Anozira Pty Ltd v Kathleen Hunt [2002] ACTSC 75 (2 August 2002)

Last Updated: 5 August 2002

Anozira Pty Limited v Kathleen Anne Matthews Hunt [2002] ACTSC 75 (2 August 2002)

CATCHWORDS

COMPANIES - Statutory demand - application to set aside - genuine dispute - debt arises from deed - claim to set deed aside as unconscionable.

Corporations Act 2001, s 459G, s 459H(1), s 459J, s 728, s 739

Barton v Armstrong [1973] UKPC 2; [1976] AC 104

Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447

Cornick v Brains Master Corporation (1996) 14 ACLC 269

Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40

Eng Mee Yong v Letchumanan [1980] AC 331

Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) Ltd (1992) 29 NSWLR 260

Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785

Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395

Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621

Pao On v Lau Yiu [1993] UKHL 3; [1979] 3 All ER 65

South Australia v Wall (1980) 24 SASR 189

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 147 ALR 444

No. SC 300 of 2002

Coram: Master T. Connolly

Supreme Court of the ACT

Date: 2 August 2002

IN THE SUPREME COURT OF THE )

) No. SC 300 of 2002

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ANOZIRA PTY LTD

Plaintiff

AND: KATHLEEN ANNE MATTHEWS HUNT

Defendant

ORDER

Coram: Master T. Connolly

Date: 2 August 2002

Place: Canberra

THE COURT ORDERS THAT:

1. The application is dismissed

2. Plaintiff to pay the Defendant's costs

1. These are two applications by the plaintiff company to set aside a statutory demand pursuant to s 459G of the Corporations Act 2001. There were two creditors statutory demands issued on 6 May 2002, each asserting that the plaintiff company, which has its registered address in Canberra in the Australian Capital Territory, was indebted to Mr Peter Hunt and Mrs Kathleen Hunt. The nature of the debt in each case is the same, being described as a "debt due pursuant to a Deed of Release dated 25 January 2002" between the plaintiff company and the creditor. The deed in the case of Mr Hunt refers to a debt of $90,000 and the deed in the case of Mrs Hunt refers to a debt of $60,000. The deeds of release, duly executed by the parties, were in evidence before me. The issues in both cases, save for the quantum of the debt, were common, and these reasonable are applicable to both applications.

 

2. The application to set aside the statutory demands were lodged on 28 May 2002 within 21 days of service of the statutory demand. The applications were taken out by the company through its Canberra solicitors, and were served on the defendants, who reside in Melbourne. They instructed the Melbourne office of Freehills to act on their behalf, and there were some complications in the filing of affidavits due, it seems, with problems encountered by the Melbourne office in drafting material in accordance with the ACT rules. As the practice of law in Australia is increasingly becoming national efforts are being made by Courts of the Commonwealth, State and Territories to harmonise and unify procedural rules to facilitate national practice, but there remain local requirements. I formed the view that the irregularities went only to matters of form, and on 5 July 2002 ordered that the time for the defendants to serve their notice of appearance and supporting affidavits be extended to 25 June 2002. The matter came on for substantive hearing on 26 July 2002.

 

3. There was an issue raised by the plaintiffs that the creditors original notice of demand was bad because it was not served at the appropriate address. I do not think that this affects the validity of the demand. Where a defect is asserted in the form of the demand, it should only be set aside for this reason if "substantial injustice will be caused unless the demand is set aside" (Corporations Act 2001 s 459J). In this case it is a matter purely of form and not of substance, and I am not satisfied that the alleged defect in the notice is itself a ground to set aside the demand (Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 147 ALR 444)

 

4. It was also asserted that the defendant was not entitled to commence proceedings for enforcement of the deed because they did not comply with a clause in the deed of release relating to civil proceedings. It seems to me that an alternative dispute resolution clause in a deed relating to future proceedings does not derogate from a creditors right to enforce a debt by way of a statutory demand. Authority for the proposition that a statutory demand is not a "proceeding" is to be found in Cornick v Brains Master Corporation (1996) 14 ACLC 269 per Whitlam J.

 

5. A statutory demand may be set aside where a Court is satisfied that there is "a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates", or that there is an offsetting claim (Corporations Act 2001 s 459H(1)). No issue of an offsetting claim arises in this case. In the usual case a company will be disputing the existence or genuineness of the alleged debt. In the present case, the evidence is that the debt is due in each case pursuant to a deed. The evidence of the deed which is before me would normally then be the end of the matter. The plaintiff company asserts, however, that there is a genuine dispute in that the deed was entered into by reason of coercion, and that the plaintiff company ought have the opportunity to go to court to have the deed set aside as being unconscionable. It is therefore necessary for me to make certain findings of fact in relation to the course of conduct leading to the making of the deed