Willaire Pty Ltd v Equititrust Limited

Case [2010] QCA 350

SUPREME COURT OF QUEENSLAND

CITATION:

Willaire Pty Ltd v Equititrust Limited [2010] QCA 350

PARTIES:

WILLAIRE PTY LTD
ACN 010 437 297
(applicant/appellant)
FLOWER SHOP UNIT TRUST
(not a party to the appeal)
v
EQUITITRUST LIMITED
ABN 71 061 383 944
(respondent/respondent)

FILE NO/S:

Appeal No 9741 of 2010
SC No 8485 of 2010

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

10 December 2010

DELIVERED AT:

Brisbane

HEARING DATE:

12 November 2010

JUDGES:

Margaret McMurdo P and Muir JA and McMeekin J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

The appeal be allowed.1.   

The order of 3 September 2010 be set aside.2.   

The statutory demand dated 29 July 2010 be set aside.3.   

The respondent pay the appellant's costs of the application to set aside the statutory demand and of this appeal4.   .

CATCHWORDS:

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – GENUINE DISPUTE AS TO INDEBTEDNESS – ASSESSING GENUINENESS – GENERALLY – respondent advanced money to a third party under a credit facility deed to which the appellant was not a party – appellant granted two mortgages in favour of the respondent – credit facility deed was varied by another deed to which the appellant was a party – respondent issued appellant with a statutory demand – appellant applied under s 459G Corporations Act 2001 (Cth) to have the statutory demand set aside – primary judge dismissed appellant’s application – appellant submitted its liability was limited by the terms of the second mortgage – appellant submitted that the description of the money secured in the second mortgage meant no debt was “due and payable” by the appellant to the respondent until the mortgaged properties were realised – respondent submitted appellant’s liability arose under the deed as varied – function of statutory demand procedure – whether there was a genuine dispute in respect of the debt alleged to be owed in the statutory demand – whether primary judge erred in dismissing appellant’s application

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – FOR DEFECT OR SOME OTHER REASON – SOME OTHER REASON – appellant submitted primary judge erred in finding there was not “some other reason” to set aside the statutory demand pursuant to s 459J Corporations Act 2001 (Cth) – whether there was “some other reason” to set aside the statutory demand – whether primary judge erred in dismissing appellant’s application

Corporations Act 2001 (Cth), s 459E, s 459G, s 459J(1)(b)
Trade Practices Act 1974 (Cth), s 52, s 87

Braams Group Pty Ltd v Miric (2002) 171 FLR 449; (2002) 44 ACSR 124; [2002] NSWCA 417, cited
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43, cited
Island Industries Pty Ltd…

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Details
AGLC
Willaire Pty Ltd v Equititrust Limited [2010] QCA 350
Case
[2010] QCA 350
Decision Date

CaseChat Overview and Summary

Willaire Pty Ltd (appellant) appealed against a decision of the Federal Court of Australia (primary judge) which dismissed its application to set aside a statutory demand issued by Equititrust Limited (respondent). The respondent had issued the statutory demand pursuant to s 459B of the Corporations Act 2001 (Cth) in an attempt to wind up the appellant in insolvency. The primary judge dismissed the appellant's application to set aside the statutory demand under s 459G of the Corporations Act. The appellant argued that the statutory demand should be set aside because it had a genuine dispute as to the debt alleged in the demand, and because there was some other reason to set the demand aside under s 459J of the Corporations Act.

The primary judge rejected the appellant's arguments and held that there was no genuine dispute as to the debt alleged in the statutory demand. The primary judge found that the appellant's liability arose under a deed as varied, and that the appellant was liable for the amount claimed by the respondent. The primary judge also held that there was no other reason to set the statutory demand aside. The appellant submitted that the primary judge erred in finding that there was no genuine dispute as to the debt alleged in the statutory demand, and that there was no other reason to set the demand aside. The appellant submitted that its liability was limited by the terms of the second mortgage, and that no debt was due and payable by it to the respondent until the mortgaged properties were realised.

The appeal was allowed. The Court held that the primary judge erred in finding that there was no genuine dispute as to the debt alleged in the statutory demand. The Court held that the appellant had a genuine dispute as to the debt alleged in the statutory demand because it was not liable for the amount claimed by the respondent until the mortgaged properties were realised. The Court also held that there was some other reason to set the statutory demand aside because the respondent's claim was statute-barred. The Court set aside the primary judge's order and the statutory demand, and ordered the respondent to pay the appellant's costs of the application to set aside the statutory demand and of this appeal.

Orders

Orders of the court

The appeal be allowed.1.

The order of 3 September 2010 be set aside.2.

The statutory demand dated 29 July 2010 be set aside.3.

The respondent pay the appellant's costs of the application to set aside the statutory demand and of this appeal4. .

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

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