Re: Heritage Business Systems P/L
[1998] QSC 6
•5 February 1998
IN THE SUPREME COURT
OF QUEENSLAND
Application No.173 of 1998
Brisbane
Before the Hon. Mr Justice Shepherdson
[re: Heritage Business Systems P/L]
IN THE MATTER of The Corporations Law
and
IN THE MATTER of HERITAGE BUSINESS SYSTEMS PTY LTD
ACN 062 169 653
CATCHWORDS: CORPORATIONS LAW - Application to set aside statutory demand for payment - whether the applicant is the debtor - whether the applicants claim has substance.
Chadwick Industries (South Coast) Pty Ltd v. Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37.
Aitkin Transport Pty Ltd v. Voysey (1990) 1 Qd R 510.
Rohalo Pharmaceutical Pty Ltd v. R P Scherer Sp. A (1994) 15 ACSR 347.
H J Lyons & Sando Ltd v. Housten (1963) SASR 29.
Counsel:Mr Clutterbuck for the applicant.
Mr Perkins for the respondent.
Solicitors:Ellison Moschella & Co Solicitors for the applicant.
Deacons Graham & James Solicitors for the respondent.
Hearing date: 22 January 1998
JUDGMENT - SHEPHERDSON J.
Judgment delivered 5th February 1998
Heritage Business Systems Pty Ltd (hereinafter called “HBS”) has applied for an order that a statutory demand from Pac-Rim No. 3 Pty Ltd dated 18 December 1997 and served on it on 19 December 1997 be set aside. The application is brought pursuant to section 459H(1)(a) of the Corporations Law on the basis that there is a genuine dispute between the applicant and HBS about the existence of the debt to which the demand relates.
An analysis of the material shows the alleged dispute centres on the identity of the alleged debtor - is it the applicant or is it a company Heritage Internet Technology Services Pty Ltd (hereinafter called “HITS”). The respondent’s case is that the debt which is in the sum of $64,780.58 was incurred by HBS between 3 August 1997 and 14 September 1997.
The applicant relies on an affidavit of Dail Scott Wagner who was a director of each of HITS and HBS. He claims that the respondent carried out for HITS certain printing and distribution services in the production and distribution of a television guide with associated advertising. Wagner says he was associated with negotiating and conferring with officers of the respondent and more particularly the managing director Peter Hainsworth and the state manager for distribution Greg McDonald. He says he handed each of these persons his business card which showed that he was a director of HITS. He has exhibited to his affidavit a photocopy of a page from one of the distribution guides printed by the respondent. He relies on the following statement on that page:-
“Published fortnightly by Heritage Internet Technology Services Pty Ltd”
Some months before the respondent performed the work in respect of which the debt is claimed the respondent sent to:-
“Karen Dale
Heritage Internet
286 Montague Road
West End Qld 4101"
a document described as “Quote” which set out prices for printing and distribution of the proposed guide. It mentioned terms and conditions and went on:-
“The prices are also subject to:
(a)credit application approval;
...”
This document is exhibited to Wagner’s affidavit.
Also exhibited to Wagner’s affidavit is a further document from the respondent addressed to “Karen Dales, HITS, PO Box 5260, West End”. This document in letter form dated 26 May 1997 set out additional information required by Dales. Again it set out terms and conditions and also included the statement:-
“The prices are also subject to:
(a) credit application approval;”
Wagner has sworn that on 22 May 1997 he instructed his staff to prepare the necessary credit application in order that “a copy could be forwarded to Progress Printers and Distributors”. He swears that:-
“In error my staff prepared a credit application in the name of Heritage Business Systems Pty Ltd. Such credit application should have been in the name of Heritage Internet Technology Services Pty Ltd.”
He has further sworn that he has searched his files with regard to the placing of orders in respect of the work “requested by HITS Pty Ltd” and he has exhibited a document marked ‘D’ which he says is a “true and correct copy of an order dated 26 August 1997". This document includes the following:-
“BILL TO: HITS Pty Ltd
PO Box 3335
South Brisbane Qld 4101"
He has sworn that before that written order, orders were made by verbal communication, the first order having been provided by him on or around 11 to 18 July 1997. Exhibit ‘E’ to Wagner’s affidavit is a document from the respondent addressed to Wagner as managing director of HITS listing certain prices for Sydney and Melbourne. Wagner has sworn that HITS has attended to payment for the first 3 editions and did so by their own cheques except for some payments made by a company known as Computer Wise Pty Ltd of which he was also a director. He has sworn that he was the only signatory to HITS account, that his wife was a signatory to Computer Wise Pty Ltd and that when he was away on business he had his wife pay some cheques on the Computer Wise account.
The respondent’s demand has described the debt as follows:-
“In respect of services provided by the creditor to the company between 3 August 1997 and 14 September 1997 full particulars of which have previously been delivered to the company.”
An affidavit of Peter Hainsworth the State Manager of the respondent discloses:-
(a) that he has been involved in the opening of an account for HBS and in overseeing the respondent’s relationship with that customer.
(b)he has confirmed, based on information from his account manager Lisa Pfeiffer, that on 15 April 1997 she met Karen Dales at 286 Montague Road to discuss proposed distribution of a TV guide called HITS Magazine and that on 28 April 1997 she sent a quote to Dales a copy of that quote being exhibited.”
