Miluc Pty Ltd v Maddalena - [2020] WASC 156

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MILUC PTY LTD -v- MADDALENA [2020] WASC 156
CORAM:   MASTER SANDERSON
HEARD:   ON THE PAPERS
DELIVERED          :   14 MAY 2020
PUBLISHED           :   14 MAY 2020
FILE NO/S:   COR 241 of 2019
BETWEEN:   MILUC PTY LTD
Plaintiff
AND
GINO DELLA MADDALENA
First Defendant
MARY JEAN DELLA MADDALENA
Second Defendant

Catchwords:

Corporation law - Application to set aside statutory demand - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Planning and Development Act 2005 (WA)
Supreme Court (Corporations) (WA) Rules 2004

Result:

Statutory demand set aside

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Spyker Legal
First Defendant	:	Thomson Geer
Second Defendant	:	Thomson Geer

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

Nil

MASTER SANDERSON:

This is the plaintiff's application to set aside a statutory demand. Procedurally the statutory demand procedure has about it a number of odd features. The application was supported by an affidavit of Michael Roland Gosatti sworn 11 December 2019. The affidavit does not have as an attachment a copy of the statutory demand. Rule 2.4A of the Supreme Court (Corporations) (WA) Rules 2004 deals with applications for orders setting aside a statutory demand. Rule 2.4A(2) says the plaintiff 'may' file with the originating process a copy of the statutory demand and a copy of any affidavit that accompanied the statutory demand. While the rule is not in mandatory terms best practice is to attach a copy of the statutory demand and the accompanying affidavit to any affidavit seeking to set aside the statutory demand. Having a copy of the statutory demand is an essential evidentiary aspect of any application.
A copy of the demand and the accompanying affidavit is attached to the affidavit of Gino Della Maddalena sworn 18 December 2019 and filed in opposition to the plaintiff's application. Under s 459E(3) of the Corporations Act 2001 (Cth) a statutory demand must be accompanied by an affidavit which verifies the debt which complies with the rules. The relevant rule is r 5.2. That rule is in the following terms:
Affidavit accompanying statutory demand (Corporations Act s. 459E(3)) (Form 7)
For the purposes of section 459E(3) of the Corporations Act, the affidavit accompanying a statutory demand relating to a debt, or debts, owed by a company must ‑
(a)be in accordance with Form 7 and state the matters mentioned in that Form; and
(b)be made by the creditor or by a person with the authority of the creditor or creditors; and
(c)not state a proceeding number, or refer to a Court proceeding, in any heading or title to the affidavit.
The relevant form is Form 7. That form requires the deponent to address five issues. First, the deponent must state his or her relationship to the creditor, quantify the debt and confirm the nature of the debt as set out in the schedule to the statutory demand. Second, the deponent, if not a creditor, must state the facts that entitle the deponent to make the affidavit. Third, the deponent must state the source of his or her knowledge of the matters stated in the affidavit in relation to the debt. Fourth, the deponent must confirm the debt is due and payable. Finally, the deponent must state his or her belief there is no genuine dispute as to the debt. These are five essential elements of the affidavit accompanying the demand. If one or other of those elements is missing then the affidavit is defective and it may provide the basis upon which a demand can be set aside. It is to be noted that r 5.2 requires the affidavit to be 'in accordance with Form 7'. It does not by its terms preclude further matters being included in the affidavit. But, it is clear the rules require an affidavit which in general conforms with form 7 perhaps with some matters added to elucidate and clarify issues in relation to the debt.
The affidavit which supported the statutory demand in this case differs significantly from form 7. Because it sets out the defendants' position in some detail I will quote it in full. But before doing so I will set out the relevant background facts.
The defendants were at all relevant times the registered proprietors of certain property known as Lot 126.[1] The plaintiff was the registered proprietor of an adjoining lot known as Lot 9010.[2] On 6 June 2014 the West Australian Planning Commission (WAPC) granted the defendants approval to subdivide the defendants land.[3] As part of the defendants subdivision works the defendants engaged Italia Stone Group to perform road works to Frankland Avenue, Hammond Park which is located adjacent to the defendants land.[4] On 21 December 2018 the WAPC approved a deposited plan for the subdivision of the plaintiff's land.[5] In other words, the upgrade work to Frankland Avenue had been completed to the satisfaction of the WAPC.
