Dalcon Construction Pty Ltd v ASA Windows Pty Ltd
[2004] WASC 160
DALCON CONSTRUCTION PTY LTD -v- ASA WINDOWS PTY LTD [2004] WASC 160
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 160 | |
| Case No: | COR:415/2003 | 25 MAY 2004 | |
| Coram: | MASTER NEWNES | 16/07/04 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Amount of statutory demand reduced Application to set aside demand dismissed | ||
| B | |||
| PDF Version |
| Parties: | DALCON CONSTRUCTION PTY LTD (ACN 009 239 589) ASA WINDOWS PTY LTD (ACN 009 227 712) |
Catchwords: | Corporations Application to set aside statutory demand Whether demand defective Whether genuine dispute as to debt or offsetting claim Turns on own facts |
Legislation: | Corporations Act 2001 (WA), s 459H, s 459J |
Case References: | Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 Eyota Pty Ltd v Havana Pty Ltd (1994) 12 ACLC 669 Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 81 John Shearer Ltd v Gehl Co (1995) 18 ACSR 780 Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1993] 11 ACLC 1066 Royal Premier Pty Ltd v Taleski [2001] WASCA 48 Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341 Topfelt Pty Ltd v State Bank of NSW (1993) 12 ACLC 15 Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 Wildtown Holdings Pty Ltd v Rural Traders Co Ltd [2002] WASCA 196 B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1997) 13 ACLC 88 Capital Bay Investments Pty Ltd v Richard Szklarz Architects Pty Ltd, unreported; SCt of WA; Library No 980503; 8 September 1998 Classic Ceramic Importers Pty Ltd v Ceramica Antiga SA (1994) 12 ACLC 334 Edge Technology Pty Ltd v Lite On Technology Corporation [2000] 34 ACSR 301 Graywinter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund [1996] 70 FCR 452 IFA Homeward Imports Pty Ltd v Shanghai Jerry Candle Co Ltd [2003] FCA 533 In the matter of Juson Pty Ltd (1992) 8 WAR 13 John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716 Kimberley Oil NL v Geological & Corporate Management Pty Ltd [2000] WASC 294 QIW Retailers Ltd v Felview Pty Ltd [1989] 7 ACLC 510 Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601 Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACLC 111 Silk Holdings Pty Ltd v Palamore Pty Ltd, unreported; SCt of WA; Library No 980692; 26 November 1998 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
ASA WINDOWS PTY LTD (ACN 009 227 712)
Defendant
Catchwords:
Corporations - Application to set aside statutory demand - Whether demand defective - Whether genuine dispute as to debt or offsetting claim - Turns on own facts
Legislation:
Corporations Act 2001 (WA), s 459H, s 459J
Result:
Amount of statutory demand reduced
Application to set aside demand dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr I A Gregory
Defendant : Mr T H Brickhill
Solicitors:
Plaintiff : Zilkens & Co
Defendant : Brickhills
Case(s) referred to in judgment(s):
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669
Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51
John Shearer Ltd v Gehl Co (1995) 18 ACSR 780
Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743
Royal Premier Pty Ltd v Taleski [2001] WASCA 48
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341
Topfelt Pty Ltd v State Bank of New South Wales Ltd (1994) 12 ACLC 15
Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294
Wildtown Holdings Pty Ltd v Rural Traders Co Ltd [2002] WASCA 196
Case(s) also cited:
B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1997) 13 ACLC 88
Capital Bay Investments Pty Ltd v Richard Szklarz Architects Pty Ltd, unreported; SCt of WA; Library No 980503; 8 September 1998
Classic Ceramic Importers Pty Ltd v Ceramica Antiga SA (1994) 12 ACLC 334
Edge Technology Pty Ltd v Lite On Technology Corporation [2000] 34 ACSR 301
(Page 3)
Graywinter Properties Pty Ltd v Gas and Fuel Corporation Superannuation Fund [1996] 70 FCR 452
IFA Homeward Imports Pty Ltd v Shanghai Jerry Candle Co Ltd [2003] FCA 533
In the matter of Juson Pty Ltd (1992) 8 WAR 13
John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716
Kimberley Oil NL v Geological & Corporate Management Pty Ltd [2000] WASC 294
QIW Retailers Ltd v Felview Pty Ltd [1989] 7 ACLC 510
Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACLC 111
Silk Holdings Pty Ltd v Palamore Pty Ltd, unreported; SCt of WA; Library No 980692; 26 November 1998
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
(Page 4)
1 MASTER NEWNES: This is an application to set aside a statutory demand. The plaintiff contends first, that the statutory demand is defective, and secondly, that there is a genuine dispute between the parties as to the existence and amount of the debt which is the subject of the demand and, in addition, that the plaintiff has an offsetting claim against the defendant.
