Broadspectrum (Australia) Pty Ltd v Centauri Business Services Pty Ltd - [2016] NSWSC 1045

Supreme Court

New South Wales

Medium Neutral Citation: Broadspectrum (Australia) Pty Ltd v Centauri Business Services Pty Ltd [2016] NSWSC 1045
Hearing dates: 26 July 2016
Date of orders: 28 July 2016
Decision date: 28 July 2016
Jurisdiction: Equity
Before: Barrett AJA
Decision:
1. Order that the statutory demand dated 4 February 2016 served on the plaintiff by the defendant be set aside.
2. Order that the defendant pay the plaintiff's costs of the proceedings.

Catchwords: CORPORATIONS – winding up – statutory demand – application for order setting aside – whether genuine dispute as to existence of debt – no matter of principle
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Delnorth Pty Limited v State Bank of New South Wales (1995) 17 ACSR 379
Infratel Networks Pty Limited v Gundry's Telco and Rigging Pty Limited [2012] NSWCA 365; 297 ALR 372
Malec Holdings Pty Limited v Scotts Agencies Pty Limited [2015] VSCA 330
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 89 ALJR 990
Trecomax Pty Limited v Prentice [2004] FCA 1057; 50 ACSR 314
Category: Principal judgment
Parties: Broadspectrum (Australia) Pty Limited (P)
Centauri Business Services Pty Limited (D)
Representation:
Counsel:
Ms V Whittaker (P)
Mr A Ogborne (D)
Solicitors:
Baker & McKenzie (P)
Aubrey F Crawley & Co (D)

File Number(s): 2016/62358
Publication restriction: Nil

Judgment

BARRETT AJA: The plaintiff, which I shall call “Broadspectrum”, makes application under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 4 February 2016 served on it by the defendant which I shall call Centauri.
The debt to which the statutory demand relates is described as "moneys due and payable under" four identified invoices. The total of the invoiced sums is $4,888,808.41. These sums are said by Centauri to relate to services performed by it for Broadspectrum and to be due pursuant to a contract between the two companies.
Broadspectrum has paid the amounts referred to in three of the four invoices. It maintains that it is not liable for the amount the subject of the fourth invoice, being $4,704,513.95. Broadspectrum's position is that it is not indebted because the work or services the subject of the fourth invoice did not fall within a particular definition in the contract between the parties.
The contract is a written contract executed by both companies. It envisages the provision of two types of services by Centauri to Broadspectrum. These are defined in the document as "Recovery Services" and "Support Services". Both kinds of services involve the application of accounting expertise.
The invoice in question refers to "Recovery Services". Broadspectrum maintains that such services as are covered by the invoice are not within the definition of "Recovery Services" and should be remunerated instead as "Support Services". The question of which category particular services fall within is of significance because Support Services are charged for on the basis of time spent, whereas Recovery Services attract a percentage fee based on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NSWSC 1045
Decision Date: 28 July 2016

CaseChat Overview and Summary

Broadspectrum (Australia) Pty Ltd sought an order setting aside a statutory demand issued by Centauri Business Services Pty Ltd, claiming the demand was not genuine. The case was heard in the Federal Circuit Court of Australia. The statutory demand was issued under section 459E of the Corporations Act 2001 (Cth) for a debt of $319,825.82, which Broadspectrum disputed on the basis of a genuine dispute as to the existence of the debt.

The court considered whether Broadspectrum had demonstrated a genuine dispute regarding the existence of the debt claimed by Centauri. Broadspectrum argued that it had made several payments to Centauri which should have been applied to the debt in question. The court had to assess the evidence provided and determine whether Broadspectrum had raised a genuine dispute sufficient to set aside the statutory demand.

The court found that Broadspectrum had not demonstrated a genuine dispute as to the existence of the debt. The evidence provided did not sufficiently establish that the payments made by Broadspectrum were applied to the debt in question. The court noted that Broadspectrum's contentions were speculative and not supported by concrete evidence. Consequently, the court dismissed Broadspectrum's application to set aside the statutory demand.

The Federal Circuit Court of Australia ordered that Broadspectrum pay Centauri's costs of the application, assessed on the standard basis.

Orders