In the matter of Shield Hardwood Pty Limited [2020] NSWSC 697

In the matter of Shield Hardwood Pty Limited [2020] NSWSC 697

There was no genuine dispute about the debt. Section 126 of the Corporations Act 2001 (Cth) permitted the plaintiff to contract through an individual with express or implied authority without using a common seal, and the defendant was entitled to treat Ms Li, a director and Chief Executive Officer, as authorised; the contemporaneous documents did not support the assertion that the contracts were mere formalities. Delivery of the timber by Oz Plantation on the defendant's behalf did not undermine performance by the defendant or the plaintiff's obligation to pay. The plaintiff's asserted disputes were devoid of substance and did not meet even the low threshold for setting aside the demand.

Jurisdiction
Australia
Judgment Date
25 May 2020
Procedural Posture
Application Pursuant to Section 459 G of the Corporations Act 2001 (cth) to Set Aside a Statutory Demand / Ex Tempore Principal Judgment
Outcome
Application to set aside statutory demand dismissed.
Legal Topics
['statutory Demand' 'genuine Dispute' 'execution of Contracts by Company' 'ostensible Authority of Director' 'supply of Goods Through Third Party']
['corporations' 'contracts'] ['statutory Demand' 'genuine Dispute' 'execution of Contracts by Company' 'ostensible Authority of Director' 'supply of Goods Through Third Party']

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Procedural Posture

Application Pursuant to Section 459 G of the Corporations Act 2001 (cth) to Set Aside a Statutory Demand / Ex Tempore Principal Judgment

Legal Issues

  1. 1 ['Whether there was a genuine dispute as to the existence of the debt for the purposes of section 459H(1)(a) of the Corporations Act 2001 (Cth).' 'Whether contracts signed by one director without use of a common seal were binding on the plaintiff.' 'Whether the plaintiff had a genuine dispute because timber was delivered by a third party and the arrangement was said to be a trade facility.']

Ratio Decidendi

There was no genuine dispute about the debt. Section 126 of the Corporations Act 2001 (Cth) permitted the plaintiff to contract through an individual with express or implied authority without using a common seal, and the defendant was entitled to treat Ms Li, a director and Chief Executive Officer, as authorised; the contemporaneous documents did not support the assertion that the contracts were mere formalities. Delivery of the timber by Oz Plantation on the defendant's behalf did not undermine performance by the defendant or the plaintiff's obligation to pay. The plaintiff's asserted disputes were devoid of substance and did not meet even the low threshold for setting aside the demand.

Court Disposition

Application to set aside statutory demand dismissed.

Orders

  • ['Dismiss the Originating Process filed 5 March 2020.' "Order the plaintiff to pay the defendant's costs of the proceedings."]