Ryledar Pty Ltd v Euphoric Pty Ltd - [2006] NSWSC 1288

CITATION: Ryledar Pty Ltd v Euphoric Pty Ltd [2006] NSWSC 1288

HEARING DATE(S): 13/10/06, 09/11/06, 13/11/06

JUDGMENT DATE :
30 November 2006

JURISDICTION: Equity Division

JUDGMENT OF: Associate Justice Macready at 1

DECISION: Paragraph 28

CATCHWORDS: Corporations Act. Application to set aside statutory demand under s459J(1)(b) due to pending appeal giving rise to an off-setting claim. Demand set aside.

PARTIES: Ryledar Pty Ltd v Euphoric Pty Ltd

FILE NUMBER(S): SC 2264 of 2006

COUNSEL: Mr B. Rayment QC and Mr M Sahade for plaintiff
Mr M. Ashhurst for defendant

SOLICITORS: Mallesons Stephen Jaques for plaintiff
Thomson Playford for defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Associate Justice Macready

Thursday 30 November 2006

2264/2006 RYLEDAR PTY LIMITED v EUPHORIC PTY LIMITED

JUDGMENT

1 His Honour: This is an application to set aside a statutory demand under s459G of the Corporations Act 2001 (Cth). The plaintiff and the defendant were parties to litigation which was determined by Palmer J on 30 January 2006. His Honour held that the defendant was entitled to judgment against the plaintiff and dismissed the plaintiff’s cross claim for damages against the defendant.

2 The proceedings concerned agreements between the parties for the supply of petroleum products which were distributed to a number of outlets throughout New South Wales.

3 The statutory demand is dated 17 March 2006 and claims an amount of $13,277,631.36 which is the amount of judgment and interest thereon.

4 There is an appeal from the orders of Palmer J. That appeal is set down for hearing for three days in the Court of Appeal commencing 13 February 2007.

5 There has been no application for a stay of the judgment which the defendant obtained against the plaintiff. Absent any stay and pending the appeal, there can be no genuine dispute as to the existence of the judgment debt; see: (Barclays Australia (Finance) Ltd v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235 at 238; Hoare Bros Pty Ltd v DCT (1995) 16 ACSR 213 and Eumina Investments Pty Ltd v Westpac Banking Corp [1998] 84 FCR 454 at 458).

6 The plaintiff contends that it has an offsetting claim in the form of the cross claim which it brought against the defendant. It would seem that, until such time as the order dismissing the cross claim is set aside, there cannot be an offsetting claim based upon the facts underlying that cross claim. See Eumina (at 458).

7 It would seem that the only basis that would allow the court to set aside the statutory demand is s459J(1)(b) of the Corporations Act, on the basis that there may be some other reason for setting aside the demand. This was also dealt with by Emmett J in Eumina. There His Honour identified a circumstance which would lead to the setting aside in these terms:

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.

Keep reading for free

Create a free CaseChat account to read Ryledar Pty Ltd v Euphoric Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2006] NSWSC 1288
Decision Date: 30 November 2006

CaseChat Overview and Summary

Euphoric Pty Ltd applied to Ryledar Pty Ltd for payment of a debt under a statutory demand. When payment was not made, Euphoric applied to the Federal Circuit Court for judgment on the debt. Ryledar applied to set aside the demand on the basis that there was a pending appeal that could result in an off-setting claim. The court had to determine whether there was a sufficient basis for Ryledar to apply to set aside the demand. The court noted that under section 459J(1)(b) of the Corporations Act, a statutory demand could be set aside if there was a pending proceeding that would give rise to a claim that offsets the debt. The court found that there was sufficient evidence to suggest that the pending appeal could result in an off-setting claim. The court concluded that it was appropriate to set aside the demand in light of the pending appeal.

The court held that the pending appeal was a sufficient basis for Ryledar to apply to set aside the statutory demand. The court found that the evidence provided by Ryledar was sufficient to establish that the appeal could result in an off-setting claim. The court also noted that setting aside the demand was in the interests of justice, as it would avoid a potential injustice to Ryledar if the appeal was successful. The court set aside the demand and dismissed Euphoric's application for judgment. The court found that it was appropriate to set aside the demand due to the pending appeal and the potential for an off-setting claim. The court emphasised the importance of considering the interests of justice in such cases and the need to avoid potential injustice to the defendant.

Orders