RCM Constructions Pty Limited v McNeice [2013] NSWSC 754

Supreme Court New South Wales

Medium Neutral Citation: RCM Constructions Pty Limited v McNeice [2013] NSWSC 754 Hearing dates: 22/05/2013 Decision date: 14 June 2013 Jurisdiction: Equity Division - Corporations List Before: Young AJ Decision: Vary statutory demand; Plaintiff to have 75% of its costs Catchwords: CORPORATIONS - Debts - Statutory demand - Application to set aside statutory demand Category: Principal judgment Parties: RCM Constructions Pty Limited (Plaintiff) David McNeice (First Defendant) Aleita R McNeice (Second Defendant) Representation: Counsel: ET Finnane (Plaintiff) RW Tregenza (Defendants) Solicitors: Senses Legal (Plaintiff) Autore & Associates (Defendants) File Number(s): 2012/140386

Judgment 1HIS HONOUR: This is an application to se aside a statutory demand. 2The defendants issued statutory demands against five companies in the same group of which RCM Constructions is one. Those applications were heard together by me on 22 May 2013 on the basis that the evidence in one was evidence in all. I reserved by decision. 3Earlier today I gave judgment in the lead matter of Touma Family Super Fund Pty Limited v McNeice (2012/140381). That judgment deals with the principles that are applied to all five matters and to questions which were common to all five. The present reasons deal only with the aspects of the cases which were germane to RCM Constructions. 4The statutory demand against RCM Constructions was for $106,467.99. This was made up of 12 items which can be summarised as follows: (a) Invoice #2317 for $20,333.50; (b) Invoice #4006 for $5,940.00; (c) Invoice #2799 for $22,385.00; (d) Invoice #4007 for $5,940.00; (e) Invoice #4001 for $22,385.00; (f) Invoice #4008 for $5,940.00; (g) Invoice #4005 for $2,970.00; (h) Invoice #4013 for $2,365.00; (i) Invoice #4016 for $5,940.00; (J) Administration fees for non-payment of invoices #2317 and #2799 for $4,271.85; (k) Interest on invoice #2317 for $6,150.88; and (l) Interest on invoice #2799 for $1,846.76. 5As to paragraph (a), the dispute is only as to quantum. Invoice #2317 contains two items: 1. "2009 Income Tax Return Company including 39 rental properties" for $14,800.00 (plus GST); and 2. "Division 129 Amendment Change of Purpose -39 rental properties" for $3,900.00 (plus GST). 6The plaintiff says that the defendant's scheduled fees were $3,500.00 (plus GST) and they know no reason why the invoice was so much higher. 7The defendant says that the preparation of a tax return with 39 rental properties involves approximately 250% more work than a return involving no rental properties. It was necessary to prepare detailed depreciation schedules. To ascertain the proper apportionment of costs between two bedroom units, three bedroom units site inspections and discussions with Charlie Touma were required. As to the "Division 129 Amendment," Raymond Touma's suggested that he did not know what this was all about. Mr McNeice however referred to a letter that he sent at the time explaining it. I cannot see from this material how there is any genuine dispute as to the amount claimed by the defendants. All the plaintiff is saying is that it thinks the amount is excessive. 8As to the "Division 129" matter, the plaintiff also disputes that the work was done, but I can see no basis for that especially in view of the letter. 9As to paragraph (b), invoice #4006 is said to cover "Reconciliation of eight Bank accounts not included in Quickbooks for Twelve Months Ended 30 June 2009." The plaintiff disputes the quantum of the invoice and Tarrants did this work. For reasons given in the Touma Super Fund judgment (2012/140381), the statutory demand for payment of this invoice should be set aside. 10As to paragraph (c), invoice #2799 seems to me to be exactly the same as invoice #2317 for the 2010 tax year, and accordingly, I hold there is no genuine dispute here. 11As to paragraph (d), the plaintiff disputes the quantum claimed and argues the work was done by Tarrants. For the later reason, I exclude it from the statutory demand. 12As to paragraph (e), invoice #4001 relates to the 2011 tax year. The plaintiff disputes the quantum of the invoice and raises the Tarrants defence. Because of the latter assertion, I would not include this claim in the statutory demand. However, as I have said in the Touma Super Fund case, once the position between the Tarrants and the defendants is clarified a separate statutory demand can be issued. It would not seem to me, on the material in this case, that there is any genuine dispute as to quantum. 13As to paragraph (f), invoice #4008 is again a matter in which the quantum is disputed and indeed has been reduced to $3,960.00. Again, I would have allowed the claim were it not for the Tarrants defence. 14As to paragraph (g), the plaintiff disputes the quantum claimed by invoice #4005.Whilst there is very little to indicate there is a genuine dispute on this basis, the Tarrants defence is also raised by the defendants. 15The paragraph (h) invoice falls into the same category as paragraph (g), but (h) is also similar to an invoice that appeared in the Touma Family Super Fund judgment, which I did not allow. 16As to paragraph (i), the plaintiff again raises the Tarrants defence and questions the quantum claimed. But for the Tarrants dispute, I would not have thought there was a genuine dispute about quantum. 17Paragraph (j) concerns an administration charge, which I have dealt with at [41] in my earlier judgment in the Touma Family Super Fund. 18Paragraphs (k) and (l) involve claims for interest, which I have also dealt with at [37] in my earlier judgment. 19Accordingly, I vary the statutory demand by reducing it to $42,718.50 (being invoices #2317 and #2799). I declare that the statutory demand to have had effect, as so varied, from 12 April 2012. I extend the time for complying with the demand by 21 days taken from the date of these reasons. 20As to costs, given the majority of the demand has been set aside, the plaintiff should receive three-quarters of its costs.