MCG v Bowral [2002] NSWSC 400

New South Wales Supreme Court

CITATION : MCG v Bowral [2002] NSWSC 400 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 6086/01 HEARING DATE(S) : 06/05/02 JUDGMENT DATE : 6 May 2002

PARTIES : MCG BRICKS & PAVERS PTY LIMITED v BOWRAL BRICKWORKS PTY LIMITED JUDGMENT OF : Master Macready at 1

COUNSEL : Mr S. Glasscott for plaintiff Mr P. Walsh for defendant SOLICITORS : Strathfield Law for plaintiff Bateman Battersby for defendant CATCHWORDS : Corporations Law. Application to set aside statutory demand. Demand varied. No matter of principle. DECISION : Paragraph 10

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

MONDAY 6 MAY 2002

6086/01 - MCG BRICKS & PAVERS PTY LIMITED v BOWRAL BRICKWORKS PTY LIMITED

JUDGMENT: 1 MASTER: This is an application to set aside a statutory demand under section 459 G of the Corporations Act. The demand is dated 27 November 2001 and claims $115,535.50 for "goods sold and delivered between 2 January 2001 to 20 April 2001". 2 There are raised both offsetting claims and genuine disputes. In addition it is said in respect of one of the disputes that there is a defect in the demand. The defendant has conceded that there is an offsetting claim for $39,360 and, accordingly, the amount of the demand should be reduced to at least $76,175.50. 3 In respect of the genuine disputes which are said to exist, I note what was said by McLelland CJ in Equity in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACLC 669. At page 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 s459H. 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, lacking 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) trust' ( 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) 24 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 whether 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 Division 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 601 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 offsetting 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".