Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd - [2001] WASCA 299

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: EASTERN METROPOLITAN REGIONAL COUNCIL -v- FOUR SEASONS CONSTRUCTION PTY LTD [2001] WASCA 299

CORAM: WALLWORK J
MILLER J
BURCHETT AUJ

HEARD: 21 AUGUST 2001

DELIVERED : 27 SEPTEMBER 2001

FILE NO/S: FUL 193 of 2000

BETWEEN: EASTERN METROPOLITAN REGIONAL COUNCIL
Appellant (Respondent)
AND
FOUR SEASONS CONSTRUCTION PTY LTD
Respondent (Applicant)

Catchwords:

Corporations - Practice and procedure - Application to set aside statutory demand on ground of disputed debt - Adequacy of affidavit in support of application - Sufficiency of affidavit accompanying statutory demand - Extent of compliance with rules - Whether form of affidavit leading to substantial injustice

Legislation:

Corporations Law, s 9, s 459E(3), s 459H(1), s 459J(1), s 459J(2)

Supreme Court Rules (WA), O 81G r 5(1), O 81G r 31

Result:

Appeal dismissed

Category: A

Representation:

Counsel:

Appellant (Respondent) : Mr P G Clifford
Respondent (Applicant) : Mr B M C N De Lestang

Solicitors:

Appellant (Respondent) : Haydn Robinson
Respondent (Applicant) : Benjamin & De Lestang

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

Carlino Enterprises v Donnybrook Holdings Pty Ltd (2001) 19 ACLC 414
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 14 ACLC 1703
Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 15 ACLC 1001
Z‑Tek Computers v Aus Linx International (1997) 15 ACLC 1233

Case(s) also cited:

B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1994) 13 ACLC 88
Classic Ceramic Importers Pty Ltd v Ceramica Antiga SA (1994) 12 ACLC 549
Dromore Fresh Produce v W Paton (Fertilizers) Pty Ltd (1997) 15 ACLC 424
Harkness v Bell's Asbestos & Engineering Ltd (1967) 2 QB 729
John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716
Mibor Investments Pty Ltd v Commonwealth Bank (1993) 11 ACLC 1062
PDR v Cottesloe Constructions [2000] WASCA 62
Portfolio Projects Pty Ltd v Oakes Building Co Pty Ltd (1987) 5 ACLC 911
Prime Link Aust Ltd v JLRE Pty Ltd (1997) 15 ACLC 1283
Sacon Constructions v Concrite Quarries Pty Ltd (1997) 15 ACLC 1303
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1994) 12 ACLC 111
Sentinel Financial Management Pty Ltd v Entercorp Finance Pty Ltd (1997) 15 ACLC 201
Southern Canola Producers Pty Ltd v Painter Griffith & Associates Pty Ltd (1997) 15 ACLC 956
Topfelt Pty Ltd v State Bank of NSW Ltd (1994) 12 ACLC 15

WALLWORK J: I agree with the reasons for judgment of Miller J. There is nothing I wish to add to those reasons.
MILLER J: This is an appeal from the decision of a Master given on 16 November 2000 in which it was ordered that the statutory demand of the appellant be set aside. The appellant seeks an order of this Court that the application of the respondent to the Master to set aside the statutory demand be dismissed, relying upon the following grounds of appeal:
1.The learned Master erred in finding that by annexing a copy of Hasluck J's reasons to his affidavit Mavlian had outlined the nature of the dispute between the parties so that the application could properly be regarded as on foot, and thereby by inference being satisfied that:
(a)there is a genuine dispute between the parties about the existence or amount of the debt claimed in the Statutory Demand; or
(b)that the appellant has an offsetting claim.
2.The learned Master erred in finding that the affidavit accompanying the Statutory Demand did not comply with Order 81Gr31 or substantially comply with that Order and therefore did not satisfy the requirements of s459E(3)(b).
3.The learned master erred in finding that the deponent to the affidavit accompanying the Statutory Demand did not turn his mind to the question of whether there is a genuine dispute in relation to the debt the subject of the demand and that this gave rise to a substantial injustice, given there was no material before the learned Master by the appellant disputing the existence of the respondent's claim or the amount claimed by the respondent.
The appellant's statutory demand pursuant to the provisions of s 349E of the Corporations Law demanded payment to it by the respondent of the sum of $168,331.99. The debt was described as "money payable by the company to the creditor pursuant to an agreement made on 2 December 1997 related to the Red Hill Land Fill Facility". The demand was dated 30 June 2000 and was accompanied by an affidavit in purported compliance with the provisions of s 459E(3) of the Law. That affidavit was in the following terms:

