MD Lawyers Pty Ltd v Stephen Wayne Velik [2009] NSWSC 879

New South Wales Supreme Court

CITATION : MD Lawyers Pty Ltd v Stephen Wayne Velik [2009] NSWSC 879

HEARING DATE(S) : 24 August 2009 JUDGMENT OF : Hammerschlag J

EX TEMPORE JUDGMENT DATE : 24 August 2009

DECISION : The statutory demand for payment of debts dated 10 June 2009 is set aside. Defendants to pay plaintiff's costs of the proceedings.

CATCHWORDS : CORPORATIONS – statutory demand – application to set aside under s 459H – genuine dispute – substantiated amount less than statutory minimum – demand set aside

LEGISLATION CITED : Corporations Act 2001 (Cth)

CATEGORY : Principal judgment

CASES CITED : Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411

MD Lawyers Pty Ltd - Plaintiff PARTIES : Stephen Wayne Velik - First Defendant Laura Alison Velik - Second Defendant

FILE NUMBER(S) : SC 3443/2009

COUNSEL : P.D. Rodionoff [Plaintiff] S.W. Velik - Solicitor [Defendants]

SOLICITORS : Mahony Dominic Solicitors [Plaintiff] SV Law [Defendants]

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

HAMMERSCHLAG J

24 AUGUST 2009

3443/2009 MD LAWYERS PTY LTD -V- STEPHEN WAYNE VELIK AND LAURA ALLISON VELIK JUDGMENT 1 HIS HONOUR: This is an application to set aside a statutory demand dated 10 June 2009 which the defendants served on the plaintiff. The defendants licensed the plaintiff to occupy certain premises at 55 York Street, Sydney. The licence agreement was part of a merger arrangement between the plaintiff, a company carrying on the business of a legal practice, and the first of the defendants, Mr Velik, a solicitor. The second defendant is Mrs Velik. 2 The Statutory Demand claims, relevantly, three separate amounts which the plaintiff asserts are genuinely in dispute: a firstly, an amount of $4,812.50 attributable to rental (or licence fee) for the remainder of the month of April 2009; b secondly, an amount of $167.46 claimed by the defendants for media advertising costs; and c thirdly, an amount of $6,732 which emanates from a quotation which has been admitted into evidence which is intended to reflect the cost of repainting. 3 I should not let the occasion pass without remarking that the amount of the Statutory Demand is relatively small and well within Local Court jurisdiction. It is a cause for regret that practitioners of this Court find themselves here when, in my view, they should do everything to resolve this commercial dispute extra-curially. 4 Barrett J said in Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 at [23]that: "... the task faced by a company challenging a statutory demand on the "genuine dispute" ground is by no means at all a difficult or demanding one. The company will fail in that task only if it is found upon the hearing of its s 459G application that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that, on rational grounds, indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger."