Micar Group Pty Ltd v Insul-Trade LLC

[2010] NSWSC 1391

CITATION:	Micar Group Pty Ltd v Insul-Trade LLC [2010] NSWSC 1391
HEARING DATE(S):	8 November 2010
JUDGMENT DATE :	8 November 2010
JURISDICTION:	Equity
JUDGMENT OF:	White J
EX TEMPORE JUDGMENT DATE:	9 November 2010
DECISION:	1. Order that the originating process be dismissed. 2. Order that the plaintiff pay the defendant's costs. 3. Exhibits may be returned after 28 days.
CATCHWORDS:	CORPORATIONS – application to set aside statutory demand – whether applicant filed and served supporting “affidavit” for purposes of Corporations Act 2001, s 459G – where jurat not signed by attesting witness – whether oath administered – form of oath required – whether genuine dispute that debt owed – whether genuine dispute as to part of debt – whether parties were in partnership – whether debt by way of loan – whether offsetting claim based on misrepresentation – quantification of claim
LEGISLATION CITED:	Corporations Act 2001 (Cth) Oaths Act 1900 (NSW) Evidence Act 1995 (NSW)
CASES CITED:	David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265 Fastlink Calling Pty Ltd v Macquarie Telecom Pty Ltd [2008] NSWSC 299; (2008) 217 FLR 366 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785; (1994) 12 ACLC 669 Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 In Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560
PARTIES:	Plaintiff: Micar Group Pty Ltd Defendant: Insul-Trade LLC
FILE NUMBER(S):	SC 2010/310496
COUNSEL:	Plaintiff: J Dupree Defendant: P Reynolds
SOLICITORS:	Plaintiff: Russo & Partners Defendant: Clayton Utz

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

WHITE J

Tuesday, 9 November 2010

2010/310496 Micar Group Pty Ltd v Insul-Trade LLC

JUDGMENT

1 HIS HONOUR: This is an application to set aside a statutory demand dated 24 August 2010.

2 In the statutory demand, the defendant demanded payment of the debt of US$271,475.12 said to be due for goods sold and delivered by the defendant to the plaintiff arising from or as denoted in seven tax invoices issued by the defendant to the plaintiff plus interest.

3 There is no issue in this application that a debt payable in a foreign currency may be a debt for the purposes of s 459E of the Corporations Act 2001 (Cth) which can be the subject of the statutory demand.

4 Section 459G provides:

“ 459G Company may apply
(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.
(2) An application may only be made within 21 days after the demand is so served.
(3) An application is made in accordance with this section only if, within those 21 days:
(a) an affidavit supporting the application is filed with the Court; and
(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company. ”

5 The defendant takes a preliminary objection that the plaintiff did not file and serve an affidavit within 21 days as required by s 459G. If that objection is well founded, it is fatal to the present application (David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265).

6 Whilst the plaintiff filed and served its originating process together with a supporting document described as an affidavit of the plaintiff's director, Mr Michael Rosier, the defendant contends that the document was not, in truth, an affidavit.

7 The document bears the heading "Affidavit of Michael Rosier sworn 17 September 2010". It is signed by Mr Rosier at its foot against the statement "sworn at Arcadia on September 2010".

8 Underneath that statement there appears the following:

“ Before me
Salvatore Russo
Solicitor (11245) ".

9 Mr Russo did not attest Mr Rosier's signature, although he initialled the annexures to the affidavit stating that it was an affidavit sworn on 17 September 2010.

10 In Fastlink Calling Pty Ltd v Macquarie Telecom Pty Ltd [2008] NSWSC 299; (2008) 217 FLR 366, Barrett J dealt with the question of whether a document signed by an officer of the plaintiff was an affidavit for the purposes of s 459G where the jurat was not signed by the solicitor. His Honour observed that failure to complete the jurat was a mere irregularity if in fact an oath or affirmation was administered (at [41]).

11 His Honour said (at [15]-[19]):

“[15] No statute of New South Wales deals comprehensively or exhaustively with the procedures involved in the creation of affidavits. The Oaths Act 1900, to which reference will be made presently, presupposes certain principles of the unwritten law and builds upon them. It is to those principles that I now turn.

[16] Bacon’s Abridgement (Matthew Bacon, “ A New Abridgement of the Law ”, London 1832), at p 124, defines or describes an affidavit as follows:

An affidavit is an oath in writing, signed by the party deposing, sworn before, and attested by him who hath authority to administer the same.

[17] An oath was central to an affidavit. An affidavit usually began:

I [name] of [address], [occupation], being duly sworn make oath and say as follows:
[18] The jurat at the end was typically:

Sworn at [place] this [day] of [month] in the year [year], Before me.

[Signature and designation of person administering oath]

[19] The deponent’s oath, essential to the character of a written statement as an affidavit, was administered by the administering official’s instructing the deponent to take the Bible in his or her hand and to say the words:

I swear by Almighty God that this is my name and handwriting and that the contents of this my affidavit are true.”

12 The question whether the document signed by Mr Rosier is an affidavit therefore turns on whether the document was made by him on oath before the person, namely Mr Russo, who had authority to administer the oath.

13 There is no question of Mr Russo's authority to administer an oath (Oaths Act 1900 (NSW), s 27). The question is whether he did so.

14 Mr Russo gave evidence that Mr Rosier signed the documents in his presence. He asked Mr Rosier whether he (Mr Rosier) swore its contents to be true and correct. Mr Rosier said that they were.

15 In cross-examination Mr Russo said that he may have added the words "so help you God", although I did not understand him to have a particular recollection of having done so on this occasion.

16 Mr Russo said that it was his practice to do so, but in his evidence in chief he did not refer to having done so.

17 Mr Rosier, who had been in Court, did not give evidence as to how any oath was administered.

18 I am not satisfied that the words "so help you God" were added.

19 Mr Russo did not administer the oath using the Bible. He did not administer the oath in the form in Schedule 1 to the Evidence Act 1995 (NSW) by asking whether the affidavit was the truth, the whole truth and nothing but the truth. He did, however, ask Mr Rosier not only whether he stated the contents of the affidavit to be true and correct, but whether he swore that they were true and correct.

20 Section 21(1) and (4) of the Evidence Act provides:

“ 21 Sworn evidence to be on oath or affirmation

(1) A witness in a proceeding must either take an oath, or make an affirmation, before giving evidence.
...
(4) The witness is to take the oath, or make the affirmation, in accordance with the appropriate form in Schedule 1 or in a similar form.
...”

21 Section 24(1) of the Evidence Act provides that it is not necessary that a religious text be used in taking an oath.

22 Section 24A provides:

“ 24A Alternative oath

(1) A person may take an oath even if the person’s religious or spiritual beliefs do not include a belief in the existence of a god.
(2) Despite anything to the contrary in this Act, the form of oath taken by a person:
(a) need not include a reference to a god, and
(b) may instead refer to the basis of the person’s beliefs in accordance with a form prescribed by the regulations.
Note. The Commonwealth Act does not include an equivalent provision to section 24A. ”

23 No form has been prescribed by the regulations for the purposes of s 24(A)(2)(b).

24 It is implicit in s 24A that the form of oath to be taken for the purposes of the Evidence Act is either to include a reference to a God or to the basis of the person's beliefs.

25 Section 21(4) requires a witness taking an oath to take the oath in accordance with the appropriate form in Schedule 1 or a similar form.

26 The form for an oath by a witness in Schedule 1 is:

“ I swear [or the person taking the oath may promise] by Almighty God (or the person may name a God recognised by his or her religion) that the evidence I shall give will be the truth, the whole truth and nothing but the truth ".

27 As I have said that was not the form of oath administered by Mr Russo, nor was the form of oath he administered, in my view, in a similar form to that prescribed by Schedule 1.

28 However, that is not the end of the matter. In my view, the question whether the document is an affidavit for the purposes of s 459G of the Corporations Act is not to be answered solely by reference to whether or not an oath is administered in accordance with the Evidence Act.

29 Section 8 of the Evidence Act provides that:

“ This Act does not affect the operation of the provisions of any other Act ".

30 Section 11A of the Oaths Act 1900 provides:

“ 11A Manner of taking oath

(1) Any person taking any oath on the Bible or on the New Testament, or the Old Testament, for any purpose whatsoever, whether in judicial proceedings or otherwise, shall, if physically capable of doing so, hold a copy of the Bible or Testament in his or her hand, but it shall not be necessary for the person to kiss such copy by way of assent.
(2) The officer administering the oath may repeat the appropriate form of adjuration, and the person taking the oath shall thereupon, while holding in his or her hand a copy of the Bible, New Testament, or Old Testament, indicate his or her assent to the oath so administered by uttering the words ‘So help me, God’ ; or
(3) The person taking the oath may, while holding in his or her hand a copy of the Bible, New Testament, or Old Testament, repeat the words of the oath as prescribed or allowed by law.
(4) In all judicial proceedings the officer administering the oath shall, unless the person about to take the oath voluntarily objects thereto, administer the oath in the form and manner set out in subsection (2); but no oath shall be deemed illegal or invalid by reason of any breach of the provisions of this section.
(5) Provided that any witness in any judicial proceeding may swear with up-lifted hand in the following manner and form:
The witness with uplifted hand says— ‘I swear by Almighty God as I shall answer to God at the Great Day of Judgment that I will speak the truth, the whole truth, and nothing but the truth.’

(6) Provided also that:
(a) an oath may be administered and taken in any form and in any manner which would have been lawful if this section had not passed,
(b) every oath shall be binding for all purposes for which it is administered and may be taken in any form and in any manner which the person taking the same declares to be binding,
(c) where an oath has been administered and taken, the fact that the person taking the same had at the time no religious belief shall not for any purpose affect the legality or validity of the oath. ”

31 It follows from s 11A(6)(a) that whilst subsections (1), (2) and (3) of s 11A require a person taking the oath who is physically capable of doing so to hold a copy of the Bible or Testament, that is not a prerequisite to the valid administration of the oath. That is so because s 24 of the Evidence Act provides that it is not necessary that a religious text be used.

32 Section 24 of the Evidence Act is given effect in this way through paragraph 11A(6)(a) of the Oaths Act.

33 The effect of s 11A(6)(a) is also that an oath may be administered and taken in any form that would be lawful at common law and still be an oath.

34 Moreover, by s 11A(6)(b) the oath may be taken in any form and in any manner that the person taking the same declares to be binding.

35 As appears from the form of oath described by Barrett J in Fastlink Calling Pty Ltd v Macquarie Telecom Pty Ltd at [19], an affidavit, at least at common law, was sufficiently sworn if the deponent swore by Almighty God that the contents of the affidavit were true.

36 Save for the omission of an express reference to swearing by Almighty God, that is the form of oath that Mr Russo administered to Mr Rosier.

37 It is, in any event, implicit in Mr Rosier's confirming that he swore the contents of the affidavit to be true and correct, and not merely stating that they were, that Mr Rosier was confirming the truth of the document by reference to God or a sacred being or object. (See the definition of "swear" in the Macquarie Dictionary.)

38 He sufficiently declared his oath to be binding on him.

39 Accordingly, although the form of oath was not in accordance with the Evidence Act and Mr Rosier did not swear on the Bible, I consider that he did swear to the truth of the contents of the document and that, accordingly, the document was his affidavit within the meaning of s 459G.

40 The preliminary objection fails.

41 The remaining issues are whether or not there is a genuine dispute that the plaintiff owes the defendant the debt the subject of the statutory demand, whether there is a genuine dispute as to part of the debt, or whether the plaintiff has an offsetting claim within the meaning of s 459H.

42 On an application to set aside a statutory demand, including an application based on an offsetting claim, the question for the court is whether there is a genuine dispute as to the debt, or whether the company has a genuine claim by way of counter-claim, set-off or cross-demand. It is not a function of the Court on such an application to resolve the merits of such a claim as distinct from determining whether the claim is genuine (Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787-788; (1994) 12 ACLC 669 at 671-672; Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 at 605).

43 In Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743, Palmer J said that for an offsetting claim to be genuine it must be advanced in good faith and in this context "good faith" means arguable on the basis of the facts asserted with sufficient particularity to enable the court to determine that the claim is not fanciful. To establish a genuine claim for unliquidated damages it is incumbent on the plaintiff to adduce evidence to show the basis on which the loss is said to arise and how the loss is calculated.

44 His Honour said that if such evidence were lacking, the court could not find there was a genuine offsetting claim for the purposes of s 459H.

45 In Elm Financial Services v MacDougal [2004] NSWSC 560 Barrett J added (at [19]) that it is sufficient for the company to establish a plausible and coherent basis for asserting a claim to a sum which despite elements of uncertainty can be seen, in any event, to be greater than the amount of the debt the subject of the statutory demand or, it might be added, if the demand is to be reduced by an offsetting claim, if it can be seen that the claim is for a sum more than a particular minimum.