"I, Gavin Kenneth Watters of 226 Great Eastern Highway, Belmont, in the State of Western Australia, Chief Executive Officer being duly sworn make oath and say as follows:-
1.I am the Chief Executive Officer of the Creditor and am authorised by the Creditor to make this affidavit on its behalf.
2.To my knowledge, the amount of $168,331.99 is due and payable by the Debtor to the Creditor.
3.This debt is money payable by the Debtor to the Creditor pursuant to an agreement made on 2 December 1997 relating to the Red Fill Landfill Facility."

Section 459E(3) provides that such an affidavit must verify that the debt is due and payable by the company and it must comply with the rules. The statutory demand itself was required by s 459E(2) to comply with certain requirements which were clearly met in this case.
The respondent made application on 21 July 2000 under s 459G of the Law for an order setting aside the statutory demand. The application was within time and was supported by an affidavit which was sworn by one Peter Mavlian, the sole shareholder and a former director of the respondent.
The Master approached the application to set aside the statutory demand by first determining whether the application was properly on foot. He then determined whether the statutory demand should be set aside. The appellant concedes that this was the appropriate course for the Master to have taken.
The appellant contended that the affidavit in support of the application to set aside the statutory demand failed to comply with the requirements of s 459G of the Law. It submitted that in order to be a supporting affidavit in an application to set aside a statutory demand an affidavit must say something to promote the debtor's case. It was contended that in this case the affidavit of Mavlian merely asserted that the debt was not due and payable, which was no more than a statement of the company's claim and a failure to back up the claim. Reliance was placed by the appellant on Z‑Tek Computers v Aus Linx International (1997) 15 ACLC 1233 at 1236 where the Master said:
"The function of 'the affidavit supporting the application' required by s 459G(3) is 'to promote the company's case' or to 'back up the claim that is made'. Where it is not alleged that there is a 'defect' in a demand or 'some other reason' sufficient to attract the operation of s 459J, 'the company's case' must be one of genuine dispute or offsetting claim (or both) under s 459H. While, in a case of alleged genuine dispute, there may simply be an issue whether the debt demanded is presently due and payable, that will not be the norm; and it would only be in such a case that the affidavit filed and served with the application under s 459G could be considered, on one view, an affidavit 'answering' that required by s 459E(3)(a) to accompany the demand.
Even in such a case, however, it would be necessary for the applicant to do more than merely assert that the debt is not due and payable, for that would be to state 'the claim' but not to 'back up the claim'. In other words, the affidavit required by s 459G(3), even if confined to raising an issue whether the debt demanded is presently due and payable, must condescend to more than a mere assertion to the opposite effect of that in the affidavit accompanying the demand."
In the present case the Master set out in full in his reasons the contents of Mavlian's affidavit sworn 20 July 2000 and it is unnecessary for me to again reproduce the document. In the affidavit Mavlian swore that the appellant's claim for $168,331.99 was a claim for damages by the appellant arising out of a contract between the appellant and the respondent for the construction of landfill facilities in Red Hill. He said that the appellant and the respondent had entered into a written contract on 2 December 1997 in relation to which various disputes had arisen, which were referred to arbitration on 20 July 1998. Both parties had been ordered to provide a Scott Schedule setting out their respective claims and counterclaims in the arbitration and in the Scott Schedule the respondent had claimed against the appellant $414,488.85 and the appellant had counterclaimed $168,331.99, being the subject of the notice of demand. Mavlian swore that the arbitration was still proceeding and the arbitrator had yet to publish his answers.
Reference was made by Mavlian in his affidavit to proceedings before the Master in relation to security for costs in the arbitration. In those proceedings the Master had noted in his judgment that "the issues between the parties were both complex and technical". There had been further interlocutory proceedings in relation to the arbitration, including an application for removal of the arbitrator. There had also been an application to this Court by Mavlian for leave to represent the respondent. Hasluck J gave leave to Mavlian to appear for the respondent, notwithstanding that he was not a solicitor. Annexed to Mavlian's affidavit was a copy of the judgment of Hasluck J delivered on 13 July 2000 in which it was claimed that there was set out "in some detail the previous history of the proceedings between the applicant (respondent) and the respondent (appellant) which demonstrate very clearly that there is a genuine dispute between the applicant (respondent) and the respondent (appellant) which are the subject of proceedings both by arbitration and under the Commercial Arbitration Act in this Honourable Court."
