In the matter of Strathfield and District Hebrew Congregation [2015] NSWSC 938

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Strathfield and District Hebrew Congregation [2015] NSWSC 938 Hearing dates: 20 April 2015 Date of orders: 20 April 2015 Decision date: 20 April 2015 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Creditor's statutory demand set aside. Catchwords: CORPORATIONS – winding up – creditor's statutory demand – application to set aside creditor's statutory demand – whether genuine dispute as to existence or amount of debt. Legislation Cited: (Cth) Corporations Act 2001, s 459E, s 459G, s 459H, s 459J Category: Principal judgment Parties: Strathfield and District Hebrew Congregation (plaintiff) Samuel Tov-Lev (defendant) Representation: Counsel: M A Friedgut (plaintiff) S Tov-Lev (in person) (defendant)

Solicitors: Eddy Neumann Lawyers (plaintiff) File Number(s): 2015/357540

Judgment (ex tempore) 1. HIS HONOUR: On or about 26 February 2015, the defendant Rabbi Samuel Tov-Lev, an undischarged bankrupt, issued and served on the plaintiff Strathfield and District Hebrew Congregation, a company limited by guarantee which has been excused from the requirement to use the word "limited" in its name, a creditor's statutory demand under (Cth) Corporations Act 2001, s 459E, demanding an amount of $3,950,000, described in the schedule to the demand as: Debt owed in respect to my true wages for all my work and entitlements for sixteen years of service as per my affidavit and detailed attached statement of 18 February 2014 marked annexure A. 1. That attachment in turn set out a claim for remuneration as rabbi at the rate of $100,000 per annum for sixteen years, as cantor at the rate of $80,000 per annum for sixteen years, administration at the rate of $30,000 per annum for sixteen years, caretaker of the synagogue complex at the rate of $23,000 per annum for sixteen years, and additional amounts for High Holy Day services, less an amount paid and some additional allowances. The demand was verified, as required, by an affidavit that accompanied it, in which the rabbi stated that the total amount was due and payable, and that he believed that there was no genuine dispute about the existence or amount of any of the debts. 2. By originating process filed on 18 March 2015, the Congregation applies pursuant to Corporations Act, s 459G, for an order setting aside the demand pursuant to s 459H on the ground that there is a genuine dispute as to the debt, and alternatively, under s 459J, on the ground that the demand is an abuse of process. 3. Essentially, the question before me is a very narrow one. I am not concerned in this case to decide whether the rabbi's claim against the Congregation is or is not valid. That is a matter which, if there is a genuine dispute about it, is for another Court on another day. Nor is it for me to determine on this application whether the termination of the rabbi's employment and his ejectment from the rabbinical residence was or was not lawful. Nor is it for me to determine whether the bankruptcy proceedings against him were validly and properly conducted. The essential question I have to determine is whether there is a genuine dispute about the debt claimed in the statutory demand, and if there is a genuine dispute, I am obliged to set the demand aside, leaving it to the rabbi to pursue his claim in such Court and such forum as may be appropriate. 4. The rabbi submitted that I should determine that his claim be determined in the London Beth Din, but the only claim before me is a claim to set aside the creditor's statutory demand, and that is a matter that only this Court or the Federal Court of Australia could determine. 5. I have summarised the nature and amount of the rabbi's claim. Against that, there is in evidence a document, to which he is apparently a signatory, by which the terms of his appointment as at 23 October 2000 were apparently confirmed as involving remuneration of $23,500 per annum, a car allowance, reimbursement for telephone rental and some other allowances. It was also provided that he reside in the rabbinical residence. There is also in evidence a letter which, on its face, gave him six months' notice – in excess of the three months required by the terms of employment to which I have referred – of the termination of his engagement as rabbi, and three months to vacate the rabbinical residence. In addition, it is manifest from the evidence before me that there has been a long ongoing dispute between the rabbi and the Congregation – or at least the board of the Congregation – as to his entitlements. This has included legal proceedings in which he sought reinstatement and damages for wrongful dismissal. 6. It is manifest that the low threshold that a company must surmount to show a genuine dispute – that is to say, a plausible contention requiring further investigation – has been surmounted. There is plainly a genuine dispute as to whether the company is indebted to the rabbi for the amount claimed in the demand. 7. That suffices to mandate that I must set aside the statutory demand. As I have said, that does not mean that I have determined the dispute one way or the other, nor does it necessarily preclude the rabbi from pursuing his claim in an appropriate jurisdiction – which may or may not be the Beth Din, and may or may not be in Sydney or London. I simply need not have any regard to that issue. 8. As it is manifest that there is a genuine dispute, it is unnecessary to consider the contentions that there is a defect in the demand by reason of the absence of an address for service, or that the demand amounts to an abuse of process. 9. The Court orders that: 1. The creditor's statutory demand dated 26 February 2015 served by the defendant on the plaintiff be set aside. 2. The defendant pay the plaintiff's costs.