Saratoga v Canjs [2010] NSWSC 654

Saratoga v Canjs [2010] NSWSC 654

The statutory demand is set aside because the plaintiff, as guarantor, has an arguable offsetting claim arising from an equitable set-off available to the principal debtor, provided that in any subsequent action on the guarantee the principal debtor is joined as a party so that all rights and liabilities may be properly determined.

Parties
Plaintiff: Saratoga Integration Pty Limited; Defendant: Canjs Pty Limited; Defendant: Zipor Pty Limited; Defendant: Campsie Mall Pty Limited
Jurisdiction
Australia
Judgment Date
21 June 2010
Procedural Posture
Application to Set Aside Statutory Demand / Judgment
Outcome
Statutory demand set aside on condition; costs to plaintiff
Legal Topics
Statutory Demand, Equitable Set Off, Guarantee and Indemnity, Breach of Covenant for Quiet Enjoyment, Assignment of Lease, Unconscionable Conduct
Corporations Law Equity Contract Law Property Law Statutory Demand Equitable Set Off Guarantee and Indemnity Breach of Covenant for Quiet Enjoyment +2 more

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Parties

Saratoga Integration Pty Limited

Plaintiff

Canjs Pty Limited

Defendant

Zipor Pty Limited

Defendant

Campsie Mall Pty Limited

Defendant

Procedural Posture

Application to Set Aside Statutory Demand / Judgment

Legal Issues

  1. 1 Whether the statutory demand should be set aside on grounds of defect, dispute as to liability or offsetting claim
  2. 2 Whether a guarantor can raise equitable set-off available to principal debtor
  3. 3 Whether there was a breach of covenant for quiet enjoyment amounting to repudiation

Ratio Decidendi

The statutory demand is set aside because the plaintiff, as guarantor, has an arguable offsetting claim arising from an equitable set-off available to the principal debtor, provided that in any subsequent action on the guarantee the principal debtor is joined as a party so that all rights and liabilities may be properly determined.

Court Disposition

Statutory demand set aside on condition; costs to plaintiff

Orders

  • Upon condition that if the defendants, or one or more of them, sue the plaintiff upon its guarantee or indemnity the plaintiff will not raise as a defence any equitable set off available to Saratoga Professional Services Pty Ltd unless it joins Saratoga Professional Services Pty Ltd as a party to such proceedings,...
  • The defendant to pay the plaintiff's costs.