The Papua New Guinea [PNG] Balsa Company Ltd v New Britain Balsa Company Ltd (2004) N2520

• Jurisdiction: Papua New Guinea
• Court: National Court
• Citation: (2004) N2520
• Date: 12 March 2004
• Year: 2004

Full Title: The Papua New Guinea [PNG] Balsa Company Ltd v New Britain Balsa Company Ltd (2004) N2520

National Court: Lenalia J

Judgment Delivered: 12 March 2004

1 Company Law—Winding up—The process of—Creditor served notice under s336 of the Companies Act 1997—Disputed debt—Creditor's statutory demand s337 of some prospective liabilities—There ought to be prima facie evidence and proof of itemised debts—Existence of substantial dispute.

2 Company Law—Creditor's statutory demand—Where there is no evidence to support the process of winding up a company—Demonstration of an arguably genuine substantial dispute—Mere assertions—Insufficient—Materials short of proof—Applicant to establish the dispute is genuine—Application granted.

3 BB Shipping (NZ) Limited (Unreported, High Court, Auckland, Civ 2003 404 2626, Master Lang), Fletcher Homes Limited v BE Ellis and S Baldick (Unreported, High Court, Auckland, M 471/99, Master Faire), Taxi Trucks Ltd v Nicholson [1989] 2 NZLR 297, Queen City Residential Limited v Patterson Co–partners Architects (No 2) [1995] 3 NZLR 307 referred to

Held

(1) The test which should apply on an application to set aside a statutory demand is set out in s338(4)(a) of the Companies Act 1997 where a statutory demand has been issued against an applicant is that, the applicant has to show a fairly arguable basis on which it is not liable for the amount claimed in the statutory demand.

(2) Mere assertions that there exists a dispute is not sufficient. Where there exist material evidence demonstrating "a substantial dispute" the dispute should normally be resolved other than by means of issuing a statutory demand.

(3) The application to set aside the statutory demand is granted.

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Lenalia J: The applicant company applied to set aside a statutory demand issued against it by the respondent counterpart company...