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SMEC International Pty Ltd v CEMS Engineering Inc

SMEC International Pty Ltd v CEMS Engineering Inc

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Case Copied 5 June 2001 26 min read

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Reported Decision:
(2001) 162 FLR 383
(2001) 38 ACSR 595
(2001) 19 ACLC 1309
[2001] NSWSC 459
[2001] ACL Rep 120 NSW 87

New South Wales

Supreme Court

CITATION: SMEC International v C.E.M.S. Engineering [2001] NSWSC 459

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 1761/01

HEARING DATE(S): 17 April 2001

JUDGMENT DATE:
5 June 2001

PARTIES :

SMEC International Pty Ltd (P)
C.E.M.S. Engineering Inc (D)

JUDGMENT OF: Austin J

COUNSEL : P M Wood (P)
M J Cohen (D)

SOLICITORS: Blake Dawson Waldron (P)
Gadens (D)

CATCHWORDS: CORPORATIONS - companies - winding up - statutory demand - genuine dispute as to existence of debt - whether demand can be expressed in foreign currency - effect of arbitration clause - requirements for contents of affidavits supporting application to set aside statutory demand

LEGISLATION CITED: Corporations Law ss 459E, 459G, 459H, 459J
Corporations Regulations 1.1.03 and 1.1.04 and Form 509H
Bankruptcy Act 1966 (Cth) s 4(2A), (2B) and (2C)
International Arbitration Act 1974 (Cth) s 7(2)

CASES CITED: British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd's Rep 368
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Daewoo Australia Pty Ltd v Suncorp-Metway Ltd (2000) 33 ACSR 481
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Dromore Produce Pty Ltd v W Paton (Fertilisers) Pty Ltd (1997 23 ACSR 230
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1996) 41 NSWLR 117
Flakt Ltd v Wilkins and Davies Construction Co Ltd [1979] 2 NSWLR 243
Goldspar Australia Pty Ltd v KWA Design Group Pty Ltd (1999) 17 ACLC 456
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
Haiki Shipping Corporation v Sopex Oils Ltd [1998] 1 Lloyd's Rep 462
Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1999) 11 ACSR 326
Re Ikin, ex parte Lambourghini Tractors of Australia Pty Ltd (1985) 4 FCR 582
Re Louisbridge Pty Ltd [1994] 2 Qd R 144
Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601
Reinsurance Australia Corporation Ltd v Odyssey Re (Bermuda) Ltd (2000) 36 ACSR 348
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
The Angelic Grace [1994] 1 Lloyd's Rep 168
Vee H Aviation Pty Ltd v BP Australia Ltd (1995) 58 FCR 73
Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc (1997) 80 FCR 571
Zanjill Pty Ltd v Sydney Autolac Centre Pty Ltd (Federal Court of Australia, Hill J, unreported, 5 December 1997)
Zenaust Imports Pty Ltd v Alembic Chemical Works Co Ltd (1998) 28 ACSR 465
Zhen Yun (Australia) Pty Ltd v State Bank of South Australia (1994) 13 ACSR 801

DECISION: Statutory demand set aside

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

TUESDAY 5 JUNE 2001

1761/01 SMEC International Pty Ltd v C.E.M.S. Engineering Inc
JUDGMENT (published 5…

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] NSWSC 459
Decision Date: 5 June 2001

CaseChat Overview and Summary

The matter before the court was a statutory demand issued by SMEC International Pty Ltd against CEMS Engineering Inc. SMEC claimed that CEMS owed it money, and CEMS disputed the claim, arguing that there was a genuine dispute regarding the existence of the debt. The dispute was heard in the Federal Circuit Court of Australia. The primary legal issues were whether the statutory demand could be expressed in a foreign currency, whether there was a genuine dispute as to the existence of the debt, and the requirements for the contents of affidavits supporting an application to set aside a statutory demand.

The court found that the statutory demand could be expressed in a foreign currency, provided that the amount was accurately converted into Australian dollars. Regarding the genuine dispute, the court held that CEMS had established that there was such a dispute. The court also noted that affidavits supporting an application to set aside a statutory demand must contain sufficient information to enable the court to determine whether there is a genuine dispute as to the existence of the debt. In this case, the affidavits provided sufficient information to support the application. The court held that the statutory demand should be set aside, and the parties were ordered to proceed with arbitration in accordance with the terms of their contract.

The court emphasised the importance of the parties' contractual obligations and the need for the parties to abide by the terms of their agreement. The court held that the arbitration clause in the contract between the parties was valid and enforceable, and the parties were ordered to proceed with arbitration as per the terms of the clause. The court also noted that the requirements for affidavits supporting an application to set aside a statutory demand must be strictly adhered to, and that failure to do so could result in the application being dismissed. The court's decision provides useful guidance for parties involved in similar disputes and highlights the importance of contractual obligations and the need for strict compliance with legal requirements.

Orders