Rectangular Pty Ltd v Mae Cardaci ATF the Marco Cardaci Testamentary Trust

In the matter of Rectangular Pty Ltd v Mae Cardaci ATF the Marco Cardaci Testamentary Trust, the Federal Court of Australia was tasked with determining whether to set aside statutory demands served on the judgment debtors. The primary issue was whether there was a genuine dispute as to the existence or amount of the debt claimed, which is a requisite for setting aside a statutory demand under section 459H of the Corporations Act 2001 (Cth). Additionally, the court had to consider whether there were any other reasons for setting aside the statutory demands, given that the judgment debtors were former trustee companies without assets and had pending appeals to the Court of Appeal, which had previously refused to stay the primary judgment.

The court examined the ratio of Eumina Investments Pty Ltd v Westpac Banking Corporation, where Emmett J had concluded that a determination by a superior court that a company had no claim against a creditor was conclusive and precluded the company from contending otherwise, even if an appeal for special leave to the High Court was pending. The court found that the judgment debtors had no genuine claim against the creditor as it had been conclusively determined by the Court of Appeal. The court also considered whether the pending appeal for special leave could be considered a genuine claim for the purposes of setting aside the statutory demand, but ultimately concluded that such a claim would not avail the judgment debtors.

The Federal Court held that the statutory demands could not be set aside as there was no genuine dispute as to the existence or amount of the debt, and there were no other reasons to do so. The court found that the determination by the Court of Appeal that the judgment debtors had no claim against the creditor was conclusive, and the pending appeal for special leave did not constitute a genuine claim that would justify setting aside the statutory demands.

The final orders of the court were that the applications to set aside the statutory demands were dismissed, and the judgment debtors were required to pay the creditor's costs of the application.