A PAK Plastics Pty Ltd v Merhone Pty Ltd [1996] NSWCA 2

A PAK Plastics Pty Ltd v Merhone Pty Ltd

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

COLE JA, GILES AJA and Simos AJA 17 September 1996 [1996] NSWCA 2

Corporations Law — statutory demand — setting aside — whether genuine dispute about existence or amount of debt — on facts, there was — demand rightly set aside.

Corporations Law s 459H

Giles AJA. The appellant served a statutory demand on the respondent dated 10 December 1994 claiming $16,552.97. The respondent brought proceedings in the Equity Division claiming an order that the statutory demand be set aside. The summons was filed on 23 December 1994. The hearing took place late in March 1995, and on 4 April 1995 Santow J published reasons the effect of which was that the statutory demand should be set aside and the respondent should have its costs. An appeal was brought from that decision, and this is the hearing of the appeal.

The issue in the Equity Division was whether or not, within the words of s 459H of the Corporations Law, there was a genuine dispute between the parties about the existence or amount of the debt claimed in the statutory demand. The debt claimed was said to be money recoverable on total failure of consideration, being the agreed purchase price for a PLC unit under a contract which had been repudiated by the respondent's failure to deliver the PLC unit and thereupon terminated by the appellant. It was plain from the voluminous correspondence between the solicitors for theparties prior to 10 December 1994 that whether or not the contract had been repudiated turned on whether there was an obligation then and there to deliver the PLC unit, which itself turned on the relationship between the purchase of the PLC unit and the purchase of some ducting, arguably part of the same blow-moulding unit which the PLC unit was to control. If, as the respondent maintained, it was not obliged to deliver the PLC unit until it had been paid for the ducting as well as for the PLC unit, there can have been no repudiation. Before his Honour it was acknowledged that there was a genuine dispute in relation to the ducting and money payable for the ducting, although that was sought to be put aside on this appeal.