Plaintiff v Defendant

1 By originating process dated 14 July 2021, Syncordia Group Operations Pty Ltd ('the plaintiff') seeks to set aside a statutory demand dated 23 June 2021 served by Nexia Melbourne Pty Ltd ('the defendant'), pursuant to ss 459G, 459H and 459J of the Corporations Act 2001 (Cth) ('the Act'). The statutory demand relates to monies owing by the plaintiff under a deed of settlement dated 16 March 2020.

2 The plaintiff's business involves the design and development of a digital content platform focused on education. The relevant platform hosts over two and half million digital book titles from over twelve thousand international publishers and facilitates access to those resources by users. In early 2011, the plaintiff engaged the defendant (then named Hayes Knight (Melbourne) Pty Ltd) to provide accounting, taxation, advisory and company secretarial services. The defendant rendered services to the plaintiff under this arrangement. However, on 1 April 2019 the plaintiff terminated the defendant's engagement. What happened next is somewhat convoluted.

3 The defendant sought payment of professional fees which had accrued since early 2016. Those fees were not paid and the defendant issued a statutory demand in June 2019 ('the first statutory demand'). The plaintiff failed to comply with the first statutory demand. As a result, on or about 30 July 2019, the defendant filed a winding up application in this Court ('the first winding up proceeding').[1] Shortly after the winding up proceeding was filed, the parties entered into a deed of settlement dated 9 October 2019 by which the plaintiff was required to pay a sum to the defendant by way of instalments ('the first settlement deed'). The plaintiff failed to make any payments and, on or about 11 March 2020, requested further time for payment of the amount owing. The defendant agreed to this request. A further deed of settlement was executed by the parties on 16 March 2020 ('the second settlement deed'). This required the plaintiff to make payment to the defendant of $85,659.43 in full and final settlement of all claims that the defendant had against the plaintiff, inclusive of interest and costs ('the settlement sum'). The settlement sum was to be paid by way of instalments due on 31 May 2020 and 30 June 2020. Clause 4 of the second settlement deed, provides:

If the terms of this Deed are not strictly complied with by Syncordia, Syncordia will, from the moment of non-compliance, have committed an act of default under the Deed and in the event that such default continues unremedied for a period of seven (7) days, Syncordia shall be automatically taken to have:

1. acknowledged that the Settlement Sum, less any amount paid under the Deed, is due and owing to Nexia; and
2. Nexia shall be entitled to issue proceedings in a Court of competent jurisdiction to obtain Judgment against Syncordia for the Settlement Sum outstanding together with the costs of issuing the proceeding and obtaining Judgment (to be fixed by the Court) and any interest calculated in accordance with section 2 of the Penalty Interest Rates Act 1983 (Vic) as amended from time to time which has accrued on the Settlement Sum outstanding between the date of the default and the date of Judgement.

4 By clauses 6 and 7 of the second settlement deed, the plaintiff granted a charge over its property to secure payment of the balance of the settlement sum and consented to the defendant registering a security interest on the Personal Property Securities Register in respect of that charge ('the security'). The evidence suggests the defendant did so on or about 23 March 2020.

5 Pursuant to clause 10, in consideration of the plaintiff's compliance with the operative provisions of the second settlement deed, the defendant would release the plaintiff from 'all claims, suits, demands, causes of action including any claim for payment and from all claims for damages, losses and expenses of every description' arising from the subject matter of the second settlement deed and the relationship between the parties. A corresponding release was given by the plaintiff to the defendant in clause 11 of the second settlement deed.

6 Again, the plaintiff failed to make payment of the settlement sum by the dates specified, or at all. As a result, on 6 July 2020, the defendant served another statutory demand on the plaintiff for the settlement sum ('the second statutory demand'). By virtue of the Coronavirus Economic Response Package Omnibus Act 2020 (Cth), the plaintiff had six months to comply with the second statutory demand.[2] It did not do so. The defendant then filed a second winding up application in this Court ('the second winding up proceeding').[3] However, because the second statutory demand did not appear to comply with the prescribed form,[4] the defendant sought leave to discontinue the second winding up proceeding. On 22 June 2021, the Court granted the defendant leave to discontinue the proceeding with no order as to costs.

7 On 23 June 2021, the defendant served a further statutory demand on the plaintiff demanding payment of the settlement sum ('the third statutory demand'). It is the third statutory demand which is the subject of this proceeding.

