Burdon Pty Ltd v Gillford Pty Ltd [1995] FCA 1121

IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 3670 of 1994 ) GENERAL DIVISION )

IN THE MATTER OF BURDON PTY LIMITED BETWEEN: BURDON PTY LIMITED Applicant AND: GILLFORD PTY LIMITED Respondent

26 JULY 1995 REASONS FOR JUDGMENT LOCKHART J. This is an application under s 459G(1) of the Corporations Law to set aside a statutory demand. The ground of the application is that there is a genuine dispute between the applicant, Burdon Pty Ltd, and the respondent, Gillford Pty Ltd, about the existence or amount of the debt to which the demand relates: s. 459H(1)(a). It is necessary to say something about the facts; they may be briefly stated. A proceeding was instituted in this Court in its ACT Registry (AG118 of 1993). The parties to the proceeding were Gillford Pty Limited (Gillford), Alan Varley Hannaford, Katherine Elizabeth Hannaford, Gregory James Gilbert and Nicola Frances Gilbert as applicants; and Burdon Pty Limited (Burdon) and Robert Graham Kent and Kevin George White as respondents. After the commencement of that proceeding the parties agreed to settle it without admissions on terms which are recorded in a document headed "Heads of Agreement" and dated 10 June 1994, a copy of which is in evidence. It is unnecessary to recite all the terms of the agreement; it is sufficient if I mention some of them. Burdon agreed, as at 4 July 1994, to take over from Gillford the business and accumulated losses of Country Bargains/Fair Dinkum Bargains (Gunnedah) on bases which included the refund of some $40,000, being a franchise fee, and relevantly, the payment of an amount equal to accumulated trading losses in the period 27 July 1992 to 30 June 1994 (clause 3(e)). Clause 5 provided that the amount of $74,500 was to be deducted from any amount payable by Burdon to Gillford. The agreement was silent as to the procedure to be adopted by the parties to determine the amount of accumulated trading losses referred to in clause 3(e); but subsequently, the parties agreed upon a procedure (the Agreed Procedure) for the determination of those trading losses for the purposes of clause 3 of the Heads of Agreement. The Agreed Procedure is also in evidence and relevantly it provides (clause 1) as follows: "Trading losses shall be determined by a currently practising accountant selected by the President of the Institute of Chartered Accountants being an accountant whom the President regards as having current and extensive experience in respect of accounting for retail shops.