In his reasons, Hasluck J (at [5] ‑ [7]) set out the issues between the parties in these terms:
"5 EMRC is a body corporate constituted in the Local Government Act. It has responsibility for a waste disposal site at Red Hill to the east of Perth. By written contract dated 2 December 1997 EMRC engaged Four Seasons to carry out certain earthworks and drainage works at the Red Hill site for a sum of $222,222. The date for the completion of the works was 20 April 1998, although this date was subsequently extended. In mid-1998, a dispute arise between the parties. EMRC claimed that there were certain defects in the way Four Seasons had carried out the works and alleged further that work had been suspended without written approval. Against this background, EMRC purported to terminate the contract by written notice. Four Seasons responded by saying that it did not accept that EMRC was entitled to terminate, with the result that EMRC had repudiated the contract. It follows from this that the contract came to an end, albeit leaving various matters in issue between the parties.
6…
7I understand from the affidavit of Haydn Ross Robinson sworn 9 June 2000 that Four Seasons has been paid $127,763.82 in respect of the contract price. It claims a further $414,488.85. EMRC counterclaims $168,331.99, being the costs allegedly incurred by EMRC in completing the work that was said not to have been done by Four Seasons under the contract. The prime issue in the arbitration is whether it was EMRC or Four Seasons that lawfully terminated the contract, with the issue of the quantum of damages to be looked at in the light of a ruling upon that point. Mr Robinson suggests in his affidavit, as solicitor for EMRC, that there are complex issues of law and fact to be decided by the Arbitrator. …"
The Master referred in his reasons to Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 14 ACLC 1703 where Sundberg J pointed out that the affidavit to comply with s 459G must say something that promotes the company's case. On the other hand, as his Honour pointed out, such an affidavit need not detail in admissible form all the evidence that supports the contention of a genuine dispute.
The Master concluded that nothing in the body of Mavlian's affidavit gave any real indication of the nature of the dispute between the parties and without more he would be inclined to the view that it was an insufficient affidavit so that the application was not presently on foot. The Master did, however, consider that the annexure of Hasluck J's decision to the affidavit sufficiently outlined the nature of the dispute between the parties so that an application could properly be regarded as on foot. The Master concluded that Hasluck J's reasons went "into some detail as to the nature of the dispute between the plaintiff (respondent) and the defendant (appellant) and the proceedings that have taken place to date".
The appellant contends that the annexure (annexure "B") established only two relevant matters, namely, that the respondent had prior knowledge of the claim by the appellant for $168,331.99 and the respondent was insolvent in the amount of $282,150.92.
In my view the submission of the appellant does not do justice to the reasons of Hasluck J. Those reasons make it plain
(1)that there is a contractual dispute between the parties in relation to earthworks and drainage works at the Red Hill site;
(2)that the appellant contends there were defects in the way in which the respondent carried out the works and that the works were suspended without written approval;
(3)that the appellant purported to terminate the contract by written notice, but the respondent contended in reply that it did not accept that the appellant was entitled to so terminate the contract, with the result that the appellant had repudiated the contract;
(4)that the contract was at an end, leaving various matters in dispute between the parties;
(5)that there was a substantial issue in the arbitration between the parties relating to the question whether the appellant or the respondent had lawfully terminated the contract, there being associated "complex issues of law and fact" to be decided by the arbitrator.
In my view, the reference by Mavlian in his affidavit to the requirement of the arbitrator that both parties provide Scott Schedules indicated in itself that there were substantial issues between the parties.
Although the appellant contends that there has been no attempt made on behalf of the respondent to explain the nature of the respondent's cross‑claim or to quantify it, I am of the opinion that the Master was correct in concluding that the information contained within the reasons for judgment of Hasluck J sufficiently outlined the nature of the dispute between the parties to enable it to be concluded.