8 The matter was first returnable before the Court on 28 July 2021 and orders were made for the filing of affidavit material by the parties with the matter coming back for further directions. By orders dated 1 September 2021, the matter was listed for final hearing today and the parties were permitted to file additional affidavit material. Orders were also made for the filing of written submissions by the parties.

9 The defendant relies upon the affidavit of Vito Interlandi, director of the defendant, sworn 1 October 2021 in opposition to the plaintiff's application. It has also filed the affidavit of service of Michael Leonard sworn 24 August 2021, along with written submissions dated 19 October 2021. The plaintiff did not file any additional affidavit material and it relies only upon the affidavit of Carlton Taya sworn on 14 July 2021 ('the Taya affidavit') in support of its application along with its written submissions dated 26 October 2021.

10 The grounds upon which the plaintiff seeks to set aside the third statutory demand are extensive but not well articulated. Having regard to the matters contained in the Taya affidavit, the plaintiff's written submissions and further arguments made by way of oral submissions, I set out below the various contentions I understand the plaintiff to now make:

(a) there is a genuine dispute between the parties because the defendant is restrained from serving any statutory demand and bringing any winding up proceeding against the plaintiff until it has complied with the terms of the second settlement deed;

(b) the plaintiff has breached the second settlement deed by not taking any steps under it and 'is not entitled to bring this winding up action' against the defendant until it has taken all necessary steps pursuant to the deed;

(c) in particular, the defendant is only entitled to issue a statutory demand against the plaintiff once it has obtained judgment against the plaintiff pursuant to clause 4(b) of the second settlement deed. There is a need to enter judgment in order to ascertain whether a debt owing under the second settlement deed exists, and if so, the amount of that debt. Until judgment is entered, there is no debt which is presently due and payable;

(d) in addition, the defendant was required to issue a written demand for payment following any default by the plaintiff in order to recover a debt arising under the second settlement deed. The defendant did not do so;

(e) on a proper construction of the second settlement deed, the defendant 'cannot allege that the Plaintiff is indebted to the Defendant (the genuine dispute) until and unless the Defendant takes steps to enforce judgment against the Plaintiff pursuant to [the second settlement deed]';

(f) because of the discontinuance of the second winding up proceeding, the defendant is precluded from bringing any further actions in respect of the settlement sum by way of a winding up proceeding 'under the principles of an Anshun Estoppel'. Alternatively, the plaintiff 'is entitled to a res judicata estoppel' against the defendant because 'it would be unjust and inequitable for the Defendant to again pursue this matter by way of a winding up proceeding';

(g) the defendant has security over the plaintiff which allows it to sell the plaintiff's assets if it were to obtain judgment and therefore satisfy any alleged debt outstanding;

(h) a judgment might ultimately be unnecessary because of the existence of the security; and

(i) the plaintiff is not insolvent by reason that it has provided a security to the defendant and because of other efforts it is undertaking in order to raise capital.

11 The solicitor for the plaintiff confirmed at the hearing that all of the plaintiff's arguments are made under both ss 459H(1)(a) and 459J(1)(b) of the Act in the alternative.

12 For the reasons which follow, the plaintiff has not succeeded on any of the grounds advanced to set aside the third statutory demand.

(1) A person may serve on a company a demand relating to:

(a) a single debt that the company owes to the person, that is due and payable and whose amount is at least the statutory minimum.

(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within the statutory period after the demand is so served.

(3) An application is made in accordance with this section only if, within that period:

(a) an affidavit supporting the application is filed with the Court; and

(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.

15 Section 459H(1) of the Act is in the following terms:

(1) This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following:

(a) that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;

(b) that the company has an offsetting claim.

16 The following principles delineate what constitutes a genuine dispute for the purpose of s 459H(1) of the Act:

(a) for a dispute to be 'genuine' it must be 'bona fide and truly exist in fact';[5]

(b) 'the grounds for alleging the existence of a dispute ... [must be] real and not spurious, hypothetical, illusory or misconceived';[6]

(c) the dispute must have a 'sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. ... Something "between mere assertion and the proof that would be necessary in a court of law" may suffice';[7]

(d) a genuine dispute may involve a 'plausible contention requiring investigation' and raise the same sort of considerations as the 'serious question to be tried' test that applies in the case of interlocutory injunctions;[8]

(e) the Court should not uncritically accept statements about an alleged genuine dispute which are 'equivocal, lacking in precision, inconsistent with undisputed contemporary documents ... or inherently improbable ...';[9]

(f) if the dispute appears to be something 'merely created or constructed in response to the pressure represented by the service of the statutory demand', then it is not advanced in good faith and will not be regarded as genuine;[10] and

(g) whilst the underlying nature of the dispute about the existence of a debt 'must be exposed', the Court will not deal with the merits and nothing of substance will be decided.[11]

(1) On an application under section 459G, the Court may by order set aside the demand if it is satisfied that:

(a) because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or

(b) there is some other reason why the demand should be set aside.

