[2020] WASCA 31
General information, not legal advice.
Court of Appeal (WA)
2020-03-13
Buss P
Original judgment source is linked above.
Consultancy Fees means the fees payable by the Project Entity [relevantly the appellant] to [the respondent] for provision of the Consultancy Services, as set out in Schedule 2.
Consultancy Services means the services set out in Schedule 1 and any other services to be provided by [the respondent] pursuant to this Agreement as may be agreed between [the appellant] and [the respondent] from time to time.
2.1 Provision of Consultancy Services
[The respondent] will provide the Consultancy Services to the Project Entity [relevantly the appellant] as provided in clause 3 and otherwise subject to and upon the terms of this Agreement.
2.2 Payment of Consultancy Fees and Costs
[The respondent]:
(a) is to be paid the Consultancy Fees as provided in clause 8; and
(b) is to be paid or reimbursed the Costs as provided in clause 9,
subject to and upon the terms of this Agreement.
[The respondent's] obligation to provide Consultancy Services, no exclusivity by [the respondent]
(a) [The respondent] must provide the Consultancy Services in accordance with this clause 3.
(b) Subject to clause 3.l(c), [the respondent] may provide services of the same or substantially the same kind as the Consultancy Services to any person (including [the respondent] itself) and [the respondent] is not required to provide those services exclusively to the Project Entity [relevantly the appellant].
(c) [The respondent] must not, and must ensure that any Associate of it does not in either case either directly or indirectly:
(1) provide consultancy services to any person; or
(2) maintain or acquire an interest of any kind in any person,
which person is in competition with the Project Entity [relevantly the appellant] with respect to the Project.
No person other than [the respondent] is to be engaged or appointed to provide services of the same or substantially the same kind as the Consultancy Services with respect to the Project except in circumstances where it is necessary to do so to comply with any applicable law or as otherwise agreed in writing by [the respondent].
8.1 Project Entity [relevantly the appellant] to pay Consultancy Fees
The Project Entity [relevantly the appellant] must pay and [the respondent] shall be entitled to be paid the Consultancy Fees for the provision of the Consultancy Services.
8.2 Invoicing and payment of Consultancy Fees
[The respondent] may issue Tax Invoices to the Project Entity [relevantly the appellant] for the Consultancy Fees and the Project Entity [relevantly the appellant] must pay [the respondent] the Consultancy Fees the subject of a Tax Invoice as provided in Schedule 2.
Schedule 2 - Consultancy Fees
The Consultancy Fees and times for payment are set out in the following table.
...
MATTER / NATURE OF FEE PAYABLE TO [THE RESPONDENT]
TIME FOR PAYMENT (Subject to issue of a Tax Invoice by [the respondent])
If appointed the Preferred Tenderer in respect of both of the Lots:
If appointed the Preferred Tenderer in respect of one only of the Lots:
On or before 5 Business Days after receipt of Notification that CA GOH, CA & A, the Project Entity or an Associate is the Preferred Tenderer for one or both of the Lots.
If the Tender is successful in respect of both of the Lots:
If the Tender is successful in respect of one only of the Lots:
On or before 5 Business Days after the Project Documentation becomes unconditional except for any conditions which may be waived by, or are otherwise under the control of, CA GOH, CA & A, the Project Entity or an Associate.
If the Tender is successful in respect of both of the Lots:
If the Tender is successful in respect of one only of the Lots:
Payable monthly in arrears on the first day of the following month with respect to the Project development and construction phase which is the period commencing on the day immediately following the date of execution of the Project Documentation and ending on final completion of Construction.
Payable where this Agreement is terminated and CA GOH, CA & A, the Project Entity or an Associate enters into an Acquisition Agreement within 24 months after termination
On or before 5 Business Days after execution of the Acquisition Agreement.
