DOF Subsea Australia Pty Ltd v Rees

[2025] WASC 26

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   DOF SUBSEA AUSTRALIA PTY LTD -v- REES [2025] WASC 26

CORAM:   HILL J

HEARD:   28 JANUARY 2025

DELIVERED          :   28 JANUARY 2025

PUBLISHED           :   31 JANUARY 2025

FILE NO/S:   COR 188 of 2024

BETWEEN:   DOF SUBSEA AUSTRALIA PTY LTD

Plaintiff

AND

PAUL REES

Defendant

Catchwords:

Practice and procedure - Application for discovery - Defendant seeks copies of documents relevant to receipt of statutory demand by plaintiff, service of the application on the defendant, and the alleged debt - Turns on own facts

Corporations - Application for mandamus - No grounds for prerogative writ - Turns on own facts

Legislation:

Corporations Act 2001 (Cth) s 110D(6)(b), s 459G

Result:

Applications refused

Category:    B

Representation:

Counsel:

Plaintiff	:	Mr T Langdon
Defendant	:	In Person

Solicitors:

Plaintiff	:	Corrs Chambers Westgarth
Defendant	:	In Person

Cases referred to in decision:

Hardel Pty Ltd v Burrell & Family Pty Ltd [2009] SASC 77; (2009) 103 SASR 408

R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; (1933) 50 CLR 228

Re Refugee Review Tribunal and Anor, Ex parte AALA [2000] HCA 57; (2000) 204 CLR 82

Re Wollongong Coal Ltd [2014] NSWSC 1711

Robowash Pty Ltd v Robowash Finance Pty Ltd [2001] WASC 112

Thorlock International Ltd v Keenfern Pty Ltd [2002] WASC 131

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)

1. The defendant in these proceedings issued a statutory demand to the plaintiff dated 7 November 2024 (Statutory Demand).  On 28 November 2024, the plaintiff filed an application in this court to set aside the Statutory Demand.  In support of that originating process, the plaintiff filed an affidavit of Claire Susan Louise Forrest, which annexes (amongst other documents) a copy of the Statutory Demand that had been issued by the defendant.[1]

   [1] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-1'.

2. In the Statutory Demand, the defendant says that the plaintiff owes him a debt of $402,893.33 (Debt).  The schedule to the Statutory Demand describes the Debt in the following terms:[2]

   A debt arising from breach of contract and unpaid invoices, not including additional penalties and charges, in accordance with agreements dated 8th March 2021 and 12th February 2020 between DOFSubsea Pty Ltd and the creditor, Paul Rees.  Despite former notices and demands, the debtor has commercially defaulted on payments for base salary only.  Superannuation, loss of earnings and associated penalties are not included.  Under the terms of the agreements, the amount remains due and payable. 

   [2] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-1' p 8.

3. The Statutory Demand was sent by email to the Executive Vice President of the plaintiff on 7 November 2024[3] and received by the plaintiff by registered post on 13 November 2024.[4]

   [3] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-13'.

   [4] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-14'.

4. The plaintiff denies that the amount claimed by the defendant (or, in fact, any amount at all) is due and owing, and says there is no basis for the defendant's claim. On this basis, the plaintiff says that the Statutory Demand should be set aside under s 459G of the Corporations Act 2001 (Cth) (Act). Although it is not specified in the originating process, it is clear from the affidavit of Ms Forrest that the Debt is sought to be set aside on the basis that there is a genuine dispute as to the existence of the Debt, rather than on the alternative basis, which is as to whether there is an offsetting claim.

5. On 7 January 2025, the defendant filed a minute of proposed orders together with an affidavit, seeking orders for the plaintiff to provide discovery of five categories of documents.[5]  In summary, the categories of documents that are sought by the defendant are discovery of procedural matters in relation to these proceedings, documents in relation to his employment, the termination of his employment, as well as workforce and vessel operations data and matters that go to the court's jurisdiction to hear the application. 

   [5] A list of the documents sought is at Annexure 'A' to these reasons.

6. The defendant says that he needs discovery of these categories of documents essentially for two reasons.  First, to enable him to assess whether there has been, or continues to be, any procedural or substantive unfairness in the conduct of these proceedings.  Second, he says the requested documents directly relate to the validity of his claim against the plaintiff.  Put simply, the defendant says that the documents that are sought by him are necessary so that the procedure that is adopted in the consideration of the plaintiff's application is both balanced and fair, particularly given his status as a self-represented litigant. 

7. The defendant's application is opposed by the plaintiff.  Counsel who appeared for the plaintiff today submitted that the defendant's application is a fishing expedition, and that no special circumstances have been demonstrated which would justify a departure from the usual rule that discovery is not normally ordered in an application under the Act.[6]  In addition, the plaintiff's counsel said that the categories sought are too broad, and do not relate to the issue in the proceedings.[7]

   [6] ts 9.

   [7] ts 11 - 12.

8. In considering the defendant's application for discovery, it is important to stress that the starting or general position is that in proceedings to set aside a creditor's statutory demand, the court, in the exercise of its discretion, will generally not make any order for discovery.[8]  The primary basis for this is because on an application to set aside a statutory demand, the court is not determining the underlying issue in dispute between the parties on the balance of probabilities.[9]  That is, these proceedings will not resolve any factual dispute between the parties.  Service of a statutory demand, as well as any order that could be made on the application to set it aside, fundamentally does not determine whether the plaintiff is liable to pay the alleged debt to the defendant.[10]  All that is necessary for a plaintiff to be successful on an application to set aside a statutory demand is for the plaintiff to establish there is a bona fide dispute as to the existence of the debt.  Master Sanderson in Robowash Pty Ltd v Robowash Finance Pty Ltd[11] expressed the view (at [17]) that if it is necessary for discovery to be given in order to establish the basis for the defendant's claim, this will generally be enough to satisfy a court that there is a bona fide dispute as to the debt.

   [8]Re Wollongong Coal Ltd [2014] NSWSC 1711 [5].

   [9] Thorlock International Ltd v Keenfern Pty Ltd [2002] WASC 131 [7].

   [10] Hardel Pty Ltd v Burrell & Family Pty Ltd [2009] SASC 77; (2009) 103 SASR 408 [41].

   [11] Robowash Pty Ltd v Robowash Finance Pty Ltd [2001] WASC 112.

9. It is for these reasons, as well as the interest of the court in promoting the cost-effective and efficient disposal of proceedings as set out in O 1 r 4B of the Rules of the Supreme Court 1971 (WA), that discovery is not normally ordered on an application to set aside a statutory demand.

10. As noted by counsel for the plaintiff, there have been occasions where the courts have made orders for discovery on such an application.[12]  However, where discovery has been ordered, it is either the recipient of the statutory demand (that is, the plaintiff in the proceedings) who has been the successful applicant for discovery where they have not had sufficient detail or information about the nature or the existence of the alleged debt, or alternatively, the plaintiff has raised an offsetting claim as to the basis to set aside the statutory demand and the defendant is unaware of the details of any offsetting claim.  Neither of those situations apply in this case. 

    [12] ts 10 - 11.  See also Thorlock International Ltd v Keenfern Pty Ltd and Re Wollongong Coal Ltd.

11. For the following reasons, it is my view that the defendant's application for discovery should be dismissed. 

12. First, at present, the court has not reached any conclusion as to whether the application to set aside the Statutory Demand was served within the statutory period of 21 days as required by s 459G of the Act. There are two aspects that are relevant to this part of the claim. The first is the question as to whether the Statutory Demand was served on 7 November 2024, or on 13 November 2024. This question will be ultimately determined at the final hearing of the originating process.

13. Second, for service of the Statutory Demand to have occurred by email on 7 November 2024, there must have been valid service of the Statutory Demand under s 110D(6)(b) of the Act. In those circumstances, the Act requires the email to have been sent by the defendant to a 'nominated electronic address' of the plaintiff. A 'nominated electronic address' is defined in s 9 of the Act to be either:

    (a)an address nominated by the addressee to the originator of the electronic communication; or

    (b)if no address has been nominated, an electronic address that the originator of the electronic communication believes on reasonable grounds to be a current electronic address for the addressee to receive communications. 

14. In both cases, the focus is on what the originator (in this case, the defendant) has either been told by the plaintiff or believes on reasonable grounds.  Given this, it is my view that all relevant evidence and documents in relation to the validity of the email address and service by that means are within the defendant's possession or knowledge.  Discovery is not required. 

15. I note that the defendant has also raised an issue about the dates that hard copies of the documents have purportedly been served on him by the plaintiff.[13]  At the hearing of the originating process, it will be up to the plaintiff to prove service of the application and the affidavit.  All the documents necessary for the plaintiff to prove this will have had to be served on the defendant before the hearing of the originating process.  For this reason, I do not consider that discovery of these matters is required. 

    [13] ts 5.

16. Second, in relation to categories 3, 4, 5.1, 5.2, and 6.2, these categories seek discovery of documents which are said to be relevant to the existence and substance of the defendant's claim against the plaintiff.  As I have already summarised, this application will not decide whether the amount the defendant says is owed to him is, in fact, owed.  This application will only consider whether, on the basis of the evidence before the court, there is a genuine dispute as to the existence of the alleged Debt.  If discovery is required to support or substantiate the defendant's claim, as noted by Master Sanderson in Robowash Pty Ltd v Robowash Finance Pty Ltd, this suggests that there is a genuine dispute about the existence of the Debt.  On this basis, I do not consider that orders for discovery of these categories should be made. 

17. Third, in relation to the remaining categories sought by the defendant,[14] these categories seek discovery of documents in relation to the court's jurisdiction and the validity of Acts that are relied upon by the plaintiff.  As already indicated during submissions, there is no basis in law to contend that this court does not have the jurisdiction to hear or determine the plaintiff's application.[15]  No issue is raised in the proceedings as to the jurisdiction of the court, and, accordingly, discovery of these categories will not be ordered.

    [14] Namely, categories 5.3 - 5.8 and 6.1.

    [15] ts 6 - 7.

18. Finally, in relation to the submission that discovery is necessary for procedural fairness and to protect the defendant's legal rights, I do not accept this submission.  Most of the matters that have been raised by the defendant in support of this submission were matters which would be relevant if the court was determining the factual dispute as to the reasons for his termination, whether the reasons were communicated to him, whether he was dismissed unfairly, and whether any amount is due and owing by the plaintiff to the defendant.  However, this is not the issue before the court.  The only issue before the court on this application is whether or not there is a genuine dispute as to the existence of the Debt.  Given that the defendant served the Statutory Demand on the plaintiff, he must have in his possession all of the necessary documents on which he relies to support his claim.  In my view, discovery is not necessary nor appropriate on the facts of this case.

Application for mandamus

1. In addition to the application for discovery, the defendant also filed an application for a writ of mandamus on 27 January 2025. 

2. Putting to one side the question as to whether it is possible for an application of this nature to be brought in proceedings commenced under the Act, it is my view that for the following reasons this application must also be dismissed. 

3. First, a writ of mandamus is a power compelling or directing a lower court or decision-maker to do their duties correctly.  That is, it cannot be exercised by a judge of this court to compel themselves to do something.[16]

   [16] Re Refugee Review Tribunal and Anor, Ex parte AALA [2000] HCA 57; (2000) 204 CLR 82 [159] (Hayne J).

4. Second, a writ of mandamus will not issue except to require the fulfilment of a duty of a public nature which remains unperformed.[17]  At this stage the originating process that was filed by the plaintiff has not yet been heard or determined.  Until that has occurred, there is no duty that remains unperformed by the court. 

   [17] R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; (1933) 50 CLR 228, 242 (Rich, Dixon & McTiernan JJ).

Conclusion

1. For these reasons, it is my view that the application for mandamus and the application for discovery should be dismissed.

ANNEXURE 'A'

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

KS

Associate to the Hon Justice Hill

31 JANUARY 2025