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Palmer Petroleum Pty Ltd v BGP Geoexplorer Pte Ltd

 

[2016] QSC 33

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Palmer Petroleum Pty Ltd v BGP Geoexplorer Pte. Ltd. [2016] QSC 33

PARTIES:

PALMER PETROLEUM PTY LTD

(applicant)

v

BGP GEOEXPLORER PTE. LTD.

(respondent)

FILE NO/S:

SC No 479 of 2016

DIVISION:

Trial Division

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

4 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

19 February 2016

JUDGE:

Boddice J

ORDER:

The application to set aside the statutory demand is dismissed

CATCHWORDS:

CORPORATIONS – GENERALLY – CORPORATIONS LEGISLATION – where application was brought under s 459G of the Corporations Act 2001 (Cth) – where the applicant seeks to set aside a statutory demand for payment pursuant to s 459H and s 459J of the Corporations Act 2001 (Cth) – where the applicant claims there is a genuine dispute and that it has an offsetting claim against the respondent – where the applicant claims an agreed arbitration clause constitutes “some other reason” to set aside the statutory demand – whether there is a genuine dispute about the existence or amount of the debt that is the subject of the demand – whether the applicant has an offsetting claim – whether an agreed arbitration clause constitutes “some other reason” to set aside the statutory demand

Corporations Act 2001 (Cth), s 459G, s 459H, s 459J

Arris Investments Pty Ltd v Fahd & Anor [2010] NSWSC 309, considered

Re Rhagodia Pty Ltd (2008) 67 ACSR 367; [2008] VSC 295, considered

SMEC International Pty Ltd v CEMS Engineering Inc (2001) 162 FLR 383; [2001] NSWSC 459, considered

TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67; [2008] VSCA 70, applied

Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd [2013] VSCA 176, cited

Welldog Pty Ltd v World Oil Tools Inc [2013] QSC 180, cited 

COUNSEL:

N Ferrett for the applicant

J Bell QC, with T Pincus, for the respondent

SOLICITORS:

Kilmurray Legal for the applicant

GRT Lawyers for the respondent

  1. The applicant makes application to set aside the respondent’s statutory demand dated 8 December 2015. The application is made pursuant to section 459G of the Corporations Act 2001 (Cth) (the ‘Act’).
  2. At issue is whether there is a genuine dispute about the existence or amount of the debt that is the subject of the demand, whether the applicant has an offsetting claim, and whether an agreed arbitration clause constitutes “some other reason” to set aside the statutory demand.

Background

  1. On 28 July 2010, the applicant and respondent entered into a written agreement (the ‘agreement’), under which the respondent was to survey petroleum resources within three tenements held by the applicant in the Gulf of Papua. Under the agreement, the respondent was, amongst other things, required to deliver to the applicant survey data and a comprehensive leads and prospects inventory in respect of each tenement (the ‘report’).
  2. The agreement included an unnumbered clause between clauses 5.8 and 5.9, which read (the ‘unnumbered clause’):

“Payment due to Contractor may be withheld by COMPANY on account of:

(a)Unsatisfactory performance of this Contract;

(b)Contractor’s failure to remedy defective portions of the Work where COMPANY has given Contractor notice of any such defective Work…”

  1. On 5 September 2011, the parties entered into a “Deed of Amendment III” (the ‘replacement Deed III’), which replaced a prior deed of the same name entered into by the parties on 15 August 2011.
  2. Clause 2 of the replacement Deed III states:

“Subject to the COMPANY approving by 5 September 2011 the invoices issued on or before 10 August 2011 (being the invoices annexed to Schedule 1), the Contractor unconditionally and irrevocable agrees and accepts the total amount, including but not limited to the Contract Price and the Rates and any chase boats, payable by or on behalf of the COMPANY to the Contractor pursuant to the Existing Agreement is limited to an amount not exceeding USD$35 million…”

  1. Clause 3 of the replacement Deed III states:

“Clause 2 of this Deed applies despite any other clause or intention to the contrary in the Existing Agreement.”

  1. Clause 4 states, clause 2:

“…[d]oes not, except in relation to the existing invoices annexed to Schedule 1, restrict the rights of the COMPANY to dispute any invoices pursuant to the Existing Agreement.”

  1. Clause 6 of the replacement Deed III provides:

“…where the existing invoices in Schedule 1 are approved in accordance with this Deed, the timing of payment of such invoices will occur … on or before December 15, 2011.”

