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Elevare Pay Easy Pty Ltd v Cathy Jayne Again Pty Ltd[2021] QSC 303

Elevare Pay Easy Pty Ltd v Cathy Jayne Again Pty Ltd[2021] QSC 303

SUPREME COURT OF QUEENSLAND

CITATION:

Elevare Pay Easy Pty Ltd v Cathy Jayne Again Pty Ltd & Anor [2021] QSC 303

PARTIES:

ELEVARE PAY EASY PTY LTD ACN 634 728 591

(applicant)

v

CATHY JAYNE AGAIN PTY LTD ACN 642 764 903

(first respondent)

AND

CATHY JAYNE HOGBEN

(second respondent)

FILE NO/S:

BS 11451 of 2021

BS 12728 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

18 November 2021

DELIVERED AT:

Brisbane

HEARING DATE:

16 November 2021

JUDGE:

Brown J

ORDER:

The order of the Court is that:

In respect of proceedings BS 11451/21:

  1. 1.The applicant have leave to file the Amended Originating Application dated 15 November 2021.
  2. 2.The first and second respondents be restrained from making an application to wind up the applicant based on non-compliance with the Creditors Statutory Demand dated 9 September 2021 (“Demand”).
  3. 3.The respondents pay the applicant’s costs on a standard basis.
  4. 4.The Demand does not substantially comply with the essential requirements of section 459E of the Corporations Act 2001 and Form 509H under the Corporations Regulations and non compliance with it is insufficient to support an application to wind up the applicant.

In respect of proceedings BS 12728/21:

  1. 5.The creditors statutory demand for payment of a debt dated 13 October 2021 is set aside.
  2. 6.The first and second respondents pay the applicants costs on the indemnity basis.

CATCHWORDS:

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – GENUINE DISPUTE AS TO INDEBTEDNESS

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – FOR DEFECT OR SOME OTHER REASON – SUBSTANTIAL INJUSTICE – where the applicant and first respondent entered into a loan agreement – where the applicant treated the loan agreement as being terminated – where the respondents issued the applicant with two statutory demands – where the applicant seeks to set aside the statutory demands

Corporations Act 2001 (Cth) ss 459G, 459H, 459E, 459J, 459S

Corporations Regulations 2001 (Cth)

Service and Execution of Process Act 1992 (Cth) s 16

David Grant & Co v Westpac Banking Corporation (1995) 184 CLR 265, cited

Elan Copra Trading Pty Ltd v JT International Pty Ltd (2005) 226 ALR 349, considered

Elliott Harvey Securities Ltd v Raynel & Anor [2015] QSC 212, cited

First Line Distribution Pty Ltd v Paul Whiley (1995) 18 ASCR 185, cited

Re Beralt Pty Ltd [2001] 1 Qd R 232, considered

Re International Materials v Technologies Pty Ltd (1993) 47 FCR 226, cited

Re Towncars Franchises Sydney Pty Ltd [2013] NSWSC 1235, cited

SP Hay Pty Ltd v David Gray & Company Pty Ltd (2019) 133 ACSR 504, considered

Sustainable Organics (Wooshaway) Pty Ltd v Ranger and Loaders Pty Ltd [2011] QSC 45, considered

COUNSEL:

L Copley for the applicant

SOLICITORS:

