Parkes Terminal Land Corporation Pty Ltd v Cambridge Integrated Services Australia Pty Ltd

[2008] NSWSC 211

CITATION:	Parkes Terminal Land Corporation Pty Ltd v Cambridge Integrated Services Australia Pty Ltd [2008] NSWSC 211
HEARING DATE(S):	10/03/08
JUDGMENT DATE :	13 March 2008
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Statutory demand set aside
CATCHWORDS:	CORPORATIONS - winding up in insolvency - statutory demand - application for order setting aside - genuine dispute - no matter of principle
LEGISLATION CITED:	Corporations Act 2001 (Cth), ss 459G, 459H
CATEGORY:	Principal judgment
CASES CITED:	Graywinter Properties Pty Ltd v Gas and Fuel Corporation Super Fund (1996) 70 FCR 452
PARTIES:	Parkes Terminal Land Corporation Pty Ltd - Plaintiff Cambridge Integrated Services Australia Pty Ltd as agent for the Workers Compensation Nominal Insurer - Defendant
FILE NUMBER(S):	SC 4821/07
COUNSEL:	Mr G B Carolan - Plaintiff Mr J C Giles - Defendant
SOLICITORS:	North Shore Lawyers - Plaintiff Premium Advisory Pty Ltd - Defendant

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

BARRETT J

THURSDAY, 13 MARCH 2008

4821/07 PARKES TERMINAL LAND CORPORATION PTY LTD v CAMBRIDGE INTEGRATED SERVICES AUSTRALIA PTY LTD

JUDGMENT

1 The plaintiff makes application under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 10 September 2007 served on it by the defendant.

2 The debt the subject of the statutory demand is described in its schedule as follows:

“

Amount
Pursuant to Balance of Judgment in the Local Court at North Sydney on 1st August 2007 in the sum of $3,650.18	$3,650.18
Plus Workers Compensation Premium for the policy period 03-02-2007 to 04-02-2008 due 17-05-2007 for the amount of $2,897.61	$2,897.61
Plus Late Payment Fee $127.56	$ 127.56
Total outstanding:	$6,675.35

“

3 Although the first item in this schedule refers to “Balance of Judgment” in the sum of $3,650.18, the evidence shows that that was the full amount of the Local Court judgment.

4 The plaintiff maintains that there exists a genuine dispute as to the amount of the debt to which the statutory demand relates. In thus raising the ground referred to in s 459H of the Act, the plaintiff relies on two particular matters. First, the plaintiff has produced evidence that the judgment in the Local Court referred to in relation to the sum of $3,650.18 was, on 30 November 2007, set aside by that court. Second, the plaintiff has produced evidence that on 31 October 2007 the defendant invoiced the plaintiff $175.00 as premium for the period 4 February 2007 to 4 February 2008 (the period referred to in the second item in the statutory demand), with the invoice fixing a due date of 30 November 2007 for payment.

5 The defendant raises the preliminary point, based on Graywinter Properties Pty Ltd v Gas and Fuel Corporation Super Fund (1996) 70 FCR 452, that the grounds the plaintiff seeks to advance in support of its genuine dispute case are not discernible from the affidavit filed within the period of 21 days referred to in s 459G, being the affidavit of Mr Smith sworn on 3 October 2007. There is an affidavit of the plaintiff’s solicitor, Mr Holmes, but that affidavit (sworn on 13 February 2008) was not filed within the relevant period of 21 days.

6 The Graywinter objection cannot be sustained, so far as the plaintiff seeks to rely on a dispute as to the existence of a debt in the sum of $3,650.18. Paragraphs 22 to 25 of Mr Smith’s affidavit squarely raise that matter by referring to default judgment, the intention to apply to have that judgment set aside and by annexing the application to have the judgment set aside and the defence proposed to be filed in the Local Court. The affidavit also puts in issue the question of any indebtedness at all, in a manner I shall mention presently.