The debt

  1. The invoices annexed to Schedule 1 were seven invoices issued by the respondent to the applicant between 4 March 2011 and 31 May 2011 (the ‘March to May’ invoices). The total sum of these invoices was USD$16,057,191.39.
  2. On 16 September 2011, the applicant sent a letter to the respondent stating the applicant “approves … those invoices … attached to Schedule 1 [of the replacement Deed III]”.
  3. On 29 November 2011, the respondent issued to the applicant invoices numbered 103 and 104 (the ‘November invoices’). The total sum of these invoices was USD$1,227,652.12.
  4. On 19 March 2012, the respondent issued to the applicant invoices numbered 303, 304 and 305, for the total sum of USD$17,862,856.49 (the ‘March 2012 invoices’).
  5. On 15 December 2011, the applicant paid the respondent USD$8,612,421.76, being fifty per cent of the March to May invoices and of the November invoices.
  6. In May 2012, the respondent delivered the report to the applicant. The applicant hired ISIS Petroleum Consultants Pty Ltd (‘ISIS Petroleum’) to examine and assess the report. In September 2012, ISIS Petroleum provided the applicant with a report of their independent assessment.
  7. On 17 October 2012, an updated payment schedule (the ‘updated schedule’) was devised and agreed upon by the parties via email. In accordance with the updated schedule, the applicant paid the respondent USD$7,979,726.45 on 2 November 2012.
  8. Under the updated schedule, the amount of USD$3,257,584.34 was due and payable on 4 March 2013. The applicant failed to pay this amount by the due date, and, by email to the respondent, apologised and stated the following:

“Palmer Petroleum … budgeted to pay BGP USD$3,257,584.34 on time, utilising the upcoming funding from CITIC Pacific … to Mineralogy Pty Ltd…, an affiliate company of Palmer Petroleum.

Unfortunately, CITIC Pacific has failed to meet their contractual obligations and pay approximately USD$203 million to Mineralogy by March 2013… Mineralogy looks to recover the amount owed from CITIC Pacific ASAP so that Palmer Petroleum can in turn make its budgeted payments ASAP.”

  1. In April 2013, the parties entered into an amended payment plan by which the applicant was to pay the respondent all outstanding amounts by the end of May 2013. In addition, an invoice for immediate payment of USD$1,630,000 was issued to the applicant in accordance with the amended payment plan (the ‘additional payment’).
  2. On 15 May 2013, the applicant paid the respondent the additional payment, but failed to make payment of all outstanding amounts under the amended payment plan. After being asked to make payment by the respondent, the applicant replied by email dated 8 June 2013:

“As you may recall, Palmer Petroleum cannot pay BGP on time due to the fact that CITIC Pacific has failed to fulfil their payment obligations to Mineralogy… Mineralogy has therefore taken court action against Sino Iron Pty Ltd (subsidiary of CITIC Pacific).”

  1. On 18 June 2013, the applicant’s legal representation wrote to the respondent, complaining as to the services rendered by the respondent, and rejecting the respondent’s claim for all outstanding amounts under the amended payment plan. This letter further stated, “[the applicant] holds [the respondent] liable for specific performance and/or damages”.
  2. By further email dated 1 August 2013, the applicant stated:

“… the work undertaken by [the respondent] not solely for [the applicant’s] benefit and the results reported by [the respondent] understated the true position to [the applicant’s] detriment and to the potential benefit of [the respondent] and/or third parties.”

Statutory Demand

  1. On 15 December 2015, the respondent sent the applicant a statutory demand for the amount of USD$16,726,575.03 (the ‘outstanding amount’), being the total amounts of the debts described in the annexed schedule.  The applicant did not pay the amount as required by the statutory demand. 

Evidence

  1. Relevantly, Mr Palmer, the director of the applicant, deposed in his affidavit affirmed on 8 January 2016:

[19]I was disappointed with the results and interpretation provided by BGP (referred to in paragraph 26 above) because the amount of gas recorded was low and the report did not contain any interpretation or conclusions regarding other petroleum products.

[24]… there were a number of matters that indicated to me that BGP has not performed or intentionally underperformed their obligations under the Principle Contract… I was also suspicious that BGP had entered into the Principal Contract for the purpose of gaining access to the area … to acquire information regarding the extent of resources for the benefit of their corporate group and the Government of China. My suspicions were based on the content of I had with representatives of BGP on number of occasions (the exact dates of which I cannot presently recall).

