Redepay Pty Ltd v Net4U.com.au Pty Ltd
[2009] VSC 316
•28 July 2009
IN THE SURPEME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
LIST E
No. 4180 of 2009
IN THE MATTER of REDEPAY LTD (ACN 108 063 038)
| REDEPAY LTD (ACN 108 063 038) | Plaintiff |
| and | |
| NET4U.COM.AU PTY LTD (ACN 116 520 702) | Defendant |
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JUDGE: | PAGONE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 July 2009 | |
DATE OF JUDGMENT: | 28 July 2009 | |
CASE MAY BE CITED AS: | Redepay Ltd v Net4U.com.au Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 316 | |
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CORPORATIONS LAW – Application to set aside statutory demand – Whether there is a genuine dispute or an offsetting claim – Mere assertions insufficient to establish genuine dispute.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Richardson | Gadens Lawyers |
| For the Defendant | Mr S Maiden | Altus Lawyers |
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HIS HONOUR:
The plaintiff, Redepay Ltd, appeals from the decision of Efthim AsJ, dated 9 June 2009. The appeal is made pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) and is a hearing de novo.
The plaintiff has issued proceedings to set aside the defendant's statutory demand dated 24 December 2008. The plaintiff relies upon two bases, namely, that there is a genuine dispute over the debt claimed in the statutory demand, and that the plaintiff had an offsetting claim. The plaintiff's claim about there being a genuine dispute has, in turn, two limbs, namely, that the plaintiff has made cash payments to the defendant of $60,900, and that the retainer which formed the basis of the dealings between the plaintiff and defendant was terminated around 29 March 2008.
There is, as Efthim AsJ also found, a lively dispute between the parties about whether cash payments amounting to $60,900 were made. The plaintiff alleges that the payments were made whilst the defendant maintains that they were not received. It is obvious, as the Associate Justice correctly observed, that someone is either mistaken or not telling the truth. However, an assertion inconsistent with a counter assertion is not of itself sufficient to discharge the onus upon the plaintiff to demonstrate the existence of a genuine dispute. The hurdle to establish that a dispute is genuine is not high and, indeed, was described by the learned Associate Justice as "very low" but it is not insignificant. In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd,[1] it was said that the low hurdle "does not mean that the court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit, ‘however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same opponent, or inherently improbable in itself, it may be’ not having ‘sufficient prima facie plausibility to merit further investigation as to [its] truth’ or a patently feeble legal argument or an assertion of facts unsupported by evidence’”.
[1](2008) 66 ACSR 67, [64] (Dodds-Streeton JA).
The plaintiff has not satisfied me that there is a genuine dispute concerning the alleged cash payment of $60,900. The defendant draws attention to, and relies upon, what is said to be a lack of evidence to support the assertion by Mr Cumberlidge that payments were made by or on behalf of the plaintiff, and upon the apparent inconsistency between the assertion by Mr Cumberlidge that payments were made by or on behalf of the plaintiff and claims of repayment by Greenstream Pty Ltd. The defendant also points to the absence of supporting evidence from Mr Field. Each of these matters may relevantly be thought to undermine the asserted proposition of the plaintiff in support of the contention of a genuine dispute. Fundamentally, however, there is little more than an assertion of a dispute which, in my view, is insufficient for me to conclude that there is a foundation for the assertion of a dispute. However low the hurdle may be, it is still necessary for the plaintiff to show enough to enable the court to form a view about the bare essential facts upon which the court itself can conclude that there is a genuine dispute. Mere assertion in opposition to a claim is not enough. Mere assertion of payment in this case does little more than assert a dispute. Nothing said by the plaintiff enables me to form a view about the matters necessary for me to conclude that there is a genuine dispute.
To these considerations may be added the fact that the plaintiff's accounts show that as at 29 September 2008 it was indebted to the defendant in the sum of $79,500. Section 1305(1) of the Corporations Act 2001 (Cth) provides that a company's books are admissible in evidence to constitute "prima facie evidence of any matter stated or recorded" in them. The section does not establish "a presumption that company records are prima facie true and correct and accurate"[2] but it does provide that they are prima facie evidence of a matter "stated or recorded" in them. In this case, what is recorded in the accounts is a liability. There is created, therefore, a presumption that the plaintiff has a liability. No evidence is adduced to rebut the statutory presumption.
