DOF Subsea Australia Pty Ltd v Rees [No 2] - [2025] WASC 101

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   DOF SUBSEA AUSTRALIA PTY LTD -v- REES [No 2] [2025] WASC 101
CORAM:   HILL J
HEARD:   28 FEBRUARY 2025; FURTHER WRITTEN SUBMISSIONS ON 12, 18, 24 & 27 MARCH 2025
DELIVERED          :   28 MARCH 2025
FILE NO/S:   COR 188 of 2024
BETWEEN:   DOF SUBSEA AUSTRALIA PTY LTD
Plaintiff
AND
PAUL REES
Defendant

Catchwords:

Corporations - Application to set aside statutory demand - When the statutory demand was served on the plaintiff - Whether service of statutory demand to an email address was effective service - Whether there is a genuine dispute as to the existence of the debt - Turns on own facts

Corporations - Application to re-open application - Application dismissed

Legislation:

Corporations Act 2001 (Cth) s 109X, s 110D, s 459E, s 459G, s 459H

Result:

Application to re-open application dismissed
Statutory demand dated 7 November 2024 set aside

Category: B

Representation:

Counsel:

Plaintiff	:	Mr T Langdon
Defendant	:	In Person

Solicitors:

Plaintiff	:	Corrs Chambers Westgarth
Defendant	:	In Person

Cases referred to in decision:

Bioaction Pty Ltd v Obgorne [2022] FCA 436
Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5
DOF Subsea Australia Pty Ltd v Rees [2025] WASC 26
Osborne v Landpower Developments Pty Ltd (in liq) [2003] WASCA 117
Players Pty Ltd v Interior Projects Pty Ltd (1996) 133 FLR 265; 14 ACLC 918
Re Stamford Bridge SW6 Pty Ltd [2024] NSWSC 486
Re Wollongong Coal Ltd [2015] NSWSC 1680; (2015) 110 ACSR 134
Sandys Swim Pty Ltd v Morgan [2022] FCA 1574
Smith v New South Wales Bar Association (1992) 176 CLR 256

HILL J:

On 28 November 2024, DOF Subsea Australia Pty Ltd (DOF Subsea) filed an originating process seeking orders to set aside a statutory demand issued by Mr Rees dated 7 November 2024 (Statutory Demand).[1] In support of its application, on 29 November 2024, the plaintiff filed an affidavit of Claire Susan Louise Forrest affirmed on 28 November 2024.
[1] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-1'.
Mr Rees sent the Statutory Demand by email to Michael Rosich, the Executive Vice President of DOF Subsea, and Mons Aase, the Chief Executive Officer of DOF Group, on 7 November 2024.[2] Mr Rees also sent the Statutory Demand by registered post to DOF Subsea's registered office, where it was received on 13 November 2024.[3]
[2] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-13'.
[3] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-14'.
DOF Subsea denies the Statutory Demand was validly served by email and says that, for the purposes of calculating the last date on which this application could be filed under s 459G of the Corporations Act 2001 (Cth) (Act), the time commenced upon receipt of the Statutory Demand at its registered office. If this submission is not accepted, DOF Subsea says that there are a number of defects in the Statutory Demand which render it a nullity and seeks a declaration to that effect. In any event, DOF Subsea denies the amount claimed by Mr Rees in the Statutory Demand (or, in fact, any amount at all) is due and payable, and says there is no basis for his claim. As there is a genuine dispute as to the existence of the Debt, DOF Subsea says the Statutory Demand should be set aside.
Mr Rees disputes each of these matters. He says the Statutory Demand was validly served by email on 7 November 2024 and that, on this basis, the application to set aside the Statutory Demand was not served within the statutory period set out in the Act and must be dismissed.
For the reasons set out below, I find that:
(a)the Statutory Demand was not validly served by email and was served on 13 November 2024 when it was received by registered post at the registered office of DOF Subsea;
(b)the originating process was filed and served on Mr Rees within the statutory period set out in the Act;
(c)on the basis of the evidence before the court, there is a genuine dispute as to the existence of the debt claimed in the Statutory Demand; and
(d)the Statutory Demand should be set aside under s 459G of the Act.
Given these conclusions, it is unnecessary to address the remaining issues raised by DOF Subsea and I decline to do so.

