Anderson Formrite Pty Ltd v Rapid Metal Developments (Australia) Pty Ltd

[2002] WASC 232

ANDERSON FORMRITE PTY LTD -v- RAPID METAL DEVELOPMENTS (AUSTRALIA) PTY LTD [2002] WASC 232

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASC 232
Case No:	COR:124/2002	Heard:	9 SEPTEMBER 2002
Coram:	MASTER SANDERSON	Delivered:	3/10/02
No of pages:	14	Judgment Part:	1 of 1
Result:	Application granted - Demand set aside
Category:	B
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Parties:	ANDERSON FORMRITE PTY LTD (ACN 097 507 652) RAPID METAL DEVELOPMENTS (AUSTRALIA) PTY LTD (ACN 004 304 447)
Catchwords:	Corporations Act Application to set aside statutory demand Turns on own facts
Legislation:	Corporations Act, s 459H, s 459G
Case References:	Aspermont Ltd v Robash Pty Ltd (1997) 16 ACLC 485 D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1997) 15 ACLC 1794 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 13 ACLC 1572 Eden Bay Pty Ltd v Bennett & Co (1997) 15 ACLC 1634 Energy Equity Corporation v Sinedie Pty Ltd [2001] WASCA 419 Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51 Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (In Liq) [2001] WASCA 360 Mibor Investments Pty Ltd v Commonwealth Bank (1993) 11 ACLC 1062 Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409 Webster v Lampard (1993) 177 CLR 598 Edge Technologies Ltd v Lite-On Technology Corp [2000] NSWSC 471 Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 15 ACLC 985 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669 Re Louisbridge Pty Ltd (1994) 2 QdR 144 Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACSR 341 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 Wylie & Skene Pty Ltd v Dalefield Holdings Pty Ltd [2000] WASC 26

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : ANDERSON FORMRITE PTY LTD -v- RAPID METAL DEVELOPMENTS (AUSTRALIA) PTY LTD [2002] WASC 232 CORAM : MASTER SANDERSON HEARD : 9 SEPTEMBER 2002 DELIVERED : 3 OCTOBER 2002 FILE NO/S : COR 124 of 2002 BETWEEN : ANDERSON FORMRITE PTY LTD (ACN 097 507 652)

Plaintiff

AND

RAPID METAL DEVELOPMENTS (AUSTRALIA) PTY LTD (ACN 004 304 447)
Defendant

Catchwords:

Corporations Act - Application to set aside statutory demand - Turns on own facts

Legislation:

Corporations Act, s 459H, s 459G

Result:

Application granted - Demand set aside

(Page 2)

Category: B

Representation:

Counsel:

Plaintiff : Mr M D Howard
Defendant : Mr N W McKerracher & Ms N Van Der Kwast

Solicitors:

Plaintiff : Minter Ellison
Defendant : Dwyer Durack

Case(s) referred to in judgment(s):

Aspermont Ltd v Robash Pty Ltd (1997) 16 ACLC 485
D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1997) 15 ACLC 1794
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 13 ACLC 1572
Eden Bay Pty Ltd v Bennett & Co (1997) 15 ACLC 1634
Energy Equity Corporation v Sinedie Pty Ltd [2001] WASCA 419
Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452
John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250
Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (In Liq) [2001] WASCA 360
Mibor Investments Pty Ltd v Commonwealth Bank (1993) 11 ACLC 1062
Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409
Webster v Lampard (1993) 177 CLR 598

Case(s) also cited:

Edge Technologies Ltd v Lite-On Technology Corp [2000] NSWSC 471
Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 15 ACLC 985


(Page 3)

Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669
Re Louisbridge Pty Ltd (1994) 2 QdR 144
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACSR 341
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
Wylie & Skene Pty Ltd v Dalefield Holdings Pty Ltd [2000] WASC 26

(Page 4)

1 MASTER SANDERSON: This is an application to set aside a statutory demand. It is brought under the provisions of s 459H of the Corporations Act ("the Act") and falls to be determined under the provisions of s 459G of the Act. The way in which the matter was argued raised two matters which are frequently at issue in applications of this nature. Because of the prevalence of these two issues in applications to set aside a statutory demand it is appropriate if I say something in detail about these issues. Before doing so I should provide some factual background to this action.