46 The defendant, Insul-Trade LLC, or a related company of the defendant, Thermafiber Inc, manufactured and sold to the plaintiff a product called a mineral wall product used as wall insulation.

47 Both the defendant and Thermafiber Inc are based in the United States.

48 Mr Rosier dealt primarily with a Mr Austin Hess, who has described himself as the Business Development Manager of the defendant and appears also to have been the Business Development Manager of Thermafiber Inc.

49 From early July 2009 the plaintiff approached either the defendant, as Mr Rosier deposed to in his affidavit of 17 September 2010, or Thermafiber Inc, with a view to the plaintiff's being supplied with insulation ceiling batts.

50 In his first affidavit, Mr Rosier deposed that the defendant advised the plaintiff that it would be able to source the product from another supplier. That supplier was another United States company called Johns Manville, which manufactures fibreglass insulation products in California.

51 According to Mr Rosier, he was told by Mr Hess that Johns Manville would appoint no more than four distributors of its ceiling batt products in Australia. He deposed that between 29 September and 11 October 2009 the plaintiff placed orders with the defendant for the supply of ceiling batts.

52 Mr Rosier contended that the plaintiff made a considerable effort to market and obtain pre-sales of the product and in doing so relied on a promise or representation by the defendant that Johns Manville would appoint only four distributors.

53 Subject to the effect of an email of 9 January 2010 (referred to later in these reasons), there is no dispute about the price or trading terms for the goods ordered by the plaintiff.

54 The statutory demand claims debts said to be payable pursuant to invoices dated between 12 October 2009 and 13 November 2009.

55 Each of the invoices includes a statement:

“ For a copy of our ‘Standard Terms and Conditions for Sale’, visit our website ".

56 The terms and conditions on that website include a term for the payment of interest if payments are not received by the due date.

57 The statutory demand includes a claim for interest.

58 No ground of dispute was raised either in the affidavit supporting the originating process or in final submissions that if the debt were otherwise payable, interest was also payable on the debt.

59 On 16 October 2009, Mr Rosier complained to Mr Hess that in trying to market the product, the plaintiff found that prospective customers were contacting other distributors of the Johns Manville products from Florida. His complaint was that the plaintiff's prices were being undercut by customers sourcing product through other distributors.

60 On 2 November 2009 the plaintiff advised the defendant that on the previous day the Australian Government had reduced its subsidy to homeowners for the installation of ceiling insulation. Mr Rosier advised that as installers were re-assessing their requirements, the plaintiff needed to make alternative plans. He stated that shipments not already loaded needed to be placed on hold immediately.

61 The plaintiff's counsel made no submission that the plaintiff had any contractual right to cancel or postpone delivery of goods that had been ordered and there is no material to support any such right.

62 On 3 November 2009 Mr Hess stated that if "we" cancel an order for ten containers which had been placed with Johns Manville and which were due to be delivered that week, there would be major trouble with Johns Manville. Mr Hess told Mr Rosier:

“ If you want to be able to sell JM products in the future, we need to keep our word on these 10 containers. After we talk, we can likely put a hold on next week's orders ".

63 Mr Rosier made a note that Mr Hess had called and said that:

“ We need to continue to work together and considering the programme will restart he’ll do whatever necessary with the ... containers and pricing.
Told him pricing in the market place was well below our cost ".

64 Mr Rosier deposed that after this email exchange, he had the following conversation with Mr Hess:

“ 25. Upon receipt of annexure ‘K’ I telephoned Austin Hess, a representative of the Defendant, and had a telephone conversation with him using words to the following effect:
Rosier: ‘Austin, with the rebate reduced it will be difficult to sell the products’
Austin: ‘We need to continue to work together considering the program (insulation program) will restart. We have also put a lot of effort into this. We will do whatever is necessary to deal with the unallocated containers and pricing.
Rosier: ‘We may not be able to sell them because the pricing in the market place will be well below our cost price. As we have advised over the past three weeks other Agents are selling below our cost.’
Austin: ‘We will deal with that when we have to. Like I said with the program restarting you should be able to move these shortly.’
26. Further discussions took place regarding reduction of the sale price in order to be able to clear the stock. On or about 8 November 2009 I telephoned Austin Hess and had a conversation with him to the following effect:
Rosier: ‘Austin we have [sic] both going to lose money in this as we won’t be able to sell the product for the current price given the oversupply of the product in the market.’
Austin: ‘Mike we are both going to make some profit even with the changes in the rebate’
Rosier: ‘If the product had arrived when it should have we would have been able to clear most of the stock. But because its a mess we are stuck with it’
Austin: ‘Don’t worry we are partners in this venture and we will sort it out’
Rosier: ‘Austin you can appreciate our frustration when not even one container has arrived’
27. The dispute in respect of the number of distributors supplying the product in the market place continued to escalate and on or about the 10 November 2009 I had a telephone conversation with Austin Hess using words to the following effect:
Rosier: ‘Austin, we need to have a meeting with JM [meaning Johns Manville] about what they are doing’
Austin: ‘We are going to have a meeting with them and sort it out’
Rosier: ‘We want to be there’
Austin: ‘No we don’t want you there’
Rosier: They have to understand the damage they have created by appointing other distributors’
Austin: We will try and sort it out’
Rosier: ‘How are we going to be able to sell this product if they keep undercutting us and selling to third parties all the time?’
Austin: ‘Don’t worry we will sort it out’”