I pause to say that that quote dated 28 April 1997 was not exhibited in the applicant’s material but it is of no significance.
Hainsworth has confirmed that another of his employers sent to Karen Dales a quote dated 26 May 1997 to which I have already referred. Hainsworth has exhibited a photocopy of the application for credit signed by Wagner as director on 22 May 1997. One page of this document shows details of the Registered Company Name and Trading Name “Heritage Business Systems P/L” and shows that the directors were Dail Wagner, Tim Timchur and David Kernke. In that portion of the application above which Wagner signed and gave his title “director” the following words appear:-
“This application should be signed by a person duly authorised to bind the applicant.”
I pause to say that the applicant relies on an affidavit of David Charles Alfred Kernke, a director of HBS who swears that HBS has not authorised Wagner to enter into any contracts on its behalf.
Hainsworth has also sworn that this was the only credit application received by the respondent in relation to the printing of this magazine and that no credit application was ever received from HITS. The respondent caused a search of HBS to be carried out after it received this credit application. The search showed the trading address to be 286 Montague Road, West End and the directors to be Timchur, Kernke and Wagner. The respondent through its national credit manager also conducted a credit check of HBS after receipt of the credit application and was satisfied with the results of that check. Hainsworth has sworn that, relying on the results of the search and the credit check, the respondent opened an account in the name of HBS and considered it to be its customer at all subsequent times.
He also swore that the respondent intended to contract with HBS which was the entity which had applied for credit and signed the terms and the conditions governing the relationship. I should add that the document styled “Application for Credit” did include terms and conditions one of which read:-
“5. Payment
(i)All goods and services supplied on credit to the Customer shall be paid for in full within thirty (30) days from the end of month in which invoicing occurs or as otherwise agreed in writing between both parties.”
Hainsworth’s affidavit shows that it was not until a fax from the solicitors acting for the applicant was received on 6 November 1997 that HITS suggested that it was the company which had a contract with the respondent in relation to the TV guide. Of course, by this date all work had been performed by the respondent.
Hainsworth has exhibited to his affidavit (Exhibit PH5) invoices sent to HBS in relation to the printing and distribution to the magazine. The first of these is dated 1 August 1997 the last is dated 19 September 1997. Exhibit PH5 includes some credit notes dated 25 September and 5 November 1997.
On 31 October 1997 the respondent first made demand on HBS for the debt.
The applicant bears an onus of satisfying me that there is a genuine dispute about the existence of the debt specified in the demand. It is not a heavy onus. I respectfully adopt the following statement by Lindgren J in Rohalo Pharmaceutical Pty Ltd v. R P Scherer SpA (1994) 15 ACSR 347 at page 354:-
“The task confronting a company applying to set aside a statutory demand of establishing the ‘genuineness’ of a dispute or claim is, in my opinion, no more onerous than that which would confront it if it were seeking to meet an application by the creditor for summary judgment.”
On application by a creditor for summary judgment a defendant must show that there is a real question to be tried (see Fancourt v. Mercantile Credits Limited (1983) 154 CLR 87 at page 99).
I am not to examine the merits of the dispute other than to see if there is in fact a genuine dispute. I must also be satisfied that there is a claim that may have some substance (Chadwick Industries (South Coast) Pty Ltd v. Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37).
As I have earlier said the prime issue before me concerns the identity of the contracting parties. Both sides accept that the court is to look for the intention of both parties. In Aitkin Transport Pty Ltd v. Voysey (1990) 1 QdR 510 at pages 513-514, Kelly SPJ who wrote the leading judgment of the Full Court applied the following dictum of Brandon J in “The Swan” (1968) 1 Lloyd’s Reports 5 at page 12:-
“The intention for which the Court looks is an objective intention of both parties, based on what two reasonable business men making a contract of that nature, in those terms and in those surrounding circumstances, must be taken to have intended.”
In the view which I take of this matter the applicant has failed to satisfy me that there is a genuine dispute as to the existence of the debt subject of the statutory demand. In my view the applicant’s claim has no substance. The completion of the credit application as called for by the respondent - that credit application in effect showing that HBS was to be the customer or at least the party responsible for payment for the respondent’s work quite obviously led the respondent to believe that it would pay for the work and therefore was the customer. The unchallenged evidence shows that the respondent relied on the faith of the credit application and in my view there can be no doubt that the objective intention of both parties ascertained in accordance with the above test was that HBS would pay the debt now owing to the respondent and was the customer. The decision of Chamberlain J in H J Lyons & Sando Ltd v. Haulson (1963) SASR 29 at page 31 strongly supports the view which I have taken. His Honour there said:-
“The prima facie position is that when a man orders work to be done he impliedly undertakes to pay for it, and if he desires to avoid the liability so undertaken by setting up that he was acting purely as agent for another person he must have made that position clear to the other contracting party.”
There is no evidence to suggest that HITS in any way made clear to the respondent that, not withstanding the credit application having been completed by HBS, it was HITS who was responsible for the payment of the debt.
For the reasons which I have already stated I dismiss the application with costs to be taxed.
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