Alan Sinclair & Associates Pty Ltd, Re [1997] QSC 61

Reporting r5c q7-, 06/ Bureau TRANSCRIPT OF PROCEEDiNGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. REVISED COPfES ISSUED State Reporting Bureau Date 1'1/ ;..f / SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION BYRNE J No 2292 of 1997 -- IN THE MATTER OF THE CORPORATIONS LAW and IN THE MATTER OF ALAN SINCLAIR & ASSOCIATES PTY LTD BRISBANE .' ., DATE 07/04/97 ORDER This judgment is to be copied fot' t! 19 only. It is not to be resold or used permission. 1 ..-----: private sn :~?/ f in any other way without It 1'111111', The Lllv COllrts, Celll'ge Slrcel, Bris":llIe, Q...WOO Telephollc: (07) .12474.1(,0 Fax: (07) .1247 55.12 -- 1 of 5 -- 0070497 T1/RZB25 M/T 280/97 (Byrne J) HIS HONOUR: This is an application for an order which would have the effect of disposing of a notice of statutory demand which issued on 19 February. There is now no objection to an order disposing of the notice of demand. The only question relates to costs. 10 On the day when the applicant was obliged to file any application to set aside the statutory demand, a letter was recei ved by the applicant's solicitors from the respondent's solicitors. Before the solicitor in the office of the applicant's solicitors had an opportunity to consider the 20 document, she received a telephone call from the solicitor who was the author of the letter. The solicitor mentioned the facsimile transmission which had been sent and Ms Elias, who was the recipient, said to him that the application to set aside the statutory demand would be filed and served "on you 30 today." The author of the letter, Mr Williams, then said to her something along these lines, "Have you read my facsimile?" She then obtained the document which had been received in the office before 8 o'clock that morning. Having read the transmission, she said, "My client is not going to pay your 40 client any money." According to her affidavit, Mr Williams then said words to the effect, "Not even the $4,500." I interpolate to say that the letter in question said this: "Our client has instructed us to withdraw its demand 50 dated 19 February 1997 and advises that it will not seek to rely on such demand in any future proceedings against your client. We look forward to the receipt of $4,200 which your client has admitted to be owing in respect of the Banksia project. Please advise whether your (sic) hold instructions to accept service on behalf of your client in respect of the other outstanding matters." When Mr Williams inquired whether not even the $4,500 would be 2 ORDER -- 2 of 5 -- 0070497 T1/RZB25 M/T 280/97 (Byrne J) paid, Ms Elias according to her affidavit said words to the effect: "Especially not the $4,500 given that Ash & Nephew have a liquidator appointed. My client could end up paying the money twice." Mr Williams then said words to effect, "Is your client going to pay my client any money at all?". According to Ms Elias she said, "I don't believe so, no, but I will get instructions." Later that day, and at a time when there had not been any 10 further communication between either the parties or the 20 solicitors, the application to set aside the statutory demand was served. Shortly thereafter a letter was written by Ms Elias to Mr Williams. It asserted that the facsimile transmission from Mr Williams earlier that day had "condi tionally" withdrawn the statutory demand and made 30 reference to the fact that the respondent "wanted payment of moneys which we have advised are disputed" no doubt a reference to the $4,500. The letter went on to assert that there was an ambiguity in 40 the facsimile because of the demand for payment and that the applicant's solicitors were not convinced that the respondent had unequivocally withdrawn the demand. This was said by way of explanation for the decision to serve the application to set aside the statutory demand. The letter proceeded to say: 50 If it is the case that your client unequivocally wi thdraws the demand without any condi tion precedent or subsequent attached please advise." There was also a request for advice concerning the willingness 3 ORDER 50 -- 3 of 5 -- 0070497 T1/RZB25 M/T 280/97 (Byrne J) of the respondent to pay the costs incurred in coping with the statutory demand. There was no further communication for about a week. Now, in my view, the letter of the respondent's solicitors dated 12 March was not beyond question the kind of unequivocal and unconditional withdrawal of a notice of statutory demand upon which a recipient of such a notice could be expected to rely. 10 It was open to two objections. One was that reference to the 20 $4,200, which the letter asserted (but Ms Elias apparently denied implicitly) had been admitted to be due by the respondent "in respect of the Banksia project." On one view, the reference to this sum of money suggested that the notice was being withdrawn conditionally, that is to say subject to 30 an acceptance of the proposition that there was a debt in the sum of $4,200. As I have said, on the applicant's case there was no admitted or other liability to pay that sum. The second difficulty relates to the opening words of the paragraph. I do not doubt that it was the author's intention 40 to communicate a wi thdrawal of the notice by the words that were used. But the recipient of a document such as this, before it can safely be relied on, needs such an unambiguous, unconditional withdrawal that the letter in question can certainly forestall the prospect of other proceedings: for 50 example, by another creditor seeking to take advantage of the notice of statutory demand. There was a history of discussions between the parties which 50 4 ORDER -- 4 of 5 -- 0070497 T1/RZB25 M/T 280/97 (Byrne J) gave sufficient reason for the applicant IS solicitors to be apprehensi ve that, to put it in the vernacular, it would be necessary to dot the Is and cross the Ts before the applicant could safely proceed upon the basis that it had an unequivocal and unconditional withdrawal. 10 In all the circumstances, I do not consider that what passed between the solicitors on 12 March could be regarded as satisfying the reasonable requirements of the applicant to be assured, beyond question, unequivocally and unconditionally that the notice of statutory demand had been withdrawn. In 20 these circumstances, in my opinion, it cannot be said that the application to set aside the statutory demand was instituted inappropriately. Nothing which has happened since the application was filed 30 affords a basis for denying the applicant the costs of the proceedings. There will therefore be an order setting aside the notice of statutory demand and an order that the respondent pay the 40 applicant I s costs of and incidental to the application to be taxed. 50 60 5 ORDER -- 5 of 5 --