Application by Mr Rees to adduce further evidence

The originating process was heard on 28 February 2025. At the conclusion of the hearing, I reserved my decision and indicated that I would deliver reasons for my decision in the week commencing 24 March 2025.
On 12 March 2025, Mr Rees applied (by email) to adduce further evidence, namely an affidavit affirmed by him on 11 March 2025 (11 March Affidavit).[4] The application stated that it was made pursuant to 'Order 35 Rule 7' of the Rules of the Supreme Court 1971 (WA) (Rules). This reference is clearly an error as this rule relates to reports by referees and is irrelevant to his application. When this was drawn to his attention in submissions filed by DOF Subsea's solicitors,[5] Mr Rees accepted this reference was an error and said that it was filed pursuant to 'Order 35 Rule 11' of the Rules.[6] This reference is also an error as this rule also applies to referees.
[4] Email from Mr Rees to Associate to Justice Hill dated 12 March 2025.
[5] Plaintiff's submissions filed 18 March 2025 [3].
[6] Defendant's submissions filed 24 March 2025 [2.1].
It is clear from Mr Rees' email dated 12 March 2025 that he seeks leave to re-open the application so that he can rely on the 11 March Affidavit.
On 25 March 2025, Mr Rees filed an additional affidavit affirmed on that date (25 March Affidavit). From the contents of the 25 March Affidavit, it is clear that Mr Rees seeks leave to re-open the application so that he can also rely on the 25 March Affidavit.
The 11 March Affidavit is 21 pages and addresses Mr Rees' use of Mr Rosich's email address for the purpose of sending the Statutory Demand to DOF Subsea. Mr Rees' evidence is that:
(a)from his role as an Offshore Manager, he was aware of Mr Rosich's email address which was used for official correspondence;
(b)he regularly used this email address to communicate with Mr Rosich and other executives during his employment;
(c)after his employment was terminated, he used Mr Rosich's email address to send correspondence and invoices. He received automatic 'out of office' replies from this email address;[7] and
(d)he was unable to present this evidence prior to the hearing of the application because he was unaware of its importance, as well as due to work commitments and disruptions caused by Tropical Cyclone Alfred.
[7] Affidavit of Paul Rees affirmed 11 March 2025, 'PR-01-01' - 'PR-01-08'.
The 25 March Affidavit is 23 pages long and seeks to adduce further evidence as to the basis for the termination of Mr Rees' employment, which he says was unlawful. The 25 March Affidavit annexes the 'out of office' replies he received from Mr Rosich and an email recording the position of DOF Subsea in relation to the storage of vaccination certificates of its employees.
DOF Subsea opposes the application by Mr Rees to re-open the application so that he can rely on the 11 March Affidavit for four reasons. First, it is not clear whether the 11 March Affidavit is Mr Rees' evidence or has been drafted by a large language model-type chatbot such as ChatGPT. Second, the 11 March Affidavit is not material to the issues before the court. Third, Mr Rees has not given an adequate explanation as to why this evidence was not previously adduced by him. Fourth, DOF Subsea says that it will suffer prejudice if the 11 March Affidavit is admitted, as it prepared for and attended the hearing on 28 February 2025 based on the materials that had been filed by Mr Rees at that date and has not had the opportunity to respond to this evidence. DOF Subsea also opposes the application to re‑open the application to enable Mr Rees to rely on the 25 March Affidavit for largely the same reasons.
The relevant considerations on an application to re-open a matter were summarised by McLure J in Osborne v Landpower Developments Pty Ltd (in liq)[8] by reference to the decision of the High Court in Smith v New South Wales Bar Association[9] which stated:
If an application is made to re‑open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision to not call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised.
(footnotes omitted)
[8] Osborne v Landpower Developments Pty Ltd (in liq) [2003] WASCA 117 [12] ‑ [14].
[9] Smith v New South Wales Bar Association (1992) 176 CLR 256, 266 - 267.
Where an application for leave to re-open is filed before reasons for decision are delivered, the primary consideration for the court is the nature and extent of prejudice that may be suffered by the other party. This is because the policy in favour of finality does not have the same force. In exercising the court's discretion, it is relevant to take into account the materiality of the evidence and whether the interests of justice would be advanced by the admission of the affidavit.[10]
[10] Osborne v Landpower Developments Pty Ltd (in liq) [14].
The only apparent relevance of the 11 March Affidavit to the application concerns whether there was valid service of the Statutory Demand by email to Mr Rosich on 7 November 2024.
Section 109X of the Act sets out how documents can be served on a company. This includes leaving documents at or posting them to the registered office of the company. More recently, courts have accepted that this section does not impose a mandatory requirement and that it is possible to use other means to serve documents on companies.[11]
