February 5, 2017
In Gucce Holdings Pty Ltd v Bank of Queensland Limited  FCA 12 the Federal Court considered whether a sale for undervalue, or at least a claim as such, was a basis for an offsetting claim (and what is required) as well as whether a special leave application was sufficient to set aside a statutory demand.
Gucce Holdings Pty Ltd (ACN 099 191 714) filed an application, , with an affidavit of Tina Michelle Bazzo, director of Gucce,, on 29 December 2015 pursuant to s 459G of the Corporations Act 2001to set aside a statutory demand made by the Bank of Queensland Limited.
Bazzo stated that Read the rest of this entry »
September 23, 2016
The Supreme Court in Pekell Delaire Holdings Pty Ltd v Bendigo and Adelaide Bank Limited  VSC 570 considered a statutory demand where a key issue was the effect of settlement of group proceedings acting as a bar to a claim of a genuine dispute to a statutory demand.
In July 2006 the applicant, Pekell Delaire Holdings Pty Ltd (“PDH”) applied to Great Southern Plantation Projects for two grove lots in the Great Southern Organic Olives Income Project and four vine lots in the Great Southern Wine Grape Income Project with associated applications for term finance. Finance was approved and funds were advanced on the basis of repayment in seven years of principal and interest. The loans were subsequently assigned and ultimately transferred to Bendigo  Read the rest of this entry »
May 19, 2016
In Complete Equipment Solutions Pty Ltd v Tesab Engineering Limited (A Company Registered in the United Kingdom, Company No. NI026214)  VSC 253 Associate Justice Randall considered the question of service. This is not a common issue in modern day jurisprudence relating to statutory demands. In this case a failure to comply with the service requirements resulted in the plaintiff’s application being dismissed.
The plaintiff, by originating process dated 9 November 2015, made an application under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand dated 14 October 2015 . The court noted, with some annoyance, that the Read the rest of this entry »
February 9, 2016
The Supreme Court, per Efthim As J, considered an application to set aside a statutory demand in Cato Brand Partners Pty Ltd v Air India Limited  VSC 28. The issue was bringing an application against a foreign corporate body and the application of foreign law in determining the applicable statute of limitations.
In December 2009 the plaintiff’s chairman, Kenneth Willis Cato, travelled to India in December 2009 and February, April and June 2010 for meetings with representatives of the defendant. An agreement was entered into on 2 June 2010 .
The plaintiff claims it was owed Read the rest of this entry »
January 24, 2016
In Locker Group Pty Ltd v HEA Australia Pty Ltd  VSC 752 the Victorian Supreme Court, per Randall AsJ, considered the authorities relating to the obligations to provide full disclosure, the failure to disclose a material fact and the consequences of not complying with an order in the service of an application resulting in late service. The Court made orders under the Civil Procedure Act relating to the very unfortunate conduct of Locker Group. The court also considered the scope of the power under the Civil Procedure Act in making costs orders encompassing costs incurred by liquidators.
On 16 April 2014 Australia Pressure Vessel Heads (2011) Pty Ltd, the Plaintiff, filed an originating process seeking to wind up HEA Australia Pty Ltd (‘the Company’) under s 459P of the Corporations Act 2001 (Cth) (‘Corporations Act’). On 14 May 2014 the plaintiff’s counsel appeared. There was no appearance for the Company. There were negotiations the result of which was that payment was expected within seven days. A further hearing was adjourned to 21 May 2014 . At that time the plaintiff’s counsel again appeared, advised that the plaintiff had been paid out and sought to be excused. Counsel for Locker Group Pty Ltd, a supporting creditor (‘Locker Group’), appeared and advised the Court that it wished to be substituted as plaintiff. At that time the Company had not filed a notice of appearance under r 2.9 of the Supreme Court (Corporations) Rules 2013 and s 465C of the Corporations Act . Read the rest of this entry »
July 6, 2014
In Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd and Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation the Victorian Court of Appeal and the Supreme Court considered applications to set aside statutory demands in very different circumstances.
Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd
The applicant sought leave to appeal a decision of Randall AsJ dismissing an application to set aside a statutory demand. The grounds of appeal included a failure to find there was a genuine dispute or offsetting claim .
The statutory demand relates to a claim for commission on the sale of various apartments in Carlton. The vendor retained Rescom as the underwriter for the sale of the apartments. It was a term of the retainer that in the event that the total sale price of the apartments did not reach a pre-determined level, Rescom would pay the difference to the vendor . If the total proceeds exceeded the predetermined level the vendor would pay the excess amount to Rescom. If the total proceeds exceeded a pre-determined level by a certain amount, then the excess would be shared between Rescom and the vendor .
Rescom engaged Reapfield as its sole marketing agent in Singapore on terms which included a 5% commission on the transacted price of all sales within Singapore. The Agreement referred to a price schedule in an Annexure A of the agreement.
