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P J McCarthy & Sons Pty Ltd v QPaint Pty Ltd

 

[2013] QSC 39

 

 SUPREME COURT OF QUEENSLAND

 

CITATION:

P J McCarthy & Sons Pty Ltd v QPaint Pty Ltd [2013] QSC 39

PARTIES:

P J MCCARTHY & SONS PTY LTD
ACN 137 498 572
(applicant)
v
QPAINT PTY LTD
ACN 088 427 712
(respondent)

FILE NO/S:

11378 of 2012

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED EX TEMPORE ON:

31 January 2013

DELIVERED AT:

Brisbane

HEARING DATE:

31 January 2013

JUDGE:

Atkinson J

ORDER:

  1. Pursuant to section 459G(1) of the Corporations Act 2001 (Cth) the respondent’s statutory demand dated 5 November 2012 be set aside.
  2. The respondent pay the applicant’s costs of and incidental to this application to be assessed on a standard basis.

CATCHWORDS:

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – GENUINE DISPUTE AS TO INDEBTEDNESS – ASSESSING GENUINENESS – GENERALLY – where the applicant applied to set aside a statutory demand pursuant to s 459G(1) of the Corporations Act 2001 (Cth) – where the applicant alleged that it was not the contracting party with the respondent and so not liable for the debt – where the respondent objected to the affidavit on various grounds – whether the application to set aside the statutory demand should be allowed

Corporations Act 2001 (Cth), s 459G(1)

David Grant and Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265, applied
Graywinter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 21 ACSR 581, applied

COUNSEL:

M K Stunden for the applicant
P Hackett for the respondent

SOLICITORS:

Flehr Law for the applicant
Wilson Lawyers for the respondent

 

HER HONOUR:  This is an application to set aside a statutory demand pursuant to s 459G(1) of the Corporations Act 2001.  The statutory demand was dated 5 November 2012 and served on 6 November 2012.

 

Within 21 days after service of the statutory demand, the application was filed together with an affidavit by a solicitor acting on behalf of the applicant.

 

It has been apparent since David Grant and Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, as explained in great detail by Sundberg J in Graywinter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund (1996) 21 ACSR 581, that the application to set aside the statutory demand must be filed and served within time with an affidavit supporting that application.

 

The affidavit which is filed with the application may have other material filed later to add to that material which is found in the affidavit filed within the 21 days.  What is abundantly clear, however, is in order for the Court to have jurisdiction, the affidavit filed within the 21 day period must sufficiently set out the facts upon which the applicant intends to rely to show that a genuine dispute exists.

 

What is sufficient, and what is admissible, has been the subject of various judicial exegesis since that time.  The affidavit which has been filed in this case was sworn by the solicitor for the applicant.  The grounds of the dispute are amply set out in that affidavit, and the material attached to it.

 

The applicant alleges that it was not the contracting party with the respondent and so is not liable for the debt, and that is the basis on which the demand should be set aside.  I am not, of course, commenting on the merits or otherwise of that except to say that the dispute is raised and is not without some support in the documents which have been provided.

 

The respondent objects to that affidavit on various grounds.  The first is that some of the material exhibited is material which he obtained from records maintained by the applicant. As such, of course, they would be business records of the applicant and therefore admissible in their own right.

 

Mr Hackett for the respondent points out that if the argument that the applicant is not the contracting party but rather Mr McCarthy personally, then it is not correct to say that they are business records of the applicant, notwithstanding that they may be records maintained by the applicant.  Ironically, Mr Hackett's argument lends further to support to the dispute raised by the applicant as to the correct identity of the debtor.

 

The other objections to admissibility also concern documents that are business records of the applicant to which, in my view, the solicitor can properly depose.  An objection to the exchange of correspondence between the parties' solicitors which sets out the nature of the dispute cannot, in my view, be objected to in an application of this type, and the objection that a comment is made as to the effect of the documents is also, in my view, not maintainable in an application of this type which is, on the authorities, required to be supported by an affidavit which alerts the claimant to the nature of the case the company will seek to make in seeking to have the statutory demand set aside.

 

True it is that the affidavit must be in admissible form but what is admissible in an application of this type is, in my view, comprehended by what has been put in this affidavit, which is an affidavit sworn by the solicitor for the applicant that includes records from the applicant and the exchange of correspondence between solicitors which, as I have said, quite clearly raises the dispute.  It is not necessary for the Court to draw some long bow or inference as to the nature of the dispute.  The nature of the dispute is quite clearly set out.

 

In those circumstances, it is unnecessary, in my view, for me to decide the interesting question of whether or not such an application is interlocutory or final, which has been the subject of various views expressed by various Courts.  It merely suffices to say that the affidavit in the form in which it was admitted in this case sufficiently raises the dispute in admissible form such that the application falls within the jurisdiction of this Court to determine.  The affidavit crosses the threshold, to use the term used by Justice Sundberg in Graywinter, and may be supplemented by further material.  That further material on which the applicant wishes to rely also shows that there is a genuine dispute between the parties.

 

In these circumstances, I propose to allow the application to set aside the statutory demand.

 

Mr Hackett has argued that there should be no order as to costs. 

 

...

 

HER HONOUR:  In my view, given that the nature of the dispute has always been apparent, the application to set aside the statutory demand was bound to succeed, and there is no reason why costs should not follow the event.

 

...

 

HER HONOUR:  The respondent should pay the applicant’s costs of and incidental to the application on a standard basis to be assessed.

 

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Editorial Notes

  • Published Case Name:

    P J McCarthy & Sons Pty Ltd v QPaint Pty Ltd

  • Shortened Case Name:

    P J McCarthy & Sons Pty Ltd v QPaint Pty Ltd

  • MNC:

    [2013] QSC 39

  • Court:

    QSC

  • Judge(s):

    Atkinson J

  • Date:

    31 Jan 2013

Litigation History

No Litigation History

Appeal Status

No Status