The appellant further contended that the set‑aside application was invalid because the affidavit served with the application was deficient in a number of formal respects. There were two copies of page 3, no page 4; two copies of page 11; no page 12; two copies of page 21 and then a blank page. Reliance was placed upon Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409, a case where four pages of annexures to the affidavit supporting the application were missing from the service copy. Kennedy J set out the provisions of O 37 r 2 of the Rules of the Supreme Court, pointing out that there is a certain lack of consistency in the treatment in the rules of annexures to affidavits, some rules expressly requiring service of annexures with affidavits and some impliedly requiring service of annexures. His Honour accepted that an exhibit is not part of an affidavit, but pointed out that this is not to say that annexures are not to be regarded as part of an affidavit for the purpose of service. His Honour held that the respondent was required to serve within the time limit a copy of the affidavit including the annexures to it. Kennedy J considered that the appellant had established on the balance of probabilities that the service copy of the affidavit and its annexures were deficient by reason of the pages which were missing from the annexures to the affidavit. Wallwork and Anderson JJ agreed.
In the present case this issue was not raised before the Master. It is raised for the first time on the hearing of this appeal. The question is whether the absence of certain pages from the copy of the reasons of Hasluck J annexed to the affidavit meant that the affidavit failed to comply with the rules and thereby made the set‑aside application invalid.
There is no doubt that the judgment of Kennedy J in Robowash Pty Ltd v Robowash Finance Pty Ltd makes it clear that the strict formalities of the rules require the affidavit and the annexures to be served in full. There is no affidavit from the appellant deposing to the fact that the affidavit of Mavlian and its annexures as served was deficient, but it seems to be accepted by both parties that the document contained within the appeal book is a true copy of what was served. If so, it certainly reveals that there were numerous pages of the reasons for decision of Hasluck J either missing or duplicated.
The respondent submits that although it may have been the case that in photocopying the documents a number of pages from the decision of Hasluck J had been omitted or duplicated, that does not detract from the validity of the affidavit, because the body of the affidavit was complete and the duplicate or omitted pages were merely in the exhibit to the affidavit which in turn consisted of a judgment that the appellant already had in its possession.
The point was not the subject of oral argument before the Court and it is not clear, in that situation, that counsel for the appellant in fact wished to pursue it. In any event, it seems to me that Robowash Pty Ltd v Robowash Finance Pty Ltd can be distinguished from the present case. Although it can be accepted from the decision in Robowash Pty Ltd v Robowash Finance Pty Ltd that the requirement for the provision of copies of documents under the rules of court is extremely strict and substantial compliance with the requirement for service of a copy of the affidavit and its annexures may be insufficient, (though how far this should be pressed, where the defect in compliance is slight, may be questionable) the document from which four pages was missing in that case was an essential annexure to the affidavit. As Kennedy J pointed out (at [22]), the affidavit of the deponent consisted of only six pages of which a substantial portion was concerned only with the identification of annexures. There were 91 pages of annexures, of which pages 58, 59, 60 and 63 were missing. The case does not reveal what was contained within those pages, but it is clear that they were not part of a judgment of the court as is the case here.
The distinguishing element of this case is that Mavlian, in his affidavit sworn 20 July 2000, made reference in the body of the affidavit to the reasons for decision of Hasluck J in the following terms:
"8.Annexed hereto and marked with the letter 'B' is a copy of the Honourable Justice Hasluck's Judgment which was delivered on 13th day of July 2000 which sets out in some detail the previous history of the proceedings between the Applicant and the Respondent which demonstrate very clearly that there is a genuine dispute between the Applicant and the Respondent which are the subject of proceedings both by Arbitration under the Commercial Arbitration Act and in this Honourable Court."
The reasons for decision of Hasluck J had been delivered on 13 July 2000 which was only a week before the affidavit was sworn. The appellant and the respondent were the parties in the proceedings before Hasluck J. The contents of those reasons can therefore be taken to be known by each party. Further, and in any event, the reasons for decision of Hasluck J are reasons of the Court and it is arguable that it was necessary only for Mavlian to make reference to those reasons without the necessity of annexing them to his affidavit. In fact, he did more, making summary statements of the effect of the reasons, and it will be remembered that Sundberg J in the decision of his that has been cited, held the material relied on need not be in admissible form. Any deficiencies in relation to the copy of the reasons annexed to the affidavit are therefore, in my view, in a different category to the deficiencies which were the subject of the decision in Robowash Pty Ltd v Robowash Finance Pty Ltd.

