JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	30 May 2023
DATE OF JUDGMENT:	2 August 2023
CASE MAY BE CITED AS:	Re Cohiba Minerals Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 450

---

CORPORATIONS – Application to set aside a statutory demand – Corporations Act 2001 (Cth) ss 459G, 459H, 459J – Genuine dispute about existence or amount of alleged debt – Offsetting claim – Some other reason for setting aside statutory demand – Plaintiff, a mineral exploration company, entered agreement with defendant for it to provide drilling services – Plaintiff alleges defendant made pre-contractual representation that defendant would charge 30 per cent discount to rate charged to other exploration companies – Defendant provided services and issued invoices – Plaintiff alleges invoices fail to provide 30 per cent discount and defendant used defective equipment which resulted in time delays and costs – Whether necessary to establish counter-factual - Held, genuine dispute as to whether 30 per cent representation made, genuine dispute and offsetting claims based on: misleading and deceptive conduct pursuant to ss 18 and 20 of the Competition and Consumer Act 2010 (Cth); breach of contract; and estoppel – Genuine dispute and offsetting claim in relation to use of defective equipment – Statutory demand set aside – Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290 – Amville Constructions Pty Ltd v LS Bricklaying (Vic) Pty Ltd [2022] VSC 65.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G Bloch of counsel	Weinberg Lawyers
For the Defendant	Mr P Fary S.C.	Meerkin & Apel

TABLE OF CONTENTS

Background......................................................................................................................................... 1

The statutory demand....................................................................................................................... 5

Submissions........................................................................................................................................ 6

Principles............................................................................................................................................. 7

Is there a genuine dispute as to the 30 per cent overcharging?................................................. 8

Is there a factual dispute about the representation of a 30 per cent discount?.................... 9
Is there an arguable claim or defence in relation to the 30 per cent representation for an amount that can be substantiated?................................................................................................ 11
Does Cohiba have an offsetting claim based on misleading or deceptive conduct? 12
Does Cohiba have an offsetting claim, or has it raised a genuine dispute, based on the alleged agreement to a 30 per cent price discount?........................................................ 15
Does Cohiba have an offsetting claim, or has it raised a genuine dispute, based in equity upon an estoppel by representation regarding a 30 per cent price discount? 16
Does Cohiba have an offsetting claim, or has it raised a genuine dispute, based upon misrepresentation at common law regarding a 30 per cent price discount? 19

Is there a genuine dispute as to use of defective equipment causing overcharging?........ 19

HIS HONOUR:

By originating process dated 23 February 2023, the plaintiff (‘Cohiba’) applies to set…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Cohiba Minerals Ltd

Details

AGLC: Re Cohiba Minerals Ltd [2023] VSC 450
Case: [2023] VSC 450
Decision Date: 2 August 2023

CaseChat Overview and Summary

Cohiba Minerals Ltd was a plaintiff in an application to set aside a statutory demand made against it. The defendant had provided drilling services and issued invoices for these services. The plaintiff sought to set aside the statutory demand on the basis of a genuine dispute over the existence or amount of the debt, as well as offsetting claims. The court had to determine whether there was a genuine dispute about the existence or amount of the debt, and if there were any other reasons for setting aside the statutory demand.

The main legal issues the court needed to resolve were whether the plaintiff had established a genuine dispute regarding the debt, and if there were any offsetting claims that could be considered. The plaintiff argued that the defendant had made a pre-contractual representation that it would charge a 30 per cent discount to the rate charged to other exploration companies. The plaintiff claimed that the invoices did not reflect this discount and that the defendant had used defective equipment, leading to time delays and additional costs. The court had to assess whether these claims constituted a genuine dispute and if they could be considered as offsetting claims.

The court found that there was a genuine dispute about whether the 30 per cent discount representation had been made, as well as genuine offsetting claims based on alleged misleading and deceptive conduct under the Competition and Consumer Act 2010, breach of contract, and estoppel. The court also found that there was a genuine dispute and offsetting claims in relation to the use of defective equipment. As a result, the court set aside the statutory demand. The decision was influenced by the cases of Mibor Investments Pty Ltd v Commonwealth Bank of Australia and Amville Constructions Pty Ltd v LS Bricklaying (Vic) Pty Ltd.

The court set aside the statutory demand made against Cohiba Minerals Ltd, finding that there was a genuine dispute about the existence or amount of the debt, as well as offsetting claims. The plaintiff had successfully demonstrated that there was a genuine dispute about whether the defendant had made the 30 per cent discount representation, and that there were genuine offsetting claims based on alleged misleading and deceptive conduct, breach of contract, and estoppel. The court also found that there was a genuine dispute and offsetting claims in relation to the use of defective equipment.

Orders