2 On 8 April 2002 the defendant served on the plaintiff a statutory demand for an amount of $2,695,381.89. The plaintiff is, as its name would suggest, a corporation which provides formwork necessary for concrete structures in the building industry. The plaintiff was awarded a subcontract to undertake formwork on a building project located at 240 St George's Terrace, Perth. This project is known as the "Woodside building". The head contractor is Baulderstone Hornibrook. After the plaintiff was awarded the subcontract it entered into negotiations with the defendant for the supply of certain equipment used for the formwork. In broad terms, the defendant was to supply all of the equipment necessary to allow the formwork to be constructed and the plaintiff was to actually construct the formwork onto which the concrete was to be poured. I should emphasise that the position was far more technical than this brief description indicates, but for present purposes, this rough description will suffice. The defendant says that the plaintiff did not make payment of amounts due under its contract with the plaintiff and it accordingly served the statutory demand.

3 The application to set aside the statutory demand was filed on 26 April 2002. It was supported by two affidavits, one sworn by Joe Passione ("Passione") on 26 April 2002 and the other sworn by Gordon Douglas Bell ("Bell"), also on 26 April 2002. Both the application and the affidavits of Passione and Bell were served on the defendant within 21 days of the date of the service of the statutory demand.

4 Thereafter there was an avalanche of affidavit material. There were further affidavits of Passione filed - one sworn 6 May 2002, another sworn 7 June 2002. The second of these affidavits ran to 450 pages, although, it must be said, most of the affidavit was taken up with annexures. They also filed an affidavit of Norman Gordon Pask ("Pask") sworn 8 July 2002. For their part the defendant filed an affidavit of Hugh McDonald ("McDonald") sworn 27 June 2002, an affidavit of Jeff Dibble ("Dibble") sworn 27 June 2002 and an affidavit of Chris Wood ("Wood") sworn 31 July 2002. There were other affidavits filed by the parties.

(Page 5)

During the course of the hearing each of the parties tendered further affidavits. In the end, the affidavit material ran to well over 1000 pages. All of this material was directed at the deceptively simple question of whether there was a genuine dispute between the parties as to the debt the subject of the demand.

5 As I have indicated above, the way the application was argued gave rise to two real issues. The first was the extent to which the plaintiff was limited in its application to matters which had been raised in the affidavits in support of the application to set aside the statutory demand. Counsel for the defendant submitted that much of the affidavit material filed after the two initial affidavits sworn by Passione and Bell, and filed with the application, went beyond matters raised in the two earlier affidavits and therefore could not be relied upon in the context of the application. The argument put by counsel was developed in this way.

6 The starting point is s 459G. That section reads as follows:

"459G(1) [Application to set aside statutory demand] A company may apply to the Court for an order setting aside a statutory demand served on the company.

459G(2) [Time limit on application] An application may only be made within 21 days after the demand is so served.

459G(3) [Requirements for effective application] An application is made in accordance with this section only if, within those 21 days:


(a) an affidavit supporting the application is filed with the Court; and

(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company."

7 It is well established that unless an applicant complies strictly with the provisions of s 459G, no application is properly on foot and the jurisdiction of the Court to set aside the statutory demand is not enlivened: see David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 13 ACLC 1572 per Gummow J at 1579. The need to comply strictly with the requirements of s 459G is illustrated by the decision of Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409. In that case a plaintiff served upon a defendant a copy of the originating process seeking

(Page 6)

to set aside a statutory demand and what purported to be a copy of an affidavit in support of the application. In fact, inadvertently, four pages of one of the annexures to the affidavit was omitted. As soon as the omission was brought to the attention of the plaintiff's solicitors they provided copies of these pages to the defendant. There was no suggestion that the defendant had suffered any prejudice as a consequence of the plaintiff's failure to serve an exact copy of the affidavit. Nonetheless, the Court of Appeal took the view that the requirements of s 459G(3) were strict - what had to be served was a copy, meaning an exact copy, of the supporting affidavit. As that had not been done, the application was not properly on foot and the Court did not have jurisdiction to set aside the statutory demand.

