Linecrest Pty Ltd v Makekadi Mining Services (NT) Pty Ltd - [2025] WASC 253

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   LINECREST PTY LTD -v- MAKEKADI MINING SERVICES (NT) PTY LTD [2025] WASC 253
CORAM:   FORRESTER J
HEARD:   9 MAY 2025
DELIVERED          :   27 JUNE 2025
FILE NO/S:   COR 185 of 2024
BETWEEN:   LINECREST PTY LTD
Plaintiff
AND
MAKEKADI MINING SERVICES (NT) PTY LTD
Defendant

Catchwords:

Corporations - Statutory demand - Application to set aside statutory demand on grounds of genuine dispute - Validity of service of SEPA Notice - Whether there is a genuine dispute - Application dismissed

Legislation:

Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)
Service and Execution of Process Act 1992 (Cth)
Service and Execution of Process Regulations 2018 (Cth)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr M Priestly
Defendant	:	Mr L Gunthorpe

Solicitors:

Plaintiff	:	Pacer Legal
Defendant	:	Stratos Legal

Cases referred to in decision:

Arcade Badge Embroidery Co Pty Ltd v Deputy Commissioner of Taxation [2005] ACTCA 3; (2005) 157 ACTR 22
CA Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31
Chief Commissioner of State Revenue (NSW) v Boss Constructions (NSW) Pty Ltd [2018] NSWCA 270; (2018) 98 NSWLR 473
David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265
Elan Copra Trading Pty Ltd v JK International Pty Ltd [2005] SASC 501; (2005) 226 ALR 349; (2005) 195 FLR 229
Energy Conservation Systems Pty Ltd v Downer EDI Engineering Electrical Pty Ltd [2008] NSWSC 1139; (2008) 221 FLR 393
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669
Joe Mangraviti Pty Ltd v Lumley Finance Ltd [2010] NSWSC 61
Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd [1999] VSC 435; (1999) 158 FLR 256
Old Kiama Wharf Co Pty Ltd v Deputy Commissioner of Taxation [2005] NSWSC 929
Owners Corp SP66609 v Perpetual Trustee Co Ltd [2010] NSWSC 497
Re Black Tie Holdings Pty Ltd [2022] NSWSC 781
Re LDW Constructions Pty Ltd [2019] NSWSC 1159
Re MHC Pathology Pty Ltd [2020] VSC 789; (2020) 356 FLR 222
Roberts v Wayne Roberts Concrete Constructions Pty Ltd [2004] NSWSC 734; (2004) 208 ALR 532
Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648; (1997) 15 ACLC 570
Slap Corporation Pty Ltd v Civil, Infrastructure and Logistics Pty Ltd [2017] VSC 168; (2017) 50 VR 542; (2017) 317 FLR 456
Tekno Autosports Pty Ltd v Jenkins [2014] FCA 774
Tokich Holdings Pty Ltd v Sheraton Constructions (NSW) Pty Ltd (in liq) [2004] NSWSC 527; (2004) 185 FLR 130; (2004) 22 ACLC 955
Ultimate Manufacturing Pty Ltd v Lyell Morris Pty Ltd (1995) ACLC 1268
WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 2] [2023] WASCA 85
Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 239 FLR 339

FORRESTER J:

Introduction

On or about 4 November 2024, the Defendant sent a statutory demand and accompanying affidavit to the registered office of the Plaintiff. By the demand, the Defendant sought payment of the sum of $197,081.39.
The Plaintiff failed to pay the sum demanded and instead, pursuant to s 459G of the Corporations Act 2001 (Cth) (Act), filed an application to set the statutory demand aside (Application) on the basis that there was a genuine dispute as to the existence of the debt, or on the basis that there is some other reason it should be set aside.
The Defendant submits that the Application was not properly served within time and therefore must be dismissed. In the alternative, the Defendant submits that there is no genuine dispute as to the existence of the debt, and no other reason to set it aside.
For the reasons which follow, the Application must be dismissed.

Evidence

The Plaintiff read the affidavits of:
(a)Rodney Grant Illingworth sworn on 22 November 2024 (Illingworth Affidavit); and
(b)Matthew David Priestly sworn on 1 April 2025.
The Defendant read the affidavits of:
(a)Luke Taylor Gunthorpe sworn on 27 March 2025;
(b)Paul Alexander Douglas Metcalf sworn on 27 March 2025 (Metcalf Affidavit); and
(c)Matthew John Hardy sworn on 27 March 2025 (Hardy Affidavit).
Neither party sought to cross-examine the deponents of any of the affidavits.

Evidence for the Plaintiff

The sole director of the Plaintiff, Mr Illingworth,[1] deposed as to a conversation between him and Matthew Hardy (the sole director of the Defendant)[2] and another man, Shannon Condon, in or about January 2024, regarding the Defendant's support of what he called the 'Frances Creek Project' (the Project). The site of the Project is in the Northern Territory.
[1] Illingworth Affidavit, Annexure RGI-1.
[2] Illingworth Affidavit, Annexure RGI-2.
According to Mr Illingworth, the arrangement arrived at set out the basis upon which the Defendant would be paid for its services, which Mr Illingworth says was agreed to by Mr Hardy, and which was to the effect that the Defendant would only be paid once the Project site became operational, and was contingent on the Plaintiff receiving funding, which was being sought on its behalf by Mr Hardy.[3]
[3] Illingworth Affidavit [14] - [18].
In April 2024, Mr Illingworth received correspondence from Mr Condon regarding proposed rates for certain equipment, an email from Mr Hardy regarding the proposed funding, and a proposal regarding fees.
However, by the end of May 2024, Mr Illingworth became concerned that Mr Hardy was not going to obtain the funding but was persisting with the notion that it might, in order to be contracted to do the services work for the Project.[4]
[4] Illingworth Affidavit [22] - [24].
Mr Illingworth deposed that the equipment supplied by the Defendant was not fit for purpose.[5]
[5] Illingworth Affidavit [26].
Ultimately, the Plaintiff was able to source 'more reliable equipment' elsewhere, and in or about late August 2024, advised Mr Hardy that the company would get the Project services work if it could secure the funding sought.[6]
[6] Illingworth Affidavit [27] - [29].
Mr Illingworth deposed that he did not sign any hire agreements or contracts in relation to the Defendant's machinery and could not locate any in the Plaintiff's records.[7]
[7] Illingworth Affidavit [30] - [31].
In late August 2024, the Plaintiff received correspondence from the Defendant dated 28 August 2024, entitled, in part, 'Formal Letter of Demand', demanding $197,081.39, allegedly for hire services charges pursuant to two hire agreements, and listing outstanding invoices for which the Plaintiff owed payment, copies of which were said to be attached (Letter of Demand).[8] The invoices attached added up to only $161,937.49, with three of the invoices attached being for lesser amounts than listed in the Letter of Demand.[9]
[8] Illingworth Affidavit [32] - [34], RGI-7.
[9] Illingworth Affidavit, Annexure RGI-7, 55 - 67.
In the Letter of Demand, the Defendant alleged that Mr Illingworth had a conversation with Mr Hardy in which Mr Illingworth indicated that payment would be made in two instalments, on 19 August 2024 and within two weeks thereafter.[10]
[10] Illingworth Affidavit [35].
In his affidavit, Mr Illingworth denied indicating that any payment would be made 'in the short term',[11] but said that in or about late August 2024, he had a meeting with Mr Hardy, in which Mr Hardy said that he needed money. Mr Illingworth deposed that he told Mr Hardy that if certain circumstances came about, the Plaintiff might be able to pay the Defendant something, but the Plaintiff had a long way to go and could not provide any guarantees.[12]
[11] Illingworth Affidavit [36].
[12] Illingworth Affidavit [37] - [38].
On 28 October 2024, Mr Illingworth received an email demanding the amount of $197,081.39 from Paul Metcalf, of Collectmore Pty Ltd, acting on behalf of the Plaintiff.[13] A copy of the Letter of Demand, including the same invoices, was enclosed.[14]
[13] Illingworth Affidavit [39]. Mr Illingworth deposed that he received this email on 28 August 2024 but the email at Illingworth Affidavit, Annexure RGI-8 is dated 28 October 2024.
[14] Illingworth Affidavit [39] - [43].
The statutory demand seeking payment of the sum of $197,081.39 was sent, under cover of a letter dated 4 November 2024, to the Plaintiff at its registered office.[15] According to Mr Illingworth, it was received by the Plaintiff 'on or about 4 November 2024'.[16]
[15] Illingworth Affidavit, Annexure RGI-3.
[16] Illingworth Affidavit [7].
Mr Illingworth deposed as to some oddities in the charges in the invoices,[17] and said that these, and the fact that the agreement was still being negotiated between the Plaintiff and Defendant, meant he was unable to properly consider the statutory demand.[18]
[17] Illingworth Affidavit [44] - [48].
[18] Illingworth Affidavit [50].
In his affidavit sworn 1 April 2025, Mr Priestly deposed as to the fact that, on 22 November 2024, he sent the email serving the Application and supporting affidavit to Mr Hardy's email address and that, on the same day, he received a phone call from a person identifying himself as Mr Hardy, acknowledging receipt of the email and indicating that he intended to provide documents to Mr Priestly over the following weekend. Mr Priestly did not receive any such documents.

Evidence for the Defendant

In the Hardy Affidavit, Mr Hardy deposed that the Defendant was approached by the Plaintiff to hire a Water Truck and 980H Loader. He deposed that, on or about 6 April 2024, the Defendant signed and issued hire agreements for a 980H Loader and 14,000L Water Truck to the Plaintiff, and that on or about 2 May 2024, the Defendant received those hire agreements executed by Mr Bruce Christian (Hire Agreements).[19]
[19] Hardy Affidavit [5] - [11].
Also annexed to the Hardy Affidavit were three Purchase Orders from the Plaintiff to the Defendant, all dated 24 April 2024. The Purchase Orders related to '980 Hire' for an estimated one month, at a cost of $55,000,[20] 'Equipment hire for Helena bench removal and rail haul' at a cost of $77,000,[21] and 'Water Truck hire' for $11,000.[22]
[20] Hardy Affidavit, Annexure MJH-1, 9.
[21] Hardy Affidavit, Annexure MJH-1, 10.
[22] Hardy Affidavit, Annexure MJH-1, 11.
Mr Hardy deposed that he did not know if Mr Christian was 'strictly an employee' of the Plaintiff, but he had always known him to be the operations manager for the Project.[23] Further, he knew Mr Christian to be an employee of Adroit Capital Group Management Services Pty Ltd, of which Mr Illingworth was also a director.[24]
[23] Hardy Affidavit [12].
[24] Hardy Affidavit [13] - [14], Annexure MJH-1, 53.
Between April 2024 and June 2024, the Defendant supplied the 'water truck, the 980H loader and the equipment' to the Plaintiff and 'rendered tax invoices from time to time in the sum of $197,081.39'.[25] While the statement of account as at 6 November 2024, showing that amount owing, was annexed to the Hardy Affidavit,[26] it was not consistent with the invoices annexed to the Letter of Demand and the statutory demand.
[25] Hardy Affidavit [16] - [17].
[26] Hardy Affidavit, Annexure MJH-1, 64.
As to this, Mr Hardy deposed that the Letter of Demand 'inadvertently' included copies of three tax invoices (tax invoices 0077, 0079 and 0080) that had been superseded. Those three invoices were originally issued for lesser amounts, but were subsequently 'amended with the knowledge of, and approved [sic] by the Plaintiff'.[27]
[27] Hardy Affidavit [21] - [22].
As to the assertion of the amendment of the invoices having been made with the knowledge and approval of the Plaintiff, Mr Hardy's affidavit annexed emails sent to and from Mr Christian, and copied to Mr Illingworth's email address, between 5 and 8 May 2024, in which Mr Christian approved the amended invoices.[28]
[28] Hardy Affidavit [29] - [35], Annexure MJH-1, 81 - 92.
The Letter of Demand stated that Mr Illingworth had made assurances regarding payment which had not been fulfilled.[29]
[29] Hardy Affidavit, Annexure MJH-1, 66 - 67.
In his affidavit, Mr Hardy did not address the fact that the same (incorrect) invoices annexed to the Letter of Demand were included with the statutory demand.
Mr Hardy deposed that the Defendant received a copy of the Application and Illingworth Affidavit by regular post at the Defendant's principal place of business in Young, NSW on 4 December 2024.
Mr Hardy deposed that at no point had he agreed, or even discussed, that the Plaintiff's payment of invoices could be deferred pending the Plaintiff receiving any funding. He would never have agreed to such an arrangement and the Defendant could not have afforded to carry such an expense indefinitely.[30]
[30] Hardy Affidavit [37] - [39].
In the Metcalf Affidavit, Mr Metcalf deposed that the statutory demand and affidavit were sent by regular post to the Plaintiff's registered office, and also by email to a number of email addresses associated with the Plaintiff, on 4 November 2024.[31]

Hire Agreements

[31] Metcalf Affidavit [4].

The Hire Agreements were annexed to the Hardy Affidavit. In each case, they were signed by Mr Christian, in the place specified for the 'authorised representative' of the Plaintiff.[32]
[32] Hardy Affidavit, Annexure MJH-1, 26, 41.
The Hire Agreements provided for the issuing of invoices on or from the last calendar day of the month, and paid in line with the 'agreed payment terms', or 'in accordance with the relevant Security of Payment legislation for the State or Territory which the work has been conducted – whichever is the earlier'.[33]
[33] Hardy Affidavit, Annexure MJH-1, 15 - 16, 30 - 31.
The Hire Agreements also provided that Linecrest was required to determine the condition and suitability of the Equipment for the purpose required, prior to using the Equipment.[34]
[34] Hardy Affidavit, Annexure MJH-1, 18, 33.
Clause 12.1 of each of the Hire Agreements provided:
This Agreement including its Schedules, Special Conditions and Annexures forms the entire agreement between the parties and supersedes any previous agreements, offers or quotations provided by [the Defendant] to [Linecrest] for the Equipment.[35]
[35] Hardy Affidavit, Annexure MJH-1, 19, 34.
The Hire Agreements defined 'Equipment' as meaning the equipment set out in Schedule 2, and as including any part of that equipment.[36]
[36] Hardy Affidavit, Annexure MJH-1, 14, 29.
Schedule 2 of the Loader Hire Agreement stated the 'Equipment' to be a '980H Loader', with an hourly rate of $110.[37] Schedule 2 of the Water Cart Agreement provided that the 'Equipment' was a '14000 Litre Water Cart', with an hourly rate of $106.[38]
[37] Hardy Affidavit, Annexure MJH-1, 22.
[38] Hardy Affidavit, Annexure MJH-1, 37.
Schedule 4 of the Hire Agreements provided a matrix as to the parties responsible for various tasks and associated costs. As to mobilisation and assembly costs, the Loader Hire Agreement provided that the Plaintiff was responsible for mobilisation and assembly costs, as well as demobilisation and disassembly costs.[39]
[39] Hardy Affidavit, Annexure MJH-1, 24 - 25.
Schedule 4 of the Water Cart Hire Agreement provided that the Defendant was the party responsible for that task and associated costs.[40] Both parties were responsible for demobilisation and disassembly costs.[41]

Statutory demand

[40] Hardy Affidavit, Annexure MJH-1, 39.

