Antill International Marine Pty Limited v Australasian Pacific Foods Pty Ltd [2010] NSWSC 90 (9 February 2010)

Last Updated: 18 February 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Antill International Marine Pty Limited v Australasian Pacific Foods Pty Ltd [2010] NSWSC 90


JURISDICTION:
Equity

FILE NUMBER(S):
2009/290132

HEARING DATE(S):
9 February 2010

JUDGMENT DATE:
9 February 2010

EX TEMPORE DATE:
9 February 2010

PARTIES:
Plaintiff: Antill International Marine Pty Limited
Defendant: Australasian Pacific Foods Pty Ltd

JUDGMENT OF:
White J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Plaintiff: M Lawson
Defendant: M Davidson (sol'r)

SOLICITORS:
Plaintiff: Lane O'Rourke & West
Defendant: Paladin Law


CATCHWORDS:
CORPORATIONS – application to set aside statutory demand under Corporations Act 2001, s 459G – genuine dispute in relation to part of debt claimed – substantiated amount of demand less than statutory minimum – statutory demand set aside under s 459H(3)

LEGISLATION CITED:
Corporations Act 2001 (Cth)

CATEGORY:
Principal judgment

CASES CITED:
Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACSR 785
Re Morris Catering (Australia) Pty Limited (1993) 11 ACSR 601

TEXTS CITED:


DECISION:
1. Make order 1 in the originating process;
2. order the defendant to pay the plaintiff's costs.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST


WHITE J

Tuesday, 9 February 2010

2009/290132 Antill International Marine Pty Limited v Australasian Pacific Foods Pty Ltd

JUDGMENT

1 HIS HONOUR: This is an application to set aside a statutory demand. The statutory demand is dated 13 July 2009 and claims that the plaintiff is indebted to the defendant in the sum of $17,689.61. This debt is said to be the amount owed for "work done & services rendered at the request of the Company and accounts stated to the Company dated 10 August 2008, 20 September 2008, 11 November 2008 and unpaid."

2 In his affidavit sworn in support of the application to set aside the statutory demand the director of the plaintiff, Mr Antill, identified the following relevant grounds for disputing the indebtedness. Relevantly, they were, first, that the defendant had sent to the plaintiff company from time to time "reconciliations" claiming various amounts ranging from $29,264.63 to $9,437.01.

3 Secondly, that in relation to the accounts for periods after 31 July 2008 the plaintiff had informed the defendant that:

"the consultancy arrangement was terminated and in its place a sales only commission arrangement was available and the defendant was permitted to occupy office premises of the company at no charge and to use the telephone and services of the company at no charge."

4 The relevance of the second ground is to be understood by reference to the invoices which the defendants says are outstanding and which give rise to the claimed debt. The defendant rendered monthly invoices. Its invoices rendered up to 10 August 2008 stated that a nil balance was then due. Its invoices rendered on 20 September 2008 and 11 January 2008 asserted that amounts of $6,970.87, $5,178 and $5,549 were due. These included the three amounts described as a consulting fee for the months of August, September and October. Each of these amounts was claimed in the sum of $5,000 plus GST of $500. The plaintiff disputes that it is liable to pay these amounts.

5 If there is a genuine dispute in relation to those amounts, then the balance of the debt claimed by the defendant would fall below the statutory minimum.

6 The plaintiff is in the business of selling new Dufour yachts. In about December 2006 it took a lease of premises at Cabarita Point for the purpose of selling new and used boats and running a boat chandlery. In about August, September or October 2007 the plaintiff and the defendant reached an agreement whereby the defendant agreed to provide services to the plaintiff including the promotion and marketing of brands and the sale of yachts, the management of the chandlery, the staffing of the office at Cabarita, and dealing with telephone enquiries.

7 It was agreed that the defendant would be paid a consultancy fee of $60,000 per annum payable in equal monthly instalments, plus commission on the sale of new and second-hand boats. A written agreement was prepared but not signed. Prima facie the agreement could be terminated by either party on reasonable notice.

