New South Wales Supreme Court CITATION : Slocomb Investments Pty Ltd v JH & EJ Williams Pty Ltd [2010] NSWSC 918 HEARING DATE(S) : 16/08/10 JUDGMENT DATE : 16 August 2010 JURISDICTION : Equity Division Corporations List JUDGMENT OF : Barrett J EX TEMPORE JUDGMENT DATE : 16 August 2010 DECISION : I order that the plaintiff's originating process filed on 1 April 2010 be dismissed with costs. CATCHWORDS : CORPORATIONS - winding up - statutory demand - demand based on Local Court judgment debt - Local Court makes order for payment by instalments after statutory demand served - four instalments paid - instalment order then set aside - later application for new instalment order refused - third application for instalment order filed but not determined - whether "some other reason" to set aside demand - held not - effect of four instalment payments discussed Civil Procedure Act 2005, s 107 LEGISLATION CITED : Corporations Act 2001 (Cth), ss 459G, 459J(1)(b) Uniform Civil Procedure Rules 2005, rule 37.5 CATEGORY : Principal judgment CASES CITED : Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 Tatlers.com.au Pty Limited v Davis [2006] NSWSC 1055; (2006) 203 FLR 473 PARTIES : Slocomb Investments Pty Ltd - Plaintiff JH & EJ Williams Pty Ltd - Defendant FILE NUMBER(S) : SC 2010/81855 COUNSEL : Mr A M Gruzman - Plaintiff Mr D A Moujalli - Defendant SOLICITORS : Savio Solicitors - Plaintiff Russell J Baxter - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J MONDAY 16 AUGUST 2010 2010/81855 - SLOCOMB INVESTMENTS PTY LTD v JH & EJ WILLIAMS PTY LTD JUDGMENT 1 The plaintiff applies under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand served on it by the defendant. 2 The debt to which the statutory demand relates is a judgment debt or, at least, the balance of a judgment debt unpaid at the time of the issue and service of the statutory demand. 3 The statutory demand is dated 5 March 2010 and was served on 12 March 2010. The description of the debt therein refers to a judgment of $37,989.68 of the Local Court at Tweed Heads on 16 June 2009 and a payment of $500 on 18 September 2009 leaving a balance of $37,489.68. It is that balance that is the subject of the statutory demand. 4 In bringing its s 459G claim, the plaintiff relies on the following sequence of events following service of the statutory demand: (1) On 1 April 2010, the plaintiff filed in the Local Court an application for an order that the judgment debt be paid by instalments. (2) On 7 April 2010, the Local Court made such an order requiring payment of $500 per month. (3) Thereafter, in each of the months of April, May, June and July 2010, a payment of $500 was made in accordance with the order. (4) On 11 August 2010, the defendant filed in the Local Court an objection to the order for payment by instalments. (5) On the same day, 11 August 2010, the order for payment by instalments was set aside. (6) On 13 August 2010, the plaintiff applied again for an instalment order. (7) Also on 13 August 2010, the Local Court refused to make an instalment order. (8) Earlier today, 16 August 2010, the plaintiff filed in the Local Court yet another application for an instalment order, which application is at this point undetermined. 5 The plaintiff says that, in terms of s 459J(1)(b), there is "some other reason" – that, some reason other than a reason stated in an earlier provision of s 459J – why the statutory demand should be set aside. 6 If the position were that execution of the Local Court judgment was stayed because of the existence of an instalment order, the court might well find "some other reason" in terms of s 459J(1)(b): see Tatlers.com.au Pty Limited v Davis [2006] NSWSC 1055; (2006) 203 FLR 473. 7 But the plaintiff cannot make that argument here. There is, at this point, no instalment order in force. Section 107 of the Civil Procedure Act 2005 therefore does not operate to stay execution of the judgment. 8 Nor does any stay operate by force of rule 37.5 of the Uniform Civil Procedure Rules 2005. While under rule 37.5(1) execution of a judgment is stayed from the time an application for an instalment order is made until the application is determined, it is provided by rule 37.5(2) that rule 37.5(1) does not apply if the applicant has previously made an instalment order application with respect to the same debt. That is the case at this point. The application now pending and undetermined is the third made by the plaintiff. 9 It cannot be argued that the pending application relates to a debt distinct from the debt the subject of the two earlier applications. I do not accept the proposition that a judgment debt somehow loses its identity and takes on a new identity when part payment is made. The obligation arising from the judgment remains constant despite part payment which causes its quantum to reduce. 10 Because no stay of execution of the judgment is now operative, the plaintiff cannot call in aid the thinking which in the Tatlers.com.au case led to the statutory demand being set aside. 11 As was submitted on behalf of the defendants, the pendency of the latest instalment order application makes the position somewhat akin to one in which the judgment from which the judgment debt arises is subject to an undetermined appeal. That, of itself, is also something that cannot amount to "some other reason" within s 459J(1)(b), although the section might be called in aid if it has shown that the appeal has reasonable and solid prospects of success: Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454. 12 No attempt to show such prospects has been made here in respect of the revived application for an instalment order; added to which it is particularly noteworthy that the current application comes hard on the heels of refusal of an apparently identical application on 13 August 2010 and an earlier successful objection to the first instalment order. 13 In those circumstances, although no particular analysis has been offered in respect of the matter, it must be regarded as quite unlikely that the new application will succeed. 14 The plaintiff's case under s 459J(1)(b) has not been made out. 15 It remains to consider the significance of the fact that four payments of $500 each were made pursuant to the now no longer operative instalment order after the statutory demand was served. 16 These payments operated by way of partial satisfaction of the statutory demand. They do not warrant any conclusion that there is or was at any time a genuine dispute about the amount of the debt. They are, in essence, irrelevant to the question before me, which is whether the statutory demand should be set aside. 17 The position is one in which there has been partial satisfaction of the statutory demand. No ground has been established for setting aside the statutory demand which will, therefore, continue to have effect as to its unsatisfied balance. 18 I order that the plaintiff's originating process filed on 1 April 2010 be dismissed with 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. 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