Product Development Solutions Limited v Parametric Technology Corporation

[2013] NZHC 33

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-804 [2013] NZHC 33

IN THE MATTER OF     section 290 of the Companies Act 1993

BETWEEN  PRODUCT DEVELOPMENT SOLUTIONS LIMITED Plaintiff

ANDPARAMETRIC TECHNOLOGY CORPORATION

Defendant

Hearing:         24 January 2013

Appearances: M S Gilmour for the Applicant

M Kersey and S C Vickers for Respondent

Judgment:      24 January 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Spencer Legal, P O Box 8080 Auckland 1150 for Applicant

Email:    [email protected]

Russell McVeagh, PO Box 8 Auckland 1140 for Respondent

Email:    [email protected] /  [email protected]

Copy for:

Sandra Grant (M Sophie Gilmour), P O Box 4338 Auckland 1140 for Applicant

Email:    [email protected] /  [email protected]

PRODUCT DEVELOPMENT SOLUTIONS LIMITED V PARAMETRIC TECHNOLOGY CORPORATION HC AK CIV-2012-404-804 [24 January 2013]

[1]      Product Development Solutions Ltd applies under s 290 of the Companies Act 1993 to set aside a statutory demand.   It relies on all three grounds under s 290(4). The statutory demand is for the sum of USD$229,460.23 under a summary judgment of Associate Judge Faire made on 31 August 2012 in CIV-2012-404-804.

[2]      Parametric Technology Corporation (“PTC”), the creditor, is a Massachusetts corporation.  It is a software developer and supplier.  It also operates out of Hong Kong, but there is no evidence that it has a place of business in Australia or New Zealand.

[3]      Product Development Solutions Ltd (“PDS”) used to carry on business as a supplier of software.  It is a New Zealand company and carries on business solely in New Zealand.   Its director is Mr Zlatko Staka.   PDS has a related company in Australia, PDS Australia Pty Ltd.  I will refer to that as the “Australian company”.

[4]      PTC supplied product and services to PDS under reseller agreements.  The products were software and the services included maintenance associated with the software.   The first reseller agreement was in 2003.   The most recent reseller agreement ran from January 2009 until 30 November 2010.  That reseller agreement provided that the agreement was governed by New Zealand law and all disputes were to be litigated exclusively in Auckland and in no other court or jurisdiction. The agreement has entire agreement provisions, and provisions against any amendments made otherwise than in writing and signed by the parties’ counsel. There were comparable provisions in the 2003 reseller agreement, except that that agreement was governed by Hong Kong law.

[5]      Associate Judge Faire’s judgment of 31 August 2012 in favour of PTC was made on a claim for unpaid debt for products and services ordered and supplied between July 2010 and December 2011.

No basis for applying under s 290(4)(a)

[6]      In the present application PDS essentially raises two matters:

(a)      It says that there was an oral maintenance agreement entered into in December 2004.   That oral maintenance agreement was invalidly terminated on the expiry of the reseller agreement at the end of November 2010.   It has a claim arising out of that unlawful termination.   It says that its claim is available under s 9 of the Contractual Remedies Act 1979.  For this judgment I will consider it as also a claim for damages for breach of contract

(b)It says that it is able to maintain a claim against PTC in the Australian courts for breach of s 51AC of the Trade Practices Act 1974 (C’th), and also of a comparable provision in the New South Wales Fair Trading Act.

[7]      It says that the amounts of its claims under the oral maintenance agreement and under the Australian statutes exceed the amount of the judgment given against it and therefore it ought not to be required to comply with the terms of the statutory demand.  In putting its case that way, it is essentially relying on s 290(4)(b) of the Companies Act.   It has presented part of its case as being a matter of substantial dispute as to liability.  That is a claim under s 290 (4)(a).  However, in the face of a final judgment against it, it is not open to it to take issue with the debt that is the subject of the statutory demand.   I will consider the matter as primarily a case alleging a counterclaim or cross-demand which may not have been able to have been set up as grounds for defence in the original proceeding.  I will deal with the claim for setting aside on other grounds under s 290(4)(c) at the end of this decision.

Proposed proceeding in Australia

[8]      Before I consider the merits of these counterclaims, I say something about the

Australian element.