[1] Plaintiff's outline of submissions filed 28 February 2020 [3].
[2] Plaintiff's outline of submissions filed 28 February 2020 [4].
[3] Plaintiff's outline of submissions filed 28 February 2020 [5].
[4] Plaintiff's outline of submissions filed 28 February 2020 [6].
[5] Plaintiff's outline of submissions filed 28 February 2020 [7].
By letter dated 25 September 2019 the defendants' project manager demanded payment from the plaintiff of $65,060.89 being one half of the alleged reasonable costs borne by the defendants of upgrading Frankland Avenue.[6] The plaintiff denies receiving this letter although that fact, in and of itself, is irrelevant to this dispute. The defendants claim the alleged costs in reliance on s 159 of the Planning and Development Act 2005 (WA) (the PD Act).[7] A statutory demand requiring payment of the upgrade costs was served on 21 November 2019.[8]
[6] Plaintiff's outline of submissions filed 28 February 2020 [8].
[7] Plaintiff's outline of submissions filed 28 February 2020 [9].
[8] Plaintiff's outline of submissions filed 28 February 2020 [10].
The affidavit which accompanied the statutory demand is in the following form.
I, GINO DELLA MADDALENA of 63 Warragoon Crescent, Attadale, 6156, Western Australia, affirm:
1.I, together with my wife MARY JEAN DELLA MADDALENA, was a registered proprietor (and co-owner) of Lot 126 on Diagram 33460 being all of the land contained in Certificate of Title Volume 12 Folio 331A (Land).
2.I am authorised by my wife MARY JEAN DELLA MADDALENA, to swear this affidavit on her behalf as co‑owner of the Land.
3.On 6 June 2014 the Western Australian Planning Commission (WAPC) granted approval to subdivide the Land subject to conditions including condition 4 which required (Condition):
"Satisfactory arrangements being made with the local government for the full cost of upgrading Frankland Avenue and Wattleup Road in locations as shown on the plan dated 25 October 2013 (attached) to a standard of urban"
4.We satisfied the Condition relating to the upgrading of Frankland Avenue by having Italia Stone Group complete the required works at a total cost of AUD$130,121.78 (Total Costs).
5.Annexed to this affidavit and marked "A" is a summary of the costs incurred by us, prepared by Development Engineering Consultants.
6.On 18 April 2016 the WAPC endorsed its approval on Deposited Plan 405773 in respect of the subdivision of the Land.
7.The Debtor Company was the registered proprietor of Lot 9010 on Deposited Plan 410555 being all of the land contained in Certificate of Title Volume 2916 Folio 803 (Adjoining Land) (also known as Lot 47 Frankland Avenue).
8.On 21 December 2018 the WAPC endorsed its approval to Deposited Plan 411347 in respect of the Debtor Company's subdivision of the Adjoining Land.
9.As a consequence of paragraphs 6 to 8 inclusive:
(a)Frankland Avenue has a "common boundary" with the Adjoining Land as the term "common boundary" is used in section 159(1)(b) of the Planning and Development Act 2005 (WA) (PD Act);
(b)my wife and I are the "original subdivider" as that term is used in section 159(1)(b) of the PD Act; and
(c)the Debtor Company is the "later subdivider" as that term is used in section 159(1)(a) of the PD Act.
10.By letter dated 25 September 2019 and pursuant to section 159(1) of the PD Act, our project manager demanded payment from the Debtor Company of one half of the Total Costs, being the Amount described in the schedule of the statutory demand which this affidavit accompanies.
11.Annexed to this affidavit and marked "B" is a copy of the letter referred to in paragraph 10.
12.No payment by the Debtor Company was forthcoming.
13.A further demand was made of the Debtor Company by letter dated 21 October 2019 by our solicitors, Thomson Geer.
14.Annexed to this affidavit and marked "C" is a copy of the letter referred to in paragraph 13.
15.No payment by the Debtor Company was forthcoming.
16.The debt mentioned in paragraph 10 of this affidavit, is due and payable by the Debtor Company to my wife and I as Creditors.
17.We believe that there is no genuine dispute about the existence or amount of the debt.
It is difficult to see how that affidavit complies with form 7. Even if a benign view is taken of the requirements of r 5.2 the affidavit contains a host of matters which might be included in an affidavit opposing an application to set aside a statutory demand. The statutory demand procedure is not a court proceeding. Rule 5.2(c) makes that clear. The form of the affidavit used in this case is inappropriate.
