Vanuatu Indigenous Development Alliance Pty Ltd v Jezabelle Investments Pty Ltd [2008] NSWSC 288

New South Wales Supreme Court

CITATION : Vanuatu Indigenous Development Alliance Pty Ltd v Jezabelle Investments Pty Ltd [2008] NSWSC 288

HEARING DATE(S) : 31/03/08

JUDGMENT DATE : 2 April 2008

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Statutory demand set aside

CATCHWORDS : CORPORATIONS - winding up - statutory demand - application for order setting aside - whether genuine dispute - no matter of principle

LEGISLATION CITED : Corporations Act 2001 (Cth), ss 459G, 459H(1)(a),

CATEGORY : Principal judgment

Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 CASES CITED : Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411

PARTIES : Vanuatu Indigenous Development Alliance Pty Ltd - Plaintiff Jezabelle Investments Pty Limited - Defendant

FILE NUMBER(S) : SC 5996/07

COUNSEL : Mr A T Busby, Solicitor - Plaintiff Ms J F Merkel - Defendant

SOLICITORS : PMF Legal - Plaintiff Hancocks Solicitors - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

WEDNESDAY 2 APRIL 2008

5996/07 VANUATU INDIGENOUS DEVELOPMENT ALLIANCE PTY LTD v JEZABELLE INVESTMENTS PTY LIMITED JUDGMENT 1 The plaintiff applies under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 16 July 2007 served on it by the defendant. 2 The description of the debt or alleged debt in the statutory demand suggests that the defendant in fact asserts two debts, each for repayment of a loan together with interest. One alleged loan is in the sum of $180,000.00, the other in the sum of $10,000.00. 3 The plaintiff's case is advanced on the ground in s 459H(1)(a), that is, that there exists a genuine dispute as to the existence of the debt or debts. 4 The plaintiff relies principally on an affidavit of Ms Gidley, one of its three directors. She says, quite simply, that the plaintiff has never requested or borrowed any money from the defendant and denies having entered into any loan agreement with the defendant or being indebted to it as alleged or at all. 5 Ms Gidley's affidavit discloses the existence of a company incorporated in Vanuatu having a name virtually the same as that of the plaintiff. The plaintiff's name is "Vanuatu Indigenous Development Alliance Pty Ltd". The name of the Vanuatu company is "Vanuatu Indigenous Development Alliance Limited". Ms Gidley's annexes to her affidavit a copy of a demand by Philip Salvatore Deprima for payment by the Vanuatu company of A$246,779.00 "being monies advanced by him to the Company". Ms Gidley states a belief that Mr Deprima's demand "is for the same money claimed in" the statutory demand served by the defendant on the plaintiff. There is thus an allegation that any debt as described in the statutory demand is really owed by the Vanuatu company to Mr Deprima. 6 Mr Deprima is one of the three directors of the plaintiff. He is also a director of the defendant which he describes in his affidavit as "an investment company for my business dealings". At paragraph 12 of his affidavit, Mr Deprima refers to a conversation on or about 10 February 2005 among Ms Gidley, himself and Mr Barber, the third director of the plaintiff (the reference to "VIDA Vanuatu" is a reference to the Vanuatu company I have mentioned): "On or about 10 February 2005, Tony Barber ('TB'), Isobelle Gidley ('IS') and I had a meeting at Gioa Restaurant in Leichhardt. During the meeting we discussed VIDA Vanuatu's purchase of the farm on Malekula. We had a conversation to the following effect: IS said: ' The position in Vanuatua is desperate; the vendor is going to terminate the contact for Malekula. We need $180,000.00 urgently to complete the contract.' I said: ' I can obtain the funds but they need to be repaid in one month.' IS said: ' That will be fine, we have lots of rice sales going through and the money can be repaid without a problem.' TB said: ' I agree.' " 7 This suggests that it was the Vanuatu company, not the plaintiff, that needed money. 8 Paragraph 13 of the affidavit, omitting a passage not read, is as follows: "The funds required were held by the Defendant, not by me in my personal bank account. I had previously put the funds into the Defendant for the purpose of a property investment … I saw no reason to transfer the funds from the Defendant into my personal account and then on to the Plaintiff. I arranged for the Defendant to transfer the funds to the Plaintiff directly expecting that the funds would be repaid within about a month." 9 Mr Deprima deposes, by reference to annexed bank statements, that $180,000.00 was deposited into the bank account of the plaintiff by the defendant on 11 February 2005 and that an equivalent (or slightly larger) amount was paid out on the same day to "Genesis". There is also a record of a cheque No 24 for $10,000.00 drawn on the defendant's account and paid on 23 March 2005, together with cheque butt No 24 showing $10,000.00 and "Vida", with the date 12 March 2005. 10 Mr Deprima has put into evidence what he describes as "a true and accurate copy of one of the pages of the cash book" if the plaintiff that he showed Mr Barber in about March or April 2005. It shows entries on the "Cr" side of $180,000.00 and $10,000.00, the first on a date that is obscured and the second on 23 March 2005, each marked "Loan Jezabelle". Three things need to be said about this. The first is that the annexure is handwritten and headed "Extract from Cash Book", from which one would infer that someone has copied by hand from another document. Second, the document carries nothing that would identify it with the plaintiff, as distinct from any other entity (including the Vanuatu company). Third, an entry on the credit side of a cash book generally connotes a payment, not a receipt. 11 I refer next to the evidence of Mr Barber, the third director of the plaintiff. He says that he is unaware that the plaintiff ever borrowed money from the defendant. He also says that Mr Deprima told him on a number of occasions that the $180,000.00 he had lent to "VIDA" was his own money; also that Mr Deprima had said that he wanted the money back as he was going buy a property in the Snowy Mountains and "I need to get the money back into Jezabelle". 12 Mr Barber accepts that Mr Deprima produced to him the cash book of the plaintiff or, at least, what Mr Deprima said was the cash book of the plaintiff. Mr Barber says that he made handwritten extracts from the book. These do not appear to contain any entries corresponding with those in the handwritten document annexed to Mr Deprima's affidavit. 13 I refer finally to the second affidavit of Ms Gidley in which she says that Mr Deprima, who had also been the secretary of the plaintiff, produced in October 2007 various documents "that he purports [sic] to contain the books and records of the company", from which she noted that "there are no proper cash books, invoices or receipts available". 14 The principles upon which the present application is to be determined are not in doubt. In Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, McLelland CJ in Eq considered the expression "genuine dispute" where it occurs in s 459H. His Honour said at p.787: