CORPORATIONS – winding up – statutory demand – application to set aside – Corporations Act 2001, ss 459G, 459H – whether evidence sufficient to establish offsetting claim – whether evidence sufficient to establish quantum of offsetting claim
[This headnote is not to be read as part of the judgment]
The respondent, Analysis & Technology Australia Pty Limited, served a statutory demand on the applicant, Britten-Norman Pty Limited, pursuant to the Corporations Act 2001 (Cth), s 459E. The applicant applied to set aside the statutory demand pursuant to the Corporations Act 2001 (Cth), ss 459H(1)(b), 459J(1)(a) and 459J(1)(b). The primary judge dismissed the application.
The applicant sought leave to appeal from that dismissal. The summons for leave to appeal and the appeal were heard concurrently. The application raised two issues for determination:
Whether the evidence was sufficient to satisfy the Court that there was an offsetting claim pursuant to the Corporations Act, s 459H(1)(b); and
Whether, pursuant to the Corporations Act, s 459H(2)-(3) the evidence was sufficient to satisfy the Court that the amount of the offsetting claim was greater than the amount of the statutory claim less the minimum statutory amount of $2,000.
The Court granted leave to appeal and allowed the appeal.
Held by the Court (Beazley P, Meagher and Gleeson JJA):
In respect of (1):
Pursuant to the Corporations Act 2001, s 459G there must be evidence that satisfies the court that there is “a serious question to be tried”, or “an issue deserving of a hearing” or a “plausible contention requiring investigation” of the existence of either a dispute as to the debt or an offsetting claim under the Corporations Act 2001, s 459H: .
Principal legislation and cases considered: Corporations Act 2001, ss 459G, 459H; Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785; Chase Manhattan Bank Australia Limited v Oscty Pty Limited  FCA 1208; 17 ACSR 128; Scanhill Pty Ltd v Century 21 Australasia Pty Ltd  FCA 618; (1993) 47 FCR 451.
Evidence sufficient to satisfy this test need not conclusively prove the claim or otherwise be incontrovertible or substantially non-contestable: . The existence of evidence that casts doubt on the contention that there is a disputed debt or an offsetting claim is not the basis for a rejection of an application under the Corporations Act, s 459H: . The evidence does not have to be supported by contemporaneous documentation: .
Principal legislation and cases considered: Corporations Act 2001, ss 459G, 459H; Evidence Act 1995 , s 55; Corporations Rules, r 2.4(1); Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785; TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd  VSCA 70; 66 ACSR 67; Infratel Networks Pty Ltd v Gundry’s Telco & Rigging Pty Ltd  NSWCA 365; 297 ALR 372.
The primary judge erred because when the evidence is considered as a whole, having regard to the absence of challenge to aspects of it, the evidence established a plausible contention requiring investigation: .
In respect of (2):
The evidence before the primary judge was sufficient to establish that the applicant had an offsetting claim for the purpose of the Corporations Act, s 459H(1)(b) for misleading or deceptive conduct (and for that matter in contract) which was greater than the statutory claim less the minimum statutory amount of $2,000.