Reschke Pty Ltd v Digiorgio Family Wines Pty Ltd

[2018] SASCFC 1

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal in Private)

RESCHKE PTY LTD v DIGIORGIO FAMILY WINES PTY LTD

[2018] SASCFC 1

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Nicholson and The Honourable Justice Parker)

21 December 2017

CORPORATIONS - WINDING UP - WINDING UP IN INSOLVENCY - STATUTORY DEMAND - APPLICATION TO SET ASIDE DEMAND - GENUINE DISPUTE AS TO INDEBTEDNESS

Application for permission to appeal.

The respondent served a statutory demand on the applicant in August 2017. A Master of the Supreme Court declined to set aside the statutory demand but varied it to claim a lesser sum.

The applicant appealed the Master's decision to a single judge of the Supreme Court. That appeal was dismissed in December 2017. The applicant now seeks permission to appeal to the Full Court.

Held, per Kourakis CJ, Nicholson and Parker JJ.

1.  The applicant has not shown any arguable error in the Judge's reasons.

2.  All other matters raised by the applicant are without any merit.

3.  The application for permission is refused.

Corporations Act 2001 (Cth) s 459E, referred to.

RESCHKE PTY LTD v DIGIORGIO FAMILY WINES PTY LTD
[2018] SASCFC 1

Full Court:  Kourakis CJ, Nicholson and Parker JJ

1. THE COURT: On 9 August 2017 the respondent DiGiorgio Family Wines Pty Ltd (DiGiorgio) served a statutory demand pursuant to s 459E of the Corporations Act 2001 (Cth) on the applicant Reschke Pty Ltd (Reschke). The demand was for an amount of $1,610,194.63.

2. A Master of this Court declined to set aside the statutory demand but varied it to claim the sum of $1,026,541.10 after finding a genuine dispute with respect to two invoices together comprising $583,653.53.  The Master found that there was no dispute as to the balance of $1,026,541.10. 

3. Reschke appealed the Master’s decision to a Judge of this Court who dismissed that appeal on 12 December 2017.

4. The claim arises out of an agreement between Reschke and DiGiorgio for the processing of grapes and the storage of wine.  The sum of $1,026,541.10 was claimed pursuant to a series of invoices on the basis of a charge per litre of wine and per unit of time, together with some ancillary charges.  Reschke disputed that claim on the basis that there was ‘no way of independently verifying this balance’.  That ground was supplemented by a further affidavit deposing that DiGiorgio had refused Reschke access to the stored wine for the purposes of taking a stocktake to ascertain the amount of wine.  Reschke claimed that stored wine may be lost over time due to evaporation or may be spoiled and for that reason removed.  Reschke contended that it was customary in the industry to permit a stocktake for those purposes.

5. However, Reschke did not put forward any evidence that the charges were levied on the full volume of the wine that had been initially stored, nor was the likely degree of evaporation quantified.

6. The Judge found that Reschke had not shown a genuine dispute on this ground for the following reasons:[1]

   [43]However, even having regard to this evidence, I agree with the Master’s conclusion.  I agree that the evidence falls short of establishing that there is a genuine dispute as to the existence or amount of the debt; that the suggestion that the plaintiff needs to verify the amount of wine in storage suggests merely that it is hoping to find an area of dispute. 

   [44]In my view, Mr Reschke’s affidavit does not go beyond mere assertion.  It does not articulate a dispute that has any foundation in the evidence.  While Mr Reschke refers to his experience of loss and contamination of wine held in storage, he does not provide any evidential foundation for supposing that the charges levied by the defendant do not reflect these matters, or have otherwise been inaccurately determined.  The fact that this assertion has not been made in the communications between the parties preceding the issue of the demand is not of itself a disqualifying matter, but it is nevertheless consistent with, and supportive of, the assertion being one that is based on no more than speculation. 

   [45]The plaintiff’s counsel makes the point that it is difficult to criticise the plaintiff for the lack of evidential basis for its complaint in circumstances where it has been prevented from inspecting the wine in storage.  While the availability of evidence can be a relevant matter in weighing the probative value of evidence, there is a limit to the work to be done by this principle.  It cannot be used to make something out of nothing.  In my view, the evidence in this case went no further than establishing that Mr Reschke considers he might have a basis for a dispute, and wishes to have access to the wine to determine if he does.  I agree with the Master’s observation, citing Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd, that when the best a plaintiff can say is that it wishes to verify the amount of the debt, a court cannot by reason of that alone be satisfied that a dispute truly exists in fact. 

   [46]The plaintiff relied upon Delta Beta Pty Ltd v Vissers as authority for the proposition that the inability to ascertain the amount of a purported debt may be sufficient to warrant a statutory demand being set aside.  The first point to note in relation to that case is that the demand was set aside under s 459J(1), and not on the basis that there was a genuine dispute.  But in any event, the case is readily distinguishable on its facts in that it involved a demand for an undifferentiated sum, the composition of which was not able to be determined by reference to either the material in (or attached to) the demand, the communications between the parties or the records of the company served with the demand.  Here, on the other hand, the amount claimed within the demand is readily referable to invoices which set out the basis for the calculation of the sum claimed and its various component parts.

   [47]To the extent that the plaintiff relies upon any other basis for suggesting the existence of a genuine dispute in relation to the $1,026,541.10, I do not accept that there is any merit in such a suggestion.

   [1]    Reschke Pty Ltd v DiGiorgio Family Wines Pty Ltd [2017] SASC 187, [43]-[47].

7. Reschke has not shown any arguable error in the Judge’s reasons.  The other matters raised are also without any merit.

8. Application for permission refused.