Dana Corporation v Unidrive Pty Limited

Dana Corporation (the applicant) sought to set aside a statutory demand issued by Unidrive Pty Limited (the respondent). The dispute concerned whether Unidrive had a genuine dispute with Dana regarding the debt claimed in the statutory demand, or whether Dana had a genuine counterclaim, set-off or cross-demand against Unidrive that exceeded the amount of the debt. The application was heard in the Supreme Court of Victoria.

The primary legal issue before the Court was whether there was a "genuine dispute" as to the existence of the debt, or a "genuine counterclaim, set-off or cross-demand" within the meaning of section 459H(1) of the Corporations Act 2001 (Cth). This required the Court to assess the evidence presented by Dana to determine if it raised a real question as to the existence of the debt or the validity of the counterclaim.

Justice Forno considered the evidence regarding the alleged defects in the goods supplied by Unidrive and the subsequent costs incurred by Dana in rectifying those defects. His Honour applied the principles established in cases such as *Haleem Pty Ltd v. K. & S. Industries (SA) Pty Ltd* and *Southern Cross Commodities Pty Ltd v. K. & S. Industries (SA) Pty Ltd*, which require a genuine dispute to be based on substantial grounds and not merely a fanciful or vexatious assertion. The Court found that Dana had adduced sufficient evidence to demonstrate a genuine dispute concerning the quality of the goods and a genuine cross-demand for damages arising from those alleged defects, which exceeded the amount claimed in the statutory demand.

Consequently, the Court ordered that the statutory demand issued by Unidrive Pty Limited be set aside.