Bismark Maritime Ltd v DNV GL Australia Pty Ltd

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 19 February 2018
• Citation: (2018) N7378
• Court: National Court
• Year: 2018
• Judgement Number: N7378

Full : OS 383 of 2017; In the matter of an application under Section 338 of the Companies Act 1997; Bismark Maritime Limited v DNV GL Australia Pty Ltd (2018) N7378

National Court: Hartshorn J

Judgment Delivered: 19 February 2018

N7378

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS 383 of 2017

IN THE MATTER OF AN APPLICATION UNDER

SECTION 338 OF THE COMPANIES ACT 1997

BETWEEN:

BISMARK MARITIME

LIMITED

Plaintiff

AND:

DNV GL AUSTRALIA

PTY LTD

Defendant

Waigani: Hartshorn J

2017: 18th October

2018: 19th February

Application to set aside statutory demand

Cases cited:

Papua New Guinea Cases

Bemobile Ltd v. Wettao (2014) N6776

Overseas Cases

Bishop Industries (Wellington) Limited v. Construction Labour Hire Limited [2016] NZHC 2848

Counsel:

Mr. W. Frizzell, for the Plaintiff

Mr. T. Injia, for the Defendant

19th February, 2018

1. HARTSHORN J: The plaintiff Bismark Maritime Limited (Bismark) applies to set aside a statutory demand issued against it by the defendant DNV GL Australia Pty Ltd (DNV). Sections 338(1) and (2) Companies Act are relied upon. The statutory demand is dated 27th February 2017, is for the sum of €168,642.42, and is for unpaid invoices (statutory demand). The invoices are for various services provided including the surveying and certification of various vessels owned by Bismark.

2. Bismark contends that the statutory demand should be set aside as it has a substantial dispute concerning the debt claimed therein. The dispute concerns additional charges for €42,649.34 which it claims have not been justified despite repeated request and the actual charges for certification which it claims are excessive.

3. DNV contends that the evidence does not establish that Bismark has a substantial dispute. DNV does not take issue with when the application to set aside was made and served.

Law

4. Bismark relies upon the cases and principles set out in Bemobile Ltd v. Wettao (2014) N6776. At [13]:

“13. In the above cases the following principles are set out as to when a statutory demand ought to be set aside:

(a) The applicant must establish that there is a, “fairly arguable basis” or a, “substantial dispute” as to the amount claimed in the statutory demand;

(b) The evidence in support of an application must demonstrate that there is arguably a genuine and substantial dispute and which goes towards supporting the claim that the debt is disputed;

(c) That a mere assertion that there exists a debt or debts is not sufficient to maintain the statutory demand;

(d) That where proof has been given that there exists a substantial dispute, the matter must be resolved by other means, meaning the statutory demand must be set aside.”

5. DNV relies upon various cases that espouse similar principles and submits that the onus of proof is on the applicant to substantiate the assertion of a substantial dispute by providing appropriate or cogent evidence. Reliance is also placed upon the New Zealand High Court case of Bishop Industries (Wellington) Limited v. Construction Labour Hire Limited [2016] NZHC 2848 and the following statement at [16]:

“[16] The onus is on the applicant to show that there is a genuine and substantial dispute as to the existence of the debt. The dispute must be real and not fanciful or insubstantial; the applicant must show a fairly arguable basis upon which it is not liable for the amount claimed. The mere assertion that a dispute exists is not sufficient. An applicant must establish that any counterclaim or cross-demand is reasonably arguable in all the circumstances. The obligation is not to prove the actual claim; such an obligation would amount to the dispute itself being tried on the application.”

Additional charges of €42,649.34

6. As to the additional charges of €42,649.34 that Bismark claims have not been justified despite repeated request, Bismark, by Mr. Hamish Sharp, claims that it made many email requests requiring written justification for additional charges totaling €42,649.34 levied in addition to various invoices for certification and other services.

7. DNV annexes copies of invoices concerning the additional charges in the affidavit of Mr Timothy Holt. Notwithstanding this, Bismark maintains its dispute to the additional sums on the basis that supporting documentation such as disbursement receipts have not been provided.

