FEDERAL COURT OF AUSTRALIA
Platinum Communications Pty Ltd v Computer Networks Pty Limited [2012] FCA 1260
Citation: Platinum Communications Pty Ltd v Computer Networks Pty Limited [2012] FCA 1260 Parties: PLATINUM COMMUNICATIONS PTY LTD ACN 515 618 601 v COMPUTER NETWORKS PTY LIMITED ACN 094 160 979 File number: NSD 1367 of 2012 Judge: GRIFFITHS J Date of judgment: 14 November 2012 Catchwords: CORPORATIONS – application under s 459G Corporations Act 2001 (Cth) to set aside statutory demand – whether application should be amended to include orders sought under s 459H – whether genuine dispute – whether offsetting claim Legislation: Corporations Act 2001 (Cth) ss 459G, 459H, 459J Cases cited: Alcatel Australia Ltd v PRB Holdings Pty Ltd (1998) 27 ACSR 708
BBB Constructions Pty Ltd v Frankipile Australia Pty Ltd (2008) 68 ACSR 1
Beauty Health Group Ltd v Scholl [2011] NSWSC 77
Chippendale Printing Co Pty Ltd v Deputy Commissioner of Taxation (1995) 55 FCR 562
Dare v Pulham (1982) 148 CLR 658
David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 184 CLR 265
Chase Manhattan Bank Australia Ltd v Oscty Pty Ltd (1995) 17 ACSR 128
Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
John Shearer Limited v Gehl Company (1995) 60 FCR 136
Kezarne Pty Ltd v Vital Security System Pty Ltd (1996) 20 ACSR 560
Macleay Nominees v Belle Property East [2001] NSWSC 743
Mibour Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290
Process Machinery v ACN 057 260 590 [2002] NSWSC 45
Reavill Farm Management Pty Ltd v Ashford Properties Pty Ltd [2010] NSWSC 1128
Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 47 FCR 451
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
Topfelt Pty Limited v State Bank of New South Wales Limited (1993) 47 FCR 226
Tuta Healthcare v Nipro Asia [2005] NSWSC 664
Viva Olives Pty Ltd v Origin Olives Australasia Pty Ltd [2012] FCA 545
W & P Reedy Pty Limited v Macadams Baking Systems (Pty) Ltd [2007] NSWCA 146Date of hearing: 25 October 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 47 Counsel for the Plaintiff: Mr D O'Connor Solicitor for the Plaintiff: PCC Lawyers Counsel for the Defendant: Mr T Brennan Solicitor for the Defendant: SBA Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1367 of 2012
BETWEEN: PLATINUM COMMUNICATIONS PTY LTD ACN 515 618 601
PlaintiffAND: COMPUTER NETWORKS PTY LIMITED ACN 094 160 979
Defendant
JUDGE:
GRIFFITHS J
DATE OF ORDER:
14 NOVEMBER 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The parties are to file and serve by 5:00 pm on 16 November 2012 any brief written submissions on the proposed orders.
2.Final orders will be made in Chambers in due course.
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- Case
- [2012] FCA 1260
- Decision Date
CaseChat Overview and Summary
The legal issues at hand included whether the application should incorporate orders under section 459H of the Corporations Act, whether there existed a genuine dispute regarding the debt, and if an offsetting claim could be validly asserted. The court examined whether the plaintiff had genuinely raised a serious question to be tried, based on a cause of action advanced in good faith, and not frivolous or vexatious. It also considered whether the plaintiff’s claim rose to the level of a serious question to be tried and if it was based on a cause of action advanced in good faith for an amount claimed in good faith.
The court found that there was a genuine dispute regarding the existence or amount of the debt, given the plaintiff's contention of a complete failure of consideration due to the SAP software not performing as expected. The court highlighted that the plaintiff had raised a serious question to be tried, which was not frivolous or vexatious. It also found that the plaintiff’s claim was based on a cause of action advanced in good faith. Consequently, the court concluded that the statutory demand should be set aside.
The final orders, to be made in due course, will direct the parties to submit written briefs on the proposed orders by 5:00 pm on 16 November 2012. The entry of final orders will be dealt with under Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. The parties are to file and serve by 5:00 pm on 16 November 2012 any brief written submissions on the proposed orders.
2. Final orders will be made in Chambers in due course.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
I respectfully agree with that approach, but would also add that an appropriate allowance may need to be made in a case, such as here, where the plaintiff’s ability to adduce the material described by Palmer J is handicapped because of the defendant’s conduct which is the subject of the asserted offsetting claim. I consider that such an approach is consistent with the following observations of Barrett J in Beauty Health Group at [23], where his Honour observed that s 459H(1)(b), when read in conjunction with the definition of “offsetting claim” in s 459H(5):… requires the court to consider whether the plaintiff has a “genuine” claim against the defendant in respect of the matter raised. It is also necessary to ascribe an “amount” to any “genuine” claim in order to determine, under s 459H(2), the “offsetting total” which plays a central part in determining whether the “substantiated amount” is less than the statutory minimum of $2,000. The court's task is not to make any final choice between the competing contentions about the relevant matter. It need only see that the plaintiff has asserted a claim and that the claim rises to the level of a serious question to be tried (Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341), is based on a cause of action advanced in good faith for an amount claimed in good faith (Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743) and is not frivolous or vexatious (Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37).Consideration Genuine dispute: The plaintiff contends that there is a genuine dispute about the existence or amount of the debt specified in the statutory demand in circumstances where there is said to be a complete failure of consideration because the SAP software did not do “what it was supposed to do or warranted to do”. The plaintiff also relies upon the fact that the defendant does not contest that, on 20 July 2012, the Base Agreement was either terminated or purportedly terminated by the plaintiff nor that, thereafter, it no longer used the SAP software in its stores. I understood the plaintiff to rely upon these matters, at least in part, to support the proposition that four of the 10 invoices relied upon by the defendant in its statutory demand post-dated 20 July 2012, when the Base Agreement was said to have been terminated. At the very least, therefore, there appears to exist a dispute regarding that component of the alleged total debt attributable to those invoices. There is also a dispute as to whether the plaintiff owes the total amount specified in the statutory demand in circumstances where the plaintiff contends that there has been a total failure of consideration by the defendant in supplying the SAP software. The defendant’s position seems to be that the SAP software was never intended to address point of sale requirements on 1 July 2012. Its position is that further implementation was required to be undertaken under Phase 2. On one view, this raises a fundamental question as to the proper construction of the Base Agreement, but I do not consider that it is either necessary or appropriate at this stage to engage in that detailed exercise having regard to the relevant legal principles outlined above. In my view, that is further reinforced by the fact that a further question may arise as to whether the parties’ agreement was varied in any event by the defendant’s conduct, having regard to the fact that some of the invoices appear to relate to work undertaken by the defendant in respect of point of sale requirements.