65 It is not a plausible contention that if, as Mr Rosier deposed, Mr Hess stated “Don't worry we are partners in this venture and we will sort it out" the parties were partners in the legal sense of carrying on business in common with a view of profit. Some of the correspondence attests to the fact that both Mr Rosier and Mr Hess expected or hoped to make profits from the business, but there is no evidence of any agreement to share profits or losses. The parties carried on their separate businesses from which each hoped to make profit. Their relationship was as seller and buyer. The plaintiff was liable to pay the price of the goods it had contracted to buy. The plaintiff pressed for a re-adjustment of prices to reflect its difficult trading conditions. The defendant was receptive to this request.

66 On 19 December 2009, Mr Hess wrote to Mr Rosier stating:

“ ... Thermafiber will continue to work with you on all JM products for 2010. We are not making much money on these materials, but we need this business, because our US outlook is not good for 2010. We will share all cost information with you moving forward and discuss margins together. We have invested too much time and effort to walk away. We will continue our direct relationship with JM through 2010. After 2010 we will exit the business and recommend to JM that they sell you [sic] direct ".

67 Mr Hess then gave Mr Rosier details of Thermafiber's costs and advised that, on the latest prices to the plaintiff, he had placed a ten per cent margin on those costs.

68 He said that as soon as Johns Manville gave lower pricing to Thermafiber, he would share those costs with the plaintiff.

69 On 9 January 2010 Mr Hess sent an email to Mr Rosier to recapitulate or summarise discussions held between the parties the previous day. He said:

“ Here is a recap of what we discussed yesterday:
1. You have containers in the following locations:

a. 2 = Adelaide (These were to be sold yesterday or today)
b. 5 = Melbourne (These were committed to before Christmas and you expect them to be sold next week)
c. 17 = Sydney (These containers are unsold)
2. Next week you will wire us the invoiced amount for the 5 containers in Melbourne and 2 containers in Adelaide.
3. We will agree to sell you the 17 unsold containers in Sydney at our cost to help you sell all of them by the end of this month.
a. Our cost for each of the containers in Sydney:
[the defendant's costs were then set out]
4. You will wire us money for each container in Sydney as soon as it is sold.
... We are willing to work with you and make no money on the 17 unsold containers in order for you to sell them quickly and get us our money. It is critical that we are paid all of our money before the end of January due to the financial audit that we are facing. Mike will also discuss with JM a meeting in Willows with you to lay out a plan to move forward with AGM as a key distributor with support from JIM in Australia. “

70 The defendant accepts that the unpaid invoices the subject of its statutory demand are for the stock in the 17 containers described in this email as "17 unsold containers in Sydney".

71 In final submissions, the plaintiff's counsel identified the following grounds as giving rise to a genuine dispute or offsetting claim.