2 The statutory demand is dated 3 December 2003 and demanded payment of an amount of $19,259.10, said to be the "amounts outstanding on Invoice No 9858, Invoice No 9872, Invoice No 9914, Invoice No 10147, Invoice No 10196 and Invoice No 10239 for the supply of goods and services by the [defendant] for and on behalf of the [plaintiff]".
3 It was contended by the plaintiff that the demand was defective because first, the demand did not identify with sufficient particularity the debt claimed and secondly, the supporting affidavit made no reference to the knowledge of the deponent of the defendant's books of account so as to be in a position to verify that the debt was due and payable and that there was no genuine dispute as to it.
4 On the first ground, it was submitted that merely to state the amounts outstanding on certain invoices did not give the debtor sufficient information to enable it to know what debt was being claimed. It was contended that it was not clear how the defendant had arrived at the amount claimed because the demand did not specify the amounts (if any) credited in respect of each invoice and therefore the amount outstanding in respect of that invoice.
5 Section 459J of the Corporations Act 2001 (Cth) provides:
"(1) On an application under section 459G, the Court may by order set aside the demand if it is satisfied that:
(a) because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or
(b) there is some other reason why the demand should be set aside.
(2) Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect."
(Page 5)
6 It was argued that the failure to specify the particular amounts said to be outstanding in respect of each invoice was a defect so serious that it justified the statutory demand being set aside. I do not accept that. Substantial injustice may be caused where a single amount is claimed in respect of the balance said to be due on a number of invoices if the debtor would be unable from its own records readily to understand how the alleged debt was calculated. I am satisfied that that is not the position in this case.
7 The total amount of the invoices referred to constitutes what the defendant says is the balance of the amount due and owing to it under two subcontracts for building works entered into between the plaintiff and the defendant. It is evident from the affidavit of James Figliomeni, the managing director of the plaintiff, filed in support of this application, and the documents annexed to that affidavit, that the plaintiff understood that that was the claim and that the plaintiff was readily able to calculate the amount, or substantially the amount, owing by the plaintiff to the defendant under those contracts.
8 In his first affidavit, which was sworn on 24 December 2003, Mr Figliomeni calculates the amount owing to the defendant under the contracts in the sum of $18,483.60, putting to one side an amount of $352 for which the defendant had invoiced the plaintiff but which the plaintiff denies is payable. If that amount were added, the total amount payable under the contracts would be $18,835.60. The discrepancy between that figure and the sum demanded by the defendant is therefore an amount of some $400. Mr Figliomeni goes on in his affidavit to say that the plaintiff has claims against the defendant in the total sum of $11,503 under the subcontracts and admits that after deduction of that amount, and certain retention moneys, an amount of $5850.18 is due and owing to the defendant.
9 In a subsequent affidavit by Mr Figliomeni, sworn 3 March 2004, Mr Figliomeni recalculates the figures (at par 41) as follows:
"Amounts claimed as due by ASA statutory
Demand $19,259.10
Less:
Invoice no 9859 not reinvoiced 423.80
Invoice no 9872 back-charge agreed 1,166.00
Invoice no 9914 not to be charged 352.00
Retained amounts under OLGC maintenance 497.48
Retained amount for maintenance for Yale 632.94
(Page 6)
- School not yet due
Amount not due Yale School as building 3,300.00
variation (invoice no 10196)
Overdue penalty under Yale cert 3,700.00
Remedial work on OLGC 7,803.00
$17,875.22
Balance due:1,383.88"
10 The sums of $3700 and $7803 are amounts which the plaintiff claims to be entitled to offset against the amount owing to the defendant; that is a total amount of $11,503.
