Timms v Dellaplus Pty Ltd - [2007] SASC 236

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
TIMMS v DELLAPLUS PTY LTD
[2007] SASC 236
Judgment of Judge Withers a Master of the Supreme Court
26 June 2007
CORPORATIONS
Corporations Act 2001 s 459S, referred to.
Powell & Anor v Fryer & Anor (2001) 37 ACSR 589; Web Wealth Pty Ltd v Helimount Pty Ltd [2006] FCA 1376; Switz Pty Ltd v Glowbind Pty Ltd (1999-2000) 33 ACSR 723, applied.
ACE Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728; ACP Syme Magazines Pty Ltd v Tri Automotive Components Pty Ltd [1997] 362 FCA; Biron Capital Ltd v Velowing Pty Ltd [2003] NSWSC 1181; Expile Pty Ltd v Jabb's Excavations Pty Ltd (2003) 45 ACSR 711, considered.

TIMMS v DELLAPLUS PTY LTD
[2007] SASC 236
Civil

JUDGE WITHERS. On 11 January 2007 the plaintiff issued an Originating Process seeking that the defendant be wound up. The relief sought was based on the failure of the defendant to respond to a statutory demand forwarded to its registered office by ordinary prepaid post on 17 November 2006. In particular no application to set aside the statutory demand had been issued and served within the required 21 day period after service of the Notice of Demand. The statutory demand was for the amount of $34,299.55, which as best I understand it was for a principal loan of $30,000.00 comprised of two payments on 2 February 2005 and 2 March 2005 ($20,000.00 and $10,000.00 respectively) and interest thereon.
The plaintiff then took the normal and necessary steps to satisfy the requirements of the Corporations Act and Rules and on the documents established his entitlement to such an order.
On 12 February 2007 the defendant filed a Notice of Appearance in which it set out its grounds of opposition to a winding up order. Those grounds were:
1.The defendant is not insolvent.
2.The defendant is not indebted to the plaintiff.
3.The defendant has counterclaim against the plaintiff.
That Notice of Appearance was supported by a joint affidavit of John Neville Rosenzweig and Teverley Deanne Rosenzweig. They attested that they are the directors of the defendant and authorised to swear the affidavit on its behalf. While no formal interlocutory application has been filed, it is clear on the material and submissions that the defendant company in its opposition to the application to wind up the company is seeking leave pursuant to s 459S of the Corporations Act (“CA”) to rely on a ground that falls within the provisions of s 459S(1)(b).
Section 459S of the CA provides as follows:
459S(1) [Demand may not ground opposition] In so far as an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the company may not, without the leave of the Court, oppose the application on a ground:
(a) that the company relied on for the purposes of an application by it for the demand…

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 Timms v Dellaplus Pty Ltd

Details

AGLC: Timms v Dellaplus Pty Ltd [2007] SASC 236
Case: [2007] SASC 236
Decision Date: 26 June 2007

CaseChat Overview and Summary

Timms v Dellaplus Pty Ltd involved a winding-up application by Timms against Dellaplus Pty Ltd based on the latter's failure to comply with a statutory demand. The demand, amounting to $34,299.55, was issued under the Corporations Act 2001. Dellaplus sought to oppose the winding-up application on several grounds, including solvency and the presence of a set-off, but had not applied to set aside the demand within the required 21-day period. The court had to decide whether Dellaplus could rely on grounds it could have used to set aside the statutory demand under Section 459G, despite missing the deadline, and whether it could demonstrate solvency and a genuine set-off.

The court found that Dellaplus failed to provide satisfactory evidence of solvency, as required by Section 459S of the Corporations Act. The company's affidavits did not include a balance sheet, profit and loss statements, or details of its assets and liabilities. The information provided was insufficient to assess the company's financial position comprehensively. Additionally, the court was unconvinced by the excuse for not applying to set aside the statutory demand within the stipulated period. The court concluded that Dellaplus did not meet the criteria for leave to oppose the winding-up application under Section 459S, as it had not demonstrated solvency or provided a satisfactory explanation for its delay in responding to the statutory demand.

The court also noted that Dellaplus had a genuine set-off claim that might have warranted setting aside the statutory demand if timely action had been taken. However, since the opportunity to address this through a Section 459G application had passed, the set-off claim did not alter the outcome. The application for leave under Section 459S was therefore refused. The court reserved the question of costs and adjourned further consideration of the winding-up application to the Companies List.

Orders