New South Wales Supreme Court CITATION : Multipye v Shakespeare's [2005] NSWSC 814 HEARING DATE(S) : 11/08/2005 JUDGMENT DATE : 11 August 2005 JURISDICTION : Equity Division JUDGMENT OF : Associate Justice Macready at 1 DECISION : Paragraph 12 CATCHWORDS : Corporations Law. Application to set aside demand under s 459G of the Corporations Act. Demand reduced. No matter of principle. PARTIES : Multipye Pty Limited v Shakespeare's Pie Co Australia Pty Ltd FILE NUMBER(S) : SC 2519 of 2005 Mr P.J. Newall for plaintiff COUNSEL : Mr N.J. Kidd for defendant L.C. Muriniti & Associates for plaintiff SOLICITORS : Pricewaterhouse Coopers Legal LOWER COURT JURISDICTION : - 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE MACREADY THURSDAY 11 AUGUST 2005 2519/05 - MULTIPYE PTY LIMITED v SHAKESPEARES PIE COMPANY. JUDGMENT 1 HIS HONOUR: This is a hearing of an application to set aside a statutory demand. The demand was for a sum of $59,093.54 and is supported by an affidavit sworn on 31 March 2005. It is in respect of the supply of various pie products for the months of August 2004 to March 2005 by the defendant company to the plaintiff. 2 The matter when it started originally included a claim for an offsetting claim as a result of what was said to be some misleading representations. I have already dealt with the rejection of the affidavit which was the foundation for that claim. 3 Accordingly, it is plain that there is on the present information now before the Court, namely the affidavit of Mr Suren Thadani of 18 April 2004 no basis for such an offsetting claim. 4 There is said to be a genuine dispute in respect of the quality of some goods. In respect of the amounts included in the demand, and in respect of the period up to November, there was an amount of $47,000 odd owed. In the affidavit in paragraph 14 the plaintiff gives evidence of an analysis of various anomalies in the reconciliation for the months of December, January, February and March 2005. A total of those amounts is $4747.96. The affidavit talks in general terms in paragraph 13 of shortfalls, double billing, spoilt goods and failure to give credits. In the schedules leading up to that amount there are various items and descriptions against them which are minimum descriptions of what is complained about them. 5 I was taken to some detail of two amounts relating to claims of double dealing, one of $2082.77 which was in December, and $698.15 in March. Although looking at invoices and the order forms one may think there is no claim for double billing. At this stage on the evidence I am not prepared to finally decide that matter. It is basically contrary to what I should do on this application. 6 There is a claim by Mr Suren Thadani that the amounts are double billed. This is not an appropriate occasion to go into the detail of that and, accordingly, I am satisfied that there is a genuine dispute in respect of the amount of $4647.96. 7 There are also amounts paid since the issue of the demand of $1668.82 and those amounts should be deducted from the amount of the demand. 8 The other claim which is sought to be made by way of an offsetting claim arises out of paragraphs 2,3 and 4 of the principal affidavit of Mr Thadani. In other words, it is said that he was induced to sign the back page of the franchise agreement and make payments of some $300,000. However, it is perfectly plain from those paragraphs that the claim is one in which Shakespeares Systems Pty Limited is involved, a different company, and indeed the affidavit clearly alleges that the representations were made by Mr Gualdi as a Director of that particular company. 9 It is sought to suggest that the company which has been supplying the product will also be liable in respect of any such claim. I do not see on the information before me how there is any such connection that would lead to that result. The actual company which entered into the franchise agreement is Shakespeares Systems Pty Limited. 10 It appears Mr Gualdi is a director of that company and also the supply company which is the defendant in the present proceedings. However, just the fact he is a director does not mean that he made representations about the entering into of an agreement for a franchise on behalf of another company, means that other company in the group is liable. 11 There simply is not before me any evidence to suggest that representations were also made on behalf of the supply company so unfortunately, I do not think that that offsetting claim is available to be brought against the company that has issued the demand. 12 Accordingly, in my view the demand should be reduced by the amount of the current dispute of $4647.96 and the amount that has been paid of $1668.82, a total of $6316.78. 13 Accordingly I vary the demand by reducing it to $52,776.76. (Counsel addressed on the question of costs). 14 I have heard submissions on costs. I think in this case that the defendant was substantially successful, particularly bearing in mind the dispute did not occur prior to the issue of the demand. Accordingly, I order that the plaintiff pay the defendants costs of the proceedings. I order the exhibits be returned. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.