[11] Bioaction Pty Ltd v Obgorne [2022] FCA 436 [39].
In order for an email to be effective service under the Act, the email must have been sent by Mr Rees to a 'nominated electronic address' of DOF Subsea.[12] A 'nominated electronic address' is defined in s 9 of the Act to be either:
(a)an address nominated by the addressee [DOF Subsea] to the originator of the electronic communication [Mr Rees]; or
(b)if no address has been nominated, an electronic address that the originator of the electronic communication [Mr Rees] believes on reasonable grounds to be a current electronic address for the addressee [DOF Subsea] to receive electronic communications.
[12] Corporations Act 2001 (Cth) s 110D(6)(b).
There is no suggestion that DOF Subsea nominated any email address to Mr Rees. On this basis, it is necessary for Mr Rees to establish that he believed on reasonable grounds that Mr Rosich's email address was a current electronic address of DOF Subsea for receiving electronic communications.
Courts have accepted that there are reasonable grounds to believe an email is a current electronic address to receive electronic communications where the electronic address is nominated in the contract which underlies the statutory demand, is in court or arbitral documents,[13] or is the email address for the company's solicitors in relation to the underlying dispute.[14]
[13] See, for example, Sandys Swim Pty Ltd v Morgan [2022] FCA 1574; Re Stamford Bridge SW6 Pty Ltd [2024] NSWSC 486.
[14] Bioaction Pty Ltd v Obgorne [93] - [94].
For the following reasons, I do not consider that leave should be given to Mr Rees to re-open the application to rely on either affidavit.
First, Mr Rees has not provided a proper explanation as to why this evidence was not filed prior to the hearing on 28 February 2025. Two reasons are set out in the 11 March Affidavit. First, he was not aware of the importance of the evidence. Second, he was not able to file it earlier because of his work and other commitments, and disruptions caused by Tropical Cyclone Alfred. Mr Rees has also referred to the disadvantages in being a self-represented litigant. While I accept that all self-represented litigants suffer procedural disadvantages by reason of not being legally trained, I do not accept that this or the other reasons are a sufficient explanation for the delay in filing these affidavits.
In dismissing Mr Rees' application for discovery on 28 January 2025, the court made it clear that in order for Mr Rees to prove effective service by email, it was necessary for him to file evidence that he had either been told by DOF Subsea that this was the email address nominated for service of electronic documents, or that he believed on reasonable grounds that this was a current email address for DOF Subsea to receive electronic communications.[15] A hard copy of these reasons was sent to Mr Rees by email on 31 January 2025, prior to Mr Rees filing his evidence.[16]
[15] DOF Subsea Australia Pty Ltd v Rees [2025] WASC 26 [13] - [14].
[16] Email from Associate to Justice Hill to Mr Rees dated 31 January 2025.
The directions made in these proceedings took account of Mr Rees' work commitments and schedule. The initial directions required Mr Rees to file his affidavits by 31 January 2025, at the end of a week when he was back from his current work commitments. This time was further extended by orders made on 28 January 2025 to 3 February 2025 to provide Mr Rees with some additional time to collate the necessary documents and finalise his affidavit.
In relation to Tropical Cyclone Alfred, the impact of this weather event on Queensland (where Mr Rees is located) was not felt until early March 2025, after the hearing of this application on 28 February 2025. I do not accept that the cyclone had any impact on Mr Rees' ability to file evidence by 3 February 2025, or prior to the hearing on 28 February 2025.
Second, I do not accept that the 11 March Affidavit meets the standard of materiality required to re-open the application. Mr Rees' evidence is, essentially, that Mr Rosich's email is a valid email address which he had previously used to send invoices and other documents. These matters are not disputed by DOF Subsea and the relevant documents are already in evidence.[17] It is not necessary to admit the 11 March Affidavit in order to consider these matters and whether they constitute the necessary 'reasonable grounds'.
[17] Affidavit of Michael John Rosich filed 3 December 2024.
Third, I also do not accept that the 25 March Affidavit meets the standard of materiality required to re-open the application. Mr Rees' evidence in this affidavit is, essentially, that his employment was not lawfully terminated. This submission was advanced by Mr Rees at the hearing on 28 February 2025. Mr Rees' affidavit filed on 1 February 2025 already addressed this. The question as to whether this contention is correct cannot be determined on this application. The only relevant issue for the court is whether there is a genuine dispute as to the amount claimed by Mr Rees in the Statutory Demand. It is not necessary to admit the 25 March Affidavit to resolve this issue.

