Soper Industries Pty Ltd v Toll Transport Pty Ltd
[2017] VSC 524
•1 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2017 01174
| SOPER INDUSTRIES PTY LTD (ACN 165 224 788) | Plaintiff |
| v | |
| TOLL TRANSPORT PTY LTD (ACN 006 604 191) | Defendant |
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JUDGE: | GARDINER AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22 August 2017 |
DATE OF JUDGMENT: | 1 September 2017 |
CASE MAY BE CITED AS: | Soper Industries Pty Ltd v Toll Transport Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2017] VSC 524 |
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CORPORATIONS – Corporations Act 2001 (Cth), s 459 – Application to set aside statutory demand by reason of alleged genuine dispute in respect of the debt – plaintiff’s case inconsistent with undisputed contemporaneous documents and records in relation to subject transactions - finding that alleged dispute was not bona fide and was spurious – plaintiff failed to establish the existence of genuine dispute – application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C J King | Petersons Legal & Strategic Management Lawyers |
| For the Defendant | Mr W H C Forrester | Results Legal |
TABLE OF CONTENTS
Legal principles.................................................................................................................................. 2
Soper Industries affidavit evidence in support of the application........................................... 3
Toll Transport’s evidence in opposition to the application....................................................... 5
Invoice No 52272........................................................................................................................ 7
Invoice No 52296........................................................................................................................ 9
Invoice No 52302...................................................................................................................... 11
Invoice No 52311...................................................................................................................... 11
Invoice No 52317...................................................................................................................... 12
Invoice No 52328...................................................................................................................... 12
Mr Matthews’ affidavit evidence.......................................................................................... 12
Soper Industries’ affidavit in reply............................................................................................... 14
Further affidavits filed by Toll Transport................................................................................... 17
Consideration.................................................................................................................................... 22
HIS HONOUR:
The plaintiff, Soper Industries Pty Ltd (‘Soper Industries’), makes application by originating process filed 31 March 2017 pursuant to s 459G of the Corporations Act 2001 (Cth) (‘the Act’) to set aside a statutory demand served on it by the defendant, Toll Transport Pty Ltd (‘Toll Transport’), on 15 March 2017.
The demand claims that Soper Industries owes Toll Transport $579,279.45. The Schedule to the demand describes the debt as money due and owing by Soper Industries to Toll Transport pursuant to the invoices attached to the demand, which are for goods and services supplied, more particularly for supply and delivery of diesel fuel between 25 December 2016 and 5 February 2017. The demand was accompanied by an affidavit of Ricky Wayne Matthews sworn 3 March 2017.
Soper Industries relies on two affidavits of its director, Daniel Soper, sworn 31 March 2017 and 17 May 2017, and one affidavit of its solicitor, Christopher Petinarias, sworn 14 August 2017. Toll Transport relies on affidavits of Rick Matthews affirmed 18 April 2017 and 21 June 2017, of Nathaniel Dundas sworn 18 April 2017 and 22 June 2017, of Mitchell Lancaster sworn 18 April 2017 and 26 June 2017, and of its solicitor, Mark Goldsworthy, affirmed 21 August 2017.
The essence of Soper Industries’ alleged genuine dispute is not that the fuel was not supplied by Toll Transport but rather that it was supplied to another company in the corporate group controlled by Daniel Soper, DEF Global Pty Ltd. For the reasons and on the basis of the analysis of the evidence which follows, I do not consider that Soper Industries has discharged the onus it bears of establishing it has a genuine dispute in respect of the debts the subject of the demand, and in my opinion its 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),[1] a decision of the Court of Appeal in this State, as follows:
[1][2015] VSCA 330, [47]–[51] (Kyrou, Ferguson and Kaye JJA) (citations omitted), quoting Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411, [23] (Barrett J).
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,[2] 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.[3] (emphasis added)
[2][2006] VSC 508.
[3]Ibid [48].
When considering applications to set aside statutory demands, it is quite often necessary to conduct a close analysis of the contemporarily generated documentation in order to perform the function described by Dodds-Streeton J, and in particular of undisputed records of communications passing between the parties at the time the alleged genuine dispute (or offsetting claim) is said to have come into existence. Experience teaches that such evidence is likely to be a reliable and objective source from which the court can proceed to perform its statutory function.
Soper Industries affidavit evidence in support of the application
In his first affidavit Mr Soper states that he is the director of Soper Industries. He states that on or about 15 March 2017, he instructed his solicitors to write to Toll Transport’s solicitors as he could not reconcile the invoices attached to the statutory demand with any executed agreement between the parties.
On 16 March 2017, Soper Industries’ solicitors requested a copy of any written supply agreement between the parties as Soper Industries’ position was that there was no such agreement between them.
On 17 March 2017, Toll Transport’s solicitors responded and provided a copy of a document titled ‘Commercial Credit Application’ generated on the stationery of Toll North Pty Ltd trading as ‘Toll Mining Services’, dated 12 December 2017, and signed by Debbie Pillay who gave her title as ‘Accounts’. The applicant for credit was identified as Soper Industries.
On 20 March 2017, Soper Industries’ solicitors wrote to Toll Transport’s lawyers stating that Soper Industries could not reconcile the commercial credit application with the debt claimed in the statutory demand. An explanation was requested as to why the statutory demand had been issued by Toll Transport on the basis of the Toll North Pty Ltd document.
