Supreme Court New South Wales Medium Neutral Citation: Bakota Holdings Pty Ltd v Bank of Western Australia Ltd [2011] NSWSC 1277 Hearing dates: 26 October 2011 Decision date: 31 October 2011 Jurisdiction: Equity Division - Corporations List Before: Barrett J Decision: Order that the statutory demand dated 14 July 2011 served on the plaintiff by the defendant be set aside. Order that the defendant pay the plaintiff's costs of the proceedings Catchwords: CORPORATIONS - winding up - winding up in insolvency - statutory demand - application for order setting aside - demanded debt arises under guarantee - company relies on offsetting claim - guarantee requires payment in full and without deduction - whether right to offsetting claim bargained away - whether inability of company to set up its claim in an action for recovery of the demanded debt deprives the claim of the character of "offsetting claim" - whether claim genuine - whether amount of claim sufficiently articulated in supporting affidavit Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth), s 12DA Corporations Act 2001 (Cth), ss 459G, 459H Trade Practices Act 1974 (Cth), s 52 Cases Cited: Blue Hills Village Management (Liverpool) Pty Ltd v Babcock & Brown International Pty Ltd [2009] NSWSC 87; (2009) 3 BFRA 450 Bonner v Wilkinson (1822) 5 B & Ald 682; 106 ER 1340 Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638; (2005) 23 ACLC 1266 Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 Energy Equity Corporation Ltd v Sinedie Pty Ltd [2001] WASCA 419; [2001] 166 FLR 179 GE Capital Australia v Davis [2002] NSWSC 1146; (2002) 180 FLR 250 Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452 Jem Developments Pty Ltd v Hansen Yuncken Pty Ltd [2006] NSWSC 1308; (2006) 205 FLR 432 John Shearer Ltd v Gehl Company (1995) 60 FCR 136 Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50 Ozone Manufacturing Pty Ltd v Deputy Commissioner of Taxation [2006] SASC 91; (2006) 94 SASR 269 Property Builders Pty Ltd v Carlamax Properties Pty Ltd [2011] NSWSC 1068 Seaham Air Pty Ltd v Australian Aerospace Pty Ltd [2006] NSWSC 1241 Category: Principal judgment Parties: Bakota Holdings Pty Ltd - Plaintiff Bank of Western Australia Ltd - Defendant Representation: Mr R D Glasson - Plaintiff Mr P J Dowdy - Defendant Eakin McCaffery Cox - Plaintiff Blake Dawson - Defendant File Number(s): 2011/00253260 Judgment 1The plaintiff (Bakota Holdings Pty Ltd) applies under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 14 July 2011 served on it by the defendant (Bank of Western Australia Ltd). 2The debt or alleged debt to which the statutory demand relates is in the sum of $122,217,523.74 and is described in the schedule to the demand as follows: "The company owes the creditor the sum of $122,217,523.74 ( Debt ) in respect of a commercial guarantee and indemnity granted by the company to the creditor in relation to the loan facilities provided by the creditor to FOB-Airlie Beach Pty Limited ACN 109 511 757 ( Guarantee ) as particularised in the notice of demand issued by the creditor to the company dated 28 January 2011 ( Demand ). 3As this description makes clear (and the plaintiff accepts), the plaintiff guaranteed to the defendant due and punctual payment by FOB-Airlie Beach Pty Ltd ("FOB") of moneys payable under loan facilities provided to FOB by the defendant. The guarantee is in evidence. It is dated 26 October 2006. 4It is not in dispute that $122,217,523.74 became due and payable by FOB to the defendant on 19 January 2009 and that FOB's liability in that respect was caught by the plaintiff's guarantee. On 26 January 2009, the defendant notified the plaintiff in writing of FOB's failure to pay and demanded payment by the plaintiff as guarantor, specifying $122,217,523.74 as the relevant amount. The plaintiff did not pay in accordance with the demand. 5The affidavit filed and served in support of the originating process is that of Mr Rory Francis O'Brien sworn on 5 August 2011. Mr O'Brien is the sole director and secretary of the plaintiff. He is also the principal of FOB and, in his own right, a guarantor of FOB's indebtedness to the defendant. 6The plaintiff's claim to have the statutory demand set aside is based on the existence of an "offsetting claim" against the defendant as referred to in s 459H(1)(b). As will be seen, the plaintiff says that the "amount" of that claim (paragraph (a) of the definition of "offsetting total" in s 459H(2)) is equal to the demanded amount so that, under s 459H(3), the court must set aside the statutory demand. The plaintiff does not rely on the "genuine dispute" ground in s 459H(1)(a). 7Section 459H(5) defines "offsetting claim" as follows: "' offsetting claim ' means a genuine claim that the company has against the respondent by way of counterclaim, set-off or cross-demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demand relates)." 8The contention of the plaintiff is accordingly that it has, as against the defendant, a "genuine claim ... by way of counterclaim, set-off or cross-demand". The claim in question is a statutory claim for damages for misleading or deceptive conduct. I shall return to the precise nature of the claim. 9It is necessary first to address a preliminary matter. The defendant says that, whatever may be the merits of the plaintiff's postulated claim for damages for misleading or deceptive conduct viewed alone and in the abstract, it is not within the s 459H(5) definition of "offsetting claim" set out at paragraph [7] above. The reason, the defendant contends, is to be found in the contract of guarantee made between the plaintiff and the defendant. It is to the content of that contract that I now turn. 10In the guarantee, the plaintiff is "you", the defendant is "we" (or "us") and FOB is "the debtor". Clause 2.1 is as follows: "You unconditionally and irrevocably guarantee payment to us of the guaranteed money . If the debtor does not pay the guaranteed money on time and in accordance with any arrangement under which it is expressed to be owing, then you agree to pay the guaranteed money to us on demand from us (whether or not we have made demand on the debtor)." 11The "guaranteed money" is all money owning by FOB to the defendant at any time on any account. 12Clause 4.2 of the guarantee reads: "Rights given to us under this guarantee and indemnity and your liabilities under it are not affected by any act or omission by us or by anything else that might otherwise affect them under law or otherwise, including: (a) the fact that we vary or replace any arrangement under which the guaranteed money is expressed to be owing, such as by increasing the credit limit or extending the term; (b) the fact that we release the debtor or give them a concession, such as more time to pay; (c) the fact that the debtor opens another account with us; (d) the fact that we release, lose the benefit of or do not obtain any security; (e) the fact that we do not register any security which could be registered; (f) the fact that we release any person who guarantees any of the debtor's obligations; (g) the fact that the obligations of any person who guarantees any of the debtor's obligations may not be enforceable; (h) the fact that any person who was intended to guarantee any of the debtor's obligations does not do so or does not do so effectively; (i) the death, mental or physical disability or insolvency of any person including you or the debtor ; or (j) changes in the membership, name or business of a firm, partnership, committee or association." 13Clause 4.5(a) is in these terms: "As long as any of the guaranteed money remains unpaid, you may not, without our consent: (a) reduce your liability under this guarantee and indemnity by claiming that you or the debtor or any other person has a right of set-off or counterclaim against us;" 14Also relevant are clause 7.3 and 7.4: "7.3 You must pay us the guaranteed money in full without set-off, counterclaim or deduction. 7.4 However, we may set off against the guaranteed money any money we owe you." 15The defendant argues that, having regard to these provisions, the plaintiff must pay under the guarantee in full and without deduction and has "bargained away" its right to rely on any set-off, counterclaim or cross-demand that would otherwise have been available to it in respect of the defendant's right to receive payment. 16Mr Dowdy of counsel, who appeared for the defendant, took me to passages in the judgments in Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 confirming that, subject to questions of public policy, a person having a right against another person may contract with the first person not to exercise or rely on the right or, by conduct, waive the right. The principle is summarised in a statement by Abbott CJ in Bonner v Wilkinson (1822) 5 B & Ald 682 at 686; 106 ER 1340 at 1341 quoted in the judgment of Toohey J at 468: "It is certainly true that a party cannot , by his own private instrument, defeat the object of an Act of Parliament, but he may thereby waive a provision intended for his own benefit." 17A right to sue for debt or damages is one that a potential plaintiff can renounce by contract with the potential defendant. No issue of "the object of an Act of Parliament" or public policy arises. 18Mr Dowdy also relied on the decision of Bryson J in GE Capital Australia v Davis [2002] NSWSC 1146; (2002) 180 FLR 250 where it was observed that clauses similar to those quoted at paragraphs [12] to [14] above precluded the guarantor setting up cross-claims against the creditor unless and until the money payable by the guarantor to the creditor had been paid. Bryson J put the matter thus (at [97] - [98]): "The jurisdiction of courts and the rights of parties to make claims before courts are not conferred by contract and cannot be ousted by contract. However there is in my opinion no infringement of this principle where parties agree that in stated circumstances a particular sum of money will change hands without the opportunity at the same time to obtain judicial disposition of any other claim between them. In