Mackay v Jonsson as trustee in Bankruptcy of the Estate of Kneipp

Mackay (the applicant) sought to set aside a statutory demand issued by Jonsson, the trustee in bankruptcy of the estate of Kneipp (the respondent). The dispute concerned whether the applicant had a "genuine dispute" about the existence of the debt claimed in the statutory demand, as required by s 459H of the *Corporations Act 2001* (Cth). The matter was heard in the Supreme Court of Victoria.

The primary legal issue before the Court was whether the applicant had established a "genuine dispute" regarding the debt. This involved determining whether the applicant's grounds for disputing the debt were substantial and arguable, rather than merely vexatious or frivolous. The Court also considered the nature of the alleged debt, which arose from a guarantee provided by the applicant in favour of a company that was subsequently placed into liquidation.

Judge Coker found that the applicant had failed to demonstrate a genuine dispute. The Court reasoned that the applicant's contentions regarding the validity of the guarantee and the extent of the alleged debt were not supported by sufficient evidence or legal argument to raise a real question to be tried. The applicant's submissions were largely based on speculation and a misunderstanding of the legal principles governing guarantees and the trustee's role in bankruptcy. The Court applied the principles established in cases concerning the interpretation of s 459H, emphasising that a genuine dispute requires more than a mere assertion of non-liability.

The Court ordered that the application to set aside the statutory demand be dismissed.