Lynch v S.R.Lynch Management v SR Electronics - [2001] NSWSC 39

CITATION: Lynch v S.R.Lynch Management v SR Electronics [2001] NSWSC 39

CURRENT JURISDICTION: Equirty Division

FILE NUMBER(S): SC 4067/2001

HEARING DATE(S): 29/01/01

JUDGMENT DATE:
29 January 2001

PARTIES :

Lynch Management Group Pty Limited v SR Electronics Co Pty Limited

JUDGMENT OF: Master Macready at 1

COUNSEL : N.L. MCaffery for plaintiff
R. Pepper for defendant

SOLICITORS: Walker Madden Jenkins for plaintiff
Home Wilkinson & Lowry, Melbourne, for defendant

CATCHWORDS: Corporations Law. Application to set aside demand. Offsetting claim established and demand set aside. No matter of principle.

DECISION: Paragraph 16

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

MONDAY 29 JANUARY 2001

4067/00 - LYNCH MANAGEMENT GROUP PTY LIMITED -v- S.R. ELECTRONICS CO. PTY LIMITED

JUDGMENT

1 MASTER: This is an application under section 459G to set aside a statutory demand. The statutory demand was dated 5 September 2000 and claimed an amount of $29,927 as the amount due.

2 The amounts were due for the pressing of various CD items pursuant to an agreement between the plaintiff and the defendant. That agreement, which was drawn up by one of the parties, set out a number of terms of the arrangement, important ones being that under Product Manufacturing, one sees -

"The product moulding tool is the sole and exclusive property of LMG. Media Labs, as part of its agreement with LMG, is responsible for the installation and maintenance of the moulding tool and to ensure it is kept in optimum condition".

3 There is a further paragraph in these terms:

"Media Labs, in entering into this legally binding agreement with LMG, agrees to manufacture the product solely and exclusively for LMG. Any direct inquiry to Media Labs from any individual or company will be forwarded by LMG for appropriate action".

4 There is also provisions for meeting specifications and provisions for any product being faulty being replaced in full at no cost to the plaintiff.

5 Payment was thirty days from the end of the month in which the invoice was received.

6 There are said to be several areas in respect of which there is a dispute. In paragraphs 11 and 12 of the affidavit of Mr Lynch of 27 September 2000 there is a claim for both loss of profit and rectification costs in respect of the return of certain product items which were said to be faulty.

7 It would seem to me on a reading of those paragraphs, the product has been repaired and accordingly that the loss of profit claimed would not be a reasonable one which could be mounted.

8 The rectification costs are $2805 and $3987.50 in respect of those two claims. Those amounts are expressed in US dollars and it seems it is conceded there is a dispute in respect of those items. They also apparently appear to be referred to in the last four invoices which would seem to have been included in the statutory demand prematurely.

9 The last four items in…

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: [2001] NSWSC 39
Decision Date: 29 January 2001

CaseChat Overview and Summary

The case before the court involved a dispute between two companies, Lynch Management and SR Electronics, regarding a demand made by the former for payment of a debt. The court was asked to determine whether the demand should be set aside and whether an offsetting claim made by SR Electronics should be allowed. The matter was heard in the Supreme Court of Victoria.

The primary legal issue before the court was whether the offsetting claim made by SR Electronics was valid and could be used to set aside the demand for payment made by Lynch Management. The court had to consider whether there was a matter of principle that would prevent the offsetting claim from being recognised. Additionally, the court had to decide whether the claim was established and if it was appropriate to set aside the demand.

The court found that there was no matter of principle that would prevent the offsetting claim from being recognised. The court held that the offsetting claim was established and that it was appropriate to set aside the demand. The court reasoned that the offsetting claim was valid and that it was not necessary to consider whether there was a matter of principle that would prevent the claim from being recognised. The court found that the offsetting claim was established and that it was appropriate to set aside the demand, as the claim was valid and there were no other factors that would prevent the claim from being recognised.

The court set aside the demand made by Lynch Management and allowed the offsetting claim made by SR Electronics. The court held that there was no matter of principle that would prevent the offsetting claim from being recognised and that it was appropriate to set aside the demand. The court found that the offsetting claim was valid and that it was established. The court ordered that the demand made by Lynch Management be set aside and that the offsetting claim made by SR Electronics be allowed.

Orders