Williams v Calivil Park Holstein Pty Ltd - [2009] NSWSC 389

CITATION: Williams v Calivil Park Holstein Pty Ltd [2009] NSWSC 389
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 4 May 2009

JUDGMENT DATE :
4 May 2009

JURISDICTION: Equity

JUDGMENT OF: Bryson AJ at 1

DECISION: (1) The interlocutory process is dismissed.
(2) Order under s 459 of the Corporations Act 2001 that Calivil Park Holsteins ACN 097 498 167 be wound up.
(3) Order that Mr. Stephen Alan Jay be appointed liquidator of Calivil Park Holsteins ACN 097 498 167.
(4) Order that the plaintiff’s costs on the Notice of Motion assessed on the indemnity basis be costs in the winding up.

CATCHWORDS: CORPORATIONS – Winding up – Statutory Demand – application s459S for leave to argue validity of statutory demand – demand based on order of Common Law Division for payment on 18 December 2008 of various sums required to be paid under terms of earlier interlocutory orders in Possession proceedings – Possession issues determined and Company evicted by Sheriff but claims and cross-claims for damages by both parties were still pending – ground in s 459S (2) was offsetting claim being pending cross-claim – HELD – cross claim for damages could not be offsetting claim against judgment of the Court for payment of money – subsection 459S(2) was satisfied as the ground was material to determination of the question of insolvency. Leave refused on discretionary grounds: (1) the ground could not succeed. (2) the company was hopelessly insolvent. (3) Procedural failings and late application.

LEGISLATION CITED: Corporations Act 2001 (Cth)
Civil Procedure Act 2005 (NSW

CASES CITED: Alam v Quest Enterprises [2006] NSWSC 752
Chief Commissioner of Stamp Duties v Paliflex Pty Ltd (1999) 149 FLR 179
D Galamos & Sons Pty Ltd v McIntyre (1974) 5 ACTR 10
Roadshow Entertainment Pty Ltd v ACN 053006269 Pty Ltd (1997) 42 NSWLR 462
Smith v Parkes (1852) 16 Beavan 115, 51 ER 720.
Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661

PARTIES: Ian Michael Williams (Plaintiff)
Calivil Park Holsteins Pty Ltd (Defendant)

FILE NUMBER(S): SC 1824/09

COUNSEL: L Wilson (Plaintiff)
C D Wood (Defendant)

SOLICITORS: Lumleys (Plaintiff)
Morrison and Sawers Solicitors (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

4 May 2009

1824/2009 Williams v Calivil Park Holstein Pty Ltd

JUDGMENT

1 HIS HONOUR: These reasons deal with the defendant's application under section 459S of the Corporations Act 2001 for an order granting leave to argue the validity of the Statutory Demand.

2 The underlying relationship between the parties was a lease dated 1 October 2002 from the plaintiffs to the defendant of two dairying properties “Glengarry” and ”Eureka” at Blighty near Deniliquin, New South Wales, originally for about three years to 20 September 2005. The defendant's obligations were guaranteed by its then directors, Mr Dennis Culton and Mrs Susan Culton.

3 In October 2005 the lease was extended, with variations set out in a written…

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: [2009] NSWSC 389
Decision Date: 4 May 2009

CaseChat Overview and Summary

In Williams v Calivil Park Holstein Pty Ltd, the applicant sought leave to argue the validity of a statutory demand issued against Calivil Park Holstein Pty Ltd (the company). The demand was based on an order from the Common Law Division that required the company to pay various sums stemming from earlier interlocutory orders in possession proceedings. The company had been evicted from the premises by the Sheriff, but claims and cross-claims for damages between the parties remained unresolved. The applicant applied for leave under section 459S to contest the demand on the basis that an offsetting claim, specifically a cross-claim for damages, was pending.

The court needed to determine whether the cross-claim for damages could be considered an "offsetting claim" under section 459S(2) of the Corporations Act. The court held that a cross-claim for damages could not be considered an offsetting claim against a judgment for payment of money. The court found that the ground for leave was material to the determination of the company's insolvency, satisfying subsection 459S(2). However, the court refused leave on discretionary grounds, finding that the ground could not succeed, the company was hopelessly insolvent, and the application was procedurally flawed and made late.

The final orders of the court were that leave to argue the validity of the statutory demand was refused. This decision highlights the strict requirements for contesting the validity of a statutory demand and the court's cautious approach in granting leave under section 459S.

Orders