JCS Developments P/L v Graveyard Recycling P/L

[2001] NSWSC 270

CITATION:	JCS Developments P/L v Graveyard Recycling P/L [2001] NSWSC 270 revised - 26/04/2001
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 4749/00
HEARING DATE(S):	9 April 2001
JUDGMENT DATE:	9 April 2001
PARTIES :	JCS DEVELOPMENTS PTY LIMITED (003 851 876) (Plaintiff) GRAVEYARD RECYCLING PTY LIMITED (094 059 417) ( Defendant
JUDGMENT OF:	Santow J

COUNSEL :	J B Conomy (Plaintiff) P Rodionoff (Defendant)
SOLICITORS:	Astridge & Murray (Plaintiff) Mackintoshs Solicitors (Defendant)
CATCHWORDS:	CORPORATIONS — Statutory demand — Genuine dispute.
LEGISLATION CITED:	Corporations Law s9; s459E; s459J
DECISION:	Statutory Demand set aside

REVISED — 26 April, 2001
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J

No. 4749/00
JCS DEVELOPMENTS PTY LIMITED (003 851 876)
Plaintiff
GRAVEYARD RECYCLING PTY LIMITED (094 059 417)
Defendant
JUDGMENT — ex tempore

INTRODUCTION

1    This is an application to set aside a statutory demand brought by the Plaintiff on the basis that there is a genuine dispute as to whether the debt is payable. The dispute in broad terms pertains to whether the Defendant claimant creditor was owed as a debt due and owing at the date of the Statutory Demand (6 November 2000) the sum of $121,349.53. That debt pertains to excavation work carried out by the Defendant for the Plaintiff.

SALIENT FACTS

2    The Schedule to the Statutory Demand contains the following terse description of the debt:

“Balance due to the creditor under the Company’s purchase Order 60 OLD dated 1st August 2000 for work carried out by the creditor at the company’s request at 972-990 Old Princess Highway, Engadine …”

3 Accompanying the Statutory Demand is an affidavit purporting to satisfy s459E(3) of the Corporations Law.

4 There is nothing in that affidavit which fills the vacuum of the earlier quoted description in actually providing the relevant purchase order. Nor is that purchase order in evidence before me. Section 459E(3) requires that the demand must be

“accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amount of the debts, is due and payable by the company …”

and then requires that the affidavit “complies with the Rules”.

5    The end result is that there has been no verification of the debt beyond the assertion contained in the description of the debt and no production of the relevant purchase order.

6    This is in a context where the essential facts are not otherwise in dispute and are contained in the Plaintiff’s chronology retained in the file and initialled for identification. But I am satisfied there is a genuine dispute when it comes to the quantification of what is said to be owed. In the Plaintiff’s affidavits there is the affidavit of Mr Curtis who is a director of the Plaintiff dated 23 November 2000. Annexures F and G accompanying that affidavit show that, in broad terms, more has indeed been paid ($192,313.27 from the total of the relevant invoices) than was authorised to be paid (Annexure F), though there remain some discrepancies which are the subject of an attempted reconciliation by the Plaintiff. While it is true that paragraph 13 does not profess to contain “all” invoices from the Defendant, the invoices provided have not been the subject of any evidence from the Defendant pointing to missing invoices which would have brought the amount authorised above the amount paid.

7 In those circumstances, when the Plaintiff’s evidence need rise no higher than a plausible contention requiring further investigation and when the Defendant’s Statutory Demand falls well short of the kind of verification that should be provided in the circumstances, the Plaintiff must succeed. This is not a case where s459J could be invoked by the Defendant. This is because I would be satisfied that the “defect” (as defined by s9 of the Corporations Law) in the demand, if such it merely be, was such as to give rise to substantial injustice, unless the demand were set aside. But in any event, there is a genuine dispute of the kind which finds its plausibility more readily established from the paucity of the Defendant’s verification of the original claimed debt.

CONCLUSION

8    The Plaintiff’s application succeeds and the Statutory Demand must be set aside and I so order. Costs follow the event such that the Defendant is ordered to pay the Plaintiff’s costs.

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Last Modified: 04/27/2001