Tennant Limited v Flomin Inc - [2009] NSWSC 1246

CITATION: Tennant Limited v Flomin Inc [2009] NSWSC 1246

HEARING DATE(S): 16/11/09

JUDGMENT DATE :
30 November 2009

JURISDICTION: Equity

JUDGMENT OF: Forster J at 1

DECISION: See paragraphs 69 to 72 of judgment.

CATCHWORDS: Application to set aside statutory demand - genuine dispute - to what extent does it have to be "revealed" by the supporting affidavit - whether "due and payable" as at the time of service of demand - offsetting claims. - Held: demand varied pursuant to section 459H.

LEGISLATION CITED: Corporations Act (Cth) 2001

CATEGORY: Principal judgment

CASES CITED: Advance Ship Design Pty Limited v DJ Ryan t/as Davies Collison Cave (1995) 16 ACSR 129
B & M Quality Constructions Pty Limited v Buyrite Steel Supplies Pty Limited (1994) 15 ACSR 433
Callite Pty Limited v Adams [2001] NSWSC 52
Canon Australia Pty Limited v Yong Bros. Pty Limited [2009] NSWSC 842
Collier Nominees Pty Limited v Consolidated Constructions Pty Limited (Supreme Court of New South Wales, Santow J, 3 July 1998, unreported)
Energy Equity Corp. Limited v Sinedie Pty Limited (2001) 166 FLR 179
Graywinter Properties Pty Limited v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
Hansmar Investments Pty Limited v Perpetual Trustee Co. Limited [2007] 61 ACSR 321
Infact Consulting Pty Limited v Kyle House Pty Limited [2007] NSWSC 56
National Telecoms Group Limited v Bulldogs Rugby League Club Limited [2003] NSWSC 654
Panel Tech Industries (Aust.) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896
Saferack Pty Ltd v Marketing Heads Australia Pty Limited (2007) 214 FLR 393

PARTIES: Plaintiff- Tennant Limited
Defendant- FloMin Inc

FILE NUMBER(S): SC 3843/09

COUNSEL: Plaintiff- M. Condon, S. Fraser
Defendant- L. Livingston

SOLICITORS: Plaintiff- Terri Bell, Christopher Stephen Frawley, Macpherson & Kelley Lawyers
Defendant- Justin McDonnell, Mallesons Stephen Jaques

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

FORSTER J

MONDAY, 30 NOVEMBER 2009

(3843/09) TENNANT LIMITED v FLOMIN INC.

JUDGMENT

1 HIS HONOUR: By originating process filed on 27 July 2009, the plaintiff, Tennant Limited (“Tennant”) seeks an order pursuant to section 459G (1) of the Corporations Act 2001, setting aside a statutory demand served on it by the defendant, FloMin Inc. (“FloMin”). It is conceded by FloMin that the application was made in accordance with the requirements of section 459G.

2 The statutory demand requires the payment of US$ 412,000, which amount is made up of the following six separate amounts:

Amount 1	Commercial Invoice No. CON-2453 dated 22 September 2007	US$ 16,445
Amount 2	Commercial Invoice No. CON-2454 dated 15 October 2007	US$ 29,120
Amount 3	Purchase Contract No. CON-2639 dated 11 February 2008	US$ 29,240
Amount 4	Purchase Contract No. CON-2662 dated 3 March 2008 (first shipment)	US$ 121,805
Amount 5	Purchase Contract No. CON-2662 dated 3 March 2008 (second shipment)	US$ 121,805
Amount 6	Purchase Contract No. CON-2694 dated 10 April 2008	US$ 93,585
Total amount	US$ 412,000

3 Tennant seeks to set aside the statutory demand on the following grounds:

(a) in…

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 1246
Decision Date: 30 November 2009

CaseChat Overview and Summary

Tennant Limited applied to set aside a statutory demand issued by Flomin Inc. The dispute before the court centred on the extent to which a genuine dispute must be revealed in the supporting affidavit for the application to be successful, and whether the debt claimed was "due and payable" at the time the demand was served. Additionally, the court considered whether Tennant's offsetting claims could be taken into account in determining the amount that was "due and payable". The court found that the applicant had disclosed a genuine dispute in its affidavit, but had not demonstrated that the debt claimed was not due and payable at the time of service. The court also found that offsetting claims could be considered in determining the amount that was due and payable. The court varied the statutory demand to reflect the amount that was actually due and payable, pursuant to section 459H.

The court held that the affidavit in support of the application to set aside the statutory demand must disclose a genuine dispute in sufficient detail to enable the respondent to respond to it. However, the court need not be satisfied that the dispute is likely to succeed; it is sufficient if the dispute is not frivolous or vexatious. The court also held that the debt claimed in the statutory demand must be due and payable at the time of service, but that offsetting claims can be taken into account in determining the amount that is due and payable. The court varied the demand to reflect the amount that was actually due and payable, having regard to the offsetting claims.

Orders