Case: IFA Homeware Imports Pty Ltd v Shanghai Jerrys Candle Company Ltd [2003] FCA 533
Outcome: distinguished
grounds under this section were advanced. These were: (a) The Statutory Demand was not made in compliance with s 459E of the Act because it was not in the prescribed form (see s 459E(2)(e) of the Act) and was not accompanied by an affidavit that: (i) Verified that the claimed debt was due and payable by BMG as at 21 August 2007; and (ii) Complied with the Rules of Court. (see s 459E(3) of the Act). The alleged non-compliance with each of the provisions referred to above was said to be constituted by the failure on the part of Adelaide Bank to verify the Statutory Demand or otherwise include in the affidavits read in support of its case on the present Application a statement by an appropriately qualified witness to the following effect: I believe there is no genuine dispute about the existence or amount of the debt. In support of these contentions, Mr Watts relied upon the decision of Tamberlin J in IFA Homeware Imports Pty Ltd v Shanghai Jerrys Candle Company Ltd [2003] FCA 533. (b) The Statutory Demand was issued for an improper purpose. That purpose was said to be the purpose of preventing or delaying BMG, Mr Watts and Mrs Watts from taking action against Adelaide Bank for damages or compensation by reason of the bank's conduct in allegedly dishonouring various alleged agreements and arrangements and in taking possession of the property and in taking steps to sell it as mortgagee in possession; and (c) The amount of the debt claimed in the Statutory Demand was misstated. At the hearing on 10 December 2008, Mr Watts conceded that there was in existence as at 21 August 2007 a debt due from BMG to Adelaide Bank but submitted that the correct amount of the debt due from BMG to Adelaide Bank at that time was $16,281.29. Subsequently, in a submission which I allowed Mr Watts to advance as a result of my decision made on 21 April 2009 (see BMG Poseidon Corp Pty Ltd v Adelaide Bank Limited; In the Matter of BMG Poseidon Corp Pty Ltd [2009] FCA 389), Mr Watts submitted that no moneys were due from BMG to Adelaide Bank and that Adelaide Bank had an obligation to account to BMG for surplus funds of approximately $86,286.32. In IFA Homeware Imports Pty Ltd [2003] FCA 533 , Tamberlin J held that, in circumstances where the Act, Rules of Court and the Regulations made under the Act required a statement to the effect that the creditor believed that there was no genuine dispute about the existence or the amount of the debt to be made as part of the evidentiary requirements supporting a creditor's statutory demand, the failure on the part of the creditor to make such a statement on oath was fatal to the validity of the statutory demand. In my opinion, however, the circumstances of the present case are quite different from those in play in IFA Homeware Imports Pty Ltd [2003] FCA 533. In my view, Adelaide Bank was not required to verify the Statutory Demand at all and was not required to include a statement in the form urged by Mr Watts. Section 459E(3) of the Act is in the following terms: (3) Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that: (a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and (b) complies with the rules. In the present case, the amount asserted to be due from BMG to Adelaide Bank in the Statutory Demand is the balance of a judgment debt. Thus, the foundation for the claimed debt in the present case is the judgment, not the loan agreements or the mortgage security. That being so, in my view, the Statutory Demand was not required to be accompanied by an affidavit that complied with s 459E(3) of the Act. It is only if such an affidavit were required that consideration needs to be given to the requirements of the Rules. It is only when those requirements are brought into play that the reasoning of Tamberlin J in IFA Homeware Imports Pty Ltd [2003] FCA 533 is apt. I reject the first contention made by BMG in support of this ground. The second contention advanced by BMG in support of this ground has not been supported by any evidence or argument. It too is rejected.