[41] Hardy Affidavit, Annexure MJH-1, 40.

The statutory demand dated 28 October 2024,[42] required the payment of the debt to be made within 21 days of service. It stated that the demand was for 'the amount of $197,081.39 being the amount of the debt described in the Schedule'.
[42] Illingworth Affidavit, Annexure RGI-3, 18.
The Schedule stated:
The Debtor Company is indebted to the Creditor Company for the sum of $197,081.39 for tax invoices dated between the 30^th April 2024 and the 30^th June 2024, particulars of which are contained in the Formal Letter of Demand dated 28^th August 2024 attached hereto.[43]
[43] Illingworth Affidavit, Annexure RGI-3, 20.
However, it does not appear that the 'Formal Letter of Demand' dated 28 August 2024 was actually attached to the statutory demand.[44]
[44] Illingworth Affidavit, Annexure RGI-3, 18 - 22.
Included with the statutory demand, as required, was the affidavit of Matthew John Hardy affirmed on 29 October 2024.[45] That affidavit stated, in part:
I am the Director of the Creditor Company in respect of debts totalling $197,081.39 owed to it by Linecrest Pty Ltd ACN 633 818 514 in relation to outstanding invoices as per the Schedule in the Form 509H Statutory Demand [emphasis added].
[45] Illingworth Affidavit, Annexure RGI-3, 21.
A number of tax invoices, which together totalled $161,937.49, appear to have been included with the statutory demand and affidavit (but were not said by either document to have been attached).[46] These invoices were the same invoices which were attached to the Letter of Demand.
[46] Illingworth Affidavit, Annexure RGI-3, 22 - 34.

Statutory framework

Corporations Act 2001 (Cth)

Pursuant to s 9 of the Act:
defect, in relation to a statutory demand, includes:
(a)an irregularity; and
(b)a misstatement of an amount or total; and
(c)a misdescription of a debt or other matter; and
(d)a misdescription of a person or entity.
…
statutory demand means:
(a) a document that is, or purports to be, a demand served under section 459E; or
(b)such a document as varied by an order under subsection 459H(4).
statutory period means:
(a) if a period longer than 21 days is prescribed—the prescribed period; or
(b)otherwise—21 days.
Winding up in insolvency is dealt with under pt 5.4 of the Act. Division 2 of pt 5.4 deals with matters relating to statutory demands and div 3 deals with applications to set aside a statutory demand. Relevantly, the Act provides as follows:
459E Creditor may serve statutory demand on company
(1) A person may serve on a company a demand relating to:
(a)a single debt that the company owes to the person, that is due and payable and whose amount is at least the statutory minimum; or
(b)2 or more debts that the company owes to the person, that are due and payable and whose amounts total at least the statutory minimum.
(2)The demand:
(a)if it relates to a single debt—must specify the debt and its amount; and
(b)if it relates to 2 or more debts—must specify the total of the amounts of the debts; and
(c)must require the company to pay the amount of the debt, or the total of the amounts of the debts, or to secure or compound for that amount or total to the creditor’s reasonable satisfaction, within the statutory period after the demand is served on the company; and
(d)must be in writing; and
(e)must be in the prescribed form (if any); and
(f)must be signed by or on behalf of the creditor.
(3)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 of court.
The prescribed form pursuant to s 459E(2)(e) is Form 509H, which includes a requirement that it state an address for service of copies of any application to set aside the statutory demand in the State or Territory in which the demand is served on the company, being, if solicitors are acting for the creditor, the address of the solicitors.[47] Further, the Act provides the following:
[47] Corporations Regulations 2001 (Cth), reg 1.0.03, sch 1 Item 51H.
459F When company taken to fail to comply with statutory demand
(1) If, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period.
(2)The period for compliance with a statutory demand is:
(a)if the company applies in accordance with section 459G for an order setting aside the demand:
(i)if, on hearing the application under section 459G, or on an application by the company under this paragraph, the Court makes an order that extends the period for compliance with the demand—the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or
(ii)otherwise—the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or
(b)otherwise—the statutory period after the demand is served.
459G Company may apply
(1)A company may apply to the Court for an order setting aside a statutory demand served on the company.
(2)An application may only be made within the statutory period after the demand is so served.
(3)An application is made in accordance with this section only if, within that period:
(a) an affidavit supporting the application is filed with the Court; and
(b)a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.
459H Determination of application where there is a dispute or offsetting claim
(1) This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following:
(a)that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;
(b)that the company has an offsetting claim.
(2)The Court must calculate the substantiated amount of the demand in accordance with the formula:
where:
admitted total means:
(a)the admitted amount of the debt; or
(b)the total of the respective admitted amounts of the debts;
as the case requires, to which the demand relates.
offsetting total means:
(a)if the Court is satisfied that the company has only one offsetting claim—the amount of that claim; or
(b)if the Court is satisfied that the company has 2 or more offsetting claims—the total of the amounts of those claims; or
(c)otherwise—a nil amount.
(3)If the substantiated amount is less than the statutory minimum, the Court must, by order, set aside the demand.
(4)If the substantiated amount is at least as great as the statutory minimum, the Court may make an order:
(a)varying the demand as specified in the order; and
(b)declaring the demand to have had effect, as so varied, as from when the demand was served on the company.
(5)In this section:
admitted amount, in relation to a debt, means:
(a)if the Court is satisfied that there is a genuine dispute between the company and the respondent about the existence of the debt—a nil amount; or
(b)if the Court is satisfied that there is a genuine dispute between the company and the respondent about the amount of the debt—so much of that amount as the Court is satisfied is not the subject of such a dispute; or
(c)otherwise—the amount of the debt.
offsetting claim means a genuine claim that the company has against the respondent by way of counterclaim, set‑off or cross‑demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demand relates).
respondent means the person who served the demand on the company.
(6)This section has effect subject to section 459J.
459J Setting aside demand on other grounds
(1) On an application under section 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.
…
459L Dismissal of application
Unless the Court makes, on an application under section 459J, an order under section 459H or 459J, the Court is to dismiss the application.

Service and Execution of Process Act 1992 (Cth)

The Service and Execution of Process Act 1992 (Cth) (SEPA) applies to civil proceedings in a court.[48] The term 'court' is relevantly defined as meaning a court of a State.[49] SEPA relevantly provides:
[48] SEPA s 13.
[49] SEPA s 3.
9 Service on companies and registered bodies
(1) Service of a process, order or document under this Act on a company is to be effected by leaving it at, or by sending it by post to, the company’s registered office.
(2) Without limiting the operation of subsection (1), a process, order or document may be served on a company by delivering a copy of it personally to a director of the company who resides in Australia.
…
15 Initiating process may be served in any part of Australia
(1) An initiating process issued in a State may be served in another State.
…
(3) Service on a company or a registered body must be effected in accordance with section 9.
16 Information to be provided
Service is effective only if copies of such notices as are prescribed are attached to the process, or the copy of the process, served.
Pursuant to reg 6 of the Service and Execution of Process Regulations 2018 (Cth), the prescribed notice for the purposes of s 16 of SEPA is Form 1, sch 1 (SEPA Notice).