“ 21. It is submitted that the following matters have been shown with a sufficient degree of cogency to be arguable:
i. It appears clearly arguable that the parties to the rockwool arrangement and the fibreglass batt arrangement appear to be the Plaintiff and ThermaFiber Inc and not the Defendant;
ii. It appears arguable that the Plaintiff and ThermaFiber Inc are companies carrying on a business in common with a view to profit;
iii. It appears that ThermaFiber held out to a third party, namely Johns Manville, that the Plaintiff was Thermafiber partner and tthat the Plaintiff was ‘... our folks in Australia ...’ whereby joint enterprise is suggested;
iv. It is arguable that ThermaFiber Inc has borrowed monies and that the true nature of Thermafiber Inc claim is in the nature of a loan;
v. It is arguable that the Defendant has no debt on which to base the demand
22. It is submitted that there is a genuine dispute between the Plaintiff and the Defendant as to the existence of the debt claimed in the demand;
23. It is submitted that there is a genuine dispute as to the amount of the debt claimed in the demand;
24. It is submitted that the Plaintiff has an arguable offsetting claim pursuant to the arguable partnership with right of dissolution of the partnership the appointment of a receiver of partnership assets and an inquiry after surcharging and falsification and further in respect of the breach resting on the factual matter of the number of agent/distributors and further in respect of the claim that ThermaFiber had borrowed funds. ”

72 Counsel also submitted on the basis of the email of 9 January 2010 that no debt was payable until the stock in the 17 containers was sold.

73 These contentions are either not raised in the plaintiff's supporting affidavit filed and served within the 21-day period, or raise no genuine dispute about the debt or offsetting claim, or both.

74 It is, of course, firmly established that an applicant under s 459G must raise the grounds for the application in the supporting affidavit. Those grounds may be raised either expressly or by reasonable inference, provided that they are raised. If the grounds are raised they can be amplified in evidence served outside the 21-day period, but it is essential that the grounds be raised by an affidavit served within that period.

75 The first ground of dispute is that the plaintiff says that it dealt not with the defendant but with Thermafiber Inc so that any debt is owed to that company and not to the defendant.

76 In support of his contention that that ground was raised in the supporting affidavit, counsel referred to the correspondence annexed to the affidavit with Mr Hess, in particular his email correspondence at an address at Thermafiber.com.

77 Nonetheless and notwithstanding that correspondence, this ground of dispute is not raised in the supporting affidavit. Instead, in that affidavit Mr Rosier deposed:

“ 4. In March 2009 the Plaintiff became aware of a range of products which were being sold by the Defendant. By early June 2009 the Plaintiff became aware that the Defendant could supply ceiling batts.

5. In early June 2009, there were conversations between the Plaintiff and the Defendant in respect of the possible supply of product to the Plaintiff for sale in Australia ".

78 He then deposes to certain conversations which he said were advice from the defendant. He described Mr Hess as being the duly authorised representative of the defendant.

79 In paragraph 11 Mr Rosier deposed that shortly after a conversation on 21 September 2009:

“ ... I accepted, on behalf of the Plaintiffs [sic], the Defendant's representation as to the number of distributors who were authorised in Australia ... ".

80 In paragraph 12 he deposed that between 29 September and 11 October orders were placed "with the Defendant for the product". He deposed that each of the shipments were "shipped by the Defendant".

81 In his affidavit, Mr Rosier identified the correspondence to and from Mr Hess at Thermafiber Inc as being correspondence from the defendant.

82 He concluded his affidavit by saying that the plaintiff denied that it had any liability to the defendant for the following reasons:

“ 43. In respect of the allegations made by the Defendant in paragraphs 1, 3, 5 8 and 9 of annexure ‘B’ the Plaintiff denies it has any liability to the defendant for the following reasons:
a. A dispute exists between the parties due to a breach by the Defendant in the agreement in relation to the number of distributors which had been appointed.
b. A dispute exists in relation to the price to be paid for the product.
c. A dispute exists in relation to the terms of payment, that being that no payment is due or payable until such time as the product is sold.
d. A dispute exists in relation to the ongoing and continuing breach of agreement by the Defendant to provide product as and when agreed. ”

83 There is no suggestion in the affidavit that the plaintiff contended that any debt was owed not to the defendant, but to Thermafiber Inc. Nor is this a matter genuinely in dispute.

84 There is no evidence that the plaintiff alleged at any time that the invoices were sent by the wrong party. To the contrary, the plaintiff agreed to provide, and on 27 January 2010 did provide, a letter of credit for US$179,141.02 in favour of the defendant. This sum was the amount that would have been payable by the plaintiff in accordance with the terms of Mr Hess' email of 8 January 2010 set out above on the sale of 17 containers, plus outstanding invoices for five containers in Melbourne. That letter of credit expired on 28 February 2010 without being called on. But the fact that it was provided to the defendant indicates that there is no genuine dispute about the contracting parties.