[9] The Australian company also had a reseller agreement with PTC. The Australian company also defaulted in paying for products and services supplied. PTC issued proceedings in the District Court of New South Wales seeking summary judgment. In that proceeding, the Australian company did not contest that it had been supplied with products and services which had not been paid for. But it said that it had a defence by way of equitable set-off. It alleged that PTC had breached obligations under the Trade Practices Act and also under the corresponding state’s fair trading legislation. It alleged misleading and deceptive conduct, and also unconscionable conduct.

[10]     The District Court of New South Wales gave summary judgment in favour of PTC.  It rejected the defence of equitable set-off.  It did not dismiss the counterclaim on its merits but it held that the counterclaim did not amount to a valid equitable set- off.   The judgment left the Australian company free to maintain its counterclaim against PTC if it wished. The Australian company sought leave to appeal to the New South Wales Court of Appeal.  That court declined leave, in effect holding that the claim made by the Australian company under the trade practices legislation was not capable of giving rise to a defence of equitable set-off.   I remind myself that in Australia the test for equitable set-off is sometimes applied more strictly than it is in New Zealand.

[11] PDS, the New Zealand company, also wants to run similar arguments under the Trade Practices Act against PTC in Australia. As part of its case it has presented a draft pleading for a proposed claim against PTC under s 51AC of the Trade Practices Act.

What is the effect of the judgment of 31 August 2012?

[12]     I consider whether it is open to PDS to maintain two heads of counterclaim against PTC in light of the summary judgment given against it.  This question goes to whether the estoppel created by res judicata stands in the way of it running these proposed  counterclaims.    I  take  it  as  uncontroversial  that  when  a  creditor  has obtained a judgment for a debt against a company and a statutory demand is then issued in reliance on that judgment, it is not open to the company to allege that

judgment was wrong in fact or in law or that notwithstanding the judgment it can still raise arguments as to the validity of the debt.  The cause of action has merged in the judgment and the entry of the judgment concludes arguments that might have been raised in the proceeding.

[13]     That applies especially when cases have been disputed and the court has made determinations on contested issues.   But even when a judgment has been entered by default, there is still a final judgment.  Matters that might have been in issue cannot be re-litigated in an application to set aside a statutory demand:  Call New  Zealand  v  Telecom  New  Zealand  Ltd1   and  Ellison  Trading  v  Brookside

Contracting  Ltd.2      While  that  is  the  general  principle,  it  is  still  necessary  to

determine what has been decided in the summary judgment application, and whether there are other matters left open for argument as not having been determined by the judgment.

[14]     In CIV-2012-404-804, PTC applied for summary judgment and set out a conventional claim for debt based on supply of products and services which had not been paid for. The steps that PDS took in response, in summary, are these:

(a)       It filed a notice of opposition;

(b)      it filed a statement of defence; and

(c)       it applied for a stay of the proceeding.

[15] The statement of defence pleaded the oral maintenance agreement issue. There was also a pleading that it had a right of equitable set-off in relation to a claim to be filed in New South Wales in Australia for unconscionable conduct by PTC under the Trade Practices Act. The notice of opposition contained a similar pleading. I bear in mind that those pleadings were prepared to oppose an application for

summary judgment.  There was no express pleading of any counterclaim.  I take that

1      Call New Zealand Ltd v Telecom New Zealand Ltd HC Wellington CIV-2007-485-1558,

14 November 2007.

2      Ellison Trading v Brookside Contracting Ltd HC Hamilton CIV-2004-419-1602, 4 May 2005.

as a pleading to best advantage: to set up matters as going to defence only, given that an alleged counterclaim does not give a defence to liability in a summary judgment application.

[16] The stay application sought a stay pending the outcome of the proposed proceedings in New South Wales under s 51AC of the Trade Practices Act. It alleged that there were common questions of fact and law for both the claims by PDS and by the Australian company against PTC, and that any claim for breach of the oral maintenance agreement ought to await the determination of the claim in New South Wales and any damages that might be awarded in New South Wales. It pleaded that New South Wales is appropriate because the relevant conduct occurred there, and the Australian courts are the appropriate courts to determine trade practices issues, giving savings if proceedings by PDS and the Australian company were heard together.

[17]     PTC’s summary judgment application was to be heard on 31 August 2012. The day before the hearing PDS filed a notice of withdrawal of application for a stay in  opposition  to  the  application  for  summary  judgment.    With  that  withdrawal counsel submitted a memorandum which, amongst other things, said:

The defendant will abide the decision of the court on the application for summary judgment.

