The Production House Pty Ltd (In liq) & Anor v Frontline Graphics Pty Ltd [1995] FCA 310

IN THE FEDERAL COURT OF AUSTRALIA ) Limited Distribution ) NEW SOUTH WALES DISTRICT REGISTRY ) No NG 3340 of 1994 ) GENERAL DIVISION ) BETWEEN: THE PRODUCTION HOUSE PTY LIMITED (IN LIQUIDATION) First Applicant PETER RAYMOND BROOK (THE LIQUIDATOR) Second Applicant AND: FRONTLINE GRAPHICS PTY LIMITED Respondent

CORAM: HILL J PLACE: SYDNEY DATED: 20 MARCH 1995

REASONS FOR JUDGMENT

The applicants, The Production House Pty Limited (In Liquidation) ("The Production House") and Peter Raymond Brook, the Liquidator of The Production House ("The Liquidator"), apply to the Court for a declaration that certain payments made by The Production House to Frontline Graphics Pty Limited ("Frontline"), the respondent, are void as against the liquidator and for an order that Frontline pay accordingly $27,423 to The Production House.

The facts are in short compass and are not in dispute. Frontline provides a graphic film combining service for the printing industry. The Production House had been a customer from some time in 1991. Between March 1992 and July 1992 Frontline rendered invoices to The Production House for services rendered. These invoices totalled $27,423. Each invoice required payment within 30 days. None were in fact paid prior to September 1992. On 11 September 1992 Frontline served upon The Production House a demand, under the then s460 of the Corporations Law for the amount owing. The demand followed an earlier request dated 23 July 1992 that the outstanding invoices be settled within five days. Under the statutory demand, three weeks were given for payment. The demand was not complied with. On 8 October 1992 Mr Anderson, the accountant for The Production House, wrote to the director of Frontline as follows: "As discussed with you by telephone yesterday I am currently renegotiating finance for The Production House. In conjunction with Kaye Neale and Sarah Ambrose of The Production House I have prepared a cashflow which permits payments to your company on the following basis: Week18 - 24 October 5,000 25 - 31 October 5,000 1 - 7 November 2,500 8 - 14 November 2,500 15 - 21 November 2,500 22 - 28 November 5,000 In my opinion there is no doubt about the company's ability to repay your debts however it is taking longer than expected because of some bad debts which The Production House has suffered. The Production House is fully committed to repaying your debt and would appreciate it if you would be agreeable to the above terms. ..."