McInnes Wilson Lawyers for the applicant

  1. [1]
    Elevare Pay Easy Pty Ltd (“the applicant”) and Cathy Jayne Again Pty Ltd (“the first respondent”) entered into a loan agreement on 31 August 2021 by which the applicant agreed to lend the first respondent $300,000.00. The second respondent, Ms Cathy Hogben (“second respondent”), is the sole director and secretary of the first respondent. The loan agreement provided that the monies were to be paid within two days of the date of the agreement, provided that the borrower provided to the lender a properly executed copy of the loan agreement, the mortgage in registrable form and any other document required for the registration of the mortgage (as requested by the lender). The security that was proposed to be provided was property of the second respondent’s mother. The lender required that the mother of the second respondent  had to comply with the VOI process which is said to be required by the South Australian Land titles office.[1] That included a verification process in relation to the identity and signature of the mortgagor. The second respondent disputes that such a process was required. In any event, the applicant’s solicitor subsequently notified the first respondent on 7 September 2021 that the applicant was not prepared to proceed further with the provision of funding, as it was not satisfied with the terms of the documents submitted and treated the negotiations as being at an end and the loan agreement, if otherwise binding, was treated by the applicant as terminated.
  2. [2]
    The applicant was subsequently served with two statutory demands by one or both of the respondents.  The first dated 9 September 2021 claimed a debt of $300,000.00 (“first demand”).  The second dated 13 October 2021 claimed a debt of $98,452.84 (“second demand”).
  3. [3]
    The applicant applied to set aside the first demand pursuant to s 459G of the Corporations Act 2001 (Cth), which is the subject of proceedings BS 11451/21.[2]  However, the applicant failed to attach the notice prescribed by s 16 of the Service and Execution of Process Act 1992 (Cth) to the originating application.  The applicant accepted that the failure to attach such a notice meant that service on the respondents was not effective and therefore, there was not a proper application before the Court to set aside the demand within the twenty-one days required by s 459G of the Corporations Act 2001 (Cth).[3]  The applicant sought leave, which was given, to amend the originating application to include relief of the kinds ordered Re Beralt Pty Ltd ,[4] seeking:
    1. (a)
      a declaration that the statutory demand does not substantially comply with the essential requirements of s 459E of the Corporations Act 2001 (Cth) and Form 509H under the Corporations Regulations 2001 (Cth), and non-compliance with it is insufficient to support an application to wind up the applicant; and
    2. (b)
      an order restraining the respondent from making an application to wind up the applicant. 
  4. [4]
    The proposed amended application was provided to the respondent on 9 November 2021.[5]
  5. [5]
    A notice of appearance was provided by the second respondent, and who appears as director of the first respondent.[6]
  6. [6]
    An application was also made to set aside the second demand, which is the subject of proceedings BS12728/21. The application to set aside the statutory demand was made and served within the requisite time under s 459G of the Corporations Act 2001 (Cth).

Service

  1. [7]
    Neither of the respondents appeared at the hearing, either in person or by telephone. 
  2. [8]
    Evidence of the service of the first and second respondents of the application to set aside the first demand, together with a supporting affidavit, was provided by Mr Giannetta. As set out above, a notice of appearance was entered by the second respondent on her own behalf and she appears as director of the first respondent.
  3. [9]
    Affidavit evidence was provided by Mr Steven Treloar, Ms Bianca Ayres and Mr Stephen Fox as to service of the application to set aside the second demand, together with the supporting affidavit on the first and second respondent. 
  4. [10]
    There is no doubt Ms Hogben was aware of the hearing.
  5. [11]
    Ms Hogben was apparently going to appear before the Court, by telephone when the application was originally returned before the Court, on 15 November 2021, but did not appear at the callover. The matter was stood down to a later time but there was no appearance by telephone. Subsequently, Ms Hogben texted the applicant’s instructing solicitor, Mr Fox, and emailed the Court indicating that she was caught up in Court in South Australia. She emailed an affidavit to the Court. The matter was adjourned to 16 November 2021 to allow the respondents to appear.
  6. [12]
    However, despite the respondents being notified of the adjournment of the Court to 16 November 2021, the respondents again did not appear by telephone, although the respondents had been provided with the telephone details to do so. As a result of being satisfied that service had been effected upon the first and second respondents, I proceeded to hear the applications.

First Demand – Proceedings BS 11451 of 2021

  1. [13]
    Given that the applicant accepted that the application to set aside the first demand had not been made, as required by s 459G of the Corporations Act 2001 (Cth), the applicant was precluded from seeking to set aside the statutory demand under s 459H or s 459J of the Corporations Act 2001 (Cth).[7] 
  2. [14]
    The applicant, however, seeks to rely on equitable relief restraining the respondents from pursuing the winding up in reliance on non-compliance with the creditor’s statutory demand dated 9 September 2021 on the basis that the statutory demand was defective and it would be unconscientious for the second respondent to rely on her entitlement to file a winding up application. There is evidence supporting the fact that Ms Hogben has expressed an intention to wind the applicant up.
  3. [15]
    The applicant submits that it would be unconscientious for the second respondent to rely on her entitlement to file a winding up application on the basis that:
    1. (a)
      the applicant is not indebted to either of the respondents for the amount described in the demand or at all;
    2. (b)
      the demand is an abuse of process;
    3. (c)
      the demand is not a statutory demand within the meaning of section 459E of the Corporations Act 2001 (Cth); and
    4. (d)
      the affidavit accompanying the first demand was not an affidavit which verified the debt described.