When was the statutory demand served on the plaintiff?

The Statutory Demand was sent by email to Mr Rosich on 7 November 2024,[18] and received by DOF Subsea at its registered office by registered post on 13 November 2024.[19]
[18] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-13'.
[19] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-14'.
There is no dispute that the service of the Statutory Demand on 13 November 2024 was valid service under the Act. The dispute between the parties is whether the email sent on 7 November 2024 was valid service. In order for this to be the case, Mr Rosich's email must be a 'nominated electronic address' of DOF Subsea under s 110D(6)(b) of the Act. In this case, this turns on whether Mr Rees believed on reasonable grounds that this was a current electronic address for DOF Subsea to receive electronic communications.
The evidence before the court is that:
(a)Mr Rosich wrote to Mr Rees on behalf of DOF Subsea Asia Pacific Pte Ltd (DOF Asia Pacific) on two occasions in relation to his employment. First, on 8 March 2021, to inform Mr Rees of a salary increase,[20] and second, on 15 December 2021 to inform Mr Rees that his employment had been terminated;[21]
[20] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-3' p 51.
[21] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-4'.
(b)following the termination of his employment, Mr Rees corresponded with Claire Forrest (the General Manager - Human Resources of DOF Subsea) in March 2022. In answer to some specific questions about the circumstances of the termination of his employment, Mr Rees received a response from Haythem El-Ansary, the General Manager - Asia of DOF Asia Pacific;[22]
[22] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-5'; Second affidavit of Claire Susan Louise Forrest filed 2 December 2024, 'CSLF-15'.
(c)between November 2021 and February 2022, Mr Rees issued a number of documents to DOF Asia Pacific. These documents were sent to Mr Aase, Mr Rosich, Ms Forrest, and Kevin Porter (the Remote Systems Manager of DOF Asia Pacific) by email,[23] and to a broader group of people employed by DOF Asia Pacific;[24]
[23] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-8'; Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-1'.
[24] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-9'; Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-2', 'MJR-3'.
(d)on 14 February 2022, Mr Rees issued a 'bill of lading' to Mr Rosich of DOF Asia Pacific attaching various documents. The documents included a notice of liability regarding non-performance of contract and trespass dated 10 February 2022. The notice was directed to a number of individuals within the DOF Subsea Group, including both Mr Rosich and Ms Forrest, and refers to Mr Rees' employment agreement dated 8 July 2016. The notice was asserted to be a self-executing contract;[25]
(e)in September 2023, Mr Rees issued two invoices to DOF Subsea (which were sent to Mr Rosich by email) in accordance with what was described as the conditional acceptance of the notice of liability. Further invoices were issued by Mr Rees between 29 November 2023 and 2 June 2024. Each invoice claimed compensation of $12,960.48 per month;[26]
(f)on 28 September 2024, Mr Rees issued a 'final notice of default' to DOF Subsea (to the attention of Mr Rosich) and to Mr Aase seeking payment of $402,893.44;[27] and
(g)on 7 November 2024, Mr Rees sent the Statutory Demand by email to Mr Rosich and Mr Aase. The email stated that:[28]
I apologize for the late reply, but due to unforeseen circumstances, I have inadvertently allowed more time for you to respond to and address previous correspondence. However, you have chosen to ignore all communications thus far.
Please see the attached Statutory Demand RPP4463800094005496175603 for payment of the outstanding debt owed. This demand does not include the unresolved items that require immediate attention, such as loss of earnings, superannuation, and tort.
I look forward to your prompt response to organize settlement of these outstanding matters.
(h)on 13 November 2024, Mr Rosich forwarded the email he received from Mr Rees on 7 November 2024 to Ms Forrest.[29]
[25] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-10'.
[26] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-11'; Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-4' - 'MJR-8'.
[27] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-12'; Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-9' - 'MJR-10'.
[28] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-12', 'CSLF-13'; Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-11'.
[29] Affidavit of Michael John Rosich filed 3 December 2024, 'MJR-12'.

