Helti (Australia) Pty Ltd v Vulcan Steel Pty Ltd
[2015] VSC 192
•8 May 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2014 06107
| HELTI (AUSTRALIA) PTY LTD | Plaintiff |
| v | |
| VULCAN STEEL PTY LTD | Defendant |
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JUDGE: | Efthim AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 12 February 2015 |
DATE OF JUDGMENT: | 8 May 2015 |
CASE MAY BE CITED AS: | Helti (Australia) Pty Ltd v Vulcan Steel Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2015] VSC 192 |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr K Hickie | Consult Solicitors |
| For the Defendant | Mr J Kohn | White Cleland Pty Ltd |
HIS HONOUR:
The plaintiff, Helti (Australia) Pty Ltd, applies to set aside a statutory demand served on it by the defendant, Vulcan Steel Pty Ltd. The demand claims that the plaintiff is indebted to the defendant in the sum of $126,231.34.
The description of the demand is as follows:
The debt is the balance due and owing by the company to the creditor for $126,231.34 for goods sold and delivered by the creditor to the company at the request of the company between May 2014 and August 2014.
The plaintiff is in the business of sourcing, fabricating and installing steel products for building projects in Victoria. It engages subcontractors to supply steel to it for building projects. When it tenders for a building project, the plaintiff needs first to determine the quantity of tonnage of steel and steel plates required to be constructed for the project. To do so, it adopts the following process:
- it obtains engineering structural plans and architectural drawings from the builder;
- it calculates the total tonnage of steel required to build the structure;
- it estimates the quantity and tonnage of steel plates required to attach the steel components in the structure;
- it then requests a quote from a steel supplier to supply the steel and steel plates for the building project;
- it obtains the quote from the steel supplier; and
- it costs the project and sends an offer to the builder to source, fabricate and install the steel plates for the project.
If the plaintiff successfully tenders for building projects, it sends plans to a draftsperson to prepare ‘shop drawings’ for the building project. Drawings are then sent to the builder and engineer for approval. The shop drawings provide an accurate measurement, quantity and tonnage of steel and steel plates required for the building project.
The defendant has been a supplier of steel to the plaintiff for approximately ten years and has supplied steel and steel plates to the plaintiff.
The statutory demand relates to a project at Lot 7, Power Park Industrial Estate, Dandenong, for the construction of three warehouses and offices.
On 19 February 2014, the plaintiff forwarded a spreadsheet to the defendant and requested a quote to cost the supply of steel. On the same day, the defendant sent an email to the plaintiff attaching a quote. That quote was subsequently revised on 3 March 2014. Steel was supplied and the defendant claims that it is now owed $126,231.24.
The plaintiff asserts that it has the following genuine disputes and offsetting claims which exceed the amount claimed in the statutory demand:
-
amount of steel not supplied reducing quantum of revised quote (including GST)
$45,764.79
-
amount overcharged by the defendant (including GST)
$13,679.70
-
amount paid for steel
$46,979.99
-
offsetting claim for steel plates
$11,624.15
-
offsetting invoice dated 27 March 2014
$8,930.19
-
offsetting invoice dated 31 March 2014
$8,043.43
-
offsetting claim for steel
$31,665.00
TOTAL:
$166,687.25
Legal Principles
It is not for me to enter into the merits of the dispute between the parties, but only to ascertain if there is a genuine dispute. In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd,[1] Dodds‑Streeton J said:
The court, in the context of an application to set aside a statutory demand, must determine whether there is a genuine dispute about the existence or amount of the debt or whether the company has a genuine off-setting claim. No in-depth examination or determination of the merits of the alleged dispute is necessary, or indeed appropriate, as the application is akin to one for an interlocutory injunction. Moreover, the determination of the ‘ultimate question’ of the existence of the debt should not be compromised …
… As the terms of section 459H of the Corporations Act and the authorities make clear, the company is required, in this context, only to establish a genuine dispute or off-setting claim. It is required to evidence the assertions relevant to the alleged dispute or off-setting claim only to the extent necessary for that primary task. The dispute or off-setting claim should have a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. As counsel for the appellant conceded however, it is not necessary for the company to advance, at this stage, a fully evidenced claim. Something ‘between mere assertion and the proof that would be necessary in a court of law’ may suffice.