Legal Principles

  1. [16]
    In Re Beralt Pty Ltd,[8] the interstate service of an application under s 459G of the Corporations Act 2001 (Cth) for the setting aside of a statutory demand did not comply with the Service and Execution of Process Act 1992 (Cth). The purported statutory demand failed to inform the debtor that a failure to have it set aside within twenty-one days after service would enable the creditor to apply to a Court to have the debtor wound up. In his Honour’s view, the statutory demand could have been set aside as a result of the deficiency under s 459J and was not a mere defect. Further, it was not until just prior to the expiry of the twenty-one day period that the respondent informed the applicant of its registered office where service was required to be effected.  Ambrose J also considered that the evidence supported the fact that the applicant had a strongly arguable case disputing the existence and the amount of any debt.  However, while Ambrose J accepted that the Court lacked the jurisdiction to set aside an ineffective statutory demand for want of a valid application under s 459G, his Honour considered that the defect was such as to deprive the debtor company of the notice of the time within which it was entitled to seek to have the demand set aside.  Ambrose J determined that a company would not wind up the applicant, having regard to the defect in the demand. Accordingly, his Honour determined that fact justified making a declaration that the demand did not substantially comply with the essential requirements of the s 459E of the Corporations Act 2001 (Cth), and non-compliance with the demand was insufficient to support a winding up application.  His Honour determined that the applicant have leave to apply for an injunction restraining the making of an application based on such non-compliance if an undertaking from the respondent not to wind up the applicant was not forthcoming. 
  2. [17]
    Re Beralt Pty Ltd was approved and followed in SP Hay Pty Ltd v David Gray & Company Pty Ltd.[9] The application to set aside the statutory demand did not comply with the Service and Execution of Process Act 1992 (Cth) and service was therefore not effected under s 459G of the Corporations Act 2001 (Cth) within the twenty one days required. Dart J, however, found that it would be unconscientious of the defendant to issue winding up proceedings founded on the plaintiff’s failure to comply with its demand. To avoid an obvious injustice, the defendant was enjoined from relying on the plaintiff’s failure to comply with the statutory demand.  Dart J stated that in considering whether or not an injunction should be granted, the question is simply whether, in the circumstances, it would be unconscientious for the defendant to rely on the plaintiff’s failure to comply with the demand in a winding up application.  Dart J considered the question of whether it would be unconscientious for the defendant to rely on the presumption of insolvency created by the right or entitlement gained from the plaintiff’s failure to comply with the demand requires a consideration of the manner in which the right or entitlement was acquired and the injustice the exercise of it would cause the plaintiff. 
  3. [18]
    In SP Hay Pty Ltd v David Gray & Company Pty Ltd,[10] the defendant had served a demand containing an address for service for which valid service in compliance with the Service and Execution of Process Act 1992 (Cth) could never have been effected.  S 459G of the Corporations Act 2001 (Cth) requires an address for service to be provided in the State in which the demand is served, in order to facilitate the tight time limits for making such an application.  The statutory demand did not provide an address in the State in which the demand was served as required by form 509H of the Corporation Regulations 2001 (Cth). Dart J considered a party should not be lightly excused from a failure to comply with the requirement to provide an address for service in the correct State. Dart J followed the decision of Elan Copra Trading Pty Ltd v JT International Pty Ltd,[11] which found that the use of an incorrect interstate address on a statutory demand was a defect, but that the deficiency did not result in the invalidity of the demand for the purpose of the Act.[12]    However, his Honour considered that it was appropriate to grant an injunction following the decision of Ambrose J in Re Beralt Pty Ltd.  The plaintiff contended it had lost the opportunity to have the Court set aside the statutory demand where there was a genuine dispute as to a large portion of the claim.
  4. [19]
    His Honour concluded that it would be unconscientious to allow the defendant the entitlement to rely on the presumption of insolvency in the foreshadowed winding up application, given that his Honour was satisfied that the applicant could establish, on the affidavit material, a genuine dispute and where the applicant had served a statutory demand containing an address for service at which valid service in compliance with the Service and Execution of Process Act 1992 (Cth) could never have been effected. In those circumstances, his Honour found that it would be unconscientious for the defendant to issue winding up proceedings and that it would be appropriate to grant an injunction.  His Honour also considered that the Court could not have granted leave under s 459S of the Corporations Act 2001 (Cth), as its ability to grant leave is restricted to disputes material to the question of solvency and in practical terms that would usually mean that the debt in dispute is the difference between the company being solvent or insolvent which was not the case there.
  5. [20]
    In Sustainable Organics (Wooshaway) Pty Ltd v Ranger and Loaders Pty Ltd,[13] Justice Philippides considered the decision of Re Beralt Pty Ltd amongst other decisions.  In that case, the applicant had sought a declaration that the statutory demand was not a statutory demand for the purposes of part 5.4 of the Corporations Act 2001 (Cth) and sought injunctive relief to restrain the party responsible for issuing the statutory demand from relying upon the statutory demand.  Her Honour determined that the failure to specify in the statutory demand an address for service within the State was an error which rendered the statutory demand defective but did not have the result that the document which, in its form, purported to be a statutory demand was incapable of satisfying the description of a statutory demand for the purposes of s 459E of the Corporations Act 2001 (Cth).  Her Honour did not consider that the applicant had shown the statutory demand was made in circumstances where there had been an abuse of process, nor did the affidavit material depose to some substantial injustice which had resulted from the defect in the statutory demand justifying injunctive relief.

