Addersome Industries Geelong Pty Ltd v Highpoint Homemaker Centre (Vic) Pty Ltd
[1995] FCA 82
•17 Feb 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) VG 3204 OF 1994
)
GENERAL DIVISION )
BETWEEN: ADDERSOME INDUSTRIES GEELONG PTY LTD
(Applicant)
AND:HIGHPOINT HOMEMAKER CENTRE (VIC) PTY LTD
(Respondent)
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 17 FEBRUARY 1995
MINUTE OF ORDERS
THE COURT ORDERS:
That the statutory demand dated 2 May 1994 and served on the applicant by the respondent be set aside.
That the respondent pay the applicant's costs of this application, including any reserved costs, such costs to be taxed in default of agreement.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) VG 3204 OF 1994
)
GENERAL DIVISION )
BETWEEN: ADDERSOME INDUSTRIES GEELONG PTY LTD
(Applicant)
AND:HIGHPOINT HOMEMAKER CENTRE (VIC) PTY LTD
(Respondent)
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 17 FEBRUARY 1995
REASONS FOR JUDGMENT
RYAN J: This is an application to set aside a statutory demand served on the applicant, Addersome Industries Geelong Pty Limited pursuant to s459E of the Corporations Law. The demand was dated 2 May 1994 and claimed a total of $71,226.76 stated in the demand to be made up of arrears of rent, unpaid rates, land tax and other outgoings. The components of the sum of $71,226.76 have subsequently been conceded on behalf of the respondent to have been wrong, although it is still asserted that the total amount of the indebtedness remains $71,226.76. That concession is embodied in an affidavit by George Adams on behalf of the respondent sworn 15 July 1994 in which the deponent swears in paragraph 3 that he confirms:
"... that the sum demanded in the notice is due and payable and say that is properly calculated as follows."
There are then set out details of rent and outgoings from various dates, water rates recoverable, rent and outgoings from further dates, a receipt on 15 September 1993 of $15,000, further accruals of rent and outgoings, water rates, council rates, a receipt on 16 February 1994 of $10,000, further accruals of rent and outgoings and an amount of land tax, amounting to a total debit balance of $71,226.76. The affidavit of Mr Adams of 15 July 1994 continues:
"The correct rental arrears as at 1 September 1993 were $24,130.06, not $48,838.70 as stated in the Demand. The total amount claimed in the Demand is however correct, as $71,226.76 is the amount that was due and payable by the Applicant to the Respondent on 2 March, 1994. The error arose as a result of incorrect information being supplied by the managing agent, Byvan Management (Vic) Pty Limited (Byvan).
The sum of $24,130.06 is calculated as follows:
-rental 17.7.1993 to 1.9.1994 $27,677.13
-less monthly outgoings of $708.64 x 3 $ 2,125.92
-less water rates $ 1,421.15
__________
TOTAL $24,130.16
==========
The variable outgoings are charged at the rate of $708.64 per month and are pro-rated for parts of a month. The outgoings have been charged at $708.64 per month from 1 August, 1993 to 30 June, 1994 and pro-rated from 17 July, 1993 to 31 July, 1993.
The statutory charges namely council rates, water rates and land tax are charged as assessed by the relevant authorities in accordance with the relevant authorities billing dates.
The term "base rent" means the monthly rental payable by the tenants and is the term used by Byvan."
It is common ground that the alleged indebtedness of the applicant has arisen from its position as original lessee under a lease dated 4 September 1991 of premises being Unit 11, in a shopping centre known as Highpoint Homemaker Centre at Maribyrnong. The lessor was Highpoint Homemaker Centre Pty Ltd and the term of the lease was a period of six years from 1 November 1990. The rent was expressed to be $155,000 per annum payable monthly in advance and subject to being re-assessed to market value at two-yearly intervals.
The evidence reveals that the applicant's interest in the lease as lessee was assigned with the consent of the lessor in 1992 to Conway Stewart Management Pty. Ltd. There were terms of the relevant deed of assignment that:
"The Assignees covenant with the Assignors and as a separate covenant with the Lessor that the Assignees will at all times during the residue unexpired of the lease duly pay the rent at the times and in the manner mentioned in the Lease and perform and observe all the covenants, terms and conditions and agreements contained in the Lease and on the Assignor's part to be performed and observed in every respect as though the Assignees had been a party to and had executed the lease instead of the Assignors."
