Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd [2014] VSCA 92 & Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation [2014] VSC 218: application to set aside statutory demands

July 6, 2014

In Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd and Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation the Victorian Court of Appeal and the Supreme Court considered applications to set aside statutory demands in very different circumstances.

Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd

The applicant sought leave to appeal a decision of Randall AsJ dismissing an application to set aside a statutory demand.  The grounds of appeal included a failure to find there was a genuine dispute or offsetting claim [2].

FACTS

The statutory demand relates to a claim for commission on the sale of various apartments in Carlton. The vendor retained Rescom as the underwriter for the sale of the apartments.  It was a term of the retainer that in the event that the total sale price of the apartments did not reach a pre-determined level, Rescom would pay the difference to the vendor [6]. If the total proceeds exceeded the predetermined level the vendor would pay the excess amount to Rescom. If the total proceeds exceeded a pre-determined level by a certain amount, then the excess would be shared between Rescom and the vendor [7].

Rescom engaged Reapfield as its sole marketing agent in Singapore on terms which included a 5% commission on the transacted price of all sales within Singapore[8].  The Agreement referred to a price schedule in an Annexure A of the agreement.

There was, and is, a dispute between the parties as to contents of Annexure A to the agreement with there being two schedules, one referring to lower prices than the other. That said Randall AsJ found he did not need to determine which schedule was incorporated into the agreement for the purpose of determining the application. Focusing on the terms of the marketing agreement and on contemporaneous conduct [9] he found that the agreement did not impose an obligation on Reapfield other than to use all due care, skill and diligence.  There were no consequences for failure by Reapfield to achieve a particular price [10].

Regarding the contemporaneous conduct the Randall AsJ found [16]:

  • the vendor accepted offers made by purchasers procured by Reapfield and booking forms that set out the purchase price and were signed on behalf of Rescom [over the caption] “accepted by underwriter”
  • email correspondence to the effect that Rescom “appreciated the good job” and that Rescom was in the “midst of arranging payment as promised”.
  • text messages passing between Rescom and Reapfield accepting the invoice for the commissions claimed without complaint and advising that payment would be made when Rescom received draw downs “from equity partners.”
  • there were over 20 text messages where Reapfield sought payment and Rescom repeatedly promised to make payment.
  • No complaint was made about the invoice that set out the prices obtained for each of the apartments or the liability to pay the commission [17].

DECISION

The Court referred to and liberally quoted from the latest Court of Appeal authority on statutory demands, Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd, handed down last year [3].  The key principles can be reduced to the following:

Barrow v McLernon & Anor [2012] VSC 134 (12 April 2012):Discovery, use of discovered documents in subsequent proceedings, use discovered documents to amend pleadings, ss 26 and 27 of Civil Procedure Act 2010 & s35 Defamation Act 2005

April 12, 2012

Today Justice Beach, in Barrow v McLernon & Anor [2012] VSC 134 handed down a very interesting and useful decision regarding discovery and the operation of section 27 of the Civil Procedure Act. It is an appeal from a decision of an Associate Justice.

FACTS

The Plaintiff is suing Hugh McLernon and IMF (Australia) Limited for defamation arising out of the publication on 30 May 2011 of an email and two pdf attachments [1]. The Plaintiff wishes to use documents discovered in this proceeding in support of issuing other proceedings, also a cause of action in defamation [2].  Five documents discovered constitute Read the rest of this entry »

Statutory demands & Sportsco Pty Ltd v Singh Group Pty Ltd (No 2) [2011] VSC 576 (15 November 2011) & BKW Investments Pty Ltd v Training Connect Limited [2011] FCA 1314

December 14, 2011

In recent decisions of Sportsco Pty Ltd v Singh Group Pty Ltd (No 2) [2011] VSC 576 (per Ferguson J) and BKW Investments Pty Ltd v Training Connect Limited [2011] FCA 1314 (per Cowdroy J) the courts considered applications to set aside statutory demands. In Sportsco the court, hearing an appeal from an Associate Justice, refused to set aside the application.  In BKW the court set aside the application.

Sportsco Pty Ltd v Singh Group Pty Ltd (No 2)

Facts

The underlying dispute related to the purchase of a franchise business.  Singh, the purchaser, submitted that the statutory demand on Sportsco for $70,500 was a refundable deposit under the franchise agreement. Sportsco, the vendor, applied to set aside the demand claiming there was a genuine dispute concerning the debt and that it had an offsetting claim.  Singh alleged there was an agreement that the money was refundable if it was unable to obtain finance for the franchise business.  Singh did not obtain finance.  While Singh was provided with an  an offer to lease premises from which the franchise would operate it was never executed by Singh.  Sportsco claimed there was a dispute as to what constituted the agreement and whether the agreement was subject to finance. It also claimed Singh was liable to pay a franchise royalty fee of five years as a consequence of the breach and was liable for damages of approximately $300,000.

Decision

Ferguson J referred to TR administration proprietor Ltd V Frank marketing and Sales Brochure Ltd as support forthe proposition that Read the rest of this entry »

PRACTICE AND PROCEDURE Costs sought by defendants against plaintiff’s solicitors, indemnity costs; Cohen v State of Victoria & Ors (No 3) [2011] VSC 229 (2 June 2011)

June 7, 2011

In Cohen v State of Victoria Nos 3 (“Cohen”) Forrest J ordered indemnity costs against solicitor for the plaintiff, Oldham Naidoo, arising out of the application by the defendants in Cohen v State of Victoria No 2 which resulted in the proceedng being struck out as an abuse of process (which I reviewed here).

Facts

The relevant conduct upon which the court exercised its discretion is set out at [5]:

(a) the issuing of the proceeding on 24 December 2008 in the name of Dr Cohen without obtaining his instructions or authorisation to do so;

(b) the maintenance of the claim (for nearly two years) in the name of Dr Cohen without any communication to him advising that he was the named representative plaintiff and therefore the subject of a number of obligations including that imposed by s 33ZD of the Supreme Court Act 1986 (Vic);

(c) the incurring of a number of costs orders against Dr Cohen – none of which were brought to his attention;

(d) the making of an allegation in the statement of claim central to Dr Cohen’s “claim” which, upon any reasonable investigation, was demonstrably false.

Decision

Principles

The key issues for consideration was whether there should be an award of costs against a legal practitioner acting without the authority of the client and, if so, whether to grant those costs on an indemnity rather than a party/party basis. In support of the former proposition Forrest J referred to the English  case of Fricker v Van  Glutten where his honour Read the rest of this entry »