Mr F Donohoe (P) Mr M Pembroke SC with Ms T Catanzariti (D)
SOLICITORS:
Laurence & Laurence (P) Michell Sillar (D)
CATCHWORDS:
CORPORATIONS - statutory demand - genuine dispute and offsetting claim - proprietor claims variation credits and compensation for delay - genuine dispute or offsetting claim established - BUILDING & CONSTRUCTION - statutory entitlement to make payment claim for progress payment - invoice for final account held not to be claim for progress payment - requirements for valid payment claim under Building and Construction Industry Securities of Payment Act 1999 (NSW)
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
AUSTIN J
TUESDAY 7 MAY 2002
2999/01 JEMZONE PTY LTD V TRYTAN PTY LTD
JUDGMENT
1 HIS HONOUR: This is an application, made pursuant to s 459G of the Corporations Act by originating process filed on 8 June 2001, to set aside a statutory demand. The plaintiff alleges, under s 459H (1), that there is a genuine dispute between it and the defendant as to the existence or amount of the debt, or that it has an offsetting claim for an amount higher than the amount claimed by the defendant. The defendant denies that there is any genuine dispute or offsetting claim, and seeks to rely on some statutory provisions to prevent such matters from being raised.
2 The plaintiff is a hotel and motel developer and the defendant is a builder. The defendant carried out work pursuant to a building contract between the parties in respect of a motel property in Gundagai, dated 31 August 2000.
3 The statutory demand arose out of a claim for payment sent by the defendant to the plaintiff on 14 March 2001 in the amount of $177,960.28. The document was headed "Final Account" and was a statement setting out the balance of moneys that had become due, giving credit for payment made, and attaching a detailed summary of variations.
4 On 27 March 2001 the plaintiff responded to the Final Account by writing a letter, alleging that the defendant had failed to complete the work in accordance with the agreed program, causing the plaintiff significant revenue loss and damage. The letter estimated the revenue loss to be in the order of $66,240, although no particulars were given. It said that the damages component…
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
AGLC
Jemzone Pty Ltd v Trytan Pty Ltd [2002] NSWSC 395
Case
[2002] NSWSC 395
Decision Date
CaseChat Overview and Summary
The Federal Court of Australia recently delivered a judgment in the case of Jemzone Pty Ltd v Trytan Pty Ltd. The central issue in this case was whether a statutory demand issued by Trytan Pty Ltd against Jemzone Pty Ltd was valid. This arose from a building contract under which Trytan Pty Ltd was the principal contractor, and Jemzone Pty Ltd was the sub-contractor. The dispute centred on the validity of the statutory demand and whether there was a genuine dispute or offsetting claim that would prevent the enforcement of the demand.
The primary legal issue was whether Jemzone Pty Ltd had established a genuine dispute or offsetting claim that would invalidate the statutory demand. Jemzone Pty Ltd argued that it had a right to vary the contract and claimed variation credits and compensation for delay. The court had to determine if these claims constituted a genuine dispute or offsetting claim under the relevant legislation. Additionally, the court examined whether an invoice for a final account could be considered a valid payment claim under the Building and Construction Industry Securities of Payment Act 1999 (NSW).
The court found that Jemzone Pty Ltd had indeed established a genuine dispute or offsetting claim. The court held that the claim for variation credits and compensation for delay was sufficient to invalidate the statutory demand. Furthermore, the court clarified that an invoice for a final account did not meet the criteria for a valid payment claim under the Building and Construction Industry Securities of Payment Act 1999 (NSW). The court reasoned that a valid payment claim must be a request for payment of an amount in respect of a breach of the building contract, not a final account statement.
In conclusion, the court set aside the statutory demand issued by Trytan Pty Ltd against Jemzone Pty Ltd. The court determined that Jemzone Pty Ltd's claims for variation credits and compensation for delay constituted a genuine dispute or offsetting claim, thereby invalidating the statutory demand. The court's decision underscores the importance of distinguishing between a final account and a valid payment claim under the relevant legislation.