In the matter of Essential Media and Entertainment Pty Limited [2020] NSWSC 990

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Essential Media and Entertainment Pty Limited [2020] NSWSC 990 Hearing dates: 24 July 2020 Date of orders: 31 July 2020 Decision date: 31 July 2020 Jurisdiction: Common Law Before: Rees J Decision: Statutory demand set aside. Catchwords: CORPORATIONS — Statutory demand — Application to set aside — whether affidavit accompanying demand complied with s 459E(3) Corporations Act 2001 (Cth) – affidavit sworn by director – no resolution of board authorising demand – importance of affidavit at [49]-[54] – principles regarding authority of director at [55]-[58] – whether can ratify unauthorised demand – statute overrides common law – creditor to authorise statutory demand when issued or possibly cure within the 21 days for payment – otherwise cannot retrospectively confer authority by ratification at [59]-[67] – as a matter of fact, director was authorised. CORPORATIONS — Winding up — Statutory demand — Genuine dispute — principles at [76]-[80] — loan apparently arranged by common director of lender and borrower — advance of loan not otherwise authorised by lender – receipt of loan not otherwise authorised by borrower –– lender and borrower both appear to consider common director liable – genuine dispute. CORPORATIONS — dispute whether "due and payable" under s 459E Corporations Act 2001 - principles at [96]-[102] — genuine dispute. Legislation Cited: Corporations Act 2001 (Cth), ss 236, 237, 459E(1), 459E(3), 459H(1)(a), 459J(1)(b) Supreme Court (Corporations) Rules 1999, r 5.2 Cases Cited: A R Pilot Pty Ltd v Gouriotis [2007] NSWSC 396 Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 AspectFP Pty Ltd v Messer [2019] VSC 249 Australian Securities and Investments Commission v Rich (2009) 75 ACSR 1; [2009] NSWSC 1229 AWA Limited v Daniels trading as Deloitte Haskins & Sells (1992) 7 ACSR 759 Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd (2013) 85 NSWLR 601; [2013] NSWCA 344 Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd (2013) 85 NSWLR 601 Chadmar Enterprises v IGA Distribution Pty Ltd [2005] ACTSC 39; (2005) 53 ACSR 645 Chase Manhattan Bank Australia Limited v Oscty Pty Limited [1995] FCA 1208; 17 ACSR 128 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35 at [20]; (2000) 201 CLR 520 David Grant & Co Pty Ltd v Westpac Banking Corp [1995] HCA 43; (1995) 184 CLR 265 Dennis Hanger Pty Limited v Kanambra Pty Limited (1992) 10 ACLC 284 Eumina Investments Pty Ltd v Westpac Banking Corp [1998] FCA 824; 84 FCR 454 Evans v Levy [2011] NSWCA 125 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 Haller v Ayre [2005] 2 Qd R 410 HL Diagnostics Pty Ltd v Psycadian Ltd [2005] WASC 234 Horizon Star Pty Ltd v Carina Holdings Pty Ltd [2003] WASCA 94 In the matter of Access Elevators Australia Pty Ltd [2016] NSWSC 739 In the matter of Forza Plumbing Systems Pty Ltd [2013] NSWSC 1234 In the matter of Gorji Property Investment Pty Limited [2018] NSWSC 1671 In the matter of Halal Meats Pty Ltd [2015] NSWSC 2041 In the matter of JF Essential Power Pty Limited [2018] NSWSC 435 In the matter of Litigation Insurance Pty Limited [2017] NSWSC 334 In the matter of Longjing Pty Ltd (2017) 123 ACSR 456; [2017] NSWSC 1534 In the matter of