[31]After reviewing the ISIS Report, I resolved not to discontinue BGP’s work on Petroleum Licence 381 and resolved to not make payments of the balance of the amount under the Principal Contract to BGP.

[32]Palmer Petroleum is currently assessing a substantial claim for damages against BGP and disputes that any amounts are owing to BGP.

[33]In accordance with the terms of the Principal Contract Palmer Petroleum is withholding payments due to the unsatisfactory performance of BGP.” 

  1. Ling Min, a director of the respondent, has also sworn an affidavit.  Relevantly, that affidavit annexes correspondence by letter and email, between the parties from March 2012 to June 2013.

Relevant Law

  1. Section 459G of the Act provides:

(1)[Application to set aside statutory demand] A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2)[Time limit on application] An application may only be made within 21 days after the demand is so served.

(3)[Requirements for effective application] An application is made in accordance with this section only if, within those 21 days:

  1. an affidavit supporting the application is filed with the Court; and
  1. a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.”
  1. Section 459H of the Act provides:

“(1)This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following:

  1. that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;
  1. that the company has an offsetting claim.

(2)The Court must calculate the substantiated amount of the demand in accordance with the formula: admitted total – offsetting total.

where:

‘admitted total’ means:

(a)  the admitted amount of the debt; or

(b)  the total of the respective admitted amounts of the debts;

as the case requires, to which the demand relates.

‘offsetting total’ means:

(a)  if the Court is satisfied that the company has only one offsetting claim--the amount of that claim; or

(b)  if the Court is satisfied that the company has 2 or more offsetting claims--the total of the amounts of those claims; or

(c)  otherwise--a nil amount.

(3)If the substantiated amount is less than the statutory minimum, the Court must, by order, set aside the demand.

(4)If the substantiated amount is at least as great as the statutory minimum, the Court may make an order:

  1. varying the demand as specified in the order; and
  1. declaring the demand to have had effect, as so varied, as from when the demand was served on the company.

(5)In this section:

‘admitted amount’, in relation to a debt, means:

  1. if the Court is satisfied that there is a genuine dispute between the company and the respondent about the existence of the debt--a nil amount; or
  1. if the Court is satisfied that there is a genuine dispute between the company and the respondent about the amount of the debt--so much of that amount as the Court is satisfied is not the subject of such a dispute; or
  1. otherwise--the amount of the debt.

‘offsetting claim’ means a genuine claim that the company has against the respondent by way of counterclaim, set-off or cross-demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demand relates).

‘respondent’ means the person who served the demand on the company.”

  1. Section 459J of the Act provides:

“(1)[Power to set aside demand] On an application under section 459G the Court may by order set aside the demand if it is satisfied that:

  1. because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or
  1. there is some other reason why the demand should be set aside.

(2)[Mere defect not ground to set aside] Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect.”

Applicant’s submissions

  1. The applicant submitted there was a genuine dispute regarding the performance of its contractual obligations by the respondent, which might, if established, form the basis of a future offsetting claim.  The statutory demand is therefore properly to be set aside.  It did not matter when that dispute was first raised by the applicant.
  2. Mr Palmer expected, “a full report of the data collected by BGP in respect of Petroleum PL380” and the provision of a “full competent geological assessment of all petroleum products in PL380” and Mr Palmer was “disappointed with the results… because the amount of gas recorded was low and the report did not contain any interpretation or conclusions regarding other petroleum products”. The disparity between the report provided by the respondent and that of the independent consultants properly led to an apprehension that the respondent did not fulfil its contractual obligations. The applicant is therefore entitled to place reliance on the unnumbered clause and refuse to pay the outstanding amount. 
  3. The applicant also submitted an arbitration clause, agreed to by the applicant and the respondent, provided “some other reason” to set aside the statutory demand.  There is a dispute as to the amount claimed by the statutory demand.  The parties should first seek to resolve the dispute internally; should that fail, the parties should then seek to settle the dispute through arbitration. This process would be in accordance with the dispute resolution clauses under the contract. 

