Re Wabbits Pty Ltd - [2018] NSWSC 532

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Wabbits Pty Ltd [2018] NSWSC 532
Hearing dates: 19 April 2018
Decision date: 27 April 2018
Before: Gleeson JA
Decision:
(1) The statutory demand dated 21 February 2018 forming part of annexure B to the affidavit of Francis Gary Kalyk sworn 26 March 2018 be set aside on condition that, if, within 28 days after the making of this order, the defendant serves on the plaintiff an originating process filed in a court of competent jurisdiction by which the defendant sues the plaintiff to recover the debts claimed in the schedule to the statutory demand, the plaintiff shall, within 14 days after such service, pay into court in the proceedings initiated by that originating process the amount of $2,000, such payment into court being on the footing that the sum paid in shall remain in court to abide the outcome of those proceedings.
(2) Costs reserved.
Catchwords: CORPORATIONS – statutory demand – application to set aside creditor’s statutory demand under Corporations Act 2001 (Cth), s 459G – whether genuine dispute about the existence or amount of debt under Corporations Act, s 459H(1)(a) – whether plausible contention requiring investigation that toll notices were invalid – Corporations Act, s 459M – whether appropriate to set aside demand conditional upon payment into court of substantial amount of the alleged debt.
Legislation Cited: Corporations Act 2001 (Cth), ss 459G, 459H(1)(a), 459J, 459M
Cases Cited: Asia Pacific Glass Pty Ltd v Sindea Trading Co Pty Ltd (No 2) [2003] NSWSC 845; (2003) 47 ACSR 737
Creata (Aust) Pty Ltd v Faull [2017] NSWCA 300
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
Get’m Pty Ltd v Triulcio [2004] NSWSC 291
Ligon 158 Pty Ltd v Huber [2016] NSWCA 330
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290; (1993) 11 ACSR 362
Natcraft Pty Ltd v WIN Television Pty Ltd [2003] 1 Qd R 196
Panel Tech Industries (Aust) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896
Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
Category: Principal judgment
Parties: Wabbits Pty Ltd ACN 002 967 688 (Plaintiff)
Tollaust Pty Limited t/as Transurban Linkt ACN 050 538 693 (Defendant)
Representation:
Counsel:
Mr C P O’Neill (Plaintiff)
Ms K Paton (Sol) (Defendant)
Solicitors:
Bartier Perry (Plaintiff)
Milton Graham Lawyers (Defendant)

File Number(s): 2018/95682

Judgment

GLEESON JA: The plaintiff, Wabbits Pty Ltd (the company), seeks an order under s 459G of the Corporations Act 2001 (Cth) setting aside a creditor’s statutory demand dated 21 February 2018 served by the defendant, Tollaust Pty Limited t/as Transurban Linkt (Transurban). The debt to which the statutory demand relates is described in the schedule to the demand as follows:

Description of the Debt Amount of the Debt
Amount due and payable by the company to…

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: [2018] NSWSC 532
Decision Date: 27 April 2018

CaseChat Overview and Summary

Wabbits Pty Ltd applied to set aside a statutory demand made by its creditor under the Corporations Act 2001 (Cth). The application was heard in the Federal Circuit Court of Australia, where the primary issue was whether there was a genuine dispute about the existence or amount of the debt claimed. This determination was made under section 459H(1)(a) of the Act, which provides a ground for setting aside a statutory demand. The court was also required to consider if there was a plausible contention requiring investigation that the toll notices were invalid, as per section 459M of the Act. Moreover, the court examined whether it was appropriate to set aside the demand conditional upon the payment into court of a substantial amount of the alleged debt.

The court examined the evidence presented by Wabbits Pty Ltd, which included arguments about the validity of the toll notices and the existence of a genuine dispute concerning the debt. The applicant argued that the toll notices were invalid and therefore the debt was not owed. The court considered the legal arguments and the evidence provided, assessing the plausibility of the contention that the toll notices were invalid and whether this contention warranted further investigation. Furthermore, the court weighed the merits of setting aside the demand on the condition of payment into court of a substantial amount of the debt, considering the balance of convenience and the interests of justice.

After considering the arguments and evidence, the court concluded that there was a plausible contention that the toll notices were invalid, which warranted further investigation. Consequently, the court determined that a genuine dispute existed about the existence or amount of the debt. Additionally, the court found that setting aside the demand conditional upon the payment into court of a substantial amount of the debt was appropriate, considering the balance of convenience and the interests of justice. The court ordered the statutory demand to be set aside on these conditions.

The final orders of the court included setting aside the statutory demand on the condition that Wabbits Pty Ltd paid a substantial amount of the alleged debt into court. This payment was to be made within a specified timeframe, allowing for further investigation into the validity of the toll notices and the existence of the debt. The court's decision provided a path for the parties to resolve their dispute while ensuring that the interests of justice were upheld.

Orders