My Casino Ltd v Papal
[2001] WASC 71
MY CASINO LTD -v- PAPAL [2001] WASC 71
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 71 | |
| 21/03/2001 | |||
| Case No: | COR:69/2001 | 14 MARCH 2001 | |
| Coram: | MASTER SANDERSON | 14/03/01 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | MY CASINO LTD (ACN 009 423 189) NICHOLAS PAPAL |
Catchwords: | Corporations Law Application to set aside statutory demand Turns on own facts |
Legislation: | Corporations Law, s 459H(1)(a), s 459H(1)(b) |
Case References: | Royal Premier Pty Ltd v Taleski [2001] WASCA 48 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
NICHOLAS PAPAL
Defendant
Catchwords:
Corporations Law - Application to set aside statutory demand - Turns on own facts
Legislation:
Corporations Law, s 459H(1)(a), s 459H(1)(b)
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr G K Paull
Defendant : Mr D H Schapper
Solicitors:
Plaintiff : Butcher Paull & Calder
Defendant : Derek Schapper
Case(s) referred to in judgment(s):
Royal Premier Pty Ltd v Taleski [2001] WASCA 48
Case(s) also cited:
Nil
(Page 3)
1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The application relies upon s 459H(1)(a) of the Corporations Law. The plaintiff says there is a genuine dispute with respect to the debt the subject of the demand. After hearing argument I indicated to the parties that I would dismiss the plaintiff's originating process and publish reasons at a later date. These are those reasons.
2 The statutory demand is to be found as annexure "JNA1" to the affidavit of Jonathan Neil Asquith, sworn 6 March 2001 and filed in support to this application. The amount in the statutory demand was $15,000. The defendant says in the affidavit accompanying the statutory demand that he was employed by the plaintiff in the capacity of General Manager - Marketing. He says he was employed until 7 November 2000 when he was given one month's notice and his contract was terminated. The defendant says that his entitlement under the terms of the contract was to be paid a salary of $7500 per month. He says that pursuant to the terms of the contract he was entitled to be paid for the months of January and February 2001 and has not been so paid. He says, therefore, that the plaintiff is indebted to him in the sum of $15,000.
3 Appearing as an annexure to the affidavit accompanying the statutory demand is a copy of the employment agreement between the plaintiff and the defendant. Clause 7 of that agreement is headed "Termination Right" and is in the following terms:
"Each party shall have the right to terminate this agreement and your employment hereunder on 30 days notice without any further obligations to the other, including any obligations under Pragraph 3 above except in the instance where the company terminates the contract prior to 1 April 2002. In the instance the company terminates the contract before 1 April 2002 for reason other than non compliance with the requirements of Paragraphs 4, 5 and 6 above, the company will pay the employee under the terms and conditions of this contract until 31 March 2002.
My Casino reserves the right to terminate this agreement without any further obligation to the employee, including any obligation under paragraph 3 and 7 above:
(a) the employee resigns his position;
(b) commits a criminal offence;
(Page 4)
- (c) My Casino terminates this contract due to employee misconduct, which may be deemed to be harmful to My Casino."
4 Paragraph 4 of the contract is headed "Duties and Responsibilities". There is no attempt to explain what the duties and responsibilities of the defendant actually are. All that the clause says is that "Those (duties) consistent with position/title". Paragraph 5 entitled "Exclusivity" requires that the defendant devote his business time exclusively to the company and its activities. Paragraph 6 entitled "Representations and warranties" warrants that the defendant is appropriately licensed with various gaming authorities, that there is no disability which would prevent the defendant carrying out his duties under the contract and at the time of entering into the contract he was under no obligation which would prevent him fulfilling his duties pursuant to the contract.
5 Also appearing as an annexure to the affidavit accompanying the statutory demand is a copy of the letter from the plaintiff to the defendant terminating the defendant's employment. Because of the importance of this letter I will quote it in full:
"Dear Nick
Employment Status
As we have discussed, due to the unexpectedly very low level of business in the casino it will not be possible for My Casino Limited to continue your current employment situation.
Accordingly this letter gives you one month's notice of discontinuation of your current employment.
We regret that this change is necessary. It was not in any way part of the company's anticipations when we commenced your employment.
