In the Matter of Limar International Pty Ltd [2012] NSWSC 1593

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of Limar International Pty Ltd [2012] NSWSC 1593 Hearing dates: 5 November 2012 Decision date: 05 November 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Creditor's statutory demand set aside Catchwords: CORPORATIONS - creditor's statutory demand Legislation Cited: (Cth) Corporations Act 2001, s 459G, s 459H, s 459J, s 459N Category: Principal judgment Parties: Limar International Pty Limited - Plaintiff Global Foods Group Pty Limited - Defendant Representation: Counsel: D Farrar (solicitor) - Plaintiff DG Healey - Defendant Solicitors: Farrar Lawyers - Plaintiff Harris Freidman - Defendant File Number(s): 12 / 312265

Judgment (ex tempore) 1HIS HONOUR: The defendant Global Foods Group sued the plaintiff Limar International Pty Limited in the Local Court for goods, being pistachio nuts, sold and delivered, claiming a total of about $74,000. Limar cross-claimed for damages for breach of contract. The Local Court magistrate gave judgment for Global for a much lesser sum, of $24,000 approximately, and on Limar's cross-claim gave judgment for Limar for $6,400. On or about 14 September 2012, Global served on Limar a creditor's statutory demand claiming a sum $21,820.05, being the difference between the judgment (inclusive of interest) in Global's favour, and the judgment on the cross-claim (inclusive of interest) in my Limar's favour. By originating process filed on 9 October 2012, Limar claims an order pursuant to (Cth) Corporations Act 2001, s 459G, setting aside the creditor's statutory demand on the ground that the indebtedness claimed in it is the subject of a genuine dispute. 2Although in the course of the evidence Global sought to tender evidence to prove that the originating process was served, if not filed, beyond the time limited by section 459G, I rejected that evidence, as it was served so late prior to the hearing as to deprive the plaintiff of an opportunity to address it. Accordingly, the present hearing proceeds on the footing that the originating process and supporting affidavit were served within time. 3On such an application the question is whether the Court is satisfied that there is a genuine dispute between the plaintiff company and the respondent creditor about the existence or amount of the debt the subject of the claim. 4Limar has filed a summons initiating an appeal in the Common Law Division of the Court from the magistrate's decision, purportedly as of right, although the orders sought include a claim for leave to appeal, and the errors it asserts are errors of law. An appeal to this Court lies from a magistrate's decision in the local court by right in the case of error in point of law alone but otherwise only by leave. 5An examination of the magistrate's judgment reveals that the magistrate's conclusions adverse to Limar depend almost entirely on the magistrate's preference for the evidence adduced on behalf of Global over that adduced on behalf of Limar. No ground of appeal directly raises the magistrate's preference for Global's witnesses over Limar's witnesses; all the grounds of appeal being framed in terms of error of law. 6When one examines the magistrate's judgment it becomes clear that the magistrate's legal conclusions flowed from the findings of fact made, rather than being independent legal conclusions. It seems very likely that if Limar is to succeed on its appeal it will need leave to appeal, and probably leave to amend its summons to add grounds of appeal that properly articulate the case it wishes to make. 7In those circumstances, I think it very doubtful that a genuine dispute has been demonstrated in the sense of one that can be reasonably pursued at appellate level. However, Global has indicated that it would be prepared to accept an order setting aside the demand upon a condition that the sum of the demand be paid into Court. It seems to me that in the circumstances that is an appropriate outcome. 8As the result is one that the defendant indicated at the outset it was prepared to accept, it seems to me that the plaintiff should pay the defendant's costs. 9I make the following orders: (1)Pursuant to (Cth) Corporations Act 2001, s 459H, s 459J and s 459N, order that upon condition that the plaintiff, by 3 December 2012, pay into the Court to the credit of these proceedings the sum claimed in the creditor's statutory demand, being the sum of $21,820.05, the creditor's statutory demand dated 14 September 2012 be set aside. (2)Order that the plaintiff pay the defendant's costs of the proceedings.