Goltep Constructions Pty Ltd v All Purpose Plumbing Supplies Pty ltd [1997] FCA 116 (6 February 1997)

C A T C H W O R D S

CORPORATIONS - Statutory demand for payment of debt - Application to set aside demand - Whether there is a genuine dispute between the parties - Effect of contract term that invoices be presumptive evidence - Factual issues.

Corporation Law, s 459G

GOLTEP CONSTRUCTIONS PTY LIMITED v ALL PURPOSE PLUMBING SUPPLIES PTY LIMITED

No. NG.3718 of 1995

CORAM: WILCOX J

PLACE; SYDNEY

DATE: 6 FEBRUARY 1997

IN THE FEDERAL COURT OF AUSTRALIA )

) No. NG.3718 of 1995

NEW SOUTH WALES DISTRICT REGISTRY )

)

GENERAL DIVISION )

BETWEEN: GOLTEP CONSTRUCTIONS PTY LIMITED

Applicant

AND: ALL PURPOSE PLUMBING SUPPLIES PTY LIMITED

Respondent

CORAM: WILCOX J

PLACE: SYDNEY

DATE: 6 FEBRUARY 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application under s 459G of the Corporations Law be dismissed.

2. The Registrar pay to All Purpose Plumbing Supplies Pty Limited the sum of $62,631.17 out of the moneys held in Court and repay the balance to Goltep Constructions Pty Limited.

3. Goltep Pty Limited pay the costs of the application incurred by All Purpose Plumbing Supplies Pty Limited.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

) No. NG.3718 of 1995

NEW SOUTH WALES DISTRICT REGISTRY )

)

GENERAL DIVISION )

BETWEEN: GOLTEP CONSTRUCTIONS PTY LIMITED

Applicant

AND: ALL PURPOSE PLUMBING SUPPLIES PTY LIMITED

Respondent

CORAM: WILCOX J

PLACE: SYDNEY

DATE: 6 FEBRUARY 1997

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: This is an application under s 459G of the Corporations Law to set aside a statutory demand.

The applicant is Goltep Constructions Pty Limited ("Goltep"), the alleged debtor. The respondent to the application is All Purpose Plumbing Supplies Pty Limited ("All Purpose Plumbing"). All Purpose Plumbing served on Goltep a statutory demand for payment of the sum of $83,916.41. Service was effected on 30 November 1995. The claimed amount is said to be payable as a result of numerous transactions whereby All Purpose Plumbing supplied plumbing equipment and appliances to Goltep, a company that carried on business as a builder.

The relationship between the parties commenced in August 1994. On 12 August 1994 Goltep made application to All Purpose Plumbing for approval of a 30 day credit account. The application form included a promise that, in consideration of All Purpose Plumbing giving credit facilities, certain terms would apply. They included:

"4. The company agrees that entries in the records of ALL PURPOSE stating that the company has requested the supply of certain good and that ALL PURPOSE has delivered the said goods to the company shall be prima facie evidence of such request and delivery."

On an earlier occasion, when the matter was in the list, I made an attempt to determine the extent of the dispute between the parties. The monthly statements sent by All Purpose Plumbing to Goltep were placed before the Court. Analysis of the statements revealed that the amount claimed in respect of each month, up to and including June 1995, was paid, in the precise sum claimed, fairly shortly after delivery of the relevant monthly statement. Accordingly, I ruled it was no longer open to Goltep to challenge items claimed by All Purpose Plumbing in respect of those months. The account had been accepted as correct and paid. No cross-claim had been made.

In relation to the period after 1 July 1995, however, the same situation did not apply. Between that date and the termination of dealings between the parties, certain payments were made; but they did not correspond to the amounts claimed on particular monthly statements or invoices for particular deliveries. They were consistent with either of two situations. One possibility was that Goltep was paying something less than the amounts claimed on the monthly statements because some items were under challenge. The other possibility was that Goltep was paying such amounts as it could, having regard to its financial position, in order to ensure a continuation of the supply of goods.

On 13 September 1995, a fax was sent by Bill McGarry, the construction manager of Goltep, to All Purpose Plumbing. Apparently it arose out of a conversation the previous day. The handwritten fax read:

"Re: Goltep Construction Payments:

Further to our discussions yesterday we confirm the following agreements:

1) $40,000 bank cheque Friday 15.9.95.

2) $46,000 paid by 30.9.95

Any further queries please do not hesitate to contact the undersigned".

It was signed by Mr McGarry.

According to a schedule prepared for the purposes of this case, which sets out all the dealings between the parties as analysed on behalf of All Purpose Plumbing, on the date of that fax the amount owing by Goltep to All Purpose Plumbing was $84,709.17. This is less than the total of $86,000 promised to be paid in the fax. Mr Rich, on behalf of All Purpose Plumbing, relies on the fax as an admission that the amount claimed by his client, as at that date, was substantially correct.

I think the fax does constitute an admission to that effect. However, the admission only goes to the situation as at 13 September. There were later dealings, including some deliveries of goods, and interest was charged. Interest was calculated in accordance with the terms of the application for credit: two per cent per month on any balance not paid within 30 days after the monthly statement.