We hope that My Casino and yourself will be able to arrange some other business relationships for the future. In particular we encourage you to consider some form of consultancy arrangements or commission structure that might be mutually beneficial and to make a proposal to us.
Yours faithfully
My Casino Ltd"
(Page 5)
6 At least two things are apparent from this letter. First, the plaintiff has terminated its contract with the defendant. That termination has come about by the plaintiff's repudiation of the contract and the defendant accepting that repudiation. Secondly, it is apparent from the terms of the letter that the defendant's employment was not terminated, and was not purported to be terminated, on the basis of clauses 4, 5 or 6 of the employment agreement. It is not alleged that the defendant failed to fulfil his duties and responsibilities. It is not suggested that he did not employ his time exclusively for the benefit of the plaintiff. It is not suggested that the defendant was in breach of any of the warranties contained in par 6. The letter makes it plain that the reason for the plaintiff's termination of the defendant's employment was the low level of business "in the casino". Prima facie then, the defendant is entitled to be paid his monthly salary until 31 March 2002. His employment was terminated before 1 April 2002 and it was not terminated pursuant to cl 4, cl 5 or cl 6 of the agreement.
7 So where then is the genuine dispute about the defendant's entitlement to be paid the $15,000 which he claims in the statutory demand? As I understand the plaintiff's position it is suggested that the defendant was dismissed from his employment because of a failure to properly carry out his duties and responsibilities. The evidence on this issue is to be found in par 7 and par 8 of Mr Asquith's affidavit. These two paragraphs are in the following terms:
"7. Whilst the letter referred to above (the letter evidencing the employment agreement between the plaintiff and the defendant) does not set out with any degree of specificity what Mr Papal's duties and responsibilities were, it is my belief that '(t)hose consistent with position/title' include contributing to the development of a marketing strategy, overseeing the ongoing implementation of that strategy, and acting in a senior role to develop contracts with influential people in the industry to ensure the recruitment of subscribers to the Plaintiff's website.
8. However, during the entire period of his employment the Plaintiff did not receive any substantial reports as to Mr Papal's activities in the position for which he was employed. Mr Papal identified no important new contacts or potential contacts beyond those referred to him by the Plaintiff. The result was that in almost five
(Page 6)
- months, and despite several overseas trips, Mr Papal failed to general any income for the Plaintiff whatsoever."
8 About that evidence, two things can be said. First, the letter terminating the defendant's employment makes no mention at all of any breach of cl 4 of the employment agreement. In other words, the plaintiff did not purport to terminate the defendant's contract on that basis. It is only if the defendant's employment was terminated on the basis of cl 4, cl 5 or cl 6 of the agreement that the entitlement to be paid the salary through to 31 March 2002 falls away. Nowhere in Mr Asquith's affidavit is it said that the letter sent to the defendant terminating his employment did not actually represent the basis upon which the employment was terminated. It is then very difficult to see how any genuine dispute arises.
9 The second difficulty with Mr Asquith's affidavit generally, and par 7 and par 8 in particular, is that detail is entirely lacking. Was there any discussion about what the defendant's duties and responsibilities were? Why is it said that he was responsible for developing a marketing strategy and within what timeframe was the marketing strategy to be completed? On what basis is it said that the defendant was to supply to the plaintiff with "substantial reports" on his activities? It is not possible from the evidence provided by the plaintiff to ascertain what the duties and responsibilities of the defendant were and how, if at all, the defendant breached those responsibilities and duties. The dangers of an affidavit failing to properly detail the basis of an alleged genuine dispute were highlighted by the recent Full Court decision of Royal Premier Pty Ltd v Taleski [2001] WASCA 48. In my view the evidence led by the plaintiff is not sufficient to establish that there is a genuine dispute as to whether or not the employment contract was terminated on the basis of a breach of cl 4 of the agreement.
10 Accordingly I am not satisfied that there is a genuine dispute which would justify setting aside the statutory demand under the provisions of s 459H(1)(a). Counsel for the plaintiff during the course of his submissions eschewed any reliance on s 459H(1)(b). In any event there is no material upon which it would be possible to calculate the amount of any offsetting claim and the statutory demand could not be set aside on that basis.
11 For these reasons I dismissed the originating process. The plaintiff should pay the defendant's costs of the application.
0