[1](2008) 66 ACSR 67 [56]-[57], [71].
The standard to demonstrate a genuine dispute is not onerous. In Powerhouse Australasia Pty Ltd v Viar (‘Powerhouse’),[2] Dodds‑Streeton J in reference to McLelland J in Eyota v Hanav[3] repeated:
“A genuine dispute connotes a plausible contention requiring investigation and raises much the same sort of considerations as a serious question to be tried prior to and arising on an application for the interlocutory injunction or extension, for the extension or removal of a caveat.” “This does not mean that the court must accept uncritically as giving rise to a genuine dispute every statement in an affidavit, however equivocal lacking in decision inconsistent with the undisputed contemporary documents or other statements by the same deponent or inherently and probable in itself” it may not be - “it may be not having sufficient prima facie plausibility to merit further investigation as to its truth or a patently feeble legal argument or assertion of the facts unsupported by evidence.”
[2][2006] VSC 508, [41]-[42].
[3](1994) 12 ACSR 785.
The grounds for alleging a dispute or an off-setting claim must not be spurious, hypothetical, illusory or misconceived. In Powerhouse,[4] Dodds‑Streeton J stated:
While it is not a very exacting standard, on the one hand mere, assertion of a dispute or off-setting claim, mere bluster or advancing grounds which are illusory or spurious or insufficiently particularized will not suffice. The court must not enter into the merits of the dispute, but it is not crossing the line in regards to its legitimate role in these applications to consider evidence which “bears on whether or not the asserted dispute or off-setting claim is genuine”. Indeed, that is its necessary function …
Genuine Disputes
[4][2006] VSC 508, [48].
Amount of steel not supplied and an amount overcharged
Michael Birnbaum, general manager of the plaintiff, in his affidavit accompanying the application to set aside the statutory demand, deposes that the defendant did not supply six items of steel which were invoiced to the plaintiff under a revised quote. Three of those items were supplied by Donovan Products Pty Ltd and the other three were supplied by Surdex Steel Pty Ltd. The plaintiff therefore submits that the total price it had to pay under the revised quote would be reduced by the sum of $45,764.79 (including GST) from $600,528.28 to $554,763.49.
In response, Dean Justin Rydquist, sales manager of the defendant, has deposed that Mr Birnbaum did not exhibit to his affidavit the defendant’s unpaid invoices referred to in the defendant’s statement of unpaid invoices. None of those invoices raised by the defendant and sent to the plaintiff include the steel products referred to by Mr Birnbaum, because the plaintiff did not request the purchase of these products from the defendant, or submit a purchase order to the defendant for the supply of those products. Mr Rydquist states that the defendant did not supply them and has not invoiced the plaintiff for them. He believes that the products purchased from Surdex Steel Pty Ltd are in fact the same products referred to in the email from Mr Birnbaum to Mr Rydquist dated 3 March 2014, where Mr Birnbaum specifically advised Mr Rydquist that the plaintiff would not be purchasing from the defendant.
The defendant submits that it is significant that the plaintiff did not identify which tax invoices relate to the disputed items of the revised quote. It further submits that it agreed to provide all of the steel referred to in the revised quote other than certain items, including steel which was not ordered from Vulcan Steel and was ordered from Donovan Products and Surdex Steel.
Mr Birnbaum, in his second affidavit, deposes that because the plaintiff did not order the products listed in his first affidavit, he expected that the total price invoiced by the defendant to the plaintiff would have been reduced by $45,764.79 compared to the price quoted in the revised quote. In other words, he expected the total price to the defendant for steel would have been reduced from $600,528.28 by $45,764.79 to $554,763.49. In contrast, the total amount invoiced by the defendant to the plaintiff for steel was $614,207.98, which is $59,444.49 more than the plaintiff expected to pay for steel.
This leads to the second dispute which relates to an amount overcharged by the defendant in the sum of $13,679.70. That sum added to the claim relating to the amount of steel not supplied adds up to $59,444.49.
In relation to the revised quote, Mr Birnbaum deposes that on or about 3 March 2014, the plaintiff accepted the defendant’s revised quote for the supply of steel for the project. The plaintiff then successfully tendered for the project and engaged Lewiun Drafting Services to prepare the shop drawings. Between March 2014 and August 2014, the plaintiff ordered steel and steel plates from the defendant in accordance with the revised quote. In this period, the plaintiff fabricated and installed the steel and steel plates in accordance with the shop drawings for the builder.
