In the matter of Jacgab Pty Ltd

[2022] NSWSC 710

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Jacgab Pty Ltd [2022] NSWSC 710

Hearing dates:

31 May 2022

Decision date:

31 May 2022

Jurisdiction:

Equity - Corporations List

Before:

Hammerschlag J

Decision:

Amended Originating Process is dismissed with costs on the indemnity basis

Catchwords:

CORPORATIONS – statutory demand – application by plaintiff to set aside the defendant’s statutory demand under s 459G of the Corporations Act 2001 (Cth), plaintiff argues that it has raised a genuine dispute with respect to delivery of the goods the subject of invoices, payment of which is claimed under the statutory demand – requirements for genuine dispute – genuine dispute not established – HELD – proceedings dismissed

Legislation Cited:

Corporations Act 2001 (Cth)

Cases Cited:

Solarite Airconditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452

Category:

Principal judgment

Parties:

JacGab Pty Ltd - Plaintiff
Metal Manufactures Pty Limited trading as Cetnaj - Defendant

Representation:

Counsel:
AJ Patterson, solicitor - Plaintiff
G McNally SC - Defendant

Solicitors:
Avondale Lawyers - Plaintiff
Breene & Breene Solicitors - Defendant

File Number(s):

2022/53424

Ex tempore JUDGMENT

1. HIS HONOUR: This is an application brought by Amended Originating Process filed on 24 February, 2022 to set aside, under ss 459G and 459H of the Corporations Act 2001 (Cth), a creditor’s statutory demand dated 1 February 2022.

2. When the process and an affidavit supporting it were filed, those filing them on behalf of the plaintiff erroneously switched the cover sheet for each of them. The result was that the Registry rejected the filing. The defect was cured the following day, which was one day out of time in accordance with the statutory 21-day period in s 459G(2). The defendant took the superficially unattractive point that the proceedings were out of time, even though they had been filed and served (admittedly with incorrect cover sheets) within time. It is not necessary to deal with this point because the proceedings fail anyway.

3. The sole basis for the application is the assertion by the plaintiff that there is a genuine dispute between it and the defendant about the existence or amount of the debt to which the demand relates. Notwithstanding the low bar for the establishment of a genuine dispute, the plaintiff has failed by a long way to establish one in this case.

4. A genuine dispute must be bona fide and truly exist in fact. It must not be spurious, hypothetical, illusory or misconceived. It is sufficient if the Court is satisfied that it may have some substance, or that a plausible contention requiring investigation has been raised: see Solarite Airconditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411; Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452

5. The statutory demand claims $403,189.80 made up of 96 separate and differing amounts, each referable to an invoice relating to the claimed supply by the defendant to the plaintiff of electrical goods and equipment.

6. The plaintiff argues that it has raised a genuine dispute as to the delivery of the goods the subject of the invoices. It relies only on the following notation, which appears on the face of some (but not all) invoices covered by the statutory demand, as raising a genuine dispute that the goods were not delivered: “GOODS ARE STILL HERE AT CETNAJ HORNSBY.”

7. CETNAJ is the defendant’s trading name, and it apparently has premises at Hornsby.

8. The plaintiff’s evidence, however, does not extend to challenging delivery of any specific goods or the efficacy of any specific invoice.

9. Moreover, the uncontested evidence is that the invoices sent by the defendant to the plaintiff did not include that notation. The irresistible inference is that it has been inserted by the plaintiff. The defendant used the term “doctored”, which may be apt. It is also to be observed that copies of the invoices were attached to the affidavit which accompanied the statutory demand, and those invoices do not have that notation. If the notation were genuine, it is peculiar in that the defendant was rendering invoices for goods with its own notation that the goods were with it.

10. But even if the invoices, when sent, had the notation, the plaintiff’s evidence does not raise that the goods were thereafter not delivered.

11. Finally, the invoices adduced by the plaintiff which contain the notation, are only some of the invoices the subject of the statutory demand, and the plaintiff did not contest that even had it otherwise established a genuine dispute with respect to the invoices adduced by it, it had not done so with respect to the balance, which total $130,236.11. Accordingly, had the plaintiff otherwise met the low threshold on it to establish a genuine dispute, the best it could have achieved is a variation of the statutory demand down to this amount.

12. The Amended Originating Process is dismissed with costs.

13. The defendant then applied for an indemnity costs order. The plaintiff’s position was that the matter was in the Court’s hands. The Court ordered that the plaintiff pay the defendant’s costs on an indemnity basis. The plaintiff did not require reasons for this costs order.

************

Decision last updated: 31 May 2022