Great Red Lettuce Company P/L v. Commonwealth Bank of Australia [1994] FCA 1001

JUDGMENT No. CO! 2%

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IN THE FEDERAL COURT OF AUSTRALIA

) ) VICTORIA DISTRICT REGISTRY ) No. VG 3437 of 1994 ) )

GENERAL DIVISION

BETWEE N:

GREAT RED LETTUCE COMPANY PTY LIMITED

Applicant - and - COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124

Respondent

JUDGE : Heerey J

DATE: 7 December 1994

PLACE: Melbourne

EX TEMPORE REASONS FOR JUDGMENT

This is an application to set aside a statutory demand under nh s 459G of the Corporations Law. The statutory demand by the

respondent the Commonwealth Bank of Australia (the bank) was

for $909,701.52. It arose out of a guarantee of accounts at

the bank. The applicant company was one of a group of

companies, the others being GRCL Industries Pty Limited (GRCL)

and Superior Fruit and Vegetables Pty Limited (SFV), which

were concerned with the production of hydroponic vegetables

and also the business of selling "Everfresh" bags, these being

bags used to store fresh produce. GRCL was deregistered on 19

April 1993 for failure to lodge accounts.

The applicant's case principally is that it has an offsetting claim within the meaning of s 459H(1)(b) of the Corporations Law. That offsetting claim is said to arise from the

following circumstances. On 25 March 1991 the bank

2.

dishonoured a cheque for $420 payable to H.R. Marketing Pty Limited (HRM). That dishonour is said to have been wrongful. As a result of that dishonour, HRM terminated a contract to supply Everfresh bags to the applicant. In turn the applicant was unable to supply Everfresh bags to Safeway, and as a consequence it lost profits at the rate of $35,000 per month which it might have earned over a period of four years. Thus the applicant is said to have an offsetting claim of $1.68

million.

In determining whether the applicant has satisfied the requirements of s 459H(1)(b), the question is whether it has been shown there is a serious question to be tried: Scanhill