On 20 March 2017 Toll Transport’s solicitors wrote in response confirming that the commercial credit application was an agreement related to Toll North Pty Ltd, was of no relevance to the debt claimed in the demand, and was sent to Soper Industries’ solicitors in error. Toll Transport’s solicitors indicated that the debt claimed in the demand arose on account of goods and services provided by Toll Transport to Soper Industries.
On 21 March 2017, Soper Industries’ solicitors wrote to Toll Transport’s lawyers seeking confirmation of the terms and conditions agreed to by the parties and pursuant to which the invoices the subject of the demand were raised. Soper Industries’ solicitors followed up this inquiry on two occasions.
On 29 March 2017, Toll Transport’s solicitors wrote to Soper Industries’ lawyers maintaining that Soper Industries had not articulated a genuine dispute as to the claim made by Toll Transport. This was met by a response the following day from Soper Industries’ solicitors contending that what they described as the ‘threshold issue’, namely confirmation of the terms and conditions of supply, needed to be resolved so that the contracting parties could be identified, the existence of the debt could be established, and the amount of the debt claimed could be reconciled. For that reason, Soper Industries contended that there was a dispute as to the existence of any settled agreement and that Soper Industries disputed the existence of any debt to Toll Transport.
Mr Soper observes that the demand annexed six invoices which simply stated ‘Fuel Sales’ with no supporting breakdown of the quantity of the fuel or the price charged for that fuel, and that he has not been able to reconcile these invoices against any agreed terms and conditions, express or otherwise, for the terms of supply. He asserts that despite the steps he has taken to understand the debt claimed by communicating through the parties’ lawyers, and despite reasonable efforts to obtain information from Toll Transport to assess the merits of the claim, Toll Transport and their lawyers have not provided information to support the existence of the debt. He states that he disputes the existence of the debt.
Toll Transport’s evidence in opposition to the application
In his first affidavit, Mr Lancaster states that he is the operations manager of Toll Transport and that on 9 December 2016 he was contacted by Marc Hyde, a business development manager employed by Soper Industries. Mr Hyde indicated he wished to set up an account on behalf of Soper Industries for the supply of fuel on credit. Mr Lancaster had previously dealt with Mr Hyde when he was employed by Greenline Industries, another customer of Toll Transport. Mr Lancaster states he is aware from his dealings with Soper Industries that the company is primarily engaged in manufacturing AdBlue, a fuel additive used to reduce harmful emissions in diesel exhaust.
Mr Lancaster states that on 12 December 2016, he received an email from Mr Hyde requesting that he be sent a credit application so that Soper Industries could apply for a credit account with Toll Transport for the supply of fuel. The email is signed off by Mr Hyde as the Business Development Manager of Top Blue Australia. Mr Lancaster says that he sent Mr Hyde a commercial credit application form and privacy declaration. The credit application was styled as being issued by Toll North Pty Ltd, a related entity of Toll Transport.
Mr Lancaster states that on 12 December 2016 he received a copy of the credit application form signed by Ms Pillay, an employee of Soper Industries in its accounts department. The following day, he received a copy of a document headed ‘privacy declaration’ which was signed by Mr Soper.
The credit application was made in the name of Soper Industries, nominated Mr Soper as its only director, and identified three credit referees. Its trading address was given as 74-80 Fitzgerald road, Laverton North, and the email address nominated for invoices was ’[email protected]’. The credit application was returned by Ms Pillay as an attachment to an email in which she stated ‘Please find attached Credit Application for Soper Industries Pty Ltd as per Marc Hyde’. She signed off as ‘Debbie Pillay, Accounts, Soper Industries’.
The privacy declaration was signed by Mr Soper. The first paragraph stated that Toll Holdings Ltd and its subsidiaries would be collectively referred to in the document as the ‘Credit Provider’.
Mr Lancaster states that on 20 December 2016, Soper Industries’ application to trade on credit was approved in reliance upon the details provided in the credit application document.
Mr Lancaster states that, as the account manager for Soper Industries, he was responsible for taking the orders for diesel fuel from Soper Industries and facilitating the supply of those orders. He would either undertake those tasks personally or delegate them to Nathaniel Dundas, an operations supervisor employed by Toll Transport, or other staff employed by Toll Transport.
Mr Lancaster states that between 25 December 2016 and 5 February 2017, Toll Transport rendered six invoices for diesel fuel supplied to Soper Industries at Soper Industries’ request.[4] The invoices totalled $579,279.45. Mr Lancaster states that with respect to each supply of fuel, Mr Hyde would contact Mr Dundas or Mr Lancaster by telephone, email, or text message to request a supply of a particular volume of fuel to a nominated location by a certain time. Mr Dundas or Mr Lancaster would then respond to Mr Hyde by telephone, email, or text message to confirm that they could meet the request and to confirm the price for the fuel. The fuel would subsequently be supplied and, in the course of delivering the fuel, Toll Transport would complete delivery dockets which stated, amongst other things, the date of the supply of fuel, the volume of fuel supplied, the location to which the fuel was supplied, and who received the fuel if it was an attended delivery.
