Mayfair Realty Pty Ltd v Glen[2011] QSC 77

SUPREME COURT OF QUEENSLAND

1. DALTON J:  This is an application pursuant to s 459G of the Corporations Act 2001 to set aside four statutory demands.  The applicant acts through its director, Mr Clarke.  He is not a lawyer. 

2. Section 459G of the Corporations Act 2001 provides:

“(1)A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2)An application may only be made within 21 days after the demand is so served.

(3) An application is made in accordance with this section only if, within those 21 days:

(a)  an affidavit supporting the application is filed with the Court; and

(b)  a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.”

3. The first point made on behalf of the respondents is that the present application was not made within 21 days after the statutory demands were served. The material shows that the statutory demands were served on 16 September 2010. The applicant therefore had until 7 October 2010 to make application to set those demands aside. On 6 October 2010 Mr Clarke on behalf of the applicant personally delivered an affidavit intended to support an application pursuant to s 459G of the Corporations Act 2001 but did not serve any such application.  On 7 October 2010 the solicitors acting for the respondents sent a facsimile transmission to the applicant requesting a copy of the originating application relevant to the affidavit which had been served.  Unfortunately for the applicant, Mr Clarke sent the respondents’ solicitors the originating application on 8 October 2010. 

4. There are other difficulties with the form of the material served on behalf of the applicant on 6 and 8 October 2010 which I need not canvas here. On the best case for the applicant the originating application was not sent to the respondents’ solicitor until 8 October 2010. The respondents are correct in submitting that this is too late. As a result of the language of s 459G(2) of the Corporations Act 2001 I have jurisdiction only if both the originating application and supporting affidavit in relation to the statutory demands was served by 7 October 2010.  They were not and that is the end of it.  I have no power to either extend time or treat the late arrival of the originating application as an irregularity under s 1322 of the Corporations Act 2001.^[1]  For that reason the application must be dismissed.

5. The respondents also urged that on the material put forward by the applicant there was not genuine dispute about the existence or amount of the debts the subject of the four statutory demands within the meaning of s 459H(1) of the Corporations Act 2001. It is strictly unnecessary for me to determine this point in light of my finding as to the application having been made out of time.  However, as it was argued. I will express my views on it.  The applicant admits that each of the respondents advanced an amount of $10,000 to the applicant in May 2008.  The applicant says that there is a genuine dispute as to whether or not these loans are repayable at present.  He says there were never any terms or conditions or expiry dates for the loans.  If that were the only evidence, the loans would be presently payable – Young v Qld Trustees Ltd.^[2]  The material filed on behalf of the applicant with the application shows that the respondents are all shareholders in a company which owns the shares in the applicant.  The applicant says that the purpose of the loans, the subject of the statutory demands, was “advancing the interest of the company”, which I take to be the applicant company.  Each of the respondents swears a short affidavit in which he says that the loan he made to the applicant was to be “short-term”. Mr Knight and Mr Taylor depose to their understanding that their loans were repayable on demand although it was not clear how their understanding could be admissible.  Mr Barley says that he was told the loan would be short term, and in any event would not exceed the term of one year. He produces a written receipt to support this version purportedly signed by Mr Clarke. Mr Clarke accepts that his signature is on the document although he does not accept that the document should be headed in the name of the applicant.   

6. I have regard to the summation of what is a genuine dispute given by McClelland CJ in Equity in Eyota Pty Ltd v Hanave Pty Ltd,^[3] to the effect that the expression genuine dispute connotes a plausible contention requiring investigation and raises much the same sort of considerations as the serious question to be tried criterion which arises on an application for an interlocutory injunction or the removal of a caveat. I have regard to C & E Pty Ltd v Corrigan^[4] where the Queensland Court of Appeal said that while the bar set by s 459G of the Corporations Act is not very high, it is necessary to show that there is a genuine claim as opposed to a claim which is spurious or misconceived.  Once I conclude that there is a genuine dispute it is not for me to embark on any extended enquiry in order to attempt to weigh the merits of the dispute.^[5] 

7. I have given some thought as to whether or not there is a genuine dispute shown, ironically enough, because the respondents swear that the loans were to be “short-term”. In the end, even in combination with the evidence from the applicant, that the loans were to be used for the purposes of advancing the interests of the applicant I cannot see that without more there is material from which it could be argued that there was an implied term that the repayment of the loans would be postponed for a period well in excess of two and a half years. I conclude therefore that there is no genuine dispute shown on the material in relation to any of the amounts which are the subject of the demands.

8. I dismiss the application. I will hear the parties as to costs.