Leading Ceramics (Sales) Pty Ltd v Prime Chem Products Pty Ltd

[2008] NSWSC 341

CITATION:	Leading Ceramics (Sales) Pty Ltd v Prime Chem Products Pty Ltd [2008] NSWSC 341
HEARING DATE(S):	14/04/08
JUDGMENT DATE :	14 April 2008
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	14 April 2008
DECISION:	Statutory demand served on plaintiff by defendant set aside
CATCHWORDS:	CORPORATIONS - winding up - statutory demand - application for order setting aside - whether genuine dispute - no matter of principle
LEGISLATION CITED:	Corporations Act 2001 (Cth), s 459G
CATEGORY:	Principal judgment
PARTIES:	Leading Ceramics (Sales) Pty Limited - Plaintiff Prime Chem Products Pty Limited - Defendant
FILE NUMBER(S):	SC 6195/07
COUNSEL:	Mr J M Darvall - Plaintiff Ms K Watson, solicitor - Defendant
SOLICITORS:	Mercuri & Co - Plaintiff Karen Watson Meehans Solicitor Corporation - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

MONDAY 14 APRIL 2008

6195/07 LEADING CERAMICS (SALES) PTY LTD v PRIME CHEM PRODUCTS PTY LTD

JUDGMENT

1 The plaintiff makes application under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 3 December 2007 served on it by the defendant. The plaintiff maintains that there is a genuine dispute as to the existence of the relevant debt.

2 The debt or alleged debt the subject of the statutory demand is in the sum of $16,280 and relates to work done by the defendant on a building project known as Pomeroy at 14 Macleay Street, Elizabeth Bay.

3 Mr Zerilli, who swore the affidavit in support of the application for an order setting aside the statutory demand, points out that there existed at the relevant time two similarly named companies. One is the plaintiff called “Leading Ceramics (Sales) Pty Ltd”. The other is “Leading Ceramics Australia Pty Ltd”. I shall call these companies respectively "Sales" and "Aust".

4 Mr Zerilli was associated with both companies and says that Sales carried on the business of selling tiles by retail while Aust was in the business of installing or laying tiles.

5 It is the contention of the plaintiff that it was Aust not Sales (the plaintiff) that was engaged in the building work on the Pomeroy project. In support of that, reference is made to correspondence from Aust to the main contractor, AW Edwards, which grounds an inference that it was, indeed, Aust that was performing work on the project.

6 Mr Hayes was the project manager on the site. The evidence leaves in doubt the question of which company Mr Hayes was working for. He says that he was contracted by Mr Zerilli "who was the director of Leading Ceramics Australia Pty Ltd and Leading Ceramics Sales Pty Ltd".

7 There is an unsworn affidavit of Mr Hayes upon which it would be wrong to place any great weight at all, but that says that he was employed by Aust as project manager. There was also a statutory declaration of Mr Hayes which formed part of the statutory demand. That says that he was employed by Aust.

8 The defendant has adduced evidence showing that Mr Hayes, as project manager, billed Sales not Aust for his own services. Furthermore, the defendant has produced evidence that a subcontractor, Stone Plus, billed Sales not Aust.

9 The defendant makes the further point that until the statutory demand was served and these proceedings were commenced, the point had never before been taken that Sales was not the company indebted on the relevant invoices.

10 In an affidavit of 31 March 2008 Mr Hayes, the project manager to whom I have referred, says that he instructed the defendant to invoice Sales not Aust for work covered by certain invoices.

11 The task of the court on this application is not to decide the question of the existence of the debt alleged in the statutory demand. The task is rather to decide whether there is a genuine dispute as to the existence of the debt. As decided cases show, the threshold to be crossed by a plaintiff is not particularly demanding when, as I have said, the only question is whether a dispute exists.

12 The evidence that has been led in this case establishes, in my view, that there is a dispute, in that it is by no means clear which of the two similarly named companies actually retained the defendant to provide services. There are indications both ways in the evidence and the matter needs to be determined in other proceedings. Furthermore, I am satisfied that the dispute is genuine.

13 I therefore order that the statutory demand dated 3 December 2007 served on the plaintiff by the defendant be set aside.

(Counsel addressed as to costs.)

14 I order that the defendant pay the plaintiff's costs of the proceedings.

15 There is an application for an order that costs be assessed on the indemnity basis, having regard to a letter of 21 January 2008. The point is taken, and I think validly taken, that that letter was sent before the full picture had emerged in the evidence. The application for indemnity costs is refused.

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