Consideration

  1. [21]
    The applicant submits it would be unconscientious for the second respondent to rely on her entitlement to file a winding up application for a number of reasons. 

No debt

  1. [22]
    The applicant contends that the first demand does not pertain to a debt and that the applicant is not indebted to either of the respondents for the amount described in the first demand or at all.
  2. [23]
    The statutory demand claims a debt of $300,000.00. It is said to be “as prescribed by the said executed mortgage and agreed upon as a non-disputable debt.”  The mortgage is a document which purports to be signed by Ms Judy Anne Staker.[14] The borrower is identified as “Cathy Jayne Again Pty Ltd”. The moneys secured include those advanced to the borrower. It is not signed by the applicant. Moreover, there is no provision providing for the proposed advance to be an “undisputable debt”. To the extent the moneys to be advanced are provided for in the loan agreement between the applicant and the first respondent dated 31 August 2021, that provides that the borrower is Cathy Jayne Again Pty Ltd.  The second respondent and Ms Stoker are nominated as guarantors in relation to that agreement.  According to the terms of the loan agreement, the first respondent was to provide the applicant with, inter alia, a mortgage in registerable form over a property owned by Judy Ann Staker, her mother, and any other document required for registration of the mortgage (as requested by the lender).  The applicant was only required to advance the funds if and when the preconditions of the advance were satisfied.  The applicant contends that the preconditions were not satisfied[15] on the basis of Ms Judy Staker not engaging in the VOI process. The applicant also contends that the negotiations for the loan came to an end and to the extent there was a binding agreement, it terminated the loan agreement on the 7 September 2021. The applicant’s evidence establishes that there is a genuine dispute as to whether the preconditions required to be fulfilled by the borrower set out in part 5 of the loan agreement were ever satisfied, such that no obligation to advance the monies ever arose. More fundamentally, the evidence does not support there being any debt being due and payable at all. A failure to provide the monies the subject of the loan would not give rise to a debt owing to the borrower and certainly not to the guarantor.  At its highest, the only claim for failing to advance the monies in question by the first respondent could be a claim for damages arising from a breach of contract.  It is not a claim for debt.  A claim for unliquidated damages is incapable of supporting a statutory demand.[16] Where the debt alleged does not exist and the claim the subject of a statutory demand is one for an unliquidated sum, that would provide a proper basis upon which a statutory demand would be set aside.[17]
  3. [24]
    The statutory demand is thus misconceived and does not comply with s 459E of the Corporations Act 2001 (Cth) and would be liable to be set aside had the application to set aside been served within the time limits of s 459G of the Corporations Act 2001 (Cth), both on the basis of a genuine dispute having been established in relation to the alleged debt and there is no debt due and owing justifying the issuing of the first demand at all. There is no question that in those circumstances a substantial injustice would arise if reliance could be placed upon the statutory demand to give rise to a presumption of insolvency and the applicant being prevented from relying on the fact that there is no debt at a winding up due to the failure to comply with the Service and Execution of Process Act 1992 (Cth).

