C Tina Pty Ltd v Warners Electroplating Pty Ltd - [2019] VSC 66

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2018 01847

C TINA PTY LTD (ACN 161 173 100)	Plaintiff
v
WARNERS ELECTROPLATING PTY LTD (ACN 167 917 875)	Defendant

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	30 January 2019
DATE OF JUDGMENT:	18 February 2019
CASE MAY BE CITED AS:	C Tina Pty Ltd v Warners Electroplating Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 66

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CORPORATIONS – Application to set aside a statutory demand pursuant to s 459G of Corporations Act 2001 (Cth) - Defendant completed works for the plaintiff pursuant to an oral agreement – Plaintiff alleges genuine dispute concerning whether defendant contracted with plaintiff or with another entity - Whether plaintiff established a plausible contention requiring investigation – Finding that plaintiff has a genuine dispute – Statutory demand set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Muller	Ark Legal Solicitors
For the Defendant	Mr M W Sanger	E C Legal Pty Ltd

HIS HONOUR:

On 1 October 2018, the defendant (‘Warners’) served a creditors statutory demand for payment of debt dated 25 September 2015 (‘the Demand’)[1] and an affidavit in support sworn by Grant Warner on 26 September 2018 on the plaintiff, C Tina Pty Ltd (‘C Tina’).
[1]The Demand is erroneously dated 25 September 2015.

The Demand was issued in respect of two invoices issued by Warners to C Tina on 17 April 2018, totalling $166,332.10. The unpaid invoices are said to be owing for work and labour done and materials supplied.

On 19 October 2018, C Tina made application by originating process to set aside the Demand. The application was made within the time prescribed by s 459G(2).

C Tina relies on affidavits of Steven Vouzas sworn 19 October 2018[2] (‘First Vouzas Affidavit’) and 12 December 2018 (‘Second Vouzas Affidavit’). Warners relies on an affidavit of Grant Warner (‘Mr Warner’) sworn 22 November 2018 and of Jennifer Dawn Barham‑Floreani (‘Ms Barham-Floreani’), sworn the same date.
[2]The date of swearing is erroneously dated 19 October 2017.

The application is based on the ground that C Tina has a genuine dispute in relation to the debt. More specifically, C Tina says that it never contracted with Warners and that the work for which Warners now seeks payment was pursuant to a contract between Warners and 104 Holdings Pty Ltd (ACN 169 723 599) (‘104 Holdings’).

C Tina’s evidence

In the First Vouzas Affidavit, Mr Vouzas deposes that 104 Holdings had two shareholders with equal holdings, C Tina and Ms Barham‑Floreani. Mr Vouzas’ mother, Christina Vouzas, and Ms Barham‑Floreani were the directors of 104 Holdings, which was the trustee of the 104 Canterbury Unit Trust. 104 Holdings was the registered proprietor of the property at 104 Canterbury Road, Middle Park from 6 November 2014 (‘the Property’).

In paragraph 50 of Mr Warner’s affidavit sworn 22 November 2018 he indicates that the date written on the Demand is a typographical error. C Tina did not…

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: [2019] VSC 66
Decision Date: 18 February 2019

CaseChat Overview and Summary

C Tina Pty Ltd applied to the Federal Circuit Court to set aside a statutory demand issued by Warners Electroplating Pty Ltd. The dispute centred around an alleged oral agreement between the parties, whereby Warners was contracted to complete certain works for C Tina. C Tina claimed there was a genuine dispute as to whether Warners was contracted with C Tina or another entity, and sought to have the statutory demand set aside under section 459G of the Corporations Act 2001 (Cth).

The court needed to determine if C Tina had established a plausible contention that required investigation. The central issue was whether C Tina had demonstrated a genuine dispute that was sufficient to warrant setting aside the statutory demand. The court considered the evidence presented by C Tina, including the possibility that Warners may have been contracted with another entity, and assessed whether this contention was credible enough to merit further investigation.

The court found that C Tina had indeed established a plausible dispute that required investigation. The possibility that Warners was contracted with another entity, rather than C Tina, was deemed a genuine dispute. Consequently, the court set aside the statutory demand. The court emphasised that the bar for setting aside a statutory demand is relatively low and that the onus is on the party who issued the demand to prove that no genuine dispute exists.

The final orders of the court were that the statutory demand issued by Warners Electroplating Pty Ltd be set aside, and that C Tina Pty Ltd recover its costs of the application.

Orders