Oxley v Fieldstone [2002] NSWSC 110

New South Wales Supreme Court

CITATION : Oxley v Fieldstone [2002] NSWSC 110 CURRENT JURISDICTION: Equity Division Corporations List FILE NUMBER(S) : SC 4914/01 HEARING DATE(S) : 25/02/02 JUDGMENT DATE : 1 March 2002

PARTIES : Oxley Corporate Finance Pty Limited - Plaintiff Fieldstone Pty Limited - Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr T.G.R. Parker - Plaintiff Mr J.K. Chippindall - Defendant SOLICITORS : Allens Arthur Robinson - Plaintiff Marshalls - Defendant CATCHWORDS : CORPORATIONS - winding up - statutory demand - genuine dispute - demand set aside LEGISLATION CITED : Corporations Act 2001 (Cth) Austrac Rail Pty Ltd v Hunter Premium Funding Ltd [2001] NSWSC 654 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 CASES CITED : Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290 Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601 Polaroid Australia Pty Ltd v Minicomp Pty Ltd (1997) 16 ACLC 529 Spencer Construction Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 DECISION : Statutory demand set aside.

- 8 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

FRIDAY, 1 MARCH 2002

4914/01 – OXLEY CORPORATE FINANCE PTY LIMITED v FIELDSTONE PTY LIMITED JUDGMENT 1 The plaintiff, Oxley Corporate Finance Pty Limited ("Oxley"), applies under s.459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand served on it by the defendant, Fieldstone Pty Limited ("Fieldstone"). The statutory demand is dated 17 September 2001 and was served on or shortly after that date. It claims a debt of $97,067.00 described as for "consultancy services provided by the Creditor [Fieldstone] to the Company [Oxley] at the Company's request between 1 June 2000 and 31 August 2000". 2 The consultancy services referred to were provided by Fieldstone through Mr Michael Brown. There are in evidence six invoices rendered by Fieldstone to Oxley for such services. One of them ($7,050.00) was paid. The other five (for $52,676.00, $14,552.50, $13,035.00, $10,203.50 and $6,600.00 – the total of $97,067.00 referred to in the statutory demand) remain unpaid. 3 Mr Brown's services were provided by Fieldstone to Oxley in the period following termination of a joint venture which had previously existed between those companies or, perhaps more accurately, between companies in the corporate group to which they respectively belonged, the joint venture having been formed in 1993 on the basis that the activities with which it was concerned extended also to associated companies of the joint venture parties themselves. At all events, it is accepted, as I understand it, that Oxley and Fieldstone were involved in the joint venture and, more importantly, in the arrangements which attended its termination. 4 The termination was effected by a deed dated 29 May 2000 the parties to which were, on the one hand, Fieldstone and an associated company and, on the other, Oxley and an associated company. At the centre of the termination arrangements lay a transfer by the Oxley parties to the Fieldstone parties of their interest in the business of the joint venture – in other words, one of the joint venture parties bought out the other. The contractual mechanisms included the production of "completion accounts" as a medium for determining the final amount due by one party to the other to put an end to their relationship. 5 At the time of the separation, the joint venture had current an assignment involving the provision of services to or in relation to DASFLEET. Mr Brown, an Oxley employee, was working on this assignment. Effective 29 May 2000, Mr Brown resigned his employment with Oxley and became an employee of Fieldstone. According to his evidence, he sent a handwritten note to Mr Marshall of Oxley on 30 May 2000 as follows: "I have discussed the DASFLEET work with Peter & we have agreed that I shall continue to work on this assignment (presumably as a sub-contractor to Oxley). We have agreed that Fieldstone shall be paid the full amount of my hourly charge out rate to the Commonwealth – I understand that this is $300/hr. I understand that this will be adjusted upwards for GST after 1 July 2000, and that travel and other on-costs will be reimbursed." 6 Mr Delaney of Oxley – the "Peter" referred to in the note – denies having had such a conversation with Mr Brown. Mr Delaney also says in his affidavit: "I never reached any agreement with Mr Brown or anyone else in the Fieldstone Group that there should be no joint venture set-offs relating to the DASFLEET work which Mr Brown was carrying out; and I always believed that the Fieldstone Group would continue to invoice monthly for the DASFLEET work being carried out by Mr Brown at an hourly rate negotiated between Mr Brown and myself. I believed this would form part of the reconciliation of all invoices and outstanding amounts between the Oxley Group and the Fieldstone Group." 7 There are thus conflicting accounts of the nature of the contractual rights and obligations concerning payment for services rendered by Mr Brown and, in particular, their interaction with the provisions of the deed of May 2000. 8 On 1 September 2000, Oxley wrote to Fieldstone setting out what it considered to be a "complete reconciliation" of financial adjustments between the parties consequent upon their separation and based on what Oxley regarded as the completion accounts provided for in the deed. Fieldstone's response on 5 September 2000 through its solicitors was that the accounts Oxley had used were not in truth the completion accounts because that status could be achieved only through the effluxion of time without query or objection, whereas Fieldstone had, by letter dated 29 August 2000 and faxed (and probably also hand delivered) on that day, indicated that there were a number of matters in the accounts "which I expect we will need to take further". The deadline for queries and objections was 31 August 2000. Mr Delaney of Oxley (to whom the letter of 29 August 2000 was addressed) gave evidence that he did not receive it until early September 2000, that is, after the relevant deadline had passed. The Fieldstone response of 5 September 2000 also said that the invoices for Mr Brown's services were not part of the adjustment based on the completion accounts. 9 The last factual matter to be canvassed concerns a conversation between Mr Delaney of Oxley and Mr Scalia of Fieldstone on 19 October 2000. They encountered one another by chance in a restaurant and had a short conversation. According to Mr Delaney, the conversation included the following: SCALIA: "Don't worry about the letter and the outstanding issues between us. We are only interested in obtaining the Joint Venture's tax records so that we can do our statutory returns. Would you mind arranging for that information to be sent to us". DELANEY: "I have no problem arranging for the release of the tax information and just want to put the dispute behind us. I'll arrange for Michael Derin to forward that information to you."