FEDERAL COURT OF AUSTRALIA

Sugarmill S.L. v Nomis Sports Innovations Pty Limited; in the matter of Nomis Sports Innovations Pty Limited [2011] FCA 1285

IN THE MATTER OF NOMIS SPORTS INNOVATIONS PTY LIMITED ACN 122 064 171

THE COURT ORDERS THAT:

1.    The Defendant be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth).

2.    Neil Robert Cussen and Rahul Goyal be appointed as the liquidators of the Defendant.

3.    The costs of the Plaintiff be paid by the Defendant out of the Defendant’s assets.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE MATTER OF NOMIS SPORTS INNOVATIONS PTY LIMITED ACN 122 064 171

REASONS FOR JUDGMENT

1    This is an application for an order that the Defendant be wound up in insolvency under s 459A of the Corporations Act based on the failure to comply with two statutory demands.

2    The statutory demands were expressed in foreign currency. The first debt is €788,096.84 and the second is Swiss francs 84,810. The matter was referred to the Corporations Duty Judge from the Registrar’s list because a number of issues arise for consideration. Mr Tyson, who appears for the plaintiff, has provided me with very helpful written submissions which address all of the issues.

3    The first issue relates to the fact that the debts upon which the statutory demand was based were assigned to the plaintiff. Paragraph 6 of each of the assignment documents contains a clause which provides that the assignment was able to be annulled in the event that enforcement had not been pursued through the courts within a period of 90 days. That indicates that the chose in action was a potentially defeasible asset. This is plainly an unusual type of chose in action, but is described by Professor Roy Goode QC in Principles of Corporate Insolvency Law (Sweet & Maxwell, 2nd edition, 1997) at 121 as a defeasible asset. Nevertheless, here the plaintiff has filed in court an affidavit which confirms that the right to annul the assignments was not exercised.

4    I am therefore satisfied that in respect of each of the debts the plaintiff is a creditor of the company and has standing to bring in the application under s 459P. Of course, the fact the plaintiff is an assignee of the debts does not preclude the plaintiff from making the demands, nor does the fact that the relevant statutory demands were expressed in a currency other than in Australian currency: see Daewoo Australia Pty Ltd v Suncorp-Metway Ltd [2000] 48 NSWLR 692 at 697–704 where Austin J analyses and discusses the relevant authorities which support that proposition.

5    The next issue relates to the form of the statutory demand. The document did not contain the boxed note which is identified in the required form. The boxed note is to the effect that a failure to respond to a statutory demand can have serious consequences for a company. The short answer to the failure to do so is that a defect in the form of a statutory demand is not necessarily fatal to the validity of the demand in the absence of proof of substantial justice. In McElligott v Boyce [2011] QCA 117 at [11]–[13], the Queensland Court of Appeal observed that, in relation to a defect identical to that in the present case, there was no reason to believe that had there been no defect in the statutory demand, matters would have turned out differently. Here I am satisfied that there is no substantial injustice which arises from the failure to include the requisite boxed note in the statutory demand.

6    The final issue which arises is that there are a number of irregularities in affidavits, which have been read in support of the application. In each instance I am satisfied that I will exercise the power contained in the rules, either because the affidavit is in substantial compliance with the form (see Rule 1.7) or because I ought to grant leave under Rule 29.07 of the Federal Court Rules 2011 (Cth) to use an affidavit that is irregular in form. An interesting aspect which arises as to the irregularity is that several of the affidavits sworn in support were sworn overseas and they contain an “apostille” which verified the signature of the deponent of the affidavit and which was witnessed by a notary.

7    Whilst the apostille is not in accordance with the Federal Court Rules it does, as Mr Tyson submitted, enhance rather than reduce the reliability of the content of the affidavit. This is a powerful reason for exercising my discretion under Rule 29.07 to receive the evidence.

8    I am satisfied that all of the matters needed to be established to support a winding-up order, including advertising as required by the rules, have been carried out. I therefore propose to make the orders sought in the application.

Associate:

Dated:    30 September 2011