Westpoint Corporation Pty Ltd v Image Progress Pty Ltd
[2005] WASC 239
WESTPOINT CORPORATION PTY LTD -v- IMAGE PROGRESS PTY LTD [2005] WASC 239
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 239 | |
| Case No: | COR:155/2005 | 27 OCTOBER 2005 | |
| Coram: | MASTER SANDERSON | 7/11/05 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Demand set aside | ||
| B | |||
| PDF Version |
| Parties: | WESTPOINT CORPORATION PTY LTD (ACN 009 395 751) IMAGE PROGRESS PTY LTD (ACN 110 725 294) |
Catchwords: | Corporations Act Application to set aside statutory demand Turns on own facts |
Legislation: | Corporations Act 2001 (Cth), s 459G(2), s 459H(1) Property Law Act 1969 (WA), s 20, s 20(1) |
Case References: | David Grant & Co Pty Ltd v Westpac Banking Corporation (1994) 12 ACLC 895 Squires v SA Steel and Sheet Pty Ltd (1987) 45 SASR 142 William Brandt's Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59 Attorney-General (NT) v Maurice (1986) 161 CLR 475 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Bentley v Nelson [1963] WAR 89 Buddies Liquor Pty Ltd v Wah Lai Investments (Australia) Pty Ltd [2001] NSWSC 337 Davies v Nyland (1974) 10 SASR 76 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 Goldspar Australia Pty Ltd v KWA Design Group Pty Ltd (1999) 17 ACLC 456 Harrington v Lowe (1996) 136 ALR 42 Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (1994) 13 ACSR 455 John Shearer Ltd v Gehl Co (1995) 134 ALR 1 Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062 Munday & Shreeve v Western Australia [1962] WAR 65 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Peak Hill Manganese Pty Ltd v Hydraplant Equipment Pty Ltd [2003] WASC 120 Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 Re Horans Steel Pty Ltd v Leac Engineering Pty Ltd (1991) 105 ALR 143 Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341 Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 Verte Pty Ltd v Grisbrook (1997) 15 ACLC 1306 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 Z-Tek Computers Pty Ltd v AusLinx International Pty Ltd (1997) 15 ACLC 1233 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
IMAGE PROGRESS PTY LTD (ACN 110 725 294)
Defendant
Catchwords:
Corporations Act - Application to set aside statutory demand - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 459G(2), s 459H(1)
Property Law Act 1969 (WA), s 20, s 20(1)
Result:
Demand set aside
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr T M Clavey
Defendant : Mr A Dal-Cin
Solicitors:
Plaintiff : Clavey Legal
Defendant : Murfett & Co
Case(s) referred to in judgment(s):
David Grant & Co Pty Ltd v Westpac Banking Corporation (1994) 12 ACLC 895
Squires v SA Steel and Sheet Pty Ltd (1987) 45 SASR 142
William Brandt's Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454
Case(s) also cited:
Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Attorney-General (NT) v Maurice (1986) 161 CLR 475
Bahr v Nicolay (No 2) (1988) 164 CLR 604
Bentley v Nelson [1963] WAR 89
Buddies Liquor Pty Ltd v Wah Lai Investments (Australia) Pty Ltd [2001] NSWSC 337
Davies v Nyland (1974) 10 SASR 76
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473
Goldspar Australia Pty Ltd v KWA Design Group Pty Ltd (1999) 17 ACLC 456
Harrington v Lowe (1996) 136 ALR 42
Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (1994) 13 ACSR 455
John Shearer Ltd v Gehl Co (1995) 134 ALR 1
Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743
(Page 3)
Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACLC 1062
Munday & Shreeve v Western Australia [1962] WAR 65
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Peak Hill Manganese Pty Ltd v Hydraplant Equipment Pty Ltd [2003] WASC 120
Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86
Re Horans Steel Pty Ltd v Leac Engineering Pty Ltd (1991) 105 ALR 143
Rush & Tompkins Ltd v Greater London Council [1989] AC 1280
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341
Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
Verte Pty Ltd v Grisbrook (1997) 15 ACLC 1306
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Westpoint Management Pty Ltd v Goakes [2002] WASCA 317
Z-Tek Computers Pty Ltd v AusLinx International Pty Ltd (1997) 15 ACLC 1233
(Page 4)
1 MASTER SANDERSON: This is the plaintiff's application to set aside the defendant's statutory demand. At the conclusion of the hearing I indicated to the parties that I would set aside the demand and that I would publish reasons for doing so at a later date. These are those reasons.