8 Not infrequently, the question arises as to whether what purports to be "an affidavit supporting the application" (see s 459G(3)(a)) can in fact be so described. The issue appears to have first arisen in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452. The plaintiff had filed an application to set aside the statutory demand and had purported to file an affidavit in support of the application which, by any measure, was remarkably succinct. It ran to four paragraphs and apart from identifying the deponent, annexing a copy of the statutory demand and claiming there was a genuine dispute between the parties, the affidavit had only one operative paragraph. It was in the following terms:

"The respondent agreed to a compromise, a terms payment and to forebear to sue in relation to the alleged debt, which is disputed. I verily believe judgment was entered erroneously and have given instructions for an application to be made to set aside the judgment."

9 Sundberg J, in the course of his reasons, set out what he regarded as the minimum requirements for an affidavit in a genuine dispute case. His Honour said (at 459):

"In order to be a 'supporting affidavit', an affidavit must say something that promotes the company's case. An affidavit which merely says 'I am a director of the company but am too busy at present to make a full affidavit, and I will do so later' would not support the application. It would in no way advance, further or assist the company's cause, which is to have the notice set aside. At the other extreme, the affidavit need not detail, in admissible form, all the evidence that supports the

(Page 7)

contention of a genuine dispute: …. That evidence must be available at the hearing of the application to set aside, because that application is for final and not interlocutory relief. …

In a s 459H(1)(a) case, the affidavit must in my view disclose facts showing there is a genuine dispute between the parties. A mere assertion that there is a genuine dispute is not enough. Nor is a bare claim that the debt is disputed sufficient. It follows from the fact that the affidavit need not go into evidence, which is the customary function of an affidavit, that it may read like a pleading.

An affidavit which exhibits an exchange of correspondence between the parties or between their solicitors from which it appears that a claim is made and rejected for reasons given can qualify as a supporting affidavit. And an affidavit verifying the pleadings in an action may qualify.

I am thus unable to accept the respondent's submission that the affidavit must contain sufficient material to make out a case under s 459H. In reply, that submission was somewhat retreated from. It was said that the affidavit must, as a minimum, contain a statement of the material facts on which the application intends to rely to show a genuine dispute - it might read more like a pleading than a story. That accords with what I consider to be the minimum requirement."

10 The ratio in the Graywinter case is straightforward. Section 459G(3) requires "an affidavit supporting the application". If an affidavit filed does not satisfy that description then the jurisdiction of the Court is not enlivened and no application is on foot. The question which has arisen subsequent to Graywinter is the extent to which a party seeking to set aside a statutory demand can rely on affidavit evidence which goes beyond matters raised in the initial application in support of the application. This question has been considered in a number of cases, including D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1997) 15 ACLC 1794, Eden Bay Pty Ltd v Bennett & Co (1997) 15 ACLC 1634, Aspermont Ltd v Robash Pty Ltd (1997) 16 ACLC 485 and Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (In Liq) [2001] WASCA 360.

11 The approach that has emerged from these and other cases is that if a matter is not raised in the initial affidavit filed in support of the

(Page 8)

application, then it cannot be raised in a subsequent affidavit. This approach reached its apogee in the decision of Energy Equity Corporation v Sinedie Pty Ltd [2001] WASCA 419. Wallwork J put the position as follows (at 29):

"In my view it now seems to be accepted that an affidavit filed outside the 21 day period which raises a new ground or grounds to set aside a statutory demand (as opposed to an affidavit which expands on grounds in an earlier affidavit which has satisfied the threshold test) cannot be used in an application of this nature. The Corporations Law operates throughout Australia and uniformity of approach is desirable."

