Townview Holdings Pty Ltd v Sunstate Design & Construct Pty Ltd - [2012] FCA 1296

FEDERAL COURT OF AUSTRALIA
Townview Holdings Pty Ltd v Sunstate Design & Construct Pty Ltd
[2012] FCA 1296

Citation: Townview Holdings Pty Ltd v Sunstate Design & Construct Pty Ltd [2012] FCA 1296

Parties: TOWNVIEW HOLDINGS PTY LTD ACN 056 047 897 v SUNSTATE DESIGN & CONSTRUCT PTY LTD ACN 120 826 271

File number(s): QUD 556 of 2012

Judges: GREENWOOD J

Date of judgment: 16 November 2012

Catchwords: INSOLVENCY – consideration of an application for a winding up order

Legislation: Acts Interpretation Act 1901 (Cth), s 25C
Corporations Act 2001 (Cth), ss 9, 459E, 459P
Corporations Amendment Regulations 2007 (No. 13) (Cth), Regulation 4(2), Item 49 of Schedule 1, Form 509H

Date of hearing: 16 November 2012

Date of last submissions: 16 November 2012

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 28

Counsel for the Plaintiff: Mr Brown

Solicitor for the Plaintiff: Ms Owen, Swift Solicitors

Counsel for the Defendant: Mr Matthews

Solicitor for the Defendant: Mr Lodder, Romans and Romans Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 556 of 2012

IN THE MATTER OF SUNSTATE DESIGN & CONSTRUCT PTY LTD
ACN 120 826 271

BETWEEN:
TOWNVIEW HOLDINGS PTY LTD ACN 056 047 897
Plaintiff

AND:
SUNSTATE DESIGN & CONSTRUCT PTY LTD
ACN 120 826 271
Defendant

JUDGE:

GREENWOOD J

DATE OF ORDER:

16 NOVEMBER 2012

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.The winding up application is dismissed.
2.The plaintiff pay the defendant’s costs of and incidental to the application for the winding up order.

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

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 556 of 2012

IN THE MATTER OF SUNSTATE DESIGN & CONSTRUCT PTY LTD
ACN 120 826 271

BETWEEN:
TOWNVIEW HOLDINGS PTY LTD ACN 056 047 897
Plaintiff

AND:
SUNSTATE DESIGN & CONSTRUCT PTY LTD
ACN 120 826 271
Defendant

JUDGE:

GREENWOOD J

DATE:

16 NOVEMBER 2012

PLACE:

BRISBANE

REASONS FOR JUDGMENT

This application today is an application for an order for the winding up of a company called Sunstate Design & Construct Pty Ltd. Mr Matthews of counsel appears on behalf of the defendant company and Mr Brown of counsel appears on behalf of the plaintiff.
The application for the winding up order is founded upon a failure, or at least a contended failure, on the part of the defendant company to comply with a statutory demand under the Corporations Act 2001 (Cth) (the “Corporations Act”). A copy of the demand in evidence reveals that the form used by the creditor fails to comply with the content requirements for the form prescribed by the Corporations Act.
Section 459E(2) of the Corporations Act provides that a statutory demand, for the purposes of s 459E, must exhibit a number of features. Relevant for present purposes is s 459E(2)(e) of the Act, which requires that the demand “must be in the prescribed form (in any)”. There is, in…

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: [2012] FCA 1296
Decision Date

CaseChat Overview and Summary

Townview Holdings Pty Ltd brought an application for a winding up order against Sunstate Design & Construct Pty Ltd in the Federal Court of Australia, citing a failure to comply with a statutory demand as the basis for the application. The application was dismissed by Greenwood J on the basis that the statutory demand was invalid due to an omission of a required warning notice. The court found that the omission of the warning notice was not a mere defect but rather a failure that rendered the statutory demand invalid. Consequently, the court dismissed the winding up application and ordered that Townview Holdings Pty Ltd pay Sunstate Design & Construct Pty Ltd’s costs of and incidental to the application for the winding up order.

Greenwood J began by examining the statutory demand made by the plaintiff to the defendant and noting that the form used did not comply with the prescribed form required by s 459E(2) of the Corporations Act 2001 (Cth). The court found that the statutory demand was invalid because it omitted a warning notice to the debtor, which is a mandatory requirement. The omission of the warning notice was deemed to be fatal to the validity of the notice as it is central to the operation and efficacy of the notice. The court also considered the transitional provisions that allowed for the use of the old form of the statutory demand for a period of 12 months after the commencement of the new regulations. However, since the statutory demand was made after this transitional period, the omission of the warning notice rendered the demand invalid. The court found that the failure to incorporate the warning notice went beyond a mere defect in the notice and that the statutory demand was invalid from the outset. Therefore, the court dismissed the winding up application and ordered that the plaintiff pay the defendant’s costs of and incidental to the application for the winding up order.

Orders