the contract of guarantee there is no infringement of the principle where parties agree to ensure that the guaranteed sum will be paid, and make this the more certain by postponing litigation raising any cross-claim or set-off. The effect in substance of the provisions of the guarantee including cl.8.1(a) is that there is no limit on the right to resort to the courts if the guarantor first meets the obligation the protection of which is the primary purpose of the guarantee and indemnity, and pays the amount of the debt. It is well established in this area of the law that the guarantor can have recourse to securities given by a principal debtor to indemnify himself, but that he cannot do so until he has paid the whole debt. The validity of modifications of what would under the general law be the rights of guarantors is well established. These contractual provisions extend the ways in which the guarantors' remedies are postponed, and extend the creditor's freedom from competition in enforcement of its rights. The condition which must be fulfilled is directly related to the purposes of the agreement." 19In the present case, the provisions quoted at paragraphs [12] to [14] above have the effect that the guarantor must pay the creditor immediately, even if some right of action is maintainable by the guarantor against the creditor; and that there is to be no deduction from the guarantor's payment on account of the availability of such a right of action to the guarantor. The provisions of the contract do not purport to extinguish any right of action that the guarantor has against the creditor. They merely require that payment be made by the guarantor to the creditor in full and without the guarantor's right of action being used as a basis for deduction from the amount paid. The creditor is to be, as Bryson J put it, free from competition in the enforcement of its rights against the guarantor. 20Mr Glasson of counsel submitted on behalf of the plaintiff that, since the provisions work in that way, it follows that, if the plaintiff's claim against the defendant for damages for misleading or deceptive conduct satisfies the "genuine" requirement of the "offsetting claim" definition and is of the requisite amount, the existence of that claim is sufficient to bring the matter within s 459H(1)(b), even though there is no ability to rely on it and to take advantage of it in proceedings commenced by the defendant to recover under the guarantee. In other words, it is submitted, the plaintiff "has an offsetting claim", in the words of s 459H(1)(b), albeit one that cannot be asserted or acted upon in such a way as to bring about reduction (or elimination) of the payment required to be made by the guarantor pursuant to the guarantee. 21I accept that submission; and I do so even though that course is not consistent with the reasoning of Austin J in Jem Developments Pty Ltd v Hansen Yuncken Pty Ltd [2006] NSWSC 1308; (2006) 205 FLR 432 and my own reasoning in Blue Hills Village Management (Liverpool) Pty Ltd v Babcock & Brown International Pty Ltd [2009] NSWSC 87; (2009) 3 BFRA 450. 22For reasons discussed in John Shearer Ltd v Gehl Company (1995) 60 FCR 136, an "offsetting claim" within the s 459H(5) definition may exist even though it could not be pleaded by way of set-off or counterclaim in an action for recovery of the debt the subject of the statutory demand. The debt in the John Shearer case was the engagement of the acceptor of a bill of exchange to pay the face value to the holder on maturity. The asserted "offsetting claim" was a claim by the acceptor against the holder for damages for misleading or deceptive conduct or for breach of contract. The court (von Doussa J, Hill J and Tamberlin J) noted the well-established principle that unliquidated cross-claims cannot be relied upon by way of extinguishing set-off against a claim against the acceptor of a bill of exchange. The court then said: "It does not follow from the rule or its underlying rationale, that a claim, as alleged on behalf of Shearer, could not constitute an 'off-setting claim' as that expression is defined in s 459H. All that follows from the rule (subject to any exception relevant to cases where s 52 has been breached) is that if Shearer [the acceptor of the bill] were sued by Gehl [the holder] and sought to set up a cross-claim or cross-demand for an unliquidated amount based either upon s 52 of the Trade Practices Act or a claim for breach of an implied term, a court would not stay judgment on the proceedings to recover moneys owing under the bills until the hearing of any cross-claim or cross-demand. Summary judgment would be ordered upon proof of the bills, no stay of execution would be granted and the cross-claim or cross-demand would proceed for hearing in due course. But to say that is not to say that Shearer has no cross-demand." 