Australian Cinemas Pty Limited ACN 002 494 662 v Kodak (Australasia) Pty Ltd ACN 004 057 621
[2010] FCA 678
•18 June 2010
FEDERAL COURT OF AUSTRALIA
Australian Cinemas Pty Limited ACN 002 494 662 v Kodak (Australasia) Pty Ltd ACN 004 057 621 [2010] FCA 678
Citation: Australian Cinemas Pty Limited ACN 002 494 662 v Kodak (Australasia) Pty Ltd ACN 004 057 621 [2010] FCA 678 Parties: AUSTRALIAN CINEMAS PTY LIMITED
ACN 002 494 662 v KODAK (AUSTRALASIA) PTY LTD ACN 004 057 621File number: NSD 265 of 2010 Judge: EMMETT J Date of judgment: 18 June 2010 Date of hearing: 18 June 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 14 Solicitor for the Plaintiff: McCooe Raves & Poole Solicitors Counsel for the Defendant: MJ Murray Solicitor for the Defendant: Festa Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 265 of 2010
BETWEEN: AUSTRALIAN CINEMAS PTY LIMITED ACN 002 494 662
PlaintiffAND: KODAK (AUSTRALASIA) PTY LTD ACN 004 057 621
Defendant
JUDGE:
EMMETT J
DATE OF ORDER:
18 JUNE 2010
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to s 459H(4)(a), the amount claimed in the creditor’s statutory demand, dated 22 February 2010, served by the defendant upon the plaintiff, be varied to the sum of $299,117.50.
2.The period for compliance with the demand be extended to 4 pm on 23 June 2010.
3.The proceeding be otherwise dismissed.
4.The plaintiff pay the defendant’s costs for the proceeding.
5.The exhibits be returned.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 265 of 2010
BETWEEN: AUSTRALIAN CINEMAS PTY LIMITED ACN 002 494 662
PlaintiffAND: KODAK (AUSTRALASIA) PTY LTD ACN 004 057 621
Defendant
JUDGE:
EMMETT J
DATE:
18 JUNE 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The defendant, Kodak Australasia Pty Limited (Kodak), supplied movie projectors equipment to the plaintiff, Australian Cinemas Pty Limited (Australian Cinemas). Australian Cinemas has not paid for the projectors. By statutory demand, dated 22 February 2010, Kodak demanded payment of the sum of $301,840. The demand was served on Australian Cinemas on 24 February 2010. Correspondence ensued between the solicitors for Kodak and the solicitors for Australian Cinemas, concerning an alleged dispute as to the amount owing for the equipment. The dispute was not resolved by the correspondence and, on 16 March 2010, Australian Cinemas commenced this proceeding against Kodak, seeking an order that the statutory demand be set aside or, alternatively, a determination of the substantiated amount of the demand.
The matter has ultimately been resolved so far as its substance is concerned, on the basis that there will be orders by consent that the amount claimed in the statutory demand be varied to $299,117.50 and that the time for compliance with the demand be extended to 4 pm on 23 June 2010. The proceeding will be otherwise dismissed. Kodak, however, asks for its costs of the proceeding. Australian Cinemas resists such an order. It is, therefore, necessary to say something about the so-called dispute.
Kodak issued two invoices to Australian Cinemas, dated 24 December 2009, for sums of $280,940 and $20,900, respectively. Those two sums amount to the amount in the statutory demand of $301,840. Kodak subsequently issued a further invoice to Australian Cinemas in the sum of $299,117.50 dated 30 December 2009.
There does not appear to be any dispute that the invoice of 30 December 2009 relates to the same equipment that is the subject of the two earlier invoices. However, it is not easy, if at all possible, to reconcile the detail of the invoices of 24 December 2009, on the one hand, and the invoice of 30 December 2009, on the other.
Following receipt of the demand, the solicitors for Australian Cinema wrote to Kodak’s solicitors on 3 March 2010 suggesting that there was a genuine dispute as to the amount of the debt. The letter of 3 March 2010 referred to the discrepancy between the invoices of 24 December 2009 and the invoice of 30 December 2009. The letter also referred to a request for confirmation as to who would be providing the two year warranty in respect of the projectors. The letter asserted that Australian Cinemas had sought that information following notification from Kodak that it would no longer be offering the warranties originally promised. The letter also asserted that Australian Cinemas had made an offer to Kodak incorporating a reduction for loss and damage suffered, as a direct result of alleged failure to provide on-site warranties originally promised. There has been no particularisation of any such failure.
