Grocon Constructors (Vic) Pty Ltd v Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 19 August 2019
• Neutral Citation: [2019] FCA 1283
• Date: 19 August 2019

FEDERAL COURT OF AUSTRALIA

Grocon Constructors (Vic) Pty Ltd v Dexus Funds Management Limited as

Trustee for the Dexus 480Q Trust (No 2) [2019] FCA 1283

Appeal from:	Application for leave to appeal: Grocon Constructors (Qld) Pty Ltd v Dexus Funds Management Ltd as Trustee for Dexus 480Q Trust (No 2) [2019] FCA 1117
File number(s):	VID 786 of 2019
Judge(s):	ANDERSON J
Date of judgment:	19 August 2019
Catchwords:	PRACTICE AND PROCEDURE – appeals – application for leave to appeal from decision of single judge of the Court – consideration of interlocutory nature of decision not to set aside statutory demand – whether the decision of primary judge was attended by sufficient doubt to warrant reconsideration by Full Court – whether substantial injustice would result if leave were refused, supposing the primary judge’s decision to be wrong ; CORPORATIONS – appeal from decision not to set aside statutory demand – whether statutory demand should have been set aside rather than varied – whether statutory demand should be set aside on basis that it was issued for a collateral and improper purpose – whether statutory demand was issued as a means of testing solvency of the company – whether testing solvency is a proper use of the statutory demand procedure ; Held: Leave to appeal granted
Legislation:	Corporations Act 2001 (Cth) Part 5.4, ss 459C(2)(a), 459F(2)(a)(i), 459G, 459H, 459J, 459J(1)(b) Evidence Act 1995 (Cth) s 192A Federal Court of Australia Act 1976 (Cth) ss 24(1A), 25(2)
Cases cited:	Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; 232 CLR 314 Createc Pty Ltd (ACN 094 263 537) v Design Signs Pty Ltd (ACN 084 384 798) [2009] WASCA 85; 71 ACSR 602 Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; 33 FCR 397 DMO17 v Minister for Immigration and Border Protection [2019] FCA 906 EBT17 v Minister for Home Affairs [2019] FCA 200 Olson v Keefe [2019] FCA 339 Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 1366; 80 FCR 295; 25 ACSR 675 First State Computing Pty Ltd v Kyling (1995) 13 ACLC 939 Grocon Constructors (QLD) Pty Ltd v Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust [2019] FCA 601 Grocon Constructors (Qld) Pty Ltd v Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust (No. 2) [2019] FCA 1117 Grocon Constructors (Vic) Pty Ltd v Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust [2019] FCA 1168 Johnston v Cameron [2002] FCAFC 251; 124 FCR 160 Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; 104 FCR 564 In the matter of UGL Process Solutions Pty Ltd [2012] NSWSC 1256 Intergraph Public Safety Pty Ltd v Tess Lawrence Media Services Pty Ltd [1996] FCA 1391; 19 ACSR 523 Lifese Pty Ltd v Lee Crane Hire Pty Ltd [2012] FCA 302 MNWA Pty Ltd v Federal Commissioner of Taxation [2016] FCAFC 154; 250 FCR 381 MZABP v Minister for Immigration and Border Protection [2015] FCA 1391; 242 FCR 585 Nationwide News Pty Ltd v Rush [2018] FCAFC 70 Rivera v United States of America [2004] FCAFC 154 Samsung Electronics Co. Limited v Apple Inc. [2013] FCAFC 138 Smith v Aircraft Maintenance Services Australia (AMSA) Pty Ltd [2018] FCA 264 SZLSI v Minister for Immigration & Citizenship [2008] FCA 1052
Date of hearing:	9 August 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	76
Counsel for the Applicant:	Dr O Bigos (Appearing at hearing) Mr S B Rosewarne (Written submissions)
Solicitor for the Applicant:	Quinn Emanuel Urquhart & Sullivan
Counsel for the Respondent:	Mr S J Maiden QC
Solicitor for the Respondent:	MinterEllison

ORDERS

		VID 786 of 2019
BETWEEN:	GROCON CONSTRUCTORS (VIC) PTY LTD (ACN 127 996 436) Applicant
AND:	DEXUS FUNDS MANAGEMENT LIMITED AS TRUSTEE FOR THE DEXUS 480Q TRUST (ACN 060 920 783) Respondent

JUDGE:	ANDERSON J
DATE OF ORDER:	19 August 2019

THE COURT ORDERS THAT:

1. The applicant’s application for leave to appeal against part of the judgment and order of the primary judge dated 22 July 2019 is granted.

2. The costs of and incidental to the application for leave to appeal are reserved, pending determination of the appeal by the Full Court.

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

REASONS FOR JUDGMENT

ANDERSON J:

Introduction and summary

1. The applicant, Grocon Constructors (Vic) Pty Ltd (Grocon (Vic)), seeks leave to appeal from a decision of a single judge of this Court. The learned primary judge dismissed an application by Grocon (Vic) for the setting aside of a statutory demand issued to Grocon (Vic) by the respondent, Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust (Dexus). The primary judge instead varied the amount of the demand, as explained further below. That decision was interlocutory in nature and, in this case, requires leave from a single judge of this Court before an appeal of that decision may be heard by the Full Court.

2. For the reasons below, Grocon (Vic)’s application for leave to appeal is granted. The decision to not set aside the statutory demand, while interlocutory in nature, has significant practical consequences for Grocon (Vic). Supposing the decision of the primary judge to be wrong, Grocon (Vic) would suffer substantial injustice should leave to appeal be refused. Moreover, the grounds of appeal that Grocon (Vic) seeks to advance before a Full Court raises questions about the circumstances in which a court may draw an inference that a statutory demand was issued for an improper purpose. In light of these questions, my view, with respect to the primary judge, is that the decision under appeal is attended by sufficient doubt such as to warrant reconsideration by the Full Court.

Background

3. The matter before the primary judge involved two proceedings in which applications were made to set aside distinct statutory demands, which are referred to below as the Current Statutory Demands. The plaintiff in the first proceeding was Grocon Constructors (Qld) Pty Ltd (Grocon...