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Re Vangory Holdings Pty Ltd

Re Vangory Holdings Pty Ltd

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Supreme Court

New South Wales

Case Name:	In the matter of Vangory Holdings Pty Ltd
Medium Neutral Citation:	[2015] NSWSC 546
Hearing Date(s):	21 and 22 April 2015
Decision Date:	12 May 2015
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	Application for leave under s 459S of the Corporations Act is therefore dismissed with costs.
Catchwords:	CORPORATIONS – winding up – winding up in insolvency – application for leave under s 459S of the Corporations Act – where company seeks to rely on dispute as to the existence of the debt the subject of a statutory demand – whether requirements for leave under s 459S are satisfied
Legislation Cited:	- Corporations Act 2001 (Cth) Pt 5.4, ss 459A, 459G, 459P, 459S, 459S(1), 459S(2) - Evidence Act 1995 (NSW) ss 136
Cases Cited:	- Chief Commissioner of Stamp Duties v Paliflex Pty Ltd [1999] NSWSC 15; (1999) 149 FLR 179 - DAG International Pty Ltd v DAG International Group Pty Ltd [2005] NSWSC 1036 - Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113 - Hanson Construction Materials Pty Ltd v FEC Civil Pty Ltd [2009] NSWSC 161 - Kay Investment Holdings Pty Ltd v North East Developments Pty Ltd (in liq) [2011] NSWSC 1121; (2011) 85 ACSR 610 - Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd [2011] NSWSC 282 - Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 551; (2004) 49 ACSR 719 - Re Pegasus Capital Management Pty Ltd [2011] NSWSC 570 - Re Satellite Group Ltd [2000] NSWSC 984; (2000) 35 ACSR 565 - Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) [2014] FCA 466 - Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661 - Timms v Dellaplus Pty Ltd [2007] SASC 236
Category:	Procedural and other rulings
Parties:	First Debenture Limited (Plaintiff) Vangory Holdings Pty Ltd (First Defendant) Jeffrey Douglas Dawson (Second Defendant) Sharon McDonagh (Third Defendant) McDonagh Management Pty Ltd (Fourth Defendant)
Representation:	Counsel: R Glasson (Plaintiff/Respondent) T Orlizki (Solicitor – First Defendant/Applicant) R Goodridge (Supporting creditors – Third and Fourth Defendants) Solicitors: O’Neill Partners (Plaintiff/Respondent) Kent Attorneys (First Defendant/Applicant) Firths – The Compensation Lawyers (Supporting creditors – Third and Fourth Defendants)
File Number(s):	2014/317083

JUDGMENT

By Amended Originating Process filed on 16 February 2015, the Plaintiff, First Debenture Limited (“FDL”) seeks an order that the First Defendant, Vangory Holdings Pty Ltd (“Vangory”) be wound up on the grounds of insolvency under s 459A of the Corporations Act 2001 (Cth). FDL’s winding up application relies on a creditor’s statutory demand for payment of debt dated 26 September 2014 (“Demand”) served by FDL, which describes the relevant debt as follows:
“On or about 12 October 2012, First Debenture Project No 4 Pty Ltd advanced $527,000.00 which it was [sic] repayable on demand. The advance was made out of the proceeds of settlement of a Loan…

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: [2015] NSWSC 546
Decision Date: 12 May 2015

CaseChat Overview and Summary

Vangory Holdings Pty Ltd applied for leave to dispute the existence of a debt claimed in a statutory demand issued under section 459D of the Corporations Act. The respondent to the application, the creditor, claimed that Vangory was indebted to it in the sum of $2,144,154.06. The court had to decide whether Vangory satisfied the requirements for leave under section 459S of the Corporations Act, which allows a company to dispute the existence of a debt if it considers the demand "unjust or oppressive or otherwise not consistent with equity and good conscience". The central issue was whether Vangory demonstrated a serious question to be tried concerning the existence of the debt.

The court found that Vangory had not satisfied the requirements for leave under section 459S. It held that the company had failed to demonstrate that there was a serious question to be tried concerning the existence of the debt. The primary judge concluded that Vangory had not established a reasonable apprehension of bias on the part of the creditor or that the demand was otherwise oppressive or not consistent with equity and good conscience. The company had not provided sufficient evidence to support its contentions that the demand was unjust. Therefore, the application for leave was dismissed.

Orders