(2) Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect.

18 In Re MHC Pathology Pty Ltd ('Re MHC Pathology'),[12] I made the following statements about the operation of s 459J(1)(b) of the Act:[13]

The case law makes clear that sub-paras (a) and (b) of s 459J(1) are mutually exclusive.[14] The only source of power to set aside a demand on the basis of a defect is found in s 459J(1)(a) and not s 459J(1)(b).[15] In other words, the provisions do not overlap.

...

[T]he authorities are clear that the 'other reason' required by s 459J(1)(b) cannot be a defect in the demand.[16] Something else is required. In Arcade Badge Embroidery Co Pty Ltd v DCT,[17] the Court of Appeal of the Australian Capital Territory found that the other reasons envisaged by s 459J(1)(b) include 'conduct that may be described as unconscionable, an abuse of process, or which gives rise to substantial injustice'.[18] Whilst the discretion conferred by the provision is broad, a judge should not set aside a statutory demand under s 459J(1)(b) simply because she or he subjectively considers it fair to do so.[19] The Court's power under the sub-section exists to maintain the integrity of the statutory demand procedure in Pt 5.4 of the Corporations Act and to counter its subversion.[20]

19 Whilst it is possible for the Court to determine a short point of law or question of construction on an application made under s 459G of the Act,[21] such a proceeding is not ordinarily an occasion for the Court to construe a contract where its meaning is in dispute.[22] However, there are limited exceptions to this rule. In Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd,[23] White JA explained the position this way:

It is usually inappropriate on an application to set aside a statutory demand that the court attempt to decide competing contentions as to contractual interpretation, partly because to do so might embarrass a judge before whom that issue arises and fundamentally because if the disputed question of contractual interpretation is arguable there will be a genuine dispute as to the existence of the debt, albeit one that does not depend upon a disputed matter of fact. But where the legal argument propounded in support of a particular construction is "patently feeble" (Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787 (McLelland CJ in Eq), or where it is "as plain as a pikestaff" that it has no basis (Spacorp Australia Pty Ltd v Myer Stores Ltd [2001] VSCA 89; 19 ACLC 1270 at [41]) then there will be no genuine dispute (Creata (Aust) Pty Ltd v Faull [2017] NSWCA 300; 125 ACSR 212 at [26]- [29]).[24]

20 The contentions advanced by the plaintiff can be grouped by issue and considered in light of the requirements of both ss 459H and 459J(1)(b) of the Act. Both parties encouraged me to consider a short point of construction concerning the operation of the second settlement deed. In light of the authorities, I am satisfied it is appropriate to do so.

Does the second settlement deed preclude the third statutory demand?

21 As a matter of construction, I am simply unable to accept the plaintiff's contention that clause 4 of the second settlement deed compels the defendant to obtain judgment prior to serving a statutory demand and commencing a winding up proceeding. Clause 4(b) of the second settlement deed says that in the event of default, the defendant 'shall be entitled to issue proceedings' to obtain judgment against the plaintiff (emphasis added). It is clearly framed in permissive and not mandatory language. Further, I do not accept that the use of the word 'and' as it appears between clauses 4(a) and 4(b) suggests that both paragraphs of clause 4 must apply in the event of default of payment of the settlement sum by the plaintiff. It simply indicates that there are two consequences of a default by the plaintiff: the first being that the plaintiff is taken to acknowledge that the settlement sum is due and owing; and the other being that the defendant may elect to exercise its rights to obtain judgment upon default of payment of that sum. But on a plain reading of the second settlement deed, they are not interdependent clauses.

22 I also observe that neither clause 4, nor any other provision of the instrument, specifies that the obtaining of a judgment is a precondition for the issuing of a statutory demand or for the commencement of any winding up proceedings.