23In both Jem Developments Pty Ltd v Hansen Yuncken Pty Ltd and Blue Hills Village (Liverpool) Pty Ltd v Babcock & Brown International Pty Ltd , it was decided, in effect, that if $X is owing, due and payable by A to B in circumstances where, as a matter of contract or for some other reason, A could not successfully assert in debt recovery proceedings brought by B a right to set off a sum of $Y owed by B to A, then A has no "offsetting claim" for the purposes of s 459H. As White J pointed out in Property Builders Pty Ltd v Carlamax Properties Pty Ltd [2011] NSWSC 1068, however, that will be so only if the effect of the contract is to extinguish A's claim for $Y against B, as distinct from merely making it unavailable as a basis for eliminating or reducing A's obligation to pay if and when B sues A for the $X debt. 24John Shearer Ltd v Gehl Company is a decision of the Full Federal Court. It was not drawn to the attention of the judges of this court sitting at first instance in Jem Developments and Blue Hills Village . To the extent that those cases proceeded on the basis that there is no "offsetting claim" if the claim relied on by the company could not be pleaded by way of set off or counterclaim in an action for recovery of the debt the subject of the statutory demand, they introduced into the definition of "offsetting claim" an element that is, in truth, not there. It is the existence of a genuine claim by way of counterclaim, set-off or cross-demand that is relevant, not the ability to use it as a defence in an action for recovery of the demanded debt. As White J noted in Property Builders (and had earlier observed in Seaham Air Pty Ltd v Australian Aerospace Pty Ltd [2006] NSWSC 1241), the inclusion of "cross-demand" in the definition of "offsetting claim" shows that the concept extends beyond claims that can be deployed by way of set-off or counterclaim in debt recovery proceedings. "Cross-demand" is a wide term apt to include a claim that a defendant can assert as an answer to the claim made against him, a cross-action of counterclaim maintainable in the proceedings in which the claim against him is advanced and a claim that can only be pursued in separate proceedings: see the discussion in McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50 and in Ozone Manufacturing Pty Ltd v Deputy Commissioner of Taxation [2006] SASC 91; (2006) 94 SASR 269 at [42] to [45]. 25Adoption of the wide term "cross-demand" in the particular statutory context is understandable. The purpose of the statutory demand process is to test whether a company's failure to pay a particular debt should be regarded as a reliable indicator of likely inability to pay debts generally so that, in proceedings for winding up on the insolvency ground, it should be for the company to prove that it is solvent rather than for the plaintiff to be put to proof of actual insolvency. The reliability of the indicator is undermined if there is a genuine dispute as to the existence or amount of the demanded debt. In such a case, the inference that failure to pay one debt is a product of inability to pay debts generally is not safe. Nor is it safe where the company shows that it has an equal or greater claim against the demanding creditor, whether or not the equal or greater claim could be litigated in proceedings in which the demanding creditor sought to recover the demanded debt. 26I am accordingly of the opinion that the provisions of the guarantee set out at paragraphs [12] to [14] above do not remove the ability of the plaintiff to seek, pursuant to s 459H(1)(b), to have the statutory demand set aside on the basis of the existence of a genuine claim that it has against the defendant. 27I turn, therefore, to the substance of the plaintiff's s 459H(1)(b) case. FOB is a property developer. It undertook a major resort project in Queensland and obtained substantial loan facilities from the defendant to enable it to do so. The maturity of the facilities was extended at least once but all moneys ultimately became payable by BOS on the revised maturity date of 19 January 2009. Before that date, FOB - and, more particularly, its principal Mr O'Brien - had conceived a new and different proposal for the development. 28Construction was completed in late 2008. Mr O'Brien was, by then, working on a plan to form a private investment fund based in the Middle East and to raise finance from that source to fund on-going plans and to pay out the debt owed to the defendant. This was in conjunction with a proposal that a Dubai group would operate and manage the resort. 29Both before and in the period immediately after the FOB debt became payable in January 2009, Mr O'Brien wrote to the defendant on several occasions requesting an extension of the facilities and explaining progress with his plans for the resort. The bank officers with whom he dealt made submissions to the defendant's credit department and told Mr O'Brien on several occasions that a decision was awaited. Ultimately, however, the defendant did not grant any extension or additional facility to FOB. The defendant proceeded to appoint receivers under securities held from FOB, sued Mr O'Brien under the guarantee given by him and served on the plaintiff the statutory demand to which these proceedings relate. 