Duncan v Weldworks [1999] NSWSC 687

New South Wales Supreme Court CITATION : Duncan v Weldworks [1999] NSWSC 687 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 1752/99 HEARING DATE(S) : 21 June 1999 JUDGMENT DATE : 21 June 1999

PARTIES : C.T. Duncan Pty Ltd v Weldworks Engineering Pty Ltd JUDGMENT OF : Master Macready at 1

COUNSEL : Mr W. Haffenden for the plaintiff Mr G.A. Moore for the defendant SOLICITORS : O'Hara & Company, Strathfield for the plaintiff W.J. Whiting, Corrimal for the defendant CATCHWORDS : Corporations Law.; Setting aside a statutory demand. ; No matters of principle. DECISION : para 15

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THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

Monday 21 June 1999

1752/99 - C T DUNCAN PTY LTD -V- WELDWORKS ENGINEERING PTY LTD

JUDGMENT

1 MASTER: This is an application to set aside a statutory demand. The statutory demand was served by the defendant on the plaintiff and dated 23 February 1999. The amount claimed is $29,133. It is conceded that there is a dispute in respect of the sum of $1338. Accordingly the demand is sought to be supported in the sum of $27,800. There is now, although there was earlier no dispute as to the applications being made within time. 2 The plaintiff is a builder and the defendant is a subcontractor doing works for it on a site. The dispute concerns the contractual arrangements between them. In determining whether there is a genuine dispute it is necessary to bear in mind that this Court cannot in this application determine the question of the dispute between the parties about the contractual arrangements. The Court's task under the section of the Corporations Law is to determine whether in fact there is a genuine dispute about that matter. 3 In this regard in determining whether there is a genuine dispute the most recent summation of the law is that given by McLelland CJ in Equity in Eyota Pty Ltd v. Hanave Pty Limited (1994) 12 ACLC 669. At p 671 his Honour made the following comments in respect of the expression "Genuine dispute". "It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s 459H. In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the 'serious question to be tried' criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat. This does not mean that the Court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit 'however equivocal, lacing in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to (its) truth' (cf Eng Mee Yong v. Letchumanan (1980) AC 331 at 341) or 'a patently feeble legal argument or an assertion of facts unsupported by evidence' (cf South Australia v. Wall (1980) 23 SASR 189 at 194.) But it does mean that, except in such an extreme case, a Court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between, on the one hand, determining wehther there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute. In Mibor Investments (at ACLC 1066; ACSR 366-7) Hayne J said, after referring to the state of the law prior to the enactment of Division 3 of Part 5.4 of the Corporations Law, and to the terms of Divisions 3: 'These matters, taken in combination, suggest that at least in most cases, it is not expected that the Court will embark upon any extended inquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the Court conclude that there is a dispute and that it is a genuine dispute.' In Re Morris Catering (Australia) Pty Limited (1993) 11 ACLC 919 at 922; (1993) 11 ACSR 602 at 605 Thomas J said: 'There is little doubt that Division 3 ... prescribes a formula that requires the Court to assess the position between the parties, and preserve demands where it can be seen that there is no genuine dispute and no sufficient genuine off- setting claim. That is not to say that the Court will examine the merits or settle the dispute. The specified limits of the Court's examination are the ascertainment of whether there is a "genuine dispute" and whether there is a "genuine claim."