Respondent’s submissions

  1. The respondent submitted there is no genuine dispute as to the existence or amount of the debt.  The asserted claim does not have sufficient objective existence and prima facie plausibility, and has no factual particularity.  Complaints as to the interpretation of data and the report cannot form the basis of a genuine dispute.  None of the invoices annexed to the statutory demand include any charge for interpretation and reporting services rendered.
  2. No complaint was made regarding work that was the subject of the invoices supporting the statutory demand. No complaints were made by the applicant at all during the period between December 2011 and 8 June 2013.  Instead, when the applicant missed payment dates, the applicant was apologetic, explaining the applicant had suffered cash-flow problems relating to related entities, which had a flow on effect on the applicant’s ability to pay the respondent.
  3. Even if there were some deficiency in the data collected, there is no reason to believe the applicant would have lost anything in the period from the receipt of the respondent’s report in May 2012 to the receipt of the report prepared by ISIS Petroleum in September 2012. Alternatively, any loss could not possibly be for any sum approaching that contained in the statutory demand.
  4. The respondent submitted the effect of the unnumbered clause, when read with clauses 5.3 and 5.7, is that the applicant could withhold payment only if the invoices were unsigned or if there was unsatisfactory performance. There is no proper basis to withhold payment.  Clause 5.10 also obliged the applicant to provide, within 30 days of receiving an invoice, notice to the respondent of any bona fide dispute it had with respect to that invoice. There was nothing before the court to indicate the requisite notice was given.
  5. Whilst invoices issued after the March to May invoices did not contain a signature line, there is nothing in the material to suggest that, at any time prior to December 2015, the applicant was concerned with respect to the signing protocol. In any event, there is no basis to invoke a requirement that the March to May invoices be signed, because they were approved by the replacement Deed III, removing any right to dispute them.
  6. Finally, the respondent submitted if there was not a genuine dispute there could be no basis to refer to the dispute resolution process. The arbitration clause was therefore irrelevant. 

Applicable principles

  1. The applicable principles for determining whether there is a genuine dispute as to the existence of a debt or whether there is an off-setting claim are usefully set out in Rhagodia Pty Ltd v National Australia Bank Ltd:[1]

“[91]In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd Dodds-Streeton JA (with whom Neave and Kellam JJA concurred) said:

[56]The court, in the context of an application to set aside a statutory demand, must determine whether there is a genuine dispute about the existence or amount of the debt or whether the company has a genuine off-setting claim.

[57]No in-depth examination or determination of the merits of the alleged dispute is necessary, or indeed appropriate, as the application is akin to one for an interlocutory injunction. Moreover, the determination of the “ultimate question” of the existence of the debt should not be compromised.

[92]Dodds-Streeton JA further said:

[71]As the terms of s 459H of the Corporations Act 2001 and the authorities make clear, the company is required, in this context, only to establish a genuine dispute or off-setting claim. It is required to evidence the assertions relevant to the alleged dispute or off-setting claim only to the extent necessary for that primary task. The dispute or off-setting claim should have a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. As counsel for the appellant conceded however, it is not necessary for the company to advance, at this stage, a fully evidenced claim. Something “between mere assertion and the proof that would be necessary in a court of law” may suffice. A selective focus on a part of the formulation in South Australia v Wall, divorced from its overall context, may obscure the flexibility of judicial approach appropriate in the present context if it suggests that the company must formally or comprehensively evidence the basis of its dispute or off-setting claim. The legislation requires something less.

[93]In Eyota, McClelland CJ of the Supreme Court of New South Wales said:

It is, however, necessary to consider the meaning of the expression “genuine dispute” where it occurs in s 450H. In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the “serious question to be tried” criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat. 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 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” (cf Eng Mee Yong v Letchumanan), or “a patently feeble legal argument or an assertion of facts unsupported by evidence”: cf South Australia v Wall.

But if it does mean that, except in such an extreme case, a court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between, on the one hand, determining whether there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute. In Mibor Investments Hayne J said, after referring to the state of the law prior to the enactment of Div 3 of Pt 5.4 of the Corporations Law, and to the terms of Div 3:

These matters, taken in combination, suggest that at least in most cases, it is not expected that the court will embark upon any extended inquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the court conclude that there is a dispute and that it is a genuine dispute.

[94]In Re Morris Catering (Aust) Pty Ltd, Thomas J said:

There is little doubt that Div 3 … prescribes a formula that requires the court to assess the position between the parties, and preserve demands where it can be seen that there is no genuine dispute and no sufficient genuine offsetting claim. That is not to say that the court will examine the merits or settle the dispute. The specified limits of the court’s examination are the ascertainment of whether there is a “genuine dispute” and whether there is a “genuine claim”.

