Firezone Protection Services Pty Ltd v D H Gibson Pty Ltd

[1995] FCA 1190

JUDGMENT No. ........ ........ ..l ........ .... /l 90 95

I

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3072 of 1995

)

GENERAL DIVISION 1

BETWEEN:

FIREZONE PROTECTION

SERVICES PTY LIMITED

Applicant

AND : D.H. GIBSON PTY LIMITED

Respondent

REASONS FOR JUDGMENT

LOCKHART J.

This is an application to set aside a statutory demand dated 30 January 1995. The demand was issued by D.H. Gibson Pty Limited (Gibson) against Firezone Protection Services Pty Limited (Firezone) claiming the amount of $3794.95 which is said to be the amount owing by Firezone to Gibson pursuant to a contract between the parties.

The origin of the matter is that in about August 1993, Firezone tendered for the contract for fire control installations as part of a refurbishment programme of the Grace Bros building at Westpoint shopping centre, Blacktown. Gibson was the head contractor for the refurbishment.

Firezone's tender was accepted on 15 November 1993 by way of a confirmation order of that date, and the acceptance of that tender was shortly thereafter confirmed by Gibson to Firezone. A contract was prepared and signed by Gibson and

sent to Firezone for execution but it was not in fact

executed.

Firezone carried out works on the site at Blacktown, the works including fire sprinkler alterations, relocation of fire extinguishers, supply and installation of metal cabinets for fire hose reels and alterations to fire hydrants and hose reels.

It is part of Firezone's case that during the course of the work certain adjustments were made to specifications which resulted in an increase in the contract price from $23,200 to $37,542. Firezone's case is that the work was carried out by it between February and August of last year.

Dispute has arisen between the parties as to certain matters relating to Firezone's performance of its work with Gibson. Gibson claims that Firezone in effect walked off the job, putting Gibson in the position of having to obtain a third party to complete the work at the cost to Gibson of some $9381.60. Gibson also claims that Firezone owes it another $917 being damage allegedly caused by Firezone during the installation of sprinklers and fire hoses. Firezone claims that it is still owed by Gibson $6504.25.

The evidence has been mainly by affidavits from both

sides, together with brief oral evidence from Malcolm John

Spinks who is a director of Firezone.

The application to set aside the demand is made pursuant to S. 459G of the Corporations Law and the questions before the Court are whether there is a genuine dispute between Firezone and Gibson about the existence or amount of the debt to which the demand relates; or whether Firezone has an offsetting claim as defined by S. 459H(2) of the C o r p o r a t i o n s

Law.

Determination of whether there is a genuine dispute has

been the subject of a number of reported cases. I dealt with

the matter in C h a d w i c k I n d u s t r i e s ( S o u t h C o a s t ) P t y L t d v

C o n d e n s i n g V a p o r i s e r s P t y L t d (1994) 13 A C S R 37 and it seems to me that the test that I expounded there is still accepted. That test, in short, is whether the alleged dispute is frivolous or vexatious, in which case it would not be a genuine dispute, but if there is a claim by the company (in this case Firezone) that may have some substance, then that is generally sufficient to pass the threshold test of determining that there is a genuine dispute about the existence or amount of the debt.

If the present matter is litigated in the appropriate tribunal or court then I have no idea as to the outcome, the case being a building case essentially to be determined in the usual way; but I am persuaded on the evidence that there is a

genuine dispute between the parties within the meaning of S. 459H(l)(a) and I am also satisfied that Firezone has an offsetting claim.

Accordingly, the Court orders that the statutory demand of 13 January 1995 be set aside.

Firezone seeks an order for costs in its favour and in my opinion the usual order should apply. Accordingly, the Court orders that the respondent, D.H. Gibson Pty Limited, pay the costs of Firezone Protection Services Pty Limited of the application, including reserved costs if any.

I certify that this and the

preceding three (3) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate

Dated: 14 July 1995

Counsel for the Applicants	Mr Peter Walsh
Solicitors for the Applicants :	Bateman Battersby
Counsel for the Respondent	Mr Stephen Wilson
Solicitors for the Respondent :	Gregory J Britain
Date of Hearing	14 July 1995
Date of Judgment	14 July 1995