Wardair v Bush [2003] NSWSC 827

New South Wales Supreme Court

CITATION : Wardair v Bush [2003] NSWSC 827 HEARING DATE(S) : 15/08/03 JUDGMENT DATE : 19 August 2003 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION :

CATCHWORDS : Corporations Law. Application to set aside statutory demand. Application out of time. Application for leave under s459S refused as not material to solvency. Proceedings dismissed. PARTIES : Wardair Pty Limited v Geoffrey Bush FILE NUMBER(S) : SC 3692/03 COUNSEL : C. Hogg for plaintiff R. Parsons for defendant SOLICITORS : Pitcher Walton & Co for plaintiff Deutsch Partners Lawyers Pty Ltd for defendant

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

TUESDAY 19 AUGUST 2003

3692/03 - WARDAIR PTY LIMITED v GEOFFREY BUSH

JUDGMENT 1 MASTER: These are proceedings seeking to set aside a statutory demand dated 23 May 2003 claiming $11,000 said to be due by the plaintiff to the defendant. 2 The demand was served on 17 June 2003 and thus any application to set it aside had to be filed and served on or before 8 July 2003. The application was filed and served on 9 July 2003 and is thus out of time. 3 It was sought to argue that the High Court decision in David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 184 CLR 265 could be distinguished and that thus time could be extended under s 1322 of the Corporations Act. 4 The basis for distinguishing the decision was said to be a change to s 459S which occurred after the Court's decision to restrict even further the ability to agitate a disputed debt at the hearing of the winding-up application. It was submitted that the High Court decision had as its foundation a view expressed by Hayne J in Tenel Pty Limited v Commonwealth Bank of Australia [1994] 2 VR 298 where his Honour referred at p 537 to the safety net provided by s 459S. 5 In fact there was no change to the terms of s 459S after the decision and the safety net referred to by Hayne J was not the foundation of the High Court decision. The reasons founded as on the structure of the Act and its evident purpose is gleaned from the Act and the explanatory memorandum. The Court on the contrary recognised that Part 5.4 could operate quite harshly (see p 279). 6 In my view I am bound by the decision and time for compliance cannot be extended. I refuse order 2 in the amended process filed on 8 August 2003. 7 I turn to consider the remaining claims and note that claim 6 was abandoned in argument. Claim 3 is an application under s 459S. Claims 4 and 8 are claims that can only arguably be made if I give leave, and would be dealt with at the winding-up application. Claims 5, 7 and 9 are claims that the winding-up proceedings number 3693/03, which are based upon the demand in this matter, should be dismissed as an abuse of process. 8 There was also in submissions a reference to what was said to be a defect in the affidavit in support of the demand in respect to compliance with Pt 80A r 15(c) of the Supreme Court Rules and an error in the "important note" at the end of the demand. These matters are now irrelevant as they could in no sense be said to be material to proving that the company was solvent. 9 The only matter which may or may not be material to solvency would be the existence of the debts the subject of the demand, and I turn to the matter of leave under s 459S. 10 The present proceedings before me are not a hearing of the summons to wind up, as that matter will be dealt with at a later hearing. The matter is thus unusual in this respect as commonly applications under s 459S are brought at the same time as the application to wind up. Section 459S of the Corporations Law provides as follows: "Insofar as an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the company may not, without leave of the Court, oppose the application on a ground: (a) that the company relied on for the purpose of an application by it for the demand to be set aside; or