Re Zenith Vinyl Pty Ltd - [2025] VSC 274

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2024 06689

IN THE MATTER of ZENITH VINYL PTY LTD (ACN 143 800 999)

BETWEEN:

ZENITH VINYL PTY LTD (ACN 143 800 999)	Plaintiff
v
TIMOTHY KAINE	Defendant

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JUDGE:	Delany J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 May 2025
DATE OF RULING:	16 May 2025 (ex tempore)
CASE MAY BE CITED AS:	Re Zenith Vinyl Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 274

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CORPORATIONS — Winding up — Creditor’s statutory demand — Application to set aside — Whether there is a genuine dispute about the existence of the debt — Costs — Corporations Act 2001 (Cth), s 459H — Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 300; Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896, applied; In the matter of CharterLaw Legal Pty Ltd [2025] NSWSC 297, cited — Demand set aside.

PRACTICE AND PROCEDURE — Civil Procedure Act 2010 (Vic) obligations upon the Court, parties and practitioners in context of applications to set aside statutory demand for modest monetary amount — Civil Procedure Act 2010 (Vic), ss 7, 8, 23, 24, 25, 28 — No order as to costs.

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APPEARANCES:	Solicitors appearing
For the Plaintiff	Barry Fried, The Law Offices of Barry Fried
For the Defendant	Timothy Kaine, Kainelaw Australian Lawyers

HIS HONOUR:

By originating process dated 11 December 2024, the plaintiff, Zenith Vinyl Pty Ltd (ACN 143 800 999) (‘Zenith Vinyl’) applies pursuant to s 459G of the Corporations Act 2001 (Cth) (‘Act’) to set aside a statutory demand served on it by the defendant, Timothy Kaine trading as Kainelaw Australian Lawyers (‘Kainelaw’), on 22 November 2024 (‘statutory demand’). The statutory demand is for the amount of $21,612.20 and was served by Mr Kaine for unpaid legal costs.

The originating process seeks an order that the statutory demand be set aside on the grounds that:

(a) The Affidavit in Support of the Demand, as sworn by Timothy Kaine of Kaine Law, does not verify the debt stated to be owed pursuant to the Demand and;
(b) To the extent the Defendant has not sought a Costs Assessment, as per the provisions of the Part 4.3 of the Legal Profession Uniform Law 2014, Legal Profession Uniform Law Application Act 2014 (“the Act”) s198 of Schedule 1 (“the Costs Assessment”); or
(c) Being a Legal Practitioner, has not complied with the Costs Disclosures required to be made to the Plaintiff under the Act:-
(i) There is a genuine dispute about the existence or amount of the debt to which the Demand relates; or
(ii) Given the Plaintiff intends to seek a costs assessment of prior invoices issued by the Defendant to the Plaintiff not being the subject of the Statutory Demand, the Plaintiff has an offsetting claim against the Defendant; and
(iii) As the Defendant has not sought a costs assessment…

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 Zenith Vinyl Pty Ltd

Details

AGLC: Re Zenith Vinyl Pty Ltd [2025] VSC 274
Case: [2025] VSC 274
Decision Date: 16 May 2025 (ex tempore)

CaseChat Overview and Summary

The matter under consideration was an application by Zenith Vinyl Pty Ltd to set aside a statutory demand issued by a creditor. The dispute arose under the Corporations Act 2001 (Cth), specifically section 459H, which pertains to the winding up of companies through statutory demand. The application was heard in the Supreme Court of Victoria. The primary issue for the court was whether there was a genuine dispute about the existence or the amount of the debt claimed by the creditor. If the debt was genuinely disputed, the statutory demand could be set aside, potentially avoiding the winding up of the company.

The court examined the principles set out in Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 300, which emphasised the importance of a genuine dispute, as well as Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896, which provided guidance on the application of section 459H. The court also considered In the matter of CharterLaw Legal Pty Ltd [2025] NSWSC 297, which dealt with similar issues in the context of modest monetary amounts. The court concluded that there was a genuine dispute regarding the debt, as Zenith Vinyl Pty Ltd provided sufficient evidence to challenge the creditor's claim. Consequently, the statutory demand was set aside.

The court also addressed the procedural aspects of the application, referencing various sections of the Civil Procedure Act 2010 (Vic) to outline the obligations of the parties and the court in this context. The court did not make an order as to costs, reflecting the balance of considerations in setting aside a statutory demand for a modest monetary amount. The decision underscores the importance of careful consideration of genuine disputes in winding up proceedings under the Corporations Act 2001 (Cth).

Orders