Firezone Protection Services Pty Ltd v D H Gibson Pty Ltd Summary

JUDGMENT No. ........ ........ ..l ........ ....

/l 90

NEW SOUTH WALES DISTRICT REGISTRY )

No. NG 3072 of 1995

)

GENERAL DIVISION

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

The case involves Firezone Protection Services Pty Limited, the applicant, and D H Gibson Pty Limited, the respondent. The applicant has applied to set aside a statutory demand dated 30 January 1995, which was issued by the respondent against the applicant. The demand claims an amount of $3794.95, allegedly owing by the applicant to the respondent under a contract between the parties. The applicant disputes the claim and has argued that it is owed a sum by the respondent. The matter is before the New South Wales District Registry of the Federal Court.

The central issue before the court was whether the applicant had a genuine dispute with the respondent regarding the existence or amount of the debt claimed. The court also had to determine if the applicant had an offsetting claim as defined by section 459H(2) of the Corporations Law. The court considered the evidence provided by both parties and concluded that there was a genuine dispute between the parties regarding the debt. The court also found that the applicant had an offsetting claim.

In the case, Firezone Protection Services Pty Limited had tendered for a contract with D H Gibson Pty Limited for fire control installations at the Grace Bros building at Westpoint shopping centre, Blacktown. The tender was accepted by Gibson, and the work was carried out by Firezone between February and August of the previous year. However, a dispute arose between the parties regarding certain matters relating to Firezone's performance of its work, including whether Firezone had walked off the job, and the cost incurred by Gibson in obtaining a third party to complete the work. Firezone also claimed that it was still owed by Gibson. Based on the evidence, the court found that there was a genuine dispute between the parties regarding the existence or amount of the debt claimed, and the applicant had an offsetting claim.

The court ordered that the statutory demand of 13 January 1995 be set aside. The applicant also sought an order for costs in its favour, which was granted by the court. The respondent was ordered to pay the costs of the applicant of the application, including reserved costs if any.

Firezone Protection Services Pty Ltd v D H Gibson Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established