8 Mr Antill deposes that by mid-2008 he had decided to close the Cabarita business, but he came to an agreement with the marina for the plaintiff to take a lease of smaller premises for six months from October 2008. He deposes that during June and July 2008 he told Mr Rogers, a director of the defendant, that the consultancy arrangement must come to an end and the payment of consultancy fees of $5,000 per month should come to an end after July. He deposes that he offered to allow the defendant the right to use the smaller premises of the Cabarita marina and earn a commission only on boat sales.

9 There is corroboration that discussions to that effect occurred. Mr Rogers accepted that he had numerous discussions at the time with Mr Antill about changing the agreement, but said that nothing was decided or agreed upon as a result of those discussions.

10 On 17 June 2008 Mr Rogers sent a long email to the plaintiff dealing with a variety of subject matters but focusing in particular on the commission sales structure of the plaintiff and the plaintiff's appointment of sales agents. In the email Mr Rogers said that the plaintiff should be easily able to maintain a profit margin of 20 percent by taking certain action which he proposed. He also said:

“I am very disappointed that the company views my efforts as non-contributing and sees Cabarita as supporting itself, Cabarita without staff is nothing, it is because of the work there that it ALMOST could be considered supportive, at present, it provides a cost centre without justification [sic].

This is a real slap in the face given the effort and work that has been committed, not only in brokerage but also updating websites, writing newsletters, ensuring AMIF was satisfied, managing tender documentation, promoting chandlery ... AND other responsibilities that are ‘unpaid’.”

11 Whilst the email is far from clear to a reader not familiar with the detail of the discussions that had taken place between the parties, it corroborates Mr Antill's evidence that he had told Mr Rogers that the consultancy fee arrangement should come to an end. Mr Antill replied to Mr Roger's email of 17 June on 20 June 2008 and he said:

“Thanks for this. I will digest it.

Don't know how we can lift our margins.

Importantly my comments re 'Cabarita Supporting it self, but not supporting you' was purely ment [sic] that it was not meeting your expectations and we need to ramp it up with presence, hence the comments about getting the 34 there before the show. OR get out. I’m supporting staying there so we don't lose the value of the work and committment [sic] you have invested there.”

12 I do not consider that the email is inconsistent with Mr Antill's version of events. It appears to me to be consistent with his evidence that the defendant was to retain a presence at Cabarita and continue to have the opportunity to earn commission from boat sales from the Cabarita marina.

13 As was submitted for the defendant, there is no evidence that the defendant accepted the plaintiff's proposal to terminate the consultancy fee arrangement. Moreover, the evidence on this application is that the defendant continued to provide the same kind of services that had been provided up to June or July 2008 until October 2008. The question is whether there is a genuine dispute that the commission ceased to become payable after July 2008 because the plaintiff gave notice that that part of the arrangement should terminate. It is no part of the court's function on this application to decide whether the consultancy fee remains payable or not. The question rather is whether there is a genuine dispute on that matter.

14 There will be a genuine dispute if the plaintiff has raised a plausible contention requiring investigation (Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACSR 785 at 787-788; see also Re Morris Catering (Australia) Pty Limited (1993) 11 ACSR 601).

15 It may be that on a final hearing it would be found that the written agreement which passed between the parties in 2007 embodied the terms which they orally or by their conduct agreed upon. It may be that it would be found at the final hearing that the agreement between the parties was wholly oral, or was partly oral and partly implied, the implication arising from conduct. I do not think it possible to say on the materials before me whether or not it was open to either party to terminate particular parts of their 2007 agreement by giving reasonable notice.

16 In my view, there is a serious question to be tried, and hence a genuine dispute, that the plaintiff was entitled to terminate the consultancy arrangement on giving reasonable notice to the defendant. I think it is also seriously arguable that the notice, which appears to be of more than a month, which the plaintiff gave, was reasonable for this purpose. If that be so then there is a serious question to be tried that the defendant was not contractually entitled to the $5,000 a month fee claimed in the unpaid invoices. The question may still arise as to whether the defendant was entitled to reasonable remuneration by way of quantum meruit for the services provided to October.