[4]Messrs Lancaster, Matthews, and Dundas have misdescribed the respective parties to this application as plaintiff and defendant throughout their first affidavits. It is clear from the context, however, that where on occasion reference is made to the plaintiff it was a reference to their employer, the defendant, Toll Transport.
Mr Lancaster states that Toll Transport would then render invoices to Soper Industries for payment within 21 days based on the volume of fuel supplied, the price of the fuel, and any additional charges which arose because of supply to more than one location from one tanker load of fuel. The invoices would then be sent to Soper Industries’ nominated email address ‘[email protected]’ for payment. Mr Lancaster details the orders and supply of fuel that he processed and which were the subject of invoices 52272 and 52296. The balance of the invoices were processed by Mr Dundas.
Invoice No 52272
Mr Lancaster states that on 19 December 2016, Mr Hyde sent him an email from ‘[email protected]’ requesting the supply of fuel to locations at Dubbo (40,000 – 50,000 litres), Shepparton/Yarrawonga (50,000 litres) and Laverton/Holbrook (50,000 litres) on the following day. Mr Lancaster responded, stating that the accounts department at Toll Transport were hopeful the account for Soper Industries would be established that evening. He requested details as to what access Toll Transport’s tankers had to the delivery sites.
Mr Lancaster states that on 21 and 22 December 2016, Toll Transport supplied the fuel to Soper Industries as requested in Mr Hyde’s email. He exhibits to his affidavit delivery dockets on the stationery of Toll Transport with the name ‘Toll Liquids’ and the ‘Toll’ logo prominent at the head of the dockets. Toll Transport is identified by its ABN and each of the delivery dockets detail the date and place of delivery as well as the quantity of fuel involved.
On 25 December 2016, Toll Transport generated invoice No 52272 for $220,473.65, inclusive of GST. The tax invoice displays the ‘Toll Liquids’ logo prominently at the head of the document and in smaller print describes the supplier as a division of Toll Transport and provides its ACN and ABN numbers. The invoice is directed to Soper Industries and required payment seven days from the date of invoice. The invoice was emailed to Soper Industries at the address nominated in the credit application, ‘[email protected]’. An excel spreadsheet compiled from the business records of Toll Transport accompanied the invoice. The spreadsheet identified the customer as Soper Industries and detailed the date and location for each delivery, the number of litres of fuel delivered, the price per litre charged, the amount of GST, and the total cost per delivery.
On 31 December 2016, Mr Hyde emailed Mr Lancaster from ‘[email protected]’ stating:
Afternoon Mitchell,
Just wanted to check our terms with you. I though [sic] we were getting 21 day terms and invoice says 14. Can you please confirm for me, we were hoping to still get the 21 day terms.
Looking forward to your reply,
Kind regards,
Marc
On 3 January 2017, Mr Lancaster telephoned Mr Hyde and informed him that Toll Transport was willing to trade with Soper Industries on 21 day payment terms and that future invoices would reflect this.
Invoice No 52296
Mr Lancaster states that, on 3 January 2017, Mr Hyde sent him an email requesting a ‘… split load of roughly 10,000 litres to our depot in Laverton and 40,000 litres to Corowa in the next couple of days if that is possible? …’. The same day, Mr Lancaster emailed Mr Hyde to provide the costs for the supply of this fuel and to seek details of the address for delivery. Mr Hyde responded shortly afterwards, on that same afternoon, providing details for delivery of the fuel. One delivery location was an address in Corowa, New South Wales, and the other was stated as ‘Soper Industries, 74-80 Fitzgerald Road Laverton’, its business address on the credit account application.
The fuel for that order was supplied on 4 January 2017 in accordance with Mr Hyde’s request. Toll Transport’s delivery dockets in respect of that supply are exhibited to Mr Lancaster’s affidavit.
On 8 January 2017, Toll Transport generated invoice No 52296 for $56,814.23, inclusive of GST, and that invoice was emailed to Soper Industries at its nominated email address, ‘[email protected]’, on 10 January 2017. An excel spreadsheet compiled from the business records of Toll Transport was attached to the email and in the same format, and containing the same details, as the spreadsheet compiled for invoice No 52272.
On about 6 February 2017, Mr Lancaster called Mr Hyde to discuss the outstanding debt owed to Toll Transport. Mr Hyde invited Mr Lancaster to call Soper Industries’ accounts department to discuss the matter. On the same day, Mr Lancaster and the regional manager of Toll Transport, Mr Gary O’Connor, called Ms Pillay of Soper Industries’ accounts department. Mr Lancaster states that, on receiving the call, Ms Pillay put the call through to Mr Soper. In the ensuing discussion, Mr Soper assured Mr O’Connor and Mr Lancaster that a payment arrangement would be provided later that day to resolve the debt. Mr Soper did not suggest during that call that he was unaware of the debt, that Soper Industries was not liable to pay it, or that there was any issue with the payment of the debt save that Soper Industries was having cash flow issues as a result of one of their largest debtors going into voluntary administration.
The following week Mr Lancaster received a call from Mr Hyde who requested a further supply of fuel. Mr Lancaster informed Mr Hyde that Toll Transport was unable to continue to supply more fuel until such time as the Soper Industries account came back within the agreed 21 day payment terms.
