Marine v Kinsley [2001] NSWSC 948

New South Wales Supreme Court

CITATION : Marine v Kinsley [2001] NSWSC 948 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2216/01 HEARING DATE(S) : 18/10/01 and 19/10/01 JUDGMENT DATE : 19 October 2001

PARTIES : Marine & Finance Industries of Australia Pty Ltd v Kinsley & Associates JUDGMENT OF : Master Macready at 1

COUNSEL : M. Ashhurst for plaintiff J. Duncan for defendant SOLICITORS : Hewitts Commercial Lawyers for plaintiff Tress Cocks & Maddox for defendant CATCHWORDS : Corporations Law. Application to set aside statutory demand under s459G of the Corporations Act. Demand set aside. No matter of principle. DECISION : Paragraph 25

- 1 - MASTER: This is an application under s 459G of the Corporations Act to set aside a statutory demand served by the defendant on the plaintiff for $142,002.32 dated 19 March 2001. 2 The plaintiff is a company doing a redevelopment of a shopping site at Edgeworth, New South Wales, a major tenant in which was Coles Supermarkets Australia Pty Limited. The defendant was a firm of architects engaged by the plaintiff to do plans and obtain development consent from the local council. They apparently had been keeping in touch with the plaintiff as they did work for Coles on a lot of their jobs. 3 The plaintiff says that there is a genuine dispute about the claim or alternatively that it has an offsetting claim for negligence of the defendants. 4 At the time of the commencement of these proceedings no consent had been obtained. A genuine dispute was said to arise because there had been a total failure of consideration in respect of the work said to have been done by the defendants in submitting the applications for consent. The architects had, according to the plaintiffs, agreed that consent would be obtained by 16 July 2000. 5 Subsequently after the commencement of the proceedings consent was granted on 24 April 2001 and accordingly there would be no total failure of consideration. That was the only way the claim for genuine dispute was put. It fails and I move to the offsetting claim. 6 It is useful to note the extent to which an offsetting claim must be established under s 459H of the Act. As has been pointed out in Jesseron v Middle East Trading 13 ACSR 455, or 12 ACLC 490, the amount of the offsetting claim must be quantified. The claim does not have to be proved as if there were proceedings brought to enforce it. The level of satisfaction required was discussed by Santow J in Edge Technology Pty Ltd v Lite-On Technology Corporation 18 ACLC 576. At 581 the Court said the following: "The alternative basis for the demand to be set aside or reduced by reason of an offsetting claim involves, as I have said, a different test. The question is not whether there is a genuine dispute in the above sense against the offsetting claim. The question is rather whether the 'offsetting claim' can be shown to be 'not frivolous or vexatious'; Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37. That places a heavier onus on the party seeking to maintain its statutory demand, than if it merely had to establish the reciprocal of a genuine dispute against the offsetting claim."