17 There was no argument about this. Whether or not the defendant would be so entitled would be a matter of genuine dispute. Without expressing any view on the matter, I can envisage that it might be said that the defendant was not entitled to reasonable remuneration for those services beyond the rights which the plaintiff alleges the defendant was entitled to in terms of making use of the premises and continuing to act as an agent of the plaintiff entitled to commission sales.

18 It was submitted for the defendant that the plaintiff did not deny indebtedness after it received a formal letter of demand from the defendant's solicitors, but rather undertook to pay the sum of $9,437.10 by 30 June 2009, which undertaking was not honoured. The defendants submitted that this indicated that there was in any event no genuine dispute that at least $9,437.01 was due and payable. The alleged undertaking is contained in an email from Mr Antill to Mr Rogers of 3 June 2009. The email was written in response to a letter of demand from the defendant's solicitors of 18 May 2009 in which they asserted that the plaintiff owed the defendant $22,697.87 for invoices rendered and dated 10 August, 20 September and 11 November 2008.

19 In his email of 3 June 2009 Mr Antill said amongst other things:

“As per previous discussions with Morgan [Mr Rogers] and payments made I believe the amount claimed to be incorrectly calculated. I was of the belief the amount was approx $10,000.

Attached is the reconciliation Morgan provided me showing outstanding balance of $14,437.01 however it has missed a payment of $5,000. 3 payments of $5,000 were made 20/6, 21/7 and 19/8 but only 2 are shown on his record. Therefore, the claimed balance should be $9,437.01. I have attached our ledger of payments.

This actually related to the final two invoices roughly which in reality Morgan never earned as commission in what was then a purely sales related commission structure as the service operation at Cabarita was closed.

However, Morgan always acted in the best interests of Dufour and Antill Marine and whilst the operation at Cabarita was a massive failure I have always wanted to make the separation between us amicable with the very likely hope that future business interests of both parties will benefit from ach [sic] other.

I have given an undertaking to Morgan that when monies are released on the settlement of the Dufour 525 which will take place on or around the 30 June 2009 [sic]. At this point a effort [sic] will be made to pay Morgan the monies claimed as the last thing we want to do is fight it.”

20 I do not think that this email was an admission that the plaintiff owed the defendant $9,437.10. In part, it was an assertion of what a correct calculation of the amount claimed by the defendant would be. It was also an offer to pay that sum to settle the dispute between the parties.

21 The defendant also referred to an email sent by Mr Antill at an earlier time, namely on 3 May 2009 in response to email correspondence from the defendant asking for an update on the plaintiff's position concerning payment of outstanding moneys. Mr Rogers had stated that he had asked for payment a number of times since December 2008, his patience was thinning rapidly, and he threatened legal action.

22 On 3 March 2009 Mr Antill wrote:

“Sorry I just returned from Melb, where I was getting the second installment [sic] on the 525.

I’ve actually written a cheque for $2,500 that will go out on Wednesday.

I have not had a cent for 3 months, living off credit cards, etc. But I am turning thing around [sic].”

23 There was then no denial that amounts claimed by the defendant were due. The payment of $2,500 was not made. Having regard to my conclusion that there is a genuine dispute as to the plaintiff's liability for the consultancy fee claimed by the defendant for the three months between August and October 2008 I do not think that the terms of the email of 3 May 2009 can demonstrate the absence of such a genuine dispute. The fact that the plaintiff was willing to pay some money, when money was available, in an attempt to resolve the dispute with the defendant, is not an admission that an amount was owed. Even if it could be characterised as an admission, it would not demonstrate the absence of a genuine dispute when the other materials on this application show that such a dispute exists.

24 It is unnecessary to deal with the plaintiff's further arguments that the confused state of accounting between the parties itself gives rise to a genuine dispute.

25 For these reasons, I am satisfied that there is a genuine dispute of at least $16,500 with the result that the statutory demand ought to be set aside (Corporations Act 2001 (Cth), s 459H(3)).

26 I make order 1 in the originating process.

27 I order the defendant to pay the plaintiff's costs.

******

LAST UPDATED:
18 February 2010