Diploma Construction (WA) Pty Ltd v CTC Commercial Pty Ltd

[2016] WASCA 192

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   DIPLOMA CONSTRUCTION (WA) PTY LTD -v- CTC COMMERCIAL PTY LTD [2016] WASCA 192

CORAM:   NEWNES JA

HEARD:   19 OCTOBER 2016

DELIVERED          :   19 OCTOBER 2016

PUBLISHED           :  15 NOVEMBER 2016

FILE NO/S:   CACV 88 of 2016

BETWEEN:   DIPLOMA CONSTRUCTION (WA) PTY LTD

Appellant

AND

CTC COMMERCIAL PTY LTD
Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :MASTER SANDERSON

Citation  :DIPLOMA CONSTRUCTION (WA) PTY LTD -v- CTC COMMERCIAL PTY LTD [2016] WASC 282

File No  :COR 112 of 2016

Catchwords:

Corporations - Statutory demand - Appeal against dismissal of application to set aside statutory demand - Application for extension of time for compliance pending outcome of appeal - Turns on own facts

Legislation:

Nil

Result:

Extension of time for compliance granted

Category:    B

Representation:

Counsel:

Appellant:     Mr G R Ritter QC

Respondent:     Mr L Hager

Solicitors:

Appellant:     HopgoodGanim Lawyers

Respondent:     Metaxas & Hager

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

Diploma Construction (WA) Pty Ltd v CTC Commercial Pty Ltd [2016] WASCA 191

1. NEWNES JA:  This is an application by the appellant for an extension of time to comply with a statutory demand pending the determination of an appeal from the decision of Master Sanderson dismissing the appellant's application to set aside the statutory demand.  The statutory demand was for the sum of $71,689.41 said to be due and owing by the appellant for goods and services supplied by the respondent at a building project, described as the Mounts Bay Road Hotel, pursuant to a subcontract between these parties.

2. The application was heard at the same time as a similar application by the appellant for an extension of time in CACV 87 of 2016, which related to a statutory demand for the sum of $50,000.59 said to be due and owing by the appellant under a different subcontract between the same parties, in respect of a building project described as Precinct on Ogilvie.  These reasons should be read with the reasons on that other application: Diploma Construction (WA) Pty Ltd v CTC Commercial Pty Ltd [2016] WASCA 191, where the relevant legal principles are also set out.

3. On 19 October 2016, I ordered that the time within which the appellant was required to comply with the statutory demand be extended to seven days after the determination of the appeal and made programming orders directed to an expeditious hearing of the appeal.  I said I would provide reasons for my decision.  These are the reasons.

4. In the application in CACV 87 of 2016, I concluded that the appellant has an arguable case on the appeal that, contrary to the view reached by the master, it has a genuine offsetting claim in an amount that exceeds the amount of the respondent's demand: see Diploma Construction (WA) Pty Ltd v CTC Commercial Pty Ltd.  The alleged offsetting claim is a claim for liquidated damages for late completion of the subcontract works by the respondent, in the sum of $335,000.

5. The substance of the appellant's case on this application was that by reason of the claim for liquidated damages under the Precinct on Ogilvie subcontract, it also has a genuine offsetting claim in respect of this demand and the master therefore erred in dismissing the application to set aside the demand.  It was submitted that the amount of the offsetting claim in CACV 87 of 2016 is not only greater than the amount of the statutory demand in CACV 87 of 2016, but is greater than the total amount of both statutory demands. 

6. It is clear from the definition of 'offsetting claim' in s 459H of the Corporations Act 2001 (Cth) that it is not necessary that the claim arises out of the same transaction or circumstances as the debt to which the demand relates. The contrary was not contended by the respondent. I accept that the appellant has an arguable case on the appeal that, arising from its claim for liquidated damages under the subcontract for the Precinct on Ogilvie project, it also has an offsetting claim in respect of this demand and that the master erred in dismissing the application to set aside this statutory demand.

7. The respondent did not advance any separate arguments on the issues of prejudice or the balance of convenience.  For the reasons I gave in respect of the application in CACV 87 of 2016, I consider that the respondent is not subject to any prejudice that cannot be sufficiently ameliorated by orders directed to ensuring the expeditious hearing of the appeal and that the balance of convenience favours the grant of an extension of time to comply with the demand.

8. It was for those reasons I extended the time within which the appellant was required to comply with the statutory demand to seven days after the determination of the appeal.  I ordered that the appeal be expedited, the appellant's case be filed by 27 October 2016, and the respondent's answer by 10 November 2016.  The matter will be referred to the Court of Appeal Registrar for programming orders from that point.