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Re Tomic Industries Pty Ltd

Re Tomic Industries Pty Ltd

Case [2012] NSWSC 1478 28 November 2012

Winding Up & Liquidation

Limitation Periods

Abuse of Process

Insolvency Law

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Tomic Industries Pty Ltd [2012] NSWSC 1478
Hearing dates: 28 November 2012
Decision date: 28 November 2012
Jurisdiction: Equity Division - Corporations List
Before: White J
Decision:
Order that the originating process be dismissed; order that the plaintiffs pay the defendant's costs of the proceedings.

Catchwords: CORPORATIONS - winding up - insolvency - whether service of statutory demand effective - statutory demand served on registered office through post but did not come to attention of company - alternative basis for service, by attaching statutory demand to originating process for winding-up application, not effective - submission that winding-up application is an abuse of process did not take account of regime imposed by Pt 5.4 - leave not required under s 459S in circumstances - genuine dispute as to liability - plaintiffs do not have a claim for debt due and payable but for damages for alleged breach of contract
Legislation Cited: Corporations Act 2001 (Cth)
Acts Interpretation Act 1901 (Cth)
Evidence Act 1995 (NSW)
Cases Cited: Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 78 ACSR 468; (2010) 239 FLR 339
Surdex Steel Pty Ltd v GB Manufacturing Pty Ltd [2012] VSC 90; (2012) 260 FLR 383
Tokich Holdings Pty Ltd v Sheraton Constructions (NSW) Pty Ltd (in liq) [2004] NSWSC 527; 22 ACLC 955; (2004) 185 FLR 130
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 21 ACSR 527; (1996) 14 ACLC 1536
Chief Commissioner of Stamp Duties v Paliflex Pty Ltd (1999) 17 ACLC 467; (1999) 199 FLR 179; (1999) 42 ATR 309
Braams Group Pty Ltd v Miric [2002] NSWCA 417; (2002) 171 FLR 449; 44 ACSR 124
Perpetual Nominees Ltd v Masri Apartments Pty Ltd (2004) 49 ACSR 719; (2004) 22 ACLC 975
Grant Thornton Services (NSW) Pty Ltd v St George Wholesale Distributors Pty Ltd [2008] FCA 1777
Willard King Organisation (1978) Pty Ltd v CT Franchises Pty Ltd [2009] NSWSC 97; (2009) 69 ACSR 612
Category: Principal judgment
Parties: Ian Hookham (1st Plaintiff)
Sheryl Hookham (2nd Plaintiff)
Tomic Industries Pty Ltd (Defendant)
Representation: Counsel:
2nd Plaintiff in person
J T Johnson (Defendant)
Solicitors:
Lander & Rogers Lawyers (Defendant)

File Number(s): 2012/249208

Judgment

HIS HONOUR: This is an application under s 459P of the Corporations Act 2001 (Cth) for an order that the defendant company be wound up in insolvency. The application relies on a failure by the company to comply with a statutory demand. The defendant did not receive the statutory demand upon which the application is based. It denies that the statutory demand was served. It also contends that, in any event, the winding up application should be dismissed because the plaintiffs do not have standing as creditors. Although the statutory demand described the plaintiffs' claim as a claim in debt, the defendant submits that…

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 Tomic Industries Pty Ltd

Details

AGLC: In the matter of Tomic Industries Pty Ltd [2012] NSWSC 1478
Case: [2012] NSWSC 1478
Decision Date: 28 November 2012

CaseChat Overview and Summary

The matter involved Tomic Industries Pty Ltd, the defendant, and the plaintiffs, who sought to wind up the company. The dispute centred on the validity of the service of a statutory demand, which is a prerequisite for winding up a company under the Corporations Act 2001. The High Court of Australia was tasked with determining whether the statutory demand had been properly served. The plaintiffs argued that the statutory demand was not effective because it was not brought to the attention of the company, even though it was sent to the registered office of the defendant. They also proposed an alternative method of service by attaching the demand to the winding-up application, which the Court held was ineffective. The plaintiffs further contended that the winding-up application was an abuse of process, but this argument was rejected as it failed to consider the statutory regime outlined in Part 5.4 of the Corporations Act.

The legal issues before the Court included whether the statutory demand was validly served and if an alternative method of service was permissible. Additionally, the Court had to consider whether the winding-up application constituted an abuse of process. The High Court held that the statutory demand was not validly served since it did not come to the attention of the company, and attaching it to the winding-up application was not an effective method of service. The Court found that the winding-up application was not an abuse of process, as it was within the statutory framework. The Court emphasised that the plaintiffs had a genuine dispute about the liability of the defendant, and while they did not have a claim for debt, they did have a claim for damages due to an alleged breach of contract.

The Court concluded that the statutory demand was not validly served, but the winding-up application was not an abuse of process. The plaintiffs' claims for damages were legitimate, and the Court found no need for leave under section 459S of the Corporations Act. The decision underscored the importance of following statutory procedures for serving a statutory demand and highlighted the requirements for winding-up applications under the Corporations Act. The Court's ruling confirmed that while the statutory demand was invalidly served, the winding-up application could proceed on the basis of a valid claim for damages.

Orders