Supreme Court New South Wales Medium Neutral Citation: In the Matter of First Equilibrium Pty Ltd [2012] NSWSC 1625 Hearing dates: 10 December 2012 Decision date: 10 December 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Creditor's statutory demand varied Catchwords: CORPORATIONS - creditors statutory demand - application to set aside creditor's statutory demand - Corporations Act s 459G - application to vary creditor's statutory demand - Corporations Act s 459H Legislation Cited: (Cth) Corporations Act 2001, s 459G, s 459H Category: Interlocutory applications Parties: First Equilibrium Pty Limited - Plaintiff Bluestone Property Services Pty Limited - Defendant Representation: Counsel: Mr J Baird - Plaintiff Ms C Latham - Defendant Solicitors: Avondale Lawyers - Plaintiff ERA Legal - Defendant File Number(s): 2012/ 312787 Judgment (ex tempore) 1HIS HONOUR: The plaintiff First Equilibrium Pty Ltd filed an originating process on 9 October 2012, returnable on 6 December 2012, claiming an order setting aside a statutory demand pursuant to (Cth) Corporations Act 2001, s 459G, served on it by the defendant, Bluestone Property Services Pty Ltd, which statutory demand claimed a debt of $864,689.67 pursuant to a judgment given in this Court on 9 April 2008 for $600,000 together with interest. 2When the matter came before the Registrar on 6 December it was adjourned to today on the basis that the plaintiff wished to have the matter set down for hearing, with a half-day estimate, and the defendant wished the matter to proceed immediately on the basis that it could be shortly disposed of. Essentially, the argument before the Court today proceeded as the plaintiff's adjournment application, in which the plaintiff sought to demonstrate that it had a sufficiently arguable case that there was a genuine dispute to justify further investigation at a full hearing. Given the proximity of the end of term and the Court's calendar in the early new year, it is impossible that a hearing could have been allocated before the second half of March 2013. 3After argument had proceeded on the adjournment application, it appeared to me that the highest that the plaintiff's case could be put so far as an offsetting claim was concerned was in a sum of $570,000. It is unnecessary at this stage to explain how this arises, and this by no means amounts to a finding that the plaintiff has an offsetting claim to that extent, but it seemed to me that on no basis could it seriously be contended that the plaintiff had an offsetting claim in a greater sum than that amount, the consequence of which was that, applying the formula in Corporations Act, s 459H, there would have been, on any view, a substantiated amount of at least $294,689.67. 4With that in mind, I have afforded the defendant the election of having the matter proceed to a full and final hearing of the application next year, or immediately varying the demand to that lesser sum pursuant to s 459H. It seems to me that by adopting that course no injustice is done to the plaintiff, whose case must be limited to what is disclosed on its 459G supporting affidavit in accordance with the Graywinter principle, which the defendant was afforded the opportunity either of an early resolution or of contesting the matter in full. 5I should make clear that by making the order I am about to make it is not intended to preclude the plaintiff from arguing on a future occasion that there was no genuine dispute or offsetting claim in that respect, nor from issuing a further statutory demand in that respect. 6I make the following orders: (1)Pursuant to (Cth) Corporations Act 2001, s 459H, order that the statutory demand issued and served by the defendant on the plaintiff and dated 18 September 2012 be varied by substituting for the sum of $864,689.67 the sum of $294,689.67. (2)Declare that the demand has had effect as so varied as from when the demand was served on the plaintiff company. [Counsel addressed on costs] 7It seems to me that, on the one hand, the outcome has been a significant reduction in the amount of the demand, but without admissions and in the interests of an early resolution, on the other, the demand, albeit as varied, remains on foot. 8On balance, I think there should be no order for costs with the intent that each party bear its own 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 May 2013