12 There is no question but that this decision is binding authority and is to be followed in determining this application. I acknowledge, as was submitted by counsel for the plaintiff, that it is difficult to see how this rather rigid approach is required by the wording of s 459G and the David Grant decision. The first question on any application is whether or not jurisdiction has been enlivened. If it is found that the plaintiff has filed an affidavit supporting the application, then the Court has jurisdiction to deal with the originating process. How it goes about dealing with the application is not covered by s 459G, any other provision of the Corporations Act or the Corporations Rules. There may, of course, be a sound basis for ensuring that the basis of the application is limited to those matters raised in the supporting application. The avoidance of an explosion of affidavit material is one good reason. But it is important to note, I think, that what has grown up is a rule of procedure. I do not understand it to be said either in the Energy Equity case or elsewhere, that there is no jurisdiction to set aside a statutory demand upon grounds not raised in the supporting affidavit. Certainly I can find no support for such a proposition in s 459G, in the David Grant decision or elsewhere in the authorities.

13 It is also worthy of note that what the supporting affidavit must do is set out the basis upon which the debt is disputed. Sundberg J, in Graywinter, anticipates the affidavit containing something in the nature of a pleading. This point was taken up by Anderson J in remarks his Honour made in Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51. His Honour said (at [1]):

"… As to the sufficiency of the affidavit in support of the application to set aside the statutory demand, I must say I do not see why a debtor faced with a statutory demand from a stranger

(Page 9)

who claims to be an assignee does not sufficiently dispute liability to the stranger by stating a 'genuine bona fide belief' that the deed of assignment 'may be void and of no legal force or effect', which is the statement made by Mr Farbenbloom in his supporting affidavit of 14 December 2000. That is more than a mere assertion that there is a genuine dispute. It states the basis of the dispute. A little more might have been required had the debtor been in possession of the deed of assignment. So far as appears, neither Mr Farbenbloom nor the debtor Predella Pty Ltd was in possession of the deed of assignment. The affidavit is to be understood as saying 'the assignment is unenforceable. Particulars will be given after discovery'. That would be a good pleading, disclosing a good defence in the sense that it is more than a bare denial."

14 It is important to note then what a plaintiff must do to satisfy the requirements that it file and serve an affidavit supporting the application. The affidavit must set out the grounds upon which the plaintiff intends to rely but at a later date those grounds can be expanded by further evidence. The authorities do not suggest that the scope of this further evidence is in any way to be limited. So long as the evidence can be related back to one or other of the grounds mentioned in the supporting affidavit, it is admissible and can be relied upon by the plaintiff. In some ways this latter evidence can be equated with particulars of a pleading. Particulars cannot go beyond the scope of the pleaded material facts. The evidence in a s 459G application cannot go beyond the scope of the grounds relied upon in the supporting affidavit.

15 Turning then to this case, in his affidavit of 26 April 2002 Pissione says (at par 14):

"The disputes have generally related to:

14.1 the amount of money payable under the contract in relation to:


(a) the hire of equipment; and

(b) the supply of the table form system; and


14.2 the defendant's delay or failure to meet obligations under the contract in relation to:

(a) the provision of a work method statement; and

(Page 10)

(b) the provision of training; and

14.3 The design faults relating to the table form system, the inability of that system to meet the plaintiff's requirements, and the defendant's failure to certify that system."

16 In the following 60 paragraphs of his affidavit, Pissione goes on to expand upon these grounds. In his affidavit of 26 April 2002 Bell refers to the same disputes (see par 9). He too goes on to expand upon the nature of the dispute. In my view, in neither case can it be said that the affidavits are inadequate to satisfy the requirements that there be an affidavit supporting the application. In my view the jurisdiction to deal with the application is enlivened.