[2]Cf Livingspring v Kliger (2008) 66 ACSR 455, 463 [37] (Maxwell P and Buchanan JA).
The plaintiff's next contention about the termination of the retainer at the end of March 2008 is that on 29 March 2008 the defendant terminated the retainer, pursuant to which amounts claimed in the statutory demand became payable, and that the plaintiff accepted the defendant's termination of the retainer. The evidence does not establish the plaintiff's contention to justify setting aside the statutory demand. On 29 March 2008 Mr Palermo wrote to Mr Field expressing himself unconditionally about what he would be doing in the near future. The e-mail said:
Bill I will be resigning as a director of this company as of next month. I will become a shareholder and nothing more. Thank you and no hard feelings.
The language thus used tells about what was then to occur in the future. It is language expressed in the future tense and, furthermore, not, apparently, to the person to whom any resignation should formally have been addressed. The response from Mr Field on the following Monday, 31 March 2008, was not, in its terms, an acceptance of a resignation. At best, it was a statement of a requirement to decide by 3 pm on that day, albeit that a threat of resignation was plainly understood to have been made. There was not established on the materials that as at 29 March 2008 or as at 31 March 2008 a resignation had been made and accepted. Indeed, contemporaneous evidence subsequent to those dates is inconsistent with a resignation as at the end of March.
It may not strictly be necessary for me to consider the next contention in this context put by the plaintiff, namely, that from April to October 2008 the engagement between the plaintiff and defendant had been on terms different from those that had obtained before the end of March. I have said that I do not accept that the termination of the retainer has been established by the plaintiff. However, there is simply insufficient evidence for the plaintiff's additional contention that there came into being, from April 2008, an agreement capable of identification as different from or varying the retainer which had existed until the end of March.
The second basis relied upon by the plaintiff to set aside the statutory demand is the offsetting claim against the defendant. In this context the plaintiff alleges that the defendant retained source codes and other information for software applications which has caused loss and damage to the plaintiff. The plaintiff asserts that it incurred $184,119.02 in costs in building these applications, and that it will cost between $40,000 and $70,000 for consultants to remedy the problems. The sum total of the plaintiff's evidence about these additional costs is a bald assertion in an affidavit by Mr Cumberlidge stating:
The plaintiff has engaged a replacement consultant to put the pieces back together, his engagement is on an hourly basis however he has given an estimate of between $40,000 and $70,000 to complete the process.
Such an unsubstantiated assertion is as insufficient in this case as a similar unsubstantiated assertion was said to be insufficient by Burley J in Sewmail v Booby Traps.[3] An offsetting claim for the purposes of defeating a statutory demand requires more than assertion if the litigant seeks to have the court act upon it. The burden of proof may be low, but it must be sufficient to permit a court to act upon it responsibly and in fairness to do justice between the parties.
[3](1997) 23 ACSR 339, 342-343.
The statutory demand claimed is $133,049.96. The plaintiff conceded that $14,694 was incorrectly claimed and that, therefore, the statutory demand should be varied to $116,355.96. The learned Associate Justice had varied the claim to $79,500 on the basis that he had accepted the assertion and counter assertion about cash payments amounting to $60,900 as establishing the dispute. The appeal before me is a de novo hearing which requires that I consider the matter for myself, without deference to the prior decision maker. In my view, the plaintiff has failed to establish the existence of a genuine dispute concerning these alleged payments and, therefore, I would not remove the statutory demand, as the learned Associate Justice did. Accordingly, I make the following orders:
(1)Orders 1, 2 and 3 made on 9 June 2009 be vacated and be substituted by the following orders.
(2)The demand dated 24 December 2008 be varied to claim $116,355.96.
(3)The demand, as varied, have effect as from the date the demand was served upon the plaintiff.
(4)The period for compliance for the demand is extended to 5 pm on 11 August 2009.
(5)The plaintiff pay the defendant's costs of and incidental to the appeal, in addition to those ordered to have been paid by the Efthim AsJ on 9 June 2009.
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