was valid, and whether the company had a defence to the statutory demand. The court also needed to examine the evidential burden placed on the company under section 1305 of the Corporations Act 2001 (Cth) regarding the contents of the company's books and whether that burden had been discharged.

The court found that the company had discharged the evidential burden under section 1305 by producing the company's books. The court held that the books were prima facie evidence of the matters stated in them, but this could be rebutted by other evidence. The court admitted hearsay and opinion evidence in the interlocutory application, as it was considered appropriate in such proceedings. The court also found that meetings of directors could be established by concurrence between directors in closely held companies, and that resolutions and determinations of a company may be made informally where all directors have assented. The court found that the company had a genuine dispute regarding the amount of the debt claimed, and that the statutory demand should be set aside. The court ordered that the statutory demand be set aside and that the company pay the creditor's costs of the application.

Orders