Cat v Horizon

[2001] NSWSC 372

CITATION:	CAT v HORIZON [2001] NSWSC 372
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 1211/01
HEARING DATE(S):	24/04/01
JUDGMENT DATE:	24 April 2001
PARTIES :	CAT MEDIA PTY LIMITED v HORIZON MEDIA PTY LIMITED
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr C.E. Moore for plaintiff Mr G.A. Seib for defendant
SOLICITORS:	Clayton Utz for plaintiff Aitken McLachlan & Thorpe for defendant
CATCHWORDS:	Corporations Law. Application to set aside statutory demand. No matter of principle.
DECISION:

1   MASTER: This is an application to set aside a statutory demand served by the defendant on the plaintiff. The demand seeks the payment of $47,692.90. said to be owing by the defendant to the plaintiff. There are in this respect two invoices numbered 1810 and 1811. The demand was served on 5th January and appears to be dated 7th December.

2   The matter concerns advertising the defendant's publication, the yellow envelope. This is a form of direct mail advertising and the two invoices concerned relate to the placement in the July/August print run.

3   According to the plaintiff the form of advertising became less effective with the introduction of the GST and prices were to become out of date. In paragraph 9 Mr Sisiolas in his affidavit of the 24th January 2001 said that he had a conversation on 18 May 2000 with Mr John Papworth, the defendant's sales manager. That conversation was to the following effect:

""Jonathan, Cat Media would like to suspend all future advertising in The Yellow Envelope for the time being. The advertisement you have been using is stale and soon to become out of date and incorrect. Therefore, please don't include any Cat Media advertisements in your publication unless we submit new advertising copy to you".

4   What happened thereafter is that in a fax of 6 June advertisements were booked by a Miss Ferguson, an employee of the plaintiff. This was confirmed back by the defendant in faxes of the 7th June. On 12 June after discussing the matter with her superior, Miss Sonia Amoroso, Miss Ferguson rang and cancelled the existing bookings and the following day rang and sought to cancel all future bookings. She was told that the deadline had passed and the material was in fact being printed and distributed. All the material was in fact distributed by way of direct mail advertising. In her original affidavit Miss Ferguson did not refer to her fax of 6 June but only relied upon the published deadlines as supporting the case that there was no liability for further payments.

5   Once the defendant put on evidence, including her letter, further evidence in reply was given by Miss Ferguson. She said that although she was currently the advertising co-ordinator, this being April 2001, at the relevant time her position was that of a copy writer who assisted her superior Sonia Amoroso when she was abroad. She gave evidence that she was not responsible for management decisions regarding the placement or cancellation of advertising by simply provided written copy materials. She said that on the 6th June she was contacted by a representative of Horizon Media who said to her words to the effect that her superior had booked advertisements but they needed to know what ads had to go in with the approaching deadline.

6   Miss Ferguson says she did not know what advertisements had been booked and she did not know about the suspension of the advertising Mr Sosiolas. She tried to contact Miss Amoroso but was unsuccessful. Miss Amoroso was overseas at the time. She then in paragraph 5 dealt with a conversation which she had with a person at Horizon Media. That conversation is in the following terms:

"I cannot get hold of Sonia, I don't know what adverts we are supposed to be putting in, but if you're sure Sonia has made the booking we'll have to repeat the ads of last time. I have not been given any instructions".

7   She says that as a result of that she sent the facsimile which is the one of the 6th June. All this material raises two important matters on the question of liability. There is no doubt that there had been a continuing course of dealing between the parties and that there was some contract in existence to cover the supply of the advertising material.

8   The two matters that are raised by this evidence are firstly whether she had the authority to place the order and secondly whether there was a misrepresentation that her superior had already placed the July order which she could not determine. The other more important point is their terms of the suspension that happened according to Mr Sisiolas in the conversation that he had on the 18th May with Mr Papworth. He made clear in that conversation which I have quoted above that the material was stale and was soon to become out of date and was incorrect. He also made it plain that there was not to be any new media advertisements unless they submitted new advertising copy to you.

9   The circumstances of the evidence before me do not allow one to form a final view as to whether there was any change in the substantive part of the publications. If any, it is likely that one could infer there had not been a change because it required the defendant's officer to give Miss Ferguson the appropriate references to previous advertisements then to be copied.

10   Accordingly it would seem that there is a dispute as to whether or not the suspension may have been overcome by the placement of the new material. There is also then the matters which go to whether or not Miss Ferguson was authorised and whether there was any misrepresentation.

11   There is, looking at the matter objectively, a fair chance of there being a basis for some confusion. The evidence seems to indicate that orders had been placed up until the end of 2000. Then it might have been this to which the officer of the defendant was referring, when referring to the fact that Sonia Amoroso had placed orders. There is also the circumstances that in fact there was this call inquiring as to whether further orders were to be placed. One might think that it probably arose as an inquiry to see whether in fact there were to be further advertisements following the 18 May discussion.

12   In my view there is at least a dispute which has to be resolved, concerning the liability in the July/August print runs and publications. The real question is whether the dispute is genuine. In this respect I have had the benefit of a number of submissions in respect of the principles to be applied and I think probably the most useful summation is that given by McLelland CJ in Equity in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACLC 669. At page 671 his Honour made the following comments in respect of the expression "genuine dispute".