It is clear from this evidence that Mr Rees corresponded with DOF Asia Pacific by email in relation to the termination of his employment, and subsequently with DOF Subsea and DOF Subsea Group by email to send invoices, a notice, and then the Statutory Demand. Ms Forrest responded to Mr Rees' initial emails in relation to the termination of his employment. His subsequent emails, which were sent to Mr Rosich and Mr Aase, received no substantive response or acknowledgement by either of them.[30]
[30] Affidavit of Michael John Rosich filed 3 December 2024 [17].
For the following reasons, I am not satisfied on the evidence before me that Mr Rees has established there were reasonable grounds on which he was satisfied that the email address of Mr Rosich was the current electronic address by which DOF Subsea could receive electronic communications.
First, the use of the phrase 'reasonable grounds' in s 110D(6)(b) of the Act makes it plain that the matter is to be considered objectively. While I accept that the Act does not require the consent of the addressee to the use of a particular email address, there must, in my view, be some conduct on the part of the recipient (or addressee) which enables the sender to have reasonable grounds for a belief that it is an appropriate electronic address for that addressee to receive documents.
Second, where a recipient has used an electronic address to substantively respond to a sender in relation to the matter in dispute, or the electronic address is referred to as the electronic address of the recipient in any contractual or court documents that relate to the dispute, there will be reasonable grounds for a sender to believe that the email is a current electronic address for the receipt of documents by that recipient in relation to that dispute under the Act. In this case, neither of these has occurred. Mr Rosich has not substantively responded to any email that he received from Mr Rees. Mr Rees' employment agreement does not contain any electronic address for DOF Asia Pacific or DOF Subsea, nor does the alleged debt arise as a consequence of any court or other proceedings in which Mr Rosich's email was used as the relevant contact for DOF Subsea.
Given this conclusion, I find that the Statutory Demand was not served by email on 7 November 2024.

Was the application to set aside the Statutory Demand filed and served within time?

