WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 4]

The parties to this appeal were WA Glass Pty Ltd (WAG) and Auto Control Systems Pty Ltd (ACS). WAG, the appellant, sought to set aside a statutory demand issued by ACS, the respondent. The dispute reached the Federal Court of Australia, where the appellant contested the validity of the statutory demand. The court's task was to determine whether the master's decision to dismiss WAG's application to set aside the statutory demand was correct. Additionally, the court needed to assess WAG's application for an extension of time to comply with the statutory demand pending the determination of the appeal, and whether WAG's offer to pay a portion of the amount into court constituted an admission of liability.

The court's reasoning was grounded in established legal principles regarding statutory demands under the Corporations Act 2001 (Cth). Firstly, the court examined the timeline of events: the master dismissed WAG's application on 18 August 2021, extending the compliance period to 21 days after the order date, which set the compliance deadline as 8 September 2021. The court noted that an extension of this kind cannot be granted after the compliance period has expired, as per Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd. WAG then sought an extension pending the appeal, supported by an affidavit from its director, Peter Harkins, expressing concerns about ACS's solvency. The court considered WAG's offer to pay a portion of the claimed amount into court as security, noting that such an offer did not signify an admission of liability. Ultimately, the court determined that WAG's offer to pay into court was insufficient to secure an extension of time for compliance with the statutory demand.

In its decision, the court dismissed WAG's appeal, affirming the master's decision to reject the application to set aside the statutory demand. The court found that WAG's concerns about ACS's solvency did not justify an extension of the compliance period. Furthermore, the court concluded that the offer to pay part of the disputed amount into court was not an admission of liability but rather a conditional offer to secure the amount pending the appeal's outcome. The court held that WAG's offer did not meet the criteria necessary for granting an extension under the circumstances. Therefore, the statutory demand remained in effect, and WAG was required to comply with it within the specified timeframe.