New South Wales Supreme Court CITATION : Gabriel Stone Homes Pty Limited v Ready Rain Watering Systems Pty Limited [1999] NSWSC 416 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 1302/99 HEARING DATE(S) : 4 May 1999 JUDGMENT DATE : 4 May 1999 PARTIES : Gabriel Stone Homes Pty Limited (P) Ready Rain Watering Systems (D) JUDGMENT OF : Master McLaughlin COUNSEL : Mr. N. A. Nicholls (P) Mr. R. W. Cameron (D) SOLICITORS : MBA Lawyers (P) McLaughlin & Riordan (D) CATCHWORDS : DECISION : SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Tuesday, 4 May 1999 1302/99 GABRIEL STONE HOMES PTY LIMITED -v- READY RAIN WATERING SYSTEMS PTY LIMITED JUDGMENT 1 MASTER: By Summons filed on 9 February 1999 the plaintiff Gabriel Stone Homes Pty Limited claims an order pursuant to section 459G of the Corporations Law that the statutory demand dated 18 January 1999 served upon the plaintiff by the defendant Ready Rain Watering Systems Pty Limited be set aside. 2 By that statutory demand the defendant seeks payment to it by the plaintiff of the amount of $11,145. That amount is described in the schedule to the demand as "unpaid invoices rendered to the company on 19/11/98". 3 The claim of the defendant relates to the provision and supply of certain irrigation works at a site at Homebush Bay in respect of which the head contractor was a company Waller Constructions Pty Limited, and the plaintiff was a subcontractor. The subcontract which the plaintiff had with the head contractor included the provision of the irrigation works which ultimately were provided by the defendant. There is now no dispute that the defendant provided that irrigation system at the site. The dispute, however, relates to the entity which is liable to pay the defendant for that work. 4 The present proceedings are brought pursuant to the provisions of section 459H of the Corporations Law. Subsection (1) of that section provides for the situation where the Court is satisfied that there is a genuine dispute between the company and the respondent about the existence, or amount, of a debt to which the demand relates. 5 In the instant case the plaintiff submits that there is a genuine dispute that the plaintiff is liable to pay the amount claimed by the defendant. The basis of that submission is that the plaintiff is not the entity which is liable to pay for the installation of the irrigation system which was provided by the defendant. The plaintiff submits that there is a genuine dispute as to whether it is the plaintiff or Waller Constructions which is liable to pay for that work. 6 The present proceedings are not an appropriate vehicle in which to decide disputed questions of fact concerning the ultimate liability for the payment of the amount claimed by the defendant. All that is necessary for the plaintiff in the present proceedings to establish is that there is a genuine dispute as to whether the plaintiff is liable to pay for that work. It is not necessary for the plaintiff to establish that the Court must be satisfied that the plaintiff is not liable to pay for the work, or for the plaintiff to establish that the defendant could not succeed in a claim in a court of appropriate jurisdiction for the work performed by the defendant. 7 The plaintiff relies upon a number of evidentiary matters as supporting the existence of a genuine dispute as to whether it is the plaintiff which is the appropriate entity under a legal obligation to pay for the work which the defendant performed. 8 Firstly, although the defendant submitted to the plaintiff a document being, a quotation for the supply and installation of an automatic irrigation system at the Homebush Bay Sub-station, nevertheless, that document was never signed, or otherwise adopted in any formal sense, by the plaintiff. 9 There is evidence given by Mr Fawas Gabriel, the principal of the plaintiff, concerning various conversations which he asserts he had with Miss Vicki Anne Tumminello, the principal of the defendant, concerning the provision of a booster pump. Those conversations are inconsistent with the conversations of which evidence is given by Miss Tumminello. 10 It is not necessary for me in the present proceedings to resolve those inconsistencies. It is appropriate that I should proceed upon the basis that those conversations are inconsistent and to consider whether it can be argued that the version given by Mr Fawas Gabriel is a version which could be accepted at a final hearing in proceedings for recovery of this debt in an appropriate court. 11 Although cross-examined in the course of the present hearing, Mr Gabriel did not withdraw from the version of the conversations which he gave. 12 The plaintiff also points to the fact that in her evidence Miss Tumminello described the usual procedure which was adopted by her company in entering into a contract with another party for the supply and installation of an irrigation system. That usual procedure included the quotation document being signed by the contracting party; the supply by the defendant of, firstly, drawings and, secondly, operating manuals to the contracting party; and the participation by the contracting party at the final inspection and commissioning of the irrigation system. 13 In the instant case, the defendant departed from its usual procedure by not requiring the quotation to be signed by the plaintiff, by not supplying to the plaintiff drawings or operating manuals and by not involving the plaintiff in the final inspection and commissioning of the irrigation system. 14 An explanation was offered for the non-participation of the plaintiff in that inspection and commissioning, in that, according to Miss Tumminello, she found it difficult to contact Mr Gabriel at the relevant time. 15 The plaintiff also points to the fact, of which evidence was given by Miss Tumminello, that the commissioning and inspection were arranged at the request of Waller Constructions. Further, the plaintiff points to the fact that the ultimate contact by the defendant in respect to the booster pump (being reflected in a document headed "Pressure Inquiry" addressed to the Water Board) named as the person to whom inquiries should be directed by the Water Board not the plaintiff, or anyone concerned with the plaintiff company, but one Scott Waller, who I would infer to be a principal of Waller Constructions. 16 The defendant, however, submits that there is strong evidence which not merely does not support the existence of a genuine dispute, but supports the submission that any alleged dispute as to whether or not the plaintiff was the appropriate entity liable to pay for the work performed by the defendant is not in fact a genuine dispute. In this regard the defendant relies upon several letters from Waller Constructions to the plaintiff, being the two letters of 8 January 1999 and 23 February 1999 (comprising Exhibit 1), and the letter of 18 January 1999 (Exhibit 2). 17 Certainly, the two letters in Exhibit 1 suggest that Waller Constructions regarded the plaintiff as being responsible for the payment for the installation of the irrigation system. In this regard it is not without significance that Mr Gabriel, although, in his oral evidence at today's hearing he disputed the accuracy of those letters, nevertheless, upon receiving those letters, chose to ignore them and not to respond in any way by pointing out either to Waller Constructions or to the defendant that the figures and assertions contained therein were incorrect. 18 It should be noted, however, that those letters were written after the dispute had arisen between the plaintiff and the defendant concerning the defendant's claim against the plaintiff. The work had been performed by the defendant between 16 and 20 November 1998 and these letters from Waller Constructions were written in January and February 1999. 19 It is somewhat curious that neither party has seen fit to place before the Court evidence which would be clearly available from Waller Constructions as to whether that company had paid the plaintiff for the work performed by the defendant. If Waller Constructions had actually paid the plaintiff for the installation of the irrigation system, that would be completely determinative of the present proceedings. There could be no possibility of a genuine dispute in those circumstances that the plaintiff was the entity then liable to pay the defendant for the work. 20 Of course, if Waller Constructions had not paid the plaintiff for the work, it would still be open for the defendant to assert that the plaintiff was the entity which was liable to pay the defendant for this work. But, although evidence has been placed before the Court, being an affidavit sworn 12 March 1999 by Anthony Asnicar, he being the site manager for Waller Constructions, nevertheless, neither in that affidavit, nor in the correspondence from that company is it revealed whether or not Waller Constructions has actually paid the plaintiff for the installation of the irrigation system. 21 It was certainly in contemplation that that irrigation system would be a component of the contract between Waller Constructions and the plaintiff. But, as I say, the evidence of Mr Asnicar did not address itself to what one might have considered to have been a vital question, an answer to which would have been determinative of the present proceedings. 22 The plaintiff chose not to cross-examine Mr Asnicar. Accordingly, the Court is left without any direct evidence as to whether Waller Constructions has paid the plaintiff for this work. 23 I do not consider that the subsequent conduct of the defendant, for example, in invoicing Waller Constructions, or, as a component of that invoicing, in raising a credit in the name of the plaintiff in respect to this work is in any way determinative of the defendant's claim against the plaintiff. It is quite obvious that that conduct, which took place well after the dispute between the plaintiff and the defendant became apparent, was part of a fully understandable and quite legitimate desire by the defendant to be paid by somebody for the work which the defendant had performed. 24 I have already stated that it is not part of the function of the Court in the present proceedings to arrive at any concluded decision as to whether or not the plaintiff is liable to pay the defendant at the amount claimed. All that the Court is required to do, and beyond which it would be inappropriate for the Court to proceed, is to decide whether there is a genuine dispute as to whether it is the plaintiff which is the entity liable to pay for the work performed by the defendant. It is apparent that there is such a genuine dispute, and, in those circumstances, I must set aside the statutory demand. 25 I make the following orders: 1. I order that the statutory demand served by the defendant upon the plaintiff be set aside. 2. I order that the defendant pay the costs of the plaintiff. 3. The exhibits may be returned. ********** Last Modified: DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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