It is often possible to discern the spurious, and to identify mere bluster or assertion. But beyond a perception of genuineness (or the lack of it), the court has no function. It is not helpful to perceive that one party is more likely than the other to succeed, or that the eventual state of the account between the parties is more likely to be one result than another.

The essential task is relatively simple — to identify the genuine level of a claim (not the likely result of it) and to identify the genuine level of an offsetting claim (not the likely result of it).

I respectfully agree with those statements.”

(Footnotes and citations omitted)

  1. The aforementioned principles were referred to in Welldog Pty Ltd v World Oil Tools Inc,[2] where Daubney J noted they had been approved by the Victorian Court of Appeal in Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd.[3]
  2. The relevance of arbitration clauses, to the discretion of the court to set aside a statutory demand under the Act, was the subject of observation by Austin J in SMEC International Pty Ltd v CEMS Engineering Inc:[4]

“… in my view, it is unlikely that a court would set aside a statutory demand on the bare ground that the service of the demand … violated an arbitration clause. The question is a little artificial, because the application of the arbitration clause is likely to arise for consideration only if there is a dispute between the parties, and once there is a genuine dispute the court will set aside the statutory demand on that ground.”

  1. These observations were considered by Palmer J in Arris Investments Pty Ltd v Fahd & Anor:[5]

[16]It has been said in obiter dicta that it is unlikely that a Court would set aside a Statutory Demand:

‘… on the bare ground that the service of the demand or the commencement of winding up proceedings in consequence of it, violated an arbitration clause.  The question is a little artificial, because the application of the arbitration clause is likely to arise for consideration only if there is a dispute between the parties, and once there is a genuine dispute the court will set aside the statutory demand on that ground.’

Per Austin J in SMEC International Pty Limited v CEMS Engineering Inc (2001) 38 ACSR 595, at [36].

[17]On the other hand it has been said, in a slightly different context and for a slightly different purpose, that if a mediation or arbitration clause in an agreement would arguably found an application for a stay of proceedings for recovery of the alleged debt, a dispute between the parties as to whether a stay of proceedings should be granted would be a genuine dispute for the purposes of setting aside a Statutory Demand: National Telecoms Group Ltd v Bulldogs Rugby League Club Ltd [2003] NSWSC 654, at [15] per Gzell J.

[18]I agree that the existence of a mediation or arbitration clause in an agreement between parties will not automatically preclude one of them from serving a Statutory Demand on the other for a debt said to arise under the agreement.  This is so because the Court retains its discretion under s 459J(1)(b) as to what significance to attach to such a contractual term in the circumstances of the case.  A dispute between the parties might have to be resolved by compulsory arbitration before one party can enforce the result by judgment against the other, but the Court may see the position taken by one of the disputants is so transparently untenable that it can conclude for the purposes of s 459J(1)(b) that that party is involving the arbitration clause in bad faith.  Again, the Court might give no discretionary weight under s 459J(1)(b) to a compulsory arbitration clause where a plaintiff seeking to set aside the Statutory Demand has continually frustrated the endeavours of the defendant to have the dispute resolved in accordance with the arbitration clause.

[19]However, where a dispute is not resolvable by the Court virtually at a glance because the position taken by one of them is transparently untenable, or where there is no conduct making it unconscionable for one party to invoke an arbitration rather than by any other form of litigious proceeding should carry great discretionary weight in considering whether a Statutory Demand should be set aside under s 459J(1)(b).

[20]There are often good commercial reasons for parties to agree to air their disputes only in the privacy of an arbitration.  There are considerations also of savings in time and legal expense in such proceeding.  If the dispute is fairly and squarely within the purview of a compulsory arbitration clause, the Court should not lightly permit one party to ignore the clause and precipitate legal proceedings by the issue of a Statutory Demand.  In short, the Court should not encourage parties to breach their contracts.”

