State Bank v Tela [2002] NSWSC 21

New South Wales Supreme Court

CITATION : State Bank v Tela [2002] NSWSC 21 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5437/2001 HEARING DATE(S) : 29/01/02 JUDGMENT DATE : 29 January 2002

PARTIES : State Bank of New South Wales - Plaintiff Tela Pty Limited - Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr R.S. Hollo - Plaintiff Mr J.A. Darvall - Defendant SOLICITORS : Minter Ellison - Plaintiff Conomos & Spinak Lawyers - Defendant CATCHWORDS : CORPORATIONS - winding up in insolvency - statutory demand - whether plaintiff must adduce on hearing of winding up application evidence in affidavit which accompanied statutory demand LEGISLATION CITED : Corporations Act 2001 (Cth) CASES CITED : Nil DECISION : See paragraph 7

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IN THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

TUESDAY, 29 JANUARY 2001

5437/2001 – STATE BANK OF NEW SOUTH WALES v TELA PTY LIMITED

JUDGMENT

1 The plaintiff applies under s.459P of the Corporations Act 2001 (Cth) for an order for the winding up of the defendant in insolvency on the basis of noncompliance with a statutory demand served on 14 November 2001. 2 A preliminary question has arisen as to whether the defendant should be allowed to cross-examine Mr Carroll, who is the deponent of the affidavit which, in accordance with s.459E(3) of the Corporations Act, accompanied the statutory demand. That affidavit includes, in conformity with Form 7 as required by Corporations Law Rule 5.2, a statement of the deponent's belief that there is no genuine dispute about the existence or amount of the relevant debt. It is in that area that cross-examination is proposed. 3 Service of both the statutory demand and the accompanying affidavit of Mr Carroll is to be proved by an affidavit of Mr Wooldridge. This is one of six affidavits that Mr Hollo, counsel for the plaintiff, has indicated he intends reading on the s.459P application. Mr Carroll's accompanying affidavit under s.459E(3) is not one of the affidavits Mr Hollo intends reading. That being so, Mr Hollo says, there will be no occasion for Mr Carroll to be cross-examined. 4 There is thus a question whether the plaintiff may progress its winding up application without adducing as evidence, on the hearing of that application, the statements made by Mr Carroll in his s.459E(3) affidavit. 5 In my judgment, the plaintiff is at liberty to present and progress its case in that way. The expression "must be accompanied" in s.459E(3), referring to an affidavit, contemplates, in a temporal sense, the time at which the statutory demand is served. In other words, the affidavit to which s.459E(3) refers is an affidavit which must be served with the statutory demand when that demand is itself served. It follows that if it is shown, as it will be by Mr Wooldridge's affidavit, that Mr Carroll's affidavit was served with the statutory demand, and if, in addition, that affidavit, on its face, complies as to content and form with the requirements of s.459E(3) and the applicable Corporations Law Rules, then the composite step Part 5.4 contemplates as the starting point of the process founded on a statutory demand will be shown to have been taken. There is no requirement that, upon the hearing of the winding up application, the plaintiff adduce as evidence the content of the s.459E(3) affidavit. 6 The s.459P application for a winding up order founded on noncompliance with a statutory demand must itself be accompanied by an affidavit of debt. This is required by s.459Q(c). Mr Hollo has indicated that that requirement will be addressed by the plaintiff without resort to Mr Carroll's affidavit. The plaintiff will rely, for that purpose, on later affidavits sworn by another bank officer, Mr Stevens. 7 I have concluded that the plaintiff's decision not to read the affidavit of Mr Carroll is in no way inimical to its present application which may proceed in the absence of that evidence. The question of cross-examination of Mr Carroll therefore does not arise. ******