Mr Rydquist deposes that the prices quoted by the defendant in quotations submitted to its customers remains current for two days. If a quotation is not accepted within the two days, the defendant reserves its right and entitlement to revise any amounts quoted. Mr Birnbaum, by email dated 3 March 2014, accepted the defendant’s revised quote. The plaintiff did not submit a revised materials list to the defendant following its receipt of shop drawings. Rather, it submitted from time to time orders to Mr Rydquist to supply certain steel and orders for the provision of steel plates.
Mr Rydquist has produced an email dated 11 March 2014, which states that the pricing would be on hold until the end of April 2014. Mr Birnbaum, in his second affidavit, deposes that he responded by email to Mr Rydquist and said the pricing for steel had to be kept on hold until the end of May 2014. He did not hear back from Mr Rydquist in response to the requirement and he assumed that Mr Rydquist had no objection to the requirement. It is submitted therefore that the plaintiff considers the total cost of the purchase of steel could not exceed the cost of the revised quote in the amount of $600,528.28.
The defendant relies on an affidavit of Andrew Paul Toplak, who was employed by the defendant as its plate manager. He deposes that from time to time he received both telephone and written orders from the plaintiff. Exhibited to his affidavit is a series of emails after 12 March 2014 which ask for quotes for ‘attached plates’. It is submitted that Mr Birnbaum is simply wrong when he stated in his affidavit that, ‘the plaintiff ordered steel and steel plates from the defendant in accordance with the revised quote’. It is submitted that he requested new quotes.
Those emails related to steel plates. Mr Birnbaum deposed that there was no separate quotation received for the supply of steel plates. He says that the plaintiff and the defendant agreed that the price for steel plates would be $1,600.00 per tonne exclusive of GST, or $1,760.00 per tonne inclusive of GST. The agreement for the price of steel plates was made on about 19 May 2014 by email between himself and Mr Toplak for the defendant.
The price of steel was arguably that referred to in the revised quote. There is a dispute because no response was received to Mr Birnbaum’s request that the price of the material be held until the end of May 2014. It is arguable that the plaintiff proceeded on the understanding that the price was fixed, as no further price was quoted. It is not for me to determine the dispute,[5] only to find whether there is a dispute that is genuine. It is not an onerous test that the plaintiff needs to satisfy. In my view, there is a dispute here that should be litigated by a court of competent jurisdiction. I am of the view that there is a genuine dispute in the sum of $59,444.49.
[5]Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290.
Amount paid for steel
The defendant has provided a list of invoices totalling $126,231.34 which it claims have not been paid by the plaintiff. Invoices 361539, 361751, 363969 and 365681 total an amount of $46,979.99. Mr Birnbaum deposes that these invoices were paid on 30 September 2014 when the plaintiff paid the amount of $67,736.32 by cheque to the defendant.
Mr Rydquist acknowledges that the payment of $67,736.32 was received from the plaintiff. When the payment was received, the defendant was unaware that the plaintiff wanted the payment to be applied to the four invoices referred to by Mr Birnbaum. This is because the payment was not accompanied by a remittance payment advice statement. As a consequence, Mr Rydquist deposes that the defendant applied the payment towards other outstanding invoices, but not the four invoices referred to in paragraph 25 of Mr Birnbaum’s affidavit.
The defendant submits that the plaintiff’s allegations are a recent invention and that no documentary evidence has been produced to substantiate that the remittance advice was attached to the cheque. It further submits that the plaintiff did not indicate to the defendant that the defendant’s monthly statements were incorrect as a result of including paid invoices. It also relies on the fact that no‑one has deposed on behalf of the defendant that they attached the remittance advice to the cheque.
The defendant now relies on a new statement of invoices upon which the statutory demand is now based. The statement produced by Mr Rydquist, exhibit DJR‑3, is different to the statement of invoices originally relied upon by the defendant in supporting the debt claimed, but the balance outstanding is the same as the balance upon which the statutory demand is based. That, in my view, is not permissible for a statutory demand. The invoices the subject of the demand have been paid. I do not regard this dispute as a recent invention. The plaintiff has only 21 days to file an affidavit alleging a genuine dispute. It is understandable that the remittance slips may not make it to the first affidavit. The plaintiff has supplemented that first affidavit and has clearly put how the dispute is raised. The plaintiff has a genuine dispute in relation to the payment of invoices in the amount of $46,979.99.
