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Re Three Pillars Lynbrook Pty Ltd

Re Three Pillars Lynbrook Pty Ltd

Case [2022] VSC 540 15 September 2022

Statutory Demand

Verification of Debt

Setting Aside Statutory Demand

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 00080

IN THE MATTER of THREE PILLARS LYNBROOK PTY LTD (ACN 611 590 820)

THREE PILLARS LYNBROOK PTY LTD (ACN 611 590 820)	Plaintiff
v
THREE PILLARS DEVELOPMENT MANAGEMENT PTY LTD (ACN 127 441 212)	Defendant

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JUDGE:	Matthews AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	31 May 2022
DATE OF JUDGMENT:	15 September 2022
CASE MAY BE CITED AS:	Re Three Pillars Lynbrook Pty Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 540

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CORPORATIONS — Corporations Act 2001 (Cth), s 459J(1), s 459E(2)(a), 459E(3) — Statutory Demand — Alleged failure to properly particularise or explain debt claimed — Defect in demand — Whether substantial injustice caused unless statutory demand set aside — Re Simmoll Pty Ltd [2021] VSC 693 — Condor Asset Management Ltd v Excelsior Eastern Ltd (2005) 56 ACSR 223 — LSI Australia v LSI Holdings (2007) 25 ACLC 1602 — Whether affidavit in support of demand properly verifies debt — Whether some other reason to set demand aside — Supreme Court (Corporations) Rules 2013 (Vic), r 5.2.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms V Bell	Mills Oakley
For the Defendant	Mr J W G Grant	SLF Lawyers

TABLE OF CONTENTS

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

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

The Statutory Demand...................................................................................................................... 4

The Application and Procedural History...................................................................................... 5

Evidence............................................................................................................................................... 7

First O’Neill Affidavit................................................................................................................... 7
Thomas Affidavit........................................................................................................................ 11
Second O’Neill Affidavit............................................................................................................ 12
Knight Affidavit.......................................................................................................................... 14

Relevant statutory provisions........................................................................................................ 14

Submissions...................................................................................................................................... 15

Plaintiff’s submissions................................................................................................................ 15
Defendant’s submissions........................................................................................................... 19

Analysis.............................................................................................................................................. 23

Application to set aside the Statutory Demand pursuant to s 459J(1)(a) of the Act......... 24
Is there a defect in the Statutory Demand?.................................................................... 24
Applicable principles........................................................................................... 24
Consideration........................................................................................................ 26

Is the defect such that substantial injustice will be caused if the Statutory Demand is not set aside?....................................................................................................................... 28
Applicable principles........................................................................................... 28
Consideration........................................................................................................ 29

Application to set aside the Statutory Demand pursuant to s 459J(1)(b)........................... 38
Applicable principles........................................................................................... 38
Consideration........................................................................................................ 40

Conclusion......................................................................................................................................... 42

HER HONOUR:

Introduction

On 24 December 2021, the Defendant served on the Plaintiff a statutory demand pursuant to s 459E of the Corporations Act 2001 (Cth) (‘Act’) (‘Statutory Demand’).

The Plaintiff applied to this Court for orders setting aside the Statutory Demand pursuant to s 459G of the Act on a number of bases, being that the Statutory Demand contains a defect such that the Plaintiff will suffer injustice unless the Statutory Demand is set aside; or, in the alternative, there is some other reason to set aside the Statutory Demand (‘Application’). While the Plaintiff initially sought to challenge the Statutory Demand on the ground that it had an offsetting claim against the Defendant which exceeds the quantum of the amount claimed in the Statutory Demand, this ground was no longer pressed by the Plaintiff by the time of the hearing before me.

For the reasons which follow, the Application will be granted and the Statutory Demand set aside.

Background

The Statutory Demand and Application arise…

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 Three Pillars Lynbrook Pty Ltd

Details

AGLC: Re Three Pillars Lynbrook Pty Ltd [2022] VSC 540
Case: [2022] VSC 540
Decision Date: 15 September 2022

CaseChat Overview and Summary

Three Pillars Lynbrook Pty Ltd applied to set aside a statutory demand issued by Re Three Pillars Lynbrook Pty Ltd, which was in turn issued by the liquidators of a company, 2363617 Australia Pty Ltd. The dispute arose under the Corporations Act 2001 (Cth) and was heard in the Supreme Court of Victoria. The central issue before the court was whether the statutory demand was defective, and if so, whether setting it aside would cause substantial injustice to the applicant, and whether the affidavit in support of the demand properly verified the debt claimed.

The court held that the statutory demand was defective as it failed to properly particularise or explain the debt claimed. The court found that the demand did not provide sufficient details about the nature of the debt, the basis for the claim, or how the amount was calculated. The court also considered whether the defect in the demand had caused substantial injustice to the applicant, and concluded that it had not. The affidavit in support of the demand was found to properly verify the debt claimed, as it contained sufficient details to substantiate the claim. The court further found that there was no other reason to set the demand aside.

In light of the findings, the court dismissed the application to set aside the statutory demand. The court held that the defect in the demand did not cause substantial injustice to the applicant, and that the affidavit in support of the demand properly verified the debt claimed. The court found that there was no other reason to set the demand aside, and therefore dismissed the application. The liquidators of 2363617 Australia Pty Ltd were entitled to costs of the application.

Orders