As to Soper Industries’ disputing the liability to pay the debt on the basis that there was no written agreement between the parties, Mr Lancaster states that, notwithstanding the credit agreement was in the name of Toll North Pty Ltd, Toll Transport agreed to trade with Soper Industries in reliance upon the credit application and the privacy statement referred to. Those documents identified Soper Industries as the purchaser of the fuel.
Mr Lancaster states that all the fuel supplied to Soper Industries was supplied at the express request of Mr Hyde and it was agreed that those invoices would be paid on 21 day terms. He states that he has never been contacted by Mr Hyde, Mr Soper, nor any other employee of Soper Industries in respect of any issues with the supply of the fuel or the invoices rendered in respect of the supply.
In his affidavit, Mr Dundas, who identified himself as an operations supervisor employed by Toll Transport, states that he has access to the business records of Toll Transport which he reviewed prior to swearing his affidavit. Mr Dundas states that he has assisted in the day to day management of the Soper Industries account with Toll Transport, under the supervision of Mr Lancaster. In that capacity he was responsible for, amongst other things, taking orders for diesel fuel from Soper Industries, arranging and facilitating the supply of those orders, and rendering invoices on account of the supply to Soper Industries. He took the orders and facilitated the supply of fuel for Invoice Nos 52302, 52311, 52317, and 52328. In his affidavit, Mr Dundas details in the same way that Mr Lancaster does in his affidavit the orders and delivery of fuel the subject of those invoices.
Invoice No 52302
The fuel for Invoice No 52302 was supplied on 11 January 2017 as a result of a request from Marc Hyde the previous day. The delivery docket and invoice in respect of that supply are exhibited to Mr Dundas’ affidavit together with a spreadsheet in the same format and containing the same details as those generated for the previous invoices. The fuel, 49,856 litres of bulk diesel, was delivered to ‘Zagami Transport’ at Laverton North. The invoice, made out to Soper Industries, was emailed to the designated email address on 17 January 2017.
Invoice No 52311
Mr Dundas states that on 13 January 2017, he had a telephone discussion with Mr Hyde regarding the supply of 50,000 litres of diesel fuel to an address in Yarrawonga. On 16 January 2017, he sent Mr Hyde an email confirming that the delivery of fuel could be made to Yarrawonga at a price of 105.45 cents per litre, exclusive of GST.
The following day, he received a call from Mr Hyde who requested a delivery of 35,000 litres of fuel to Corowa in New South Wales. Shortly after that telephone call he sent a message to Mr Hyde confirming the cost for the delivery to the Corowa address at 105.5 cents per litre, exclusive of GST. Later that day, or on the morning of 18 January 2017, he received a further call from Mr Hyde requesting a delivery of 45,000 litres of fuel to Holbrook in New South Wales. On 18 January 2017, he texted Mr Hyde to confirm the delivery time and the cost of the delivery to the Holbrook address. That fuel was supplied on 17 and 18 January 2017 and Mr Dundas exhibits copies of the delivery dockets prepared by Toll Transport detailing that supply.
On 22 January 2017, Toll Transport generated invoice No 52311 in the sum of $149,383.60 for the deliveries to Yarrawonga, Holbrook and Corowa and that invoice together with a spreadsheet providing details of the several deliveries the subject of the invoice was emailed to Soper Industries on 24 January 2017.
Invoice No 52317
On 23 January 2017, Mr Dundas received a telephone call from Mr Hyde requesting delivery of 50,000 litres of diesel fuel to Shepparton in Victoria. Later that same day he sent a text message to Mr Hyde to confirm delivery of that fuel to MMV Transport in Shepparton at 103 cents per litre, exclusive of GST. That fuel was supplied on 24 January 2017. On 29 January 2017, Toll Transport generated Invoice No 52317 for $55,801.99; that invoice together with a spreadsheet in the same format and containing the same details as those generated for the previous invoices was emailed to the designated email address on 31 January 2017.
Invoice No 52328
On 30 January 2017, Mr Dundas texted Mr Hyde regarding a delivery Mr Hyde had requested to Corowa. On 1 February 2017, Mr Hyde texted him back enquiring as to what time the fuel would arrive at Corowa, to which Mr Dundas responded ‘Between 4-5pm today’. On 1 February 2017, the fuel was supplied in accordance with the request. The delivery docket prepared by Toll Transport detailing the supply of fuel to Soper Industries on 1 February 2017 to the Corowa address is exhibited to the affidavit. On 5 February 2017, Invoice No 52328 was generated for the sum of $39,798.14; that invoice, as well as a spreadsheet in the same format and containing the same details as those generated for the previous invoices, was emailed to the designated email address on 7 February 2017.
Mr Dundas states that he has never been contacted by Mr Hyde, Mr Soper, nor any other employee of Soper Industries in respect of any issues with the supply of the fuel or the invoices for which he was responsible. He states he is not aware of any basis on which Soper Industries’ liability to pay the debt may be disputed.
Mr Matthews’ affidavit evidence
In his first affidavit, Mr Matthews states he is the credit manager of Toll Transport and in that capacity has access to the business records of Toll Transport, including its electronic records, which he reviewed prior to affirming his affidavit. His role at Toll Transport involves responsibility for supervising the management of credit accounts of customers including the Soper Industries’ account.