Dispute as to the price of steel plates
Mr Birnbaum has deposed that the agreed price per tonne of steel plate was $1,600.00 (exclusive of GST), or $1,760.00 (inclusive of GST). A dispute has been raised as to whether the cost of cutting steel plates was included in the price agreed for the supply of steel plates by the defendant.
Mr Birnbaum deposes that from his review of the invoices the defendant has charged the plaintiff $1,996.39 (inclusive of GST) per tonne of steel plates instead of the agreed price of $1,760.00 (inclusive of GST) per tonne of steel plates. Accordingly, the defendant has overcharged the plaintiff the cost of steel plates by $11,624.15. That figure is calculated by reference to the difference between the cost of steel plates charged by the defendant and the cost of steel plates supplied at the agreed price.
I note that Mr Birnbaum has deposed in his first affidavit that the defendant issued 34 invoices to the plaintiff in relation to the supply of steel plates. The invoices are particularised in a table. In that table, invoice 349494, dated 27 March 2014, refers to 0.907 tonnes of steel plate provided. A copy of that invoice has been provided by Mr Toplak and written in handwriting on that invoice is a number 5,981.33.
Counsel for the defendant prepared a table with all the tax invoices for steel plates. The numbers appearing in handwriting on the invoices are the tonnes referred to in the table. The difference between the plaintiff and the defendant regarding invoice 349494 is that Mr Birnbaum in his affidavit refers to the weight of steel as 0.907 tonnes, but the number 5,981.33 is written on the invoice as the weight, and that has been adopted by the defendant. All the other numbers written in the invoices appear in the table prepared by Mr Birnbaum. There is no reason why the number appearing on invoice 349494 should not have been adopted by Mr Birnbaum. There is no evidence in Mr Birnbaum’s affidavits alleging that 5,981.33 tonnes of steel were not delivered. If that weight of steel was delivered, then it is clear that the cost of steel delivered, when analysing the defendant’s table and doing the necessary calculations is in the sum of $1,600.00 or $1,760.00 per tonne (including GST).
On the evidence before me, there is not a genuine offsetting claim for steel plates in the sum of $11,624.15.
Offsetting claims
Invoices dated 27 March 2014
The plaintiff claims that two invoices (350640 and 349494) included the price of cutting, which should not have been charged by the defendant. Therefore, the plaintiff disputes that the defendant is entitled to offset $8,043.43 in respect of invoice 350640 and $8,930.19 in respect of invoice 349494.
Mr Birnbaum deposes that the basis of the offsetting claim is that the price of the cutting labour was included in the price per tonne for the plates in the amount of $1,760.00 (inclusive of GST).
I do not accept that this is a genuine offsetting claim because no evidence has been supplied that these two amounts have been paid. It is only a bare assertion from Mr Birnbaum. In addition, it is clear that the price of cutting labour was included in the price per tonne for plates in the amount of $1,760.00 as was demonstrated by the defendant’s analysis of the overcharging claim.
Offsetting claim for steel
The plaintiff submits that there is a genuine dispute about the quantity of steel supplied by the defendant to the plaintiff. Exhibit MB‑21 to Mr Birnbaum’s second affidavit contains invoices for steel supplied to the plaintiff. Mr Birnbaum denies that 416 tonnes of steel has been provided. He deposes that he believes that the defendant has supplied the plaintiff with the items in the revised quote (400 tonnes of steel which includes approximately 18 tonnes of wastage). He calculated wastage at a rate of just under five per cent of the tonnage of steel.
