Case: Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560
Outcome: applied
Ultradrilling submitted that the fact that West now puts forward these details of the offsetting claim to overcome the difficulties identified by the Deputy Registrar should tell strongly against the genuineness of the claim, both on the issue of whether the delays are recoverable by West against Ultradrilling and the amount of any such claim. In any event, Ultradrilling contends that the evidence now provided does not rise above mere assertion and should be rejected on that basis alone: see Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560 at [18] - [19] and TR Administration 66 ACSR at 79-80. Ultradrilling focused, in particular, on the charges for "lost mark up" and the "lost profit" on the pumps (see [35] above). Ultradrilling contended that if, as was required, a line was drawn to distinguish between evidence that was merely spurious, bluster or assertion and evidence which provided sufficient factual particularity to exclude the merely fanciful or futile, the offsetting claim would be dismissed: TR Administration at 79-80. 38 I reject this submission. What this application has demonstrated is that the terms on which West engaged Ultradrilling to drill bore holes and the manner in which Ultradrilling completed that work is the subject of dispute. Those issues cannot be resolved and should not be resolved in the present application. Moreover, it must be recalled that West is not required to establish the precise dollars and cents or provide a fully evidenced claim: Elm Financial Services at [19]. 39 Secondly, the bases on which Ultradrilling contends that charges for "lost mark up" and the "lost profit" on the pumps are spurious cannot be accepted. "Lost mark up" was criticised by Ultradrilling on the grounds that "[t]he sense in which this amount was 'lost' [was] unexplained." However, that loss was explained. In Mr West's additional affidavit and accompanying spreadsheet (see [35]-[36] above), it was described as the margin which West would have received on the engineer's labour - that is, the difference between the rate charged to the client and the rate actually paid to the engineer. Whether such loss is recoverable from Ultradrilling and if so, whether 30% is the correct rate to apply in calculating the loss, are issues to be determined in other forums. The other loss, the "lost profit" component, was challenged by Ultradrilling on the basis that because the pumps were said to be custom-built for the Project, there could be no "usual practice" for renting the pumps and it was not plausible to assume that each of the pumps, if not required on the Project, would have been immediately rented out for the whole period to a third party at $110 per day. Again, those are issues that will need to be resolved in another forum. 40 In the present case, it cannot be said that the evidence was merely spurious, bluster or assertion. The evidence ultimately provided by West provided sufficient factual particularity to exclude the merely fanciful or futile. Whether West will succeed at any trial of the issue is irrelevant. 41 Adding together the $47,916 in genuine dispute and the approximately $151,610 in offsetting claims yields a total amount which exceeds the balance of $155,397 claimed by Ultradrilling pursuant to the Statutory Demand. In the circumstances, the appropriate orders are that the Statutory Demand be set aside under s 459H(3) of the Act and that Ultradrilling pay West's costs of and incidental to the application, both before the Registrar and this Court, such costs to be taxed in default of agreement. 42 In view of those orders, it is unnecessary to separately consider setting aside the Statutory Demand on one or more of the grounds set out in s 459J of the Act . I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate: Dated: 23 September 2008 Counsel for the Plaintiff: CM Slater Solicitor for the Plaintiff: Webb Korfiatis Counsel for the Defendant: R Strong Solicitor for the Defendant: Colquhoun Murphy Date of Hearing: 10 September 2008 Date of Judgment: 23 September 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1443.html