FMA Facilities v Reflections Group - [2006] NSWSC 257

CITATION: FMA Facilities v Reflections Group [2006] NSWSC 257

HEARING DATE(S): 30 March 2006

JUDGMENT DATE :
30 March 2006

JURISDICTION: Equity Division

JUDGMENT OF: Associate Justice Macready

EX TEMPORE JUDGMENT DATE: 03/30/2006

DECISION: Paragraph 31

CATCHWORDS: Corporations Law. Application to set aside statutory demand under s459G of Corporations Act. Consideration of defects in the affidavit and whether there was an abuse of process. Demand not set aside as offsetting claim not quantified.

PARTIES: FMA Facilities Management Australia Pty Limited v Reflections Group Services Pty Ltd

FILE NUMBER(S): SC 5222 of 2005

COUNSEL: Mr K. Pierce for plaintiff
Mr. C.D. Wood for defendant

SOLICITORS:
Thurlow Fisher for plaintiff

LOWER COURT DATE OF DECISION: 03/30/2006

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

THURSDAY 30 MARCH 2006

005222/05 - FMA FACILITIES MANAGEMENT AUSTRALIA PTY LIMITED v REFLECTIONS GROUP SERVICES PTY LIMITED

JUDGMENT

1 HIS HONOUR: This is an application to set aside a statutory demand under section 459G of the Corporations Act. The demand was dated 7 September 2005 and it claimed $69,091.52, being for maintenance and cleaning.

2 The parties had a subcontract between them for cleaning, which was coming to an end on 30 June 2005. There had been a tender in 2002 that had led to their contract which went over some years for a lump sum payment of $816,618.22 including GST.

3 Clause 6.3 of the contract provided for equal monthly instalments during the contract, the amount of which was in the sum of $69,091.52.

4 The parties’ contract was ending on 30 June 2005 and there was to be a change as a result of the fresh tender process. The plaintiff, who had been the head contractor of the defendant up until then, won the tender for the future work. There therefore had to be a hand-over and in the process of this the same cleaners continued to do the work. Effectively on 30 June 2005, at midnight, there was a change in the supervisors and the companies responsible for the cleaning.

5 The dispute relates to the condition of the premises at the time of handover. Clause 6.5 of the contract between the parties provided:

“6.5 Payment of Fee

FMA must pay the amount it is satisfied is due to the Specialist Supplier for the relevant part of the Period within thirty (30) days of receipt of each invoice unless the Specialist Supplier has failed to perform the services in accordance with the Agreement (including changes to the Services under clause 1.3) in which case, FMA may withhold payment of the invoice until the performance criteria for the Services have been met by the Specialist Supplier. If FMA disputes any amount included in an invoice, FMA must pay the amount, if any, not in dispute.”

6 The defendant issued an invoice for the June cleaning which was dated 1 June 2005. There was a letter from the plaintiff of 6 July 2005 in which complaints were made about…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading FMA Facilities v Reflections Group

Details

AGLC: FMA Facilities v Reflections Group [2006] NSWSC 257
Case: [2006] NSWSC 257
Decision Date: 30 March 2006

CaseChat Overview and Summary

The parties to this case were FMA Facilities and Reflections Group. The dispute arose when FMA Facilities issued a statutory demand to Reflections Group under section 459G of the Corporations Act, seeking payment of a debt. Reflections Group applied to set aside the demand, arguing there were defects in the affidavit and that there had been an abuse of process. The Federal Circuit Court considered the application.

The primary legal issue before the court was whether the statutory demand should be set aside. This involved determining if there were any defects in the affidavit that warranted setting aside the demand and whether there had been an abuse of process. The court was required to assess the validity of the offsetting claim made by Reflections Group, which was not quantified, and its potential impact on the statutory demand.

In examining the application, the court noted that while the affidavit contained some defects, they were not of a nature that would necessarily invalidate the statutory demand. More critically, the court found that the offsetting claim made by Reflections Group was not quantified, which rendered it ineffective in offsetting the demand. The court held that the absence of a quantified offsetting claim meant the statutory demand could not be set aside. The court further found no evidence of an abuse of process, as the demand was issued in good faith and for the purpose of pursuing the debt.

The court determined that the statutory demand should not be set aside. Consequently, the application by Reflections Group was dismissed, and the demand remained in effect. The court did not make any additional orders beyond dismissing the application.

Orders