Parkview v Powderlys [2001] NSWSC 908

New South Wales Supreme Court

CITATION : Parkview v Powderlys [2001] NSWSC 908 revised - 23/10/2001 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4293/01 HEARING DATE(S) : 15/10/01 JUDGMENT DATE : 17 October 2001

PARTIES : Parkview Orchard Properties Limited v Powderlys Pumping & Irrigation Services Pty Limited JUDGMENT OF : Master Macready at 1

COUNSEL : A.R. Coleman for plaintiff A.J. Grant for defendant SOLICITORS : Teys McMahon Solicitors for plaintiff Jim Main & Associates for defendant CATCHWORDS : Company Law. - Application to set aside statutory demand. - Demand set aside. - No matter of principle. DECISION : Paragraph 28

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1 MASTER: This is an application under s 459G of the Corporation Law to set aside a statutory demand. The statutory demand, which was made by the defendant upon the plaintiff, was in the sum of $296,127.53 and dated 2 August 2001. 2 The debt, the subject of the demand, is for the supply of irrigation pipes, bores and equipment, which are installed on two properties at Forbes. The contract work was fairly substantial, being together a sum in excess of $550,000. The demand is for the amounts which are still unpaid. 3 The only dispute is whether the debt is owed by Parkview Orchard Properties Limited or some other company or entity. The plaintiff company owns two properties, Cawarrie and Roseville South, near Forbes, on which there is an orchard project. 4 There was a prospectus issued for this project which at page 43 sets out the structures of the various companies which make up the whole project. The prospectus was issued by the plaintiff and ARG Management Limited. The structure of the projects was complex and was described by Mr Henderson, an accountant, in the following terms: ARG Management Limited had appointed a custodian to hold all assets of the Project. The custodian was said to be the Australian Rural Group Limited. 5 The land in question was leased by the plaintiff to Australian Rural Group Limited for 20 years and it was then subleased for a term, almost the same, to ARG Management Limited. These leases were granted in about August 2000. 6 ARG Management Limited grants investors in the project a licence to use and occupy a specified and identifiable allotment on the land pursuant to separate licence agreements. It also enters into separate and individual management agreements with each investor in the project under which it is appointed to manage, to maintain and to harvest the fruit trees on each allotment. 7 There was an operators agreement between ARG Management Limited and Parkview Orchard Management Limited. The effect of the operations agreement is to subcontract to Parkview Orchard Management Limited the tree maintenance, management and harvesting duties under all of the individual management agreements entered into with investors. 8 The project has only been partly successful. It was intended to bring two further properties in the project if the level of subscription justified it. Those properties are known as Wonganoo and Gum Swamp and owned by Brancourts Nominees Pty Limited and operated by Brancourt's Cheeses Pty Limited as trustee of the Lachlan Trust trading as Parkview Orchards. 9 That company, Brancourt's Cheeses Pty Limited, is now in liquidation. These latter two companies are associated with the ones I have earlier described in the project. 10 Mr Brancourt himself is a director of the Brancourt's Cheeses, the plaintiff, and Parkview Orchard Management Limited. 11 The contracts for the work in question came about as a result of discussions between Mr Bancourt and Mr Powderly, who was the Managing Director of the defendant. Apparently in April 2000 Mr Powderly was asked to quote by a company which produced some plans for the instillation or irrigation work. He was sent some plans by the company and he prepared quotations for the works on the two properties I have named, namely Cawarrie and Roseville South. 12 The drawings were used for the purpose of preparing the quotations which were sent to Mr Brancourt at a PO Box at Forbes. 13 In June 2000 Mr Powderly attended a conference with Mr Brancourt, Mr Cohen of Netafim, at Gum Swamp near Forbes. The evidence is that Mr Brancourt a few days later telephoned Mr Powderly and said, "I want you to go ahead with the job and get it in before the frost in mid September." The work then proceeded. 14 There was an additional quotation which arose from a request in August 2000 when Mr Brancourt wanted a quote for an irrigation bore hole pump on Roseville South. That was sent and apparently accepted. 15 It is apparent that there was no discussion between the two gentleman as to whose behalf Mr Brancourt was contracting. It was a case where he was clearly contracting as agent for an undisclosed principle. The quotations themselves were addressed to "Parkview Properties." There is no such business name registered. The closest name in all the companies mentioned is the plaintiff company. It is the only name with the word "Properties" in it. 16 It is abundantly clear that the quotations were addressed to the entity "Parkview Properties" which appears on the plans which had been sent to Mr Powderly. 17 Thereafter, the majority of the invoices were issued to "Parkview Properties" with a few to "Parkview Orchards". According to Mr Bancourt two companies, Parkview Orchard Management Limited and Brancourt's Cheeses Pty Limited, carried on business as "Parkview Orchard." These were the companies that in fact paid the sum of $259,118 which was paid under the contract. According to Mr Brancourt they were responsible for running the business on the properties at Cawarrie and Roseville South. Also, according to Mr Brancourt, the plaintiff did not trade but merely owned the land upon which the business was conducted. 18 It is in these circumstances that I have to decide whether there is a genuine dispute as to whom Mr Brancourt was contracting for when he accepted the quotes given by the defendant. 19 I have had the benefit of a number of submissions in respect of principles to be applied and I think probably the rmost useful submission is that given by McLelland CJ in Equity in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACLC 669. At page 671 his Honour made the following comments in respect of the expression "Genuine dispute": "It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s 450H. 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).