I accept and find that the Statutory Demand was served by registered post at the registered address of DOF Subsea on 13 November 2024.[31] On this basis, any application to set aside the Statutory Demand, together with the affidavit in support of the application, was required to be filed and served by no later than midnight on 4 December 2024.[32]
[31] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-14'.
[32] Corporations Act 2001 (Cth) s 459G, s 9 ('statutory period').
The originating process was filed on 28 November 2024. The supporting affidavit of Ms Forrest was filed on 29 November 2024. Copies of each of these documents (with the appropriate notice under the Service and Execution of Process Act 1992 (Cth) (SEPA) attached to the originating process) were sent by express post to Mr Rees on 29 November 2024. These documents were sent to the post office box nominated by Mr Rees in the Statutory Demand as the address on which any application to set aside the Statutory Demand could be served. These documents were delivered to the nominated post office box on 3 December 2024.[33]
[33] Affidavit of Jack Donnelly filed 3 December 2024 [6] - [7], 'JD-2'; Affidavit of Michelle Leanne Dean filed 3 December 2024 [11], 'MLD-10'.
On 4 December 2024, orders were made by the court granting leave to amend the originating process and permitting service of the court documents on the defendant by email. The evidence before the court is the amended originating process (including a SEPA notice) and the orders of the court of 4 December 2024 were served by email on Mr Rees at 1.23 pm on 4 December 2024. The email included a link to the court documents filed in these proceedings.[34]
[34] Affidavit of Eimear McNamara filed 19 December 2024, 'EM-1', 'EM-2'.
Even though this application is an originating process of the court, personal service of the application is not required. As the Statutory Demand requires a party to nominate an address at which any application to set aside the statutory demand may be served, the service requirement is met when the documents are served at that address.[35]
[35] Players Pty Ltd v Interior Projects Pty Ltd (1996) 133 FLR 265; 14 ACLC 918, 921 - 923.
In this case, the Statutory Demand nominates a post office box on Bribie Island, Queensland as the address on which any application to set aside the Statutory Demand may be served. Service was effected at this address on 3 December 2024.
On this basis, I accept and find that the application to set aside the Statutory Demand was served on Mr Rees by post on 3 December 2024, alternatively, by email at 1.23 pm on 4 December 2024. Given this conclusion, I find that the application to set aside the Statutory Demand was filed and served within the time prescribed in s 459G of the Act.

Is there a genuine dispute about the existence of the Debt?

