Case: Tatlers.com.au Pty Ltd v Davis (2007) 213 FLR 109 ; [2007] NSWSC 835
Outcome: distinguished
difficulty confronting Benson Communications Pty Limited in applying for an order setting aside the statutory demand, is that the nature of its case for setting aside the demand as it has now emerged was in no way disclosed in the affidavit that was filed within the 21-day period. The authorities establish that while supplementary affidavit material may be filed and served outside that period, the further affidavit or affidavits must be limited to filling out or supporting a ground that was set out in an affidavit or affidavits filed within that period. For this proposition, many cases could be referred to, including Graywinter Properties Pty Ltd v Gas &amp; Fuel Corporation Superannuation Fund (1996) 70 FCR 452 , Energy Equity Corporation Ltd v Sinedie Pty Ltd (2001) 166 FLR 179 ; [2001] WASCA 419 ; Jian Xing Knitting Factory v Scasa Pty Ltd [2004] SASC 152 at [18] ; Tokich Holdings Pty Ltd v Sheraton Constructions (NSW) Pty Ltd (in liq) (2004) 185 FLR 130 ; [2004] NSWSC 527 ; Arcade Badge Embroidery Co Pty Ltd v Deputy Commissioner of Taxation [2005] ACTCA 3 ; (2005) 157 ACTR 22 ; Tatlers.com.au Pty Ltd v Davis (2007) 213 FLR 109 ; [2007] NSWSC 835 at [19] , [28], [29]. Mr Evans, counsel for Benson Communications Pty Limited, has referred to Tatlers.com.au Pty Ltd v Davis (2007) 213 FLR 109 ; [2007] NSWSC 835 at [19] . In that case, White J in the Supreme Court of New South Wales rejected a contention that the purpose of s 459G was to enable the defendant to understand, to test and to respond to the material on which the plaintiff relies. His Honour considered that that aspect of case management and natural justice could be met, even though the plaintiff company might be permitted to file and serve further affidavits outside the 21 day period. White J observed that all that s 459G required was that the application and supporting affidavit be filed and served within the 21 day period, and that the question of how the application was dealt with subsequently was a matter for the ordinary pre-trial procedures directed to ensuring a fair hearing. However, his Honour also acknowledged as follows (at [19]): The courts have implied from the requirement that there be a supporting affidavit that the affidavit filed in support of the application must raise the grounds to be relied upon to set aside the demand, and have further implied that the plaintiff is restricted to the grounds so raised. White J accepted that the stringency of the 21-day period reflects the legislative purpose of the quick resolution of the issue of solvency and the determination of whether a company should be wound up without the interposition of disputes about debts, unless they are raised promptly. I do not think that anything said by White J detracts from the line of authority that insists that the ground relied on for the setting aside of the statutory demand be identified in the affidavit or affidavits supporting the application that is or are filed within the 21-day period. The most that can be said of Mr Benson's affidavit is that in para 6 he accepts that there was a change of trustee. One might reason along the lines that by some unidentified mechanism his claim is that the identity of the trustee from time to time does not matter. Apparently, however, it is accepted that the identity of the trustee does matter. Indeed, the case to be put in support of the appeal is that if the Court of Appeal will allow evidence of the trust deed and Deed of Variation to be admitted, it will find that the change of trustee was invalid. This, however, is in no way remotely suggested in Mr Benson's affidavit. Another approach might be to say that since the affidavit was filed in support of an application to set aside and refers to an offsetting claim in excess of the judgment debt of $446,314.14, one should read the affidavit as somehow proposing as the "other reason" referred to in s 459J(1)(b) , that Mr Carroll brought about the change of trustee in a fraudulent or otherwise sinister manner. However, this would be mere speculation and is not suggested in the affidavit or in submissions.