85 The second ground advanced in final submissions is based upon the allegation of partnership.

86 I understand the plaintiff's contention to be that the parties were partners or joint venturers, such that, implicitly, the plaintiff was not liable to pay the purchase price of goods sold to it by the defendant, but rather the defendant, or perhaps Thermafiber Inc, arranged for delivery of the goods to the plaintiff for the plaintiff to sell on behalf of both parties, presumably, with there being an agreement to share profits or losses from the joint endeavour.

87 However, there is simply no evidence that that was the arrangement.

88 Plaintiff's counsel referred to correspondence from Mr Hess to Johns Manville of 12 February 2010 and 16 October 2009.

89 In the earlier communication Mr Hess said to Johns Manville:

“ Our partners in Australia are working very hard to promote the JM product and we need some protection so that the people they are promoting your products to, can't go around us ".

90 In another email of 19 October 2010 [check] to Johns Manville Mr Hess described the plaintiff as "our folks in Australia".

91 In the email of 12 February 2010 he described the plaintiff as "our sole distributor".

92 None of these references indicates a legal relationship of partnership.

93 It is not seriously arguable that the loose use of the word "partner" to describe a distributor with whom the defendant was doing business connotes the relationship of partnership, rather than buyer and seller.

94 I do not think there is a genuine dispute on this ground.

95 The next ground raised is that any debt was not for goods sold or delivered, but was by way of loan.

96 No such ground of dispute was raised in the supporting affidavit and on this ground alone the contention would fail. However, there is no substance to it.

97 The basis for the contention in paragraph 21(iv) of counsel's submission is that in an email of 24 February 2010 (not annexed to Mr Rosier's first affidavit), Mr Doug Mayes, the Chief Financial Officer of the defendant, stated to the plaintiff:

“ I understand you are in a difficult market now and your government is changing its programs, but I cannot continue to pay our bank interest on the funds I have had to borrow to cover your purchases ".

98 He went on to say:

“ I need a commitment and a payment plan from you to pay us the balance due ".

99 When read in context, the reference to the defendant paying interest on funds it had to borrow to cover the plaintiff's purchases is clearly a reference to its having borrowed to pay a debt it owed to Johns Manville for the goods it ordered to supply to the plaintiff.

100 I turn then to the ground that there was an agreement recorded in the e-mail of 9 January 2010 that no debt would be payable until the goods in question were sold by the defendant.

101 The proposal in the email was a proposal to help the plaintiff sell the containers by the end of January. The receipt of money by the end of that month was said by Mr Hess to be critical. It may be, as the defendant's counsel contended, that there was no consideration to vary the terms of trade. However, questions of consideration raise difficult questions of law which are not usually suitable for determination on an application under s 459G.

102 I am prepared to assume, without deciding, that the promises in the email of 9 January 2010 were binding. However, it is not reasonably arguable that the email of 9 January 2010 contains an agreement to vary the terms of trade so that the price for the unsold containers would only become payable when the containers were sold, irrespective of when the containers were sold.

103 At best from the plaintiff's perspective, the email records an agreement by the defendant to forebear from claiming the full price of the goods if the cost price of the goods, that is, the cost price to the defendant, were remitted to it by the end of January. That was not done.

104 Moreover, there was no evidence in the plaintiff's supporting affidavit that the goods in question had not been sold, and I doubt that this ground of alleged dispute is in any event sufficiently raised in the supporting affidavit.

105 In final submissions the plaintiff's counsel did not contend that the plaintiff had a genuine offsetting claim to unliquidated damages because Johns Manville appointed more than four distributors of its product.

106 It was not a contractual term between the plaintiff and the defendant that only four such distributors would be appointed by Johns Manville, although there is a serious question that the defendant made a representation to that effect. There may be a serious question for enquiry as to whether there were reasonable grounds for such a representation. I would assume that that would be a plausible question for investigation.

107 Nonetheless, there is no evidence that the plaintiff has any quantified claim in consequence of any misrepresentation by the defendant.

108 To maintain such an offsetting claim, it would be incumbent on the plaintiff to adduce evidence to show what loss it had suffered and how that loss was calculated. There was no such evidence. Nor, in any event, was such a case propounded in final submissions.

109 For these reasons, the plaintiff has not shown that there is a genuine dispute as to the debt claimed or that it has an offsetting claim.

110 I order that the originating process be dismissed.

111 I order that the plaintiff pay the defendant's costs.

112 The exhibits may be returned after 28 days.

******