Court of Appeal
New South Wales
Case Title: TQM Design & Construct Pty Ltd v KCL Developments Pty Ltd & Golden Plantation Pty Ltd Medium Neutral Citation: [2011] NSWCA 7 Hearing Date(s): 3 February 2011 Decision Date: 03 February 2011 Jurisdiction: Before: Spigelman CJ at 1; Hodgson JA at 39; Macfarlan JA at 44.
Decision: Order that the appeal should be dismissed with costs.
Catchwords: CORPORATIONS - winding up - insolvency - s 459F(2) presumption of insolvency arising from failure to comply with statutory demand - where two companies made a joint application purporting to be in accordance with s 459G - where court found that no valid or effectual application under s 459G had been made - whether the only requirement for a valid s 459G application is compliance with 21 day period for filing - whether issue estoppel on validity of s 459G application
Legislation Cited: Corporations Act 2001 (Cth) ss 459C, 459F, 459G, 459P
Cases Cited: David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265
Golden Plantation Pty Ltd v TQM Design & Construct Pty Ltd [2010] NSWSC 1279
Golden Plantation Pty Ltd v TQM Design & Construct Pty Ltd; KCL Developments Pty Ltd v TQM Design & Construct Pty Ltd [2010] NSWSC 1453
Leveraged Capital Pty Ltd v Modena Imports Pty Ltd [2009] NSWSC 509
Long Nominees Pty Ltd v Roandale Holdings Pty Ltd [2009] NSWSC 932
Re J & E Holdings Pty Ltd (1995) 36 NSWLR 541
Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661Texts Cited: Category: Principal judgment Parties: Appellant: TQM Design & Construct Pty Ltd (ACN 091 508 422)
First Respondent: KCL Development Pty Limited (ACN 105 826 876)
Second Respondent: Golden Plantation Pty Limited (ACN 072 465 876)Representation - Counsel: Appellant: V Culkoff
Respondents: J T Johnson- Solicitors: Appellant: Julie A Orsini
Respondents: Gadens LawyersFile number(s): 2010/379523 Decision Under Appeal - Court / Tribunal: Supreme Court - Before: Barrett J - Date of Decision: 15 December 2010 - Citation: Golden Plantation Pty Ltd v TQM Design & Construct Pty Ltd; KCL Developments Pty Ltd v TQM Design & Construct Pty Ltd [2010] NSWSC 1453 - Court File Number(s) SC (1) 2010/379638; (2) 2010/379523 Publication Restriction:
Judgment
SPIGELMAN CJ: On 20 May 2010 the appellant ("TQM"), served two creditor's statutory demands in the amounts of $2.933 million on the first respondent ("KCL") and $2.035 million on the second respondent ("GP"). Pursuant to s 459G of the Corporations Act 2001 (Cth) ("the Act"), which I will set out below, KCL and GP had a right to apply to the Court for an order setting aside the statutory demand within 21 days. The legislative scheme also made provision pursuant to s 459F, which I will also set out below, that the period of compliance with a statutory demand would, where there was an application under s 459G, be extended to seven days after the s…
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- AGLC
- TQM Design and Construct Pty Ltd v KCL Developments Pty Ltd and Golden Plantation Pty Ltd [2011] NSWCA 7
- Case
- [2011] NSWCA 7
- Decision Date
CaseChat Overview and Summary
The legal issues before the Court of Appeal were whether the initial application made by two companies jointly under section 459G was valid, and if not, whether the doctrine of issue estoppel applied to prevent TQM Design & Construct Pty Ltd from arguing that a valid application had been made. Specifically, the court had to determine if Barrett J's prior finding that no valid or effectual application had been made under section 459G was binding on the parties in subsequent proceedings.
Hodgson JA, agreeing with the Chief Justice, held that issue estoppel applied. His Honour reasoned that Barrett J had previously determined that the deficiency in the application meant that no valid application had been made, thereby excluding the possibility of it being a mere defect or irregularity. This prior decision was found to be binding between the parties, establishing that no application had been made that would engage the provisions of section 459F(2)(a) of the *Corporations Act*. Consequently, the appeal was dismissed.
The appeal was dismissed with costs.
Orders
Orders of the court
Order that the appeal should be dismissed with costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
HODGSON JA: I agree that the appeal should be dismissed with costs. I express no view as to whether the deficiency in the application purportedly made in this case under s 459G of the Corporations Act was a defect or irregularity within s 467A of the Act or rather was such that there was no application made that would engage the provisions of s 459F(2)(a). That is, I express no view on the correctness of the first decision of Barrett J in this case made on 4 November 2010: Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279. In my opinion, the appellant does face the insurmountable difficulty that in that decision Barrett J held that no valid or effectual application had been made in accordance with s 459G, holding at para [18] that he had no jurisdiction to set aside either of the statutory demands in this case. He dismissed the respondent's originating process on that basis. By that decision he excluded the possibility that the deficiency in the application was a defect or irregularity within s 467A or was otherwise curable, but rather determined in a binding fashion between these particular parties that it did not amount to an application that could give the Court jurisdiction. In those circumstances, in my opinion there was an issue estoppel that established as between these parties that no application had been made such as would engage s 459F(2)(a), and it is for that reason in my view that the second decision of Barrett J on 15 December 2010 should not be reversed on appeal. This view does have the consequence that where a respondent to a purported application under s 459G contests that purported application on the basis that it did not constitute an application under s 459G, or that it was not made within twenty one days within the meaning of s 459G(3), and where the purported application is later dismissed on that basis, then the respondent to that application may at the time of that dismissal be out of time for reliance on the statutory presumption, because proceedings were not commenced within the three month period prescribed by s 459C. I note however that this problem does not arise if the respondent to such an application merely contests the application on the merits. MACFARLAN JA: I agree with the Chief Justice.