Supreme Court New South Wales Medium Neutral Citation: Agusta Pty Ltd ACN 118 267 726 v Provident Capital Limited [2011] NSWSC 807 Hearing dates: 26 July 2011 Decision date: 26 July 2011 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: The statutory demand dated 7 March 2011 served by the defendant on the plaintiff is set aside. The defendant to pay the plaintiff's costs of the proceedings Catchwords: CORPORATIONS - Corporations Act 2001 (Cth) ss 459J(1)(b), 459E(3) - statutory demand - where statutory demand relies on judgment debt but claims a different amount because of an amount received reducing the debt and also claims interest - requirement for accompanying affidavit in respect of amount received - statutory demand set aside Legislation Cited: Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Civil Procedure Act 2005 (NSW) Cases Cited: Anderson Formrite Pty Ltd v CASC Hire Pty Ltd (2006) 24 ACLC 154 Category: Principal judgment Parties: Agusta Pty Ltd ACN 118 267 726 - Plaintiff Provident Capital Limited - Defendant Representation: Counsel: J.T. Svehla - Plaintiff B.K. Nolan - Defendant Solicitors: Colin Biggers & Paisley - Plaintiff Tiernan Lawyers - Defendant File Number(s): 2011/106676 EX TEMPORE Judgment 1HIS HONOUR: On 23 November 2007 the defendant obtained a verdict and judgment in the District Court of New South Wales against the plaintiff (and one other) in the sum of $119,341 together with interest in the amount of $19,225.34. The total judgment amount was accordingly $138,566.34. 2On 7 March 2011 the plaintiff served on the defendant a statutory demand claiming the judgment amount, less $271.84 described in the schedule to the demand as being an amount "received from the Sheriff of New South Wales following the seizure and sale by the Sheriff of personal property from the second defendant to the District Court Proceedings", plus an amount of $49,799.83 described as "Interest from the date of judgment to present in accordance with s 101 of the Civil Procedure Act (NSW) 2005". 3The schedule to the demand included calculations yielding the amount claimed as interest. It did not indicate the date upon which the amount from the Sheriff was received, although it may be inferred from the calculations that the amount was received between 10 September 2009 and 31 December 2009. 4The demand was not accompanied by an affidavit. 5Section 459J(1)(b) of the Corporations Act 2001 (Cth) ("the Act") provides that: (1) On an application under s 459G, the Court may by order set aside the demand if it is satisfied that: ... (b) there is some other reason why the demand should be set aside. 6Section 459E(3) of the Act provides that: (3) Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that: (a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and (b) complies with the rules. 7By Originating Process dated 1 April 2011, the plaintiff moves to set aside the statutory demand on the basis that it should have been accompanied by an affidavit on the footing that the amount claimed is not a judgment debt within the meaning of the section because it is an amount different from that which appears on the face of the judgment. 8The plaintiff relies on the decision of the Federal Court of Australia in Anderson Formrite Pty Ltd v CASC Hire Pty Ltd (2006) 24 ACLC 154, in which Siopis J held that the term judgment debt in s 459E(3) of the Act means, and is restricted to, the amount reflected on the face of the judgment, without variation, and where a different amount is claimed in the demand, the demand must be accompanied by an affidavit. 9So far as the statutory demand in this case involves a reduction by way of monies received by the creditor, the position is on all fours with the decision. In the absence of being persuaded (which I am not) that the decision is clearly wrong, I propose to follow it with the consequence that the statutory demand must be set aside. 10I should say, however, that I have significant doubt as to the correctness of his Honour's judgment, so far as it would entail the conclusion that the debt is not a judgment debt by reason only of the addition of the claim for interest under s 101 of the Civil Procedure Act 2005 (NSW), read with Pt 36, r 36.8 of the Uniform Civil Procedure Rules 2005 (NSW). 11Sections 101(2) and (3) of the Civil Procedure Act 2005 (NSW) provide that: (2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date on which the judgment takes effect, or (b) such later date as the court may order. (3) Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary. 12Part 36, r 36.8 of the Uniform Civil Procedure Rules 2005 (NSW) prescribes the rate of interest payable under s 101 of the Civil Procedure Act 2005 (NSW). 13In my view, the interest amount can be derived simply by an empirical arithmetic calculation applying the statutory interest rate to the amount of the judgment and can properly be regarded as part of the judgment debt. 14I do not consider that there is any policy reason why this should not be the case. 15The statutory demand dated 7 March 2011 from the defendant to the plaintiff is set aside. 16The defendant is to pay the plaintiff's costs of the proceedings. ********** 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. Decision last updated: 28 July 2011