Salmon v Asphalt - [2009] NSWSC 689

CITATION: Salmon v Asphalt [2009] NSWSC 689

HEARING DATE(S): 20/05/09

JUDGMENT DATE :
23 July 2009

JURISDICTION: Equity Division

JUDGMENT OF: Macready AsJ at 1

DECISION: Paragraph 32

CATCHWORDS: Corporations Law. Application to set aside statutory demand under s 459G of Corporations Act. Held there was a genuine dispute in respect of the claims. No matter of principle.

PARTIES: Salmon & Speck Pty Ltd v Asphalt Haulage Pty Ltd & Anor

FILE NUMBER(S): SC 4697/2008

COUNSEL: Mr R Alkandamani for plaintiff
Mr JT Johnson for defendant

SOLICITORS: Patterson Houen & Commins for plaintiff
Proctor Phair Lawyers for defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Associate Justice Macready

Thursday 23 July 2009

4697/2008 SALMON & SPECK PTY LIMITED v ASPHALT HAULAGE PTY LIMITED AND ANOR

JUDGMENT

1 HIS HONOUR: This is an application under 459G of the Corporations Act 2001 to set aside a statutory demand served by the defendant on the plaintiff dated 26 August 2008 for $187,000. The plaintiff raised what it says is a genuine dispute and alleges that it has offsetting claims against this amount.

Background

2 The defendants were the vendors under a Deed of Agreement dated 20 June 2007 for the sale of a business to the plaintiff. The sale of the business included the manufacture and wholesale of potato chips, vegetables and other foods.

3 The consideration was the sum of $2,400,000 together with stock at valuation. The relevant clause for the payment of the purchase price was clause 3.1 which was in the following terms:

"3.1 Apportionment and payment of purchase price.
(a) The parties agree that the Purchase Price shall be apportioned to between the Assets and the Vendor on the basis set out in Schedule 5.
(b) The Purchase Price shall be paid:

(i) As to the sum of $1,350,000.00 plus or minus any adjustments on Completion;
(ii) As to the sum of $250.000.00 within 10
Business Days after the Vendor delivering to the
Purchaser;

A. A letter from Integra Water (The Contractor) for the Water Treatment Works confirming that the Water Treatment Works have been satisfactorily completed; and
B. A written report from Labpoint confirming that the water sample analysed meets the guidelines of the Trade Waste Agreement (such water sample being supplied after completion of the Water Treatment Works); and

(iii) As the balance of $800,000.00 (plus interest) after the first, second and third anniversaries of Completion subject to adjustment as provided in Clause 3.2 (Deferred Consideration)."

4 The initial sum of $1,350,000 was paid. The dispute arose between the parties as to the payment of the next installment of $250,000. It can be seen from clause 3.1(b)(ii) that there were two requirements before the sum was payable.

5 According to the defendants the appropriate conditions were satisfied.

6 It can be seen that they allege this in the way they have described the debt in the statutory demand, which was as follows:

“By Deed of Agreement for Sale of Business dated…

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: [2009] NSWSC 689
Decision Date: 23 July 2009

CaseChat Overview and Summary

Salmon and Asphalt were in a dispute, and Salmon applied to the court to set aside a statutory demand that Asphalt had issued under section 459G of the Corporations Act. The dispute revolved around whether Salmon owed a debt to Asphalt, and the court had to decide if there was a genuine dispute in respect of the claims. This decision was significant as it involved the interpretation of the Corporations Act and the criteria for setting aside a statutory demand.

The court had to consider whether Salmon had a genuine dispute in respect of the claims made by Asphalt. The court examined the evidence presented by both parties and the applicable legal principles. The court also had to consider if there was a matter of principle involved in the dispute. The court concluded that there was a genuine dispute in respect of the claims, and there was no matter of principle that would prevent the setting aside of the statutory demand.

The court's reasoning was based on the evidence presented by both parties and the interpretation of the Corporations Act. The court found that there was a genuine dispute in respect of the claims, and that the statutory demand should be set aside. The court also found that there was no matter of principle involved in the dispute, which would have prevented the setting aside of the statutory demand.

As a result, the court granted Salmon's application to set aside the statutory demand issued by Asphalt. The court ordered that the statutory demand be set aside, and that the parties bear their own costs of the application. This decision provides guidance for practitioners on the criteria for setting aside a statutory demand and the importance of considering the evidence and applicable legal principles.

Orders