The proposition that there is no genuine dispute between the parties is supported by the facts that regular monthly statements were sent to Goltep and there was no challenge to the correctness of any statement until the institution of this proceeding; that is, after service of the statutory demand. It might have been expected that Goltep would have sooner drawn attention to any error in a monthly statement.

Mr Rich places considerable reliance on paragraph 4 of the agreement between the parties for the supply of credit. He argues that the records of the company include its copies of invoices and its delivery dockets. Copies of the relevant invoices and dockets have been tendered in evidence. They were kept by the company for its own purposes, including verification of claims made by it.

I think there is substance in this contention. No doubt the reference to entries in the records of All Purpose Plumbing extends to other documents as well; but I see no reason to read down para 4 so as to exclude copies of invoices and delivery dockets. If this is correct, the documents constitute prima facie evidence that the goods were ordered and delivered. This throws on Goltep the burden of adducing evidence in rebuttal.

Goltep failed to adduce any such evidence. When the matter was previously before the Court, I expressed dissatisfaction with the form of the evidence filed on behalf of Goltep. The evidence was bulky but unenlightening; it merely listed disputed items and indicated Goltep's lack of information concerning them. No attempt was made to deny that particular goods were ordered or delivered, or to demonstrate that the number of any particular item was inconsistent with the project to which the goods were delivered. For example, it seems that appliances such as washing machines, dishwashers, stoves etc. were supplied. The projects were mostly home-unit blocks, with a known number of units. But no attempt was made to demonstrate, for example, that for a 24 unit development, more than 24 dishwashers were ordered. There was merely talk, in the affidavits, in a general way, of goods being ordered by unauthorised people.

Having regard to the unsatisfactory nature of the contrary evidence, I think All Purpose Plumbing is entitled to succeed in this application simply by reference to paragraph 4. However, there is evidence that takes the matter further. Pamela Johnson, who was the showroom manager of All Purpose Plumbing at the time, gave evidence that she did not release goods to Goltep except with the authority of Mr McGarry or, occasionally, Mr Serge Goldman, a director of the company. Her affidavit referred to certain other people who had been nominated by Mr McGarry. I was unsure exactly what she meant by this. However, the situation was clarified when she gave oral evidence and was cross-examined. She made it clear that what she was saying was that all orders had to have the authority of Mr McGarry or Mr Goldman; but there were occasions when the details of the order, for example the dimensions of particular items, were conveyed by one of the nominated people. The commonsense of this is obvious, bearing in mind that the nominated persons were either the site supervisors or plumbers working on the site. I would not expect Mr McGarry to concern himself with that sort of detail.

On one view of the evidence, there is a small discrepancy between this evidence and that of Mr McGarry. He said that the nominated people had authority to "call the product in", by which I think he meant they were able to telephone and arrange the timing of the delivery. Ms Johnson did not say anything about this aspect of the matter. She was not asked about it. But I do not think it undermines her assertion that, in all cases, either Mr McGarry or Mr Goldman authorised the transaction.

I see no reason to doubt the truth of Ms Johnson's evidence. It is consistent with what was said by Mr Cessario, the director of All Purpose Plumbing who was responsible for its financial operations. He said he gave instructions to Ms Johnson to the effect of her claimed practice and that, from time to time, he discussed with her the importance of obtaining the authority of an appropriate person for each telephone order. I was impressed by Ms Johnson. She seemed to me a truthful person. She seemed also to be a careful person who would ensure she had proper authority before causing goods to be delivered to a site. In the event, therefore, it is not necessary to resort to the presumption included in the contract between the parties.

Mr Epstein, on behalf of Goltep, emphasises that the issue is whether there is a genuine dispute between the parties. He says this is not the appropriate time to determine any dispute that does exist. I accept that, but I do not think there is a genuine dispute. It is true that, after the statutory demand was made, a dispute was claimed to exist. But I think the claimed dispute was manufactured by Goltep in order to avoid the necessity to comply with the notice. There is no reason to think there is a serious question as to the liability of Goltep for the amount claimed in the statutory demand.

Goltep paid some money into Court. It did so as a condition of an adjournment of the case on the day it first came before me. Some of that money, namely $21,285.24, was later paid out to All Purpose Plumbing on my direction. This was done after Goltep conceded it owed at least this amount. In the view I now take, there is no question about the liability of Goltep to All Purpose Plumbing for the balance of the statutory demand, namely $62,631.17. Accordingly, this amount should be paid out to All Purpose Plumbing and the balance returned to Goltep. The orders I make are as follows:

1. I order that the application under s 459G of the Corporations Law be dismissed.

2. I order that the Registrar pay to All Purpose Plumbing Supplies Pty Limited the sum of $62,631.17 out of the moneys held in Court and repay the balance to Goltep Constructions Pty Limited.

3. I order that Goltep Pty Limited pay the costs of the application incurred by All Purpose Plumbing Supplies Pty Limited.

I certify that this and the preceding seven (7) pages

are a true copy of the Reasons for Judgment

of the Honourable Justice Wilcox.

Associate:

Dated: 6 February 1997

APPEARANCES

Counsel for the Applicant: S Epstein

Solicitors for the Applicant: Baron & Associates

Counsel for the Respondent: G Rich

Solicitors for the Respondent: Patrick Woods & Co

Date of hearing: 6 February 1997