In the matter of Ligon 158 Pty Limited; In the matter of 12 Years Juice Foods Australia Pty Limited [2016] NSWSC 652

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Ligon 158 Pty Limited; In the matter of 12 Years Juice Foods Australia Pty Limited [2016] NSWSC 652 Hearing dates: Thursday, 5 May 2016 Date of orders: 06 May 2016 Decision date: 06 May 2016 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: In proceedings 2015/254776 originating process dismissed with costs. In proceedings 2015/245329 creditor's statutory demand set aside with costs. Catchwords: CORPORATIONS – winding up – winding up in insolvency – creditor's statutory demand – application to set aside – whether there is a genuine dispute as to existence of debt Legislation Cited: (CTH) Corporations Act 2001, s 459E, s 459G Cases Cited: Re Wollongong Coal Ltd [2015] NSWSC 1680 Category: Principal judgment Parties: 2015/ 254776 Ligon 158 Pty Ltd (plaintiff) Deborah Huber (defendant)

2015/ 245329 12 Years Juice Foods Australia Pty Ltd (plaintiff) Ronald Binetter (defendant) Representation: Counsel: M Henry (plaintiff) C P O'Neill (defendant)

Solicitors: Polczynski Lawyers (plaintiff) Peterson Haines (defendant) File Number(s): 2015/ 2547762015/ 245329

Judgment (EX TEMPORE) 1. HIS HONOUR: Before the Court are two applications under (CTH) Corporations Act 2001, s 459G, to set aside creditors' statutory demands. In proceedings 2015/245329, the plaintiff 12 Years Juice Foods Australia Pty Ltd, formerly known as Nudie Juice Foods Australia Pty Ltd, and to which for the sake of convenience I shall refer as "JFA", applies to set aside a demand served on it on 31 July 2015 by Dr Ronald Binetter claiming a debt of $200,000 which is described in the Schedule to the demand in the following terms: On demand loans from the creditor to the company pursuant to cheques drawn by the creditor in favour of the company which were presented by the company on the following dates: 24 March 2011 $100,000; 25 March 2011 $70,000; 25 March 2011 $30,000, Total $200,000. 1. In proceedings 2015/254776, Ligon 158 Pty Ltd (which I shall call "Ligon 158", or "158") applies to set aside a demand served on it on 10 August 2015 by Ms Deborah Huber claiming a debt of $410,000 described in the Schedule to the demand as follows: On demand loan from the creditor to the company pursuant to a cheque drawn by the creditor in favour of the company on 1 July 2010 and presented by the company on 2 July 2010: $410,000, Total $410,000. 1. Mr Andrew John Binetter is a director of each of JFA and Ligon 158. Dr Ronald Binetter – from whom he is estranged – is his brother and the husband of Ms Deborah Huber. Because of the commonality of the parties, the proceedings were heard together with evidence in one being evidence in the other, although there is only a slight overlap in the relevant factual material. The sole issue in each case is whether there is a genuine dispute as to the existence of the debts to which each demand relates. 2. The applicable law on such an application is well established, and has recently been collected by Black J in Re Wollongong Coal Ltd [2015] NSWSC 1680 (at [9] to [22]). For present purposes, it suffices to summarise the principles as follows. A dispute is to be regarded as genuine if it is not plainly vexatious or frivolous or may have some substance, or involves a plausible contention requiring investigation. The task faced by a company challenging a statutory demand on this ground is by no means a difficult or demanding one, and the company will fail only if it is found that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. The Court does not engage in a balancing exercise between the strengths of competing contentions; but if it sees any factor that on rational grounds indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even though the contrary case seems stronger. Except in extreme cases, the Court on this kind of application is not ordinarily concerned to engage in an inquiry as to the credit of the deponent of the affidavit filed in support of the application: the question is whether there is plausible evidence to establish the existence of a genuine dispute, not whether the evidence is likely to be accepted on a final hearing of any such claim. 3. It is against the background of those principles that I consider these applications. 4. Mr Andrew John Binetter was cross-examined, by video-link from New York, without any spectacular result. He certainly made no concession in the course of his cross-examination that would result in the Court being persuaded on that basis that there was no genuine dispute. But it was distinctly put to him that the disputes he sought to raise were, in effect, spurious – which he denied. If his denial is plausible, I must find that there is a genuine dispute. 5. Dr Binetter and Ms Huber were ultimately not cross-examined, but on the basis that I should draw no adverse inference from the failure to impugn their evidence in that way.