Mr Rydquist deposes that there is a discrepancy between the amount of steel invoiced and the amount of steel recorded as having been delivered. There were discussions between the plaintiff and the defendant concerning the delivery of steel ordered by the plaintiff. He says that Mr Birnbaum requested a meeting with Mr Rydquist and requested that Mr Rydquist provide copies of delivery dockets and matching invoices. He met with Mr Birnbaum at his office on 5 September 2014 and provided him with copies of all the defendant’s relevant truck run sheets. These are the documents which prove delivery by the defendant to the plaintiff to the addresses nominated by the plaintiff. The truck sheets he handed to Mr Birnbaum included the defendant’s truck run sheets 43334 dated 4 June 2014, and 43404 dated 6 June 2014. He fails to understand why Mr Birnbaum did not exhibit those run sheets to his affidavit.
According to Mr Rydquist, the run sheets record the defendant’s invoices relevant to the steel being delivered, the weight of steel being delivered and a provision for signature by the recipient. Truck run sheet 43334 records three deliveries on behalf of the plaintiff. Steel comprising the defendant’s invoices 362712, 36194 and 361922 were delivered on 4 June 2014. He states that the plaintiff does not allege a discrepancy in the steel invoiced and delivered in relation to invoices 362712 or 361914, but alleges a discrepancy in relation to invoice 361922. That invoice comprises 13,406.12 kilograms of steel which was delivered together with steel invoiced in invoices 362712 and 361914. Similarly, the truck running sheet 43404 relating to the other disputed delivery, records the delivery of 10,923.69 kilograms of steel.
He deposes that at no time has the plaintiff advised that he did not order the steel delivered and which was subsequently invoiced in invoices 361922 and 361780-A. At no time has the defendant been advised that either 13,406.12 kilograms of steel delivered and referred to on truck run sheet 43334 or the 10,923.69 kilograms of steel delivered and referred to on truck run sheet 43404 has been delivered in error and should be collected. He does not agree that analysis of the steel ordered by the plaintiff and supplied by the defendant should be referrable to the revised quote. He deposes that the defendant supplied such steel as the plaintiff ordered, without reference to the revised quote, in accordance with the relationship between the parties being one of supplier and customer. It is only after shop drawings were prepared that the plaintiff obtains an accurate measurement of the steel required for a particular project. The steel that the plaintiff ordered from the defendant is of different quantities, lengths and materials than the steel referred to in the revised quote, because the shop drawings would have set out precisely the steel the plaintiff needed to order, whereas the revised quote was prepared before the preparation of shop drawings and before the plaintiff knew its actual steel requirements.
Mr Birnbaum, in reply to the affidavit, believes that the defendant does not have accurate records of the steel it has delivered for the project. He has reviewed all of the truck run sheets and believes that the defendant only has truck run sheets for approximately 382 tonnes of steel.
Mr Birnbaum states that truck run sheet 43334 refers to deliveries of steel in relation to invoices 361914 in the amount of 4.001 tonnes, and 362712 in the amount of 2.677 tonnes. However, the defendant appears to have recorded the delivery of steel in relation to invoices 361914 and 362712 twice, because truck run sheet 43158 also refers to the delivery of steel in relation to invoice 361914 in the amount of 4.001 tonnes, and truck run sheet 43303 refers to the delivery of steel in relation to invoice 462712-B in the amount of 2.059 tonnes. Based on the evidence, the plaintiff submits that it was overcharged for the delivery of 39.2 tonnes of steel plate in circumstances where the run sheets demonstrate that 15.4 tonnes of steel were delivered.
Run sheet 43334 demonstrates clearly that 13,406.1 kilograms of steel has been provided in accordance with invoice 361922, and run sheet 43404 demonstrates that 10,923.69 kilograms of steel was delivered pursuant to invoice 361780-A. The invoices charge for what has been delivered and is recorded in the run sheets. There can be no dispute when looking at the run sheets and the invoices.
I note that Mr Birnbaum, in his affidavit in reply, referred to what appears to be the delivery of steel being recorded twice. It may well have been recorded twice, but the invoices are only sent once, not twice. The onus is on the plaintiff to demonstrate that there is a dispute in that the steel requested was not supplied. On carefully considering the evidence, I can find no evidence of oversupply and cannot accept the plaintiff’s contention as plausible.
Conclusion
The plaintiff has three genuine disputes which are as follows:
- amount of steel not supplied
$45,764.79
- amount overcharged by the defendant
$13,679.70
- amount paid for steel
$46,979.99
TOTAL:
$106,424.48
The statutory demand will therefore be varied to the sum of $19,806.86, being $126,231.34 minus $106,424.48.
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