The defendant has resolved to pursue its claims through other proceedings and its complaint to the ACCC.

[18]     The  “ACCC”  is  the Australian  Competition  and  Consumer  Commission. PDS says that to pursue its claims of unconscionable conduct by PTC it has made a complaint to the ACCC with a view to the Commission taking up its case against PTC. At present, it is not known whether the ACCC will in fact take the matter up.

[19]     To return to the application for summary judgment.  The court has entered judgment in favour of PTC.  PDS has not consented to judgment, nor on the other hand has it opposed.  The court has not dealt with the matter as a contested summary judgment application.  It has not heard arguments on the merits of the matters raised

by PDS.   But PDS made it clear to the court, through the memorandum filed by counsel, that the defendant was resolved to pursue its claims through other means.

[20]     In these circumstances I treat the summary judgment as akin to a default judgment rather than a judgment where there have been determinations after the court has heard contested evidence and contested argument.    Mr Kersey acknowledged that if the case had gone to a hearing on 31 August 2012 he had prepared argument that the matters being raised by PDS were not appropriate matters for a defence of equitable set-off.  Additionally, he had prepared argument on the merits of the defences raised.

[21]     The approach of the courts to the effect of a concluded judgment, when a judgment has been by default, is a limited one when defining the matters that had been decided by that judgment.  A leading authority on the point is New Brunswick Railway Co v British and French Corporation Ltd,3 where Lord Maugham LC said:

In my opinion we are at least justified in holding that an estoppel based on a default judgment must be very carefully limited. The true principle in such a case would seem to be that the defendant is estopped from setting up in a subsequent action a defence which was necessarily, and with complete precision, decided by the previous judgment; in other words, by the res judicata in the accurate sense.

The defence of equitable set-off raises two questions.   First, whether the matters raised are capable of being an equitable set-off, and secondly whether the claim of equitable set-off is sound on the merits.

[22]     I regard the judgment of 31 August 2012 as concluding that a defence of equitable set-off would not have been available.  It is inconsistent with the judgment to assert a matter giving grounds for defence in the original application for summary judgment.  But it cannot follow from that, that there is also a decision on the merits if the matters to be the subject of equitable set-off were to be run as an independent counterclaim.  In other words, I do not regard the merits of the counterclaim issues as having been decided by the judgment of 31 August 2012.

[23]     Accordingly,  it  still  remains  open  to  PDS  to  contend  that  it  has  a counterclaim on the merits.  The fact that judgment has been given against it on the summary judgment application does not prevent it running a counterclaim in any event - after all, a counterclaim is not a defence to a summary judgment application.

[24]     I also add this.  The documents in this case included all the evidence that had been placed before the court on the summary judgment application.  I have been able to form a view whether this would have been an appropriate case for equitable set- off.   The test for equitable set-off is found in Grant v NZMC.4    In delivering the decision of the Court of Appeal, Somers J said:

The principle is, we think, clear.  The defendant may set-off a cross-claim which so affects the plaintiff’s claim that it would be unjust to allow the plaintiff to have judgment without bringing the cross-claim to account.  The link must be such that the two are in effect interdependent:  judgment on one cannot fairly be given without regard to the other; the defendant’s claim calls into question or impeaches the plaintiff’s demand.   It is neither necessary, nor decisive, that claim and cross-claim arise out of the same contract.

[25]   In this case, the reseller agreement does not have a no set-off clause. Nevertheless I regard the claims by PTC for non-payment of the debt as not being interdependent with the claims that PDS was raising in opposition.  In my view, there would be no injustice in allowing PTC to recover payment for the actual supplies made, which were uncontested, while leaving the parties free to litigate over the contested issues for the alleged breach of the maintenance agreement plus the alleged claims of unconscionable conduct.   When PDS gave its withdrawal on 30 August

2012, it simply recognised that it could not hope to win its arguments for equitable set-off.

[26]     That means that the matters now raised could not have been run as defences in the original proceeding and cannot be proper matters for an alleged substantial dispute under s 290(4)(a), but they still remain live issues under s 290(4)(b) as matters of counterclaim or cross-demand.

[27]     Since judgment was given, PDS has not lodged any counterclaim in New Zealand but it still remains open to it to issue its own independent proceeding against PTC.

