Chacal Maritime Engineering Pte Ltd v Electromotive Electrical Services Pte Ltd [2021] FJHC 400; HBE30.2021 (23 December 2021)

IN THE HIGH COURT OF FIJI AT SUVA

COMPANIES JURISDICTION

Companies Action No. HBE 30 of 2021

IN THE MATTER of a Statutory Demand dated 14^th July 2021 taken out

by ELECTROMOTIVE ELECTRICAL SERVICES PTE LIMITED

(The Respondent) against CHACAL MARITIME ENGINEERING

PTE LIMITED (the Applicant) and served on the

Applicant on 14the July 2021.

AND

IN THE MATTER of an Application by the Applicant for an Order setting

aside the Statutory Demand pursuant to section 516 of the

Companies Act 2015.

BETWEEN

CHACAL MARITIME ENGINEERING PTE LIMITED a limited liability

company having its registered office at Floating Dry Dock,

Off Coast of Navutu, Lautoka.

APPLICANT

AND

ELECTROMOTIVE ELECTRICAL SERVICES PTE LIMITED a limited

liability company having its registered office at Level 1,

172 Ratu Mara Road, Samabula, Suva.

RESPONDENT

Counsel : Mr. Haniff F. for the Applicant.

Mr. Chand A. with Ms. Dass S. for the Respondent.

Date of Hearing : 03^rd December 2021

Date of Ruling : 23^rd December 2021

RULING

(On an Application for Setting aside the Statutory Demand)

[1] The applicant filed this summons pursuant to section 516 of the Companies Act 2015, seeking to have the statutory demand dated 14^th July 2021 issued by the respondent.

[2] Section 516 of the Companies Act 2015 provides:

(1) A Company may apply to the Court for an order setting aside a Statutory Demand served on the Company.
(2) An application may only be made within 21 days after the demand is so served.
(3) An application is made in accordance with this section only if, within those 21 days—

• (a) an affidavit supporting the application is filed with the Court; and
• (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the Company.

[3] In the affidavit in support of Rufus Thadeus D’Cruz it is stated that the Government Shipping Service obtained the services of the applicant company to repair the generator of the ship Iloilovatu. Since it was beyond repairs the applicant decided to the replace the generator and suggested it to the Government Shipping Service and they advised the applicant to look at two available generators. The applicant finally entered into an oral agreement with the respondent company and it agreed to commissioned and synchronized with the second generator within few days.

[4] The agreed price was $54,500.00 and a deposit of $17,000.00 paid in advance. The agreement was to complete the job by 27^th November 2020. The applicant issued a post-dated cheque for the balance amount and advised him not to encash the cheque before the completion of the work but Mr. Ali on behalf of the respondent company submitted the cheque to the bank and it was dishonoured. The applicant then offered additional $3,000.00 to the respondent to complete the synchronization but Mr. Ali, the Managing Director of the respondent company insisted that the balance money should be paid before any work is done.

[5] The respondent’s position is that the agreement was only to supply the generator and synchronizing it with the other generator was not part of the agreement.

[6] Section 517 of the Companies Act 2015 provides:

(1) This section applies where, on an application to set aside a Statutory Demand, the Court is satisfied of either or both of the following—

• (a) 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;
• (b) that the Company has an offsetting claim.

(2) The Court must calculate the substantiated amount of the demand.
(3) If the substantiated amount is less than the statutory minimum amount for a Statutory Demand, the Court must, by order, set aside the demand.
(4) If the substantiated amount is at least as great as the statutory minimum amount for a Statutory Demand, the Court may make an order—

• (a) varying the demand as specified in the order; and
• (b) declaring the demand to have had effect, as so varied, as from when the demand was served on the Company.

(5) The Court may also order that a demand be set aside if it is satisfied that—

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

[7] It is a fact conceded by the applicant that it offered additional $3000.00 to synchronize the two generators. The applicant has referred to a conversation with Capt. Rufus who states that the respondent promised to synchronize the two generators. The question here is whether synchronisation was part of the agreement. On the other hand if the synchronisation of the two generators was part of the original agreement there was no necessity for the respondent to offer a payment of additional $3000.00. From these facts the only reasonable conclusion the court can arrive at is that the understanding between the parties was only to supply the generator and synchronisation was not part of the agreement.

[8] Section 517(1)(a) and (b) requires the court to ascertain whether there is a genuine dispute between the applicant and the respondent as to the existence of amount of debt or the applicant has an offsetting debt.

[9] In this matter the amount claimed by the respondent is not disputed by the applicant and there is also no offsetting debt.

[10] For the above reasons the court makes the following orders.

ORDERS

1. Application for setting aside the statutory demand is refused.
2. There will be no order for costs.
   

Lyone Seneviratne

JUDGE

23^rd December 2021