Sportsco Pty Ltd v Singh Group Pty Ltd - [2011] VSC 390

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

S CI 6855 2010

IN THE MATTER of Sportsco Pty Ltd (ACN 006 617 545)

B E T W E E N:

SPORTSCO PTY LTD (ACN 006 617 545)	Plaintiff
v
SINGH GROUP PTY LTD (ACN 128 860 319)	Defendant

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 June 2011
DATE OF JUDGMENT:	19 August 2011 (Revised 2^nd September 2011)
CASE MAY BE CITED AS:	Sportsco Pty Ltd v Singh Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2011] VSC 390

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CORPORATIONS – Application to set aside statutory demand pursuant to section 459G of the Corporations Act 2001 (Cth) on bases of genuine dispute and offsetting claim – contemporaneous written communications and oral communications supporting the defendant’s contention that agreement conditional on finance being obtained not contradicted – plaintiff fails to satisfy onus – application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Mereine	Mr Andrew Nguyen, Legal Counsel Sportsco Pty Ltd
For the Defendant	Mr S Hopper	Tasiopoulos Lambros

HIS HONOUR:

On or about 26 November 2010, the defendant (“Singh”) served a statutory demand on the plaintiff (“Sportsco”). The demand claims that Sportsco is indebted to Singh for $70,500 for the “refundable deposit or part payment under franchise agreement that was subject to finance (being $71,500 less $1,000 documentation fee)”.

On 17 December 2010, Sportsco made application by originating process to set aside the demand. The application was supported by an affidavit of Andrew Carter, the chief executive officer of Sportsco of the same date. Singh relied on an affidavit of Hardeep Singh sworn 21 February 2011 in opposition to the application. Mr Carter swore an affidavit in reply to Mr Singh’s affidavit on 4 May 2011.

Sportsco contends that there is a genuine dispute concerning the debt the subject of the demand and that it has an offsetting claim or damages against Singh for $300,000.

Factual background

Sportsco is the franchisor of retail sports and leisurewear businesses. It has granted rights to establish and conduct franchises to a number of franchisees across Australia.

Sportsco was approached by Singh in September 2009 with a proposal that Singh take up a Sportsco franchise. On 6 October 2009, Sportsco provided Hardeep Singh and Jaween Singh with its franchise application form and requested that it be completed and returned together with an initial deposit of $5,000. The application form was completed on 7 October 2009 by Hardeep Singh and the application was subsequently approved by Sportsco.

Later that month, on 29 October 2009, Sportsco agreed with Singh that Singh would pay $71,500 inclusive of GST in payment of the initial franchise fee, training fee and establishment costs. Sportsco sent a number of documents to Singh including a form of franchise agreement and a disclosure statement. On the same day, Messrs Singh signed an offer to lease a premises at Bayside Shopping Centre from Perpetual Limited. The centre was managed by Colonial…

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.

Continue reading Sportsco Pty Ltd v Singh Group Pty Ltd

Details

AGLC: Sportsco Pty Ltd v Singh Group Pty Ltd [2011] VSC 390
Case: [2011] VSC 390
Decision Date: 19 August 2011 (Revised 2nd September 2011)

CaseChat Overview and Summary

In the case of Sportsco Pty Ltd v Singh Group Pty Ltd, the primary dispute involved an application by the defendant, Singh Group Pty Ltd, to set aside a statutory demand issued by the plaintiff, Sportsco Pty Ltd. The case was heard in the Federal Circuit Court of Australia. The crux of the matter was whether the statutory demand could be set aside based on the defendant's assertion of a genuine dispute and an offsetting claim, as provided under section 459G of the Corporations Act 2001 (Cth).

The legal issues before the court encompassed whether there existed a genuine dispute regarding the debt claimed and whether the defendant had a legitimate offsetting claim. Specifically, the court needed to determine if the defendant's evidence, including contemporaneous written and oral communications, sufficiently supported their contention that the agreement was conditional upon the defendant obtaining finance. The plaintiff bore the onus of proving that the statutory demand was valid and that there was no genuine dispute or offsetting claim.

The court examined the evidence provided by both parties and concluded that the defendant's assertions were not effectively contradicted by the plaintiff. The contemporaneous written communications and oral communications presented by the defendant were deemed credible and sufficient to substantiate the claim of a conditional agreement. As the plaintiff did not meet the required burden of proof, the court dismissed the application to set aside the statutory demand. The court's reasoning hinged on the plaintiff's failure to negate the defendant's contentions and the weight of the evidence supporting the defendant's position.

In light of the findings, the court did not proceed to grant the application for setting aside the statutory demand. Consequently, the statutory demand remained in effect, and the defendant was required to address the debt as initially claimed by the plaintiff.

Orders