In the matter of 360 TV Network Pty Limited [2015] NSWSC 2142

Supreme Court New South Wales

Medium Neutral Citation: In the matter of 360 TV Network Pty Limited [2015] NSWSC 2142 Hearing dates: 25 August 2015 Date of orders: 25 August 2015 Decision date: 25 August 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Statutory demand varied; originating process otherwise dismissed. Catchwords: CORPORATIONS – creditor's statutory demand – application to set aside statutory demand – genuine dispute as to the amount or existence of debt – whether directors salary not due and payable – whether defendant had abandoned employment – offsetting claim – where claim not particularised or quantified – variation of statutory demand – abuse of process – collateral purpose – no abuse – where statutory demand underpinned by debt about which there is no genuine dispute. Legislation Cited: (CTH) Corporations Act 2001, s 459G Category: Principal judgment Parties: 360 TV Network Pty Ltd (ACN 109 929 704) (plaintiff) Jonathan Papworth (defendant) Representation: Counsel: C O'Neill (plaintiff) B Hemsworth (solicitor) (defendant)

Solicitors: Kennedys (plaintiff) Somerville Legal (defendant) File Number(s): 15/156581

Judgment (ex tempore) 1. HIS HONOUR: By originating process filed on 26 May 2015, the plaintiff company 360 TV Network Pty Limited applies pursuant to (CTH) Corporations Act 2001, s 459G, for an order setting aside a creditor's statutory demand dated 1 May 2015 and served on it by the defendant Jonathan Papworth on or about 5 May 2015. Although the precise date of service of the demand is not established by the evidence, no point was taken that the originating process was out of time and accordingly I need not consider that question any further. 2. The statutory demand asserted that the company owed Mr Papworth the amount of $27,405 described in the schedule as "salary owing pursuant to employment agreement between the creditor and the debtor company" and particularised as amounts of $3,915 for monthly salary said to be due and payable on 23 October 2014, 23 November 2014, 23 December 2014, 23 January 2015, 23 February 2015, 23 March 2015 and 23 April 2015. The demand was accompanied by the affidavit of Mr Papworth which deposed that the amount claimed was due and payable by the debtor company and that he believed that there was no genuine dispute about the existence or amount of the debt. 3. On the application presently before the Court, essentially three grounds were raised: first, that there was a genuine dispute as to whether the debt claimed was due; secondly, that there was an offsetting claim said to arise out of the unilateral withdrawal of moneys, principally on account of arrears of salary, by Mr Papworth in December 2014; and thirdly, that the service of the demand was an abuse of process in that it was an attempt to exert pressure on the company and the other directors and shareholders to buy him out from the company in circumstances in which he wished to be extricated from it.