Pakall Industries (Qld) Pty Ltd v Jadhill Pty Ltd

[1998] QCA 55

IN THE COURT OF APPEAL	[1998] QCA 055
SUPREME COURT OF QUEENSLAND

Appeal No. 1342 of 1997.

Brisbane

[Pakall Industries (Qld) P/L v. Jadhill P/L]

BETWEEN:

PAKALL INDUSTRIES (QLD) PTY LTD
A.C.N. 010 009 168

(Applicant) Appellant

AND:

JADHILL PTY LTD A.C.N. 051 607 080

(Respondent) Respondent

___________________________________________________________________

Fitzgerald P.
McPherson J.A.

Pincus J.A.

___________________________________________________________________________

Judgment delivered 31 March 1998

Judgment of the Court

___________________________________________________________________________

APPEAL DISMISSED WITH COSTS
___________________________________________________________________________

CATCHWORDS: Corporations Law - statutory demand - appeal against dismissal of application to set aside - whether appellant had an offsetting claim - whether supporting affidavit required to show claim was genuine and the amount of the claim - whether a District Court plaint claiming damages and particulars sufficient where no evidence as to whether allegations in pleadings were true.

Corporations Law s. 459G, s. 459H

Counsel:	Mr K C Fleming Q.C. with him Mr J W Moore for the appellant. Mr M D Martin for the respondent.
Solicitors:	J K Smith for the appellant. Baker Johnson for the respondent.
Hearing date:	31 March 1998.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 1342 of 1997.

Brisbane

Before Fitzgerald P.

McPherson J.A.

Pincus J.A.

[Pakall Industries (Qld) P/L v. Jadhill P/L]

BETWEEN:

PAKALL INDUSTRIES (QLD) PTY LTD
A.C.N. 010 009 168

(Applicant) Appellant

AND:

JADHILL PTY LTD A.C.N. 051 607 080

(Respondent) Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 31 March 1998

This is an appeal against the dismissal of an application to set aside a statutory demand made

under s. 459E of the Corporations Law. The respondent was the lessor of premises let to the

appellant to enable the appellant to manufacture plastic bags and packaging materials. The claim the

subject of the demand related to monies said to be due under that lease for outstanding rental, the cost

of repairs and replacements, and interest.

The primary judge found that it was not disputed that rental of "something over $35,000" was outstanding and that it was not in dispute that other obligations of the appellant to the respondent relating to the lease amounted to "something over $14,000". By reason of the provisions of s. 459H of the

Corporations Law, then, it was necessary for the appellant, if it wished to obtain an order setting aside

the statutory demand to show that it had an "offsetting claim" of an amount which cannot be precisely

stated, on the findings mentioned, but must have been about $47,000. That is so because the

"substantiated amount" calculated in accordance with s. 459H(2) being, to put it shortly, the difference

between the amount due to the respondent and the amount of the appellant’s offsetting claim, had to be

reduced to less than $2,000 to entitle the appellant to an order setting aside the demand.

To establish its offsetting claim the appellant had to establish its genuineness, by reason of the

definition of "offsetting claim" in s. 459H(5). Under s. 459G(3) it was necessary that an affidavit be filed

supporting the application; that affidavit had to show not merely that there was a claim by the appellant

against the respondent, but that it was a genuine one and that it was one of the required amount.

The affidavits placed before the primary judge in support of the appellant’s application included

evidence that a parking area, being part of the premises leased by the appellant from the respondent,

had been damaged during construction work on neighbouring premises and that despite complaints the

damage was not repaired. There was also evidence of difficulty with a drainage system in the parking

area. There was, however, no evidence that the matters to which we have referred caused the appellant

loss amounting to $47,000, or indeed any loss at all.

When this difficulty was adverted to, in the course of argument before us, senior counsel for the appellant pointed out that the evidence before the primary judge included a plaint issued out of the District Court on behalf of the appellant against the respondent claiming $150,000 damages in respect

of the matters to which reference has been made - the damage to the surface of the parking area and

the drainage problem. There was also evidence, counsel pointed out, that particulars of that claim had

been delivered. There was no evidence as to whether or not the allegations in these pleadings were

true. Counsel for the appellant contended, as we understood the argument, that it was enough, in order

to show that the appellant had a genuine claim for the requisite sum, to prove that the problem with the

damage to the parking surface and drainage of that surface had occurred and then to prove that a

particularised claim of a sufficient sum had been made in a court relating to those matters.

It must be conceded that, in some circumstances, a problem might arise as to how far a

company applying to set aside a statutory demand must go with respect to proof of the amount of its

claim. Plainly, much less than full and complete proof would be sufficient, to establish genuineness. But

no such question arises here; there is simply no evidence, it must be reiterated, that the respondent’s

alleged contraventions of the lease caused the appellant any loss, let alone loss exceeding $47,000. The

genuineness of the $150,000 claim is unsupported by evidence; it is one thing to prove that a claim,

whether in a court or otherwise, has been made and quite another to prove that the claim is genuine.

To this point, the matter has been discussed on the basis that the appellant has no difficulty with

respect to the genuineness of its cause of action, as opposed to the amount; in truth, the appellant faces

an obstacle in that area also, but it is unnecessary to discuss it.

The appeal is dismissed with costs.