23 In making its arguments, the plaintiff appears to have misapprehended the nature of a statutory demand. There is an important distinction between the process of entry and enforcement of a judgment for the recovery of a debt, on the one hand, and the issue of a statutory demand and any subsequent winding up proceeding, on the other. In Equipped Constructions Pty Ltd v Form Architects Pty Ltd,[25] Austin J observed:

... the statutory demand procedure is not provided by the law as a mechanism for the recovery of debt. The function of a statutory demand is to facilitate proof of insolvency in a winding-up application by creating a presumption of insolvency if the demand is properly served and not met.

24 Further, unlike an application to enter a judgment or the process of enforcement of a judgment, a statutory demand is not a proceeding, either curial or non-curial in nature.[26] Its function is to provide a means of facilitating proof of a company's inability to pay its debts by creating a rebuttable statutory presumption of insolvency in the event the company fails to comply with the demand within the requisite statutory period.[27]

25 Such a statutory presumption can then be relied upon by a creditor in any subsequent winding up proceedings brought against the debtor company. However, a winding up proceeding is not ordinary inter partes litigation in which a party may pursue a debt and obtain a judgment.[28] Nor does a winding up proceeding constitute a process by way of enforcement of a judgment.[29] Rather, it is a proceeding brought for the benefit and protection of all creditors of a company, including existing and future creditors.[30] As a collective or representative process for the good of all creditors, rather than an individual creditor, the central issue is the insolvency of the debtor company.[31] This is in the context of a clear policy mandate found in Part 5.4 of the Act that insolvent companies should be promptly wound up as a matter of public interest.[32]

26 Because of the nature and purpose of a statutory demand and any resulting winding up proceedings, it would be surprising if the second settlement deed purported to restrain the defendant from invoking the statutory demand procedure under Part 5.4 of the Act. It is unclear whether any such restraint would be enforceable.

27 By way of further submissions at the hearing, the plaintiff's solicitor suggested that the defendant had failed to take a further step of issuing a written demand for payment following default by the plaintiff. However, the second settlement deed does not, on its face, require any such step as a precondition to making application for judgment and/or issuing a statutory demand. I do not accept the argument that the requirement to serve a written demand upon default should be implied by the Court as a matter of custom or usage in construing the second settlement deed. Clause 4 appears to be capable of operation without the inclusion of such a term and the plaintiff has not put forward any material to establish the need for such a term to be implied. Further, there is no evidence before the Court that the plaintiff ever complained about an absence of a written demand for payment or that it was denied the opportunity to remedy its default in payment. This contention is not one which appears to be advanced in good faith.

28 The construction of the second settlement deed contended for by the plaintiff is patently feeble and lacking in prima facie plausibility. Accordingly, it does not give rise to any genuine dispute in relation to the interpretation of the second settlement deed. Nor does it constitute 'some other reason' sufficient to set aside the statutory demand under s 459J(1)(b) of the Act. Moreover, the argument that the defendant has breached the second settlement deed by failing to obtain judgment prior to serving the third statutory demand appears to be spurious and misconceived.

29 The plaintiff argues that the need to enter judgment is important in ascertaining whether a debt arising under the second settlement deed exists, and if so, the amount of that debt. The plaintiff also submitted for the first time at the hearing that until the debt is recognised by a judgment, there is no debt which is presently due and payable. On any application for judgment, the Court would need to ascertain the amount outstanding and the calculation of any interest payable on that amount. The plaintiff's solicitor sought to make good these contentions by indicating he was instructed that the plaintiff had in fact made a $10,000 payment towards the settlement sum which would need to be taken into account on an application for judgment.

30 For the purpose of s 459E of the Act, a debt is due and payable when it is ascertainable, immediately payable and presently recoverable or enforceable by action.[33] Here, the amount claimed in the third statutory demand is the settlement sum due under the second settlement deed. It is clearly 'a liquidated sum in money presently due, owing and payable'[34] by a debtor to a creditor and can therefore be distinguished from a claim of damages for breach of contract or any other unliquidated claim.[35] Further, by virtue of clause 4(a) of the second settlement deed, upon the failure to remedy its default within seven days, the plaintiff is automatically taken to have acknowledged that the settlement sum, less any amount already paid under the second settlement deed, is due and owing to the defendant. The argument that the amount owing under the third statutory demand is not a debt that is due and payable is not a plausible contention requiring further investigation.