Disposition The requirement of a 'genuine dispute'
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' or patently feeble legal argument or an assertion of facts unsupported by evidence.[22] (citations omitted)
A dispute as to the existence of a debt that is the product of a dispute about construction is not removed from s 459H(1)(a) just because the issue in contention is one of construction. While it has been said that 'a short point of law or the construction of documents or agreed facts' may, unlike a disputed question of fact, be determined upon a s 459G application, it does not follow that the court is compelled to make such a determination. In the case of a legal argument, determination might be appropriate if it were, in the words of McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd, a 'patently feeble legal argument'.
I consider it appropriate to adopt in this case the approach I outlined in Wellnora Pty Ltd v Fiorentino:
Where the basis for the alleged dispute is a legal argument or question of construction which is not 'patently feeble' and does not involve a 'short point of law' and there are clearly arguable alternatives as to the correct outcome, the court should not, upon the s 459G application, attempt to reach a definitive resolution.[23] (citations omitted)
... if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate' ...[53]
The appellant must pay and the respondent shall be entitled to be paid the fees as set out in sch 2 for the provision of the services set out in sch 1, namely, that the respondent will provide assistance of the type as described in sch 1 to the extent requested by the appellant.
on the basis that, if the appellant's appeal is unsuccessful, then within 7 days of the determination of the appeal the appellant will cause the amount of the respondent's statutory demand dated 23 May 2019 to be paid to the respondent.
be allowed if this court is satisfied that the existence of a genuine dispute should be inferred from that evidence, and the master erred in failing to draw that inference.[62]
Section 459G of the Act allows a company, within 21 days of service of a statutory demand on the company, to apply to the court for an order setting aside the statutory demand. Section 459H provides for the court to make an order setting aside or varying the statutory demand on the basis of a genuine dispute about the existence or amount of the debt to which the demand relates and/or an offsetting claim. Section 459J provides for the court to set aside the statutory demand because of a defect in the demand which will cause substantial injustice if the demand is not set aside, or there is some other reason why the demand should be set aside. Unless the court makes an order under s 459H or s 459J, it must dismiss the company's application.
Failure to comply with a statutory demand which has not been set aside gives rise to a presumption that the company is insolvent for purposes which include an application that the company be wound up in insolvency. Failure to pay an undisputed debt on formal demand suggests that the company is unable to pay all its debts as and when they become due and payable. The onus of proving solvency is cast on the company, rather than the person seeking to wind it up in insolvency, in circumstances where a rational inference is that insolvency is the reason for a failure to pay a formally demanded debt which is due and payable. The evident object of s 459H is to confine the effect of a statutory demand to amounts which are undisputedly due and payable (having regard to offsetting claims). The existence of a dispute as to the claim or of an offsetting claim provides a reason, other than insolvency, for why a company may refuse to pay the amount which is demanded. (citations omitted)
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[1] CA & Associates Pty Ltd v Fini Group Pty Ltd [2019] WASC 346 (primary reasons).
[14] Respondent's submissions par 1 WAB 18.
[15] Respondent's submissions pars 15 - 16 WAB 22.
[17] ts 6 (referring to GAB 142 - 143 par 17); ts 6 (referring to GAB 64 par 8); ts 18 (referring to GAB 130 pars 13 and 14).
[18] Energy Equity Corp Ltd v Sinedie Pty Ltd [2001] WASCA 419; (2001) 166 FLR 179 [29].
[19] Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85; (2009) 71 ACSR 602 [4], [46] (referring to Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] VicRp 61; [1994] 2 VR 290, 295).
[20] Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306 [22]; Createc Pty Ltd v Design Signs Pty Ltd [44]. (Both decisions referring to Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, 787.)
[21] Createc Pty Ltd v Design Signs Pty Ltd [45] (referring to Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452, 464).
[22] Eyota Pty Ltd v Hanave Pty Ltd (787).
[23] Drillsearch Energy Ltd v Carling Capital Partners Pty Ltd [2009] NSWSC 1192 [45] - [46] (referred to with approval in Creata (Aust) Pty Ltd v Faull [2017] NSWCA 300; (2017) 125 ACSR 212 [27] - [28]).
[24] Creata (Aust) Pty Ltd v Faull [29], [37]. See also Infratel Networks Pty Ltd v Grundy's Telso and Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372 [46].