"It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s 459H. In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the 'serious question to be tried' criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat. This does not mean that the Court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit 'however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbably in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to (its) truth' (cf Eng Me Yong v Letchumanan (1980) AC331 at 341), or 'a patently feeble legal argument, or an assertion of facts unsupported by evidence' (cf South Australia v Wall (1980) 24 SASA 189 AT 194).

But it does mean that, except in such an extreme case, a Court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between, on the one hand, determining whether there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute. In Mibor Investments (at ACLC 1066; ACSR 366-7) Hayne J said, after referring to the state of the law prior to the enactment of Division 3 of Part 5.4 of the Corporations Law, and to the terms of Division 3:

"These matters, taken in combination, suggest that at least in most cases, it is not expected that the Court will embark upon any extended inquiry 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. All that legislation requires is that the Court conclude that there is a dispute and that it is a genuine dispute".

In re Morris Catering (Australia) Pty Limited (1993 11 ACLC 919 at 922; (1923) 11 ACSR 601 at 605 Thomas J said:

"There is little doubt that Division 3...
prescribes a formula that requires the
Court to assess the position between the
parties, and preserve demands where it can
be seen that there is no genuine dispute and
no sufficient genuine offsetting claim. That
is not to say that the Court will examine the
merits or settle the dispute. The specified
limits dispute "and whether there is a
"genuine claim".

It is often possible to discern the spurious,
and to identify mere bluster or assertion.
But beyond a perception of genuineness (or
the lack of it) the Court has no function.
It is not helpful to perceive that one party
is more likely than the other to succeed, or
that the eventual state of the account
between the parties is more likely to be one
result than another.

The essential task is relatively simply - to
identify the genuine level of a claim (not
the likely result of it) and to identify the
genuine level of an offsetting claim (not
the likely result of it).

I respectfully agree with those statements".

13   There were a number of matters raised in submissions about the genuineness of the dispute. Firstly it was suggested that there was no complaint after the confirmation letters and the facsimile was sent by the defendant on the 7th June. Firstly the first thing to say about that was that those documents required a signature and return and there is no evidence that they were and secondly the direct evidence of Miss Ferguson was she phoned on 12 June as soon as she had made contact with her superior overseas and had been told that the advertisements should not have been placed. The second matter is that it was suggested there was no complaint made at the meeting of the 1st September about the lack of liability.

14   The evidence given by Mr Papworth which is set out in paragraphs 20 and 21 of his affidavit is suggestive of the plaintiff not having a real complaint about the matter but trying to obtain some commercial discount in the circumstances for them. That however is not the whole of the evidence.

15   In particular there is the further evidence of Mr Sisiolas on 19th April when in paragraph 5 he says that the conversations are incomplete. He gives evidence of taking a position and making that known at the meeting but he did not believe that he was obliged to pay the invoices and was not happy with the situation. According to him "technically I don't own you anything". He then says that he went on to talk about a substantial discount.

16   In addition Sonia Amoroso in her affidavit of 19 April 2001 puts in clear context what was suggested on her behalf. She denies that she stated that Cat Media would pay the invoices and she says that she refer the matter to Alex as he was responsible for accounts.

17   It is not up to me on this application to resolve that dispute which is clear on the affidavits. Another matter was the question of the 18th May conversation. It was suggested that this was an extremely convenient date because he just happened to be before the fourteen days prior to the appropriate deadline on which the discussion took place. According to the contract fourteen days prior to the specified deadline was required for the submission of appropriate specimens. According to paragraph 3.1 of the terms and conditions of the contract there could be a termination not less than fourteen days prior to the deadline date set out in the campaign schedule. However although it was only dealt with by way of submissions that would require a direct disregard of the sworn evidence and I do not think that is appropriate.

18   There are two remaining things which really touch upon the genuineness. The first one I have adverted to in part earlier and that is the kind of way Miss Ferguson gave her evidence. Clearly she did not disclose the confirmation that when she swore her first affidavit which was on 24 January 2001.

19   Also it is fairly true that she spoke then from her position as advertising co ordinator of having knowledge of the facts concerning the matter. No doubt her knowledge at that stage may well be different to her knowledge back in June 2000 when she was then simply a copy writer without the relevant authority, according to her evidence.

20   I think there might be a number of explanations for this matter. I did not allow cross examination because it seemed to me that it was really an attempt to proceed with matters which should only be dealt with by affidavit. Normally cross examination is not necessary in respect of the determination of a genuine dispute unless a party does not have access to relevant material and the other party does have such access and cross examination might reveal and provide additional facts which cannot otherwise be proved.

21   It was submitted that the course of this evidence showed that really this is a convenient means of avoiding the responsibility for the payment of the demand and it is some matter that has been thought up by way of justification. I do not necessarily think so. It seems to me it is more likely to have been thought up by lawyers probing a little bit deeper than was done originally when the affidavits were first put forward. No doubt in due course in some other proceedings points might be taken about the way in which she went about giving her evidence in this case. There might be some proper explanation.

22   The other matter is that it is suggested that there was a lack of complaint after September and ultimately nothing was said about liability until the demand was served and the affidavits served by the plaintiff. That period is from September through to December and it is a reasonable period. However, this matter is a little bit different to what one frequently sees where there are excuses put forward often by way of promises for payment and other matters of a similar nature.

23   In the present case there is at least the evidence of Mr Sisiolas in the meeting of 1st September. He made it clear that he had a position that there was no liability. In the circumstances I am satisfied there is a genuine dispute and accordingly I make orders 1 and 2 in the application. The exhibits may be returned.

oOo

Last Modified: 05/16/2001