31 Further, in the absence of any evidence from the plaintiff, and in the face of uncontradicted evidence from the defendant, the suggestion that the plaintiff has paid $10,000 towards the settlement sum does not rise above mere assertion.

Is the discontinuance of the second winding up proceeding a bar to the third statutory demand?

32 As previously noted, the plaintiff argues that by virtue of the discontinuance of the second winding up proceeding, the defendant was barred from issuing the third statutory demand on the basis of Anshun estoppel or res judicata. In my view, this argument is without merit.

33 Where a dispute is determined by a court of competent jurisdiction, the principle of res judicata operates and the judgment is final and conclusive to the rights and duties of the parties, such that there is an absolute bar to the same cause of action.[36] That is because the cause of action no longer exists and has merged into the judgment.[37]

34 Anshun estoppel prevents the bringing of a cause of action or the raising of a defence if the matter is so relevant to the subject matter of an earlier proceeding that it would have been unreasonable not to rely upon it in the earlier proceeding.[38]

35 Neither doctrine has application to the facts of the case. The second winding up proceeding was clearly discontinued and not dismissed. There was no final judgment of the Court to which Anshun estoppel or res judicata might apply. More importantly, because the third statutory demand is not a proceeding, it is difficult to see how Anshun estoppel or res judicata could arise in any event.

36 Further, r 25.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('the Rules') states:

The discontinuance of a proceeding, counterclaim or claim by third party notice or the withdrawal of any part of a proceeding, counterclaim or claim by third party notice shall not be a defence to a subsequent proceeding for the same, or substantially the same, cause of action, unless the Court otherwise provides by any order granting leave to discontinue or withdraw.

37 I accept the defendant's submission that having regard to this rule, the discontinuance of a proceeding is not an impediment to a subsequent proceeding, unless the discontinuance or withdrawal is by leave and the order granting leave directs otherwise.[39] By contrast, an order that a proceeding be dismissed may operate as a bar to a further proceeding for the same cause of action.[40] That is so, regardless of how the proceeding came to be dismissed. As the Full Court of the Federal Court explained in Zetta Jet Pte Ltd v The Ship "Dragon Pearl" (No 2):[41]

A party who is commanded to attend a trial or final hearing to answer a claim based upon a cause of action would face the same injustice if the claim could be re-agitated after final judgment was given dismissing the claim irrespective of the circumstances in which the judgment was given. Whether a claim is allowed or dismissed by consent, default or after a contested hearing, the need for finality is the same in each instance. A party who wishes to preserve the right to bring further proceedings should seek leave to discontinue. The need for finality is one reason why an application for such leave may be refused if brought late in the day and without explanation beyond inability to proceed with the case.[42]

38 The High Court decision of UBS AG v Tyne[43] concerned the discontinuance of proceedings in the Supreme Court of New South Wales by an original trustee of a trust in circumstances where a later appointed trustee commenced fresh proceedings in the Federal Court of Australia which essentially raised the same claims against the same defendant. The majority of the High Court held that it was appropriate that the Federal Court proceeding be stayed as an abuse of process because of oppression to the defendant and the likely perception that the administration of justice was inefficient and wasted public money.[44] This was despite the operation of rules equivalent to r 25.06 of the Rules by which the discontinuance of a proceeding is not a bar to new proceedings seeking the same relief. Critically, the discontinuance of the trustee's claim had not brought the Supreme Court of New South Wales proceedings to an end. The proceedings were ultimately prosecuted to a final determination by another plaintiff. However, the majority also held that, as a general rule, '[w]here discontinuance of proceedings brings the proceedings to an end, the later commencement of fresh proceedings may work no unfairness to the defendant'.[45]

39 Because the second winding up proceeding was clearly discontinued and not prosecuted to a final determination, the decision in UBS AG v Tyne can be readily distinguished. The statutory demand is not specifically challenged as an abuse of process in any event. Further, I accept the defendant's submission that because the relevant orders of 22 June 2021 do not state that the defendant is prevented from serving another statutory demand in relation to the settlement sum, the defendant was prima facie entitled at law to serve the third statutory demand.

40 It follows from the above that I do not consider there is any genuine dispute in relation to the debt by reason of the doctrine of res judicata or the principle of Anshun estoppel. The plaintiff's arguments in this regard are spurious and misconceived. Similarly, there is no basis to set aside the third statutory demand under s 459J(1)(b) of the Act.