There is then a covenant by the assignees to indemnify the assignors against proceedings, costs, claims and expenses on account of any omission to pay the rent and clause 4 recites:
"It is agreed between the Assignors and the Lessor that nothing herein contained shall in implication of otherwise release the Assignors from payment of the rent reserved by and the performance and observance of the covenants, terms, conditions and agreements contained in the Lease and on the assignors part to be performed or otherwise prejudice or affect the rights, powers and remedies of the Lessor against the assignors in respect of such rent, covenants, conditions and agreements."
At some time Highpoint Homemaker Pty Ltd was succeeded as lessor by Bill Acceptance Corporation Limited, ("Bill Acceptance") in the capacity of mortgagee in possession. As I infer from the evidence, Bill Acceptance subsequently sold the premises to Highpoint Homemaker Centre (Vic) Pty Ltd. By letter dated 21 July 1993 addressed to the applicant at the subject premises, solicitors for Highpoint Homemaker Centre (Vic) Pty Ltd wrote to the applicant in these terms:
"We act for Highpoint Homemaker Centre (Vic) Pty Ltd, the purchaser of the premises currently leased by you. Enclosed is a letter from the Vendor's solicitors advising you that all rental moneys due as from 16 July, 1993 are due to our client company.
Our client company has retained the services of Byvan Management (Vic) Pty Ltd as the Manager of the Centre, and therefore all payments due under the Lease should continue to be made to the Manager."
No other notice to the applicant of any change of landlord has been asserted. In support of the application to set aside the demand, Mr Bornstein of counsel has contended that the effect of the assignment was to convert the primary liability of the applicant under the lease to a liability as guarantor of the assignee, namely Conway Stewart Management Pty Ltd. That view was apparently shared by the respondent when it served the statutory demand, because the affidavit of Mr George Adams dated 2 May 1994 which was served with the demand and purporting to verify it contains this recital:
"The Company is the assignor of retail premises owned by the Creditor and known as Shop 11, 179 Rosamond Road, Maribyrnong in the State of Victoria and is also the Guarantor of the Assignee and current tenant of the said premises, namely, Conway Stewart Management Pty Ltd .... of Shop 11, 179 Rosamond Road, Maribyrnong in the said State which trades as "Delta Carpets" ("Conway"), pursuant to a Deed of Assignment of Lease dated 13 October 1992. In respect of a Lease of the premises dated 2 September 1991 to which the aforesaid assignment of lease relates, Conway to date is in arrears of rent to the Creditor in the sum of $71,226.76 as particularised in the Schedule to the Statutory Demand and Conway has failed and or refused to pay the outstanding sum owing to the Creditor. Accordingly the Creditor looks to the Company in its capacity as Guarantor pursuant to the aforesaid Assignment of Lease and despite repeated requests made by the Creditor to the Company, the Company has failed and or refused to pay the aforementioned outstanding sum owing to the Creditor. No allegation of dispute has been to the Creditor by the Company and I believe there is no genuine dispute about the existence or amount of the aforementioned debt."
There has been considerable debate in the course of argument as to whether the assignment of lease did have the effect of changing the character of the relationship between the applicant and the respondent as successor to the original landlord. It is not necessary nor appropriate for me to express a concluded view on that issue because I consider that even if the correct analysis be that the applicant and Conway Stewart Management Pty Ltd became, after the deed of assignment, jointly and severally liable to the landlord for the time being, the circumstances including the lack of effective notice of amounts allegedly owing under the lease, after the deed of assignment, are sufficient to sustain the applicant's contention that there is a genuine dispute as to the debt.
Apart from the assertions at the conclusion of Mr Adams' affidavit verifying the statutory demand, there is no evidence of demands prior to the statutory demand or the applicant's reaction to those demands, which tends to cast doubt on the genuineness of the dispute which the applicant has asserted; although I accept as I indicated in Moyall Investment Services Pty Limited v White (1993) 12 ACSR 320 at page 324 that the applicant bears the onus of establishing the existence of a genuine dispute.
For the reasons that I have indicated, I am satisfied that the present applicant has discharged that onus and that I should set aside the demand. Accordingly the demand will be set
aside and it will be ordered that the respondent pay the applicant's cost of the application including any reserved costs, such costs to be taxed in default of agreement.
I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment of his Honour Mr Justice Ryan
Associate:
Date:
Counsel for the applicant Mr P Bornstein
Solicitors for the applicant Gargan & Roache
Counsel for the respondent Mr J Delany
Solicitors for the respondent Bellofiore & Associates
Hearing date: 17 February 1995
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