Abuse of Process

The second ground upon which the applicant states that it would be unconscientious for the first respondent to be able to rely on the presumption of insolvency is that there has been an abuse of process.  In that regard, it relies on the fact that the purported debt described in the demand did not exist or is genuinely disputed.  Secondly, there is some evidence raising the genuineness of  the signature of the second respondent’s mother on the mortgage (although Ms Hogben has stated she assisted her mother due to a condition affecting her mother). Thirdly, the applicant contends that the second respondent is using the demand for the collateral purpose of applying to pressure and to harass the applicant.  There is some evidence in support of this claim however, it may be that it is just a misconceived understanding of the first and second respondent. Given my other findings I do not need to consider this matter further.

Defects in the Demand and Affidavit

  1. [25]
    Thirdly, the applicant contends there are a number of defects in the demand,[18] which would give rise to substantial injustice if the demand were not set aside.
  2. [26]
    The first demand omits the warning contained in Form 509H “A failure to respond to a statutory demand can have very serious consequences for a company.  In particular, it may result in the company being placed in liquidation and control of the company passing to the liquidator of the company”.  Further, the first demand did not include any address for service for the alleged creditor in Queensland.  The description of the debt is said to be nonsensical referring to the “said executed mortgage” which is not identified, nor is the purported agreement by which the debt is said to be a “non-disputable debt”.  Further, the demand appears to be issued by the second respondent in her personal capacity although it is executed by the second respondent in her capacity as the director of the first respondent.  As discussed above the second respondent, Ms Hogben, has no relevant claim as a guarantor. 
  3. [27]
    The failure to provide any address for service of the creditor and in particular, to provide an address for service in Queensland where the applicant was served the statutory demand, and to clearly identify the creditor together with the ambiguous and confusing description of the debt and an identifiable basis on which the debt is owed either to one or other creditor or jointly, which were defects raised in the application to set aside the statutory demand and accompanying affidavit of Mr De Pasquale,[19] are defects which give rise to a substantial injustice whether on the busis of the mortgage or some other agreement. The basis on which there is said to be a “non-disputed debt” for the amount the applicant was to advance to the first respondent under the loan agreement is not identified, nor any particulars of the mortgage given. While the accompanying affidavit did provide an address in South Australia, it again suffered from not making clear who was the creditor in question or if both the first and second respondent were creditors, or the basis upon which any debt was owed given it only refers to “a proposed and agreed mortgage” to each of them and whether it was owed jointly or otherwise. It also fails to identify the document by reference to a date or the parties to the agreement. The failure in the first demand to identify the creditor or whether the debt was said to be jointly owed and the basis upon which the debt was owing to either creditor does give rise to a substantial injustice as does the failure to provide any address, particularly where the identity of the creditor is unclear. The defects in the first demand are such that the debtor cannot identify what the debt is based on, who is to be paid, or where or who documents are to be served on. While the failure to give the warning alone would not give rise to a substantial injustice it is a further example of a litany of deficiencies in complying with form 509H.
  4. [28]
    The applicant contends that the defects in the demand are such that had the applicant served the application within time, the Court would have found that the demand should be set aside in accordance with s 459J of the Corporations Act 2001 (Cth) on the basis that because of the defects in the demands, substantial injustice would be caused unless a demand was set aside.  In relation to the defects discussed above, I consider that the defects are such to give rise to a substantial injustice and that the first demand would have been liable to be set side. 