2 A copy of the statutory demands appears as annexure "NPC-1" to the affidavit of Norman Phillip Carey ("Mr Carey") sworn 24 June 2005. The statutory demand alleges that the plaintiff is indebted to the defendant in an amount of $30,279.45. The schedule to the statutory demand refers to two invoices. The first dated 10 January 2005 is for $21,812.48 and the second dated 1 March 2005 is for $8,466.97. Copies of both of these invoices were provided with the statutory demand.
3 At the commencement of the hearing counsel for the plaintiff tended a document which was titled "The Plaintiffs Objections to the Defendant's Affidavits". In opposition to the application, the defendant had lodged an affidavit sworn by Brigitta Yabsley sworn 25 July 2005 and two affidavits of Evan Vaughn Yabsley ("Mr Yabsley"), one sworn 25 July 2005 and the other sworn 26 September 2005. A large number of objections were taken to each of these affidavits. Rather than take time dealing with these objections, I advised the parties that if any of the paragraphs of the various affidavits to which the plaintiff objected were relevant to the determination of the matters in issue, I would take account of the plaintiff's objection and, if necessary, give the defendant the chance to respond. Sensibly, both counsel indicated they were happy for the matter to proceed in that way.
4 In his written submissions, counsel for the defendant raised as an issue whether or not the application to set aside the statutory demand was brought within the 21-day period specified in s 459G(2) of the Corporations Act 2001 (Cth). Of course, if the application is not brought within 21 days after the date of service of the demand, the application is not properly on foot. There is no power in the Court to extend the time within which the demand can be made: see David Grant & Co Pty Ltd v Westpac Banking Corporation (1994) 12 ACLC 895. In his affidavit of 24 June 2005 Mr Carey says that the statutory demand was served on 3 June 2005. The application to set aside the demand was served on 24 June 2005. There was nothing in the evidence led on behalf of the defendant which directly challenged any of these dates. Nonetheless, the submissions made by the defendant called upon the plaintiff to establish that the application was made within time.
(Page 5)
5 On 29 September 2005 Mr Carey swore a supplementary affidavit dealing directly with the date upon which the statutory demand was received. Annexed to that affidavit as annexure "NPC-1" is a copy of a letter from Donaldson Walsh, the defendant's solicitors in Adelaide, to the plaintiff which enclosed the statutory demand. The letter itself, oddly enough, is undated. It bears a date received stamp of 3 June 2005. Mr Carey explains the process by which mail is collected by officers of the plaintiff, opened and date stamped. I am satisfied that based upon this uncontradicted evidence the statutory demand was received by the plaintiff on 3 June and that the application to set aside the demand was made within time.
6 The circumstances in which the alleged debt was incurred can be summarised in this way. The plaintiff has diverse business interests which include property development, design and construction. The plaintiff conducts its business directly and through related corporate entities which, in his affidavit of 24 June 2005, Mr Carey describes as "the Plaintiff's Group of Companies". He says that in late 2003 he decided that the Plaintiff's Group of Companies did not have a recognisable and consistent brand and that that was an impediment to marketing its activities. He therefore resolved to engage a "branding" consultant to undertake a comprehensive review of the plaintiff's business with a view to developing a brand strategy which would define and support the plaintiff's strategic corporate direction. He also anticipated that the branding consultant would provide brand management services and implement the brand strategy once developed.
