Topcide Pty Ltd v Deputy Dog Pty Ltd [2008] NSWSC 1323

Topcide Pty Ltd v Deputy Dog Pty Ltd [2008] NSWSC 1323

Leave under s 459S was granted because Deputy Dog Pty Ltd showed a sufficient preliminary basis for disputing the debt, its failure to apply to set aside the statutory demand was explained by the director's illness, and the existence of the debt was material to proving solvency since, if the company held assets as trustee and had no right of indemnity out of trust assets, the debt could make the difference between solvency and insolvency.

Jurisdiction
Australia
Judgment Date
05 December 2008
Procedural Posture
Application for Winding Up in Insolvency Relying on Non Compliance With a Statutory Demand / Interlocutory Process by the Defendant Seeking Leave Under S 459 S to Oppose the Winding Up Application
Outcome
Leave granted under s 459S.
Legal Topics
['winding Up' 'statutory Demand' 'presumption of Insolvency' 'leave to Oppose Winding Up Application' 'genuine Dispute About Debt' 'solvency' 'trustee Indemnity']
['corporations' 'insolvency'] ['winding Up' 'statutory Demand' 'presumption of Insolvency' 'leave to Oppose Winding Up Application' 'genuine Dispute About Debt' 'solvency' 'trustee Indemnity']

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Procedural Posture

Application for Winding Up in Insolvency Relying on Non Compliance With a Statutory Demand / Interlocutory Process by the Defendant Seeking Leave Under S 459 S to Oppose the Winding Up Application

Legal Issues

  1. 1 ['Whether leave should be granted under s 459S of the Corporations Act 2001 (Cth) for Deputy Dog Pty Ltd to oppose the winding up application on the ground of a genuine dispute about the debt the subject of the statutory demand.' 'Whether the alleged dispute about the debt was material to proving that Deputy Dog Pty Ltd was solvent.' 'Whether the failure to apply under s 459G to set aside the statutory demand was sufficiently explained.']

Ratio Decidendi

Leave under s 459S was granted because Deputy Dog Pty Ltd showed a sufficient preliminary basis for disputing the debt, its failure to apply to set aside the statutory demand was explained by the director's illness, and the existence of the debt was material to proving solvency since, if the company held assets as trustee and had no right of indemnity out of trust assets, the debt could make the difference between solvency and insolvency.

Court Disposition

Leave granted under s 459S.

Orders

  • ['Pursuant to s 459S of the Corporations Act, leave is granted to the defendant to oppose the winding up application on the ground that there is a genuine dispute between the defendant and the plaintiff about the existence of the debt to which the statutory demand dated 14 July 2008 relates.' "The plaintiff will pay...