I am therefore of the view that although the Master was not called upon to determine this last point, he was correct in his decision that the affidavit of Mavlian outlined the nature of the dispute between the parties so that an application could properly be regarded as on foot. It may be added that, if the affidavit stood alone, par 7 alleges an admission by the appellant's solicitor going precisely though with brevity to the crucial point. I would therefore dismiss the appellant's first ground of appeal.
The second and third grounds of appeal deal with the adequacy of the affidavit which accompanied the statutory demand. The respondent's submission before the Master was that the affidavit did not comply with the rules and was, in all senses, inadequate so as to justify the statutory demand being set aside under s 459J of the Law. That section provides:
"(1)On an application under s 459G, the Court may by order set aside the demand if it is satisfied that:
(a)because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or
(b)there is some other reason why the demand should be set aside.
(2)Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect."
Section 459E(3) provides:
"Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:
(a)verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and
(b)complies with the rules."
The affidavit which accompanied the statutory demand clearly failed to comply with O 81G r 31 of the Supreme Court Rules which requires such an affidavit to be in accordance with Form 7. Firstly, the affidavit contained a heading being the heading in the proceedings in this Court. Form 7 does not provide for such a heading with the insertion of an action number. Those details are clearly quite inappropriate. Secondly, the affidavit did not accord with par 1 of Form 7 in that there is no reference in the first paragraph to the statutory demand. Thirdly, the affidavit did not provide any indication as to how the deponent was aware that the debt was due and payable by the debtor. Form 7 gives us an example of what a deponent should incorporate in this paragraph by the following words: "I am the person who, on behalf of the creditor, had dealings with the debtor company that gave rise to the debt." The Master considered it plain that what is intended in Form 7 is that the deponent give an indication of how it is that he or she knows the amount of the debt. As the Master found, this was not provided in the affidavit. Fourthly, the deponent did not swear in the affidavit that he believed there to be no genuine dispute about the existence of or amount of the debt. Such a statement is required by Form 7.
As the Master pointed out, O 81G r 31 is couched in mandatory language. It provides that the affidavit "must" comply with subr (a), (b) and (c). There is, however, a provision in O 81G r 5(1) that it is sufficient compliance with the order in relation to a document that is required to be in accordance with a form in Pt 1 of the Seventh Schedule if the document is "substantially in accordance with a form required or has only such variations as the nature of the case requires".
In this case the Master looked closely at the question whether the affidavit in question substantially complied with Form 7. As he pointed out, it is a question of fact whether or not there has been substantial compliance with the rules. The view the Master reached was that the affidavit did not substantially comply with the rules because of what he referred to as "five defects". These were in fact four defects being those that I have set out above. The Master was particularly influenced by the fact that the deponent to the affidavit had failed to swear that there was no genuine dispute between the parties. This he considered to be a significant omission. Combined with the other defects in the affidavit the Master considered it to be sufficient to conclude that there had not been substantial compliance with the rules.
The appellant argues that the Master ought to have determined that the affidavit was substantially in accordance with the form required. Counsel for the appellant relied on Carlino Enterprises v Donnybrook Holdings Pty Ltd (2001) 19 ACLC 414 where the Master (at [4]) said:
"4. It is apparent that the affidavit accompanying the statutory demand is defective. Order 81G r 31 and Form 7 set out the requirements of an accompanying affidavit. Section 459E(3)(b) requires that the accompanying affidavit complies with the Rules. Order 81G r 5(1) allows a document which is 'substantially in accordance with the form required' to stand even when a rule is in mandatory terms. The question is whether in a particular case the form of the affidavit is such as to allow a debtor to understand the nature of the case to be met: See Four Seasons Construction Pty Ltd v Eastern Metropolitan Regional Council (2001) 19 ACLC 419; [2000] WASC 277."
The appellant contends that the first problem with the affidavit (the incorporation of a Supreme Court heading) in no way affects the evidence contained within the affidavit. This submission is clearly correct. The incorporation of any relevant heading could not, in my view, invalidate the affidavit. The appellant also contends that the second non‑conforming element of the affidavit is irrelevant, namely, the failure to refer in the first paragraph to the statutory demand and thereby link the affidavit to the demand itself. The Master conceded this to be a "relatively minor" discrepancy and so it is.
