Mainlink Developments Pty Limited v BAM (Australia) Pty Limited [2003] NSWSC 832

New South Wales Supreme Court

CITATION : Mainlink Developments Pty Limited v BAM (Australia) Pty Limited [2003] NSWSC 832 HEARING DATE(S) : 09/09/03 JUDGMENT DATE : 9 September 2003 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION :

CATCHWORDS : Corporations Law. Application to set aside demand under s 459G of the Corporations Act. Demand set aside. No matter of principle PARTIES : Mainlink Developments Pty Limited v BAM (Australia) Pty Limited FILE NUMBER(S) : SC 3655/03 COUNSEL : J.T. Johnson for plaintiff. A.S., Patterson for defendant SOLICITORS : Dennis and Company for plaintiff Access Legal Pty Limited for defendant

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

MASTER MACREADY

TUESDAY 9 SEPTEMBER 2003

3655/03 - MAINLINK DEVELOPMENTS PTY LIMITED v BAM (AUSTRALIA) PTY LIMITED

JUDGMENT 1 MASTER: This is an application to set aside a statutory demand dated 23 June 2003 claiming a sum of $31,713.60, being a balance due for performing brickwork at properties at Cheltenham and Fairfield between July 2002 and November 2003. The plaintiff says that a genuine dispute exists for two reasons: one, the company to whom the demand was addressed was not the contracted party, two, there was a compromise for the amount owing for $25,000 which amount was paid. 2 I think the appropriate principles in considering what is a genuine dispute are given 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 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, 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) 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) 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.'