Mr Matthews states that on 6 February 2017 he was contacted by Mr Gary O’Connor, a regional manager employed by Toll Transport, who informed him that he had spoken to Mr Soper regarding the debt which was due. Mr Soper told Mr O’Connor that he would provide a repayment plan for the debt later that day, however no repayment arrangement was ever received from Mr Soper nor any other employee of Soper Industries. Mr Matthews states that, on 7 February 2017, he attempted to telephone Mr Soper to discuss the debt however he was unable to get in contact with him and left a message. Later that day he received an email from Mr Soper which stated:
Hi, Rick.
Thanks for touching base – We’re working on a payment date at the moment, as our largest debtor just went into VA and second to this, are experiencing slow in-flows from other key clients.
Debbie & I will come back to you asap with an indication on payment for this account.
Regards,
Daniel
On 8 February 2017, Mr Matthews emailed Mr Soper to inform him that the matter had been referred to Toll Transport’s solicitors. On the following day he received an email from Mr Soper which stated:
Email received and understood, working on the solution with my solicitor to get it remedied.
He [Chris - Petersons Legal] will contact Results Legal as requested.
Thanks Rick
Regards,
Daniel.
Mr Matthews states that he has read Mr Soper’s affidavit which appears to dispute Soper Industries’ liability to pay the debt on the basis that Mr Soper is not aware of any agreement between the parties for the supply of fuel.
He states that, in view of the emails he received from Mr Soper, he believes Soper Industries is aware of the debt and had previously intended to pay it. He states that he was informed by Mr Soper that the reason Soper Industries did not pay the debt was because of the cash flow issue caused by the voluntary administration of Soper Industries’ largest debtor and slow payments from other key debtors.
Soper Industries’ affidavit in reply
In his affidavit of 17 May 2017, Mr Soper responds to the affidavits of Messrs Lancaster, Matthews, and Dundas. He states that Marc Hyde is not employed by Soper Industries as Mr Lancaster contends. He refers to the correspondence between Mr Lancaster and Mr Hyde and the position and title with their respective employers as stated in the footers to the emails; Mr Hyde describes himself as the Business Development Manager for Top Blue Australia and Mr Lancaster as the operations manager for Toll Liquids.
Mr Soper states that Top Blue Australia is a registered business name for DEF Global Pty Ltd ACN 607 204 357, not Soper Industries. He exhibits a Linked-In search in respect of Mr Hyde which indicates he is currently employed as the business development manager for TopBlue Australia and has been so employed since June 2016. That search states that Top Blue is one of the largest AdBlue suppliers in the world.
Mr Soper asserts that the correspondence between Toll Transport and DEF Global trading as Top Blue Australia confirms a relationship whereby fuel is supplied by Toll Transport to DEF Global, not Soper Industries. He states Mr Lancaster has failed to establish a relationship between Mr Hyde, Soper Industries, and the claimed supply of fuel on the one hand, and the debt between Soper Industries and Toll Transport on the other.
Mr Soper addresses the subject of the credit application which, as has been observed, is on Toll North Pty Ltd stationery. He asserts that Toll Transport has failed to make a connection between the Toll North document and Marc Hyde and how that connection bears a relationship and relevance to Toll Transport and the amount demanded in the statutory demand.
Mr Soper seeks to make much of the obvious misdescription and confusion in Toll Transport’s affidavits as to the respective titles of plaintiff and defendant, an endeavour I regard as being quite disingenuous. For example, he states that Mr Lancaster is not clear about his role with respect to Soper Industries and, for the avoidance of doubt, Mr Soper confirms that Mitchell Lancaster was not an account manager for the plaintiff at any time. While it is unfortunate that confusion as to the titles of the parties occurrs in Toll Transport’s initial affidavits, the context in which it occurs makes it clear there has been a transposition as sometimes occurs in applications to set aside a statutory demand, whereby a party who would normally be defendant to debt recovery litigation is in fact the plaintiff by reason of its need to make the application to set the demand aside. The same arises in the reference in Mr Lancaster’s affidavit to Debbie Pillay being part of the defendant’s accounts department. Mr Soper states that Ms Pillay is his accounts clerk and is employed by Soper Group Pty Ltd and assists with various administrative functions and accounts across the various companies of which Mr Soper is either a director or a shareholder. He asserts that any fuel supplied was at the express request of Mr Hyde - not Daniel Soper, nor Soper Industries.
Mr Soper ‘does not accept’ the proposition deposed to by Mr Lancaster where Mr Lancaster observes that Mr Soper did not suggest in the telephone call of 6 February 2017 that he was unaware of the debt, that Soper Industries was not liable to pay the debt, nor that there was any issue with the payment of the debt save that Soper Industries was having cash flow issues as a result of one of their largest debtors going into voluntary administration.
I note at this point Mr Soper specifically does not address Mr Lancaster’s evidence that Mr Soper assured Mr Lancaster and Mr O’Connor that a payment arrangement would be provided later that day to resolve the debt, which was confirmed by Mr Soper in his email of 7 February 2017. I also note that Mr Soper does not take issue with the evidence as to the date, place, and quantity of the deliveries of the fuel which was deposed to in detail by Mr Lancaster and Mr Dundas, and corroborated by the documentation exhibited which was contemporaneously generated by Toll Transport and which all nominate Soper Industries as the purchaser of the fuel.
