Vodicka Holdings Pty Ltd v Vodicka - [2022] WASC 82

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   VODICKA HOLDINGS PTY LTD -v- VODICKA [2022] WASC 82
CORAM:   MASTER SANDERSON
HEARD:   11 JANUARY 2022
DELIVERED          :   11 MARCH 2022
PUBLISHED           :   11 MARCH 2022
FILE NO/S:   COR 150 of 2021
BETWEEN:   VODICKA HOLDINGS PTY LTD
Plaintiff
AND
PETER VINCENT VODICKA
Defendant

Catchwords:

Corporations Law - Application to set aside statutory demand - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Superannuation Industry (Supervision) Act 1993 (Cth)

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	B Panov
Defendant	:	J Hammond

Solicitors:

Plaintiff	:	Mendelawitz Morton Commercial Lawyers
Defendant	:	Hammond Legal

Case(s) referred to in decision(s):

Willaire Pty Ltd v Equitrust Limited [2010] QCA 350

MASTER SANDERSON:

This is the plaintiff's application to set aside a statutory demand. A copy of the demand is found as part of attachment PVV 14 to the affidavit of Peter Vincent Vodicka sworn 26 November 2021. The demand is based upon a judgment obtained in this court for an amount of $795,538.90. Despite the fact the demand is based upon a judgment, and no application has been made to set aside that judgment, the plaintiff says there is a genuine dispute or some other reason why the demand ought be set aside. For reasons which follow, that submission ought be rejected.
Peter William Vodicka is the son of the defendant. Belinda Kate Vodicka is the daughter‑in‑law of the defendant. Peter William Vodicka and Belinda Vodicka are directors and shareholders of the plaintiff. The defendant made a loan of $950,000 to the plaintiff in November of 2017. The plaintiff defaulted under the terms of the loan. On 8 March 2021, the defendant commenced proceedings to recover the loan. Default judgment was obtained and was entered on 23 July 2021.
There is no suggestion, in the affidavit filed in support of this application, that judgment was not properly entered. The plaintiff had ample time to enter an appearance and chose not to do so. There is nothing in the evidence to suggest that an order could be obtained setting aside the default judgment. But even if that was a possibility, no steps have been taken by the plaintiff. It must be inferred, in the circumstances, the plaintiff accepts the defendant was entitled to issue proceedings, was entitled to obtain judgment and that the judgment is in all respects regular.
The plaintiff's position is as follows. On 15 November 2017, in its capacity as trustee of the Vodicka Super Fund, it entered into a borrowing agreement described as a 'Limited Resource Borrowing Agreement' (LRBA). The LRBA records the terms and conditions upon which the defendant agreed to lend the principal sum to the plaintiff. The loan agreement acknowledges the plaintiff is trustee for the Vodicka Super Fund. Clause 2.6 of the LRBA provides that the borrower must ensure that the trustee provides the collateral security to secure the advance of money. The collateral security is a first registered mortgage over a property in Balcatta.

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: [2022] WASC 82
Decision Date

CaseChat Overview and Summary

Vodicka Holdings Pty Ltd initiated proceedings against Peter Vincent Vodicka in the Supreme Court of Western Australia, seeking to set aside a statutory demand based on a judgment debt of approximately $795,538.90. The demand stems from a loan made by the defendant to the plaintiff, which defaulted under the terms agreed upon. Despite the plaintiff's argument that there is a genuine dispute or other reasons justifying the setting aside of the statutory demand, the court found against the plaintiff.

The central legal issue in this case was whether the statutory demand, based on the judgment, should be set aside. The plaintiff contended that the terms of the Limited Resource Borrowing Agreement (LRBA) limited the recourse available to the defendant to the security provided, which was a first registered mortgage over a property in Balcatta. They argued that the statutory demand procedure should not be used to circumvent the terms of the agreement. The defendant maintained that the statutory demand was correctly issued under the prevailing circumstances and was not unjust or unconscionable.

The court reasoned that while the terms of the LRBA did limit the recourse to the mortgaged property, the plaintiff, by not defending the proceedings that led to the judgment, had effectively admitted liability for the debt. The court found no basis to set aside the statutory demand, noting that the plaintiff had ample opportunity to contest the proceedings but chose not to. Consequently, the application to set aside the statutory demand was dismissed, and the plaintiff was ordered to pay the defendant's costs of the application, including reserved costs.

Orders