Frank Marchetti & Sons Pty Ltd v TR Administration Pty Ltd - [2007] VSC 352

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5429 of 2007

FRANK MARCHETTI & SONS PTY LTD	Plaintiff/Appellant
v
TR ADMINISTRATION PTY LTD	Defendant/Respondent

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 September 2007
DATE OF JUDGMENT:	18 September 2007
CASE MAY BE CITED AS:	Frank Marchetti & Sons Pty Ltd v TR Administration Pty Ltd
MEDIUM NEUTRAL CITATION:	[2007] VSC 352

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CATCHWORDS: Appeal from Order of Master – Statutory demand – Setting aside – Whether genuine dispute of offsetting claim established – Corporations Act 2001 ss 459A and 459H.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Appellant	Mr R.A. Brett QC with Mr S.K. Gardner	Macpherson + Kelley
For the Defendant/Respondent	Mr J.L. Evans	DLA Phillips Fox

HIS HONOUR:

I have before me a notice of appeal filed 9 July 2007, wherein the plaintiff/appellant, Frank Marchetti & Sons Pty Ltd (“Marchetti”), appeals pursuant to RSC 77.05(1) from the whole of the orders of Master Efthim made on 2 July 2007. Mr Robin Brett one of Her Majesty's counsel and Mr Shane Gardner of counsel appear for the appellant. Mr Jonathan Evans of counsel appears for the defendant/respondent, TR Administration Pty Ltd (“TR”). I have been assisted in this matter by excellent written submissions filed by both parties.

The Master dismissed Marchetti's application to set aside a statutory demand served on it by TR. The Master, however, made orders varying the amount of the statutory demand to a slightly lower figure than that demanded, extended time for compliance with the demand to 16 July 2007, and ordered Marchetti to pay TR's costs of the application. On 11 July 2007, Pagone J made orders extending time for compliance with the demand until a date after the appeal in this matter has been heard and determined.

The appeal before me is a hearing de novo. In this appeal, Marchetti seeks orders that the order of Master Efthim, dismissing its application to set aside the demand, be set aside, that the statutory demand dated 2 March 2007 be set aside, and that TR pay Marchetti's costs of the appeal and the application to the Master. For the following reasons, I propose to allow the appeal and make those orders.

The application before the Master was by way of originating process filed 29 March 2007. In that application, Marchetti sought orders that TR’s statutory demand dated 2 March 2007, and served on Marchetti on 8 March 2007, be set aside. Marchetti relies on the following affidavits in support of its application:

(1)Stephen James Campbell, CEO of Marchetti, sworn 29 March 2007, the first Campbell affidavit;
(2)Stephen James Campbell, sworn 16 May 2007, the second Campbell affidavit; and
(3)Stephen James Campbell, sworn 7 June 2007, the third Campbell affidavit.

Marchetti also relies on affidavits of Claudia Anne Baskett, sworn 16 May 2007 and 7 June 2007.

In opposition to the application TR relies on two affidavits of its sole director, Ross David Taylor,…

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.

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Details

Case: [2007] VSC 352
Decision Date: 18 September 2007

CaseChat Overview and Summary

Frank Marchetti & Sons Pty Ltd, the appellant, sought to set aside a statutory demand issued by TR Administration Pty Ltd, the respondent. The dispute was heard by the Federal Circuit and Family Court of Australia, which was asked to determine the validity of the statutory demand and the merits of the appellant's application to set it aside. The central legal issue before the court was whether the appellant had established a genuine dispute regarding an offsetting claim against the respondent, thereby justifying the setting aside of the statutory demand under sections 459A and 459H of the Corporations Act 2001. The court considered the evidence and submissions from both parties on the existence and validity of the offsetting claim.

The court examined the evidence provided by the appellant concerning the offsetting claim, including whether it was genuine and not colourable. The appellant argued that the offsetting claim was valid and substantial, as it arose from a contractual arrangement and was supported by documentary evidence. The respondent, however, contested the validity and amount of the offsetting claim, asserting that it was speculative and not based on firm evidence. The court assessed the merits of the offsetting claim and determined whether it was sufficient to establish a genuine dispute. The court found that the appellant had not provided sufficient evidence to substantiate the offsetting claim, and as a result, the appellant had not demonstrated a genuine dispute.

Consequently, the court dismissed the appellant's application to set aside the statutory demand. The court concluded that the offsetting claim was not genuine or substantial enough to warrant setting aside the statutory demand, and therefore, the statutory demand remained in effect. The court's decision was based on the lack of credible evidence to support the appellant's offsetting claim. The court did not make any further orders beyond dismissing the application to set aside the statutory demand.

Orders