11 I do not accept that any substantial injustice arises by reason of the form of the statutory demand. It is evident that the plaintiff has been able to understand the basis of the defendant's claim from the plaintiff's own calculation of it. In the initial affidavit, the discrepancy between the amount of the demand and the plaintiff's calculation of the sum owing is a minor amount in the order of $400. In the affidavit of 3 March 2004, no issue is taken with the amount of the demand. Even if it were the case that the demand overstated the amount owing by some $400, a minor misstatement of that magnitude would not cause a substantial injustice to the plaintiff: Topfelt Pty Ltd v State Bank of New South Wales Ltd (1994) 12 ACLC 15 at 20; Wildtown Holdings Pty Ltd v Rural Traders Co Ltd [2002] WASCA 196.
12 The other ground upon which it was said the statutory demand was defective was that the supporting affidavit did not establish the basis of the knowledge of the deponent that the debt was due and owing. The affidavit was sworn by one Arthur Sedgewick, who is a director of the defendant. He says, relevantly, that he has "inspected the business records of the creditor in relation to the debtor company's account with the creditor". He goes on to say that the amount demanded is due and payable and he believes there is no genuine dispute about the existence or the amount of the debt.
13 In support of his contention that the affidavit was deficient, counsel for the plaintiff referred to Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51, where criticism was made of an affidavit in support of a statutory demand in which the deponent for the defendant said that he made it from his own knowledge and from the records of the defendant. In that case, however, as Parker J pointed out at [7], the debt had been assigned to the defendant and substantial parts of the affidavit referred to dealings between the plaintiff debtor and the
(Page 7)
- assignor. There was no evidence that the defendant's records contained anything relevant to those dealings.
14 I do not think anything said in that case assists the plaintiff. In my view, the affidavit is sufficient. I also note that the plaintiff does not deny the debt, but contends that there have been variations to some components of it, some parts are not yet due and that the plaintiff has an offsetting claim in respect of the part of the debt which is due and payable.
15 It is therefore necessary to turn to the argument by the plaintiff that there is a genuine dispute about the existence or amount of the debt and that the plaintiff has an offsetting claim.
16 The test to be applied in determining whether there is a genuine dispute under s 459H(1)(a) has been expressed in a number of ways.
17 An oft-cited passage is from the judgment of McLelland J in Eyota Pty Ltd v Hanave Pty Ltd(1994) 12 ACLC 669 at 671 as follows:
"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 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 improbable in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to its truth' (cf Eng Mee Yong v Letchumanan [1980] AC 331 at 341), or 'a patently feeble argument, or an assertion of facts unsupported by evidence' (cf South Australia v Wall (1980) 24 SASR 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
(Page 8)
- Mibor Investments Pty Ltd v Commonwealth Bank of Australia[1993] 11 ACLC 1062 Hayne J said:
'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 the legislation requires is that the court conclude that there is a dispute and that it is a genuine dispute'."
"From the relevant authorities on the issue of what amounts to a 'genuine dispute' under s 459H there can be discerned an emphasis on two overriding considerations. First, that in determining whether there is a genuine dispute a court is required to undertake an investigation that raises much the same sort of considerations as the 'serious question to be tried' criterion which arises in an application for an interlocutory injunction or for the extension or removal of a caveat: Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669 per McLelland J at 671. Further, to reach a finding that there is a genuine dispute the applicant must satisfy the court that:
(a) the dispute is bona fide and truly exists in fact; and
(b) the grounds alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived: Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 15 ACLC 1001 per Northrop, Merkel and Goldberg JJ.
This formulation has been adopted in a number of recent decisions: see Goldspar Australia v KWA Design Group (1999) 17 ACLC 456per Austin J at 462 and Universal Greening Pty Ltd v Sabine & Anor (1999) 17 ACLC 880 per Kenny J at 885. In the interests of consistency in the various courts that have to apply the Corporations Law, I think this is the approach to be preferred."
(Page 9)
19 It is convenient to deal with this aspect of the plaintiff's case by reference to the figures I have quoted from par 41 of Mr Figliomeni's affidavit of 3 March 2004.
20 There are three distinct elements contained in the figures set out in par 41. First, there is an admitted debt of $1383.88, secondly, there are disputed amounts totalling $6372.22 and thirdly, there is a claim for offsetting amounts totalling $11,503.