7 In furtherance of this enterprise, the plaintiff issued a tender specification document outlining its requirements for the branding project. On 23 April 2004, the plaintiff received an expression of interest from Mr Yabsley for the provision of brand strategy and brand management services. A copy of that expression of interest appears as annexure "NPC-3" to Mr Carey's affidavit of 24 June 2005.
8 Mr Carey met with Mr Yabsley in Perth on 12 May 2004. The branding project was discussed. Mr Carey liked what he heard and on 14 June 2004 Mr Carey sent Mr Yabsley a facsimile engaging him to perform the brand strategy services. A copy of that letter appears as annexure "NPC-4" to Mr Carey's affidavit of 24 June 2005.
9 It was common ground between the parties that as of the date of Mr Carey's facsimile - that is 14 June 2004 - there was in existence a contract between the plaintiff and Mr Yabsley. The contract was
(Page 6)
- undoubtedly partly oral and partly written. Its precise terms are, on the evidence filed in these proceedings, in dispute. But the nature of that dispute is not of concern. What is important for present purposes is that the contract was between the plaintiff and Mr Yabsley.
10 Having been engaged, Mr Yabsley set to work. He took certain steps and in due course rendered invoices to the plaintiff. These invoices were paid. However, the two invoices rendered in January and March 2005 were not paid. But the statutory demand was issued by the defendant - Image Progress Pty Ltd. So, in some way or another, the debt which arose under the contract between the plaintiff and Mr Yabsley is now said to be owing by the plaintiff to the defendant. The question then is whether there has been an effective assignment of the debt owed by the plaintiff to Mr Yabsley to the defendant.
11 In fairness to the plaintiff, I should say that the primary thrust of the evidence led by the plaintiff was that the debt said to be owing was not in fact due and payable. It was the plaintiff's position that the work that was to have been undertaken by Mr Yabsley was not done or was not done in accordance with the terms of the contract and the plaintiff was not therefore liable to pay the amounts claimed in the two invoices referred to in the demand. In addition, the plaintiff says that it has an offsetting claim greater than the amount of the statutory demand and therefore the demand ought be set aside under s 459H(1) of the Corporations Act. The evidence on these two issues was detailed and complex and for present purposes it is not necessary to consider it. It was the plaintiff's position that whatever else might be said about the debt, there had not been an effective assignment of it between Mr Yabsley and the defendant such as would allow the defendant to issue a statutory demand. It was on that issue that I determined this application in the plaintiff's favour.
12 There would seem to be no doubt that the contract between the plaintiff and Mr Yabsley was concluded in Western Australia. Mr Yabsley is a resident of South Australia and his initial expression of interest originated from that state. The meeting between Mr Yabsley and Mr Carey took place in Perth and the confirmation of engagement from the plaintiff to Mr Yabsley originated in Perth. The work undertaken pursuant to the contract was in large measure done in South Australia but impacted upon the plaintiff in its business activities in Perth. Without reaching a decided view on this question, it is at least arguable that the contract between the plaintiff and Mr Yabsley was subject to the law of Western Australia.
(Page 7)
13 That being so, if a debt owing by the plaintiff to Mr Yabsley was to be assigned to the defendant it had to comply with s 20 of the Property Law Act 1969 (WA). Section 20 is in the following terms:
"(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim that debt or chose in action, is effectual in law (subject to equities having priority over the right of the assignee), to pass and transfer from the date of the notice —
(a) the legal right to that debt or chose in action;
(b) all legal and other remedies for the debt or chose in action; and
(c) the power to give a good discharge for the debt or chose in action, without the concurrence of the assignor.
(2) Where the debtor, trustee, or other person liable in respect of the debt or chose in action referred to in subsection (1) has notice —
(a) that the assignment so referred to is disputed by the assignor, or any person claiming under him; or
(b) of any other opposing or conflicting claims, to the debt or chose in action,
he may, if he thinks fit, either call upon the persons making claim thereto to interplead concerning the debt or chose in action, or pay the debt or other chose in action into court, under the provisions of the Trustees Act 1962.
