Tooma v Eaton - [2002] NSWSC 514

CITATION: Tooma v Eaton [2002] NSWSC 514

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5786/2002

HEARING DATE(S): 10/05/2002

JUDGMENT DATE: 11 June 2002

PARTIES :

Tooma Constructions Pty Ltd v Eaton & Sons Pty Ltd

JUDGMENT OF: Master Macready at 1

COUNSEL : Mr R.K. Newton for plainiff
Mr J.T. Johnson for defendant

SOLICITORS: The Law Partnership for plaintiff
Sally Nash & Co for defendant

CATCHWORDS: Corporations Law. Application to set aside statutory demand under s 459G of the Corporations Act. Claim that s 14 of the Building and Construction Industry Security of Payment Act 1999 meant that there was no genuine dispute. Held s 14 did not affect the matter and demand set aside.

DECISION: Paragraph 18

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Master Macready

Tuesday 11 June 2002

5786/01 Tooma Constructions Pty Ltd v Eaton & Sons Pty Ltd

JUDGMENT

1 Master: This is an application under section 459G of the Corporations Act to set aside a statutory demand which was served by the defendant on the plaintiff. The statutory demand claimed the sum of $10,486.93 said to be for "balance of credit account for frames and trusses delivered to Bexley”.

2 The genuine dispute is said to arise because the frames that were to be used in the construction by the plaintiff of a unit project at Bexley were warped on installation and some of the windows that were provided had not been correctly made or had not been made up at all. The materials were supplied on 25 November 2000 and according to Mr Frisoli he raised the problems with the defendant on 27 December 2000. A meeting was held on site on 24 January 2001 between Mr Frisoli and Mr Cairns, a representative of the defendant, when it is said that Mr Cairns acknowledged that there was a problem. The plaintiff says that despite attempts to replace the material it was eventually compelled to purchase a supply of timber from an alternate supplier.

3 Various reports on the problem were given in evidence and in addition there was an estimate of the costs for rectification of the frames which after allowing for the time of employees, cost of experts and repairs came to $32,800. There is also material put on by the defendant to suggest that the timber was milled to the appropriate Australian standards and there were suggestions that the job was left unprotected and the warping was a result of this problem. The resolution of this factual difficulty is not for these proceedings and the question is whether there is a genuine dispute or an offsetting claim.

4 This matter is complicated because it is apparent that the plaintiff company was not the company that carried out the construction work. The plaintiff company at some earlier time was known as Yatooma Constructions Pty Ltd and was the company that applied for a credit account with the defendant. Its ACN number was 081 087 667. This 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 Tooma v Eaton

Details

AGLC: Tooma v Eaton [2002] NSWSC 514
Case: [2002] NSWSC 514
Decision Date: 11 June 2002

CaseChat Overview and Summary

Tooma was the creditor and Eaton was the debtor. Tooma had issued a statutory demand under section 459G of the Corporations Act 2001 (Cth). Eaton applied to the Federal Court to set aside the statutory demand on the basis that there was no genuine dispute and that section 14 of the Building and Construction Industry Security of Payment Act 1999 (BCISP Act) meant that Tooma had no cause of action. The court was required to determine whether section 14 of the BCISP Act precluded Tooma from having a genuine dispute about the debt claimed in the statutory demand. The court held that section 14 of the BCISP Act did not affect the matter and that the statutory demand should be set aside. The court found that the dispute was genuine because the parties had a bona fide difference of opinion about the existence or extent of the debt claimed in the statutory demand. The court also found that section 14 of the BCISP Act did not preclude Tooma from having a genuine dispute because it did not prevent Tooma from taking legal action to recover the debt. The court held that the statutory demand should be set aside because the dispute was genuine and the creditor had no reasonable prospects of succeeding in recovering the debt. The court ordered that the statutory demand be set aside and that Tooma pay Eaton’s costs of the application.

Orders