Relevance of the defendant's security interest

41 The plaintiff argues that the defendant has security over the plaintiff so as to satisfy any alleged debt outstanding after the entry of judgment. In his affidavit, Mr Taya says that, as director and CEO of the plaintiff, he only agreed to granting the security to the defendant, together with the judgment in default provision in clause 4 of the second settlement deed, on the basis that the defendant could not take any 'further winding up action' against the plaintiff without first satisfying the terms of the deed.

42 However, the granting of the security by the plaintiff does not operate to restrain the defendant from issuing a statutory demand. Further, there is nothing in the legislation to suggest that a secured creditor cannot issue a statutory demand. In fact, a secured creditor is expressly identified as one of the persons who may apply to wind up a company in insolvency under s 459P of the Act, including for failure to comply with a statutory demand.

43 At the hearing, the solicitor for the plaintiff also argued that the obtaining of judgment by the defendant might ultimately be unnecessary because of the existence of the security granted by the plaintiff.

44 There is no reason in principle why the granting of security and the mechanism for entry of judgment are mutually exclusive. A secured creditor has a right of action against the property over which they have security and a personal right of action against the company itself.[46] For example, the creditor might seek to enforce a judgment against assets other than any personal property of the debtor over which security has previously been provided. I also note that s 110 of the Personal Property Securities Act 2009 (Cth) expressly states that the legislation does not derogate in any way from the rights and remedies of a secured party, a debtor, or a grantor. Moreover, I accept the submission of the defendant's counsel that there is no evidence before the Court as to the value of the security which has been granted by the plaintiff to the defendant.

45 I cannot see how any of these arguments about the security gives rise to a genuine dispute in relation to the third statutory demand or constitutes 'some other reason' for the purpose of s 459J(1)(b) of the Act.

46 The plaintiff says it is not insolvent by reason that it has provided the security to the defendant. Mr Taya also deposes to capital raising efforts by the plaintiff which he expects will provide sufficient capital to satisfy any demand by the defendant.

47 This aspect of the plaintiff's case can be disposed of briefly.

48 The question of a debtor company's solvency may become relevant in an application to set aside a statutory demand in the following limited circumstances:

(a) where a statutory demand is served upon a company that is obviously solvent, the Court is entitled to take this into account in determining whether the issue of the statutory demand constitutes an abuse of process under s 459J(1)(b) of the Act;[47] or

(b) where the Court considers '[i]t may be easier to conclude that a dispute about a debt or an offsetting claim is "genuine'' when raised or made by a solvent company than in other cases'.[48]

49 Neither of the above circumstances apply here. The plaintiff has not adduced sufficient evidence to demonstrate that it is obviously solvent or that there is an abuse of process for the purpose of s 459J(1)(b) of the Act. Moreover, the plaintiff's arguments about the existence of a genuine dispute are particularly weak and are not made stronger by its assertions of solvency.

50 In its submissions, the defendant makes a subsidiary argument that the plaintiff is prohibited from applying to set aside the third statutory demand in light of the express terms of the second settlement deed. In particular, the defendant relies on clause 11 of the document which states that in consideration of the defendant's compliance with the operative provisions of the second settlement deed, the plaintiff releases the defendant from all claims, suits, demands, et cetera. Given the conclusions I have reached in relation to the grounds advanced by the plaintiff in support of its application, and the fact that the defendant's argument was not fully developed, it is unnecessary for me to consider this point any further.

51 In view of the above matters, I will dismiss the plaintiff's originating process and hear the parties on the question of costs.

[2] See Part 2 of Schedule 12 of the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) which replaced, by way of temporary relief, the reference to 21 days for compliance with a statutory demand (found throughout Part 5.4 of the Act) with a new 'statutory period'. The 'statutory period' was, in turn, relevantly defined in s 9 of the Act as the 'prescribed period'. The prescribed period was temporarily set at six (6) months by a new regulation 5.4.01AA of the Corporations Regulations 2001 (Cth) ('the Regulations').

[4] See s 459E(2) of the Act and Schedule 2 of the Regulations where Form 509H was temporarily amended by the Coronavirus Economic Response Package Omnibus Act 2020 (Cth).

[5] Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452, 464 (Northrop, Merkel and Goldberg JJ) ('Spencer Constructions'), cited with approval by the Victorian Supreme Court of Appeal in Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330 [49] (Kyrou, Ferguson and Kaye JJA) ('Malec').