21 Turning to the alleged dispute as to the sum of $6372.22, the first item is invoice 9859 in the amount of $423.80. The plaintiff says it has never received an invoice in that amount. Mr Figliomeni says that at a meeting in August 2003 with Mr Sedgewick, they discussed outstanding invoice queries. Mr Figliomeni says at that meeting an invoice for $385, being invoice 9858, was discussed. GST of $38.50 had been charged on it. Mr Figliomeni says it was agreed that the invoice would be amended to a total of $385, inclusive of GST, and the defendant would forward a new invoice to the plaintiff for payment. The plaintiff has never received such an invoice.
22 The next item is invoice 9872, in the sum of $1166. Mr Figliomeni says that at the meeting in August 2003 he discussed that invoice with Mr Sedgewick and they agreed that, as there were quantifiable costs justifying a back-charge to the defendant, the plaintiff would retain the amount of $1166 as a back-charge and no money would be due to the defendant in respect of that invoice.
23 Mr Figliomeni says that invoice 9914, in the sum of $352, was also discussed at that meeting. The invoice was for a variation for aluminium window sills on one of the contracts, the OLGC school contract. The plaintiff had refused to pay the invoice, contending that the work was not a variation to the contract. The plaintiff said that the need for aluminium window sills was brought about by defects in the defendant's performance in that the defendant made the windows too big and that required the removal of the existing wooden frame to enable the windows to fit. That exposed the cavity in the cavity wall, which then required sealing. Aluminium window seal flashings were incorporated to overcome that problem. The plaintiff alleges that at the meeting in August 2003 it was agreed that the work was not a variation and that the plaintiff would not pay the invoice. That is denied by the defendant, who alleges that the variation resulted from gaps due to an uneven brick sill and was therefore properly a variation under the contract.
(Page 10)
24 The plaintiff says that the retained amount of $497.48 for maintenance under the OLGC contract constituted retention moneys which were only payable within 30 days of the end of the month in which the defendant completed the contract maintenance. Mr Figliomeni says that, in September and November 2003, the plaintiff called upon the respondent to complete the maintenance work, but it was not completed. As a result, the applicant had to carry it out and the retention moneys are not therefore due and payable.
25 The amount of $632.94, said to be the retained amount for maintenance under the Yale School contract, is alleged not to be due and payable because the retention payments are only due to be paid on completion of maintenance, which as at the date of service of the statutory demand had not been completed.
26 The sum of $3300 in invoice 10196 is an amount claimed for a variation which the plaintiff says is not yet payable to the defendant. In his affidavit of 24 December 2003, Mr Figliomeni says that the plaintiff and the respondent have had an ongoing business relationship, with the plaintiff subcontracting to the defendant for the supply, fitting and installation of windows and glazing on various building projects. Mr Figliomeni says that with each project the implied and customary terms and conditions of the window fitting and glazing contract works supplied by the defendant were, among other things, that if there were any variations agreed on site or during the contract, the defendant's invoice for the variation would be paid within 30 days of the end of the month in which the applicant received the progress payment incorporating payment for the variation from the customer.
27 Mr Figliomeni says that the window was fitted on 5 October 2003, although it was invoiced by the defendant in September 2003. As at 3 December 2003 the plaintiff had not been paid for the window variation by Yale School, so at that date the invoice was not due and payable.
28 Mr Sedgewick, on behalf of the defendant, denies that there is any such practice or any basis for such an implied term. He says that the contract between the parties was constituted by a quote of 5 November 2002 by the defendant, the plaintiff's acceptance of it by a purchase order of 18 November 2002, a facsimile from the plaintiff of 9 December 2002 containing a variation to one of the specifications, a facsimile from the defendant providing the requested revised quote, and an amended copy of the plaintiff's purchase order of 18 November 2002 to take into account the revised quote. Mr Sedgewick points out that in none of those
(Page 11)
- documents is there any suggestion of the terms now contended for by the plaintiff. Counsel for the defendant submitted that no term to the effect alleged could be implied into the contract, the criteria for the implication of a contractual term plainly not being met.
29 In my view, however, the question of whether or not there was the custom or practice alleged by the plaintiff which gave rise to the implied term is not something that can be resolved on this application.