That said, the plaintiff did not apply to set aside the statutory demand on the basis the affidavit accompanying the demand was defective. Rather, the plaintiff maintained there was a genuine dispute as to the debt. Accordingly, I will approach this matter on the basis that there is no defect in the affidavit accompanying the demand which would warrant the demand being set aside. However, nothing in these reasons should be taken to indicate I do not regard the affidavit as not complying with r 5.2 and form 7 and therefore warranting the demand being set aside for that reason.
The plaintiff advances four reasons why it says there is a genuine dispute.[9] The first two of these reasons relate to s 159 of the PD Act. The plaintiff says it does not admit it is liable to pay any amount to the defendants.[10] The plaintiff says the onus is on the defendants to establish first, the plaintiff has subdivided the land and second, there exists a common boundary with an existing road.[11] On the evidence as it stands it is somewhat difficult to see how the plaintiff can advance either of those two arguments. However, it is unnecessary for me to deal with that issue in detail.
[9] Plaintiff's outline of submissions filed 28 February 2020 [23].
[10] Plaintiff's outline of submissions filed 28 February 2020 [24].
[11] Plaintiff's outline of submissions filed 28 February 2020 [25].
The third ground advanced by the plaintiff is it says there is a genuine dispute in relation to whether the alleged debt is what can be described as 'reasonable costs' of upgrading Frankland Avenue. The plaintiff says it has been unable to verify whether the cost of the works are reasonable because the defendants have failed to provide the plaintiff with clean plans showing road details and an original priced bill of quantities for the entire works project.[12] In my view that point is well made.
[12] Plaintiff's outline of submissions filed 28 February 2020 [28] – [34].
The whole point of an expression such as 'reasonable costs' anticipates costs being detailed. It must involve an assessment of whether the scheme of the project was in all respects proper and appropriate, what steps were taken to obtain the best price to conduct the works and so on. It is at least arguable the demand made of the plaintiff does not contain sufficient detail to allow the costs claim to be regarded as 'reasonable'. On that basis I would accept there is a genuine dispute as to the amount of the demand.
For the sake of completeness I would note the fourth aspect of the plaintiff's submissions details particular charges which it is alleged do not qualify as a 'reasonable amount'.[13] Given that I have concluded the plaintiff has made good its argument on ground 3 it is unnecessary for me to say anything further on this issue.
[13] Plaintiff's outline of submissions filed 28 February 2020 [35].
It is the defendants' position that even allowing for challenges made by the plaintiff to the costs the defendant seeks to recoup at least $60,984.18 or alternatively more than $2,000 of the amount claimed is incapable of dispute.[14] The flavour of the defendants' submission can be illustrated by quoting par 57 of the written submissions. That paragraph is in the following terms:
Contrary to the Plaintiff's assertions in paragraph 35.7 of the Plaintiff's submissions, the upgrading of Frankland Avenue required it to be raised above existing levels and for new pavement to be laid, which necessitated excavation works. This required the location of existing services to be ascertained to protect those services from being damaged by the carrying out of the upgrade works and to ensure the safety of workers carrying out the upgrade works – see the roadworks layout plan and the notations thereon in Annexure GDM 10 to the Defendants' December 2019 Affidavit at page 76.
[14] Defendants' outline of submissions filed 17 March 2020 [6.2].
Taken in the overall, I am not satisfied this is a case where it can be said there is no genuine dispute. It must be borne in mind that the threshold to establish a genuine dispute is low. Here the plaintiff raises a number of issues – the most important of which is the question of whether or not the amount claimed in the debt is 'reasonable expenses'. A determination of that question is beyond the scope of the statutory demand procedure. Furthermore, while I have some difficulty seeing that s 159 of the PD Act would not apply, that too is a matter which should be determined in other proceedings.
Accordingly, the statutory demand will be set aside. I make the following orders:
(1)The statutory demand dated 18 November 2019 be set aside.
(2)The defendants pay the plaintiff's costs of the application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
14 MAY 2020