Unconscionable

  1. [29]
    It will be a rare circumstance that the Court will grant injunctive relief, as was granted in Re Beralt Pty Ltd[20] or SP Hay Pty Ltd v David Gray & Company Pty Ltd,[21],given the onerous requirements imposed upon a party to comply with s 459G of the Corporations Act 2001 (Cth). However, the failure to identify any basis upon which a debt was owing, and the fact that the evidence reveals any claim by the first respondent in respect of the proposed advance of $300,000 would sound in damages, such that there was no debt due and owing and therefore the first demand did not comply with the fundamental requirement for issuing a statutory demand under s 459E, means that it would be insufficient to support a winding up. It would not be a matter for which leave could be given to be raised under s 459S of the Corporations Act 2001 (Cth).[22] Further the failure by the respondents to provide an address for service in Queensland resulted in service having to be effected under the Service and Execution of Process Act 2002 (Cth). The application and supporting affidavit did come to the respondents’ attention notwithstanding the fatal non-compliance with the Service and Execution of Process Act 2002 (Cth). The other defects in the first demand identified above are significant and give rise to a substantial injustice. As set out above, there is substantial evidence supporting a genuine dispute about the existence of the debt even if the $300,000 could be characterised as a dispute.
  2. [30]
    I am satisfied in the particular circumstances of this case where Ms Hogben has stated her intention to pursue the applicant and bring a winding up application that injunctive relief should be granted to avoid injustice. Given Ms Hogben’s public postings about the applicant due to its failure to provide the advance of monies, the applicant would suffer reputational and other harm if injunctive relief was not granted.

Second Demand – Proceedings BS 12728 of 2021

  1. [31]
    As to the second demand, which was served on the respondents in accordance with s 459G of the Corporations Act 2001 (Cth) within time, it suffers from the same deficiencies as the first demand.  stating that the debt was $98,452.84 “as described by the said executed mortgage and agreed upon as a non-disputable debt”.  Neither document is identified. The mortgage is not a document to which the first and second respondents are parties. Any claim arising out of the non-advancement of monies under the loan agreement to the first respondent would be one for damages not a debt. The second demand therefore does not comply with s 459E of the Corporations Act 2001 (Cth). Again, the second demand does not identify the creditor or the basis upon which a debt is owed to the first or second respondent. No address for service of the creditor is contained in the second demand. The demand, while signed by Ms Hogben, in her capacity as director, states that the creditor is Ms Hogben personally.  It again fails to provide the warning of not responding to the statutory demand. 
  2. [32]
    The accompanying affidavit to the statutory demand appears to again identify Ms Hogben as well as Cathy Jayne Again Pty Ltd as creditors. It is unclear who is actually the creditor. The alleged debt is said to be “owed relating to costs relating to the loan documentation as a result of non-settlement but do not include all damages by which a notice of default has been set out”.  The evidence of Mr De Pasquale demonstrates that there is a genuine dispute. As set out above, the evidence raises a genuine dispute as to whether the preconditions of the loan agreement were satisfied for the advance of monies.  If there is any claim, it is one for damages.  In any event, how the debt is calculated and the basis of the alleged debt is unclear. Ms Hogben is a guarantor and has no identifiable claim. The solicitors for the applicant again wrote to Ms Hogben outlining the defects in the demand and inviting her to withdraw it on 13 October 2021.
  3. [33]
    I am satisfied that in relation to second demand, that the demand should be set aside on the basis that the second demand is not a demand within the meaning of s 459E. Even if a debt was owing by reason of the loan agreement, there is a genuine dispute about the existence of the debt and the defects in the second demand give rise to a substantial injustice given the ambiguity as to the basis of any debt, who it is owed to, and the absence of any address for service as well as the failure to provide the warning.
  4. [34]
    The statutory demand should be set aside under s 459H and s 459J of the Corporations Act 2001 (Cth), the applicant having established there is a genuine debt and that the defects in the demand would cause substantial injustice unless it is set aside.
  5. [35]
    As to the question of costs, the applicant seeks an order that costs be paid on an indemnity basis.  Given the failure of the applicant to seek to set aside the first demand as required under s 459G of the Corporations Act 2001 (Cth) within time, even though the respondents were informed of the deficiencies in the statutory demand by the applicant’s solicitors prior to the application to set aside being made, I am not satisfied that I should order indemnity costs in respect of that application.  The respondents did, however, refuse to withdraw the demand despite being informed of its deficiencies by the applicant’s solicitors and invited to withdraw it. An application therefore had to be made. The respondents should therefore pay the applicant’s costs on a standard basis. However, in relation to the second demand dated 13 October 2021 (albeit sent by email on 11 October 2021 which is the date of the affidavit), it would be appropriate to order, in the circumstances, that costs be paid on an indemnity basis by the first and second respondents. The respondents were given a clear opportunity to withdraw,[23] the statutory demand having been placed on notice by the applicant’s solicitors as to its deficiencies and that costs would be sought by the applicant’s solicitor in its letter dated 13 October 2021, a number of those matters having been raised in the context of the first demand on 28 September 2021. Notwithstanding that, Ms Hogben refused to withdraw the demand. I am satisfied that the circumstances warrant an order being made on an indemnity basis.  I will therefore order in both cases that the costs be paid on the standard basis.

