Ryledar Pty Ltd v Euphoric Pty Ltd [2006] NSWSC 1288

New South Wales Supreme Court

CITATION : Ryledar Pty Ltd v Euphoric Pty Ltd [2006] NSWSC 1288

HEARING DATE(S) : 13/10/06, 09/11/06, 13/11/06

JUDGMENT DATE : 30 November 2006

JURISDICTION : Equity Division

JUDGMENT OF : Associate Justice Macready at 1

DECISION : Paragraph 28

CATCHWORDS : Corporations Act. Application to set aside statutory demand under s459J(1)(b) due to pending appeal giving rise to an off-setting claim. Demand set aside.

PARTIES : Ryledar Pty Ltd v Euphoric Pty Ltd

FILE NUMBER(S) : SC 2264 of 2006

COUNSEL : Mr B. Rayment QC and Mr M Sahade for plaintiff Mr M. Ashhurst for defendant

SOLICITORS : Mallesons Stephen Jaques for plaintiff Thomson Playford for defendant

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

Associate Justice Macready

Thursday 30 November 2006

2264/2006 RYLEDAR PTY LIMITED v EUPHORIC PTY LIMITED JUDGMENT 1 His Honour: This is an application to set aside a statutory demand under s459G of the Corporations Act 2001 (Cth). The plaintiff and the defendant were parties to litigation which was determined by Palmer J on 30 January 2006. His Honour held that the defendant was entitled to judgment against the plaintiff and dismissed the plaintiff's cross claim for damages against the defendant. 2 The proceedings concerned agreements between the parties for the supply of petroleum products which were distributed to a number of outlets throughout New South Wales. 3 The statutory demand is dated 17 March 2006 and claims an amount of $13,277,631.36 which is the amount of judgment and interest thereon. 4 There is an appeal from the orders of Palmer J. That appeal is set down for hearing for three days in the Court of Appeal commencing 13 February 2007. 5 There has been no application for a stay of the judgment which the defendant obtained against the plaintiff. Absent any stay and pending the appeal, there can be no genuine dispute as to the existence of the judgment debt; see: (Barclays Australia (Finance) Ltd v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 235 at 238; Hoare Bros Pty Ltd v DCT (1995) 16 ACSR 213 and Eumina Investments Pty Ltd v Westpac Banking Corp [1998] 84 FCR 454 at 458). 6 The plaintiff contends that it has an offsetting claim in the form of the cross claim which it brought against the defendant. It would seem that, until such time as the order dismissing the cross claim is set aside, there cannot be an offsetting claim based upon the facts underlying that cross claim. See Eumina (at 458). 7 It would seem that the only basis that would allow the court to set aside the statutory demand is s459J(1)(b) of the Corporations Act, on the basis that there may be some other reason for setting aside the demand. This was also dealt with by Emmett J in Eumina. There His Honour identified a circumstance which would lead to the setting aside in these terms: