Romas Corporation Pty Ltd v Ozemac Pty Ltd
[2018] VSC 673
•8 November 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2018 00768
| ROMAS CORPORATION PTY LTD (ACN 082 351 442) | Plaintiff |
| v | |
| OZEMAC PTY LTD (ACN 607 250 822) | Defendant |
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JUDGE: | GARDINER AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 April 2018 |
DATE OF JUDGMENT: | 8 November 2018 |
CASE MAY BE CITED AS: | Romas Corporation Pty Ltd v Ozemac Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2018] VSC 673 |
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CORPORATIONS – Corporations Act 2001 (Cth), s 459G – Application to set aside statutory demand by reason of alleged genuine dispute in respect of the debt – Defendant alleges that it completed works for the plaintiff pursuant to partly written and partly oral agreement – Whether plaintiff adduced sufficient admissible evidence to establish a plausible contention requiring investigation – Plaintiff’s evidence inconsistent with contemporaneously generated electronic communications – Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T M Dowling | Dandanis & Associates Lawyers |
| For the Defendant | Mr B Reid | Fraser Barrett Baird Lawyers |
TABLE OF CONTENTS
Legal Principles.................................................................................................................................. 2
Romas’ affidavit evidence in support of the application........................................................... 5
Ozemac’s affidavit evidence in opposition to the application................................................. 6
Correspondence between the parties’ solicitors........................................................................ 13
Romas’ affidavit evidence in response to Ozemac’s affidavit evidence............................... 15
Consideration.................................................................................................................................... 19
HIS HONOUR:
The plaintiff, Romas Corporation Pty Ltd trading as Samor Homes (‘Romas’), makes application by originating process filed 2 March 2018 pursuant to s 459G of the Corporations Act 2001 (Cth) (‘the Act’) to set aside a statutory demand served on it by the defendant, Ozemac Pty Ltd (‘Ozemac’), dated 2 February 2018.
Romas is a building company which constructs residential dwellings throughout Victoria. Ozemac manufactures, supplies and installs pre-cast concrete panels (‘panels’).
The demand claims that Romas owes Ozemac $44,000.00. The debt is described in the demand as money due and payable by Romas to Ozemac pursuant to an invoice dated 20 September 2018 (‘the Invoice’). The Invoice relates to the manufacture and supply of 196 pre-cast concrete panels for installation at Romas’ construction site at Seaton Court, Mount Waverly, Victoria (‘the Mount Waverley site’). The demand was accompanied by an affidavit of Dimce Nedeljkovic sworn 5 February 2018 as required by s 459E of the Act.
Romas relies on two affidavits of its director, Arthur Romas, sworn 2 March 2018 and 3 April 2018,[1] and two affidavits of his father, George Romas, sworn 3 April 2018 and 5 April 2018.
[1]George Romas’ second affidavit corrects a typographical error in his earlier affidavit.
Ozemac relies on the affidavit of its director, Dimce Nedeljkovic (‘Mr Nedeljkovic’), sworn 20 March 2018.
Initially there were a number of issues which arose in the application. Ozemac had contended that the application was not served within the time prescribed by s 459G of the Act but ultimately this was not pressed. Romas had contended that there was a defect in the demand which was served by reason of a disconformity with the form for a statutory demand prescribed by the Corporations Regulations 2001, Form 509H, in that the demand omitted the paragraph in the prescribed form which makes reference to the affidavit accompanying the demand. Such submission was faintly pressed and at the hearing of this matter on 20 June 2018, I indicated that the disconformity in this instance was not such as to warrant the demand being set aside in circumstances where, as here, the affidavit was served at the same time as the demand. There was also an issue that arose by reason that the demand predated the affidavit which accompanied it but Ozemac conceded that this did not give rise to a basis for setting the demand aside. I regard this as a proper concession; the situation is to be contrasted with that where the affidavit predates the demand.[2] The application ultimately involved a determination as to whether there was a genuine dispute in respect of the debt the subject of the demand.
[2]See Wiltown Holdings Pty Ltd v Rural Traders co Ltd (2002) 172 FLR 35; Farid Assaf, Statutory Demands and Winding Up In Insolvency (LexisNexis Butterworths Australia, 2nd ed, 2012) 7.52-7.55.
The essence of Romas’ alleged genuine dispute is that there was no concluded contract for Ozemac to manufacture the pre-cast panels.
Ozemac contends that such alleged dispute is a recent invention of Romas concocted since obtaining legal advice, is implausible, does not warrant further investigation and that Romas’ application should be dismissed.
Legal Principles
The principles applicable in applications to set aside statutory demands were conveniently summarised in Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq),[3] summarised as follows (citations omitted):
[3][2015] VSCA 330, [47]–[51].
The terms of s 459H of the Corporations Act and the authorities make clear that, on an application to set aside a statutory demand, the applicant is required only to establish a genuine dispute or offsetting claim. The applicant is required to evidence the assertions relevant to the alleged dispute or offsetting claim only to the extent necessary for that primary task. It is not necessary for the applicant to advance a fully evidenced claim. Therefore, the task faced by an applicant is by no means at all a difficult or demanding one.
In determining such an application, it is not necessary or appropriate for a court to engage in an in-depth examination or determination of the merits of the alleged dispute. This is because an application alleging a genuine dispute or offsetting claim is akin to one for an interlocutory injunction and requires the applicant to establish that there is a ‘plausible contention requiring investigation’ of the existence of either a dispute as to the debt or an offsetting claim. It is therefore not helpful to perceive that one party is more likely than the other to succeed or that the eventual state of the account between the parties is more likely to be one result than another. Further, the determination of the ‘ultimate question’ of the existence of the debt at a substantive hearing should not be compromised.
The court is required to determine whether the dispute or offsetting claim is ‘genuine’. It has been said that the criterion of a ‘genuine’ dispute requires that the dispute be bona fide and truly exist in fact and that the grounds for alleging the existence of a dispute be real and not spurious, hypothetical, illusory or misconceived. It has also been observed that the dispute or offsetting claim should have a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion. It must also have sufficient factual particularity to exclude the merely fanciful or futile. A rigorous curial approach is essential to the effective operation of the statutory scheme.
The court is not required to accept uncritically every statement in an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be, as it may not have sufficient prima facie plausibility to merit further investigation as to its truth. The court is also not required to accept uncritically a patently feeble legal argument or an assertion of facts unsupported by evidence, although this should not be read as suggesting that the applicant must formally or comprehensively evidence the basis of its dispute or off-setting claim. Except in such extreme cases, the court should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on by the applicant to set aside a statutory demand.
Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd involved a demand for payment of a debt alleged to be due under a contract for the supply of goods. The applicant relied on four matters, each of which had the potential to affect the respondent’s entitlement to be paid the entire amount of the debt. Barrett J held that all four matters were sufficiently plausible to raise a genuine dispute. He relevantly stated:
The [applicant] will fail in [the] task [of establishing a genuine dispute] only if … the contentions upon which it seeks to rely … are so devoid of substance that no further investigation is warranted. Once the [applicant] shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that, on rational grounds, indicates an arguable case on the part of the [applicant], it must find that a genuine dispute exists, even where any case apparently available to be advanced against the [applicant] seems stronger.
In Powerhouse Australasia Pty Ltd v Viarc Pty Ltd,[4] Dodds‑Streeton J considered the approach and standard to be applied when dealing with applications of this type:
While it is not a very exacting standard, on the other hand mere, assertion of a dispute or off-setting claim, mere bluster or advancing grounds which are illusory or spurious or insufficiently particularised will not suffice. The Court must not enter into the merits of the dispute, but it is not crossing the line in relation to its legitimate role in these applications to consider evidence which ‘bears on whether or not the asserted dispute or off-setting claim is genuine’. Indeed, that is its necessary function.[5]
[emphasis added]
[4](‘Powerhouse’) [2006] VSC 508.
[5]Ibid [48].
Romas bears the evidentiary burden of positively establishing the existence of a genuine dispute. In Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd,[6] it was stated that the threshold is not high or demanding, however, the claim must have some merit and be genuine. That requirement has been described variously as the claim must be real and not spurious, the claim must have a real chance of success, and there must be a ‘serious question’ to be tried.[7]
[6][2007] VSCA 121.
[7]Citation Resources v IBT Holdings Pty Ltd [2016] FCA 1265, [17] per McKerracher J.
In Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd,[8] Lockhart J observed:
The notion of a “genuine dispute” in this context suggests to me that the court must be satisfied that there is a dispute that is not plainly vexatious or frivolous. It must be satisfied that there is a claim that may have some substance. On the other hand the court must be careful, because if all an applicant has to do is to assert both a claim and some basis for it, without more, it would mean in almost every case that the court would set aside statutory demands where application is made to that effect. Plainly that is not what the legislature intended by introducing this new regime.
[8](1994) 13 ACSR 37, 39.
The legislature intended that any dispute must have an ‘objective’ existence, the genuineness of which must be capable of being assessed. The use of the word ‘genuine’ is included in s 459H to sound a note of warning that the propounding of spurious disputes and clauses is to be expected but must be excluded from consideration.[9]
[9]Rohalo Pharmaceuticals Pty Ltd v R.P. Scherer SpA & Pharmagel SpA (1994) 15 ACSR 347, 353 per Lindgren J.
In my view, where there is conflicting evidence of the oral dealings and negotiations which the parties conducted at or about the time the alleged dispute is said to have come into existence, it is appropriate to have regard to contemporaneously generated written and electronic communications between the parties if they are available. The written records of such communications, together with an analysis of the actions taken by the parties is likely to be a reliable and objective source of evidence from which the Court can proceed to perform the statutory function described by Dodds‑Streeton J in Powerhouse.
Romas’ affidavit evidence in support of the application
Arthur Romas is the sole director of Romas. In his affidavit sworn 2 March 2018, Arthur Romas states that Romas entered into a contract to construct five townhouses at the Mount Waverley site. Under that contract, two of the townhouses were to have an underground basement of brick construction. Arthur Romas states that following a review of the building contract by an engineer, the construction of the basement was then re-designed so as to be constructed of concrete panels. As a result of this revision, he contacted Ozemac and sought a quotation for the panels. Ozemac then provided him with a quotation dated 31 July 2017 (‘the quotation’).
The quotation is addressed to Romas by its trading name of Samor Homes, lists Arthur Romas as the contact, and identifies the Mount Waverley site as the site address. The quotation indicates it has been formulated on the basis of certain working drawings (described as ‘S1, S2, S3, S4, and S5’) supplied to Ozemac and includes a detailed description of their size, strength colour and finish. The price quoted for supply only was $37,000.00 (excluding GST) and installation and post erection as an extra $25,000.00 (excluding GST), a total of $62,000.00 (excluding GST).
In the quotation under the subheading ‘NOTES’ there is a stipulation ‘a signed works order, letter of intent or contract is required prior to commencement of works’. Arthur Romas contends that no such documentation came into existence and that there was no concluded contract for the manufacture of the panels.
Arthur Romas deposes that following the provision of the quotation there was a series of communications between the parties regarding its finalisation, relating to amendments required following the review of working drawings to determine the exact nature and extent of the construction of the panels. He states that he advised Mr Nedeljkovic that he required a formal amended quotation as he could not proceed with the works without the approval and the execution of a signed variation by the owner.
He exhibits email correspondence between Romas and Ozemac sent between 14 July 2017 and 20 September 2017, which are also exhibited to Ozemac’s affidavit and are discussed below. He contends that there was no formal order for the concrete panels and that Ozemac manufactured the panels of its own volition and not at Arthur Romas’ direction.
Ozemac’s affidavit evidence in opposition to the application
In his affidavit sworn 20 March 2018, Mr Nedeljkovic, the director of Ozemac, states that the panels the subject of the invoice were not delivered to the Waverley site as payment was never received for them. He states further that the invoice was a ‘payment claim’ under s 14 of the Building and Construction Industry Security of Payment Act 2002 (Vic) (‘BACISOP’).[10]
[10]This does not mean that the debt the subject of a payment claim under BACISOP cannot be the subject of a genuine dispute for the purpose of setting aside a statutory demand, even where that dispute has not been the subject of a payment schedule served in accordance with the provisions of BACISOP. Aldoga Aluminium v De Silva Starr Pty Ltd [2005] NSWSC 284.
In response to Arthur Romas’ affidavit, Mr Nedeljkovic agrees the quotation was provided and incorporated the stipulation that ‘a signed works order, letter of intent or contract is required prior to the commencement of works’, but asserts a contract was in existence which was partly oral and partly written. He also contends the contract did not incorporate a term that manufacture of the panels was subject to and conditional upon Romas receiving a signed variation order from the developer.
Mr Nedeljkovic states that on 14 July 2017 he received a telephone phone call from Arthur Romas who stated he required an urgent quote for the manufacture of pre-cast concrete panels required to construct two basement garages in the townhouses he was constructing. He indicated that he would email the plans required for the quote.
On 14 July 2017, Arthur Romas emailed Mr Nedeljkovic and attached the engineering plans for five units with basements for two units and requested a quote for panels for two units.
On 27 July 2017, Arthur Romas sent two identical emails (at 1.05am and 10.05am) which stated:
Hello Dimce and Ashley
Just following up on the precast panel quote for the basement at 6 Seaton Crt Mount Waverley.
On 1 August 2017, an email was sent to Arthur Romas on behalf of Ozemac by an employee, Mr Fernando, which attached the quotation.
Mr Nedeljkovic states he met with Arthur Romas and George Romas at Romas’ offices on 3 August 2017 to discuss inserts specified by the electrician and openings required by the plumber for the panels.
On 4 August 2017, Mr Nedeljkovic met again with George Romas at Romas’ offices. Mr Nedeljkovic states that at this meeting it was agreed the quote would be accepted by Romas on the basis the price would be reduced from $62,000.00 (excluding GST) to $63,000.00 (including GST), provided further additional works including cleaning of debris and rubbish on completion of the works, internal and external caulking of panels, and grouting were included in the revised price (the ‘amended quotation’). He states it was also agreed by the parties that Ozemac required full payment of its invoice for the manufacture of the panels within 14 days of the date of the invoice, or before installation of the panels, whichever was the earliest. Mr Nedeljkovic exhibits an email sent by Arthur Romas to him on 1 September 2017 which reads:
Dimce
Please amend changes to quote.
*Price $63,000 inc GST for supply and install.
*Cleaning of debris & rubbish on completion from works
*Internal & External Caulking of panels
*Grouting
And other changes as discussed in our meeting
Regards
Arthur Romas
Director
Mr Nedeljkovic states that at their meeting on 4 August 2017, George Romas advised Mr Nedeljkovic the panels were required urgently and instructed him that Ozemac was to commence manufacture of the panels immediately. In order to assist with the manufacture, Mr Nedeljkovic states, George Romas organised for the architectural drawings to be immediately emailed to Mr Nedeljkovic by the engineers for the project, TGL Engineering Group Pty Ltd. That same day, a representative from TGL Engineering Group Pty Ltd emailed Mr Nedeljkovic attaching the architectural drawings.
On 22 August 2017, after apparently having sent an email on 21 August 2017 which failed to attach the relevant documents, Mr Nedeljkovic sent an email to Arthur Romas which stated:
Sorry George
I attached the project I am quoting now. Give me a call when you receive. We started marking the panels
Regards
Dimce
Mr Nedeljkovic deposes that neither Arthur Romas nor George Romas advised him to cease manufacture of the panels on the basis of the alleged precondition or at all but that, on the contrary, they advised on a number of occasions by telephone between 14 July 2017 and 22 August 2017 that the panels were required urgently. Mr Nedeljkovic deposes that he had understood the amended quotation to be accepted on 4 August 2017 and that Ozemac then commenced substantial work towards the production of the panels.
Mr Nedeljkovic states that on 23 August 2017, Arthur Romas telephoned him and requested a copy of the shop drawings for the panels. Mr Nedeljkovic emailed Arthur Romas on 22 August 2017 and 23 August 2017 attaching the shop drawings.
On 28 August 2017 and on 30 August 2017, Arthur Romas sent an email to Mr Nedeljkovic attaching the shop drawings with comments made by an engineer from TGL Engineering Pty Ltd. Mr Nedeljkovic states that the emails sent by Arthur Romas contained requests by the engineer for minor changes to be made to the shop drawings. Mr Nedeljkovic states that he reviewed the changes to ensure none of the panels already cast on 22 August 2017 were affected by the amendments and that none were. Mr Nedeljkovic states that he then implemented the requested changes for the panels that had not yet been manufactured.
Mr Nedeljkovic states that in or around late August and early September 2017, George Romas attended Ozemac’s factory in Campbellfield to view and inspect the manufacture of the panels and that at this time he does not recall George Romas saying anything negative about the quality, number, or manufacturing process of the panels. He states that in early September 2017, George Romas again attended at the factory and said at this time that he was very happy with the panels manufactured to date and wished to discuss the process for installation of the panels at the Waverley site. Mr Nedeljkovic says that he advised George Romas that once payment of Ozemac’s invoice was made, installation of the panels would commence immediately. Mr Nedeljkovic states that George Romas responded words to the effect of ‘No problem, I can’t tell you about payment, Arthur is doing that.’
Mr Nedeljkovic states that on 4 September 2017, Arthur Romas requested by telephone that casting of the panels be completed urgently because the concrete slab had been poured.
Early in the morning of 6 September 2017, Arthur Romas sent an email to Mr Nedeljkovic which stated:
Hi Dimce
Please find attached plan with measurements from George.
The measurements are approximates and you will need to confirm these measurements onsite.
Regards
Arthur Romas
Director
Mr Nedeljkovic states the attached plan was for the poured slab footing measurements upon which the panels were to be installed. He notes that Arthur Romas requested for Mr Nedeljkovic to attend to confirm the measurements because Ozemac was responsible for ensuring the accuracy of the panel measurements. Mr Nedeljkovic states that this was a typical process because if there are inaccuracies it is possible to make amendments to either the poured slab or cast panels to ensure a flush installation.
Mr Nedeljkovic attended at the Mount Waverley site with George Romas to take the slab footing measurements on 6 September 2017. He states he then emailed Arthur Romas advising him of the measurements taken and of a minor discrepancy he had discovered. Mr Nedeljkovic’s email attaching his measurements was sent to Arthur Romas’ email address (but directed to George Romas) on 6 September 2017 and states:
Hi George
See the concrete outline as we measure. There are minor differences on all measurement from today and the previous one except the middle wall. One side is very close but the other does not look that is right from today’s measurement. By this measurement the overall building dimension is much bigger than 17300.
Give me a call
Regards
Dimce
Mr Nedeljkovic states that he and George Romas also discussed arrangements for installation of the manufactured panels, and that it was agreed that one of Ozemac’s cranes would be required for this purpose and would need to be sited on council land adjacent to the Waverley site. Mr Nedeljkovic deposes that he agreed to contact the council to obtain the permission necessary to effect this arrangement.
Mr Nedeljkovic states that on 8 September 2017 he telephoned the council and was told by a council representative that Romas would need to complete most of the information on the relevant application form. Mr Nedeljkovic states that the form was sent to him by the council representative shortly after their telephone call and that once he had received the form, he telephoned Arthur Romas to discuss what information was required. He then forwarded a copy of it to Arthur Romas and George Romas by email. He exhibits an email attaching a City of Monash Council Reserve Access Application Form sent from Mr Nedeljkovic to Romas’ email address on 8 September 2017.
Mr Nedeljkovic states that on 18 September 2017, the final panels were being cast by Ozemac and a third party installer was contacted to discuss installation of the panels at the Waverley site. Mr Nedeljkovic states that all panels were manufactured by 20 September 2017 and that on this date, Mr Nedeljkovic attended at the Waverley site in the company of Ozemac’s installer, Remo Montanero, to confirm final preparation of the site and placement of the crane for installation of the panels.
On 20 September 2017, Mr Nedeljkovic sent an email to Arthur Romas attaching the Invoice. This email states:
Arthur
Please find attached the invoice for manufactured panels. The invoice for installation of panels will be sent after panels being install. (sic)
Regards
Dimce
That same day, Arthur Romas sent an email in response to Mr Nedeljkovic which states:
Hi Dimce
Please send me the amended quote with items we agreed.
Regards
Arthur Romas
Managing Director
Mr Nedeljkovic responded to Arthur Romas’ email shortly afterward, attaching a copy of the amended quotation.
Mr Nedeljkovic states that on 22 September 2017, Remo Montanero attended at the Waverley site to confirm arrangements for the positioning of the crane, and that on or around that date there was a further meeting at Ozemac’s offices attended by Mr Nedeljkovic, Arthur Romas and George Romas. Mr Nedeljkovic states that at this meeting, Arthur Romas advised that the developer was a partnership consisting of two partners, one of whom lived in China, the other in Australia and that the Australian partner was travelling to China to collect the required money for the project and would be arriving that Saturday with sufficient money to pay Romas who would in turn pay Ozemac’s Invoice. Mr Nedeljkovic states that Arthur Romas then requested that Ozemac install the panels immediately to which he refused, reiterating that Ozemac required full payment of the invoice before installation could take place.
Mr Nedeljkovic states that on 6 October 2017, Arthur Romas telephoned him. During this conversation, Arthur Romas requested that Mr Nedeljkovic send to him photographs of the cast panels so he could forward these to the developer. Mr Nedeljkovic deposes that during this conversation Arthur Romas advised he was experiencing difficulty obtaining money from the developer and that he wanted to show them that the panels had in fact been cast and were ready for installation. On 6 October 2017, Mr Nedeljkovic sent an email to Romas attaching photographs of the panels. Approximately three days later, on 9 October 2017, Mr Nedeljkovic sent an email to Romas which states:
Dear Arthur
Please confirm the day of payment for invoice No. 7. All panels have been cast completely on 18.09.2017 awaiting installation. Please note that this matter was address (sic) to my lawyer and she is waiting for your response by end of business day today. If the answer is not received today, with no warning the legal action will be taken. Please note that from Thursday 12.10.2017 the warehouse rent of $20 per day will apply for keeping the panels in the factory.
Regards
Dimce
On 11 October 2017, Mr Nedeljkovic sent an email to Arthur Romas which states:
Arthur
I spoke with the crane operator yesterday. The earliest time to come to install the panels is Tuesday. Please note that if we are not going to booked (sic) the crane by tomorrow morning the installation day will be moved to the next crane availability. Please organise the payment and provide the trucks and crane access to the site. If the payment is not made by COB day will be no installation by abovementioned day
Regards
Dimce
Mr Nedeljkovic states that on 27 October 2017, he had a further telephone discussion with Arthur Romas regarding payment of the invoice as no payment had been received and Mr Nedeljkovic understood installation was required urgently. Mr Nedeljkovic deposes that Arthur Romas advised him that he had been unable to open his email and requested the invoice be resent.
On 27 October 2017, Mr Nedeljkovic sent an email to Arthur Romas forwarding the emails he had sent earlier, which attached the Invoice and the Quotation as amended by hand by Mr Nedeljkovic.
Correspondence between the parties’ solicitors
On 21 December 2017, Ozemac’s solicitor, Ms Barrett, sent an email to the Romas’ solicitors advising that, unless Romas arranged for the collection of the panels by 4.00pm the next day the panels stored in Ozemac’s factory would be disposed of and Ozemac would hold Romas responsible for all disposal costs.
Ozemac’s solicitors responded by letter dated 22 December 2017 stating, inter alia:
Our client is hopeful of a resolution being achieved in mid January 2018 however, they cannot abide by your clients unreasonable timeframe constraints. Please take notice that your clients are not permitted to dispose of our clients property and our client will seek to recover all loss and damage should your client unlawfully dispose of same…
It appears from the context that the ‘resolution’ referred to was a reference to matters concerning Ozemac and the developers.
On 25 January 2018, Romas’ solicitors wrote to Ozemac’s solicitors and stated:
Our correspondence of 22 December 2017 sought to preserve the position of the parties given that our client intended to meet with the owner to seek the execution of the variation. The reference to “your client are not permitted to dispose of our clients property” was a reference to a situation where should the owner consent to the variation our client will not be liable for two sets of costs should your client dispose of the existing panels and thereafter have to manufacture new panels.
Mr Nedeljkovic states that approximately one month later, on 22 February 2018, he received 16 messages and telephone calls from Arthur Romas requesting a meeting in relation to the Invoice and Demand. He deposes that on 27 February 2018, he and Arthur Romas met at Kerrimuir Shopping Centre and that at this time Arthur Romas explained Romas was owed approximately $250,000.00 from the developer in relation to the Waverley site project and this was the reason Ozemac was unable to pay the Invoice. Mr Nedeljkovic states Arthur Romas requested a payment plan and it was agreed Romas would pay 50 per cent of the invoice immediately with the balance being paid by equal monthly instalments of $5,000.00 until the debt was extinguished, and that Ozemac would store the panels for a further month at its factory. Mr Nedeljkovic maintains that meeting was an open meeting and was not without prejudice. Mr Nedeljkovic exhibits email correspondence between he and Arthur Romas by which the two arranged to meet on 27 February 2018, and an email from Arthur Romas to Mr Nedeljkovic sent that day which stated:
Hi Dimce
Please find attached engineer plans for the retaining walls we were talking about today.
Also, forward me your drainage plan so I can forward to the drainer for you.
Mr Nedeljkovic states that, on the basis that agreement had been reached between the parties subject only to formal terms of settlement, he instructed his solicitors on 28 February 2018 to consent to the extension of time by which Romas was required to file the application to set aside the statutory demand.[11]
[11]This alleged agreement of course would have no legal effect as the parties have no ability to vary the time constraint imposed in the Act.
Mr Nedeljkovic states that on 1 March 2018, he telephoned Arthur Romas and that Arthur Romas advised he would try to pay $22,000.00, being 50 per cent of the Invoice, on Friday, 2 March 2018. No payment was made by Romas either then or at all. Romas made this application to the court on 2 March 2018.
On 15 March 2018, Mr Nedeljkovic received a text message from Arthur Romas advising that he was meeting with the engineer of another site to discuss whether the panels could be used for another project.
Romas’ affidavit evidence in response to Ozemac’s affidavit evidence
In his affidavit sworn 3 April 2018 (Arthur Romas’ ‘later affidavit’), Arthur Romas maintains in response to Mr Nedeljkovic’s affidavit that he did not order nor authorise the manufacture of the panels, and that there was never a contract between the parties. He states that the invoice was not a payment claim under the BACISOP Act as he did not order nor authorise the manufacture of the subject panels. Arthur Romas exhibits a copy of a letter from his solicitors to the solicitors for Ozemac dated 10 November 2017 which encloses a payment schedule and which states that Romas never requested the manufacture of the concrete panels.
In relation to the conversations and correspondence detailed above in paragraphs 22 to 26, Arthur Romas asserts that these relate to the provision of a quote for the project and that at no stage did he ever contract (on behalf of Romas) with Ozemac. In relation to the alleged meeting between George Romas and Mr Nedeljkovic on 4 August 2017 as detailed above in paragraph 27, Arthur Romas states that George Romas would sometimes help him with the construction aspect of Romas’ projects, but that George Romas always acted in accordance with Arthur Romas’ directions and that at no stage did he instruct George Romas to accept a quote.
George Romas confirms the evidence in his earlier affidavit[12] that he met with Mr Nedeljkovic on 4 August 2017, and that Arthur Romas was in attendance. George Romas states that at this meeting Arthur Romas discussed the quotation and that following discussions Mr Nedeljkovic agreed to provide an amended written quotation for the owners’ consideration. George Romas deposes that at no stage did he request that Ozemac manufacture the panels either immediately or otherwise, nor advise Mr Nedeljkovic that the panels were required urgently.