[6] Spencer Constructions 464, cited with approval by the Victorian Supreme Court of Appeal in Malec [49] (Kyrou, Ferguson and Kaye JJA).

[7] TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67, 79 [71] (Dodds-Streeton JA) ('TR Administration'); Malec [49] (Kyrou, Ferguson and Kaye JJA).

[8] Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344; (2013) 85 NSWLR 601, 608 [31] (Beazley P, Meagher and Gleeson JJA) ('Britten-Norman'); Malec [48] (Kyrou, Ferguson and Kaye JJA).

[9] Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, 787 (McClelland CJ in Eq), cited with approval by the Victorian Supreme Court of Appeal in TR Administration 78 [64] (Dodds-Streeton JJA) and Malec [50] (Kyrou, Ferguson and Kaye JJA).

[10] Creata (Aust) Pty Ltd v Faull [2017] NSWCA 300; (2017) 125 ACSR 212, 224 [47] (Barrett AJA, with Gleeson and White JJA agreeing) ('Creata').

[11] Quadrant Constructions Pty Ltd v HSBC Bank Australia Ltd [2004] FCA 111 [4] (Finkelstein J). See also Malec [48] (Kyrou, Ferguson and Kaye JJA).

[12] (2020) 356 FLR 222.

[14] See Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd [1994] FCA 1059; (1994) 13 ACSR 525; Spencer Constructions 464 (Northrop, Merkel and Goldberg JJ).

[15] Spencer Constructions 458-9 (Northrop, Merkel and Goldberg JJ); Daewoo Australia Pty Ltd v Suncorp-Metway Ltd [2000] NSWSC 35; (2000) 33 ACSR 481, 493-4 [44]-[45] (Austin J) ('Daewoo v Suncorp-Metway').

[16] Spencer Constructions 458-9 (Northrop, Merkel and Goldberg JJ); Daewoo v Suncorp-Metway 493-4 [44]-[45] (Austin J).

[17] [2005] ACTCA 3; (2005) 157 ACTR 22.

[18] Ibid 26 [27] (Crispin P, Gray and Marshall JJ). See also Hoare Bros Pty Ltd v Deputy Commissioner of Taxation (1996) 19 ACSR 125; Neutral Bay Pty Ltd v Deputy Commissioner of Taxation [2007] QCA 312; (2007) 25 ACLC 1341.

[19] Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24; (2005) 53 ACSR 229, 240 [60]-[61] (Santow and Tobias JJ, and Young CJ in Eq).

[20] Rinfort Pty Ltd v Arianna Holdings Pty Ltd [2016] NSWSC 251; (2016) 111 ACSR 607, 633 [84] (Black J).

[21] Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483 [46]-[48] (Barrett J); Hallinan & Co Pty Ltd v A & B Cotton Pty Ltd [2014] QSC 112 [34] (Ann Lyons J) and BMDI Tuta Health Care Pty Ltd v CME Medical Australia Ltd [2011] NSWSC 50 [37] (Barrett J).

[22] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 92 ACSR 27, 34 [46] (Young AJA); Broadspectrum (Australia) Pty Ltd v Centauri Business Services Pty Ltd [2016] NSWSC 1045 [22] (Barrett AJA); Re Litigation Insurance Pty Ltd [2017] NSWSC 334 [31] (Gleeson JA); Creata [29] (Barrett AJA, Gleeson and White JJA agreeing).

[23] (2019) NSWLR 397.

[25] [2006] NSWSC 500 [24].

[26] See Farid Assaf, Assaf's Winding Up in Insolvency (LexisNexis, 3rd ed, 2021) [3.3] ('Assaf's Winding Up in Insolvency') and the numerous cases cited therein.

[28] In the matter of Erfanian Developments Pty Ltd [2018] VSC 342 [8] (Hetyey JR as his Honour then was) ('Erfanian Developments'); In the matter of Vitamin Co Pty Ltd [2019] VSC 540 [97] (Hetyey JR as his Honour then was) ('Vitamin Co').

[29] O'Mara Constructions Pty Ltd v Avery (2006) 151 FCR 16, 212-3 [56]-[57] (Heerey, Dowsett and Conti JJ).