Statutory demand

The statutory demand was in Form 509H, as required by s 459E(2)(e) of the Act and sch 2 of the Corporations Regulations 2001 (Cth) (Regulations). However, there were two problems with the statutory demand.
The first was that the address of the creditor company for service of copies of any application and affidavit pursuant to s 459G of the Act was an address in Young, NSW, and not an address in the Territory, namely, the Northern Territory, in which the statutory demand was served, as required.
The address for service of an application and affidavit pursuant to s 459G of the Act stated in the statutory demand was the principal place of business of the Defendant, in Young, NSW.[50] Unless the application was to be personally served on a director of the Plaintiff, service at this address would not have been valid, as service was required to be on the registered address of the Defendant, being an address in Pitt Street, Sydney.[51]
[50] Illingworth Affidavit, Annexure RGI-2, 14.
[51] For interstate service see SEPA s 9, or intrastate service see Corporations Act2001 (Cth) s 109X(1).
The second problem was that, as I have indicated, the statutory demand did not annexe the 'Formal Letter of Demand' referred to in the Schedule as particularising the debt. Further, the supporting affidavit referred to the Schedule to the statutory demand did not itself annexe the invoices. The invoices themselves were apparently enclosed with the statutory demand and supporting affidavit, but they did not add up to the amount demanded.

The Application

The Application is made on the grounds that:
(a)there is a genuine dispute as to the existence of the debt.
(b)there is 'some other reason' to set aside the statutory demand, in accordance with s 459J(1)(b) of the Act, namely, that the statutory demand process was being used by the Defendant for an improper purpose, and thus the Defendant was engaging in an abuse of process.
The Plaintiff did not, in the Application, contend that the statutory demand was invalid by reason of either of the errors referred to at [52] ‑ [54] above. In written submissions, it submitted that the statutory demand was 'inherently defective' but relied only on the existence of a genuine dispute to base that submission.[52]
[52] Plaintiff's submissions [50], [56], [67].
The Application did not contain, as a ground for setting aside the statutory demand, that there was a defect in the statutory demand of such a nature as to warrant it being set aside. The Illingworth Affidavit provided no evidence capable of supporting such a ground, for example by suggesting that substantial injustice had occurred as a result of any defects.
In oral submissions, the Plaintiff did argue that the statutory demand should be set aside as a result of a defect causing substantial injustice. However, as that was not stated to be a ground of the Application within the statutory period, it was not open to the Plaintiff to raise it at the hearing.[53]

Time of service of the Application

[53] Tokich Holdings Pty Ltd v Sheraton Constructions (NSW) Pty Ltd (in liq) [2004] NSWSC 527; (2004) 185 FLR 130; (2004) 22 ACLC 955 [51].

The Application and Illingworth Affidavit were filed on 22 November 2024.
At the hearing, a preliminary issue arose as to whether, putting to one side the absence of the SEPA notice, the Application and Illingworth Affidavit had been served on the Defendant within 21 days of service of the statutory demand. Neither party appeared to have addressed their mind to the issues of when the statutory demand had been served, or when the Application had been served, having regard to the fact that both were sent by ordinary post to interstate locations. Ultimately, this issue does not need to be specifically dealt with; the Defendant conceded that the Application and Illingworth Affidavit had been served within the required 21 days, and I am satisfied that the concession was properly made.

Means of service of the Application

According to the Hardy Affidavit, the Application and Illingworth Affidavit were received by the Defendant at its principal place of business by regular post on 4 December 2024.[54] The service address stated on the Application was the registered office of the Defendant, but there is no indication that it was served at that address.
[54] Hardy Affidavit [23].
The documents were also said to have been emailed to various emails associated with the Defendant. However, as the Application was a document to which s 9 of SEPA applied, service could not be effected by electronic communication.[55]

Failure to attach a SEPA Notice to the Application

[55] Further, and in any event, s 600G of the Act was repealed effective 15 September 2023, and accordingly, even if SEPA did not apply, service by electronic communication was not a valid means of service under the Act.

It is common ground that, in serving the Application and Illingworth Affidavit on the Defendant in a State other than Western Australia, the Plaintiff should have, but did not, include a SEPA Notice.

Was the Application validly served, or can invalid service be rectified so as to enable the Application to proceed?

Effect of failure to serve a SEPA Notice with Application

The Defendant submitted that the Application was not validly served on the basis that no SEPA Notice was attached to the Application, and that, as a result, the Application was not properly served within 21 days and must therefore be dismissed.[56]
[56] Defendant's submissions [16] - [17].
The Plaintiff called in aid the equitable jurisdiction of the court and submitted that the court could 'stop a creditor from saying that no SEPA notice means the court [sic] cannot hear about a genuine dispute over the debt'.[57]
[57] Plaintiff's submissions [77] - [79].
Pursuant to SEPA, service on a company of any initiating process in a civil proceeding in a court must be effected in accordance with s 9, namely by personally serving it on a director of the company or by leaving it at, or sending it by post to, the company's registered office. Service is not effective unless a SEPA Notice is attached to the process, or a copy of the process, that is served.
In Ultimate Manufacturing Pty Ltd v Lyell Morris Pty Ltd,[58] Senior Master Mahoney considered an application on the part of a company to set aside a statutory demand which provided an address for service of the application which was not in the same State as the State in which the statutory demand was served. The application was dismissed on the basis that, the company having failed to serve a SEPA Notice with the application, notice of the application had not been served on the creditor in accordance with s 459G(3)(b) of the Act.
[58] Ultimate Manufacturing Pty Ltd v Lyell Morris Pty Ltd (1995) ACLC 1268 (Ultimate Manufacturing).
In Marlan Financial Services Pty Ltd,[59] Byrne J similarly held that in circumstances where a SEPA Notice was required but not served, service of an application to set aside a statutory demand was not valid, and the court had no jurisdiction to act.[60]
[59] Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd [1999] VSC 435; (1999) 158 FLR 256 (Marlan).
[60] Marlan [24].
In Elan Copra Trading Pty Ltd v JK International Pty Ltd,[61] the court held that an application to set aside a statutory demand was ineffective by reason of a number of issues with its service, including the failure to serve a SEPA Notice.[62]
[61] Elan Copra Trading Pty Ltd v JK International Pty Ltd [2005] SASC 501; (2005) 226 ALR 349; (2005) 195 FLR 229 (Elan Copra).
[62] See also Energy Conservation Systems Pty Ltdv Downer EDI Engineering Electrical Pty Ltd [2008] NSWSC 1139; (2008) 221 FLR 393; Re MHC Pathology Pty Ltd [2020] VSC 789; (2020) 356 FLR 222.
Having regard to this line of authority, the failure of the Plaintiff to attach a SEPA Notice to the Application has the result that the Application was not effectively served on the Defendant, and therefore was not 'made in accordance with' s 459G.

