Super Benefit Pty Ltd v McNamara

[2009] SASC 167

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

SUPER BENEFIT PTY LTD v MCNAMARA

[2009] SASC 167

Reasons of Judge Lunn a Master of the Supreme Court

15 June 2009

CORPORATIONS

Application to set aside statutory demand based on guarantee which made debt due after demand for payment - defendant alleged service of statutory demand was the demand to activate the guarantee - affidavit supporting statutory demand was incorrect in saying debt was due when affidavit was sworn - held this was sufficient "other reason" to set aside the demand under s 459J(1)(a) of the Corporations Act 2001.

SUPER BENEFIT PTY LTD v MCNAMARA
[2009] SASC 167

Reasons on application to set aside the statutory demand.

1. JUDGE LUNN:     These reasons are to be read as supplementary to the reasons published today in 4WD Systems Pty Ltd v McNamara (43/09), [2009] SASC 166. As stated in those reasons, none of the grounds relied upon by 4WD Systems Pty Ltd can avail Super Benefit Pty Ltd (“Super Benefit”) in setting aside the statutory demand issued against it. However, there are some additional grounds relied upon by it.

2. The operative part of the Guarantee states:

   1(a)The Guarantors shall pay the Mortgagee on demand all monies of any nature whatsoever now owing or hereinafter (for any reason whatsoever) to become owing by the Mortgagor to the Mortgagee pursuant to the said Bill of Sale.

   (In the Guarantee there is reference to a Bill of Sale which is annexed to the Guarantee.  It is strictly speaking not a bill of sale, but the annexed document is the Deed of charge referred to in the other reasons).

3. There was no evidence that the defendant had made any demand on Super Benefit under clause 1(a) of the Guarantee before it served the statutory demand on it.  Thus Super Benefit argued that the moneys payable under the Guarantee had not become due for payment and so could not be the subject of the statutory demand.  The defendant argued that the service of the statutory demand itself was a sufficient demand for the purpose of clause 1(a) of the Guarantee.  No authority was cited for this proposition.  In any event, I need not pursue it.

4. Even if service of the statutory demand on Super Benefit was a sufficient demand under clause 1(a) of the Guarantee, it could not have operated and made the moneys due and payable until the demand was actually served.  As is required by Rule 5.2 of the Corporations Rules 2003 (South Australia) the statutory demand had to be accompanied by an affidavit in Form 7 and had to be in accordance with that form.  Such an affidavit of the defendant sworn on 16 December 2008 did accompany the statutory demand.  Its paragraphs 7-10 deposed:

   7    4WD Systems has defaulted on the terms of the Deed in failing to make all or some of the payments to the Creditor, and as such, the Debt is due and payable by 4WD Systems and therefore, by the company of the creditor pursuant to the Deed.

   8    The company is liable to pay this amount to the Creditor under the Deed.

   9    The company has not disputed the existence or amount of the Debt.

   10    I believe there is no genuine dispute about the existence of amount of the Debt.

   (In this affidavit the company is Super Benefit, the “Creditor “ is defined as the defendant and the Deed is that referred to in the reasons in 43/09).

5. Paragraph 7 says that the debt payable by Super Benefit to the defendant is “pursuant to the Deed”.  Super Benefit is not a party to the Deed but only to the Guarantee.  No liability is imposed on Super Benefit by reason of the matters deposed to in paragraph 7.

6. Paragraph 8 is incorrect for similar reasons.

7. The defendant’s affidavit was sworn on 16 December 2008.  Mr Glaser, a director of Super Benefit, has sworn that the demand was not received until about 18 or 19 December, but the exact date is not important.  As a copy of the affidavit had to accompany the Demand when it was served, of necessity the affidavit must have been sworn before the Demand was served.  This means that the service of the statutory demand could not have operated as a demand under clause 1(a) of the Guarantee to make the debt due and payable by Super Benefit to the defendant at the time at which the affidavit was sworn.  Hence there was a proper ground of dispute about the existence of the debt at the time the affidavit was sworn.  The defendant had no proper basis to believe that there was no genuine dispute at that time.  He was not entitled to swear the affidavit in anticipation that the statutory demand would be served and that this would make the debt become due and payable.  The affidavit must speak of the circumstances at the time at which the demand is served and be correct when it is sworn:  Technology Licensing Ltd v Climit Pty Ltd [2002] 1 Qd R 566; Chadmar Enterprises Pty Ltd v IGA Distributors Pty Ltd, (2005) 190 FLR 466. Such mis-statements within the supporting affidavit are sufficient “other reason” to justify setting aside the statutory demand.

8. Accordingly, the statutory demand from the defendant against Super Benefit will be set aside.

9. For similar reasons, the statutory demand of the defendant against B & CC Pty Ltd in action 42/09 will also be set aside.