Energy Equity Corporation Ltd v Selvendra

Energy Equity Corporation Ltd (EEC) brought an application under s 459G of the Corporations Law to set aside a statutory demand for consultancy fees issued by it against Rajendram Selvendra. The demand was for $30,000 for services rendered between 1 January 2001 and 31 March 2001. The application was dismissed by Master Bredmeyer. The statutory demand could be set aside if there was a genuine dispute as to the debt, or the amount of the debt, and/or an offsetting claim. The plaintiff's case was based on two alleged offsetting claims: first, that the defendant was negligent in recommending that a payment of US$1 million be made to Prenergy in respect of a milestone payment under a sale and purchase agreement; and second, that the defendant failed to ensure that the plaintiff received dividend payments from GMR Vasavi Power Corporation Private Ltd, a company in which the plaintiff was a 25 per cent shareholder. The court found that the first claim was not genuine as the defendant had not been negligent in his work. The second claim was also not genuine as the defendant was not in a position to ensure that the plaintiff received the dividends. The court dismissed the application.