Merits of the alleged counterclaims and cross demands

[28]     Now to assess the merits of those alleged counterclaims.  The test is that PDS must show, in the words of the Court of Appeal in Covington Railways Ltd v Uni- Accommodation:5 “clear and persuasive grounds” for its counterclaim.  I am sure that the Court of Appeal chose those words wisely, because it would be alive to the tendency for insolvent companies faced with demands that they cannot resist, to resort to imaginative counterclaims against their creditors to stall the claims for payment.

[29]     In  Industrial  Group  Ltd  v  Bakker,6   the  Court  of Appeal  offered  helpful guidance on applications under s 290 of the Companies Act. The Court said:7

[24]  We  note  that  the  statutory  scheme  is  for  applications  to  set  aside statutory demands to be a summary proceeding. The application must be made  within  10  working  days  of  the  date  of  service  of  the  demand: s 290(2)(a). No extension of time may be given: s 290(3). It follows that it would be unusual for the High Court to engage in detailed analysis of the merit of any counterclaim, set off or cross demand. The section calls for a prompt judgment as to whether there is a genuine and substantial dispute. It is not the task of the Court to resolve the dispute. The test may be compared with  the  principles  developed  in  cognate  fields  such  as  applications  to remove  caveats, leave to appeal  an  arbitrator’s award  and  opposition to summary judgment.5

[25] The approach required by the “appearance” test in s 290 is a review with  a  low  threshold.  The  tight  time  constraints  distinguish  the  s 290 discretion  from  that  to  be  exercised  on,   say,  a  summary  judgment application, where the presence of complex legal issues is not necessarily a bar to a remedy. As with leave to appeal an arbitrator’s award, the hearing should, in the normal course, be short and to the point, and the judgment likewise.

Correctly, the Court of Appeal noted that applications under s 290 must be made within a confined time frame.  There are only 10 working days in which to mount an

application.

5      Covington Railways Ltd v Uni-Accommodation [2001] 1 NZLR 272, 275.

6      Industrial Group Ltd v Bakker [2011] NZCA 297; (2011) PRNZ 413.

7      At [24]-[25].

[30]     In this case, however, I bear in mind that the issues which PDS wishes the court to consider have been live issues between the parties for much more than those

10 working days.  They have been before the parties from the time that PTC began its summary judgment application.  PDS has had extended time in which to prepare the evidence required to be able to show that it does have counterclaims on clear and persuasive grounds.

Claim under maintenance agreement

[31]     The matter is pleaded in the statement of defence filed on 2 August 2012. Mr Staka deposed to it in his affidavit of the same date.  Mr Staka says that in about December 2004 PTC and PDS entered into an oral agreement which was in addition to the reseller agreement.  This agreement was about the supply of maintenance in relation to PTC’s software products sold to PDS’s New Zealand customers.  These maintenance services were said to comprise access to PTC’s website to enable PDS and its customers to download new versions of PDC’s software, access to an 0800 number for software support, and access to PDS staff by telephone for that software support.

[32]     Mr Staka’s complaint essentially is this:  when the reseller agreement expired, that meant that PDS lost access to PTC’s website, with the result that PDS and its customers could no longer download new versions of PTC’s software, there was no longer access to software support, and there was no software support forthcoming from PTC to enable PDS to service its customers.   There is nothing within the documents  that  shows  what  the  amount  of  PDS’s  claim  might  be.    Mr Staka’s evidence is short on the circumstances in which this alleged agreement was made. He simply says that there was an oral agreement made in or about December 2004. He does not say who within PDS made the agreement – although I might surmise that it could have been himself – nor does he say with whom the agreement was made in PTC.

[33]     That broad general allegation has caused difficulties for PTC because they have not been able to identify who within the organisation could have made the agreement.  Mr Ruddy of PTC has made enquiries, but I bear in mind that Mr Ruddy

is in Massachusetts.   While I accept he may have made enquiries in good faith I cannot be confident that he is bound to have contacted every potential person who may have had a telephone conversation with someone inside PDS in 2004. Nevertheless, the very fact that PTC is unable to mount an effective answer to this allegation merely shows the shortcomings of the allegations made by PDS.  PDS has simply made an allegation which is not verifiable one way or the other.

