New South Wales Supreme Court CITATION : PSR Australia Pty Ltd v Chief commissioner of State Revenue RSP Recruitment Australia v Chief Commissioner of State Revenue [2009] NSWSC 1494 HEARING DATE(S) : 6 August 2009 JUDGMENT DATE : 6 August 2009 JURISDICTION : Equity JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 6 August 2009 DECISION : Order that the originating process be dismissed and the plaintiff pay the defendant's costs. CATCHWORDS : CORPORATIONS – application to set aside statutory demand – where plaintiff sought to discontinue proceedings by filing notice of discontinuance – effect of Corporations Act, s 459L – court required to dismiss application LEGISLATION CITED : Corporations Act 2001 (Cth) TEXTS CITED : Farid Assaf, Statutory Demands: Law and Practice, LexisNexis Butterworths, 2008 Plaintiff (4329/08): PSR Australia Pty Ltd PARTIES : Defendant: Chief Commissioner of State Revenue Plaintiff (4330/08): RSP Recruitment Australia Defendant: Chief Commissioner of State Revenue FILE NUMBER(S) : SC 4329/08; 4330/08 COUNSEL : Plaintiff: A Hew (Sol'r) Defendant: A Iuliano (Sol'r) SOLICITORS : Plaintiff: Aequitas Attorneys Defendant: Champion Legal IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST WHITE J Thursday, 6 August 2009 4329/08 PSR Australia Pty Ltd v Chief Commissioner of State Revenue 4330/08 RSP Recruitment Australia v Chief Commissioner of State Revenue JUDGMENT 1 HIS HONOUR: In each of these proceedings the plaintiff has applied under s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand served by the Chief Commissioner of State Revenue. 2 Yesterday the solicitors for the plaintiffs sent a facsimile to my Associate stating that they had been instructed that the plaintiffs wished to discontinue the matters. The solicitors enclosed a copy of notices of discontinuance stating "which we intend to file tomorrow when we appear before you". The notices of discontinuance are in the form prescribed by the Uniform Civil Procedure Rules 2005 providing for the plaintiff to discontinue the proceedings and contain a notation that each party consented to the discontinuance. 3 The consent of the defendant was not endorsed on the notices forwarded to my chambers, but I was advised this morning by the solicitor for the defendant that the defendant did consent to the discontinuance provided its costs were paid. 4 The plaintiffs no longer seek an order under s 459H or s 459J for the setting aside of the demands. 5 Section 459L provides that "Unless the Court makes, on an application under s 459J [sic], an order under section 459H or 459J, the Court is to dismiss the application". As is pointed out in Farid Assaf, Statutory Demands: Law and Practice, LexisNexis, Butterworths 2008 at [8.1], s 459L contains a typographical error. The first reference to s 459J should be to s 459G. That is so because applications to set aside a statutory demand, either by order under s 459H or s 459J, are made pursuant to s 459G. That this was the intended provision also appears from paragraph 702 of the Explanatory Memorandum to the Corporations Law Reform Bill 1992. 6 The solicitor for the plaintiffs said that the reason the plaintiffs wished to discontinue the proceedings is because they wanted to have the option to continue the proceedings at a later date. Even if the proceedings can be discontinued, that would be a futile course because the 21-day period for applications to set aside the statutory demands has long since past. But in my view s 459L precludes a discontinuance of the applications where the plaintiffs no longer seek orders under s 459J or s 459H. In those circumstances, the court is required to dismiss the applications. 7 This might have practical consequences in terms of the time for compliance with the demand. Under s 459F(2)(a), unless the court makes an order extending the period for compliance with the demand, the period for compliance is seven days after the application under s 459G is, "finally determined or otherwise disposed of". There will be no determination of the application if it were discontinued. Whilst the filing of a notice of discontinuance would be a disposition of the application, that disposition would not occur until the plaintiff filed the notice of discontinuance which might be at a time after the defendant consented to a discontinuance, or leave were given. 8 I do not consider that I should act on the defendant's consent to the discontinuance of the proceedings. In my view the proceedings are required to be dismissed. 9 There is no question about costs. The plaintiffs accept that they will be liable to pay the defendant's costs of each proceeding. The defendant does not seek costs otherwise than on the ordinary basis. 10 For these reasons, in each matter I order that the originating process be dismissed and the plaintiff pay the defendant's costs. ***** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.