Beringer Nominees Pty Ltd v MT Pty Ltd - [2000] WASC 171

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BERINGER NOMINEES PTY LTD -v- MT PTY LTD [2000] WASC 171

CORAM: MASTER BREDMEYER

HEARD: 16 JUNE 2000

DELIVERED : 23 JUNE 2000

PUBLISHED : 28 JUNE 2000

FILE NO/S: COR 111 of 2000

MATTER :Section 459 of the Corporations Law

BETWEEN: BERINGER NOMINEES PTY LTD (ACN 009 187 820)
Applicant
AND
MT PTY LTD (ACN 054 914 617)
Respondent

Catchwords:

Setting aside a statutory demand - No genuine dispute

Legislation:

Corporations Law, s 459H

Result:

Application dismissed

Representation:

Counsel:

Applicant: Mr G M Townsend
Respondent: Mr R A Zilkins

Solicitors:

Applicant: Stables Scott
Respondent: Zilkins & Co

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

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 699
John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716
Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062
Scanhill Pty Ltd v Century Australasia Pty Ltd (1994) 12 ACLC 111
Spencer Constructions Pty Ltd v G & M Oldridge Pty Ltd (1997) 15 ACLC 1001

Case(s) also cited:

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 42 ALJR 20
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37

MASTER BREDMEYER: This is an application to set aside a statutory demand for $50,689.33. The applicant is a company controlled by Mrs Beringer. For ease of reference I will refer to the applicant as Mrs Beringer and that should be taken as a reference to her or to the company, according to the context. Mrs Beringer worked for the respondent, MT Pty Ltd ("MT"), on commission. The sum represents sums advanced to Mrs Beringer against future commissions, less commissions earned and credited against that advance, so that the balance is $50,689.33. The advances were made over the period November 1995 to September 1997. Mrs Beringer continued to work on commission for MT until 2 July 1999 when her work terminated.
Mrs Beringer had two written contracts with the Pindan Group of Companies. The first dated 8 November 1996 was with MT, trading as Pindan Group Housing. The second dated 15 March 1999 was with Pindan Pty Ltd trading as Pindan Property Group. In each case the company's address, fax, phone number and box numbers were the same.
The advances, the subject to the statutory demand, were made under the 1996 agreement with MT and an earlier agreement in 1995, which included her husband, in similar terms. That agreement also was with MT. Those agreements are silent on the question of advances.
A statutory demand can be set aside under s 459H of the Corporations Law if there is a "genuine dispute" between the company and the respondent about the existence or the amount of the debt, or if the company has an offsetting claim. As to what is a genuine dispute I respectfully adopt extracts from the cases cited to me by both parties.
•A genuine dispute must be "bona fide and truly exist in fact … it must be real and not spurious, hypothetical, illusory or misconceived" (Spencer Constructions Pty Ltd v G & M Oldridge Pty Ltd (1997) 15 ACLC 1001.
•"A plausible contention requiring investigation" (Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 699 at 671).
•"A serious question to be tried" (Scanhill Pty Ltd v Century Australasia Pty Ltd (1994) 12 ACLC 111 at 113.
•"Something between mere assertion and the proof that would be necessary in a court of law. Something more than mere assertion is required because if that were not so, then anyone could merely say that it did not owe the debt." (John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716 at 718.
•"It is not expected that the court will embark upon any extended enquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute." (Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062).
Mrs Beringer in her first affidavit at par 7.1 says that she worked for both companies, MT and Pindan Pty Ltd, and that she had an oral agreement with them that:
(a)advances would be paid against future commission;
(b)commissions earned would be set off against money advanced; and
(c)no claim for payment would be made upon her while there were commissions which may be earned in the future.
She also said that it was in par 8 that there should be an implied term to the same effect as (c). She says in a second affidavit that whilst she was engaged with the Pindan Group there was never any distinction made between the two companies, MT and Pindan Pty Ltd, and that her entitlement to commissions and the arrangement about advances, (c) above, applied to both companies. That was so even before the 1999 contract was signed with Pindan Pty Ltd.
So her case is that by express agreement or by an implied term the advances she received were not to be called up while she might be paid commissions in the future. She says she may be due for commissions on three projects:
(1)Peninsula Hotel, Mandurah - a $20M project;
(2)a development of 17 units at Blackwood Avenue, Augusta.
(In each case she introduced the clients to the Pindan Property Group, the proposed builder.)
(3)Brookland Valley Development. She said she was due for $70,000 commission on the sale of 10 strata title units or condominiums and a further $7000 if the eleventh unit or condominium proceeded and she has produced a memo from MT's director, George Allingame to that effect, dated 14 April 1998.
The respondent's response to this evidence is that the first two projects mentioned were projects with the Pindan Property Group, the business name of Pindan Pty Ltd, and there was never any agreement to use those commissions to offset MT advances. In other words the two companies in the Pindan Group kept their accounts and payments separate and there was never any agreement that payments from the Pindan Property Group could be used to offset advances from MT.