17 In his affidavit of 7 June 2002 at pars 88 through to 93.17, Pissione provides a summary of matters which he says are in dispute between the parties and which taken together, establish a genuine dispute. It was submitted on behalf of the defendant that some of these matters were not raised in the supporting affidavits of 26 April 2002 and cannot therefore be relied upon to set aside the statutory demand. Given the way the submissions were put on behalf of the defendant it is appropriate if I quote what is said by Pissione in pars 88 through to 93.17:

"88. To date, the plaintiff has made a total of $694,170 in payments to the defendant in relation to the hire and purchase contracts. I annex cheque butts and a ledger printout relating to those payments as 'JP43' to this supplementary affidavit.

89. The plaintiff disputes the contract price and the terms of the contract in relation to the purchase of the table form system and the hire of the equipment. The plaintiff is only potentially liable for a maximum of $960,000 for the table form system. It was agreed that this amount would relate to the entire life of the works.

90. The plaintiff disputes the variations claimed by the defendant totalling $197,739.

91. The plaintiff disputes the amount claimed with respect to hire of equipment as the defendant has failed to account for the agreed period of off-hire and has continued to

(Page 11)

charge at the normal rate. The disputed amount with respect to off-hire is $312,211.

92. The plaintiff argues that the hire charges were excessive and should, according to industry practice, be discounted by between 60 and 70 per cent, the total additional cost being between $560,000 and $740,000 respectively.

93. The plaintiff has also incurred various losses that were materially caused by the acts or defaults of the defendant:


93.1 Liquidated damages relating to the Knoxville Substratum Works in the sum of $75,000.

93.2 Potential liquidated damages relating to the Knoxville Substratum Works in the sum of $70,000.

93.3 Costs of additional tables in the sum of $169,994.

93.4 Additional labour costs associated with inefficiencies with the tables in the sum of $1,328,100.

93.5 Labour costs associated with the installation of additional temporary propping in the sum of $12,150.

93.6 Labour costs associated with the replacement of damaged parts in the sum of $4,500.

93.7 Costs of hiring additional temporary props in the sum of $10,973.

93.8 Additional labour costs associated with the failure to account for multi-storey loads in the sum of $14,580.

93.9 Additional labour costs associated with the failure to account for post stressing loads in the sum of $7,290.

93.10 Additional costs for prop hire in relation to the failure to account for post stressing loads in sum of $618.

(Page 12)

93.11 Additional labour costs associated with the failure to account for stacking loads in the sum of $810.

93.12 Additional costs for prop hire in relation to the failure to account for stacking loads in the sum of $463.

93.13 Deductions from progress payments in the sum of $1,060,632.

93.14 Loss of bank guarantees in the sum of $625,000.

93.15 The difference between industry standard productivity and labour costs and the plaintiff's actual labour costs in the sum of $1,328,100.

93.16 Potential unspecified damages to Baulderstone under the formwork subcontract.

93.17 The profits lost on the project of approximately $2,050,000."

18 There can be no dispute that some of the matters raised by Pissione in these paragraphs of his later affidavit fall neatly within the disputes he referred to in par 14 of his earlier affidavit. For instance, pars 89 through to 92 relate to the amount of money payable under the contract in relation to the hire of equipment and the supply of the table form system. That is a matter covered in par 14.1 of the affidavit of 26 April 2002. The matters raised in par 93 are somewhat more difficult. Nowhere in par 14 of the affidavit of 26 April 2002 is there a mention of losses caused by the acts or defaults of the defendant. Nonetheless, it seems to me that such claims are so closely related to the matters raised by par 14 of the earlier affidavit that they can be relied upon by the plaintiff. By par 14.2 of the earlier affidavit, Pissione raises the issue of the defendant's alleged delay or failure to meet obligations under the contract. Clearly if there was such failure or delay, that would have an effect on the plaintiff. That affect might well be that the plaintiff would incur losses either because it was in breach of its subcontract with the head contractor, or otherwise. In my view it is not a new matter which was not raised in the supporting affidavit. I am therefore satisfied that not only is the application properly on foot, but that the affidavit material filed subsequent to the supporting affidavit is admissible.
(Page 13)