30 The defendant also took issue with the amount claimed to be retained. Invoice 10196 was annexed to the affidavit of Mr Sedgewick. The total amount of the invoice is $3300. It appears from the invoice, however, that that constitutes the total amount of a periodic progress claim, of which the variation for an extra window comprises an amount of only $539. On the basis of the trade custom asserted by the plaintiff, only the variation amount is deferred until 30 days after the plaintiff receives the progress payment, incorporating the payment for the variation, from the customer.
31 Accordingly, there is not, in my view, a dispute as to the sum of $3300, but only in respect of the sum of $539.
32 In my view, sufficient has been shown to establish that there is a genuine dispute as to the amounts referred to in invoices 9859, 9914 and 9872, to the retained amounts of $497.48 and $632.94 and to the sum of $539 in respect of invoice 10196.
33 The plaintiff also seeks to rely on two offsetting claims in respect of the sum of $11,503.
34 An offsetting claim is defined by s 459H(5) as being:
"A genuine claim that the company has against the respondent by way of counterclaim, set-off or cross-demand … "
35 The test to be applied, as with the test to be applied to determine whether there is a genuine dispute, has been expressed in a number of ways. In Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341 , Beazley J said at 357:
"The test to be applied for the purposes of s 459H is whether the Court is satisfied that there is a serious question to be tried that the applicant has an offsetting claim."
(Page 12)
36 In Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 Lockhart J, having reviewed a number of the authorities, including Scanhill Pty Ltd v Century 21 Australasia Pty Ltd, considered that the various tests enunciated were not inconsistent, although the highest threshold was probably that stated by Beazley J. His Honour concluded (at 39) that the Court must be satisfied that the claim is not plainly frivolous or vexatious and that it may have some substance.
37 In John Shearer Ltd v Gehl Co (1995) 18 ACSR 780, Von Doussa, Hill and Tamberlin JJ said at 787:
"In order to show that an offsetting claim is genuine it must be put forward in good faith. There must be something more than mere assertion."
38 The concept of good faith was considered in Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743, where Palmer J said:
"In my opinion, a genuine offsetting claim … means a claim on a cause of action advanced in good faith, for an amount claimed in good faith. 'Good faith' means arguable on the basis of facts asserted with sufficient particularity to enable the Court to determine that the claim is not fanciful. In a claim for unliquidated damages for economic loss, the Court will not be able to determine whether the amount claimed is claimed in good faith unless the plaintiff adduces some evidence to show the basis upon which the loss is said to arise and how that loss is calculated. If such evidence is entirely lacking, the Court cannot find that there is a genuine offsetting claim for the purposes of s 459H."
39 The need for the plaintiff to adduce evidence of the basis of the claim and the manner in which it has been calculated was also considered in Royal Premier Pty Ltd v Taleski [2001] WASCA 48, in which Ipp J said, in relation to an offsetting claim for unliquidated damages (at [57]):
"Of course, at this stage, it is not necessary for evidence as to damages to be given in meticulous detail. But there must be at least some material upon which the court can conclude that some damage has been sustained and which will enable the court to make a reasonable assessment as to the amount thereof. In this case, however, there is simply no way of determining
(Page 13)
- whether damage was suffered by the appellant in consequence of the alleged negligence or misleading or deceptive conduct, and there is no evidentiary material from which damage suffered by the appellant can be calculated. This absence of evidence as to damage is, of itself, fatal to the appellant's argument."
40 In this case, the sum of $3700 is said to be an amount which the plaintiff is entitled to set off against the defendant's claim, being liquidated damages which were payable by the plaintiff under the head contract for the period 23 September 2003 to 30 October 2003. The basis of the claimed entitlement is that the liquidated damages became payable due to delay caused by the defendant.
41 In his affidavit of 24 December 2003, Mr Figliomeni refers to certain work by the defendant which he says was late and defective and goes on "as a result of the respondent's delays and negligence or unprofessional fitting of windows at Yale School, the applicant ran behind schedule on the Yale School project. The delays resulted in the applicant being penalised by $3700 by the contracting architect … ". Objection was taken to those assertions on the grounds of admissibility. In my view, they are not in admissible form but, in any event, of itself, and particularly in the face of the documents annexed to the affidavit of Mr Figliomeni on which the plaintiff relies, the evidence goes nowhere near establishing to the requisite degree that the liquidated damages for which the plaintiff incurred liability were attributable to delays by the defendant.