[12]As read with George Romas’ affidavit sworn 5 April 2018, which serves only to correct a typographical error in his earlier affidavit, wherein George stated that the meeting was held on ‘31 August 2017’. In George’s affidavit sworn 5 April 2018, he states this should in fact read ‘4 August 2017’.
Arthur Romas states in his later affidavit that he is advised by George Romas that he never accepted a quote. Arthur Romas confirms Mr Nedeljkovic was prepared to amend his original quote at this meeting and that he requested the provision of an amended written quote to enable him to show the owners and seek their approval. He reiterates that he never accepted the original quote nor the amended quote.
In response to Mr Nedeljkovic’s contention described above in paragraph 30, that ‘on a number of occasions by telephone between 14 July 2017 and 22 August 2017’ the panels were required urgently, Arthur Romas denies both that he advised Mr Nedeljkovic that the panels were required urgently or that he requested Ozemac commence manufacturing the panels.
In relation to the correspondence regarding the shop drawings for the panels and the changes requested by TGL Engineering Pty Ltd, Arthur Romas asserts that the provision of the shop drawings and the requested changes were for the purpose of obtaining an amended quote.
In respect of the alleged meetings between George Romas and Mr Nedeljkovic, described at paragraph 33 whereby the former is alleged to have attended Ozemac’s factory on two occasions, George Romas states he only ever attended the premises on one occasion which he believes was in early September 2017. He states that on that occasion he had a meeting with another supplier of trusses and as the supplier was in the immediate area of Ozemac’s premises, he attended at the premises following this meeting. George Romas states that Mr Nedeljkovic, surprised to see him, said he would show George Romas around the premises. George Romas observed, he says, a number of workers working with steel, however he states that he did not see any completed panels and that Mr Nedeljkovic did not advise him that he was manufacturing any panels for the Waverley site.
Arthur Romas denies in his later affidavit that the alleged telephone conversation described in paragraph 34 namely that Arthur Romas called Mr Nedeljkovic on 4 September 2017 requesting that casting of the panels be completed urgently as the concrete slab had been poured, ever happened. In his earlier affidavit, George Romas agrees that the defendant attended the Waverley site two days later on 6 September 2017, but states he believes this was for the purpose of finalising the amended quote. Arthur Romas also states the correspondence between the parties on this occasion (amongst others) related to the provision of a quote for the project.
Arthur Romas states that he did not complete the City of Monash Council Reserve Access Application Form as he had not approved the manufacture of the panels, and denies ever physically sighting any completed panels.
In relation to the email exchange described above in paragraph 18 whereby Arthur Romas requested that an amended quote be sent, Arthur Romas maintains that this request is consistent with his discussions with Ozemac that he required an amended quote. He notes the amended quote was merely the original quote with handwritten amendments.
George Romas confirms in his earlier affidavit that Mr Nedeljkovic attended the Waverley site on 20 September 2017, however maintains that he believed that was for the purpose of finalising the amended quote (and not to confirm final preparation of the site and placement of the crane for installation).
As regards the meeting on 22 September 2017, referred to above at paragraph 44, Arthur Romas states in his later affidavit that at this meeting he advised the defendant that Romas could not proceed until the amended quote was approved by the owner and that he required the owner to sign a variation if he accepted the amended quotation. Arthur Romas states further that he advised Mr Nedeljkovic that he was awaiting the owners instructions. Arthur Romas states that he did advise Mr Nedeljkovic that he was having difficulty obtaining instructions as one of the owners was in China, but denies requesting that the defendant install the panels immediately as he did not have the authority from the owner to proceed with the works. George Romas in his earlier affidavit also confirms that he attended a meeting with Mr Nedeljkovic and Arthur Romas on this date, at which, he deposes, Arthur Romas advised Mr Nedeljkovic he was still endeavouring to obtain the owners’ approval for the amended quote and was having difficulty obtaining instructions as one of the owners was in China. Arthur Romas denies ever advising Ms Barrett that he was going to pay the invoice, as he was still seeking instructions from the owner.
Arthur Romas deposes that the purpose of his telephone call to Mr Nedeljkovic on 6 October 2017 was to inform Mr Nedeljkovic that he could not pay the invoice as he had not received approval from the owners as to the amended quote. He deposes that Mr Nedeljkovic told him that he could forward the photographs of the completed panels to assist Arthur Romas in seeking the owner’s instructions, and that he accepted that invitation. He denies advising Mr Nedeljkovic to install the panels.
Arthur Romas does not deny attempting to contact Mr Nedeljkovic on 22 February 2018 to discuss the dispute. He states that at their meeting at Kerrimuir Shopping Centre, he advised Mr Nedeljkovic that the meeting was without prejudice to which Mr Nedeljkovic accepted. He states further that the alleged settlement was never reached. He further denies the allegation described above at paragraph 54, being that Arthur Romas advised Mr Nedeljkovic on 1 March 2018 that he would try to pay $22,000.00 on 2 March 2018.