[25] Creata (Aust) Pty Ltd v Faull [26]. See also, as to restraint, Ligon 158 Pty Ltd v Huber [2016] NSWCA 330; (2016) 117 ACSR 495 [11].
[26] Creata (Aust) Pty Ltd v Faull [37].
[27] Appellant's submissions pars 2, 14, 16, 21 WAB 7, 9 - 10; ts 4.
[29] Appellant's submissions par 11 WAB 9; ts 9.
[30] Appellant's submissions par 12 WAB 9; ts 9.
[32] Appellant's submissions par 16 WAB 9 - 10.
[35] Appellant's submissions par 21 WAB 10; ts 2, 7 - 9, 11.
[36] Appellant's submissions par 25 WAB 11. See also generally at pars 24 - 30 WAB 11 - 12.
[38] Appellant's submissions par 32(a) WAB 12; ts 3, 17 - 18.
[39] Appellant's submissions par 32(b) WAB 12.
[40] Appellant's submissions par 33 WAB 12.
[41] Appellant's submissions par 34 WAB 12.
[42] Appellant's submissions pars 35 - 37 WAB 12 - 13.
[43] Appellant's submissions par 39 WAB 13.
[44] Respondent's submissions par 6 WAB 19 - 20.
[45] Respondent's submissions par 8 WAB 20; ts 20 - 21.
[46] Respondent's submissions par 9 WAB 20.
[47] Respondent's submissions pars 11 - 12 WAB 20 - 21.
[48] Respondent's submissions pars 12 WAB 21; ts 20, 22 - 23, 26 - 30.
[49] Respondent's submissions pars 12 WAB 21; ts 27 - 28.
[50] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [52].
[51] Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42(10)].
[52] Black Box Control Pty Ltd v Terravision Pty Ltd [42(9)].
[53] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109.
[54] Mineralogy Pty Ltd v The State of Western Australia [2005] WASCA 69 [15].
[55] Black Box Control Pty Ltd v Terravision Pty Ltd [42(11)].
[57] See eg cl 3.1(b) (may provide services); 3.1(c) (must not ... provide consultancy services); cl 3.2(c) (provide services); cl 3.3(a), cl 3.3(b)(3), cl 10.4(c), cl 11.3(a), cl 16.3(b)(2) (provision of the Consultancy Services); cl 3.4(a) (provision of Consultancy Services); cl 10.6(b) (provide the Consultancy Services).
[59] Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5; Apex Minerals NL v Ashley [2013] WASCA 176.
[60] See eg Range Resources Ltd v Lind Asset Management LLC [2015] WASCA 233; (2015) 117 ACSR 1 [50]; Complete Hire and Sales Pty Ltd v Terra Firma Constructions Pty Ltd [No 2] [2018] WASCA 111 [99].
[61] Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59 [7]; cf Pravenkav Group Pty Ltd v Diploma Construction (WA) Pty Ltd [No 3] [2014] WASCA 132; (2014) 46 WAR 483 [100].
[62] Cf Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 184; (1992) 35 FCR 359, 369, cited with approval in many cases including Proudlove v Burridge [2017] WASCA 6; (2017) 79 MVR 257 [127].
[63] Complete Hire and Sales Pty Ltd v Terra Firma Constructions Pty Ltd [No 2] [2018] WASCA 111 [5] - [6].
[65] See Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24] and cases there cited.
[66] Creata (Aust) Pty Ltd v Faull [2017] NSWCA 300; (2017) 125 ACSR 212 [27] - [29], [37].
[67] See the affidavit of Adriano Giacomo Fini sworn 8 July 2019, par 14 - 15.
(2001) 166 FLR 179
(1997) 76 FCR 452
(2002) 26 WAR 306
(2012) 297 ALR 372
(2014) 251 CLR 640
(2015) 256 CLR 104
(1973) 129 CLR 99
(2014) 46 WAR 483
(1992) 35 FCR 359
(2017) 79 MVR 257