There was, and is, a dispute between the parties as to contents of Annexure A to the agreement with there being two schedules, one referring to lower prices than the other. That said Randall AsJ found he did not need to determine which schedule was incorporated into the agreement for the purpose of determining the application. Focusing on the terms of the marketing agreement and on contemporaneous conduct  he found that the agreement did not impose an obligation on Reapfield other than to use all due care, skill and diligence. There were no consequences for failure by Reapfield to achieve a particular price .
Regarding the contemporaneous conduct the Randall AsJ found :
- the vendor accepted offers made by purchasers procured by Reapfield and booking forms that set out the purchase price and were signed on behalf of Rescom [over the caption] “accepted by underwriter”
- email correspondence to the effect that Rescom “appreciated the good job” and that Rescom was in the “midst of arranging payment as promised”.
- text messages passing between Rescom and Reapfield accepting the invoice for the commissions claimed without complaint and advising that payment would be made when Rescom received draw downs “from equity partners.”
- there were over 20 text messages where Reapfield sought payment and Rescom repeatedly promised to make payment.
- No complaint was made about the invoice that set out the prices obtained for each of the apartments or the liability to pay the commission .
The Court referred to and liberally quoted from the latest Court of Appeal authority on statutory demands, Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd, handed down last year . The key principles can be reduced to the following:
December 2, 2013
The High Court will hand down its decision in Willmott Growers Group Inc v. Willmott Forests Ltd (Receivers and Managers Appointed) (In Liquidation) In its capacity as manager of the unregistered managed investment schemes listed in Schedule 2 and Ors this Wednesday 5 December 2013.
For those, like myself, who practice in the corporations and insolvency area it is a long awaited decision with significant ramifications.
The High Court transcript provides:
MR G.T. BIGMORE, QC: May it please the Court, I appear Read the rest of this entry »
November 24, 2013
The Court of Appeal in Wolfe v Permanent Custodians  VSCA 331 considered issues of duty to co operate in the context of a contractual relationship and unconscionability by a creditor in recovery proceedings against a defaulting mortgagor.
Permanent Custodians Ltd (“Permanent”) holds a first mortgage over a property in Pascoe Vale which secured a loan to Mr Wolfe and his former partner . In 2008 there was default on the loan. In August 2009 Permanent obtained default judgment against Wolfe, a default judgment for the loan and for possession of the Property against his former partner and issued a warrant of possession. Eviction by the Sheriff was scheduled for the week commencing 4 December 2009 . Wolfe entered into an arrangement, on terms set out in a letter from Permanent’s solicitors on 1 December 2009 (the “1 December 2009 arrangement”).
Those terms were, at ,relevantly:
September 26, 2013
Gordon J in Chan v Four C Realty Pty Ltd (in liq), in the matter of Four C Realty Pty Ltd (in liq)  FCA 928 and then in Chan v Four C Realty Pty Ltd (in liq), in the matter of Four C Realty Pty Ltd (in liq) (No 2)  FCA 959 made orders regarding the enforcement of a contract and then approval for the Liquidator to enter into that contract. The facts are common to both hearings
The Applicant, (“Chan”) applied under sections 471B, 477(2B) and 477(6) of the Corporations Act 2001 (Cth) (the Act) for a series of orders including a declaration that, on 13 August 2013, she and the First Respondent (“Four C Realty”) entered into a binding and enforceable contract for her to purchase its business assets of Four C Realty. The Respondents submitted that no binding contract existed on 13 August 2013 and, alternatively, if a binding contract did exist, then Chan was required to provide security for what has been described as “the indemnity” .
Four C Realty carries on business as an estate agent, conducting Read the rest of this entry »
September 25, 2013
In First Equilibrium Pty Limited v Bluestone Property Services Pty Limited (in liq)  FCAFC 108) the Full Federal Court considered an appeal against a winding up order, made by Jacobson J in Bluestone Property Services Pty Ltd (in liq) v First Equilibrium Pty Ltd  FCA 876, under sections 459A and 459P of the Corporations Act 2001 (Cth) (“the Act”) . The court considered in detail the principles associated with winding up on the grounds of insolvency, including the concept of “commercial realities”, and the argument that there was a genuine offsetting claim (which was included as an asset in the financial returns of the appellant on the question of solvency).
Equilibrium has a sole director and shareholder, Mr Justin Brown (“Brown”). Bluestone has a sole director and a shareholder, Mr Lance Hodgkinson (“Hodgkinson”) . Brown & Hodgkinson were property developers involved in a number of substantial property developments  – . In late 2005 Brown wanted to sell out of a development  and at a meeting convened to discuss this with Hodgkinson he wrote on a single sheet of paper what arrangements would effect this outcome. Both then signed the document. Brown claimed the document was an enforceable agreement. Some of the payments contemplated by the document (totalling $600,000) Read the rest of this entry »