TSW Analytical Pty Ltd v The University of Western Australia
[2015] WASC 232
•26 JUNE 2015
TSW ANALYTICAL PTY LTD -v- THE UNIVERSITY OF WESTERN AUSTRALIA [2015] WASC 232
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 232 | |
| 26/06/2015 | |||
| Case No: | CIV:2760/2014 | 8 JUNE 2015 | |
| Coram: | MASTER SANDERSON | 8/06/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application for summary judgment refused Statutory demand set aside | ||
| B | |||
| PDF Version |
| Parties: | TSW ANALYTICAL PTY LTD THE UNIVERSITY OF WESTERN AUSTRALIA |
Catchwords: | Corporations law Application to set aside statutory demand Application by defendant for summary judgment Both turns on own facts |
Legislation: | Nil |
Case References: | Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 The University of Western Australia v TSW Analytical Pty Ltd [No 2] [2014] WADC 145 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- COR 244 of 2014
- Plaintiff
AND
THE UNIVERSITY OF WESTERN AUSTRALIA
Defendant
Catchwords:
Corporations law - Application to set aside statutory demand - Application by defendant for summary judgment - Both turns on own facts
Legislation:
Nil
Result:
Application for summary judgment refused
Statutory demand set aside
Category: B
Representation:
Counsel:
Plaintiff : Mr S Penglis
Defendant : Ms P A Martino
Solicitors:
Plaintiff : Thompson Downey Cooper
Defendant : P A Martino
Case(s) referred to in judgment(s):
Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454
The University of Western Australia v TSW Analytical Pty Ltd [No 2] [2014] WADC 145
1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand in COR 244 of 2014 and the defendant's application for summary judgment in CIV 2760 of 2014. The two actions are interlinked. I ordered both applications be heard together. After hearing argument I dismissed the defendant's application for summary judgment in CIV 2760 of 2014 and set aside the statutory demand in COR 244 of 2014. I indicated I would publish reasons for my decision. These are those reasons.
2 It is convenient to begin with the defendant's application for summary judgment in CIV 2760 of 2014. The statement of claim identifies in the first two paragraphs the parties. Paragraph 3 pleads the plaintiff between 1 January 2008 to on or about 31 December 2013 provided to or on behalf of the defendant services, materials and benefits. By way of example, par 3.1 pleads:
Chemical analyses of various samples for the purposes of research projects undertaken by postgraduate students of the Defendant, all of whom were candidates for the research degrees of Master of Science or Doctor of Philosophy.
3 By par 4 of the statement of claim the plaintiff pleads that the parties intended to enter into a legal agreement to govern the terms of their relationship but never actually did so. The plaintiff says it is entitled to be paid for the services, materials and benefits it provided to the defendant and claims an amount of $4,705,246.97. A detailed breakdown of how that claim is made up is provided in the schedules to the statement of claim. It is clear the plaintiff is basing its claim in quantum meruit. These days such a remedy is taken up under the rubric of unjust enrichment. However it is described in legal terms it is clear the plaintiff is saying it is entitled to payment for services rendered when no contract exists between the parties. Both parties did agree the absence of any contractual arrangement is an essential element of the cause of action.
4 No defence has been filed to the plaintiff's claim. In support of the application the defendant relied on an affidavit of Abbe Louise Rorrison sworn 3 December 2014 and filed in COR 244 of 2014. In her written submissions counsel for the defendant drew upon this affidavit to provide a summary of what she described as the 'undisputed facts'. In fact one particular aspect of the facts as summarised by counsel was challenged by counsel for the plaintiff. But the summary does effectively put the defendant's position. It reads as follows:
The key pieces of evidence including statements from both representatives of UWA and TSW and the documentation reveal the following undisputed facts and/or documents:-
(a) Mr Thomas, Mr Scadding and Professor Watling registered a company known as TSW Analytical Pty Ltd ('TSW') in or about 2006. By letter dated the 23rd November 2006 Mr Thomas, Mr Scadding and Professor Watling sought approval to become directors of TSW, that approval was to be obtained from the Vice Chancellor of UWA;
(b) Letter dated 8th December 2006 by the Vice Chancellor of UWA approved Mr Thomas, Mr Scadding and Professor Watling's request on the grounds as stated in the letter dated the 23rd November 2006;
(c) During the period 2008 to 2013 a Research Funding Agreement came, into effect between UWA and TSW. This funding was by way of a calculation by Mr Scadding on behalf of TSW of the salaries and related costs of staff and a 15% infrastructure charge. The process was by way of written offers which were accepted through the green form process and invoices were issued and paid during the whole of the period 2008 to November 2012 with UWA's claim commencing in the District Court of Western Australia in November 2013 being a claim for the funding payable for December 2012 to June 2013;
(d) Mr Scadding on behalf of TSW admits by email dated the 25th March 2013 that the December 2012 invoice is owing but is not payable because of cash flow;
(e) In terms of the funding for January 2013 to June 2013 Mr Scadding calculated the funding to be provided by TSW to UWA for the period January 2013 to June 2013 inclusive. The funding included the salary for Mr Scadding's wife Rachel Green and Mr Thomas;
(f) The staff of TSW (excluding professor Watling) were employed by UWA on the sole basis that consultancy income would be forthcoming from TSW. Their respective employment agreements were contingent upon the continuing provision of funding from TSW. Each of their employment agreements clearly specified the same particularly for the period which is the subject of UWA's judgment. The employment obligations being salary payments and any associated leave were the obligation of TSW as was clearly indicated through the process by even Mr Scadding (refer to the green form process and also his emails and letters confirming continuity of staff). It was further confirmed at the conclusion of the Agreement whereby Professor O'Donnell confirms the obligations of TSW on cessation of employment of staff with UWA. This is by letter dated the 28th June 2013 and specifically states that all severance costs and leave payouts in relation to the following staff members will be costed to TSW PG and will be the responsibility of TSW. Those staff were Cameron Scadding, Rachel Green, Vicki Green, Sven Fjastad, Chris May and Allen Thomas. Professor Watling was a UWA staff member and any joint funding agreement between TSW and UWA were to be formulised under a written agreement.