Failure to serve the Defendant at its registered office

While it was not an issue taken up by the Defendant, the Plaintiff's failure to serve the Defendant at its registered office was also a failure to comply with the requirements of SEPA.
In its submissions, the Defendant suggested that 'authorities generally seem to acknowledge that service at the address for service in the statutory demand is good service (provided it is within time)'.[63]
[63] Defendant's submissions [12].
However, contrary to the Defendant's submission, in the case of service of the Application in a State other than the State in which it was filed, the authorities establish that service of the Application on the Defendant other than by personal service on a Director of the Defendant or at the Defendant's registered office is not effective.
In Elan Copra, White J, with whom Doyle CJ and Perry J agreed, observed that:
It is doubtful in any event that the requirements of SEPA with respect to service are capable of being waived. SEPA represents an enactment, substantially, of the recommendations contained in the ALRC Report No 40 'Service and Execution of Process'. The ALRC Report did recommend that the requirement for service of a notice (to which effect is given in s 16) should be capable of being waived.[64] However, SEPA does not contain any provision permitting waiver by the parties of its requirements. This makes it difficult to construe SEPA as impliedly authorising the waiver of its requirements with respect to service or, at least, the requirement for service of a s 16 notice. Whether or not a waiver accompanied by detrimental reliance may give rise to an estoppel is not, as will be seen shortly, something which needs to be considered in this case.[65]
[64] Australian Law Reform Commission, Service and Execution of Process, Report 40 [205].
[65] Elan Copra [38].
The Defendant's address for service was (improperly) stated in the statutory demand as the Defendant's principal place of business in NSW. It might be argued this constituted a purported waiver by the Defendant of the requirement that it be served at its registered office. However, having regard to my decision that the failure to attach a SEPA Notice rendered service ineffective, it is unnecessary for me to decide if such a waiver (a) had taken place and, if so, (b) could have been effective.

Can the failure to effectively serve the Application be rectified to enable the Application to proceed?

The Plaintiff argued that:
There is a line of authority that the court [sic] has a robust ability to stop a creditor, before any winding up petition is brought, from unconscionably using the black letter of the law as a way of taking advantage of a debtor who genuinely disputes a debt.[66]
[66] Plaintiff's submissions [33].
To the extent that the Plaintiff's submission was that, as a matter of principle, the court's equitable jurisdiction can be exercised to prevent an application for winding up which is attended by unconscionable conduct, so much does not appear to be contentious. Whether the exercise of the court's jurisdiction to prevent an abuse of process in such circumstances can be exercised by way of placing conditions on a creditor, or pursuant to s 459S, or both, it is plain that the court has the power to so act.[67]
[67] Ultimate Manufacturing (1270 - 1271); Marlan [37] - [44]; Slap Corporation Pty Ltd v Civil, Infrastructure and Logistics Pty Ltd [2017] VSC 168; (2017) 50 VR 542; (2017) 317 FLR 456; Elan Copra [38], [44] - [45].
However, the Plaintiff's submission went beyond this. The Plaintiff contended that, even in the absence of proper and timely service of an application to set aside a statutory demand, the court's equitable jurisdiction could be exercised so as to set aside the statutory demand.[68] In support of this contention, the Plaintiff cited Woodgate v Garard Pty Ltd,[69] Joe Mangraviti Pty Ltd v Lumley Finance Ltd,[70] Arcade Badge Embroidery Co Pty Ltd v Deputy Commissioner of Taxation,[71] and Rochester Communications Group Pty Ltd v Lader Pty Ltd.[72]
[68] Plaintiff's submissions [71] - [81].
[69] Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 239 FLR 339 (Woodgate).
[70] Joe Mangraviti Pty Ltd v Lumley Finance Ltd [2010] NSWSC 61 (Mangraviti).
[71] Arcade Badge Embroidery Co Pty Ltd v Deputy Commissioner of Taxation [2005] ACTCA 3; (2005) 157 ACTR 22 (Arcade).
[72] Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648; (1997) 15 ACLC 570 (Rochester).
In my view, a close analysis of these authorities does not reveal strong support for the Plaintiff's submission, particularly in the context of subsequent authority.
Woodgate involved a winding up application. In the course of his reasons for decision, Palmer J summarised the preponderance of authority as supporting a proposition that in certain circumstances (which included reliance on the presumption of insolvency) the court may, in its discretion and in the interests of justice, set aside a statutory demand under s 459J(1)(b), not for want of good service, but for want of fair notice.[73]
[73] Woodgate [44](iii).
Palmer J did not specify how, in the course of (as opposed to after dismissal of, or in the absence of) an application to set aside a statutory demand, the presumption of insolvency could arise. In any event, as there was no application to set aside the statutory demand in Woodgate, there was no basis for s 459J to operate.
However, in Mangraviti, also a matter decided by Palmer J, the plaintiff had applied to set aside the statutory demand, on the basis that, despite service of the statutory demand having been effected upon the debtor at its registered office, the statutory demand had not come to the notice of the debtor in time, and as a result, the application had not been filed within 21 days of service. Palmer J found that, while the statutory demand had been validly served, the statutory demand should be set aside pursuant to s 459J(1)(b), on the basis of a 'lack of fair notice'.[74]
[74] Mangraviti [13] - [14].
Arcadeinvolved a case in which the application to set aside the statutory demand was properly served within time. The statutory demand was set aside pursuant to s 459J(1)(b) having regard to the conduct of the creditor in that case.
In Rochester, the Full Court of the Federal Court of Australia dismissed an appeal against a refusal to set aside a statutory demand. The original application, and the appeal, were dismissed on the basis that the application was not properly served on the registered office of the company. Beaumont J accepted that 'the doctrine of estoppel can operate in this area in certain circumstances'.[75] Moore J said:
satisfaction of the requirement in s 459G(3)(b) that the application be served is essential to found the Court's jurisdiction to determine the application to set aside the statutory demand. It may be doubted whether, if there had not been service in any of the ways I have discussed, estoppel has a part to play so as to satisfy the requirement in s 459G(3)(b).[76]
[75] Rochester (671).
[76] Rochester (685).
None of these cases involved the failure to attach a SEPA Notice to the originating process, or interstate service of an originating process. Further, only in Mangraviti were the strict requirements of service under s 459G avoided.
In Mangraviti and Woodgate, and, to the extent that they allowed for the potential for equity to permit the extension of the scope of s 459G, Arcade and Rochester, it was clear that the means by which it was contemplated that the statutory demand was to be set aside in the event that unconscionable conduct had occurred was by the application of s 459J of the Act. That is, in all of the cases, it was left open (even if only just open) that, even in the absence of compliance with s 459G, in certain circumstances, a plaintiff may be entitled to a remedy pursuant to s 459J(1)(b).
Such a conclusion is difficult to reconcile with the opening words to s 459J, which predicate its operation on the application being made 'under s 459G'.
In Chief Commissioner of State Revenue (NSW) v Boss Constructions (NSW) Pty Ltd,[77] the New South Wales Court of Appeal unanimously rejected the proposition that estoppel can operate in relation to the question of extension of the time in which an application pursuant to s 459G is required to be made. Bathurst CJ (with whom Leeming JA and Sackville AJA agreed) gave the following reasons for so concluding:
In the present case, it seems to me plain that an estoppel cannot operate to effectively extend the time limitation imposed by s 459G(2). This is for a number of reasons. First, as was pointed out in [David Grant & Co Pty Ltd v Westpac Banking Corporation][78] at 277, the requirement as to time defines 'the jurisdiction of the court' by imposing the requirement as 'an essential condition of the new right conferred by s 459G'. Just as the time could not be extended by an order under s 1322(4)(d) of the Act so as to confer jurisdiction, it cannot be extended either by agreement of the parties or by the operation of an estoppel.
Second, the text of the legislation supports this conclusion. The expression 'may only' in s 459G(2) tells against any variation in the time limit as a result of an agreement of the parties or an estoppel. Further, the other detailed requirements in Pt 5.4 of the Act relating to the form of the application to set aside a demand under s 459G and the limited power to extend the time in s 459F(2)(a)(i), coupled with the wording of s 459G itself, suggest that the statutory time limits cannot be varied.
Third, the policy behind Pt 5.4 of the Act tends against the suggestion that time limits can be varied as a result of the operation of an estoppel. I have already set out the history of the legislation and what has been said by the High Court concerning the policy behind it. In summary, the object of the legislation was to provide a mechanism by which applications to wind up potentially insolvent companies could be dealt with promptly, with an application required to be finally determined within 6 months in accordance with s 459R(1). It did this, in the case of the statutory demand procedure, by providing detailed steps to be taken with precise time limits. It can readily be seen why the legislature regarded this policy to be in the public interest, and this provides a further powerful reason why the time limits should not be able to be varied by the application of doctrines such as estoppel.
To the extent that such a conclusion may produce harsh results, this must be balanced against the public interest in determining applications to wind up insolvent companies promptly and avoid injustices that may be caused by the continued trading of such companies: see David Grant at 279; Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661; [2000] NSWCA 37 at [50]. Further, the provisions of s 459S, which confer on a court the power to grant leave to raise matters which could have been raised in an application under s 459G if relevant to the question of solvency, can alleviate any hard result: see MGM Bailey Enterprises v Austin Australia [2002] NSWSC 259 at [15]-[16], in which Austin J held, in factual circumstances somewhat similar to the present case, that to allow an estoppel to operate would be contrary to the legislative policy behind Pt 5.4 of the Act.
[77] Chief Commissioner of State Revenue (NSW) v Boss Constructions (NSW) Pty Ltd [2018] NSWCA 270; (2018) 98 NSWLR 473 (Boss Constructions).
[78] David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265, 270.