30Mr O'Brien alleges a number of representations (almost wholly oral) made by officers of the defendant to him, including: (a) in September 2008, that the defendant would provide the necessary funding to launch the Middle East investment fund and extend facilities as sought; (b) in September 2008, that the defendant had no concerns in respect of the loan facilities provided to FOB; (c) in October 2008, that the defendant agreed with FOB's strategy for the development and would roll over loan facilities; (d) in December 2008, that the defendant still intended to provide further funding to FOB before Christmas 2008 or by early January 2009; (e) in February 2009, that the defendant would roll over residual loan facilities to provide further funding to protect the defendant's own interests; also that the defendant would provide finance to pay ongoing costs of the development; (f) in February 2009, that further funding would be forthcoming; (g) in February 2009, that funding had been approved and that remaining paperwork was merely a formality; (h) in February 2009, that documents regarding further funding had been sent to Perth for "formal sign-off" within three days; (i) in February 2009, that funding would be provided in the first week of March 2009; (j) in March 2009, that the defendant supported the arrangement with the Dubai party and would roll over banking facilities as previously agreed. 31Mr O'Brien says that, as a result of these representations, he and FOB were led to believe that the defendant would roll over the facilities beyond January 2009 and provide further funding. He further says that he and FOB, relying on that belief, did not seek alternative sources of funding to refinance the debt due in January 2009 - something they would have done had they not been of the state of mind induced by the representations. 32It is alleged that FOB suffered loss or damage by reason of the making of the alleged representations and that the making of those representations contravened s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) or s 52 of the Trade Practices Act 1974 (Cth) as in force at the relevant time. Furthermore, it is said, each of Mr O'Brien and the plaintiff, as a guarantor of the obligations of FOB, suffered loss or damage through the making of demands under the relevant guarantee and the crystallisation of the liability as guarantor, something that would not have happened but for the representations. 33The question in these proceedings is whether the claim the plaintiff seeks to articulate by reference to the representations alleged by Mr O'Brien is "genuine" in the sense that it is "arguable on the basis of facts asserted with sufficient particularity to enable the court to determine that the claim is not fanciful". This is the formulation by Palmer J in Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 at [18]; see also Ozone Manufacturing Pty Ltd v Deputy Commissioner of Taxation (above) at [46], [47]. 34In the particular circumstances, the viability of the claim will ultimately come down to issues of credibility. Mr O'Brien has given his account of relevant conversations with bank officers. There is, at this stage, no evidence from those officers. It also seems tolerably clear that the officers with whom Mr O'Brien spoke were dependent on decisions of the defendant's credit department and that Mr O'Brien not only knew that but also knew that the officers in question were awaiting the credit department's decision. 35If and when the matter is fully litigated, this last matter might make it difficult to establish a case against the defendant. But that is not the issue here. The only question now is whether the claim is "genuine" in the sense referred to above, not whether it is a strong case. That question must be answered in the affirmative. 36The account I have given of the foreshadowed misleading and deceptive conduct claim alleged by the plaintiff on the present application is taken largely from a cross-claim filed by Mr O'Brien in the proceedings in which the defendant sues on the guarantee given by him. I am satisfied, however, that the basis of the plaintiff's claim is sufficiently outlined (although in less detail) in Mr O'Brien's affidavit of 5 August 2011 filed and served under s 459G(3) in support of the present application. 37That leads me to the next matter and to the defendant's contention that that affidavit is deficient in a way that means that the plaintiff cannot succeed upon the present application. 