Tatlers.com.au Pty Ltd v Davis

Tatlers.com.au Pty Ltd, the plaintiff, pursued a statutory demand against Ms. Davis, the defendant, under section 459F of the Corporations Act 2001 (Cth). The primary dispute revolved around the validity of the statutory demand and the subsequent application by Ms. Davis to set it aside. The case was adjudicated in the Federal Circuit Court of Australia.

The court was tasked with determining whether certain exhibits had to be served within the 21-day period specified by section 459G(3) of the Corporations Act. Additionally, the court examined whether the grounds for the application to set aside the statutory demand were appropriately raised in the affidavit supporting the application, in accordance with the principles established in Graywinter v Graywinter. The court also assessed whether the plaintiff could avail itself of a costs order in favour of a third party as an offsetting claim against the statutory demand, particularly when the debt was owed jointly and severally by both the third party and the plaintiff to the defendant.

The court found that the service of exhibits was not mandated within the 21-day period, and that the plaintiff was not entitled to rely on grounds that were not expressly or reasonably inferred in the affidavit supporting the application. The court further held that the plaintiff could rely on the existence of a genuine dispute or offsetting claims arising from costs orders in their favour. Consequently, the plaintiff was entitled to set off the amount owed by the defendant to the plaintiff under the costs order. However, the court determined that a joint and several obligor who is sued alone cannot raise a set-off to which their co-obligor is entitled.

The court's final orders included a determination that the statutory demand could be set aside on the grounds of genuine dispute and offsetting claims. The court directed that the amount owed by the defendant to the plaintiff be set off against the statutory demand.