Air Conditioning Company Pty Ltd v Network Air Conditioning Equipment Co Pty Ltd [2000] QSC 320

1°' lL\j ~ ~°'~ scoo/3;2.o State Reporting Bureau TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION JONES J No 88 of 2000 THE AIR CONDITIONING COMPANY PTY LTD (ACN 082 466 439) and NETWORK AIRCONDITIONING EQUIPMENT PTY LTD (ACN 011 007 935) CAIRNS .. DATE 01/09/2000 JUDGMENT T!tc Law Cotll"IS. Gt•on•t• Str-,,,•f. Bri-:h:1111• n ..11Hill RE~~SED COP1E\ISSUED -1State ;::sureau Date$ 14 12.oco Applicant Respondent -- 1 of 3 -- 01092000 D.l Tl8/MFK M/T CNS619/2000 (Jones J) HIS HONOUR: This is an application made pursuant to section 459G of the Corporations Law to set aside a statuto:l'."y-clBrnand for payment. The relevant bases upon which that application can succeed is set out in section 459H which is the following terms. 11 This section applies where on an application under section 459G the Court is satisfied of either or both of the following:- (a) That there is a genu.ine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates. (b) That the company has an offsetting claim. The creditor in the statutory demand claims for the sum of $10,087 being balance due on a cost of supplying 38 air- conditioning units for the total sum of $54,087. The applicant has paid $44,000 of that original price. He has, however, refused to pay the balance because he claims offsetting allowance for warranty claims in respect of which he has supplied work and materials. The original warranty claim was for $7,955.50 which was disputed by the creditor and ultimately led to a compromise being reached between the parties into a compromise agreement that the quantum of that claim should be $5,000. The applicant also claims that he is entitled to offset subsequent warranty claims in the sum of $4,480. This is disputed by the creditor who during the course of this time transferred the obligation for the warranties to a different company, Air- Conditioning Australia Pty Ltd. Further, there is a question of whether the applicant is entitled to claim the offsetting benefit of such claims where 10 20 40 50 the warrant really gives the right to the current owner of the 60 2 JUDGMENT -- 2 of 3 -- 01092000 D.l Tl8/MFK M/T CNS619/2000 (Jones J) units to make such claim. There is something of a legal issue there but there is a practice and past conduct which suggests that claims under the warranty have been attended to by the applicant. In any event, these are matters of dispute which must be resolved before there can be a determination as to what is the outstanding debt. If this dispute was determined in favour of the applicant it would not be shown that he owed the creditor anything. He may do, but the importance of identifying the issue is simply to satisfy myself that there does exist a genuine dispute within the meaning of section 459H. Further to these matters, there is a sum of $2,305 retention amount which the person to whom the air-conditioning units were supplied says he will retain against the claims of the applicant. The basis of retaining those monies is that the air-conditioners are not functioning. That would certainly give rise to a claim by the applicant against the supplier for whatever deficiency the air-conditioning is identified as justifying that retention. So, there is a number of issues that fall to be determined which if the applicant were successful in litigating would result in a cancellation of the debt. In those circumstances, the statutory demand ought to be set aside. HIS HONOUR: I order that the respondent pay the applicant's costs, to be assessed. 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 3 --