Powerhouse Australasia Pty Ltd v Viarc Pty Ltd
[2006] VSC 508
•23 November 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6954 of 2006
| POWERHOUSE AUSTRALASIA PTY LTD | Plaintiff |
| v | |
| VIARC PTY LTD | Defendant |
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JUDGE: | DODDS-STREETON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 November 2006 | |
DATE OF JUDGMENT: | 23 November 2006 | |
CASE MAY BE CITED AS: | Powerhouse Australasia Pty Ltd v Viarc Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 508 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J. Selimi | |
| For the Defendant | Mr S. Gardiner |
HER HONOUR:
By notice of appeal dated 6 November 2006, the plaintiff, Powerhouse Australasia Pty Ltd, appeals against the order of Senior Master Mahoney made on 31 October 2006 whereby the learned Senior Master ordered that the plaintiff’s proceeding be dismissed. The plaintiff’s proceeding, by its originating process dated 14 June 2006 pursuant to s.459G of the Corporations Act 2001, sought an order that a statutory demand dated 16 May 2006, served by the defendant, VIARC Pty Ltd (“VIARC”) on 24 May 2006, be set aside.
The statutory demand demanded payment of $48,142.50 owed pursuant to attached invoices dated from 31 March 2004 to 11 July 2005 for work described as “schematic design” and which set out hours worked and the rates charged for the relevant officer.
An appeal from the Master pursuant to Rule 77 of the Supreme Court (General Civil Procedure) Rules (1996) operates as a rehearing de novo.
In an application pursuant to s.459G, the plaintiff bears the onus of establishing that there is a genuine dispute about the existence of the debt or a genuine off-setting claim.
The affidavits relied upon by the plaintiff were: the affidavit of Dominic Barba sworn 14 June 2006 and: the affidavit of Dominic Barba in reply sworn on 30 August 2006. The defendant relied on the affidavit sworn by Sergio Petricca on 4 August 2006.
Mr Selimi, counsel for the plaintiff, contended that an examination of the conflicting affidavits and indeed, the written submissions in the matter, clearly revealed a genuine dispute between the parties and a genuine off-setting claim. He referred, in that context, to Heerey J’s observations in Gribbles Pathology (Vic) Pty Ltd v Shandford Investments Pty Ltd (“Gribbles Pathology”),[1] where His Honour cautioned against “trawling” through the authorities for different articulations of the relevant test. Mr Selimi emphasised that it is a question of fact in every case whether there is a genuine dispute or a genuine off-setting claim. He also referred to Barrett J’s recognition in Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd (“Solarite”),[2] that the task faced by a company seeking to set aside a statutory demand is not a very demanding one.
[1](2004) 51 ACSR 578; [2004] FCA 1466; BC200408164.
[2][2002] NSWSC411.
Mr Selimi (whilst acknowledging that that error is not the basis of an appeal from the Master) argued that the learned Senior Master, had erred, in that he turned his mind only to the assertion of the off-setting claim, and had skipped over the existence of a dispute as to the existence of the debt.
Mr Selimi conceded that there was no evidence of any recrimination or complaint made to the defendant in relation to alleged breach of the retainer in any of the contemporaneous documentation, but contended that the mere absence of contemporaneous complaint did not mean that there was no genuine dispute. He also argued that the conduct of Mr Petricca led to the plaintiff’s loss of the commercial opportunity to sell its land to the RSL and that the evidence indicated that there was a real prospect of the plaintiff obtaining the planning permit. It was, he said, arguable that the plaintiff’s loss resulting from the withdrawal of the planning permit (for which Mr Petricca was responsible) gave rise to a claim of at least $50,000. That sum was more than enough to offset the defendant’s claim for the debt.
Mr Selimi contended that Mr Petricca’s role in the plaintiff company far exceeded what he deposed his retainer to be. He also submitted that although Mr Coomes’ organisation was retained in relation to obtaining the planning permit, Mr Petricca had liaised with Mr Coomes. Mr Selimi submitted that there was no positive notification or authorisation of the withdrawal of the planning permit in any of the contemporaneous documentation.
Mr Gardiner, counsel for the defendant, argued that the plaintiff’s claims were not genuine, but spurious. He emphasised the significance and delimiting status of the 21 day affidavit in this context, as the relevant authorities (such as Graywinter Properties Ltd v Gas & Fuel Corp Superannuation Fund (“Graywinter”)[3] and Dominion Capital Pty Ltd v Pico Holdings Inc (“Dominion”)[4]) indicate that all the material facts relied on must be included in the 21 day affidavit, although further affidavits can be used to amplify them.
[3] [1996]822 FC 1 ( 17 September, 1996).
[4] (2001) 4VR195.
Mr Gardiner said that the s.459(j) argument raised by the plaintiff was not raised or was not supported, by Mr Barba’s first affidavit. At any rate, no discrete facts were raised in relation to it. He argued that paragraph 7 of Mr Barba’s first affidavit raised only the withdrawal of the plans and did not raise any ground in relation to the sale to the RSL. As there was no reference to that issue in the first affidavit, it could not now be relied upon. Mr Gardiner submitted that Mr Barba’s reference to his belief about the several million dollars in damages constituted the high water mark of particularity in relation to that claim, which thus fell short of the requisite standard. He said that the high water mark of particularly was in Paragraph 29 of Mr Barba’s second affidavit. Mr Selimi, in reply, disputed that, pointing out that discussions of unit holders evidenced in documentation referred to issues relevant to the quantification of damage.
Mr Gardiner contended that although the plaintiff had had ample time to muster its material, the material remained vague. There was some dispute about the compliance of the parties with orders fixing dates for filing and serving affidavits. I do not place any great significance on that matter. Mr Gardiner identified the factors which weighed heavily against the genuineness of the plaintiff’s claimed dispute, and off-setting claim as: first, the nature and tenor of the contemporaneous documentation; secondly, the plaintiff’s failure to issue the proceeding as Mr Barba had asserted it would do in his affidavit sworn on 14 June 2006; and thirdly, the quality of Mr Barba’s first affidavit, which was vague. It made no claim in relation to Ms Care and the RSL sale. Mr Gardiner submitted that even if consideration of those issues were not precluded by the Graywinter principle, they nevertheless failed to meet the quantification standard required by the relevant authorities, such as Remuneration PlanningCorp Pty Ltd v Paidion (“Remuneration Planning”)[5].
[5][2001] NSWSC 598; BC200104182.
Mr Gardiner submitted that the plaintiff’s material fell well short of what would suffice to secure the successful grant of an injunction. He further relied upon the plaintiff’s request for any further account from the defendant in July 2005, the acknowledgement at a meeting of unit holders’ representatives on 21 July 2005 that VIARC was a creditor of the plaintiff and the inclusion of the defendant’s claim in the plaintiff’s aged summary of debts of October 2005, which was handed to Mr Petricca in a manila folder at a meeting in February 2006.
Mr Gardiner contended that Mr Barba’s affidavit in response took matters no further. Although it introduced the RSL sale claim, the contemporaneous documentation was consistent with the defendant’s assertions, and did nothing to support the plaintiff’s claim of breach of retainer. Further, the plaintiff’s affidavit in reply did not answer the defendant’s assertion that Mr Coomes, or his organisation, had the primary role in relation to obtaining the planning permit. Mr Gardiner submitted that the relevant emails which passed between the unit holders indicated that they were working cooperatively together, with no suggestion of any issue being taken in relation to the withdrawal of the planning permit.
The affidavit of Dominic Barba sworn 14 June 2006 deposed that he was an accountant authorised to make the affidavit on behalf of the plaintiff. It is not clear from his affidavit that Mr Barba was a director of the plaintiff, but, in any event, it is not disputed that he is authorised to make the affidavit.
Mr Barba further deposed that the plaintiff company is the trustee of a unit trust, known as the Powerhouse Australasia Unit Trust (“Powerhouse Unit Trust”). He denied that the plaintiff company was indebted to the defendant for the sum of $44,142 claimed in the statutory demand for the provision of professional services for the benefit of the plaintiff in January 2004 and June 2005.
He deposed, however, that the defendant was retained to provide professional project management and architectural services for the plaintiff’s proposed development of a Sunshine property, acquired in about April 2004. The defendant, Mr Barba deposed, was primarily retained to take the necessary steps to obtain planning permits with respect to the proposed development and sale. He asserted that the terms of the retainer included all the matters set out in paragraph 6 of his affidavit.
In paragraph 7 of his affidavit, Mr Barba asserted that in late 2005, in breach of that retainer, the defendant withdrew the development plans which had been submitted to the Council, under what Mr Barba called the guise (which I take to mean pretext), of pursuing the sale to the RSL, which sale did not occur. He also asserted that breach of the retainer led to a forced sale of the land to a third party. There is no indication in paragraph 7 that this is a reference a different breach from the withdrawal of the permit. If it is intended to be an independent breach, no details of it are given.
Mr Barba deposed that the plaintiff intended to issue proceedings against the defendant for loss of commercial opportunities caused by the defendant’s breach of its contractual and fiduciary duties. The damages were, he believed, in the order of several million dollars and counsel had been retained. Mr Barba believed that the substantial unliquidated damages would far exceed the alleged debt. There had been, he said, a total failure of consideration by the defendant and there was a genuine dispute in relation to the existence of the debt.
Mr Sergio Petricca, a director of the defendant, VIARC, by affidavit sworn 4 August 2006 in opposition to the plaintiff’s application, deposed that both his family trust and Mr Barba’s family trust are unit-holders in the Powerhouse Unit Trust, which has eight units in total. The Powerhouse Unit Trust was formed at Mr Barba’s instigation to purchase and develop the Sunshine property, sometimes called the Harvester property. Mr Barba had formerly been VIARC’s accountant. (None of those matters was disputed.) Mr Petricca deposed that VIARC was retained by the plaintiff solely to provide architectural services in relation to the proposed property and not, as Mr Barba claimed, to provide the project management services and architectural services in relation to obtaining a planning permit. There is thus a dispute in relation to the ambit of the defendant’s retainer.
Mr Petricca referred to minutes of the meeting of unit-holders representatives on 27 December 2003, which stated that, “Sergio will submit a proposed costing at the next meeting for his architectural meetings. Sergio (which I take to be Mr Petricca) has indicated he anticipates lodgement to be submitted to the counsel by March”. Mr Petricca deposed that he presented a costing of approximately $50,000 as the total budget for the planning approval package, with VIARC’s work charged at $80 per hour, that that was expected that VIARC would claim $30,000 for its architectural costs and that $20,000 would be spent on the planning consultant.
Mr Petricca denied the plaintiff’s claim that VIARC was retained to provide professional project management services in relation to the property. He contended that VIARC only provides and provided architectural services and has no expertise in property management, as Mr Barba, its former accountant, would well know. The provision of architectural services Mr Pettrica said, does not include the preparation of planning applications.
Further, Mr Petricca deposed that to Mr Barba’s (and the plaintiff’s) knowledge, VIARC engaged Mr Jim Coomes and his organisation to take all necessary steps to prepare and prosecute the planning application. Mr Petricca exhibited the letter of Coomes Planning to Mr Barba dated 13 January 2004, confirming Mr Coomes’ discussion with Mr Petricca and request for, inter alia, an indication of a quote on “Our costs to manage the time planning processes associated with obtaining approval for the use and development of this land”.
The Coomes letter of 13 January 2004 referred to the Coomes firm’s personnel and its experience planning, in liaising with councils and in zoning. It referred to a fee range of $10,0000 to $25,000. A further letter of Coomes to Mr Barba dated 11 May 2004 refers to the engagement of Coomes Planning by the plaintiff to assist in obtaining the town planning permit for the development of the Sunshine land. It enclosed an invoice for $4,180 which referred in detail to liaison with the council. The letter stated that Coomes’ activities were the provision of advice on town planning controls, attending and liaising with the council and attending on meetings with the council.
Mr Petricca agreed that VIARC’s retainer included the matters set out in paragraphs 6(i-iii) of Mr Barba’s first affidavit, but contended that Paragraph 6(iv) was not included and that Mr Barba himself was responsible for the matters set out in paragraphs 6(vi-vii). Mr Petricca asserted that the development plans were withdrawn only because the marketing campaign for sale of the Sunshine property had failed. It was not, he said, “a guise for seeking to sell to the RSL”. Rather, that possibility was explored only after the failure of the marketing plan, when all unit-holders agreed that uses other than those originally contemplated must be considered.
Further, Mr Petricca deposed that at no time since his involvement with the Sunshine property commenced in January 2004 did Mr Barba criticise VIARC, or claim that it had failed to fulfil its retainer or contractual obligations. On the contrary, Mr Petricca deposed that on 11 July 2005, Mr Barba emailed Mr Petricca a request that he submit any further VIARC accounts and on 21 July 2005, there was a unit‑holders representatives’ meeting at which it was acknowledged that VIARC was a creditor of the plaintiff.
At a further unit-holders representatives’ meeting in February 2006, Mr Barba gave Mr Petricca and other attendees a manila folder which contained the plaintiff’s Aged Payables Summary, showing a debt of about $48,000 odd to VIARC. Mr Barba’s affidavit in reply sworn on 30 April 2006, admitted much of the background which was deposed to by Mr Petricca. He denied, however, the defendant’s assertion that its role was limited to design and drawing for architectural service and reiterated his contention that the defendant’s true contractual role went well beyond that, including liaison with the council, project management and the like, including managing the planning project.
Paragraphs 1-23 of Mr Barba’s affidavit in reply essentially dealt with the ambit of the defendant’s retainer. Mr Barba deposed that the exhibited minutes of meetings of unit-holder’s representatives are inconsistent with the defendant’s allegedly limited role. He quoted at length from those minutes. Having read them, I am not persuaded that the relevant quotes support the contention that the defendant’s role included project management and responsibility for obtaining the permit.
Further, the minutes refer to Mr Barba’s own “project management” and “project director’s costs”. Mr Barba explained this reference by saying that project management was merely management of financial and legal matters, while all project management functions affecting planning and development were delegated to the defendant. That, however, is mere assertion and the reference is, at best, ambiguous. In paragraphs 24-26 (which due to their responsive structure are somewhat unclear), Mr Barba reiterated that the planning permit was withdrawn without the unit-holder’s agreement. He did not assert, however, that it was withdrawn without their knowledge.
He appeared to assert that a sale to the RSL was explored before the marketing plan failed in September or October 2004, and before the planning application was withdrawn.
However, p.15 of Exhibit DB1, comprised a document indicating that on 18 October 2004, Mr Sergio Petricca reported that for the first time (there is no indication of any prior report) that the RSL had expressed interest to negotiate a site in the Western suburbs and a motion was passed at that meeting that Sergio was to, “Head the valuation team”. Mr Barba asserted that the “forced sale” in July 2005 was well after the marketing campaign failed in September, October 2004, which is obviously correct.
In Paragraph 28, Mr Barba asserted that it was “understood … That the planning permit should remain on foot even if half the land were sold to the RSL”. In Paragraph 29, Mr Barba responded to Mr Petricca’s assertion that Mr Barba never, since the defendant’s first involvement with the project from January 2004, criticised the defendant’s performance of its retainer.
In my view, Mr Barba’s response to Mr Petricca’s assertion was oblique at best.
Having been confronted with Mr Petricca’s assertion of the absence of any complaint, Mr Barba asserted that it was false, but then did not depose to a single instance of a direct assertion of breach of retainer by reason of unauthorised withdrawal of planning permit or, indeed, on any other basis. The highest his response rose was an assertion that, “On numerous occasions I questioned the reason why the planning process was not continuing in earnest”. This would not necessarily point to any breach of retainer by the defendant, even if the retainer were as broad as the plaintiff alleges. If that is the highest level of complaint at any time prior to the s.459G application, it does not in my view, support the plaintiff’s contention of a breach of retainer by unauthorised withdrawal of the planning permit in January 2005. Mr Barba also stated that Mr Petricca’s “unprofessional conduct in dealing with the RSL also caused the unit holders to lose the commercial opportunity of selling the land to the RSL for a substantial profit”.
That was not referred to in the 21 day affidavit and I do not regard it as properly an amplification of the material facts in that affidavit. Nevertheless, Exhibit D1 contains correspondence and emails between the unit holders, including Mr Barba and Mr Petricca, showing the unit holders working towards the common aim of selling the site, or half of it, to the RSL from at least December 2004, and involving Mr Petricca in dealing with an intermediary, one Ms Antonella Care. There is no evidence in the minutes of meetings of unit holders of any complaint about an unauthorised withdrawal of the planning permit in January 2005 or indeed at any time thereafter, and no facts supporting a claim of breach.
Minutes of the meeting of 11 July 2005 indicate a common concern that sale to the RSL should occur and a concern with refinancing or a sale to JACE Pty Ltd, whose offer would expire on 15 July 2006. They indicate no recrimination against Mr Petricca for unauthorised withdrawal of the planning permit but rather, suggest a united approach. The minutes of the meeting of the unit holders dated 21 July 2005 similarly, do not indicate any accusation of, or factual basis for, breach by VIARC or Mr Petricca. Rather, they indicate a close cooperation and working to pursue common goals and absence of evidence of breach.
There is, as Mr Barba contends, an email from Ms Care to Mr Petricca dated 13 July 2005, which complains strongly of his having contacted the RSL directly. An email of Mr Petricca to Mr Barba of the same date advises him of this complaint. An email of Mr Barba to a Mr Napoli, another unit holder, dated 16 July 2006, indicates that Mr Barba was privately critical of Mr Petricca’s dealing with the RSL. It refers to the withdrawal of the planning certificate as having “backfired on us,” but there is no suggestion that this was unauthorised or associated with any breach of duty. It is a private email between the two unit holders and there is no evidence that the company or the unit holders in meeting ever reproached Mr Petricca or accused him of breach of retainer in relation to the withdrawal of the permit at any time, although clearly, they were aware of the withdrawal.
Similarly (although it was not a matter relied on Mr Barba’s first affidavit and is not referred to or explained in any detail in his affidavit in reply) there is no assertion or documentary evidence that Mr Petricca or VIARC were ever subject to criticism, complaint or accusation of breach relating to dealings with the RSL in a unit holders representatives’ meeting or in correspondence received by VIARC or Mr Petricca. On 11 July 2005, Mr Barba (who knew that the planning permit had been withdrawn) questioned whether Mr Petricca would be submitting any accounts to add to the current outstanding account on behalf of VIARC, giving no indication that he disputed the account or considered that there was a claim off-setting the same.
I agree with the defendant’s submission that Mr Barba’s explanation that he wished to know what any outstanding claim was, but did not agree to pay, is implausible in this context. While he did not, as he stated, know of the criticisms made by Ms Care on 11 July 2005, that occurred a couple of days later, on 13 July. The complaints by Ms Care were clearly known by 16 July 2005, but there is no assertion or evidence of any complaint or accusation after that day. For example, VIARC was acknowledged to be a creditor on 21 July 2005, and Powerhouse’s Aged Payables Summary dated 3 October 2005 recognises the total due to VIARC as $48,000. Mr Barba stated that he only became aware of Mr Petricca’s unprofessional conduct after 11 July 2005, when he had learned of the matter with the RSL, but he does not address the meeting of 21 July 2005; nor does he address the Aged Payables Summary in the manila folder in October 2005, or the fact that there was a meeting in February 2006 when it was handed to Mr Petricca.
The Court, in the context of the present application, need only find that the company has a genuine off-setting claim, or a genuine dispute about the existence or amount of the debt. That does not impose a particularly high standard, as is commonly recognised. The grounds for alleging a dispute or an off-setting claim must be not spurious, hypothetical, illusory or misconceived, but must be real, as the Full Federal Court stated in Spencer Constructions Pty Ltd v Aldridge[6]. The approach is analogous to that adopted in an application for summary judgment.
[6]Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452.
In Eyota v Hanave, McLelland J stated[7] that “A genuine dispute connotes a plausible contention requiring investigation and raises much the same sort of considerations as a serious question to be tried prior to and arising on an application for the interlocutory injunction or extension, for the extension or removal of a caveat”.
[7]Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787.
“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 decision inconsistent with the undisputed contemporary documents or other statements by the same deponent or inherently and probable in itself” it may not be - “it may be not having sufficient prima facie plausibility to merit further investigation as to its truth or a patently feeble legal argument or assertion of the facts unsupported by evidence.”
The Court referred to Rohalo Pharmaceutical Pty Ltd v R P Scherer SpA & Pharmagel SpA (“Rohalo”),[8] where it was stated that there must be an objective existence to the dispute or off-setting claim. It also referred to the formulation in John Holland, where it was said that “It is clear that what is required in all cases is something between mere assertion and proof that would be necessary in a court of law. Something more than mere assertion is required, because if that were not so, then anyone could merely say that they did not owe a debt.”[9]
[8](1994) 15 ACSR 347; (1994) 13 ACLC 94; BC9400168.
[9]John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd(1994) 14 ACSR 250 at 253.
Further, in relation to off-setting claims, as Palmer J recognised in Macleay Nominees v Belle Property,[10] “The claim must be arguable on the basis of facts asserted, with sufficient particularity to enable the court to determine the claim is not fanciful. An off-setting claim can include a claim for unliquidated damages but must be one which the court can, without looking too deeply at the issues that may arise, can see has some real chance of success as enunciated in Intag Microelectronics Pty Ltd v. AWA ((1995) 18 ACSR 284 at 289)”.
[10]MacLeay Nominees Pty Ltd v Bell Property East Pty Ltd (2001) NSWSC 743 at [18].
In the present case, the evidence indicates a current dispute about the parameters of the defendant’s retainer and some material consistent with the defendant’s contention on that issue, but equally, or in my view, more, consistent with the defendant’s contentions. It is not, however, the Court’s task to determine such a dispute. That dispute is merely preliminary or contextual. It is not the dispute on which the plaintiff relies as the basis for the off-setting claim, which is that such retainer was breached by the defendant’s unauthorised withdrawal of the planning permit in January 2005, giving rise to a claim for unliquidated damages, which is submitted to be greatly in excess of the defendant’s claim for debt.
Similarly, the allegation that Mr Petricca’s conduct with the RSL gave rise to a separate claim (if, contrary to my conclusion, it could properly be introduced after the first affidavit of Mr Barba) is not evidenced in any contemporaneous document of the company or the unit holders as a body. It occurred in July 2005, but as late as October 2005 and February 2006, the defendant’s debt appeared to have been acknowledged. There was no indication of any off-setting claim, or of any fact stated to constitute breach.
The plaintiff’s deponent, Mr Barba, has asserted that there is a breach of retainer and professional duty, which has given rise to a genuine dispute as to the existence of the debt and a genuine off-setting claim. The Court’s function is simply to discern the existence of a genuine, bona fide dispute or off-setting claim. It is not to weigh the merits or determine any such claims, nor is there to be any extended inquiry.
While it is not a very exacting standard, on the other hand mere, assertion of a dispute or off-setting claim, mere bluster or advancing grounds which are illusory or spurious or insufficiently particularised will not suffice. The Court must not enter into the merits of the dispute, but it is not crossing the line in relation to its legitimate role in these applications to consider evidence which “bears on whether or not the asserted dispute or off-setting claim is genuine”. Indeed, that is its necessary function.
The dispute or off-setting claim should, as has been recognised, have some objective existence, and the plaintiff bears the onus of establishing the genuineness of the dispute or off-setting claim. The plaintiff has not discharged that onus in the present application. In my opinion, the plaintiff’s position conflates the conflicting assertions about the terms of the retainer with a genuine dispute about existence of the debt or a genuine off-setting claim on the basis of facts sufficiently particularised.
The fact that there is, or even were, conflicting views about the ambit of the defendant’s retainer, does not mean that there currently, is, or was, a genuine dispute about the existence of the claimed debt, or a genuine off-setting claim. If the plaintiff’s evidence goes no further than the ambit of the retainer, a necessary further element is missing. Sufficiently particularised grounds for a genuine dispute, or a genuine off-setting claim must be advanced.
The plaintiff also submitted that it was unconscionable of the defendant in this case to serve a statutory demand, rather than to take proceedings in the Magistrates’ Court.
The statutory demand procedure, however, exists in order to eliminate any requirement that a creditor must issue proceedings and first obtain judgment for debt against a company, and no adverse inference can be drawn from the defendant’s failure to do so in the present case. Under the Act, the company is afforded the opportunity to demonstrate that there is a genuine dispute, off-setting claim, or other basis to set the statutory demand aside, which it has used in the present case.
As Mr Selimi contended, the failure to register a contemporaneous recognition of a relevant breach, dispute or off-setting claim would not, in every case, mean that it was spurious or not genuine. For example, the basis of the dispute or claim may not have been apparent. The contemporaneous documentation will, in the ordinary case, however, have great relevance to the determination of the genuineness. Here, the plaintiff does not satisfactorily explain the absence of any contemporaneously documented facts indicating breach with sufficient particularity, or the lack of any recognition of breach in the contemporaneous documentation.
Mr Selimi has ably advanced all possible arguments on behalf of the plaintiff in this well prepared and well argued application. In my opinion, however, the evidence currently before me, although it registers a private expression of dissatisfaction by Mr Barba in July 2005 in relation to the RSL, does not sufficiently support a plausible contention requiring further investigation in the relevant sense, that there is a genuine dispute or a genuine off-setting claim.
I am unable to conclude that there was or is a genuine, as distinct from asserted dispute or off-setting claim by the company against the defendant. Similarly, for like reasons, set out in detail above, I am not persuaded that (were the claim otherwise properly raised) it would be unconscionable or unconscientious of the defendant to seek to recover the debt. There is no evidence therefore indicating that there is some other reason justifying the setting aside of the statutory demand pursuant to s.459J.
It follows that, in my opinion, the appeal from the order of Senior Master Mahoney should be dismissed.
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