While the decision in Boss Constructions related to the time limits for the making of an application under s 459G, three of the four reasons set out in the passage above have equal application to the issue of the manner of service of the application:
(a)the requirement is one of the factors which defines the jurisdiction of the court;
(b)the text of the provision sets out the circumstances which are preconditions to an application being made in accordance with s 459G, which includes service on the person within the statutory period (which must, by implication, mean effective service); and
(c)the apparently harsh outcomes which could result can be alleviated by s 459S.
The Plaintiff also relied upon the more recent authority, Re Black Tie Holdings Pty Ltd,[79] as supporting the proposition that a creditor can be estopped from contending that the failure to serve a SEPA Notice renders an application to set aside a statutory demand ineffective.[80]
[79] Re Black Tie Holdings Pty Ltd [2022] NSWSC 781 (Black Tie).
[80] Plaintiff's submissions [78] - [79].
Black Tie involved an application to set aside a statutory demand in circumstances in which a SEPA Notice should have been, but was not, attached to the application. Without specifying any particular remedy, Meek J left open the prospect that, in some cases, the equitable jurisdiction of the court could operate in such a case in circumstances where unconscionable conduct was established.[81] Meek J did not, however, specify whether that exercise of the equitable jurisdiction could extend to setting aside a statutory demand where the requirements of s 459G had not been complied with.
[81] Black Tie [321] - [323].
Further, in refusing the application in Black Tie, Meek J cited with approval the decision of Black J in Re LDW Constructions Pty Ltd,[82] in which Black J declined to follow Mangraviti and found that s 459J was not available in a case in which s 459G had not been complied with.
[82] Re LDW Constructions Pty Ltd [2019] NSWSC 1159 [6] - [14] (LDW).
In light of the opening words to s 459J, and the decisions in Boss Constructions, LDW and Black Tie, I am not persuaded that Woodgate and Mangraviti remain good authority for the proposition that the service requirements set out in s 459G can be varied in the exercise of the equitable jurisdiction of the court, such that the scope of s 459J extends beyond the scope of s 459G of the Act.
In particular, I am not persuaded that any of the authorities relied upon by the Plaintiff support the proposition that a creditor can be estopped from contending that the failure to serve a SEPA Notice renders an application to set aside a statutory demand ineffective.

Alleged unconscionable conduct on the part of the Defendant

Even if I were to find that a creditor could be estopped on this basis, the Plaintiff would be required to establish that the Defendant's conduct was such as to give rise to such an estoppel in this case.
The 'unconscionable conduct' of the Defendant on which the Plaintiff relied was that, after the statutory demand had been issued but prior to the expiry of the statutory period, Mr Metcalf had emailed the Plaintiff in the following terms:
The Statutory Demand we served on you expires in 7 days. Next Monday 25^th November 2024 is the final day for you to respond or pay the debt in full. We will be commencing the process to wind the company up and appoint liquidators on Tuesday 26^th November 2024 if you don't. Make absolutely no mistake about this.[83]
[83] Metcalf Affidavit, Annexure PM-1, 7.
The Plaintiff contended that the email was threatening. It submitted that, having regard to the fact that the email was sent by a debt collection agency, and the fact that a statutory demand is not to be used as an instrument of debt collection,[84] the Defendant had engaged in an abuse of process.
[84] Plaintiff's submissions [65].
It is to be noted that the email suggested two options were open to the Plaintiff: to respond or to pay. There is no evidence that the Plaintiff took the first option, by communicating with the Defendant or its agents at any time during the statutory period.
The authorities relied upon by the Plaintiff to support its submission that the Defendant was engaged in an abuse of process[85] are all to the effect that it may be an abuse of process to issue a statutory demand as a means of collecting a disputed debt. If the company is clearly solvent, this may add to the likelihood of an abuse of process being found.
[85] Roberts v Wayne Roberts Concrete Constructions Pty Ltd [2004] NSWSC 734; (2004) 208 ALR 532; Old Kiama Wharf Co Pty Ltd v Deputy Commissioner of Taxation [2005] NSWSC 929; Owners Corp SP66609 v Perpetual Trustee Co Ltd [2010] NSWSC 497; Tekno Autosports Pty Ltd v Jenkins [2014] FCA 774.
The only evidence adduced by the Plaintiff as to any suggestion of a dispute being made to the Defendant prior to the issuing of the statutory demand was the evidence as to Mr Illingworth's meeting with Mr Hardy, Mr Illingworth deposed that he told Mr Hardy that if certain circumstances came about, the Plaintiff might be able to pay the Defendant something, but the Plaintiff had a long way to go and could not provide any guarantees.[86] Notably, while Mr Illingworth deposed that he did not state that any payment would be made in the short term,[87] he did not depose that he told Mr Hardy that he did not accept that the debt, or any part of it, was owing.
[86] Illingworth Affidavit [37] - [38].
[87] Illingworth Affidavit [36]
The evidence not only failed to establish that the Defendant was on notice of the alleged 'genuine dispute' prior to issuing the statutory demand, it also suggested that there might then have been valid concerns as to the solvency of the Plaintiff. I do not accept in those circumstances that the Plaintiff has established any abuse of process on the part of the Defendant.
Mr Metcalf's email failed to take account of the fact that the statutory period could not have expired on 25 November 2024 having regard to the fact that it was posted from New South Wales to the Plaintiff on 4 November 2024. However, even having regard to that matter, I am not satisfied that the email did more than make clear to the Plaintiff that the Defendant intended to strictly enforce its legal rights in respect of the matter.
The Plaintiff further submitted that the Defendant had notice of the Application during the statutory period, including the alleged defects in the statutory demand and that, on receipt of the Illingworth Affidavit, the Defendant should have withdrawn the statutory demand. The Plaintiff argued that, in failing to do so, the Defendant is acting unconscionably, and the proceedings are an abuse of process.
For reasons which will be set out in the section of this judgment relating to the existence of a genuine dispute, I am not persuaded that the Defendant's conduct in failing to wholly withdraw the statutory demand, or its conduct in opposing the Application, is unjustified, or could be properly characterised as unconscionable conduct.
Finally, if any of the Defendant's conduct could be described as unconscionable, the Plaintiff did not submit that its failure to comply strictly with the requirements of s 459G was in any way attributable to the conduct of the Defendant.
Even if the Plaintiff had contended that the failure of the Defendant to include in the statutory demand an address for service within the Territory in which the statutory demand was served constituted unconscionable conduct, the Plaintiff did not adduce any evidence that it acted to its detriment in reliance on that conduct. Indeed, having regard to the fact that the Plaintiff apparently acted entirely of its own accord in commencing the proceedings in Western Australia, it would be extremely difficult for the Plaintiff to demonstrate that its failure to attach a SEPA Notice was substantially contributed to by the Defendant's conduct.
Accordingly, even if I were satisfied that it was open, in circumstances of unconscionable conduct, to set aside the statutory demand in the exercise of the court's equitable jurisdiction, notwithstanding the failure to effectively serve the Application, I would not do so on the evidence available to me in this case.