[34]     Mr Ruddy makes the point that it is PTC’s practice with such agreements to ensure that they are in writing so that the arrangements between the parties are properly documented and recorded.  In saying that he is simply reflecting sensible business practice.  You would expect bodies dealing with each other internationally when making arrangements to endure over a long term, particularly where one body

– PTC – could well have changes in personnel, would take steps to document their arrangements so that there could not be any doubt what the arrangements were.

[35]     It is striking that Mr Staka is not able to place before the court any documents evidencing  this  oral  maintenance  agreement.     I  would  expect  him  to  have documented the arrangements so that he would have some record to refer to if the matter came up for consideration downstream.

[36]     Moreover, Mr Ruddy also points out that the reseller agreement in force at the time – the 2003 reseller agreement – has an entire agreement clause and also has provisions that there be no variations to the reseller agreement except in writing. Mr Ruddy  also  makes  the  point  that  everything  that  Mr  Staka  says  was  to  be supplied under this oral maintenance agreement was already provided as part of the services to be provided under the reseller agreement.

[37]     Faced with those matters, I see no basis for the claim of an oral maintenance agreement of the sort claimed by Mr Staka.   The reseller agreements defined the parties’ relationship, and defined it on the basis that there were to  be no other documents setting the terms of that relationship except if they were recorded in writing and signed by the parties.   Mr Staka’s claims of an oral maintenance agreement are simply matters of assertion which are unsubstantiated.  I therefore find

that PDS has not made out, on clear and persuasive grounds, any basis for the oral maintenance agreement asserted.

[38]     If there were such an oral maintenance agreement, there is a question whether it  could  survive  the  expiry  of  the  reseller  agreement.     Obviously  the  two arrangements were to  work together.   Mr Staka simply deposes that  it was his understanding that the oral maintenance agreement would not expire with the reseller agreement, but he offers nothing more than that to show why it should survive.  The maintenance arrangements that he describes were obviously intended to work hand- in-hand with the reseller agreement.  If the reseller agreement were to expire under those terms, I see no reason why the maintenance agreement he alleges should not also expire at the same time.

[39]     Finally, there is the question of quantum of the claim by PDS.  There is no evidence as to what monetary relief PDS could claim for breach of this maintenance agreement.  To paraphrase s 290(4)(b) somewhat, it is necessary for the counterclaim to exceed the amount of the statutory demand, while making an allowance for the prescribed sum of $1000.   There is no evidence to show that the claim that PDS might want to assert does exceed the amount of the judgment.   PDS has also not made out its claim on that basis.

[40]     Accordingly,  I conclude that the first head of counterclaim has not been proved to the standard required by the Court of Appeal in the Covington case.

Claim for unconscionable conduct in Australian courts

[41] The second matter is the alleged breach of s 51AC of the Trade Practices Act. [42] This is a claim under a foreign law. Foreign law is a question of fact and, as

such, needs to be proved.   Section 144 of the Evidence Act does relax the requirements for proof of foreign law.  For a case like this I would not necessarily expect  PDS  to  instruct  an Australian  lawyer  to  provide  expert  testimony  as  to Australian law.  It is adequate for PDS to rely on the kind of materials referred to in

s 144 such as copies of statutory provisions, copies of case law and, if appropriate, articles by learned commentators.

[43]     PDS has provided a decision of the Federal Court of Australia, Australian Competition and Consumer Commission v Allphones Retail Pty Ltd.8 That case gives guidance to the meaning that the Australian courts have given to the word “unconscionable” when used in the Trade Practices Act.

[44]     Counsel has not provided a copy of the section itself.  There is, for me at any rate, uncertainty as to how the section does work in practice.  I bear in mind that this is a cause of action established by statute in Australia.   I am not aware of any corresponding provision under New Zealand law.   To deal with a claim under a statutory cause of action, I would need assistance to understand how this claim does operate in practice.   It is not safe to make any assumptions about such a cause of action in the absence of evidence as to Australian law and practice.  In particular, I do  not  know  how  this  provision  operates  when  there  are  contractual  relations between the parties, or there are actions which the parties might take which might be governed by the terms of their contract.  I am simply left with a lingering sense of uncertainty about this claim.

[45] There is also uncertainty whether an Australian court would accept that PDS would be able to bring a claim in Australia under the statute. PDS is a New Zealand company. The unconscionable conduct it accuses PTC of are steps taken to drive it out of the New Zealand market. PTC is based in Massachusetts, but also has an office in Hong Kong. There seems to be little if any evidence of any conduct by PTC in Australia on which an Australian court could seize to assume that the Trade Practices Act is engaged. Again, that would be a matter on which there should be some evidence given through the liberal provisions of s 144 of the Evidence Act which could assist the court in understanding whether such a claim could be heard in

Australia.