Kodak’s solicitors responded on 11 March 2010 asserting that the invoices of 24 December 2009 are correct. The letter of 11 March 2010 also said that the agreement between the parties included the warranty, for a period of two years, from 14 December 2009 to 14 December 2011 and that any warranty work would be performed by Kodak. The letter queried the entitlement of Australian Cinemas to the warranty, in circumstances where no payment had been made for the projectors. The letter also rejected the offer to pay the sum of $278,036, rather than making payment of the amount stated in the invoices.
An affidavit filed on behalf of Kodak on 23 April 2010 contains an assertion that the invoice of 30 December 2009 was an “off the system” invoice to assist Australian Cinemas in its application for finance from St George Bank. An email of 9 December 2009 from Australian Cinemas requests the supply of a new invoice, in the name of Australian Cinemas, and for adjustment of the payment date from 31 December 2009 to 21 December 2009. The email said that St George Bank required that adjustment, if payment was to be made by 21 December 2009.
On 21 December 2009, Kodak forwarded an email to Australian Cinemas, confirming that the projectors had been installed to specification together with operator training. The email sought confirmation that, since the scheduled dates had been met, St George Bank had been provided with the necessary approval to release full payment for the work done by Kodak, under an invoice dated 14 December 2009. That invoice is not in evidence.
The deponent of the affidavit of 23 April 2010 went on to assert that the invoice of 30 December 2009 was not “registered” within the normal accounting system of Kodak, but that the invoices of 24 December 2009 were generated from Kodak’s normal billing and accounting system. The affidavit asserted that, while the goods and services mentioned in the two lots of invoices are identical, the difference was caused by a change in the exchange rate between 23 November 2009 and 24 December 2009. The deponent indicated that Kodak was prepared to accept the variation of the amount claimed in the demand from $301,840 to $299,117.50.
As at today, nothing has been paid by Australian Cinemas. There is evidence before the Court that St George Bank expects to be able to remit funds in the sum of $299,117.50 sometime today, although confirmation has not yet been received that that has occurred. Hence, the agreement that the time for compliance with the statutory demand be extended until next week.
As I have said, there is some obscurity as to the differences between the invoices of 24 December 2009 and the invoice of 30 December 2009. Nevertheless, before the commencement of the proceeding, any dispute concerning the provision of a two year warranty appears to have been resolved by the unequivocal assertion in Kodak’s solicitor’s letter of 11 March 2010 that the warranty for two years would be provided. It may well be that there was a dispute as to the total amount payable, to the extent of some $2,000. However, at no time did Australian Cinemas accept that it was liable to pay the sum of $299,117.50, and, as I have said, it has in fact paid absolutely nothing in respect of the projectors, which appears to have been delivered and installed by 21 December 2009, and has been in use since that time.
In circumstances where a proceeding is compromised, it is ordinarily undesirable to inquire into the merits of the proceeding in order to determine who should bear the costs of the proceeding. If there is a genuine compromise, the appropriate course may be to direct that there be no order as to costs. However, where both parties have acted reasonably, it may be that in some cases the Court may be confident that one party was almost certain to have succeeded, if the matter had proceeded to a final hearing. In such circumstances, it may be appropriate for that party to have the benefit of an order for costs.
In the present case, the result is very much in favour of Kodak. While there has been a minor compromise to the extent of something just in excess of $2,000, the necessity for the proceeding has not been established. It might have been a different matter if Australian Cinemas had indicated to Kodak its willingness and ability to pay the sum of $299,117.50. However, it is apparent that, even as at this morning, Australian Cinemas is not yet in a position to pay that sum, since it is still waiting for St George Bank to provide the funds.
In all of the circumstances, I consider that, although the consent orders have been made for the benefit of Australian Cinemas, this is a case where it is apparent that, had the matter been resolved on a final hearing, Kodak would have been successful. It may be that it would not have been successful in respect of the amount claimed in the statutory demand of $301,840. Be that as it may, I consider the appropriate course is to order that Australian Cinemas pay Kodak’s costs of the proceeding.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 28 June 2010
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