19 The second point that arises in this case may be summarised in this way. The defendant says that prior to the service of the statutory demand, the plaintiff had made no complaint about the services rendered by the defendant and had not suggested that the debt the subject of the statutory demand was not due and owing. Furthermore, it was submitted that when viewed objectively, none of the documents in the possession of the parties gives any hint of the matters which the plaintiff now says constitute a genuine dispute. The defendant says, in effect, that the plaintiff's claims should be seen as matters of recent invention. That being so, the plaintiff's witnesses should not be seen as credible and any dispute could not properly be viewed as genuine.

20 In this case, the position can be illustrated in the following way. In par 86.1(d) of his affidavit of 7 June 2002, Pissione claims that the plaintiff was 13 weeks behind schedule in its programme with the head contractor and he says that 11 weeks were attributable to the failure of the defendant to supply equipment or the supply of faulty equipment, and other defaults on the part of the defendant. The defendant points to the fact that there was no complaint about delay prior to the service of the demand. Thus, it is said, the complaints made by Pissione lack credibility and should be ignored. This issue was dealt with by Hayne J (then a Judge of the Supreme Court of Victoria) in Mibor Investments Pty Ltd v Commonwealth Bank (1993) 11 ACLC 1062. His Honour said (at 1064):

"Whether the defences can be described in the sense used in the bank's submissions as 'recent inventions' does not in my view bear upon the existence in this matter of a genuine dispute. That is to be judged according to whether there is now a genuine dispute about the alleged debt - not according to how recently that dispute may have arisen."

21 What is, of course, being suggested by the defendant is that the plaintiff's witnesses are not to be believed on their oath because the genuine dispute was not alluded to prior to the service of the statutory demand. In my view the evidence submitted on behalf of a plaintiff on an application to set aside a statutory demand must be treated in much the same way as evidence produced by a defendant in a summary judgment application. In circumstances where the evidence is not inherently incredible and given that no cross-examination has taken place, truth must be assumed: see Webster v Lampard (1993) 177 CLR 598 per Mason CJ, Deane J and Dawson J at 604. In my view there is simply no other way of dealing with the matter. It is not to the point to say that there is a dispute on the evidence and the defendant's witnesses are to be preferred over the

(Page 14)

plaintiff's witnesses. The question is whether there is a genuine dispute. This cannot allow for the evaluation in any real sense of the evidence led by the plaintiff. Unless that evidence is inherently incredible, the conclusion must be that there is a dispute between the parties and that it is genuine.

22 That is not to say that in every case, where a party leads evidence disputing a debt, the statutory demand must be set aside. A cursory examination of the evidence may well establish that even if the plaintiff's witnesses are believed, there can be no possible defence to the defendant's claim of the plaintiff's indebtedness. But where there is a dispute between the parties which requires a determination of which of the witnesses is to be believed, that dispute cannot be resolved on an application to set aside a statutory demand.

23 In this case I do not propose to undertake a detailed examination of all of the evidence led by the plaintiff and the defendant. As I have said, the affidavit material is voluminous and the issues between the parties are complex. It will suffice if I say that I am satisfied that there is, on the evidence, a genuine dispute as to the indebtedness of the plaintiff to the defendant. In this context it is relevant to note that this is a dispute about a subcontract agreement. The precise nature of the contractual arrangement between the parties and who said what to whom, and when, are at issue. It was optimistic of the defendant to anticipate that it could resolve its differences with the plaintiff through the statutory demand procedure. Building disputes are notorious for their mind-numbing complexity and it must be a rare case where a challenge to a party's claim will not be seen as giving rise to a genuine dispute: see John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 per Young J at 254.

24 In my view there is a genuine dispute in relation to the defendant's claim and the statutory demand ought be set aside. I will hear the parties as to the precise form of orders and as to costs.