(3) For the purposes of this section 'any debt or other legal chose in action' includes a part of any debt or other legal chose in action."
14 Section 20(1) has two requirements. First, there must be an assignment by writing under the hand of the assignor (in this case
(Page 8)
- Mr Yabsley) of the debt to the defendant. There was no evidence tended by the defendant of any such written assignment. However, it was alleged that there was an assignment in equity. Without exploring what is required for an effective equitable assignment, it can be assumed for the purposes of this application that there was such an assignment. The second requirement is that "express notice in writing" of the assignment has been given to the debtor. The question then is whether in this case such express notice in writing had been given.
15 In her affidavit of 25 July 2005, Ms Brigitta Yabsley says that the defendant took over the partnership of Evan Yabsley Consulting on 1 September 2004. She says that some time after the takeover was effective she contacted an employee of Westpoint advising of the change and that the result would be that further invoices would contain a different ABN number. It is common ground between the parties that no direct advice of the assignment - that is to say a document unequivocal in its terms - was sent to the plaintiff either by Mr Yabsley, Evan Yabsley Consulting or the defendant. So how then can it be said that the requirements of s 20 of the Property Law Act that express notice be given to the debtor of the assignment has been satisfied?
16 In answer to this question the defendant points to invoices it says were rendered to the plaintiff by the defendant which show the assignment. Further, it is said that these invoices were paid confirming, so it is said, that the defendant was aware of the assignment. One such invoice is dated 1 December 2004. It appears as part of annexure "BY-3" to the affidavit of Mrs Brigitta Yabsley (page 15). The invoice is headed in bold type "Evan Yabsley Consulting". Immediately under that title in smaller print and in brackets is the name of the defendant. At the foot of the page there appears the name of the defendant, its address, telephone number and its ABN. There is no dispute that this invoice was paid. The question then is whether the information contained on that invoice is sufficient to satisfy the requirements of s 20 of the Property Law Act. In support of his submission that this was sufficient, counsel for the defendant relied upon the well-known case of William Brandt's Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454. Lord Macnaghten, dealing with what is sufficient notice of an assignment, said (at 462):
"It (the notice of assignment) may be addressed to the debtor. It may be couched in the language of command. It may be a courteous request. It may assume the form of mere permission. The language is immaterial if the meaning is plain. All that is necessary is that the debtor should be given to understand that
(Page 9)
- the debt has been made over by the creditor to some third person. If the debtor ignores such a notice, he does so at his peril."
17 Counsel for the plaintiff relied upon the decision of Bollen J in Squires v SA Steel and Sheet Pty Ltd (1987) 45 SASR 142. In that case an account had stamped on it a notice that it had been purchased by a factor. That was accompanied by a request to forward payment to the factor's address. The question was whether or not this stamp was sufficient notice of the assignment. His Honour concluded that the stamped notice was insufficient. He put the position as follows (at page 146):
"… what does the stamp notice mean? Does it tell the customer that there has been an assignment of his indebtedness? No. It does not. Does it tell him that he must pay Heller Factors Pty Ltd or that he may not pay Eastern Haulage? Again, it does not."
18 It is to be borne in mind that in an application such as this, what is to be determined is whether there is a genuine dispute between the parties. There was no dispute between the plaintiff and the defendant as to the test to be applied. It is not for me to determine whether or not the reference to the defendant on the invoice rendered to the plaintiff was sufficient to constitute a notice under s 20 of the Property Law Act. All I have to determine is whether or not there is a genuine dispute on the question. Clearly there is. That being so, the plaintiff is entitled to an order setting aside the statutory demand.
19 Having indicated to the parties that I would set the demand aside, both counsel requested the opportunity to make submissions with respect to costs after reading these reasons. Counsel for the defendant also sought to have the order setting aside the demand operate only from the date of publication of the reasons. I agreed to both requests. I will therefore deal with the issue of costs at a later date.
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25
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