(g) The agreement by way of conduct was the provision of various services to and from TSW and UWA. In effect TSW had access to UWA's facilities such as library and other services, the perceived association with UWA and credibility by being located on UWA's campus and TSW was better positioned to source expertise by being located on UWA's campus. In return TSW provided support to UWA students, tuition, laboratory equipment and consumables for the use of UWA and its students. This agreement by conduct was confirmed by Mr Scadding in his letter to Professor McEachorn dated 24th September 2009 and was subsequently confirmed in both the draft and final Deloittes Report issued on the 11th October 2011 (par 14). (emphasis added)
5 The District Court action referred to in par 14(c) above was commenced on 26 November 2013. The writ of summons, a copy of which was tendered as exhibit 1, had only an indorsement of claim. Paragraph 3 of that indorsement is in the following terms:
Throughout 2009 to 2013 the Plaintiff and the Defendant entered into a partly verbal and party written research, grant and funding agreement whereby the Plaintiff would provide academic staff, students and provision of laboratory and other resources ('infrastructure resources') and the Defendant would pay the Plaintiff the expenses for the infrastructure resources and provide funding to the Plaintiff ('research grant and funding agreement').
6 The defendant to the District Court action (the plaintiff here) did not enter an appearance to the writ and default judgment was entered. Application was made to set aside that default judgment. The matter came on before Staude DCJ and on 24 October 2014 his Honour published reasons dismissing the application to set aside the default judgment: see The University of Western Australia v TSW Analytical Pty Ltd [No 2] [2014] WADC 145. As part of its application to set aside the judgment the plaintiff in this case claimed it had available to it an equitable set-off. Essentially it argued what is now contained in the statement of claim in this action - it was entitled to maintain a claim in quantum meruit. His Honour rejected that submission. He said:
Accordingly, the proposed defence is simply not tenable. It is not reasonably open to TSW, having benefited from the relationship with UWA in the way that Mr Scadding described, to argue at the conclusion of that relationship that UWA accepted a benefit which it would be unconscionable for it to retain. It involves no finding of fact, nor any adjudication of an issue of law, to find that no defence of set-off is available on this basis [122].
7 His Honour's conclusion is based upon a finding that there was a contractual arrangement between the plaintiff and the defendant. In the course of his reasons his Honour undertook a detailed consideration of the affidavit evidence which included a large number of documents passing between the parties. He concluded:
UWA says that the agreement was simply that TSW would pay the agreed amounts to UWA in consideration of UWA employing and paying its staff. The contract was formed periodically by the acceptance by UWA of an offer of a research grant by TSW. The existence of the contracts on which the judgment is based is also evidenced by Mr Scadding's admissions as to TSW's indebtedness in his emails of 14 and 25 February 2013. There was no other agreement [99].
8 The difficulty with that conclusion is it is at odds with par 3 of the indorsement of claim. Paragraph 3 seems to anticipate just one agreement. His Honour found there were a series of agreements. It is not entirely clear how that conclusion relates to the indorsement of claim or whether in fact the form of the indorsement of claim and the apparent inconsistent case run by the plaintiff in the District Court action is relevant.
9 The District Court decision of his Honour is presently under appeal. While it is not for me to make any assessment of the merits of that appeal it must be said it could not be regarded as hopeless. Of course if it fails it will be very difficult for the plaintiff in this action to maintain its claim. Then a summary judgment application may or may not succeed. But at present it seems to me there is too much uncertainty over the contractual position of the parties to say without doubt summary judgment should run. For those reasons I determined the defendant's application ought be dismissed. Once that point is reached it seems to me the application to set aside the statutory demand ought succeed. In some circumstances a pending appeal can give rise to some other reason why the demand should be set aside under s 459J(1)(b) of the Corporations Act 2001 (Cth): see Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454, 459 (Emmett J). Of course if the appeal is dismissed a further statutory demand can be issued.
10 It was for these reasons I dismissed the application for summary judgment and set aside the statutory demand.
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