8. In paragraphs 13 to 25 of Mr. Holt’s affidavit sworn 26th June 2017, he deposes concerning email correspondence between employees of the parties. Mr. Holt deposes that Mr. Nimal Ranasinghe, Bismark’s Financial Controller, raised queries relating to the additional charges in invoices issued in 2015-2016 to which Mr. Spiliotis and Mr. Simpson of DNV responded. Mr. Ranasinghe was provided the invoices, order confirmations and expense sheets setting out DNV’s surveyors travel expenses amongst others, by Mr. Simpson and Mr. Spiliotis. The relevant email correspondence is:

a) George Spiliotis’s email of 14th September 2017 to Mr. Ranasinghe, attaching the relevant invoices and order confirmations or service agreement forms signed by Bismark’s agents;

b) Mr. Ranasinghe’s email of 15th September 2016, in which he acknowledged receipt of Mr. Spiliotis’s email of 14th September 2016 and requested for a reasonable time to settle the outstanding debt;

c) From Mr. Ranasinghe dated 29th September 2016 to Mr. Spiliotis attaching a statement of a detailed analysis of DNV’s invoices. He indicated that he had noticed that the airfare, travelling/waiting, overtime and hotel expenses charged with very high and requested detailed clarification;

d) In an email dated 10th October 2016, Mr. Simpson provided Mr. Ranasinghe with a breakdown of the additional charges in the two big invoices. The “two big invoices” refer to invoice no. 112261963 dated 12th May 2016 and invoice no. 11276845 dated 21st July 2016;

e) By email of 13th October 2016, Mr. Ranasinghe queried why the airfares were so high and why Bismark should pay for travelling and waiting time;

f) In an email of 21st October 2016 from Ami Simpson to Mr. Ranasinghe attaching invoices for the airfares and accommodation, Mr. Ranasighe was advised that DNV’s surveyors travel in economy class and all travelling, waiting and overtime charged by DNV were made in accordance with DNV’s General Terms and Conditions which form part of each of the service agreements executed by parties before the services were rendered;

g) By email of 28th October 2016 to Mr. Spoliotis, Mr. Ranasinghe acknowledged receipt of Ami Simpson’s email of 21st October 2016 but advised that the Bank of Papua New Guinea had restricted outward remittances.

9. DNV submits that the evidence shows that Bismark has been provided with relevant documentation which explains the additional charges being travel expenses of DNV’s surveyors, including accommodation, sustenance and other charges for waiting time, overtime and travelling time.

10. After considering:

a) The correspondence between the employees of the parties, including the email of 15th September 2016 of Bismark’s Financial Controller in which it is stated, “Thank you for sending of the details. As I explained you, will be arranging payments to settle your outstanding. Please allow us reasonable period for complete settlements.”;

b) The email dated 28 October 2016 at 8:19am from DNV to Bismark’s Financial Controller stating:

“Dear Nimal, I hope you have received the explanations/response from our administrator for the outstanding invoices. I hope we can receive your payment as required.”;

c) The reply from Bismark’s Financial Controller on 28 October 2016 at 8:34am stating:

“Dear Mr. Georgios, Yes Ami has send the explanation with supporting for the airfares and charges for the waiting time. According to our bank now BPNG (Central Bank of PNG) has restricted the outward remittances. We will check with our bank and inform you.”

d) That several reminding items of correspondence have been sent by DMV but no further correspondence or any payment has been received from Bismark;

I find that DNV did provide details of the additional charges of €42,649.34 to Bismark such that Bismark’s Financial Controller was satisfied sufficiently for him to inform by email that payment for the “outstanding” was being arranged, that allowance for reasonable period for complete settlements was sought, that DNV (Ami) had sent an explanation with supporting information for the airfares and charges for waiting time, and that by inference, payment would be made but this had been affected by restrictions from the Bank of Papua New Guinea.

11. Consequently, I am of the view that Bismark has not established or demonstrated that it has a fairly arguable basis upon which it is not liable for the additional charges or that it has a genuine or substantial dispute as to the existence of that part of the debt comprised of the additional charges.

Remainder of debt

12. In regard to the claim by Bismark that the certification services had increased by 30%, DNV submits and makes reference to clause 7.2 of DNV’s General Terms and Conditions which entitle DNV to...