Pendle Hill Development Pty Limited v McNeice

[2013] NSWSC 756

Supreme Court

New South Wales

Medium Neutral Citation:	Pendle Hill Development Pty Limited v McNeice [2013] NSWSC 756
Hearing dates:	22/05/2013
Decision date:	14 June 2013
Jurisdiction:	Equity Division - Corporations List
Before:	Young AJ
Decision:	Vary statutory demand; no order as to costs
Catchwords:	CORPORATIONS - Debts - Statutory demand - Application to set aside statutory demand
Category:	Principal judgment
Parties:	Pendle Hill Developments Pty Limited (Plaintiff) David McNeice (First Defendant) Aleita R McNeice (Second Defendant)
Representation:	Counsel: ET Finnane (Plaintiff) RW Tregenza (Defendants) Solicitors: Senses Legal (Plaintiff) Autore & Associates (Defendants)
File Number(s):	2012/140378

Judgment

1. HIS HONOUR: This is an application to set aside a statutory demand.

1. The subject company is one of a group of five companies each of which were served with a statutory demand by the defendants. I heard the five applications to set aside the statutory demands on 22 May 2013. The matters were heard together with the evidence in one being evidence in all.

1. I decided questions of principle in the case of Touma Family Super Fund Pty Limited v McNeice (2012/140381), for which I delivered judgment earlier today. The method by which I preceded was to deal with questions of principle in that case and then to deal with the problems that were specific to the other companies.

1. In the present case, the statutory demand bearing the date 5 April 2012 was served on 12 April 2012. The demand was for $26,291.71 and was made up of the following components:

(A) Invoice #2108 for $6,050.00;

(B) Invoice #2327 for $2,365.00;

(C) Invoice #2328 for $4,125.00 (later amended to $3,135);

(D) Invoice #2366 for $4,125.00 (later amended to $3,135);

(E) Invoice #4010 for $2,365.00;

(F) Administration fees for invoices A to D for $1,668.50; and

(G) Four sets of charges for interest on invoices A to D totalling $5,593.21.

1. In each case, it is said that the debt is genuinely disputed.

1. Invoice #2108 deals with two items:

(i) "Valuation prepared by Solutions in Property in September 2009" for $2,200 (plus GST); and

(ii) "Review of Valuation and statement prepared by Solutions in Property in December 2010" for $3,300.00 (plus GST).

1. Mr McNeice says in his affidavit of 16 November 2012 at [4] that the valuation prepared by 'Solutions in Property' was for property in the name of Pendle Hill Developments Pty Limited. The parties were concerned with the plaintiff's prospective liability for what is called "Land Rich Stamp Duty'. It was vital to know whether the value of the land involved was less than $2 million because if it was Mr McNeice's opinion that this would exempt the plaintiff from any liability for the stamp duty.

1. The flavour of the affidavit is that the Toumas wanted the property to be valued at a high figure for some purposes, but at a low figure for stamp duty purposes. Eventually the matter went to the Administrative Decisions Tribunal, which the Toumas lost. The Toumas say that Mr McNeice's advice to proceed with the appeal was bad. Mr McNeice says that the appeal was lost because the Toumas gave inconsistent evidence. It is unnecessary for me to work out where the truth lies.

1. It would appear, but it is not completely clear, that the invoice for $2,200.00 represents what was paid to the valuer (plus a small amount for the time taken examining the valuation). There is no credible evidence to doubt the quantum. The only other defence raised by the plaintiff is that the bill was payable by the partnership of various members of the Touma family and not by Pendle Hill Developments. Mr McNeice says that he was told at some stage to invoice the partnership for expenses in connection with this stamp duty matter. He says that whilst he did so after being so instructed, the present account was incurred before that the instruction was received. There is no reply to this submission, but it is credible. It is consistent both with the invoices that have been raised without comment until the statutory demand was made and the fact the land concerned was owned by Pendle Hill Developments.

1. I can see no genuine dispute with respect to this claim.

1. So far as the claim for examining the valuation is concerned, there is little material either way. The bill is for time and it was costed out at the current rates. I cannot see any genuine dispute as to quantum. As to liability, I have already dealt with the contention that the bill was that of the partnerships and not of Pendle Hill. Indeed, one would think that if that were the case the partnership would have paid it, or at least the admitted amount.

1. Invoice #2327 is only queried so far as the quantum is concerned. The charge of $2,365.00 is not explained. The fee quoted was from $600.00 (plus GST). I think I should say that the admitted sum is $600.00. Although the schedule of complaints show that only the quantum of this bill is queried, the affidavits show that the real dispute is that the defendants did not know how to go about supplying a GST transaction report. They say Mr McNeice made an error in recording a deposit twice and the audit was brought about as a result of Mr McNeice's mistakes. This allegation does not appear to be answered by the defendants and accordingly this item should not stand.

1. As to invoice #2328, the defendant subsequently reduced it to $3,135 (via affidavit of the first defendant filed 11 February 2013. The defendant says that he spent the day at the plaintiff's office correcting error made by the bookkeepers and also dealt with a Review Officer of the ATO. I can see no answer to the defendant's claim. Thus, the statutory demand must remain for the $3,135.

1. The quantum of invoice #2366 is disputed. Again, very few details are given apart from the fact that various phone calls were made to the Australian Taxation Office. I think I should treat as admitted $1,650.00; an amount representing 5 hours work (plus GST).

1. Invoice #4010 involves a dispute over whether it was the defendants or Tarrants completed the work. There is also a dispute over quantum and that the work was not done. It seems to me that for the reasons that I gave in the Touma Super Fund (2012/140381), I should not allow this item.

1. It follows that I assess the admitted amount due as $14,435.00; order that the statutory demand be varied to reduce it to that amount; and declare that the statutory demand is to have effect as so varied from 12 April 2012. I extend the time for compliance by 21 days from the date of these reasons.

1. The next question is the issue of costs. The plaintiff has succeeded in having the statutory demand set aside, as to about 50% of the original claim. It seems to me that the appropriate order is that there be no order for costs.

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Decision last updated: 14 June 2013