KV RENTALS v HKAC [2010] NSWSC 405

New South Wales Supreme Court

CITATION : KV RENTALS v HKAC [2010] NSWSC 405

HEARING DATE(S) : 04/05/2010 (Further submissions received 05/07/10)

JUDGMENT DATE : 19 August 2010

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

DECISION : I dismiss both proceedings and will hear the parties on costs.

CATCHWORDS : Corporations Law. Application to set aside statutory demand under s 459 G of the Corporations Act. Offsetting claim said to be a claim by a joint debtor against the defendant. Held no joint debt so no offsetting claim established. Proceedings dismissed.

KV RENTALS PTY LIMITED v HKAC ASSET MANAGEMENT SERVICE (AML) PTY LIMITED (FORMERLY KNOWN AS ALLCO PARTIES : MANAGEMENT LIMITED) KV RENTALS PTY LIMITED v HKAC ASSET MANAGEMENT SERVICE (AAFL) PTY LIMITED (FORMERLY KNOWN AS ALLCO ASSET FINANCE LIMITED)

FILE NUMBER(S) : SC 2010/59699; 2010/59705

COUNSEL : Mr AP Coleman for plaintiff Miss K Rees for defendant

SOLICITORS : DibbsBarker for plaintiff Chang, Pistilli & Simmons for defendant

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IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Associate Justice Macready

Thursday 19 August 2010

10/59699 - KV RENTALS PTY LIMITED v HKAC ASSET MANAGEMENT SERVICE (AML) PTY LIMITED (FORMERLY KNOWN AS ALLCO MANAGEMENT LIMITED)

10/59705 - KV RENTALS PTY LIMITED v HKAC ASSET MANAGEMENT SERVICE (AAFL) PTY LIMITED (FORMERLY KNOWN AS ALLCO ASSET FINANCE LIMITED) JUDGMENT 1 His Honour: These proceedings are to set aside statutory demands served by the defendant on the plaintiff in each matter. As the matters are similar and concern similar documentation I have ordered that the proceedings be heard together and that the evidence in one matter is evidence in the other. 2 The underlying commercial transactions concern commercial financing leases in respect of a number of aircraft. 3 By statutory demands dated 15 February 2010, the defendants seek to recover from the plaintiff sums of $220,014.10 (in proceedings 10/59699) and $236,904.38 (in proceedings 10/59705) respectively. The debts as described in the demands are said to arise from: "Liability pursuant to the Management Fee Letters and Management Letter Variations ... ("the Agreements") to pay to the Creditor amounts equal to Input Tax Credits received by the Company under the New Tax System (Goods and Services Tax) Act for the period July 2009 to December 2009 in respect of Payments made under the Agreements" 4 The statutory demands attach a schedule detailing amounts claimed. 5 The plaintiff originally sought to dispute the debt but that is no longer pressed. The plaintiff suggests there are offsetting claims that in respect of the demand subject to proceedings 10/59699 should reduce the debt to $156,613.49 and in respect of the demand in proceedings 10/59705 should reduce the debt to $145,038.19. Background to the proceedings 6 The plaintiff, KV Rentals Pty Limited (previously known as Allco Rentals Pty Limited) ("KV Rentals"), is a subsidiary of KV Aviation Holdings Pty Limited which initially purchases the aircraft and enters into lease agreements with airlines who then operate the aircraft. 7 There are different defendants in each proceeding. One defendant Allco Asset Finance Limited has now changed its name to HKAC Asset Management Services (AAFL) Pty Limited ("AAFL"). It is a subsidiary of Allco Finance Group Limited ("AFGL"). AAFL is the defendant in proceedings number 10/59705. 8 Allco Management Limited has now changed its name to HKAC Asset Management Services (AML) Pty Limited ("AML"). It is also a subsidiary of AFGL. It is the defendant in proceedings number 10/59699. 9 The statutory demands sought payment of: