Mueller v Smartcard Financial Services Pty Ltd

Mueller (the applicant) sought to set aside a statutory demand issued by Smartcard Financial Services Pty Ltd (the respondent) under s 459G of the Corporations Act 2001 (Cth). The applicant alleged that there was a genuine dispute about the existence of the debt, or that there was a substantial injustice if the demand were not set aside. The application was heard in the Supreme Court of Western Australia.

The primary legal issue before the Court was whether the applicant had established a "genuine dispute" regarding the existence of the debt claimed in the statutory demand, or whether there was a "substantial injustice" that warranted setting aside the demand. This required the Court to consider the nature and strength of the applicant's defence to the alleged debt.

Judge Lucev found that the applicant had failed to demonstrate a genuine dispute about the existence of the debt. The applicant's defence relied on allegations of misleading and deceptive conduct and breach of contract by the respondent, but these claims were found to be unsubstantiated and lacking in sufficient particularity to raise a real question as to the respondent's entitlement to the debt. The Court applied the principles established in cases such as *Southern Cross Commodities Pty Ltd v. Kwinana Pty Ltd* and *Hale v. Worrell*, which require a defence to be more than a mere assertion and to have some factual or legal basis. As no genuine dispute was established, the Court did not need to consider the substantial injustice limb of s 459G(1)(b).

The application to set aside the statutory demand was dismissed.