Conclusion

The Plaintiff did not commence an application in accordance with s 459G of the Act. The court therefore has no jurisdiction to set aside the statutory demand and the Application must be dismissed.
An issue arises as to the consequences, if any, of that result.
If the Defendant sought to wind up the Plaintiff, it would potentially be open to the Plaintiff to seek leave to resist any application to wind up the Plaintiff pursuant to s 459S, on the basis of the deficiencies in the statutory demand.
More fundamentally, however, if the Plaintiff's Application was not made in accordance with s 459G, it is, also in my view, doubtful that s 459F(2)(a) has any application in this case to extend the statutory period beyond 21 days.[88]
[88] David Grant & Co Pty Ltd v Westpac Banking Corporation (278).
If that is the case, the statutory period expired in early December 2024 and the Defendant is no longer entitled to rely upon the presumption of insolvency provided for by s 459C(2) of the Act, as more than three months have passed since the Plaintiff's failure to comply with the statutory demand.

Has the Plaintiff established that there is a genuine dispute?

Notwithstanding my conclusion as to the invalidity of the Plaintiff's Application, it remains appropriate to briefly deal with the bases on which the Plaintiff sought to set aside the statutory demand.

Legal principles

The legal principles applicable to the determination of whether there is a 'genuine dispute' for the purposes of s 459H(1) of the Act were recently summarised by the Court of Appeal, in WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 2],[89] in the following terms:
[89] WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 2] [2023] WASCA 85 (WA Glass).
There are numerous cases which have discussed what is required to constitute a genuine dispute about the existence or amount of a debt. In CA & Associates Pty Ltd v Fini Group Pty Ltd Buss P and Vaughan JA summarised the effect of the authorities. Buss P and Vaughan JA stated that it is well-established that:
1.The court's function is to determine whether there is a genuine dispute; the court is not expected to undertake an extended inquiry or attempt to weigh the merits of the dispute. It is not part of the court's function to resolve the dispute.
2.It suffices if there is a 'plausible contention' requiring 'further investigation' - something that may be equated to the criterion of whether there is a 'serious question to be tried'.
3.However, the applicant must establish that: (a) the dispute is bona fide and truly exists in fact; and (b) the grounds alleging the existence of the dispute are real and not spurious, hypothetical, illusory or misconceived.[90] (citations omitted)
Buss P and Vaughan JA also referred with approval to the often-cited words of McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd. Having said that the expression 'genuine dispute' connotes a plausible contention requiring investigation, thus raising much the same sort of considerations as 'serious question to be tried' criteria, his Honour stated:
This does not mean that the court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit 'however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to [its] truth', or a patently feeble legal argument or an assertion of facts unsupported by evidence.[91] (citations omitted)
Eyota Pty Ltd v Hanave Pty Ltd is the ultimate source for the many authorities that have accepted that, for the purpose of s 459H(1)(a) of the Corporations Act, a genuine dispute is established where a company applying to set aside a statutory demand raises a plausible contention requiring investigation.
Thus there must be an evidential basis for the asserted dispute. Mere assertion is insufficient. So too a claim that is spurious or fanciful is insufficient. The dispute must have a sufficient objective existence and prima facie plausibility.
The requirement is to refer to something more than the mere 'raising' of a dispute or, in the context of an offsetting claim, the mere 'making' of a claim. The provisions assume that the dispute or offsetting claim have an 'objective' existence the genuineness of which is capable of being assessed. The word 'genuine' is included to sound a note of warning that the propounding of spurious disputes or claims is to be expected but must be excluded from consideration.[92] (citations omitted).
[90] CA Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31 [35].
[91] Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669, 787 (Eyota).
[92] WA Glass [46] - [50].
The Plaintiff has the onus of establishing that there is a genuine dispute.
The Plaintiff submitted that there were four areas which raise a genuine dispute:
(a)'the discrepancy between invoices detailed in the [Letter of Demand] and the SD invoices';
(b)the inconsistencies in respect of the 980H Loader hire rates;
(c)the demand for the purported debt was not due and payable at the time the statutory demand was issued; and
(d)the machinery was not fit for purpose and the Plaintiff instead sourced more reliable equipment.[93]

Genuine dispute

Discrepancy between the invoices

[93] Plaintiff's submissions [48].

In fact, there was no discrepancy between the invoices attached to the Letter of Demand and those which were sent with the statutory demand. The inconsistency was between the total of the invoices said to be relied upon and the amount demanded in the statutory demand. The amount demanded was $35,143.90 more than the total of the invoices provided to substantiate the demand.
Further, the Schedule to the statutory demand stated that the Letter of Demand, which contained the particulars of the alleged debt, was attached to it. However, the Letter of Demand was not attached to the statutory demand.
As I have indicated, the Defendant adduced evidence by way of the Hardy Affidavit explaining that the discrepancy was a result of the wrong version of invoices being provided to the Plaintiff on both occasions. The Hardy Affidavit showed that Mr Christian had approved the variations, with the emails in which he did so being copied to Mr Illingworth.
Given that Mr Illingworth had been copied into the approvals for the changes in invoice amounts, he may well have been able to resolve the discrepancy himself. Further, it might have been expected that he would simply contact the Defendant and ask about the discrepancy. Plainly, he did not take this approach. However, he was not obliged to do so.
In my view, the Defendant's failure to attach the Letter of Demand to the statutory demand, and instead attaching the faulty invoices, means that, at best, the Plaintiff can only demonstrate that it properly demanded the sum substantiated by the invoices, namely the sum of $161,937.49.

Amounts charged for the Loader

The issue with the 980H Loader hire amounts was said to be that for April 2024 the plaintiff was charged $100 per hour, said to be for 'wet hire' of the Loader (hire including fuel),[94] and in May 2024 the plaintiff was charged $110 per hour for 'dry hire' (hire excluding fuel) of the Loader.[95] According to the relevant Hire Agreement, the Plaintiff was responsible for fuel costs.
[94] Illingworth Affidavit, Annexure RG-3, 22.
[95] Illingworth Affidavit, Annexure RG-3, 34. See also Illingworth Affidavit, Annexure RG-3, 24 in which the Plaintiff was also charged $110 per hour without specification of whether the charge was for 'wet hire' or 'dry hire'.
On the basis of the rates in the relevant Hire Agreement, the discrepancy was in favour of the plaintiff, to the amount of $65 plus GST.
I am not satisfied this discrepancy could establish a genuine dispute.