Mr Soper states that the account that Mr Matthews gave of his conversation with Mr O’Connor regarding his contact with Mr Soper on 6 February is hearsay, however he does not take the opportunity to say that the account of that exchange was not true. As to Mr Matthews’ reference to Mr Soper’s email of 7 February 2017 sent to Mr Matthews and outlined at paragraph 46 above, he states that the correspondence ‘does not establish that the plaintiff is the debtor, nor does it specifically refer to the particular debt which the defendant believes it is owed.’ He does not state what other debts the email could have been a reference to.
Mr Soper states he is a director and/or shareholder of a group of companies in the fuel industry that have either purchased from or supplied to various entities within the Toll group of companies and that Mr Matthews has made a self-serving assumption that the email exchanges on 7, 8, and 9 February 2017, described at paragraphs 46 and 47 above, are not linked to dealings with Soper Industries.
At its height, Mr Soper’s position appears to be that Toll North Pty Ltd supplied the fuel to another member of the corporate group, DEF Global Pty Ltd, of which he is sole director. Further there is no evidence at all that any member of Mr Soper’s corporate group has supplied any fuel to any entities within the Toll group as he states.
Mr Soper states that it is his understanding that Mr Matthews is employed by Toll North Pty Ltd and not Toll Transport. He says this is supported by the footer to Mr Matthews’ email which is signed off as ‘Rick Matthews, Credit Manager, Toll Group Credit’. He contends that Mr Matthews’ title indicates that he performs credit management for the Toll group of entities, one of which is Toll Transport, as well as Toll North Pty Ltd. It is not clear what point Mr Soper seeks to make by this observation. Mr Matthews’ responsibilities clearly include credit management of the Soper Industries‘ account.
Mr Soper contends that the email correspondence exhibited by Mr Matthews purports to show a sequence or chain of emails, but that without explanation, the emails appear to have been either redacted or cut and paste manually into a photocopied sequence which affects their integrity. The unredacted chain of emails would presumably be readily accessible to Mr Soper, yet he does not elaborate at all as to how the integrity of the chain has been corrupted in such a way as to mislead anyone reading the document. Mr Soper then goes on to make a similar critique of Mr Dundas’ affidavit. Mr Soper’s affidavit culminates in an assertion that Toll Transport is using the statutory demand regime as a debt collection mechanism and that the demand should be set aside.
I note that neither Mr Hyde nor Soper Industries’ accounts manager Ms Pillay, both of whom had the major carriage of the dealings with Toll Transport, have made affidavits. They are both still apparently employed by the Soper Group. Mr Hyde is clearly an employee of one or another of the corporate group controlled by Mr Soper. He has been armed with abundant ostensible authority to present himself as an agent of Soper Industries and there is no evidence from him to contradict the position in that regard. Mr King, counsel for Soper Industries, cited the reason for Mr Hyde not going into evidence as being that he may be sued by Soper Industries for his conduct in relation to this matter. I am not persuaded at all that that is a plausible and credible explanation and I infer that Mr Hyde would have no evidence which would advance Soper Industries’ case. I consider that the same inference can be drawn from the failure to put on any evidence from Ms Pillay.
Further affidavits filed by Toll Transport
Messrs Lancaster, Matthews and Dundas filed further affidavits taking issue with matters deposed to by Mr Soper in his second affidavit.
Mr Lancaster, in the earlier segment of his affidavit, corrects the misdescription of his employer as the plaintiff and Soper Industries as the defendant. Mr Lancaster then deposes that in addition to being the sole director and secretary of Soper Industries, Mr Soper is the sole director and secretary of DEF Global Pty Ltd, trading as Top Blue Australia, and of Soper Group Pty Ltd, which is the sole shareholder and therefore the holding company of both Soper Industries and Top Blue Australia. Searches obtained from the ASIC database to confirm this are exhibited to Mr Lancaster’s affidavit.
Mr Lancaster states that he has reviewed the business records of Toll Transport and its related entities and deposes that neither Toll Transport nor any of its related entities have accounts with DEF Global Pty Ltd nor Soper Group Pty Ltd for the supply of fuel.
As to the position of Mr Hyde, Mr Lancaster states his belief that Mr Hyde was employed by Soper Industries, that he ordered the fuel on behalf of Soper Industries, that Soper Industries obtained the benefit of the fuel supplied by Toll Transport, and that Soper Industries is liable to pay for the fuel which is the subject of the statutory demand. His belief in that regard is based on the fact that on 12 December 2016 he provided Marc Hyde with a credit application at his request to enable Soper Industries to purchase fuel from Toll Transport. Further, Ms Pillay of Soper Industries provided him with a copy of the credit application which had been completed with Soper Industries’ details annexed to an email which stated:
Please find attached Credit Application for Soper Industries Pty Ltd as per Marc Hyde.
