Tripod Funds Management Pty Limited v Arkbay Investments Pty Limited

[2014] NSWSC 1908

Supreme Court

New South Wales

Medium Neutral Citation:	Tripod Funds Management Pty Limited v Arkbay Investments Pty Limited [2014] NSWSC 1908
Hearing dates:	10 November 2014
Date of orders:	10 November 2014
Decision date:	10 November 2014
Jurisdiction:	Equity Division - Corporations List
Before:	Brereton J
Decision:	Plaintiff’s solicitor refused leave to withdraw. Originating process dismissed with costs.
Catchwords:	CORPORATIONS - winding up - winding up in insolvency - setting aside creditors statutory demand – where founded on judgment debt – alleged intention to appeal but not application for a stay or leave to appeal filed – insufficient grounds to establish “some other reason” PROCEDURE – representation – ceasing to act – necessity for notice of intention to cease to act
Legislation Cited:	(Cth) Corporations Act 2001, s 459G (NSW) Real Property Act 1900, s 74
Cases Cited:	Arkbay Investments Pty Limited (in liquidation) (receivers and managers appointed) v Tripod Funds Management Pty Limited [2014] NSWSC 1003 Barclays Australia (Finance) Limited v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235 Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 Timberland Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd [2011] NSWSC 466
Category:	Procedural and other rulings
Parties:	Tripod Funds Management Pty Ltd ACN 145 339 653 (plaintiff) Arkbay Investments Pty Ltd (in liquidation) (receivers and managers appointed) (ACN 086 719 655) (first defendant) McEvoy Street Alexandria Pty Limited (in liquidation) (receivers and managers appointed) (ACN 114 206 414) (second defendant) Australian and New Zealand Banking Group Limited (ABN 11 005 357 522) (third defendant)
Representation:	Counsel: B Payne (plaintiff) R Tyson (defendants) Solicitors: Ronayne Owens Lawyers Pty Ltd (plaintiff) Allens (defendants)
File Number(s):	2014/384505

Judgment (ex tempore)

1. HIS HONOUR: By originating process filed on 8 October 2014, the plaintiff Tripod Funds Management Pty Ltd makes a claim pursuant to the (Cth) Corporations Act 2001, s 459G, for an order setting aside a creditor’s statutory demand dated 17 September 2014 and served on it that day by the defendant Arkbay Investments Pty Limited (in liquidation) (receivers and managers appointed), McEvoy Street Alexandria Pty Limited (in liquidation) (receivers and managers appointed) and Australia and New Zealand Banking Group Ltd.

2. The statutory demand claims an amount of $40,815.53, described in the schedule to the demand as:

Judgment debt ordered by Robb J in Arkbay Investments Pty Limited (in liquidation) (receivers and managers appointed) v Tripodi Funds Management Pty Limited [2014] NSWSC 1003 by order pursuant to (NSW) Real Property Act 1900, s 74 (the judgment). A sealed copy of the judgment is enclosed with this creditor’s statutory demand for payment of debt.

3. As the demand was, apparently, served on 17 September 2014 the application appears to have been made just in time on 8 October 2014.

4. At the outset of the hearing today, Ms Payne, who appears for the plaintiff, sought leave to withdraw from the proceedings. No evidence was put before the Court on this application. No notice of intention of ceasing to act had been given to the plaintiff. As it appears, the originating process was filed by the plaintiff without a solicitor acting. However, as Ms Payne informed the Court, there was a conversation between her firm and Mr Lazar of the plaintiff in which it was indicated that the firm would act in the matter. Mr Lazar has subsequently been arrested and is presently in custody. While it was asserted that the solicitors had no way of contacting him, I am unable to accept that there is no way for solicitors acting for a person in custody to contact that person. As it seems to me, it would be inappropriate to permit the solicitors to cease to act in the absence of their having given any notice of their intention to do so to their client.

5. When I declined to permit the solicitors to withdraw from the proceedings I proceeded to hear the application. The plaintiff did not seek any adjournment and did not make submissions.

6. The s 459G affidavit sworn by Mr Lazar in support of the application alleges, in paragraph 5, as follows:

Since the date of the judgment serious irregularities in the evidence which formed the basis for the judgment have emerged. The proceedings involved inter alia the determination of damages payable by the plaintiff as a result of a caveat lodged on a property which was ultimately purchased by a third party from the defendants. Evidence was relied upon which purported to establish that the third-party purchaser had the funds to complete the purchase of the property from November 2013 or, alternatively, December 2013 onwards until 5 May 2014. It has now become apparent that there are irregularities in this evidence and that the third party purchaser may not have had funds to complete the purchase during this period which would have the result that the defendants ought not have the benefit of the award of damages made in their favour in the proceedings.

7. The affidavit goes on to depose to the plaintiff’s intention to seek leave to lodge an appeal once notice of grounds of appeal and supporting materials have been finalised or, alternatively, to apply to set the judgment aside and to apply to stay the judgment pending any appeal or application to set aside the judgment. The affidavit concludes with bare assertions that the plaintiff has valid grounds to appeal the judgment and has the means to satisfy the judgment and that there is a genuine dispute as to the existence and amount of the debt and that substantial injustice will be caused unless the demand is set aside.

8. The fundamental problem with all of that is that it all depends on the existence of “serious irregularities” in the evidence which formed the basis of the judgment. Neither the affidavit nor any further evidence begins to identify what those “serious irregularities” may be.

9. In any event, no appeal has at this stage been filed, so far as the evidence discloses, nor any application for leave to appeal, nor any application to set aside the judgment, nor any application for a stay of the judgment.

10. It is, of course, well established that where a creditor’s statutory demand is founded on a judgment debt there is no scope for an argument that there is a genuine dispute as to the existence of the debt. That is because the judgment concludes the question [Timberland Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd [2011] NSWSC 466, [11]]. In some cases, the pendency of an application to set aside a judgment or appellate proceedings which impugn the judgment may afford “some other reason” to set aside the demand which is founded on the judgment, but the mere pendency of an appeal or proceedings impugning the judgment is of itself insufficient to do so [Barclays Australia (Finance) Limited v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235].

11. At least in the usual case, proceedings that impugn a judgment will provide “some other reason” to set aside a demand that is founded on it only if the amount of the demand is paid into Court or otherwise secured [Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454].

12. In this case there is, as I have said, no pending appeal, application for leave to appeal, application to set aside the judgment or even an application for a stay of the judgment, notwithstanding that more than a month has now passed since Mr Lazar swore his affidavit on 8 October 2014. Even if there were, absent an offer of payment into Court or securing the sum of the demand, there would not be sufficient other reason to set aside a demand founded on the judgment. No basis for setting aside the creditor’s statutory demand is established by the evidence.

13. The Court orders that the originating process filed on 8 October 2014 be dismissed with costs assessed in the sum of $6,600.

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