In the matter of Benjamin & Khoury Pty Ltd [2023] NSWSC 756

In the matter of Benjamin & Khoury Pty Ltd [2023] NSWSC 756

A creditors' statutory demand cannot be sustained where payment to the person named in the demand would not discharge the debt due to an unresolved solicitor's lien, and there is a seriously arguable dispute as to whether the debt is due and payable to the client; additionally, service of the demand in these circumstances undermines the statutory regime and provides some other reason to set aside the demand under s 459J(1)(b) of the Corporations Act.

Jurisdiction
Australia
Judgment Date
29 June 2023
Procedural Posture
Application to Set Aside Creditors' Statutory Demand / Final Determination and Order
Outcome
Statutory demand set aside. Defendant ordered to pay plaintiff's costs from 17 May 2023.
Legal Topics
['statutory Demand' 'winding Up' "solicitor's Lien" 'genuine Dispute' 'debt Due and Payable']
['corporations Law' 'equity'] ['statutory Demand' 'winding Up' "solicitor's Lien" 'genuine Dispute' 'debt Due and Payable']

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Procedural Posture

Application to Set Aside Creditors' Statutory Demand / Final Determination and Order

Legal Issues

  1. 1 ["Whether statutory demand should be set aside on grounds of a seriously arguable dispute as to debt being due and payable to client given solicitors' lien" 'Whether some other reason exists under s 459J(1)(b) of Corporations Act to set aside statutory demand']

Ratio Decidendi

A creditors' statutory demand cannot be sustained where payment to the person named in the demand would not discharge the debt due to an unresolved solicitor's lien, and there is a seriously arguable dispute as to whether the debt is due and payable to the client; additionally, service of the demand in these circumstances undermines the statutory regime and provides some other reason to set aside the demand under s 459J(1)(b) of the Corporations Act.

Court Disposition

Statutory demand set aside. Defendant ordered to pay plaintiff's costs from 17 May 2023.

Orders

  • ["Creditor's statutory demand dated 27 April 2022 issued by the Defendant, Ms Rahme, to the Plaintiff, Benjamin & Khoury Pty Ltd set aside." "Defendant, Ms Rahme, to pay the Plaintiff's costs of and incidental to the proceedings on and from 17 May 2023, on an ordinary basis as agreed or as assessed." 'Exhibit D1 to...