7 As to the second matter (the apparent decision by the defendant, in October 2007, to reduce the premium for the year from 4 February 2007 to 4 February 2008 from $2,897.61 to $175), the submission made on behalf of the plaintiff is that the matter is covered by the whole of Mr Smith’s affidavit, the general thrust of which is that the plaintiff’s dealings with its insurance brokers were such that it never entered into any contract of insurance with the defendant. I accept that submission. Mr Smith’s affidavit raises as an issue the existence of any contract, including a contract that the defendant might have relied on to charge any premium for the year 4 February 2007 to 4 February 2008. The affidavit thus puts in issue the question of any indebtedness at all.

8 Because the grounds on which the plaintiff relies are not precluded by the “Graywinter principle”, I proceed to the merits.

9 As to the sum of $3,650.18, the position today is that the defendant has proceedings for recovery in progress in the Local Court and the plaintiff has filed or intends to file the defence annexed to Mr Smith’s affidavit which defence, I might say, is itself verified by an affidavit of Mr Smith. There is not in existence today a judgment debt for $3,650.18. It follows that, whether one regards the first item in the statutory demand as confined to the judgment debt as such or accepts it as extending also to the alleged underlying debt, there is a genuine dispute as to the existence of the debt, which dispute has become the subject of the defended Local Court proceedings.

10 In relation to the second item in the statutory demand relating to $2,897.61, Mr Smith has given evidence of a series of events involving the plaintiffs, a firm of insurance brokers and the defendant. In summary, Mr Smith’s evidence is that the plaintiff instructed the brokers to obtain quotes for various kinds of insurance the plaintiff required; that the brokers told him that, in order to obtain quotations, it would be necessary for the plaintiff to complete proposal forms for directors and officers insurance and workers compensation insurance; that, in relation to the latter, he completed and gave to the broker a proposal addressed to the defendant; that some ten weeks later the plaintiff received a bill from the defendant for workers compensation insurance premium; that he then wrote to the defendant saying that he had asked for “a proposal” (which I interpret as a quotation) but had never received one yet had received a premium notice; that the defendant then sent him a copy of the proposal signed on behalf of the plaintiff and that follow-ups were received by the plaintiff from the defendant up to early September 2006, at which point he telephoned Richard at the defendant’s office and the following conversation occurred:

“I said, ‘We do not need the workers compensation insurance policy because we do not have any employees. We think that the policy was issued in error.’
Richard: ‘Ok you will not have to pay any fees then. Just send us something in writing, stating the policy number and the reason why it needs to be cancelled.’”

11 On 7 September 2006, Mr Smith faxed a letter to the defendant referring to his conversation with Richard and saying:

“We do not require the insurance that this policy has apparently been providing. We don’t have any employees. The policy was issued in error we think.”

12 By a letter dated 11 September 2006, the defendant’s debt collection agency demanded payment. On 4 October 2006, the defendant’s agent wrote to the plaintiff, apparently in response to the letter of 7 September 2006 saying that the WorkCover Authority permits cancellation of policies only in limited circumstances (which were described) and, “since the reason for cancellation does not meet these guidelines we are unable to cancel your policy at this time”.

13 The defendant says that the proposal was completed and submitted; that the broker was the agent of the plaintiff; that the defendant issued the policy in the ordinary course and in a perfectly regular way; and that premiums became payable accordingly.

14 But the defence filed in the Local Court makes it clear that the bases of opposition it states in relation to the first item in the statutory demand apply also to the second – added to which, the defendant has reduced the relevant premium to $175.00 and apparently does not now claim a debt of $2,987.61.

15 The position is clearly one in which defended debt recovery proceedings are in train in respect of one of several sums said by the defendant to be due because of a particular contractual position. The stated grounds of defence in relation to that sum logically apply to others. The parties must sort out the whole of their dispute in debt litigation.

16 The genuine dispute ground is established in respect of the first and second items. Nothing was said in submissions about the third item ($127.56) but, because it is less than the statutory minimum referred to in s 459H, the finding of genuine dispute in relation to the other two items means that s 459H(3) requires the statutory demand to be set aside.

17 I order that the statutory demand dated 10 September 2007 served on the plaintiff be set aside.

18 The proceedings will be listed for argument on costs unless I am informed that the matter can be dealt with by written submissions.

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