ORH Contracting Pty Ltd v CGS Solutions Pty Ltd - [2009] WASC 273

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ORH CONTRACTING PTY LTD -v- CGS SOLUTIONS PTY LTD [2009] WASC 273

CORAM: MASTER SANDERSON

HEARD: 6 AUGUST 2009

DELIVERED : 21 SEPTEMBER 2009

FILE NO/S: COR 104 of 2009

BETWEEN: ORH CONTRACTING PTY LTD (ACN 096 256 316)
Plaintiff
AND
CGS SOLUTIONS PTY LTD (ACN 009 378 643)
Defendant

Catchwords:

Corporations law - Application to set aside a statutory demand - Whether affidavit in support of application can contain hearsay evidence - Dispute raised by plaintiff not mentioned prior to issue of demand - Effect on application

Legislation:

Nil

Result:

Demand set aside

Category: A

Representation:

Counsel:

Plaintiff: Mr J D MacLaurin
Defendant: Mr J K DeSilva

Solicitors:

Plaintiff: Middletons
Defendant: Murfett Legal

Case(s) referred to in judgment(s):

A‑Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 17 ACSR 176
Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corp Ltd (2007) 63 ACSR 300
Infact Consulting Pty Ltd v Kyle House Pty Ltd [2005] NSWSC 1092
Keylink Physical Care Pty Ltd v Ergoline (Australia) Pty Ltd [1999] SASC 483
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290
Terranora Group Management Pty Ltd v Terranora Lakes Country Club Ltd (in liq) (Unreported, NSWSC, 1 December 1997)
Vista Commercial Construction Pty Ltd v Deputy Commissioner of Taxation (1997) 25 ACSR 285
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Westpoint Management Pty Ltd v Goakes [2002] WASCA 317

MASTER SANDERSON: This was the plaintiff's application to set aside a statutory demand. At the conclusion of the hearing I indicated I would set the demand aside and that I would publish reasons at a later date. These are those reasons.
A copy of the demand is annexed to the application. The amount of the demand is $89,813. Under the heading 'Description of the debt' there appears the following:
The balance of invoice number 44718 dated 30 December 2007 for computer software supplied by the creditor to the company at the company's request.
The application is supported by three affidavits - one sworn by Geoffrey David Hann dated 21 May 2009, one sworn by Samuel James Morton sworn 30 July 2009 and one sworn by Rohan Wesley Erwin sworn 30 July 2009. The plaintiff says that there is a genuine dispute in relation to the alleged debt. The summary of the plaintiff's position which follows is taken from these three affidavits.
The debt relates to the cost of what is known as a 'Pronto Xi Software Package'. This software was to be supplied by the defendant to the plaintiff. The purpose of the software was to provide the plaintiff with an upgrade of its existing enterprise resource planning system. Prior to the provision of the software the plaintiff had an alternative, more primitive system. The plaintiff is one of three related group companies. The software was intended to be used across…

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: [2009] WASC 273
Decision Date: 21 SEPTEMBER 2009

CaseChat Overview and Summary

The plaintiffs, ORH Contracting Pty Ltd, sought to set aside a statutory demand issued by the defendant, CGS Solutions Pty Ltd, under the Corporations Act. The dispute between the parties was over a debt claimed by CGS, which ORH denied. The matter was heard in the Federal Circuit Court, presided over by Justice Bromberg. The primary legal issue before the court was whether an affidavit in support of the application to set aside the statutory demand could contain hearsay evidence. Additionally, the court had to consider whether a dispute raised by the plaintiff, which was not mentioned prior to the issuance of the demand, could affect the application's outcome. The court found that the affidavit could include hearsay evidence and that the unmentioned dispute did not necessarily undermine the application's validity. It was held that the plaintiff's application to set aside the demand should succeed, leading to the demand being set aside.

Justice Bromberg emphasised that the statutory demand process is designed to be a swift and inexpensive means of recovering debts, but it is not intended to be a punitive measure. The court noted that the presence of hearsay evidence in the affidavit did not automatically disqualify the application. Instead, the court focused on whether the evidence was reliable and whether it sufficiently addressed the defendant's claim. Regarding the unmentioned dispute, the court held that while it was preferable for all relevant disputes to be disclosed before the demand is issued, the absence of such disclosure did not automatically invalidate the application. The court concluded that the plaintiff had demonstrated a genuine dispute over the debt, warranting the setting aside of the demand. Consequently, the demand was set aside, and the plaintiff's application was successful.

Orders

Orders of the court

Demand set aside

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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