Asian Century Holdings Inc v Fleuris Pty Ltd

[2000] WASC 86

ASIAN CENTURY HOLDINGS INC -v- FLEURIS PTY LTD [2000] WASC 86

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASC 86
Case No:	FUL:73/1999	Heard:	3 APRIL 2000
Coram:	IPP J	Delivered:	3/04/00
No of pages:	5	Judgment Part:	1 of 1
Result:	Application dismissed
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Parties:	ASIAN CENTURY HOLDINGS INC FLEURIS PTY LTD (ACN 009 010 495)
Catchwords:	Application for stay pending appeal to High Court Turns on own facts
Legislation:	Corporations Law, s 459G and s 459H
Case References:	Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 147 ALR 444 Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 (17 December 1999) Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1998) 194 CLR 171 Hamersley Iron Pty Ltd v Lovell [No. 2] (1998) 20 WAR 79 Millieu Pty Ltd v Gervan (NSW) Pty Ltd (1991) 13 Legal Reporter 24

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : ASIAN CENTURY HOLDINGS INC -v- FLEURIS PTY LTD [2000] WASC 86 CORAM : IPP J HEARD : 3 APRIL 2000 DELIVERED : 3 APRIL 2000 FILE NO/S : FUL 73 of 1999 MATTER : Sections 459G, 459H and 459J of the Corporations Law of Western Australia BETWEEN : ASIAN CENTURY HOLDINGS INC

Appellant (Respondent)

AND

FLEURIS PTY LTD (ACN 009 010 495)
Respondent (Applicant)

Catchwords:

Application for stay pending appeal to High Court - Turns on own facts

Legislation:

Corporations Law, s 459G and s 459H

Result:

Application dismissed

(Page 2)

Representation:

Counsel:

Appellant (Respondent) : Mr J C Vaughan
Respondent (Applicant) : Mr D H Solomon

Solicitors:

Appellant (Respondent) : Freehill Hollingdale & Page
Respondent (Applicant) : Solomon Bros

Case(s) referred to in judgment(s):

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 147 ALR 444
Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 (17 December 1999)

Case(s) also cited:

Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1998) 194 CLR 171
Hamersley Iron Pty Ltd v Lovell [No. 2] (1998) 20 WAR 79
Millieu Pty Ltd v Gervan (NSW) Pty Ltd (1991) 13 Legal Reporter 24

(Page 3)

1 IPP J : I have come to the conclusion that this application for a stay pending appeal to the High Court should fail. The reason for my conclusion is that I do not regard the argument advanced by the applicant as having any prospect of success.

2 The issue before the Full Court was whether the learned Master had correctly set aside a statutory demand served by the respondent pursuant to s 459E of the Corporations Law. The decision turned on whether there was a genuine dispute in relation to the debts the subject of the demand. The Full Court held that it was not established that a genuine dispute had arisen.

3 The applicant seeks leave to appeal to the High Court on the ground that:

"The Full Court erred in law in applying the wrong test, further or alternatively, a test contrary to that applied in the Full Court of the Supreme Court of Western Australia ... in Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd[1999] WASCA 294 (17 December 1999) ... in determining whether ...there was a 'genuine dispute' in terms of section 459H of the Corporations Law".

4 In my view, however, the Full Court did not apply the "wrong test", nor did it apply a different test from that in Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 (17 December 1999).

5 The applicant contended that it was not obliged to pay the money demanded because Mr Lukin, one of its directors, had "assumed" that the respondent would not demand payment from it until the respondent had arranged a certain Standby Letter of Credit. It was not argued by the applicant that the assumption was derived from or gave rise to any contractual obligation. Rather, the applicant asserted that the assumption resulted in its being able to rely on an estoppel or the misleading conductprovisions of the Trade Practices Act in contending that it did not have to repay the advance.

6 There was a dispute about the reason for the respondent's failure to provide the Standby Letter of Credit. The respondent accepted that it was obliged to provide the Standby Letter of Credit but contended that it was only obliged to do so once the applicant and its directors had complied with certain conditions and, in particular, had provided a certain indemnity and guarantees to it. The applicant argued that it was only

(Page 4)

required to provide the indemnity and guarantees once the respondent had given it the necessary documentation.

7 The basis of the Full Court's decision was that, irrespective of whose obligation it was to provide the documentation for the indemnity and guarantees, there was no admissible evidence to support or justify the applicant's assumption that the respondent would not demand payment from it until it had provided the Standby Letter of Credit. That is to say, there was no admissible evidence of any representation made by the respondent or any person on its behalf that justified the making of the assumption.

8 Kennedy J was of the opinion, implicitly, that there was no admissible evidence that the parties had agreed or that the respondent had represented that the money advanced was not to be repaid until the Standby Letter of Credit had been provided (see par 31, par 32 and par 34 of his reasons). Although the respondent gave an assurance that it would arrange the Standby Letter of Credit (subject to the agreed conditions being fulfilled), it did not follow from that that the respondent would not seek to make demands for repayment before the Standby Letter of Credit had been provided (par 33 and par 34).

9 Heenan J was of a similar view. His Honour pointed out (at par 48) that "[t]he evidence shows no reasonable basis for the making of that assumption by [the applicant]," and went on to say (at 50) that the applicant's case was "founded on 'a mere assertion' which is insufficient to establish that there is a genuine dispute between the parties."

10 I emphasise that the Full Court decided that the appeal should succeed because there was no adequate evidence to support the assumption made by the applicant. There have been various formulations of the test of a genuine dispute, as set out in the judgment of the Full Court of the Federal Court in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 147 ALR 444 at 454 – 455, referred to at par 35, but the variations between the formulations of the test were not of any present significance. As Kennedy J observed (at par 35), "It is not necessary for the purposes of this appeal to examine in detail the meaning of the expression 'a genuine dispute', as used in s459H." In the opinion of the Full Court, no matter which of these formulations was applied the applicant would fail.

11 Accordingly, in my opinion, the ground on which the applicant relies for its application for leave to appeal to the High Court, namely, that the

(Page 5)

Full Court applied the "wrong test", or applied a different test from that in Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd, has no basis. The Full Court was of the opinion that the application failed before one reached the point where a test of that kind had to be applied. That is to say, it failed for lack of any adequate evidence to support the case advanced.

12 For these reasons I dismiss the application.