Businessman fails to prove claim was genuine

A New South Wales businessman who attempted to get a $2.4 million bill from his supplier overturned has had his case thrown out of the New South Wales Supreme Court.

The retailer, who ran two associated womenswear companies called Inglas and Sobay, had taken wholesale group MacBell Collections to court in an effort to get a statutory demand issued by the latter, set aside.
MacBell had served the demand for payment after delivering stock to the two companies valued at $1,439,747 and $975,049 respectively.

However the hearing, before Justice J Barrett, was told there were a number of issues contested by both parties including the amount of the original debt, the terms of trade, and details of the original purchase orders.

The lawyer acting for Inglas and Sobay, PJ Beazley of Beazley Singleton, told the court that in July 2006 the businessman - referred to only as Wilson - had sent a letter outlining the terms of trade between the two parties. The letter allegedly included a clause allowing for a rebate in the event Wilson was not satisfied with the order. For its part MacBell, through its lawyer JF Boyle of Boyle Associates, denied having received such a letter.

Wilson stated that shortly after the two companies had sent a number of purchase orders to MacBell. For its part MacBell argued that with nine exceptions this too was never received.

As a result of this, Wilson claimed that although the goods had been invoiced at full or list price, that under the terms of trade he was entitled to a rebate if certain conditions were not satisfied.

In an affidavit tendered to the court, Wilson stated that while he had yet to ask forensic accountants to determine the loss caused by MacBell's "failure to supply" it equated to around $3 million in gross profit or $6 million in lost revenue.
The lost revenue, had had a "dramatic effect" on his companies, the court heard. However Justice Barrett said he was not convinced the offsetting claim was genuine.

Wilson had accepted the claim was never advanced or articulated in written form before he swore his affidavit in support of each originating process. He had also stated in the witness box that credit notes had been raised, yet he has not sought to put any of those into evidence, Justice Barrett said.

"The statements made by [the owner of the two retail companies] are entirely unsupported [and] are mere assertion on his part. There is no attempt whatsoever to explain any quantification even in broad terms or by way of reasoned estimate or even resort to rough methods of calculation. There is bare assertion without any factual basis or methodological rationale attached to it; and fundamentally there is no attempt to apportion global figures between different entities."

The judge said Wilson had failed to show that the court should set aside the statutory demand and ordered that he pay MacBell's costs.

A search of the Australian Securities & Investments Commission's (ASIC's) records revealed that while both Inglas and Sobay are still registered Inglas is under the control of an external administrator and Sobay is awaiting confirmation of a winding up order.

By Tracey Porter