Mr Lancaster observed that since at least 19 December 2016, Mr Hyde used the email address ’[email protected]’ and all the emails he received from Mr Hyde from 19 December 2016 onwards were sent from that email address. On 20 December 2016, Mr Hyde emailed Mr Lancaster from that email address stating:
I’m sorry if you are getting some emails from my TopBue [sic] address and some from my Soper Industries but I am just in the middle of a change over to Soper Industries email …
He states that at least from 18 January 2017 Mr Hyde had the following ‘Soper Industries’ email signature:
Marc Hyde-Business Development Manager
E: [email protected]
M: 0429004749
A: PO Box 101, PRAHRAN VIC 3181
SOPERINDUSTRIES
Mr Lancaster states that at no stage during his dealings with Mr Hyde did he inform him he was employed by or was otherwise acting for Top Blue Australia. To the contrary, he states Mr Hyde mentioned on a number of occasions (including in the email of 20 December 2016) that he was employed by Soper Industries.
In his second affidavit, Mr Matthews corrects the earlier incorrect references to the defendant as the “plaintiff” where they appeared in his earlier affidavit. As to the allegation that the integrity of the email chain exhibited to his earlier affidavit was corrupted, he states that the email chain was redacted to remove irrelevant portions of the email chain and that Mr Soper would be in possession of the original emails given they were sent to his email address at ’[email protected]’.
As to the position of Mr Hyde, Mr Matthews agrees with the evidence of Mr Lancaster that the orders for fuel were placed by Mr Hyde on behalf of Soper Industries. He states that during the course of his dealings with Mr Soper, Mr Soper never suggested nor indicated that Mr Hyde was not employed by or otherwise acting on behalf of Soper Industries nor that the debt was owed by any entity other than Soper Industries, despite the fact that he was fully aware that Soper Industries had been invoiced for the fuel.
In addition, he observes that if Mr Hyde was not an employee of Soper Industries or was otherwise not acting for it, he would have expected that Soper Industries (i) would not have completed the credit application on 12 December 2016, rather, TopBlue Australia would have (ii) queried why it was receiving invoices from Toll Transport for fuel that allegedly it did not order and (iii) queried the fact that Toll Transport had delivered some 759,000 litres of fuel to it, and (iv) not have made repeated offers to pay the outstanding invoices or otherwise settle the debt. Rather, Mr Matthews observes, the first time that Soper Industries articulated its ‘dispute’ in relation to the employment of Mr Hyde was on 17 April 2017, some four months after Soper Industries received the first supply of fuel and the invoice for payment.
In his affidavit Mr Dundas also corrects the misdescriptions contained in his first affidavit which referred to the defendant as the “plaintiff”. He states that all the emails he exchanged with Mr Hyde were received from and sent to his email address ’[email protected]’. He states that at no time during any of his discussions with Mr Hyde did he inform him that he was employed by DEF Global Pty Ltd, trading as Top Blue Australia, nor that the orders were being placed on behalf of an entity other than Soper Industries.
Mr Goldsworthy, an employed solicitor of Toll Transport’s solicitors, exhibits correspondence passing between the parties’ solicitors. On 17 February 2017, Soper Industries’ solicitors, Peterson’s Legal, wrote to Mr Hill of Toll Transport’s solicitors. The letter is expressed to be ‘without prejudice’ but no objection was made to the reference to it at the hearing of this matter and, in fact, Mr Soper in his affidavit of 31 March 2017, more particularly exhibit ‘DS-10’, extracted and referred to this correspondence. The letter states as follows:
Dear Mr Hill,
Our Client: Soper Industries Pty Ltd
Your Client: Toll Transport Pty Ltd trading as Toll Liquids
We act for Soper Industries and confirm receipt of your letter to our client dated 06 February 2017.
Our client instructs that he is genuinely committed to working with Toll Liquids to satisfy the current debt outstanding.
At this stage, our client can commit to repay the $539,475.79 over 60 months in equal instalments commencing on 17 March 2017.
Daniel has also indicated that there are other equipment/products or services that Soper Industries is prepared to extend to Toll Liquids, including fuel cartage in consideration of an offset/reduction of the debt amount. If this type of arrangement is of interest to Toll Liquids, please let our office know so that we can explore a workable arrangement.
Should Toll Liquids be interested in having our Client extend equipment/products or services to it, we can review our proposed repayment plan to factor in any offset/reduction.
We respectfully request the due consideration be given again to the above proposal.
We thank you for not initiating recovery action against our Client and do hope that we can resolve this claim amicably with a view to continued future supply to our Client.
We thank you in advance for your consideration and understanding.
Yours faithfully,
Petersons
On 2 March 2017, Peterson’s wrote to Ms O’Brien at Results Legal. Again, the letter is marked ‘without prejudice’ however the same situation in my view applies to this letter. It was admitted without objection at the hearing of this matter and in any event, excerpts from that letter, more particularly the salient aspects of it in the present context, were exhibited as part of exhibit ‘DS-10’ to Mr Soper’s affidavit of 31 March 2017. The letter states:
Dear Ms O’Brien,
Our client: Soper Industries Pty Ltd
Your client: Toll Transport Pty Ltd
We refer to the above matter and confirm receipt of your letter to this office dated 23 February 2017.
Since receiving your correspondence we have been working with our Client to propose a workable repayment plan that will pay the outstanding debt to your client in full sooner than what had been previously proposed.