42 In addition, the basis of the plaintiff's liability for liquidated damages was not sufficiently explained. The plaintiff relies on a letter from the project architect in which the architect says that "[p]ursuant to Clause 35.6 of the Contract Notice is hereby given that because you have failed to reach Practical Completion by the due date - 23 September 2003 liquidated damages have been deducted from Progress Payment No 7 … ." The amount of the liquidated damages is calculated at $100 per day. No copy of the contract, or of the provisions of the contract under which the plaintiff became liable for liquidated damages, was produced.
43 Moreover, the documents annexed to Mr Figliomeni's affidavit do not seem to assist the plaintiff's case. It appears from annexed minutes of a meeting between the architects and owner of 22 September 2003, one day before the due date of practical completion, that at that stage there were a number of items of work of various sorts still to be completed.
(Page 14)
- The only reference to work apparently involving the defendant is one item, "louvre pieces missing at some ends". The minutes do not, in fact, mention who is responsible for that work.
44 The minutes of 25 September 2003, some two days after the due date for practical completion, refer to substantially the same work still to be done. The only reference to work apparently pertaining to the defendant is one item, "louvre pieces missing at some ends and door seals - waiting on the window manufacturer". The minutes do not refer to the defendant.
45 The minutes of 11 November 2003, some 12 days after the expiration of the period for which the plaintiff was liable for liquidated damages, refer to 11 items of work still to be attended to by the plaintiff, of which only one appears to relate to the defendant. That is an item "windows broken - catch to office window requires attention". Once again, the minutes do not refer to the defendant as the entity responsible for that work.
46 The same item appears in the minutes of the meeting of 19 November 2003 in which there are some 13 items of work requiring attention by the plaintiff.
47 In no case do the minutes identify the defendant as the party responsible for any of the work referred to and, in respect of each of the items which apparently relate to the defendant, it is not evident how significant that item is in terms of practical completion, if it is of any significance at all. Moreover, the (bare) assertion that the failure by the defendant to complete that work caused the other work to be delayed appears to be contradicted by the minutes. In the minutes of 25 September, for instance, several of the other outstanding items are noted as being done or programmed to be done that day, although the louvre rectification is not and is still waiting on the window manufacturer.
48 The claim to offset an amount of $7803 for remedial work on the OLGC contract is sought to be supported by an assertion by Mr Figliomeni that the defendant failed and/or neglected accurately to measure or establish the correct size of the windows and installed incorrectly sized windows. Mr Figliomeni goes on to say that "as a result of the respondent's delays and negligence or unprofessional fitting of windows on OLGC school project, the applicant had to conduct remedial work and effect repairs to damage created by inadequate and inaccurate works supplied by the respondent". According to Mr Figliomeni, "the respondent was advised of the nature and extent of the problem and in a
(Page 15)
- site meeting and discussion with Geoff Stein for the respondent, it was agreed that … the respondent would elect not to remedy its work. It was agreed that instead the applicant would carry out remedial work and deduct the costs … from payments due to the respondent pursuant to the subcontract."
49 Mr Figliomeni, apparently in support of this ground, annexes a series of site supervisors' reports and various facsimiles. No explanation is given of the relevance of each of the annexed documents or the circumstances in which they came into existence, although in many cases the documents are far from self-explanatory. The documents do not appear to set out the rectification work which the plaintiff says it carried out, nor the circumstances in which it was required to carry out that work. Mr Figliomeni also annexes a hand written "costs sheet" dated 23 February 2003, which he says contains approximate costings of the rectification work which the plaintiff carried out. No explanation is given as to the manner in which the total sum of $7803 has been calculated. The costs sheet is not self-explanatory, in many parts is illegible, and as it stands is incomprehensible. It is, in my view, of no assistance at all.
50 I do not consider that the plaintiff has established the basis of either offsetting claim.
51 As, in my view, there is a genuine dispute as to the amounts referred to in invoices 9859, 9914 and 9872, to the retained amounts of $497.48 and $632.94 and to the sum of $539 in respect of invoice 10196, I would therefore reduce the amount of the demand by an amount of $3611.22 and declare the demand to have effect, as so varied, from the date the demand was served on the plaintiff.
52 I would dismiss the application to set aside the statutory demand.
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