Simatis v Walgenup Aboriginal Corporation - [2023] FCA 357

FEDERAL COURT OF AUSTRALIA
Simatis v Walgenup Aboriginal Corporation [2023] FCA 357

File number: WAD 271 of 2022

Judgment of: COLVIN J

Date of judgment: 13 April 2023

Date of publication of reasons: 19 April 2023

Catchwords: CORPORATIONS - interlocutory application for leave to oppose the defendant's winding up on the ground that the subject of the statutory demand is disputed - where application to wind up based upon failure to comply with statutory demand - where defendant otherwise out of time to apply to set aside statutory demand - where defendant is an Aboriginal Corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) - where directors of the defendant are volunteers of a charitable organisation with no employees - where plaintiff only raised alleged debts from a period of many years once the lease was not renewed - where directors of the defendant felt threated by the circumstances of the demand for debt and some suffered health problems relating to stress cause by the demand - where the defendant did not obtain legal advice until after the time to apply to set aside the demand had expired - consideration of circumstances in which leave can be granted under s 495S of the Corporations Act 2001 (Cth) - leave to oppose winding up application granted on the ground that the alleged debt the subject of the statutory demand is disputed

Legislation:
Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) s 526.35, Division 526

Corporations Act 2001 (Cth) s 459S

Cases cited:
Owen-Pearse v Lander Land Company Pty Ltd [2018] FCA 2077

Soundwave Festival Pty Limited v Altered State (WA) Pty Limited (No 1) [2018] FCA 466

Tony Innaimo Transport Pty Ltd v Skyroad Logistics Pty Ltd [2018] FCA 1134

Division: General Division

Registry: Western Australia

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 48

Date of hearing: 13 April 2023

Counsel for the Plaintiff: Mr N Ekanayake

Solicitor for the Plaintiff: Bennett

Counsel for the Defendant: Mr PG Donovan with Ms CD Radenti

Solicitor for the Defendant: MDS Legal

ORDERS

WAD 271 of 2022

BETWEEN:
GEORGE SIMATIS

Plaintiff

AND:
WALGENUP ABORIGINAL CORPORATION (ICN 849)

Defendant

ORDER MADE BY:

COLVIN J

DATE OF ORDER:

13 APRIL 2023

THE COURT ORDERS THAT:
1.Pursuant to s 459S of the Corporations Act 2001 (Cth) there be leave for Walgenup Aboriginal Corporation to oppose the winding up application by the applicant on the ground that the alleged debt the subject of the statutory demand dated 18 November 2022 is disputed.
2.By 27 April 2023 the plaintiff file and serve any further affidavit evidence.
3.By 5 May 2023 the defendant file and serve any further affidavit evidence in response.
4.By 19 May 2023 the plaintiff file and serve an outline of submissions.
5.By 26 May 2023 the defendant file and serve an outline of submissions in response.
6.The winding up application be listed for hearing at 10.15am AWST on 6 June 2023.
7.On or before…

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: [2023] FCA 357
Decision Date: 13 April 2023

CaseChat Overview and Summary

Simatis sought to wind up the Walgenup Aboriginal Corporation based on its failure to comply with a statutory demand. Walgenup Aboriginal Corporation, an organisation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), opposed the winding up on the basis that the debt was disputed. The opposition was filed out of time, and the court considered whether it should grant leave under section 495S of the Corporations Act 2001 (Cth). The dispute centred on debts from a period after the lease was not renewed, which were raised by the plaintiff only after the lease was not renewed. The directors of Walgenup Aboriginal Corporation, who are volunteers of a charitable organisation, felt threatened by the demand and experienced health issues related to stress caused by the demand. They did not seek legal advice until after the time to apply to set aside the demand had expired.

The court examined the circumstances in which leave could be granted under section 495S of the Corporations Act 2001 (Cth). The directors' lack of legal representation and the stress experienced due to the demand were considered. The court granted leave to Walgenup Aboriginal Corporation to oppose the winding up application, finding that the debt was disputed. This decision was based on the directors' lack of legal representation and the stress experienced due to the demand, which contributed to the delay in opposing the statutory demand. The court scheduled further hearings and required both parties to file and serve affidavit evidence and outlines of submissions.

The court's orders included granting leave to Walgenup Aboriginal Corporation to oppose the winding up application on the ground that the debt was disputed. It set a timeline for filing and serving further affidavit evidence and outlines of submissions. The hearing was scheduled for 6 June 2023, with each party required to file and serve a statement of the legal costs incurred in the winding up proceedings. These orders ensured that the dispute over the debt could be thoroughly examined and that both parties had the opportunity to present their cases.

Orders

Orders of the court

1. Pursuant to s 459S of the Corporations Act 2001 (Cth) there be leave for Walgenup Aboriginal Corporation to oppose the winding up application by the applicant on the ground that the alleged debt the subject of the statutory demand dated 18 November 2022 is disputed.

2. By 27 April 2023 the plaintiff file and serve any further affidavit evidence.

3. By 5 May 2023 the defendant file and serve any further affidavit evidence in response.

4. By 19 May 2023 the plaintiff file and serve an outline of submissions.

5. By 26 May 2023 the defendant file and serve an outline of submissions in response.

6. The winding up application be listed for hearing at 10.15am AWST on 6 June 2023.

7. On or before 9am on 6 June 2023 each party do file and serve a statement of the legal costs incurred in the conduct of the winding up proceedings including expected costs of the hearing on 6 June 2023.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	WAD 271 of 2022
Judgment of:	COLVIN J
Date of judgment:	13 April 2023
Date of publication of reasons:	19 April 2023
Catchwords:	CORPORATIONS - interlocutory application for leave to oppose the defendant's winding up on the ground that the subject of the statutory demand is disputed - where application to wind up based upon failure to comply with statutory demand - where defendant otherwise out of time to apply to set aside statutory demand - where defendant is an Aboriginal Corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) - where directors of the defendant are volunteers of a charitable organisation with no employees - where plaintiff only raised alleged debts from a period of many years once the lease was not renewed - where directors of the defendant felt threated by the circumstances of the demand for debt and some suffered health problems relating to stress cause by the demand - where the defendant did not obtain legal advice until after the time to apply to set aside the demand had expired - consideration of circumstances in which leave can be granted under s 495S of the Corporations Act 2001 (Cth) - leave to oppose winding up application granted on the ground that the alleged debt the subject of the statutory demand is disputed
Legislation:	Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) s 526.35, Division 526 Corporations Act 2001 (Cth) s 459S
Cases cited:	Owen-Pearse v Lander Land Company Pty Ltd [2018] FCA 2077 Soundwave Festival Pty Limited v Altered State (WA) Pty Limited (No 1) [2018] FCA 466 Tony Innaimo Transport Pty Ltd v Skyroad Logistics Pty Ltd [2018] FCA 1134
Division:	General Division
Registry:	Western Australia
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	48
Date of hearing:	13 April 2023
Counsel for the Plaintiff:	Mr N Ekanayake
Solicitor for the Plaintiff:	Bennett
Counsel for the Defendant:	Mr PG Donovan with Ms CD Radenti
Solicitor for the Defendant:	MDS Legal

ORDER MADE BY:	COLVIN J
DATE OF ORDER:	13 APRIL 2023