The appellant argues that the Master was wrong to conclude that the affidavit provided no indication as to how the deponent was aware that the debt was due and payable. Counsel for the appellant points out that the deponent is the Chief Executive Officer of the appellant who has deposed to the fact that he is authorised to make the affidavit and to his knowledge, the debt is due and payable by the respondent to the appellant and payable pursuant to an agreement made on 2 December 1997 relating to the Red Hill Land Fill Facility. This, counsel submits, is substantial compliance with the requirements of O 81G r 31. However, I do not agree. I consider the Master to have correctly concluded that the deponent to the affidavit failed to indicate how he was aware that the debt was due and payable. That is a very important matter in the scheme of statutory demands and it would be quite unfair to their recipients not to insist upon observance of it. What is contained within the affidavit is a mere statement that, to the knowledge of the deponent, the amount is due and payable. No reference is made to any source from which that knowledge is derived.
Counsel for the appellant submitted that there was a ready explanation for the failure of the deponent to the affidavit to swear that he believed there to be no genuine dispute about the existence or amount of the debt. The affidavit was sworn on 30 June 2000, but the format for the affidavit contained within Form 7 had changed on 7 June 2000. The affidavit sworn by the deponent was in respect in accord with the requirements of Form 7 prior to the amendment, which was made on that day. It was thus a case of overlooking the amendment. Whilst this may well be the explanation for the deficiency in the affidavit, in my view, however, it is a significant defect. The Master was, in my view, entitled to conclude that the failure of the deponent to swear that there was no genuine dispute between the parties was a significant omission. It is essentially because there is no genuine dispute that the legislation has provided for the procedure.
Having determined that the affidavit accompanying the statutory demand failed to comply or substantially comply with O 81G r 31, the Master determined that the affidavit did not satisfy the requirements of s 459E(3)(b). He then turned to the question whether the demand should be set aside under s 459J(1)(b) or whether the non‑compliance could be categorised as a "mere defect" to be excused under s 459(2). The Master considered the omissions in the affidavit to be much more than "sloppy drafting" and concluded that the form of the affidavit gave no indication whether or not the deponent had turned his mind to the question whether there was a genuine dispute in relation to the debt the subject of the demand. This the Master considered a fundamental issue and one which gave rise to a substantial injustice. He was therefore unable to be satisfied that there was a mere defect in the affidavit, concluding (in the words of the statute) that there was "some other reason why the statutory demand ought be set aside".
The appellant submits that, upon the proper construction of s 459J(2), a statutory demand should not be set aside because of a defect in the accompanying affidavit, unless there be some substantial injustice. Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 15 ACLC 1001 is authority to this effect. The appellant asserts that the respondent has not pointed to any injustice or substantial injustice caused by the form of the affidavit in question, nor has it submitted that it has any doubt about how the amount of the debt is alleged to have arisen. It contends that, because the Master would not have considered the failure to refer to a genuine dispute on its own, would have justified the conclusion that there was no substantial compliance, the first, second and third deficiencies identified by the Master were insufficient to determine the matter. It is contended that the decision of the Master is in conflict with his subsequent decision in Carlino Enterprises v Donnybrook Holdings, the passage from which I have quoted above. In essence, the appellant's submission is that, on any view of the affidavit, it could not be said that substantial injustice had been done to the respondent.
I accept, however, the submission made on behalf of the respondent that the failure by the deponent to the affidavit to state that there is no genuine dispute between the parties was a crucial and substantive omission. The fact was that the parties were already locked in arbitration. Moreover, there were a number of interlocutory proceedings in that arbitration which had already been before this Court. Whilst it can be accepted that the affidavit failed to comply with Form 7 because of an amendment to that form at or about the time the affidavit was sworn, this is no sufficient excuse for the failure to incorporate within the affidavit

the statement that there was no genuine dispute between the parties. All the evidence points to a substantial dispute between them. It was, in my view, essential that the affidavit accompanying the statutory demand comply with Form 7 and include this particular sworn allegation. The failure to do so was rightly categorised by the Master as a fundamental failure and one giving rise to a substantial injustice. For these reasons I would dismiss the second and third grounds of appeal.

BURCHETT AUJ: I agree with the orders proposed by Miller J and with his reasons.