Conclusion

  1. [36]
    I will make the order in terms of the draft provided by the applicant save in relation to costs for the first demand which the respondents will be ordered to be paid on a standard basis.

Footnotes

[1]  Affidavit of Luigino De Pasquale CFI 2 of BS 11451/21 at [17]-[21].

[2]  CFI 1 in BS 11451/21.

[3]  S 459G (3) of the Corporations Act 2001 (Cth); Beralt Pty Ltd v Joe Battaglia Plastering Pty Ltd [2001] 1 Qd R 232.

[4]  [1999] QSC 202; Beralt Pty Ltd v Joe Battaglia Plastering Pty Ltd [2001] 1 Qd R 232.

[5] Affidavit of Stephen Fox sworn 15 November 2021 [9]-[13] and [15].

[6]  CFI 6.

[7]  See David Grant & Co v Westpac Banking Corporation (1995) 184 CLR 265.

[8]  [2001] 1 Qd R 232.

[9]  (2019) 133 ACSR 504.

[10]  (2019) 133 ACSR 504.

[11]  (2005) 226 ALR 349.

[12]  CF the approach of Brereton J in Re International Materials v Technologies Pty Ltd (1993) 47 FCR 226 at 238.

[13]  [2011] QSC 45.

[14]  That is challenged by the applicant but it is not a matter which I need to consider further for the purpose of this decision and I will assume it is signed by Ms Staker.

[15]  Ms Hogben contends otherwise, referring to an email said to be from the applicant’s solicitor. There is evidence to the contrary provided by the applicant.

[16] First Line Distribution Pty Ltd v Paul Whiley (1995) 18 ASCR 185 at 18; Re Towncars Franchises Sydney Pty Ltd [2013] NSWSC 1235 at [28] and [29].

[17] Re Towncars Franchises Sydney Pty Ltd [2013] NSWSC 1235 at [30] and [31]. Given that a statutory demand includes a purported demand, there is little scope for declaring the demand a nullity.

[18]  The application to set aside was on the basis of both s 459H and s 459J of the Corporations Act 2001 (Cth) and the affidavit of Mr De Pasquale which accompanied the application to set aside (CFI 2) identified defects in relation to the identity of the creditor, the form itself and that the applicant did not know who is to pay the alleged debt owing and the basis of the alleged debt given no money was advanced. This was elaborated upon in his affidavit of 9 November 2021. The deficiencies in the affidavit are not however identified.

[19]  CFI 2. I have therefore not considered the question of whether additional grounds were raised in the subsequent affidavits.

[20]  [2001] Qd R 232.

[21]  (2019) 133 ACSR 504. As was discussed by Philippides J in Sustainable Organics (Wooshaway) Pty Ltd v Rangers Loaders Pty Ltd [2011] QSC 45.

[22] SP Hay Pty Ltd v David Gray & Company Pty Ltd (2019) 133 ACSR 504 at [50]. The director of the applicant in the present case has deposed to the applicant’s insolvency in any event.

[23] Elliott Harvey Securities Ltd v Raynel & Anor [2015] QSC 212.

Close

Editorial Notes

  • Published Case Name:

    Elevare Pay Easy Pty Ltd v Cathy Jayne Again Pty Ltd & Anor

  • Shortened Case Name:

    Elevare Pay Easy Pty Ltd v Cathy Jayne Again Pty Ltd

  • MNC:

    [2021] QSC 303

  • Court:

    QSC

  • Judge(s):

    Brown J

  • Date:

    18 Nov 2021

Appeal Status

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