Kids At Sea Programme Australia Ltd v Pacific New Media Pty Ltd [1998] FCA 476

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 3119 of 1998

BETWEEN: KIDS AT SEA PROGRAMME AUSTRALIA LTD

(ACN 068 795 139)

Applicant

AND: PACIFIC NEW MEDIA PTY LTD (ACN 053 912 502)

Respondent

JUDICIAL REGISTRAR: MURPHY

DATE OF ORDER: 4 MAY 1998

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The statutory demand is set aside; 2. The respondent pay the applicant's cost of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 3119 of 1998

BETWEEN: KIDS AT SEA PROGRAMME AUSTRALIA LTD

(ACN 068 795 139)

Applicant

AND: PACIFIC NEW MEDIA PTY LTD (ACN 053 912 502)

Respondent

JUDGE(S): MURPHY JR

DATE: 4 MAY 1998

PLACE: MELBOURNE

REASONS FOR JUDGMENT Under s 459G of the Corporations Law the applicant seeks to set aside the respondent's statutory demand for payment of a debt. The demand was made on 20 March 1998 and alleges that the applicant is indebted to the respondent in the amount of $18,500, being the total of two invoices for $3,500 and $15,000 set out in the schedule.

THE ISSUE The applicant has the burden of establishing that there was a genuine dispute between it and the respondent about the existence of the debt or the amount of a debt to which the demand relates. The leading recent authority on the meaning of the expression "genuine dispute" is Spencer Constructions Pty Ltd v G. & M. Aldridge Pty Ltd, (1997) 15 ACLC 1,001. In that case, at 1,011 the Full Court, after considering a number of decisions, said: "In our view a 'genuine dispute' requires that: · the dispute be bona fide and truly exist in fact; · the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived." Earlier, the Court noted various comments about the role that it plays in these applications. At 1,009 the Court said: "What is clear is that in considering applications to set aside a statutory demand, a court will not determine contested issues of fact or law which have a significant or substantial basis." At 1,010 it referred to another formulation: "It is clear that what is required in all cases is something between mere assertion and the proof that would be necessary in a court of law. Something more than mere assertion is required because if that were not so then anyone could merely say that it did not owe a debt: John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716 at 718...." The Court also referred to Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 at 605where Thomas J said: "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."