[30] Intergraph Public Safety Pty Ltd v Tess Lawrence Media Services Pty Ltd [1996] FCA 1391; (1996) 19 ACSR 523, 527 (Heerey J); South East Water Ltd v Kitoria Pty Ltd (1996) 21 ACSR 465, 472 (Ryan J); Erfanian Developments [8]; Vitamin Co [97].

[31] See Re Lines Bros Ltd (in liq) [1983] Ch 1, 20 (Brightman LJ) and Re Criggleston Coal Company, Limited [1906] UKLawRpCh 87; [1906] 2 Ch 327, 330-2 (Buckley J).

[32] See Kelly v J Stockwell & Co Pty Ltd [2007] NSWSC 214 [11] (Barrett J); Equititrust Limited v Willaire Pty Ltd [2012] QSC 206 [90] (McMurdo J). See also the decision of the majority of the High Court in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; (2008) 232 CLR 314, 323 [14] (Gleeson CJ, Hayne, Crennan and Kiefel JJ).

[33] Re Elgar Heights Pty Ltd [1985] VicRp 67; [1985] VR 657, 669-671 (Ormiston J) ('Re Elgar Heights'); Remuneration Data Base Pty Ltd v Pauline Goodyer Real Estate Pty Ltd [2007] NSWSC 59 [39]-[42] (White J) ('Remuneration Data Base'); NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd [2010] NSWCA 210; (2010) 79 ACSR 544, 552-3 [63] (Lindgren AJA); Main Camp 731-2 [17] (Barrett J); Re Sceam Construction Pty Ltd [2021] VSC 437 [34] (Hetyey AsJ).

[34] Rothwells Ltd v Nommack (No 100) Pty Ltd [1990] 2 Qd R 85, 86 (McPherson J).

[35] Young v Queensland Trustees Ltd (1956) 99 CLR 560, 569 (Dixon CJ, McTiernan and Taylor JJ). See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 424 where Brennan CJ, and Dawson and Toohey JJ characterised a debt as being a 'form of action for a liquidated sum and not for damages'; and Hansmar Investments Pty Ltd v Perpetual Trustee Company Ltd [2007] NSWSC 103; (2007) 61 ACSR 321, 327 [34] (White J).

[36] See Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502; Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 275 (Deane and Gaudron JJ).

[37] Blair v Curran [1939] HCA 23; (1939) 62 CLR 464, 532 (Dixon J); Western Australia v Fazeldean (No 2) [2013] FCAFC 58; (2013) 211 FCR 150, 155 [25] (Allsop CJ, Marshall and Mansfield JJ). See also JD Heydon, Cross on Evidence (LexisNexis, 12th ed, 2020) [5005].

[38] Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589, 602-3 (Gibbs CJ, Mason and Aickin JJ).

[39] See also Lawson v Wallace [1968] 3 NSWR 82, 86 (Asprey JA).

[40] The Owners of the Cargo of the Kronprinz v The Owners of the Cargo of the Kronprinz [1887] UKLawRpAC 7; (1887) 12 App Cas 256, 259 (Lord Halsbury L.C.).

[41] [2018] FCAFC 132; (2018) 265 FCR 290.

[42] Ibid 297 [33] (Allsop CJ, Moshinsky and Colvin JJ).

[43] [2018] HCA 45; (2018) 265 CLR 77 ('UBS AG v Tyne').

[44] Ibid 100 [58]-[59] (Kiefel CJ, Bell and Keane JJ, with whom Gageler J agreed).

[45] Ibid 98 [52] (Kiefel CJ, Bell J and Keane JJ).

[46] Michael Murray and Jason Harris, Keay's Insolvency: Personal and Corporate Law and Practice (Thomson Reuters, 10th ed, 2018) [15.305]; Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd [2015] WASCA 95; (2015) 106 ACSR 79, 117 [203] (Newnes and Murphy JJA).

[47] Paperlinx Ltd v Skidmore [2004] FCA 1624; (2004) 51 ACSR 614, 616 [9] (Finkelstein J). See also the discussion in Assaf's Winding Up in Insolvency [8.101].

[48] Chippendale Printing Co Pty Ltd v Deputy Commissioner of Taxation (1995) 15 ACSR 682, 695 (Lindgren J). See also Leda Developments Pty Ltd v Orion Consolidated Pty (formerly Hillnorth Pty Ltd) [2001] QSC 400 at 7 (Mullins J); Reavill Farm Management Pty Ltd v Ashford Properties Pty Ltd [2010] NSWSC 1128 [27]-[28] (Barrett J).