38Where a company seeking to have a statutory demand set aside relies on the s 459H(1)(b) ground, the supporting affidavit filed and served within the period specified in s 459G(2) and (3) must not only show that the alleged offsetting claim is of the "genuine" in the sense already mentioned but also enable the court to see the "amount" of the offsetting claim. Otherwise, an element made essential by the definition of "offsetting total" in s 459H(2) is lacking and the affidavit is not a "supporting affidavit" as referred to in s 459G(3). The need for quantification has been referred to in a number of cases. In Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638; (2005) 23 ACLC 1266, for example, Gzell J said (at [26], [28]): "In my view, the task required of a court by the Corporations Act 2001 (Cth), s 459H(2) requires evidence to be put on within the statutory 21-day period enabling the Court to make a determination of the offsetting total. That means that some evidence of quantum must be contained in the affidavit to enable the Court to take that course. . . . It was submitted that an affidavit in support that is more than a mere assertion but less than final proof is insufficient. In my view it is insufficient if it does not contain material from which a Court ... can make an estimate of the amount of an offsetting claim." 39As this passage makes clear, the s 459G(3) affidavit does not need to particularise the amount to the last dollar and cent; but it must contain sufficient material - rising beyond mere assertion - to allow an estimate to be made. 40Mr Dowdy submitted that the plaintiff has not fulfilled this requirement. He raised the matter by way of objection to passages in Mr O'Brien's subsequent affidavit of 21 October 2011 going to the matter of quantification. The main objection was not as to admissibility of parts of the 21 October 2011 affidavit according to the rules of evidence (although some points of that kind were raised). It was, rather, by way of submission as to the need for a "supporting affidavit" to be filed and served within the relevant period of 21 days and the inability of a plaintiff to rely on the content of some later affidavit to repair a deficiency depriving the earlier affidavit of the character of a "supporting affidavit": Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452; Energy Equity Corporation Ltd v Sinedie Pty Ltd [2001] WASCA 419; (2001) 166 FLR 179. 41Mr Dowdy submitted that, in the area of quantification, Mr O'Brien's affidavit of 5 August 2011 suffers from such a deficiency. The only explicit statement in that affidavit concerning the amount of the offsetting claim is in paragraph 60: "On the basis of these grounds, Bakota disputes that the Alleged Debt is owed, or alternatively, claims an offsetting claim for the full value of the Alleged Debt." 42The reference to the "Alleged Debt" is, according to paragraph 15 of the affidavit, a reference to the debt of $122,217,523.74. The statement in paragraph 60 is thus a statement that the offsetting claim is in the sum of $122,217,523.74, being a sum equal to that demanded by the statutory demand. 43It is true that the affidavit does not articulate any process of reasoning leading to a conclusion that the damages based on the alleged misrepresentations by the defendant would be equal to the amount of the guaranteed debt. But the basis for the conclusion may be inferred from the overall circumstances stated in the affidavit. Had the defendant not made representations giving rise to an expectation that it would roll over the loan facilities (causing FOB not to pursue possibilities of obtaining alternative finance in order to pay out the defendant), FOB would have obtained replacement finance elsewhere and thereby avoided a presently enforceable obligation to pay the defendant on 19 January 2011; the plaintiff, in turn, would not have incurred, as guarantor, an equivalent presently enforceable obligation to pay the defendant; the incurring of that presently enforceable obligation by the plaintiff was therefore caused by the defendant's representations and FOB's reliance on them; and the plaintiff will suffer damage by having to make under the guarantee a payment that it would not have had to make had the defendant not made the representations. 44As I have said, I am satisfied that this reasoning can be inferred from the content of the affidavit as a whole, including its description of the parties' relationship, the surrounding circumstances and the point the relationship had reached. I am also satisfied that, although aspects of it might be controversial, it of sufficient prima facie cogency, in conjunction with the statement of amount in paragraph 60 of the affidavit of 5 August 2011, to qualify as sufficient articulation of the quantification of the offsetting claim. That affidavit is accordingly a "supporting affidavit" in the s 459G(3) sense, including as to the matter of quantification of the offsetting claim. 45In the result, the plaintiff has succeeded in showing that, for the purposes of the formula in s 459H(2), the "admitted total" is equal to the "offsetting total", so that the "substantiated amount" is zero. It follows that the court must, in accordance with s 459H(3), make an order setting aside the demand. The orders are therefore as follows: 1. Order that the statutory demand dated 14 July 2011 served on the plaintiff by the defendant be set aside. 2. Order that the defendant pay the plaintiff's costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 October 2011