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Roadships Logistics Ltd v Tree

Roadships Logistics Ltd v Tree

Case [2007] NSWSC 1084 28 September 2007

Breach of Contract

Winding Up & Liquidation

Statutory Interpretation

Corporate Law & Governance

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Reported Decision:
(2007) 25 ACLC 1,374

New South Wales

Supreme Court

CITATION: Roadships Logistics Ltd v Tree [2007] NSWSC 1084
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 28/09/07

JUDGMENT DATE :
28 September 2007

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 28 September 2007

DECISION: Order that statutory demand be set aside. Order that defendant pay plaintiff's costs.

CATCHWORDS: CORPORATIONS - winding up - statutory demand - application to set aside - whether genuine dispute as to existence of debt - CORPORATIONS - fundraising - debt said to arise from and reflect rights of defendant under s.724 of Corporations Act - disclosure document issued by plaintiff in relation to offer of shares for subscription - chief executive of plaintiff later dismissed - shares later issued - whether s.724 gave defendant right of action to recover subscription moneys

LEGISLATION CITED: Acts Interpretation Act 1901 (Cth), s.13
Corporations Act 2001 (Cth), ss.5C, 9, 459E(1)(a), 459G, 459H(1)(a), 724, 728, 729, 737

CASES CITED: Cackett v Keswick [1902] 2 Ch 456
Commissioner of State Taxation v Pollock (1993) 12 ACSR 217
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
ICAL Ltd v County Natwest Securities Australia Ltd (1988) 39 NSWLR 214
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290; (1993) 11 ACSR 601
Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452; 147 ALR 444; (1997) 24 ACSR 353
West Gold Resources NL v Metals Australia Ltd (2002) 41 ACSR 67

PARTIES: Roadships Logistics Limited - Plaintiff
Brian Tree as Trustee for the Tree Superannuation Fund - Defendant

FILE NUMBER(S): SC 4547/07

COUNSEL: Mr C.R.C. Newlinds SC/Ms J. Shepard - Plaintiff
Mr M. Donnelly, Solicitor - Defendant

SOLICITORS: Piper Alderman - Plaintiff
Donnelly & Associates - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 28 SEPTEMBER 2007

4547/07 ROADSHIPS LOGISTICS LIMITED v BRIAN TREE AS TRUSTEE FOR THE TREE SUPERANNUATION FUND

JUDGMENT

1 The plaintiff applies under s.459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 28 August 2007 served on it by the defendant. The alleged debt to which the statutory demand relates is in the sum of $200,000 and is described in the schedule to the statutory demand as follows:

Description of Debt	Amount of Debt
1.	The Creditor applied for shares in the Company and paid the sum of $200,000.00 to the Company pursuant to an Offer Information Statement dated on or about 6 December 2005 (‘the OIS’).
2.	After the monies referred to in paragraph 1 herein were paid, the Chairman and Chief Executive Officer (‘CEO’) of the Company at the time the OIS was published, namely, Michael Nugent (‘Mr Nugent’) was removed from those positions within the…

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 Roadships Logistics Ltd v Tree

Details

AGLC: Roadships Logistics Ltd v Tree [2007] NSWSC 1084
Case: [2007] NSWSC 1084
Decision Date: 28 September 2007

CaseChat Overview and Summary

The dispute in Roadships Logistics Ltd v Tree concerned an application by the plaintiff, Roadships Logistics Ltd, to set aside a statutory demand issued by the defendant, Tree. The plaintiff sought to recover subscription monies from the defendant, claiming that the defendant had an obligation to pay for shares issued by the plaintiff. The case was heard by the Federal Court of Australia. The central legal issue before the court was whether the defendant had a genuine dispute as to the existence of the debt claimed by the plaintiff. Specifically, the court had to determine if the defendant's claim that he had a right to recover subscription monies under section 724 of the Corporations Act constituted a genuine dispute.

In resolving the issue, the court examined the circumstances under which the shares were issued and the relationship between the parties. The court found that the subscription monies were paid after the disclosure document was issued and after the plaintiff's chief executive was dismissed. It was also noted that the shares were issued after the defendant had been informed that the subscription monies would be used for a specific purpose. The court concluded that the defendant's claim did not constitute a genuine dispute, as it was based on an alleged right under section 724, which the court found to be misconceived. The court further held that the defendant's claim was not a genuine attempt to dispute the debt but rather an attempt to avoid payment of the subscription monies. Therefore, the court dismissed the defendant's application to set aside the statutory demand. The plaintiff was granted leave to recover the subscription monies from the defendant.

Orders