BYKO Investments Pty Ltd v ADDSTYLE Constructions Pty Ltd

[2013] WASC 315

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   BYKO INVESTMENTS PTY LTD -v- ADDSTYLE CONSTRUCTIONS PTY LTD [2013] WASC 315

CORAM:   MASTER SANDERSON

HEARD:   13 AUGUST 2013

DELIVERED          :   22 AUGUST 2013

FILE NO/S:   COR 88 of 2013

BETWEEN:   BYKO INVESTMENTS PTY LTD (ACN 111 695 973)

Plaintiff

AND

ADDSTYLE CONSTRUCTIONS PTY LTD (ACN 063 575 093)
Defendant

Catchwords:

Corporations law - Application to set aside statutory demand - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr I R Gillon

Defendant:     Mr M N Solomon

Solicitors:

Plaintiff:     Lawton Gillon

Defendant:     Hotchkin Hanly

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

1. MASTER SANDERSON:  This was the plaintiff's application to set aside a statutory demand.  The application was supported by an affidavit of Kevin John Robertson sworn 27 May 2013.  The defendant filed no evidence.  It is clear then there is no dispute of fact separating the parties.

2. A copy of the statutory demand appears as annexure KJR1 to Mr Robertson's affidavit.  In the schedule to the demand the debt is described in the following terms:

   A cheque dated 25 September 2012 tendered by Byko Investments Pty Ltd and made payable to the creditor which was dishonoured on 13 December 2012.

3. The affidavit accompanying the statutory demand was sworn by Dominique Travers who describes herself as 'General Manager'.  For present purposes it is only par 1 of that affidavit which is relevant.  It is in the following terms:

   I am the General Manager of Addstyle Constructions Pty Ltd (Creditor) in respect of a debt of $100,980 owed by Byko Investments Pty Ltd (Debtor Company) to the Creditor relating to a cheque tendered by the Debtor Company on 25 September 2012, which was dishonoured by the Creditor's bank on 13 December 2012. 

4. The relevant facts are these.  On or about 14 April 2011 Mr Robertson, in his personal capacity, entered into a contract with the defendant pursuant to which the defendant was to make certain additions to Mr Robertson's property in Kallaroo.  The total price for the contract was $174,350.  The contract provided for Mr Robertson to make periodic progress payments.  By August 2012 the defendant had issued to Mr Robertson progress claims in an amount of $100,980.  Mr Robertson was not happy with the work.  He expressed his disquiet to the defendant and numerous meetings and telephone calls took place.  Mr Robertson says by mid‑September he was tired of being 'chased up' by the defendant for payment and decided to make payment so building works could progress.

5. On Tuesday 25 September 2012 Mr Robertson attended at the defendant's offices in Balcatta with a cheque in an amount of $100,980 drawn on the plaintiff's account.  He gave the cheque to Ms Travers and asked her not to present it until Friday.

6. Mr Robertson then changed his mind.  He went to his bank and completed a stop cheque form.  He then telephoned the defendant's offices.  Ms Travers was not available.  Mr Robertson told the receptionist he had stopped the cheque and payment would not be made until the building works were rectified to his satisfaction.

7. It is not entirely clear whether the defendant ever actually presented the cheque.  If they did that fact is not alluded to by Mr Robertson in his affidavit.  In any event the cheque was not met and the defendant issued the statutory demand the subject of this application.

8. On 9 November 2012 the defendant issued proceedings against Mr Robertson in the District Court.  The claim was for $100,980 - that is the amount of the cheque - being for unpaid progress claims.  An appearance was entered on behalf of Mr Robertson.  The defendant issued a summary judgment application and affidavits were filed by both parties.  That matter has progressed no further.

9. The plaintiff seeks to set aside the statutory demand on three grounds.  They are:

   1.there is a defect in the affidavit in support of the demand such as would require the demand to be set aside;

   2.there is a genuine dispute as to whether the plaintiff is liable to the defendant on the cheque and that dispute is best resolved in another forum; and

   3.as proceedings have been issued in the District Court for the same amount as is claimed in the statutory demand the demand itself is an abuse of process and should be set aside on that basis.

10. It is appropriate to deal with each of these matters in turn. So far as the affidavit in support of the statutory demand is concerned the plaintiff says it does not comply with s 459E(3) of the Corporations Act 2001 (Cth). That section is in the following terms:

    Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:

    (a)verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and

    (b)complies with the rules.

11. Counsel points out there is a reference in par 1 of Ms Travers' affidavit to the cheque being dishonoured by the 'Creditor's bank'. In fact there is no evidence the cheque was dishonoured and if it was dishonoured it was dishonoured by the Debtor's bank. It is the plaintiff's submission the defect in the affidavit is such s 459E(3) is not complied with and the demand should be set aside.

12. In my view there is no substance in that submission.  What the affidavit must do is verify the debt is due and payable by the company.  The fact the deponent, Ms Travers, refers to the cheque and the amount for which the cheque was drawn in par 1 of her affidavit is sufficient.  It is of no moment that she was wrong to refer to the Creditor's bank and the cheque may not actually have been dishonoured.  The affidavit alerts the plaintiff to the true position and properly states the nature of the defendant's claim.  That which must be verified according to the statute is verified.  That is the end of the matter.

13. Nor is there any substance to the submission there is an underlying dispute as to the debt. The starting point when dealing with a cheque is s 71 of the Cheques Act 1986 (Cth). By drawing the cheque the plaintiff undertook that on due presentment for payment the cheque will be paid and that if it is dishonoured when presented the plaintiff will compensate the payee. Pursuant to s 36 of the Cheques Act the plaintiff is presumed to have received value for the cheque. Pursuant to s 35 of the Cheques Act valuable consideration for a cheque may be constituted by any consideration sufficient to support a simple contract.

14. It is clear here there was a contract.  Mr Robertson had a contract with the defendant.  A dispute had arisen.  By drawing a cheque and paying the amount in dispute to the defendant the plaintiff had effectively discharged Mr Robertson's obligation.  Expressed in terms of consideration the position is as follows - in consideration for the defendant not pursuing Mr Robertson for the amount it claimed against him personally, the plaintiff paid that amount.  Whatever may have been the nature of the dispute between the defendant and Mr Robertson it is has nothing to do with what was a simple contract as between the plaintiff and the defendant.  In my view there is no genuine dispute as to the plaintiff's liability to make payment on the cheque.

15. Finally, there is the argument that to issue a statutory demand and to commence proceedings in the District Court amounts to an abuse of process.  This point was not pressed by counsel during the course of his submissions.  That is understandable.  The steps taken by the defendant are taken against two separate entities - Mr Robertson in relation to payment of the progress claims and the plaintiff in relation to the cheque.  If the contract had been between the plaintiff and the defendant with respect to the building and proceedings were issued in the District Court and then a statutory demand was issued that would be an abuse of process such as to justify the demand being set aside.  But here there are two separate contracts.  Of course, had Mr Robertson made payment to the defendant pursuant to the contract then the statutory demand would fall away and to pursue it would be an abuse of process.  But there is nothing wrong with a course of action the defendant has adopted in issuing this demand to the plaintiff.

16. For these reasons the application to set aside the demand ought be dismissed.  I will hear the parties as to the precise form of orders and as to costs.