Discussion

  1. Whilst the applicant contends there is a genuine dispute about the existence or amount of the debt the subject of the statutory demand, a consideration of the material does not support that contention.
  2. The respondent undertook the work required of it and forwarded invoices in relation thereto.  Far from disputing an obligation to pay those amounts, the applicant entered into replacement deeds and repayment plans.  When those arrangements were not met by the applicant, the applicant apologised for non-payment and candidly acknowledged that non-payment was due to cash flow problems.  Against that background, a belated attempt to avoid payment by claims of failure by the respondent to perform its obligations amounts to nothing more than a cynical attempt to deflect responsibility for a debt due and owing to the respondent. 
  3. This conclusion is supported by a consideration of the objective evidence, including the contents of contemporaneous correspondence.  Whilst Mr Palmer asserts he was “disappointed” with the results of the respondent’s report delivered in May 2012, that he commissioned ISIS Petroleum to prepare an independent report as a consequence of his concerns, and that following receipt of that report in September 2012 he “resolved to not make payments” of the balance owing to the respondent, the correspondence sent by the applicant to the respondent on 26 March 2013 and the email of 8 June 2013 are entirely inconsistent with those assertions. 
  4. Whilst it is correct that the timing of the raising of genuine contractual rights does not deny the applicant the right to raise those contractual rights, the circumstances in which such a claim is first raised are relevant to a perception of the lack of genuineness of the claimed dispute or off-setting claim.  Here, the alleged dispute and off-setting claim does not have sufficient objective existence.  It amounts to a "merely spurious claim, bluster or assertion” lacking sufficient actual particularity “to exclude the fanciful or futile”.[6] 
  5. Such a claim does not genuinely give rise to any asserted contractual rights.  The attempt to raise possible rights on the basis of the possible identification of company shortcomings, leading to a possible substantial claim for damages, lacks specificity in either the shortcomings or the likely damages.  There is also a lack of objective independent evidence to support those assertions.  Such claims are insufficient to constitute either a genuine dispute or an off-setting claim. 
  6. A consideration of the claimed damages said to have been suffered by the applicant also reveals the hollowness of the applicant’s assertions.  There is scant detail in relation to such matters, only a bald assertion a report is to be obtained leading to a possible damages claim.  The lack of detail is not surprising considering the independent report obtained by the applicant in September 2012 itself raised no concerns as to the work undertaken by the respondent. 
  7. Similarly, the presence of an arbitration clause in the agreements entered into between the applicant and the respondent does not provide “some other reason” for this Court to set aside the statutory demand.  If the arbitration clause is to be properly engaged, there must be shown to exist a dispute between the parties in relation to a matter properly the subject of that arbitration clause. 
  8. As was observed by Palmer J in Arris, s 459J provides a discretion to prevent abuses of process and to ensure the statutory demand process is not itself improperly used by parties to an agreement to escape an arbitration clause.  There is no basis to form such a conclusion in the present case.  The applicant has not established there is a dispute between the parties that should properly be the subject of arbitration in accordance with the clause. 
  9. The applicant has sought to grasp onto the arbitration clause in an effort to avoid the effects of the statutory demand, in circumstances where the material supports a conclusion that the applicant’s failure to comply with the statutory demand is due to the applicant’s inability to do so financially.  The applicant has not established there is “some other reason” the statutory demand ought to be set aside. 

Conclusions

  1. The application to set aside the statutory demand is dismissed.
  2. I shall hear the parties as to any other orders, and costs.

Footnotes

[1] (2008) 67 ACSR 367; [2008] VSC 295 at [91]–[94].

[2] [2013] QSC 180 at [31]-[32].

[3] [2013] VSCA 176 at [5].

[4] SMEC V CEMS Engineering (2001) 162 FLR 383; [2001] NSWSC 459 at [36].

[5] [2010] NSWSC 309.

[6] TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67; [2008] VSCA 70 at [71].

Close

Editorial Notes

  • Published Case Name:

    Palmer Petroleum Pty Ltd v BGP Geoexplorer Pte Ltd

  • Shortened Case Name:

    Palmer Petroleum Pty Ltd v BGP Geoexplorer Pte Ltd

  • MNC:

    [2016] QSC 33

  • Court:

    QSC

  • Judge(s):

    Boddice J

  • Date:

    04 Mar 2016

Litigation History

Event Citation or File Date Notes
Primary Judgment - - -
Primary Judgment [2016] QSC 33 04 Mar 2016 -
Notice of Appeal Filed File Number: 2547/16 10 Mar 2016 SC479/16
Appeal Determined (QCA) [2016] QCA 149 08 Jun 2016 -

Appeal Status

{solid} Appeal Determined (QCA)