The debt was not due and payable at the time the statutory demand was issued

The Plaintiff alleged that there was an express agreement that it would not be required to pay the costs of hiring the equipment until it was able to secure funding and the Project was operational.
The Defendant disputed this.
As the Defendant correctly points out, the Hire Agreements postdated any agreement such as that alleged by the Plaintiff. It was an express term of the Hire Agreements that they superseded any prior agreement and constituted a complete agreement.
Again, it is notable that (at least as far as the evidence shows) the Plaintiff did not, at any point prior to the issuing of the statutory demand, including after being sent the Letter of Demand, communicate with the Defendant or Collectmore in writing which in any way referred to what the Plaintiff claimed was the earlier express agreement between the parties. There is not even evidence that Mr Illingworth verbally challenged Mr Hardy at their meeting as to the existence of the debt or part of it.
On the evidence available to me, I have grave concerns as to the plausibility of the Plaintiff's claim that there was an agreement between the parties that payment for the equipment would wait until the Plaintiff had secured funding or the Project was operational. Mr Hardy expressly disavowed that he would enter into such an agreement. Further, such an agreement is contrary to common sense, and there is no other evidence of any kind which supports the Plaintiff's contention, notwithstanding that some such evidence might have been expected in the commercial context.
In addition, all of the evidence which is available to me suggests that the process of invoicing was occurring in the ordinary way, to Mr Illingworth's knowledge, without objection by him at any point prior to these proceedings being commenced.
In those circumstances, I would have had considerable difficulty in finding on this basis that there was a genuine dispute.

Machinery was not fit for purpose

Mr Illingworth deposed only that the machinery supplied by the Defendant was not fit for purpose and the Plaintiff sourced more reliable equipment.
Mr Illingworth's affidavit contained no other detail as to why the machinery was not fit for purpose, when he obtained other equipment, or from whom. He also did not depose as to how this resulted in there being a genuine dispute as to the Plaintiff's liability for the hire of the equipment while it used it. Finally, there is no evidence which indicates that the Plaintiff at any time raised the unsuitability of the equipment with any person.
I am not satisfied that the evidence, as vague as it is, and lacking any supporting evidence, gives rise to a finding of a genuine dispute.

Whether the Plaintiff was bound by the Hire Agreements

It was contended by the Plaintiff that the Defendant had not established that Mr Christian was authorised to sign the Hire Agreements on the part of the Plaintiff, and the Hire Agreements were not signed in accordance with s 127 of the Act.[96]
[96] Plaintiff's submissions [58] - [59].
The Defendant submitted that Mr Christian signed the Hire Agreements as the Plaintiff's authorised representative. Further, while the Defendant conceded it had no evidence that Mr Christian was authorised by the Plaintiff, it referred to the fact that Mr Christian was said to be employed by Adroit Capital Group Management Services Pty Ltd, of which Mr Illingworth was also a director. The Defendant submitted that it was entitled to rely on the 'indoor management rule', enshrined in s 128 ‑ s 129 of the Act, particularly in circumstances in which Mr Illingworth was copied into emails relating to invoicing.

In the Illingworth Affidavit, Mr Illingworth deposed to having no record of any hire agreements. The Hire Agreements were subsequently adduced, and annexed to the Hardy Affidavit, as were relevant purchase orders on the Plaintiff's letterhead. It is noteworthy that Mr Illingworth did not adduce any evidence by way of reply that Mr Christian was not authorised to sign the Hire Agreements. Mr Illingworth also did not seek to adduce evidence in reply addressing the fact that he was copied into emails sent by Mr Christian authorising the amendment of invoices, or any steps taken by him in relation to this.
In the circumstances, I am not satisfied that the evidence adduced by the Plaintiff constituted a sufficient evidentiary basis for the contention that the Hire Agreements were not validly entered into by the Plaintiff by its authorised agent.

Contracts for other items the subject of invoices

The invoices relied upon by the Defendant included charges related to a number of items of equipment other than the 980H Loader and the Water Cart, in addition to some fuel costs. The total amount for which there did not appear to be a contractual basis was $60,869 plus GST.
The Defendant did produce a Purchase Order from the Plaintiff for $70,000 worth of equipment hire, plus GST, being for 'Equipment hire for Helena bench removal and rail haul'. The Defendant did not address to which equipment this referred. Further, no Hire Agreement was apparently entered into, and the Defendant did not respond to the Plaintiff's contention that the invoices covered equipment hire outside the agreements entered into by the parties.
On the evidence available to me, I am satisfied that the Plaintiff has established that there is a genuine dispute in relation to the invoices which were for the hire of equipment outside the scope of the Hire Agreements.

Should the statutory demand be set aside for some other reason?

Abuse of process

The Plaintiff submitted that the statutory demand should be set aside pursuant to s 459J(1)(b) of the Act. It contended that the Defendant was engaging in an abuse of process, by using the statutory demand process as a means to place pressure on the Plaintiff to pay a disputed debt. It submitted this was further demonstrated by the fact that the Defendant used a debt collection agent to issue the statutory demand.
The Defendant submitted that service of the statutory demand cannot be an abuse of process in circumstances in which the Plaintiff first raised or ventilated the alleged bases of a genuine dispute after the statutory demand was served. It argued that the use of a debt collection agency was evidence of its genuine belief that the debt was due and payable.
As indicated above, the only evidence adduced by the Plaintiff as to any suggestion of a dispute being made to the Defendant prior to the issuing of the statutory demand was the evidence as to Mr Illingworth's meeting with Mr Hardy. Mr Illingworth deposed that he told Mr Hardy that if certain circumstances came about, the Plaintiff might be able to pay the Defendant something, but the Plaintiff had a long way to go and could not provide any guarantees.[97] As I have already noted, while Mr Illingworth deposed that he did not state that any payment would be made in the short term,[98] he did not depose that he told Mr Hardy that he did not accept that the debt, or any part of it, was owing.
[97] Illingworth Affidavit [37] - [38].
[98] Illingworth Affidavit [36]
In my view, the evidence does not suggest that the Plaintiff informed the Defendant that it had a genuine dispute about the existence of the debt. At most, the evidence went to what the Plaintiff told the Defendant about whether it was in a position to pay it.
I have already addressed the submission that the Defendant acted in an abuse of process by its agent, Mr Metcalf, sending an email reminding the Plaintiff of the looming deadline set by the statutory demand and the fact that the Defendant intended to make an application for winding up on its expiry. I do not consider it to be an abuse of process for the Defendant to have informed the Plaintiff that it intended to enforce its lawful rights.

Conclusion as to s 459H and s 459J

If I were required to determine whether the statutory demand should be set aside on the basis that there was a genuine dispute as to the existence of the debt, I would find that the Plaintiff had established that there was a genuine dispute in relation to $66,955.90 of the amount demanded (which I have found was $161,937.49).
Accordingly, pursuant to s 459H, I would have varied the demand such that it demanded the sum of $94,981.59, rather than $197,081.39.
I would not have been satisfied that there was 'some other reason' to set aside the statutory demand pursuant to s 459J(1)(b).

Orders

The Application is dismissed.
I will hear the parties on the issue of costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CA
Associate to the Honourable Justice Forrester
27 JUNE 2025