Ridgepalm Corporation Pty Ltd v Vision Lab Pty Ltd - [2001] WASC 108

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RIDGEPALM CORPORATION PTY LTD -v- VISION LAB PTY LTD [2001] WASC 108

CORAM: MASTER BREDMEYER

HEARD: 30 APRIL 2001

DELIVERED : 1 MAY 2001

FILE NO/S: COR 15 of 2001

BETWEEN: RIDGEPALM CORPORATION PTY LTD (ACN 007 984 680)
Plaintiff (Debtor)
AND
VISION LAB PTY LTD (ACN 002 162 772)
Defendant (Creditor)

Catchwords:

Statutory demand for goods supplied and delivered - Application to set aside - No genuine dispute

Legislation:

Corporations Law, s 9, s 286, s 459H, s 459H(4)

Evidence Act 1906 (WA), s 73A, s 79C(2a), s 1305(1), s 1306(5), s 1306(6)

Result:

Sum stated in demand reduced
Application otherwise dismissed

Representation:

Counsel:

Plaintiff (Debtor) : Mr N McCabe
Defendant (Creditor) : Mr T Galic

Solicitors:

Plaintiff (Debtor) : Williams & Co
Defendant (Creditor) : Galic & Co

Case(s) referred to in judgment(s):

R v Connell (1996) 14 ACLC 32
Tubby Trout Pty Ltd v Sailbay Pty Ltd (1992) 113 ALR 748
Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294

Case(s) also cited:

Nil

MASTER BREDMEYER: This is an application by the plaintiff to set aside a statutory demand served upon it by the defendant. The plaintiff is a company based in Perth and trades under the name of Australian Lens Laboratories. The defendant is a company which trades in Sydney and which I will refer to as "Vision Lab". Vision Lab supplied optical goods to the plaintiff between July 1999 and May or June 2000 and on 1 December 2000 issued a statutory demand upon the plaintiff for $100,571.20. The demand was received on or about 4 December. The plaintiff has applied to set aside that demand under s 459H of the Corporations Law. It can do so by showing that it has a genuine dispute as to the existence of the debt or the amount of the debt to which the demand relates, or that the company has an offsetting claim. In this case, the plaintiff's claim is as to the existence of the debt or the amount of the debt. To reach a finding that there is a genuine dispute, the plaintiff must satisfy the court that:
(a)the dispute is bona fides and truly exists in fact; and
(b)the grounds alleging the existence of the dispute are real and not spurious, hypothetical, illusory or misconceived: Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294.
In this case the plaintiff relies on two affidavits of its director, Maurice Barbeau, sworn 19 January and 28 February 2001. The defendant relies on an affidavit of Darryl Brown, sworn 29 January, an affidavit of Timothy William Daley, sworn 30 January and one of Tihomir (Tim) Galic, sworn 30 April 2001. The latter affidavit exhibits three volumes of invoices. Vision Lab's invoices are admissible and prima facie evidence of the matters stated therein. This was not disputed before me but I desire to briefly set out the law on this. Under s 1305(1) of the Corporations Law, a "book kept by a body corporate" is admissible in evidence and prima facie evidence of any matter stated or recorded in the book. By s 9, "books" includes "financial records". Also by s 9, "financial records" includes invoices: see Tubby Trout Pty Ltd v Sailbay Pty Ltd (1992) 113 ALR 748 at 752 and R v Connell (1996) 14 ACLC 32. Section 286 of the Corporations Law requires a corporation to keep financial records (eg, invoices) that correctly record and explain its transactions. Books and records may be kept electronically: s 1306(5). A print‑out of an electronic record such as an invoice is admissible and prima facie proof of its contents: s 1306(5). See also the deeming provision in s 1306(6).
Also, invoices are part of the business records of the defendant and are also admissible under s 79C(2a) of the Evidence Act 1906 (WA). I should add that copy documents are now readily admissible under s 73A of the Evidence Act.
In nearly every case, the invoice from the defendant to the plaintiff is supported by a consignment note from Wards Skyroad stating that a consignment of goods was sent on a certain date. The copy of the Wards Skyroad consignment note is marked "sender's copy". I consider that is reasonable evidence that the goods were sent. I know that it is not a document created by the defendant, so it does not get the benefit of the sections I have just quoted. I also realise that, by a mistake, the document could be attached to the wrong invoice. I also realise that in some cases the goods may have gone astray and not been delivered. Nevertheless, in the absence of any firm evidence to the contrary - and there is none - I regard it as reasonable evidence that the goods invoiced were parcelled up and sent by air express, via Wards Skyroad, to the plaintiff consignee.
In nearly every case the invoice from the defendant to the plaintiff is also accompanied by a copy of the plaintiff's faxed order to the defendant.
Mr Barbeau, for the plaintiff, complained in his first affidavit that Vision Lab failed to provide delivery dockets, product invoices or a reconciliation of the plaintiff's accounts. He said that he and his staff were attempting to reconcile Vision Lab's account, however, an accurate reconciliation was difficult because of the lack of financial records. Since 28 February 2001 the plaintiff and his solicitors have had those detailed records but have not produced to me any detailed analysis or criticism of them. The plaintiff's evidence about non‑supply and errors etc remains vague in the extreme. For example, Mr Barbeau states in par 14 of his second affidavit that he had previously been told by Vision Lab's representatives that the plaintiff was spending approximately $1,000 per working day with Vision Lab and yet the total amount owing to Vision Lab for the month of February 2000 was $28,000. February 2000 of 29 days, of course, included less than 29 working days. However, I find that a weak argument. After all, the defendant's representative said that his company was spending "approximately" $1,000 per working day. The plaintiff has not produced its records of orders placed, which was normally done by fax, to show that less than $28,000 worth of goods was ordered that month. My study of the invoices and orders, in particular, show that over $50,000 worth of goods were ordered, supplied and invoiced in February 2000. I consider the defendant's member of staff who said that the plaintiff was spending about $1,000 per day with the defendant, was mistaken.
In par 15 of Mr Barbeau's second affidavit he said he disputes and denies approximately $40,000 of Vision Lab's statutory demand because, inter alia:
"15.1The March and April 2000 figures of $36,305.53 and $31,777.10 are excessive; and
15.2I do not believe that Ridgepalm purchased $23,158.67 worth of products from Vision Lab in May 2000 when we were purchasing products elsewhere because of inconsistency of supply.
15.3I deny that [the plaintiff] purchased any product from Vision Lab in June 2000."
This is vague evidence which cannot, in my view, stand against the defendant's evidence supported by production of the invoices and orders. Consider the statement about June. The statement shows that seven invoices were rendered to the plaintiff in June 2000. Five of them have the Wards Skyroad consignment document attached to them. Five of the orders are supported by faxed orders. Two of those five (Invoices 470 and 471) are supported in part by faxed orders and in part by notes of phone orders. In other words, part of the goods were ordered by phone and part by fax. Two of them (Invoices 467 and 472) were phone orders only and are each supported by a note of the phone call. Both are for small sums.
The plaintiff's bookkeeper, Maureen Mellor, prepared a handwritten reconciliation of what sums the plaintiff said was owing in about late October 2000. It is Exhibit "E" to Mr Brown's affidavit. Mr Brown has prepared an answering reconciliation which is typed and is Exhibit "F" to the same affidavit. A comparison of the two documents is instructive. Exhibit "E" lists the sums owing each month, less payments made, less a "C note" for March 2000 $1,409.05 and less four interest charges which are itemised, giving a net total owing of $89,647.03. Exhibit "E" records seven payments made by the plaintiff in the period January to October 2000 and that agrees with the payments received on the defendant's document Exhibit "F". The disputed items are the c/note already mentioned and the five interest payments. The c/note appears to refer to a credit note. The sum of $1,409.05 is shown as a negative on invoice No 439 (ie, as "‑ $1,409.05") and is shown as a credit in the defendant's statements, for example, on page 2 of the statement dated 3 July 2000 (Exhibit "C" to the affidavit of Brown) and at page 5 of Exhibit "D" to the same affidavit. The plaintiff has been given credit for the return of these goods.
The plaintiff queries four interest charges which appear on the statement, in each case at the bottom of the page, as follows:
12‑3‑00  $218.04
30‑4‑00  $1517.76
30‑7‑00  $3386.22
23‑8‑00  $5829.71
$10,951.73
The defendant says, in its reconciliation Exhibit "F" and in the supporting affidavit, that the reconciliation does not include interest charges on the outstanding debt. I consider that is correct. According to the last statement produced - that for 23 August 2000 page 6 - the balance owing was $123,400.91. This, on the face of it, includes the last interest charge called "finance charge" of $5,829.71 and may or may not include the earlier interest charges. However, the reconciliation statement (Exhibit "F") as at the end of August shows an outstanding balance of $107,571.20. There were no payments received in August which would reduce the outstanding balance. I consider the plaintiff has raised no genuine dispute as to these interest charges. The plaintiff has not been charged them.
Since the statutory demand was issued for $100,571.20 on 1 December 2000 the plaintiff says that it has made the following payments:
$1,500 on or about 28 December 2000
$1,500 on or about 5 January 2001
$1,500 on or about 12 January 2001
$1,500 on or about 19 January 2001
$1,500 on or about 22 January 2001
$1,500 on or about 30 January 2001
I learn this from the plaintiff's solicitor's letter of 26 February 2001 ("MB05" to Mr Barbeau's second affidavit). That letter also refers to a payment of $7,000 on or about 16 October 2000, that is before the statutory demand, which is shown as a credit in the defendant's reconciliation, Exhibit "F". That was the last payment before the demand was received. There is correspondence stating that the plaintiff agreed to pay $1,500 per week off the debt, starting from 28 December 2000. According to par 19 of Mr Brown's affidavit, payments of $1,500 each were received on 6, 9, 16, 25 and 30 January 2001. This totals $7,500. The payment in dispute is the first which was due on 28 December 2000. I am not satisfied that the plaintiff has raised a genuine dispute in regard to this payment. It has not produced a cheque butt or a bank statement or a covering letter supporting the payment of this sum. Consistent with my other views where I believe the defendant and not the plaintiff, I do not consider the plaintiff has raised a genuine dispute in relation to this sum.
I propose to reduce the statutory demand by $7,500 to reflect the five recent payments of $1,500 each as I am entitled to do under s 459H(4). That leaves a balance of $93,071.20. I consider that the plaintiff has raised no genuine dispute why the demand should be set aside in relation to that sum. Subject to that reduction of the sum stated in the demand, I will dismiss this application.
The costs should follow the event. The reduction in the sum stated in the demand, was not in dispute and does not falsify the demand. Those moneys were paid after the demand was issued. I will order the plaintiff to pay the defendant's costs of this action, including any reserved costs, to be taxed if not agreed.