Our Client has been able to restructure its affairs and can propose that the repayment of the outstanding amount of $539,475.79 by Monthly repayments of $11,239.10 over 48 months, commencing on 01 April 2017.
Our Client instructs that he is genuinely committed to working with Results Legal and Toll Transport Pty Ltd to repay this debt.
As has previously been proposed, Soper Industries is still prepared to extend to Toll Transport other equipment/products or services including fuel cartage in consideration of an offset/reduction of the debt amount. If this type of arrangement is of interest to United Petroleum,[5] please let our office know so that we can explore a workable arrangement.
Should Toll be interested in having our client extend equipment/products or services to it, we can review our proposed repayment plan to factor in any offset/reduction.
We are hopeful that your client will give due consideration to the above repayment proposal.
We reiterate that we would like to resolve this claim amicably with a view to continued future supply to our Client.
We thank you in advance for our consideration and understanding and look forward to your client’s favourable response.
Yours faithfully,
Petersons
[5] It is not explained what is meant by the reference to United Petroleum.
On 10 March 2017, Petersons again wrote to Ms O’Brien at Results Legal. Again, extracts of that letter were part of an exhibit to Mr Soper’s affidavit of 31 March 2017. Mr Petinarias of Petersons states:
Dear Ms O’Brien,
Our client: Soper Industries Pty Ltd
Your client: Toll Transport Pty Ltd
We refer to the above matter and confirm receipt of your letter to this office dated 09 March 2017.
We regret that we have been unable to propose a repayment plan that meets the satisfaction of your client.
In an urgent attempt to avoid the commencement of formal collection action, we are instructed to seek a proposal for a reasonable repayment plan from your client that would meet its satisfaction for the full repayment of the debt.
We will put that proposal to our Client and consider our Client’s ability to agree to meet the repayment commitments contained in the proposal.
We await your client’s proposal.
Yours faithfully,
Peterson’s
Shortly afterwards, the statutory demand was served on Soper Industries.
Consideration
In my view, when one has regard to the substance of the communications passing between the parties and their respective solicitors, there is no dispute between the parties which requires further investigation such that the demand should be set aside. In fact, I regard the position being put by Soper Industries in this proceeding as being implausible, disingenuous in its submission as to how various events should be interpreted, and without merit.
On the other hand, there is abundant evidence consisting of uncontradicted contemporaneously generated documents to support the position put by Toll Transport in this proceeding. That documentation reveals that all the requests for the supply of fuel were initiated by Mr Hyde. To my mind, it is abundantly clear that when doing so, he did so under the auspices of Soper Industries. The basis of my view in this regard is the email signatures and addresses he employed when communicating with Toll Transport. At no point until the hearing of this matter was it suggested that Mr Hyde did not have the authority to order the fuel on behalf of Soper Industries and then only by unsupported assertion. I regard the explanation as to why he and Ms Pillay, the accounts manager for Soper Industries, did not file evidence in this proceeding as being unconvincing. Those persons who had the direct dealings with the representatives of Toll Transport could give direct evidence regarding the transactions but the decision has been taken not to provide any such evidence. As I have indicated, I will infer that nothing they had to say would advance Soper industries’ case.
In addition, there is no dispute raised by Soper Industries that Toll Transport supplied the fuel, rather, there is some alleged controversy about the identity of the entity within the Soper group of companies to which it was supplied. Again, Mr Hyde and Ms Pillay apparently are still in the employ of the companies and one presumes Mr Soper could have prevailed upon them to put on evidence to support Soper Industries position in that regard.
As against this is the evidence of Messrs Lancaster, Dundas and Matthews which is inherently plausible and which is again supported by the contemporaneous documentation, in particular the emails invoices and spreadsheets which have been described. Subsequent to the supply of fuel in each instance, a tax invoice for the fuel, together with a spreadsheet containing details of the delivery of it, were sent to the nominated email address ‘[email protected]’. In early February 2017, when the accounts had not been paid, Mr O’Connor and Mr Lancaster spoke with Mr Soper who stated that a payment arrangement would be provided later that day to resolve the debt. There was no suggestion by Mr Soper that he was unaware of the debt, that Soper Industries was not the relevant party required to pay it, or that there was any issue with the payment of the debt save that Soper Industries was having cash flow issues as a result of one of their largest debtors going into voluntary administration. That account of the conversation is entirely consistent with the emails which are exhibited to Mr Goldsworthy’s affidavit and referred to above.
When the matter was passed into the hands of the respective parties’ solicitors, Soper Industries proposed instalment plans for payment of the debt over five years. At that point the debt was said to be $539,475.79. I assume the reason for the difference between this amount and the ultimate amount demanded was that the final invoice generated on 5 February 21017 for $39,798.14, sent on 7 February 2017, would not have been payable until 28 February 2017. Correspondence from Soper Industries’ solicitors identified their client as Soper Industries and save for the difference in the amount of the final invoice which was not yet payable, identified the debt and made proposals for its repayment, without reservation, by instalments. That offer was repeated on 2 March 2017 and both offers proposed other offset arrangements, including fuel cartage to reduce the debt amount.
For the foregoing reasons, I do not regard the alleged dispute to be bona fide. Rather I consider it to be spurious. The proceeding should be dismissed.
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