The third project, Brookland Valley, was with MT. There is documentary evidence which supports that in the affidavit of Mr Bradshaw. The respondent's evidence is that the first two projects will not proceed, or if they do, Pindan will have no involvement in them. The respondent's evidence is that the Brookland Valley Project is, in effect, also concluded. Mrs Beringer has been paid for her work in connection with the sale of the restaurant and the gallery which were constructed by the company. She was paid $28,000 for that on 30 September 1997 which was deducted from her advances. The other stage of the project was the building of 10 or 11 units or condominiums. This is not going ahead. The owners are selling the lots as vacant land and hence are not using Pindan as a builder. Mrs Beringer submitted an invoice to the company for this $77,000 on 30 June 1998, but it was refused.
What is the evidence of the agreement to defer repayment of the advances until future commissions are determined? Mrs Beringer's evidence comes from her first affidavit at par 7.1. That evidence is vague. She does not say who the agreement was made with and that evidence carries little weight. Her second affidavit is much better. Her evidence is more detailed. At par 8.1 she says that she agreed with Mr Allingame that she could retain commissions until such time as commissions likely to be paid to her for the Brookland Valley Project were credited to her account and she refers to Mr Allingame's letter of 14 April 1998 already mentioned, re the $70,000 commission. That letter does not record the deferred payment agreement but it does indicate that $77,000 commissions to her could be expected on the sale of the 10 or 11 condominiums in the Brookland Valley Project.
At par 9.1 of her second affidavit she refers to a conversation with Mr Allingame in which he said:
"Don't worry about the $50,000. The commissions due on the deals you have coming up will more than cover the amount".
At par 9.3 she states that after that meeting with Mr Allingame she also met with Mr David Pringle, a director and accountant of the company, and he and she agreed that commissions from the Peninsula Hotel and Blackwood Avenue, Augusta developments would also be offset against the balance of the advances. Mr Pringle has not led any evidence to refute this.
What is the respondent's evidence on these agreements? Mr Allingame in his first affidavit, p 9, subpar (8), (9) and (13) practically agrees in substance with Mrs Beringer's evidence. At subpar (13) he states:
"Shortly after refusing Colleen Beringer's request for the $28,000 she came to me again and told me that she needed money to live on. I told her that I was not prepared to let her have any more advances on commissions so she asked me whether she could at least keep the commissions she was earning until the commission for the condominium stage of the Brookland Valley Project became payable. She was expecting to earn commission of about $70,000 from that deal. I agreed to allow her to keep her commissions subject to Brookland Valley Development proceeding."
I consider Mrs Beringer's evidence of the oral agreements made is plausible. It is her word against Mr Allingame's. It was purely an oral agreement. It was plausible that she had an agreement that repayments of the advances could be deferred pending commission to be earned on those three projects. I accept her evidence as plausible that that agreement applied to commissions earned from either company in the Pindan Group.
I now consider Mr Allingame's evidence that none of these three projects are proceeding and hence no commissions are due to Mrs Beringer. I accept Mr Allingame's evidence that the condominium part of the Brookland Valley Project is not proceeding. The owner or developer is selling the lots as vacant land and MT has no role in that. There will be no further commissions due to Mrs Beringer from that project. Her evidence does not contradict that.
Mr Allingame says in his affidavit at par 18(9)(b) that the other two projects are also dead. There are no current discussions or negotiations going on between the would‑be developer of the Peninsula Hotel and Pindan. Likewise with the Blackwood Avenue, Augusta project. The owner or developer has written a letter stating that he has no current plans to proceed to development. Its plans are on hold until the market is ready to accept such a development. I point out that this deferred repayment arrangement made between Mrs Beringer and the company was made in September 1997. Two years nine months have gone by since then and I consider her evidence that these projects will go ahead is not plausible.
Mrs Beringer has argued for an implied term. If her oral agreement about deferral is not accepted, she relies on an implied term in the agreement to the same effect. I now consider that term. If a sales person working on commission introduces a client to her principal prior to her termination and that results in a sale after her termination (what I will call a transitional sale), a court could imply a term that she should receive some commission for her work. However, where, as here, the employer has advanced commissions without interest and the employee is terminated, I would not imply a term that the employee has to wait for transitional sales to conclude before he can demand repayment of the advances. In terms of Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347, that would not be:
(1)reasonable and equitable (I note that the advance is without interest);
(2)necessary to give the agreement business efficacy; and
(3)so obvious that it goes without saying.
I point out that if a loan is made and there is no agreement on the term of repayment, it is implied by law that the loan is repayable on demand. I apply that in this case. If there was no agreement on the repayment of the advances made, I would imply a term that they are repayable on demand. That is a separate thing from saying that there may be an implied term that she is to get commissions earned on transitional sales, which come to fruition within a specified time after termination of her employment. It is not necessary for me here to decide what would be a reasonable specified time for that implied term.
I consider that Mrs Beringer has not raised any genuine dispute or offsetting claim.
This application will be dismissed.