Under s 459H(1)(a) of the Act, a creditor's statutory demand may be set aside if the court is satisfied that there is a genuine dispute about the existence or amount of the Debt to which the demand relates. An applicant will establish there is a genuine dispute about the debt if the dispute is not plainly vexatious or frivolous, involves a plausible contention that requires investigation, or there are matters that, on rational grounds, indicate that the applicant has an arguable case.[36]
[36] Re Wollongong Coal Ltd [2015] NSWSC 1680; (2015) 110 ACSR 134.
The threshold for establishing a genuine dispute is not a difficult or demanding one.[37] Where there is a bona fide disputed issue of fact or law, which is not based on spurious, hypothetical, illusory, or misconceived grounds, the statutory demand will be set aside. Once a dispute of this nature is raised, it is not necessary for a company to satisfy the court as to where the merits of the dispute lie. The court will not attempt to weigh or examine the merits of any dispute on an application to set aside a statutory demand.[38]
[37] Re Wollongong Coal Ltd [10].
[38] Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 [9].
In this case, by the Statutory Demand, Mr Rees says that DOF Subsea owes him a debt of $402,893.33 (Debt). The schedule to the Statutory Demand describes the Debt in the following terms:[39]
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 DOF Subsea Pty Ltd and the creditor, Paul Rees.
Despite formal 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.
[39] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-1' p 8.
The affidavit of Mr Rees which accompanied the Statutory Demand did not annexe copies of the agreements referred to nor the invoices relied upon. In his accompanying affidavit, Mr Rees stated that he believed there was no genuine dispute about the existence or amount of any of the debts before concluding:[40]
All communications have been commercially defaulted and ignored.
[40] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-1' p 10.
It is clear from the evidence before the court that DOF Subsea has ignored the emails sent by Mr Rees, and did not respond to the numerous emails and documents received from Mr Rees. While Mr Rees' frustration at this conduct is evident, this cannot create any liability on the part of DOF Subsea if the liability does not otherwise exist.
It is also clear from the evidence before the court that Mr Rees honestly and genuinely believes that the termination of his employment was harsh and unfair. He believes that the reason stated for the termination of his employment, namely that DOF Asia Pacific was unable to find employment for him within the Asia-Pacific Region, was not accurate and that there was another reason that his employment was terminated. On an application to set aside the Statutory Demand, these issues cannot be resolved. The question for the court on this application is simply whether there is a genuine dispute as to whether DOF Subsea owes the Debt to Mr Rees.
At the hearing of the application, Mr Rees sought to tender a recording and transcript of a telephone call between Ms Forrest and Mr Rees.[41] Ultimately, counsel for DOF Subsea accepted that the plaintiff would suffer no prejudice if the court were to accept the recording and transcript into evidence. Given this, I consider that the recording and transcript should be accepted as evidence on the application as Exhibit A and B respectively.
[41] MFI A and MFI B.
For two primary reasons, I accept and find that on the evidence before me, there is a genuine dispute about the existence of the Debt.
First, I accept that there is a genuine dispute as to whether any amount is owed by DOF Subsea to Mr Rees, even if Mr Rees has any claim in relation to the termination of his employment.
The only employment contract in evidence before the court is a contract dated June 2016 between DOF Asia Pacific and Mr Rees.[42] Consistent with his contract being with DOF Asia Pacific:
(a)on 8 March 2021, Mr Rees received a letter from Mr Rosich of DOF Asia Pacific giving notice that his salary had been adjusted; and
(b)on 15 December 2021, Mr Rees received a letter from Mr Rosich on the letterhead of DOF Asia Pacific, giving notice of the termination of his employment.
[42] Affidavit of Claire Susan Louise Forrest filed 29 November 2024, 'CSLF-3'.
Under the terms of Mr Rees' contract of employment:
(a)when Mr Rees was working on a vessel located in Australia, Mr Rees was 'automatically transferred' to DOF Subsea;
(b)even if Mr Rees was working for DOF Subsea, all legal obligations to Mr Rees remained with DOF Asia Pacific;
(c)during the period of any secondment to DOF Subsea, all liability and legal obligations that exist under the contract of employment also applied as between Mr Rees and DOF Subsea; and
(d)the secondment arrangement ceased on the day the vessel departed Australian waters or the day Mr Rees departed Australia.
The question as to who Mr Rees' employer was at the date of the termination of his employment (that is, DOF Subsea or DOF Asia Pacific) cannot be resolved on this application. For the purposes of this application, it is sufficient to say that I accept there is a genuine dispute as to whether Mr Rees was employed by DOF Subsea (as opposed to DOF Asia Pacific) and whether DOF Subsea has any liability to Mr Rees.
Second, and in any event, cl 11.2 and sch B of Mr Rees' employment contract gave either party the right to terminate the agreement by giving one month's written notice. On 15 December 2021, Mr Rosich, on behalf of DOF Asia Pacific, gave written notice to Mr Rees of the termination of his employment. DOF Asia Pacific elected to pay Mr Rees his salary under 31 December 2021 and one month's pay in lieu of notice until the end of January 2022. Mr Rees says that DOF Subsea invalidly terminated his employment, or alternatively, failed to state the real reason for the termination of his employment. As set out above, these issues cannot be resolved on this application. It is sufficient to say that I accept and find that there is a genuine dispute as to whether any amount is owed to Mr Rees as claimed in the Statutory Demand, given the notice of termination issued by DOF Asia Pacific.
If Mr Rees wishes to pursue a claim arising out of the termination of his employment and whether or not this was valid, it is necessary for him to commence proceedings which are able to finally determine the factual and legal issues involved in this claim. It is not open to him to send invoices to DOF Subsea, who dispute the existence of any liability, and then rely on the non-payment of these invoices for the issue of the Statutory Demand. This is a misuse of the statutory demand process.

Conclusion

For these reasons, I have concluded that the Statutory Demand must be set aside. My preliminary view is that Mr Rees should pay DOF Subsea's costs of the application to be taxed if not agreed. However, before making any costs orders, I will hear from the parties as to the appropriate orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
28 MARCH 2025