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Royal Premier Pty Ltd v Taleski

Royal Premier Pty Ltd v Taleski

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Case Copied 28 February 2001 42 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: ROYAL PREMIER PTY LTD -v- TALESKI [2001] WASCA 48

CORAM: MALCOLM CJ
IPP J
WALLWORK J

HEARD: 22 SEPTEMBER 2000

DELIVERED : 28 FEBRUARY 2001

FILE NO/S: FUL 53 of 2000

BETWEEN: ROYAL PREMIER PTY LTD
Appellant
AND
CANE TALESKI
Respondent

Catchwords:

Corporations Law - Application to set aside statutory demand - Whether offsetting claims pursuant to s 459H - Held, the Master correctly held that the evidence did not demonstrate an offsetting claim

Legislation:

Corporations Law (Cth), s 459H

Rules of the Supreme Court 1971 O 37 r 6(2a)

Result:

Appeal dismissed

Representation:

Counsel:

Appellant: Mr C P Stokes
Respondent: Mr A Metaxas

Solicitors:

Appellant: Chris Stokes & Associates
Respondent: Arthur Metaxas & Co

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

Automatic Fire Sprinklers v Watson (1946) 72 CLR 435
Goldspar Australia v KWA Design Group (1999) 17 ACLC 456
Heyman v Darwins Ltd [1942] AC 356
Turner Corporation WA Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294
Universal Greening Pty Ltd v Sabine & Anor (1999) 17 ACLC 880

Case(s) also cited:

Brown v Jam Factory Pty Ltd (1981) ATPR 40-213
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporises Pty Ltd (1994) 13 ACSR 37
Eden Vale Pty Ltd v Bennett & Co, unreported; SCt of WA; Library No 970533; 23 January 1997
Eyota Pty Ltd v Hanabe Pty Ltd (1994) 12 ACSR 785
Gates v City Mutual Life Assurance Society Ltd (1986) ATPR 40-666
Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1
Kashemije Stud Pty Ltd v Hawkes (1978) 1 NSWLR 143
Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555
Mibor Investments Pty Ltd v Commonwealth Bank (1993) 11 ACLC 1062
Moriarty v Regent's Garage [1912] 2 KB 766
Re Morris Catering (Australia) Pty Ltd (1993) 11 ACLC 919
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 47 FCR 451

MALCOLM CJ : This is an appeal against an order made by Master Sanderson dated 10 March 2000 by which the learned Master dismissed an application by the appellant to set aside a statutory demand made by the respondent. The application was made pursuant to s 459G of the Corporations Law. The application fell to be determined under s 459H and was made on alternative grounds. First, the appellant said that there was a genuine dispute about the amount claimed in the demand. Alternatively, it was contended by the appellant that it had an offsetting claim greater than the amount of the demand and that the demand should therefore be set aside under s 459H(3).
The demand was served on the applicant on 24 December 1999. The application to set aside the demand was filed on 17 January 2000. The application was supported by an affidavit of one Li Chien (Terrence) Chan sworn 14 January 2000. Throughout his reasons the learned Master referred to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] WASCA 48
Decision Date: 28 FEBRUARY 2001

CaseChat Overview and Summary

The case of Royal Premier Pty Ltd v Taleski involved a dispute over an application to set aside a statutory demand. The applicant, Royal Premier, sought to set aside a statutory demand issued by Taleski, the respondent, in relation to a debt of $17,500. The crux of the case was whether Taleski could offset his claim against the demand by asserting that Royal Premier owed him money for unpaid salary and expenses. The matter was heard in the Federal Court of Australia.

The central legal issue was whether Taleski could establish an offsetting claim under section 459H of the Corporations Act 2001, which would allow him to offset his debt against the statutory demand. To do so, Taleski needed to demonstrate that Royal Premier owed him money for services rendered or expenses incurred. This required an examination of Taleski's role within the company, his duties, and whether any representations made by him had been relied upon by Royal Premier. Additionally, the court had to determine if Taleski's failure to fulfill his duties and responsibilities could justify an offset against the statutory demand.

The court found that Taleski's affidavit did not sufficiently demonstrate any offsetting claims. It was noted that Taleski had made various representations to Royal Premier regarding his role and the business plan, but these had not been substantiated by any evidence of a breach by Royal Premier or of any financial obligation owed to Taleski. The court emphasised that the burden of proof lay with Taleski to show that he had a legitimate offsetting claim. Since Taleski failed to provide adequate evidence to support his claims, the court upheld the Master's decision that the statutory demand could not be set aside.

In conclusion, the court ruled that Taleski's application to set aside the statutory demand was dismissed. The evidence did not support Taleski's assertion of an offsetting claim, and thus the statutory demand for the $17,500 remained valid.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

IPP J MALCOLM CJ IPP J (dissent)

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: IPP J, MALCOLM CJ,

If the evidence in this case is examined in the same manner as in the Turner Corporation decision, it appears from Mr Li Chien Chan's affidavit of 14 January 2000, that the duties and responsibilities of the respondent in the company were as follows:"(a)General management and day to day administration;(b)Production management and production control of the company's manufacturing activities;(c)Establishing production schedules, logistic plans and procedures;(d)Quality control of manufactured vehicles;(e)Production cost controls and materials procurement;(f)Automobile engineering, innovative designs and improvements;(g)…(h)Overseas marketing and promotions jointly with Chan;(i)Approvals to ensure full compliance with local laws and regulations;(j)Policy and planning decisions of the company jointly with Chan." (AB 24 cl 12 of the agreement) It was provided in cl 13 of the agreement that the respondent was entitled to the salary he had claimed in the statutory demand "for the carrying out of the duties and responsibilities as a full‑time working director…." Mr Chan deposed that prior to entering into the agreement, the respondent had represented that he had been carrying out the duties and responsibilities abovementioned for some time and that he had the skill and experience to carry out those duties. He had also represented that each of the Ford stretch limousines proposed to be produced would cost $30,000 to purchase and stretch. Mr Chan deposed that the appellant had relied upon the above representations when agreeing to employ the respondent in May 1998. Further that in July 1998 the respondent had prepared a business plan for the company, which plan had provided amongst other things, that that there was one Ford stretched limousine nearing completion by the end of July 1998; that there was also a Mercedes 300 SEL limousine to be completed by August 1998, two other limousines to be completed by October 1998 and sports cars which would commence to be manufactured by October 1998. Mr Chan further deposed that in preparing the business plan for the company the respondent had represented that he had the skill and experience to ensure the fulfilment of the plan and that the company had relied on those representations in continuing to employ him from July 1998 onwards. Mr Chan also deposed that in August 1998 the respondent had represented that if the company paid the costs of a Yellow Pages advertisement in the sum of $18,356, a number of smaller limousine operators would promote their services under the umbrella of the company and share the advertisement costs. He deposed that the company had relied on this representation and paid the costs of the advertisement on 4 August 1998. The alleged breach of duties and responsibilities by the respondent which it was claimed would substantiate an off‑setting claim against the statutory demand for the $17,500 salary owing, included an allegation by Mr Chan that by January 1999 when the respondent had been invited to resign as a director of the company, he had been in breach of his general management duties as well as his duties concerning production management and production schedules. Mr Chan deposed that the first two limousines being manufactured had not been completed. He deposed that manufacturing had not commenced on the next two limousines scheduled for completion by October 1998 and that manufacturing had not commenced on the kit sports cars (due to have been commenced by October 1998) or the balance of the 10 limousines which had been due for completion by July 1999 pursuant to the business plan.