Fpaa Pty Ltd v EMPRO Pty Ltd (in Liq)

[2020] WASC 283

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   FPAA PTY LTD -v- EMPRO PTY LTD (IN LIQ) [2020] WASC 283

CORAM:   MASTER SANDERSON

HEARD:   2 JULY 2020

DELIVERED          :   4 AUGUST 2020

PUBLISHED           :   4 AUGUST 2020

FILE NO/S:   COR 50 of 2020

BETWEEN:   FPAA PTY LTD

Plaintiff

AND

EMPRO PTY LTD (IN LIQ)

Defendant

Catchwords:

Corporation law - Application to set aside statutory demand - Turns on own facts

Legislation:

Nil

Result:

Application to set aside statutory demand dismissed

Category:    B

Representation:

Counsel:

Plaintiff	:	T B Lyons
Defendant	:	J P Cook

Solicitors:

Plaintiff	:	Gibson Lyons
Defendant	:	Mendelawitz Morton Commercial Lawyers

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

Nil

MASTER SANDERSON:

1. This is the plaintiff's application to set aside a statutory demand.  The application is supported by an affidavit of Rodney McPherson sworn 14 April 2020.  Appearing as attachment RM1 to Mr McPherson's affidavit is a copy of the statutory demand.  Under the heading 'Description of the debt' in the schedule to the demand there appears the following:

   Receipt of sums from third party debtors by the Company which are due and payable to the Creditor as reflected in …

2. There is then reference to two 'distribution summaries', one dated 23 October 2019 and one dated 30 October 2019.  The total amount of the demand is $34,638.63.

3. Turning to the affidavit, Mr McPherson says the plaintiff is a wholly owned subsidiary of the Chamber of Fruit and Vegetable Industries in WA Inc (the 'Chamber') and trades as Market West Credit Service.[1]  The Chamber was incorporated in 1959 and currently has 24 primary wholesalers as members and nine associated businesses all of which operate from the Market City site at Canning Vale.  The Chamber's role is to provide services to Market City tenants and liaison services to the owner of Market City.[2]  The majority of buyers visiting Market City utilise the services of the plaintiff which enable a buyer to make one weekly payment on a consolidated statement to the plaintiff who in turn distributes those funds to its members as directed by the buyer.  The plaintiff can receive funds from members and other buyers for distribution to other members for produce sold.  The buyers and sellers contract directly with each other.  The plaintiff facilitates the transaction between the members and the buyers.  The plaintiff takes a fee for each transaction.  Not all buyers are members but all members are registered buyers.  There are approximately 350 currently active registered buyers.[3]

   [1] Affidavit of Rodney McPherson sworn 14 April 2020 par 7.

   [2] Affidavit of Rodney McPherson sworn 14 April 2020 par 8.

   [3] Affidavit of Rodney McPherson sworn 14 April 2020 par 9.

4. In order for a buyer to utilise the services of the plaintiff they must become a registered buyer and receive a 'buyer code'.[4]  The defendant was a registered buyer and had the code 'EMP'.[5]

   [4] Affidavit of Rodney McPherson sworn 14 April 2020 par 10.

   [5] Affidavit of Rodney McPherson sworn 14 April 2020 par 12.

5. It is important to note and it was accepted by both the plaintiff and the defendant that the plaintiff is only ever an agent for its members.  That is confirmed by cl 4.3 of the Credit Application which was entered into by the plaintiff and the defendant and appears as attachment RM2 to Mr McPherson's affidavit.

6. In accordance with the usual practice, a statement was issued to the defendant on 23 October 2019 representing amounts owed to other wholesalers of produce purchased and supplied in the previous week.  On that date, the defendant's accounts manager, Tracy Pham, confirmed having received the produce and requested the defendant to withhold the amount due to those wholesalers from funds which the defendant was due to receive that week.[6]  The same arrangement took place on 6 November 2019.[7]

   [6] Affidavit of Rodney McPherson sworn 14 April 2020 par 15.

   [7] Affidavit of Rodney McPherson sworn 14 April 2020 par 17.

7. The plaintiff had not yet been notified that a liquidator had been appointed and had no reason to suspect that the defendant had solvency issues.  Mr McPherson says it is a common practice for buyers to direct that money collected by the plaintiff and which would otherwise be owed to those buyers be used to offset monies owed by them.[8] 

   [8] Affidavit of Rodney McPherson sworn 14 April 2020 par 19.

8. In opposition to the application the defendant relied on an affidavit of Boika Simeva Panov sworn 20 May 2020.  Mr Panov is a solicitor employed by the firm acting for the defendant.  Appearing as attachment BP3 to Mr Panov's affidavit is a copy of a letter directed to the plaintiff by the liquidator of the defendant.  Relevantly the letter reads as follows:

I refer to the above matter and advise that, I Mathieu Tribut, was appointed Liquidator of the Company on 31 October 2019.  A copy of my Notice of Appointment is enclosed.

As Liquidator, I am in control of the Company and am required to take possession of the Company's assets

My enquiries indicate that an amount of $34,638.63 was paid to your bank account by the Company's pre‑appointment trade debtors on 6 November 2019.

In this regard, please urgently arrange to transfer the sum of $34,638.63 to the Liquidator's bank account as follows:

1. That letter provoked a response from the plaintiff's solicitors.  There then followed some correspondence of peripheral relevance to the present dispute.  In paragraph 21 of this affidavit Mr McPherson says that on or about 15 January 2020, 'at the request of its members', the plaintiff distributed $35,254.88 to various of its members who were owed money by the defendant.

2. The plaintiff says there is a genuine dispute as to whether or not the money held by the plaintiff at the date the liquidator was appointed belonged to the defendant.[9]  With respect, that cannot be right.  As counsel for the defendant said in his submissions the plaintiff collected the subject money in its capacity as the agent for the defendant.  It is the defendant's money.[10]  The plaintiff had no entitlement to the money in its own right.  The position is very simple.  There is no dispute.  It is not to the point the plaintiff paid out the money at the request of its members.  The fact is it paid out the defendant's money at the request of its members.  As a liquidator had been appointed it was not entitled to take that step.  There is and can be no dispute that the plaintiff is indebted to the defendant as alleged.

   [9] Plaintiff's outline of submissions in support of application to set aside statutory demand filed 2 June 2020 par 23.

   [10] Defendant's outline of submissions in opposition to plaintiff's application to set aside statutory demand filed 16 June 2020 par 10.

3. The application to set aside the statutory demand will be dismissed.  The plaintiff should pay the defendant's costs of the application including the reserved costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CB
Associate to Master Sanderson

4 AUGUST 2020