Consideration
In my view, if one has regard to the email correspondence between the parties which was generated around the time of the transaction the subject of the alleged dispute that Romas seeks to raise, together with a consideration of the actions of the parties at about that time, Mr Nedeljkovic’s evidence in this regard overwhelms that of Arthur and George Romas. Mr Nedeljkovic’s evidence is inherently more plausible and is supported by the contemporaneous communications. Indeed, I find that the position being put by Arthur and George Romas on behalf of Romas is not bona fide but rather is spurious and has been ‘got up’ as a means of attempting to impeach Ozemac’s demand. This finding does not involve a determination of the respective deponent’s credibility where there is a controversy in regard to their accounts of oral communications, which in most circumstances is not appropriate in these types of applications (save where the evidence is implausible).
I regard the following as significant features of the evidence. There is no doubt that Arthur Romas requested Ozemac to produce the quotation and provided detailed engineering plans for this to be achieved on 14 July 2017. Indeed, on 27 July 2017, Ozemac was pressed to provide the quotation when it was not forthcoming in two emails.
Certain amendments were required which were confirmed by Arthur Romas in his email of 1 September 2017 which contained a confirmation of revised conditions as to price and other associated matters.
Mr Nedeljkovic states that he met with George Romas on 4 August 2017 who instructed him that the panels were required urgently and that their manufacture should be commenced immediately. I do not accept Arthur Romas’ assertion that his father had no authority to bind Romas. There is abundant evidence that he was held out as having apparent or ostensible authority to represent Romas. I find on the evidence that he was closely involved at a managerial level in the project and that this was to the knowledge of Arthur Romas.
On 22 August 2017, Mr Nedeljkovic emailed Arthur Romas and indicated that Ozemac had commenced manufacture of the panels. Romas did not respond to this email and no instruction was given for Ozemac to cease manufacturing.
Mr Nedeljkovic provided copies of the shop drawings for the panels at Arthur Romas’ request on 23 August 2017. Romas did not raise any issues at this time in relation to the amended quote or state that Romas was waiting on instructions from the owner.
On 28 and 30 August 2017, Arthur Romas emailed Mr Nedeljkovic attaching copies of these drawings with commentary from an engineer engaged on the project which requested certain modifications. On 6 September 2017, Arthur Romas again emailed Mr Nedeljkovic plans and requested that certain measurements be confirmed. On the same day, Mr Nedeljkovic apparently carried out such measurements and emailed Arthur Romas with the outcome.
On 8 September 2017, after Mr Nedeljkovic had made contact with the council concerning arrangement for the cranes to be used in the installation of the panels, he forwarded the necessary documentation for completion by email to Arthur and George Romas. On 20 September 2017, manufacture of the panels was completed and Mr Nedeljkovic emailed Arthur Romas the Invoice for the manufacture of the panels and advised that the Invoice for the installation of the panels would be sent separately. This was followed by an email from Arthur Romas on the same day which sought an amended quotation (as per Arthur Romas’ email of 1 September 2017). Mr Nedeljkovic provided that amended quotation that day.
On 6 October 2017, Mr Nedeljkovic sent Arthur Romas an email attaching photographs of the panels. On 9 October 2017, he emailed Arthur Romas seeking confirmation of the date of payment and noted that the panels had been manufactured and awaited installation. He stated that warehouse rent of $20.00 per day would be charged. On 11 October 2017, Mr Nedeljkovic emailed Arthur Romas in relation to details concerning the crane and the need to book it if installation was to occur on the following Tuesday. He requested payment of the invoice and stated that if it was not paid installation would not take place on the Tuesday.
On 27 October 2017, Mr Nedeljkovic emailed Arthur Romas with copies of emails he had previously sent and attached further copies of the invoice and amended quotation.
This was followed by the correspondence from Ozemac’s solicitor of 21 December 2017 referred to above. This correspondence was met with the response from Romas’ solicitor on 22 December 2017 which stated that Ozemac was not permitted to dispose of [their] client’s property and that Romas would seek to recover all loss and damage should Ozemac ‘unlawfully dispose’ of the panels. I regard the explanation in the letter from Romas’ solicitors of 25 January 2018 which purports to explain the alleged context of the letter of 22 December 2017 as being disingenuous.
I consider that the foregoing chronicle as set out in the parties email transmissions reveals that Romas concluded a contract with Ozemac for the manufacture of the panels. The evidence of the numerous communications between Ozemac to Romas clearly indicates Romas’ knowledge of the progress of the manufacture of the panels and is completely consistent with Romas having concluded a contract with Ozemac for the manufacture of the panels.
I consider that Romas’ application should be dismissed with costs.
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