Miles v Bidalo [2004] NSWSC 369

New South Wales Supreme Court

CITATION : Miles v Bidalo [2004] NSWSC 369 HEARING DATE(S) : Friday 30 April 2004 JUDGMENT DATE : 30 April 2004 JURISDICTION: Equity JUDGMENT OF : Master Macready at 1 DECISION : See paragraph 6

CATCHWORDS : Corporations law -- Application to set aside statutory demand under s 459G of the Corporations Act -- Demand reduced -- No matter of principle CASES CITED : Edge Technology Pty Limited v Lite-On Technology Corp (2000) 18 ACLC 576 Macleay Nominees Pty Limited v Belle Property East Pty Limited [2001] NSWSC 743 Miles Special Builders Pty Limited PARTIES : v Bidalo Consulting Pty Limited T/As Fortstaff FILE NUMBER(S) : SC 1004/04 COUNSEL : Lovas with Rush - Plaintiff Aldridge SC with Blank - Defendant SOLICITORS : Malouf Solicitors Parramatta - Plaintiff KM Harkness & Co - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Master Macready

Friday 30 April 2004

1004/04 Miles Special Builders Pty Limited v Bidalo Consulting Pty Limited T/As Fortstaff JUDGMENT 1 MASTER: In this matter there is an application to set aside a statutory demand. The statutory demand is one which claims the sum of $421,694.31 and it is dated 11 December 2003.

2 As a result of the rulings on objections to the affidavits during the course of the hearing, the only matter that remains is the question of whether or not there is an off-setting claim which is identified in par 10 of the affidavit of Mr Kovacic.

3 The court's task in off-setting claims has been dealt with in a number of cases. For instance, in Edge Technology Pty Limited v Lite-On Technology Corp (2000) 18 ACLC 576, Santow J had the following to say at pars 24 and 24: "It is here again true (as it was in Goldspar Australia Pty Limited v. KWA Design Group Pty Limited (1999) 17 ACLC 456 that it 'is not my task in the present proceedings to seek to resolve the competing claims of the Plaintiff and the Defendant': per Austin J at 462. Rather, it is to 'resolve whether, for the purposes of s 459H(1)(a), there is a genuine dispute between the Plaintiff and the Defendant about the existence or amount of the debt to which the Defendant's statutory demand relates': Austin J at 462. Or alternatively, whether there is a genuine counter-claim, set-off or cross-demand against the Defendant and if so, in what amount. In particular, how should it be quantified; at a nominal $1 or at a large figure and if the latter, how is the quantification to be arrived at? The latter question essentially asks whether the counter-claim or set-off is fictitious or merely colourable; Jesseron Holdings Pty Limited v. Middle East Trading Consultants Pty Limited (No 2) (1994) 12 ACLC 490; 13 ACSR 787. In that context, to come up with a plausible contention to (sic) requiring further investigation which, if later established, would preclude there being an off-setting claim. That would not establish that the counter-claim or set-off was fictitious, or merely colourable. In that sense the counter-claim or set-off is not the reciprocal of the statutory demand debt. Rather it is a means of off-setting the statutory demand debt with a genuine counter-claim or set-off. I adopt the approach of the Full Federal Court in Spencer Constructions Pty Limited v. G & M Aldridge Pty Limited (1997) 15 ACLC 1001 at 1011 (1997) 76 FCR 452 at 464; that a genuine dispute requires that in 'the dispute be bona fide and truly existing fact' and that the 'grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived'. The same applies to the counter-claim or set-off. One asks: Is it bona fide, is it real and not spurious?"