8      Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2)

[2009] FCA 17.

[46]     There are further difficulties for PDS.  The reseller agreement in force at the end of 2010, which expired on 30 November 2010, has an exclusive jurisdiction clause requiring disputes to be heard in Auckland.  PTC invoked that clause to resist the application to stay the proceeding in this court.  It could also rely on that same clause to seek an anti-suit injunction to prevent PDS bringing proceedings against it in Australia.  The approach of the courts is to enforce exclusive jurisdiction clauses unless there are very strong reasons why they should not be.

[47]     Corresponding  difficulties  could  arise  in Australia.    An Australian  court would be asked to assume jurisdiction over Parametric Technology Corporation, a foreign corporation, which apparently has no place of business in Australia and has not  apparently  submitted  to  the  jurisdiction  of  the  Australian  courts.    So  an Australian court would have to consider whether it should assume jurisdiction over a foreign company in respect of actions it has taken against a New Zealand company. The test for Australian courts to issue proceedings out of the jurisdiction is not the same test in New Zealand.   I understand that the Australian courts run a “clearly

inappropriate” test.9    Again there has been no evidence to show that PDS has an

arguable case under that test that it would be able to mount proceedings in Australia and persuade the Australian courts to allow proceedings to be taken against PTC in respect of matters that bear on a dispute in relation to PDS in New Zealand.

[48]     There is also the question that if the Australian statute generally gives PDS a good cause of action against PTC, why it has not actually brought proceedings relying on that cause of action here in New Zealand, which is the place where the parties agreed that their disputes should be litigated.  One possible response to that is that because there is not a corresponding cause of action in New Zealand then the matter might not survive the double actionability rule under Phillips v Eyre.10    But I regard it as seriously arguable that the test in Philips v Eyre may be overruled one day.

[49]     The reality is  that  there seems  to  be no  real substance in  the claims of unconscionable conduct as forming a basis to resist payment.  It is striking that PDS

9      Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538.

10     Phillips v Eyre (1870) LR 6 QB 1.

has  not  actually filed any proceedings  against  PTC,  either in Australia or New Zealand.   It has simply continued to dangle the possibility that a claim might be brought if the ACCC does not take up the claim itself.   It is tactics - dangling a counterclaim without seriously bringing it - that are the hallmarks of delaying tactics by a debtor who is simply looking for excuses not to pay debts that have fallen due.

[50] I conclude that PDS has not proved a viable case under s 51AC of the Trade

Practices Act to the required standard.

Section 290(4)(c)

[51]     PDS  also  asks  the  court  to  exercise  its  discretion  in  its  favour  under s 290(4)(c) on other grounds.  It says that the matters of discretion it would want to have taken into account are PTC’s alleged unconscionable conduct.  I do not regard that as raising something new that has not already been raised under s 290(4)(b). Simply restating arguments that were unsuccessful under other heads does not give a basis for setting aside for other grounds.

Solvency of PDS

[52]     The question of PDS’s solvency has arisen.   It is clear from Mr Staka’s evidence that PDS does not presently have the funds to satisfy the judgment.   He holds out the possibility that if its claims against PTC were successful then it would not be insolvent.  However, as I do not regard those claims as capable of being taken seriously,  that  goes  nowhere towards satisfying me that  the company is  in  fact solvent.

Outcome

[53]     The general purpose of applications under s 290 is to consider whether it would be unjust to require a company to comply with a statutory demand so as to give rise to the presumption of insolvency if it does not.   Looking at the matter overall, I do not regard it as unjust that PDS be required to comply with the statutory

demand and if it is unable to do so to be presumed to be insolvent.  Accordingly, I dismiss the application.

[54]     Under s 291 I make an order extending the time for PDS to comply with the statutory demand until 8 February 2013.  If PDS does not comply with the demand by that date then Parametric Technology Corporation will be able to file an application for PDS to be put into liquidation.

[55]     I make an order for costs in favour of Parametric Technology Corporation against PDS on the 2B basis.  I invite counsel to confer as to costs. If they are unable to reach agreement then memorandum may be filed.

...........................................

R M Bell

Associate Judge