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Switz v Glowbind

Switz v Glowbind

Case [1999] NSWSC 1296 24 December 1999

Contract Formation

Winding Up & Liquidation

Admissibility of Evidence

Contract Law

Corporate Law & Governance

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CITATION: Switz -v- Glowbind [1999] NSWSC 1296

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 3407/99

HEARING DATE(S): 9 & 10 December 1999

JUDGMENT DATE:
24 December 1999

PARTIES :

Switz Pty Ltd (Plaintiff)
Glowbind Pty Ltd (Defendant)

JUDGMENT OF: Austin J

COUNSEL : P - B Coles QC with J Chippendall
D - J Simpkins

SOLICITORS: P - Clayton Utz Solicitors
D - PricewaterhouseCoopers Legal

CATCHWORDS: CONTRACT - construction - whether consultancy agreement an "entire" or "lump sum" contract; CORPORATIONS - companies - winding up on grounds of insolvency for non compliance with creditor's demand - application for leave under s459S to raise matter which could have been relied in an application to set aside the demand - grounds for granting leave - whether an application for summary dismissal is an available alternative to s459S; effect of incorrect service of application to set aside creditor's demand under s459G; EVIDENCE - opinion evidence - admissibility of accountant's report as to solvency based on draft financial statements.

ACTS CITED: Corporations Law, ss459G, 459P, 459S
Evidence Act, 1995 (NSW), s79
Supreme Court Rules (NSW), Pt 13 r5

CASES CITED: Automatic Fire Sprinklers Pty Limited v Watson (1946) 72 CLR 435
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Bolton v Mahadeva [1972] 2 All ER 1322
Chief Commissioner of Stamp Duties v Paliflex Pty Limited (1999) 17 ACLC 467
CVC Investments Pty Limited v P & T Aviation Pty Limited (1989) 18 NSWLR 295
David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 18 ACSR 225
Gradfan Pty Limited (in liq) v Miling Nominees Pty Limited (1995) 19 ACSR 466
Kekatos v Holmark Construction Company Pty Limited (1995) 18 ACSR 199
Master Paving Pty Limited v Heading Contractors Pty Limited (1997) 15 ACLC 1025
Quick v Stoland Pty Limited (1998) 29 ACSR 130
Re Bond Corporation Holdings Ltd (1990) 1 ACSR 350
Zan Holdings Pty Limited v Bay View Holdings Pty Limited (1997) 15 ACLC 1238

DECISION: see paragraph 47

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

FRIDAY 24 DECEMBER 1999

3407/99 - SWITZ PTY LIMITED V GLOWBIND PTY LIMITED

JUDGMENT (Delivered orally; revised 13 January 2000)

1 HIS HONOUR: These proceedings are for orders for the winding up of the defendant. They are based upon a creditor's statutory demand served by the plaintiff on the defendant on about 25 May 1999. The demand seeks the payment of a total amount of $1,300,000 comprising a consultant’s fee and a sum alleged to be due for failure to deliver a conditional bank guarantee. The plaintiff says that both the consultant’s fee and the further sum fell due under the provisions of a consulting agreement between the plaintiff and the defendant in respect of a unit development at 1B Coulson Street, Erskineville, dated 24 October 1999 (‘the consulting agreement’).

2 The statutory demand is in the usual form and, as is usual, states the address of the creditor for service of any application. The address which is given is…

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 Switz v Glowbind

Details

AGLC: Switz v Glowbind [1999] NSWSC 1296
Case: [1999] NSWSC 1296
Decision Date: 24 December 1999

CaseChat Overview and Summary

Switz, a company involved in the construction industry, brought an action against Glowbind, a company that provided consultancy services, concerning the terms of their consultancy agreement. The primary dispute was whether the consultancy agreement was an entire or a lump sum contract, impacting the rights and obligations of the parties under the agreement. The case was heard by the Supreme Court of Victoria.

The central legal issues the court had to address were whether the consultancy agreement constituted an entire or a lump sum contract, and if the applicant had grounds for seeking leave to raise matters that could have been considered in a prior application to set aside a creditor's demand. The court also had to determine if an application for summary dismissal was a viable alternative to the leave application under section 459S. Additionally, the court examined the effect of the incorrect service of an application to set aside the creditor's demand under section 459G and the admissibility of an accountant's report regarding solvency based on draft financial statements.

The court concluded that the consultancy agreement was an entire contract, meaning that Switz had to complete its obligations before Glowbind was required to perform its duties. Regarding the leave application, the court found that there were no grounds for leave as the matters could have been raised in the prior application to set aside the creditor's demand. The court also determined that an application for summary dismissal was not an available alternative to the leave application under section 459S. Concerning the service of the application, the court held that the incorrect service did not invalidate the application itself. Finally, the court ruled that the accountant's report was inadmissible as it was based on draft financial statements.

No specific final orders were made in the text. However, the court's decision on the nature of the consultancy agreement, the grounds for leave, and the admissibility of evidence would have implications for the proceedings between the parties.

Orders