MK Group Phoenix Pty Ltd [2014] NSWSC 1467 In the matter of PostNet Australia Pty Ltd [2017] NSWSC 160 In the matter of Pulse Interactive Pty Limited (in liquidation) [2019] NSWSC 22; (2019) 134 ACSR 461 In the matter of ReNu Waste Pty Limited [2020] NSWSC 108 In the matter of Shot One Pty Ltd (in liquidation) [2017] VSC 741 In the matter of Tuffrock Pty Ltd [2015] NSWSC 738 In the matter of Unity Resources Group Australia Pty Limited [2015] NSWSC 1174 Jones v Dunkel (1959) 101 CLR 298 Junker v Hepburn [2010] NSWSC 88 Katsilis v Broken Hill Proprietary Co Ltd (1977) 18 ALR 181 Kern Group (Paddington) Pty Limited v Armstrong [2011] QSC 133 Kisimul Holdings Pty Ltd v Clear Position Pty Ltd [2014] NSWCA 262 Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377; [2008] VSCA 93 Macleay Nominees v Belle Property East Pty Ltd [2001] NSWSC 743 Main Camp Tea Tree Oil Limited v Australian Rural Group Ltd (2002) 20 ACLC 726; [2002] NSWSC 219 McHugh v Eastern Star Gas Ltd [2012] NSWCA 169 MNWA Pty Ltd v Deputy Commissioner of Taxation (2016) 250 FCR 381; [2016] FCAFC 154 NA Investment Holdings Pty Limited v Perpetual Nominees Limited (2010) 79 ACSR 544; [2010] NSWCA 2010 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 NT Resorts Pty Limited v Deputy Commissioner of Taxation (1998) 16 ACLC 957; (1998) 153 ALR 359 Ogilvie v Adams [1981] VR 1041 Ox Operations Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (in liq) [2007] FCA 1221 Panel Tech Industries (Aust) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896 Papadimitropoulos v R (1957) 98 CLR 249; [1958] ALR 21 Portrait Express (Sales) Pty Limited v Kodak (Australasia) Pty Limited [1996] NSWSC 199; (1996) 20 ACSR 746 Range Resources Limited v Lind Asset Management LLC [2015] WASC 238 Re Elgar Heights Pty Ltd (1985) 9 ACLR 846; [1985] VR 657 Re Morris Catering (Australia) Pty Ltd (1993) 11 ACLC 919; (1993) 11 ACSR 601 Remuneration Data Base Pty Ltd v Pauline Goodyer Real Estate Pty Ltd [2007] NSWSC 59 Rinfort Pty Ltd v Arianna Holdings Pty Ltd [2016] NSWSC 251; (2016) 306 FLR 413 Saferack Pty Ltd v Marketing Heads Australia Pty Ltd (2007) 214 FLR 393; (2007) 25 ACLC 1392; [2007] NSWSC 1143 Scanhill v Century 21 Australasia [Pty Ltd (1993) 47 FCR 451 Smith v Henniken-Major & Co (A Firm) (2002) 3 WLR 1848 Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452 Telstra Corporation Limited v Ivory; Telstra Corporation Limited v Solar-Mesh (Australia) [2008] QSC 123 TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67; [2008] VSCA 70 Whitton v Regis Towers Real Estate Pty Ltd (2007) 161 FCR 20; [2007] FCAFC 125 Willard King Organisation (1978) Pty Ltd v CT Franchises Pty Ltd [2009] NSWSC 97 Zaccardi v Caunt [2008] NSWCA 202 Texts Cited: Dal Pont, Law of Agency, (2001) 200 Farid Assaf, Statutory Demands and Winding Up in Insolvency (2nd ed, 2012, LexisNexis Butterworths) Professor Ian Ramsay and Dr Robert (Bob) Austin, Ford, Austin and Ramsay's Principles of Corporations Law (15th ed, 2012, LexisNexis Butterworths) Perry Herzfeld and Thomas Prince, Interpretation (2nd ed, 2020, Thomson Reuters) Category: Principal judgment Parties: Plaintiff: Essential Media and Entertainment Pty Ltd Defendant: Hilton Cordell & Associates Pty Limited Representation: Counsel: Mr JP Knackstredt (Plaintiff) Mr EA Walker (Defendant)