PMP v Z Computer [2001] NSWSC 287

New South Wales Supreme Court

CITATION : PMP v Z Computer [2001] NSWSC 287 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3817/2000 HEARING DATE(S) : 2 April 2001 JUDGMENT DATE : 2 April 2001

PARTIES : PMP SOFTWARE AUSTRALIA PTY LIMITED v Z COMPUTER CO PTY LIMITED JUDGMENT OF : Master Macready at 1

COUNSEL : K. Odgers for plaintiff B. Vasic for defendant SOLICITORS : Duncan Scott Solicitor for plaintiff Wight & Strickland for defendant CATCHWORDS : Corporations Law. Application to set aside statutory demand. No matter of principle. DECISION : Paragraph 24

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

MONDAY 2 APRIL 2001

3817/00 - PMP SOFTWARE AUSTRALIA PTY LIMITED v Z COMPUTER CO PTY LIMITED

JUDGMENT

1 MASTER: This is an application to set aside a statutory demand in respect of debts being a balance of invoice dated 30 May plus an invoice dated 30 June for $86,880, which demand was served by the defendant on the plaintiff on 15 August 2000. 2 The parties were involved in the provision of closed circuit TV at railway stations. Apparently the plaintiff was a contractor to the SRA and the defendant was a sub-contractor which was providing software services pursuant to an agreement between the defendant and the plaintiff. 3 That agreement had a number of specific provisions and clause 2 of the agreement provided a minimum of 40 hours' service each week. Under par 4 the defendant was to be remunerated at a rate of $50 per hour and it is apparent from those clauses he was simply paid on a time basis for the work which he did. 4 Importantly, par 9 required that the contractor was required to document all hours used on the site for the client. There is reference to the supply of time sheets, that they are to be signed on a weekly basis and to be delivered to the contractor on a fortnightly basis. There is also a requirement to follow standards and guidelines set by the client in respect of the project management. These included a system of reporting which is documented in what is called a work user guide that required, for instance, work package reports which gave details of the work being done, the progress of the work and other similar matters. Obviously it was a system that was carefully designed to ensure that the plaintiff when dealing with its sub-contractors could have sufficient information so that it could satisfy itself about the performance of the sub-contractor and that it was receiving appropriate value for the amounts being claimed. 5 It is clear from the evidence which has been read before me that during the period that this agreement was in existence there were a number of breaches of the requirements which involved the reporting procedure. For example, the time sheets were not signed on a weekly basis, nor were they provided to the company on a fortnightly basis. Instead there seem to have been batches of time sheets which were presented and they covered a substantial period. The difficulties for the plaintiff in this regard would be fairly apparent. 6 However, the clear fact of the course of the history of the matter up until 30 June is that for a large proportion of the time sheets, particularly the ones in dispute up until March 2000, they were in fact signed notwithstanding that they were supplied late. This was done and the explanation was given was that it was in order to keep the defendant company on the job so that the complete package could be delivered to the SRA. 7 The area which is in dispute is an area which covers the second and the last lot of time sheets which were covered by two invoices given by the defendant company to the plaintiff. In respect of the first which was given in May $40,000 was paid on account. On 30 June the last bunch of time sheets were supplied. They covered the period up to 30 June. On that date the contract between the parties was terminated. It is apparent, therefore, there was no termination during the period in respect of which a claim is made under the invoices that had been sent by the defendant to the plaintiff. 8 The question of what is a genuine dispute has been referred to in many cases. I think probably the most useful summation is given by McLelland CJ in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACLC 669. At p 671 his Honour made the following comments in respect of the words "Genuine dispute": "It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s 459H. In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the 'serious question to be tried' criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat. This does not mean that the Court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit 'however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to (its) truth' (cf Eng Mee Yong v Letchumanan (1980) AC 331 at 341), or 'a patently feeble legal argument, or an assertion of facts unsupported by evidence' (cf South Australia v Wall (1980) 24 SASR 189 at 194). But it does mean that, except in such an extreme case a Court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between, on the one hand, determining whether there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute. In Mibor Investments (at ACLC 1066; ACSR 366-7) Hayne J said, after referring to the state of the law prior to the enactment of Division 3 of Part 5.4 of the Corporations Law, and to the terms of Division 3: 'These matters, taken in combination, suggest that at least in most cases, it is not expected that the Court will embark upon any extended inquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the Court conclude that there is a dispute and that it is a genuine dispute.' In Re Morris Catering (Australia) Pty Limited (1993) 11 ACLC 919 at 922; (1993) 11 ACSR 601 at 605 Thomas J said: 'There is little doubt that Division 3 ... prescribes a formula that requires the Court to assess the position between the parties, and preserve demands where it can be seen that there is no genuine dispute and no sufficient genuine offsetting claim. That is not to say that the Court will examine the merits or settle the dispute. The specified limits of the Court's examination are the ascertainment of whether there is a "genuine dispute" and whether there is a "genuine claim".