Duncan v Weldworks

[1999] NSWSC 687

CITATION:	Duncan v Weldworks [1999] NSWSC 687
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	1752/99
HEARING DATE(S):	21 June 1999
JUDGMENT DATE:	21 June 1999
PARTIES :	C.T. Duncan Pty Ltd v Weldworks Engineering Pty Ltd
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr W. Haffenden for the plaintiff Mr G.A. Moore for the defendant
SOLICITORS:	O'Hara & Company, Strathfield for the plaintiff W.J. Whiting, Corrimal for the defendant
CATCHWORDS:	Corporations Law.; Setting aside a statutory demand. ; No matters of principle.
DECISION:	para 15

- 7 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

Monday 21 June 1999

1752/99 - C T DUNCAN PTY LTD -V- WELDWORKS ENGINEERING PTY LTD

JUDGMENT

1    MASTER: This is an application to set aside a statutory demand. The statutory demand was served by the defendant on the plaintiff and dated 23 February 1999. The amount claimed is $29,133. It is conceded that there is a dispute in respect of the sum of $1338. Accordingly the demand is sought to be supported in the sum of $27,800. There is now, although there was earlier no dispute as to the applications being made within time.

2 The plaintiff is a builder and the defendant is a subcontractor doing works for it on a site. The dispute concerns the contractual arrangements between them. In determining whether there is a genuine dispute it is necessary to bear in mind that this Court cannot in this application determine the question of the dispute between the parties about the contractual arrangements. The Court's task under the section of the Corporations Law is to determine whether in fact there is a genuine dispute about that matter.

3    In this regard in determining whether there is a genuine dispute the most recent summation of the law is that given by McLelland CJ in Equity in Eyota Pty Ltd v. Hanave Pty Limited (1994) 12 ACLC 669. At p 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, lacing 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 legal argument or an assertion of facts unsupported by evidence' (cf South Australia v. Wall (1980) 23 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 wehther 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 Divisions 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 the 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; (1993) 11 ACSR 602 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 off-
setting claim. That is not to say that
the Court will examine the merits or
settle the dispute. The specified limits
of the Court's examination are the
ascertainment of whether there is a "genuine
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 simple - 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).'

4    I respectfully agree with those statements."

5    The dispute is said to centre around the arrangements for work that was to be done by the defendant for the plaintiff. It seems clear that there was an initial quotation for $30,000 given verbally by the defendant to the plaintiff. That followed upon Mr Holsworth for the defendant being given two plans so that he could peruse them and see the amount of work involved. There is evidence on behalf of the plaintiff that he was given plans S01 and S02. However that is disputed by Mr Holsworth who says that he only had plan SO2.

6    What is clear is that after the oral quotation was given that a fax was sent by Mr Holsworth to the plaintiff. That fax referred to the fact that there had been an oral quotation for $30,000 and indicated that having only had one plan in respect of the site, the job would cost more and a total price of $57,800 was quoted and that thirty per cent was required before commencement, that being $17,340.

7    The matter has been dealt with in affidavits both by Mr Duncan and also by Mr Holsworth, Mr Duncan on behalf of the plaintiff and Mr Holsworth on behalf of the defendant. Clearly they are at issue about what happened after the giving of the initial oral quotation for $30,000. In par 7.2 Mr Duncan swears to the effect that after he received the written quotation he rang up Mr Holsworth and taxed him about it and said:

"The quote was for $30,000, the extras can only be treated as a variation and had to be approved by the Building Consultancy Centre. You would have to be able to justify the claim."

8    The substance of that paragraph is not dealt with except to the extent that Mr Holsworth said that he telephoned Mr Duncan and he said he agreed to revise the price. Clearly there is an issue between the parties as to what happened in that telephone conversation.

9    Thereafter there was obviously a delivery of the quotation by Mr Holsworth to Mr Duncan in the meeting of 10 September. Apparently there was taken at least initially an invoice which was numbered 003091 claiming a progressive payment of $17,340, a figure which had been mentioned in the fax. That however obviously was not paid because a further one which was the next invoice in sequence No 3092 was delivered showing an amount of $15,000.

10    Mr Holsworth gave evidence that the plaintiff was unable to pay $17,340 which led to the change. However Mr Duncan denies that he was unable to pay. Clearly there was some discussion about a change and there is a note which was signed by or in the handwriting of Mr Duncan which refers to invoice 3092 in which the first claim for $15,000 was authorised. There is also a note "Get original invoice". That might be an explanation for the second invoice coming before payment was made. Clearly what has been authorised is 3092 and that on its face does not say whether or not the contract was per the written quotation or whether in fact it might have been pursuant to whatever was the discussion between Mr Duncan and Mr Holsworth after the faxed quote.

11    Subsequently the matter proceeded and it is also notable that at the time when the later payment of $15,000 was made there was submitted from the defendant an invoice which referred to the total contract being $57,800 and making a claim for $18,600. Those comments about the nature of the original quotation have been crossed out and initialled with $15,000 written in as $15,000 paid. Accordingly the changes to the invoice would support the view that the plaintiff put forward about the variation. It is clear that the question of variation was raised and the defendants asked to submit details. They started to and ultimately the parties fell out. The defendant was replaced on the works and the works were completed by the plaintiff.

12    More recent evidence shows that given what information has been supplied by the defendants the Building Consultancy Centre has approved an additional sum by way of variation of $10,107.17. The other matter about which there is evidence is the fact that Mr Duncan has sworn that the work that the company has done to complete the works after that became necessary was $6612.90. There is some suggestion in correspondence that some of the amounts were a little higher but that has not been sworn to. It seems clear to me given that the question of whether or not there was an oral agreement on which the parties embarked is one in which there is a genuine dispute. It could well be that if Mr Duncan were accepted the documentation would be seen as having more impact on his position. No doubt if Mr Holsworth were accepted on a final hearing then the written quotation would be probably what governed the parties' rights. That would run into the terms of the subsequent documents.

13    It seems to me, therefore, that there is a genuine dispute but the defendant should be credited with $10,017.17, an amount which I am prepared to accept on the basis of the evidence already having been sworn. There is by way of counter claim an amount of $6612.90. That leaves a balance due by the plaintiff to the defendant of $3404.27. An amount close to that has been paid into the solicitor's trust account pending the final determination of these proceedings.

14    Accordingly I order that the demand dated 23 February 1999 served on the plaintiff by the defendant be varied by reducing the amount to $3404.27.

15    I have heard further argument on costs. The plaintiff has been substantially successful but not totally. It had also made an offer once the proceedings were started and it is somewhat difficult to assess that in terms of the impact on the costs order. In the result I make an order that the defendant pay the plaintiff's costs on a party and party basis.

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