JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 February 2022
DATE OF JUDGMENT:	4 August 2022
CASE MAY BE CITED AS:	Re J Build Developments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 434

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CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4 – Insolvency – Statutory demand – s 459G – Application to set aside statutory demand – s 459H – Building and Construction Industry Security of Payment Act2002 (Vic) – Whether genuine dispute under s 459H(1)(a) that the defendant’s invoice is a ‘payment claim’ for purpose of s 14 of the Building and Construction Industry Security of Payment Act2002 (Vic) – Whether invoice served out of time and/or includes an ‘excluded amount’ – Whether plaintiff precluded from raising other genuine dispute grounds – Whether offsetting claim – s 459J(1)(b) – Where offsetting claim not raised in s 459G affidavit – Whether demand and supporting affidavit ambiguous in referring to debt – Whether failure to verify debt because affidavit refers to monies owing under invoice as opposed to contractual basis of debt – Whether some other reason to set aside statutory demand.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Tennant	Ward & Co. Legal Consultants Pty Ltd
For the Defendant	Ms S Hooper	Mark Croft Legal

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

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

Statutory provisions and legal provisions.................................................................................... 6

Application of the SOP Act............................................................................................................ 12

Whether the second invoice served out of time and not a valid progress claim..... 14
Whether second invoice includes an excluded amount.............................................. 17
Other matters concerning the applicability of the SOP Act........................................ 20
Conclusion on application of the SOP Act..................................................................... 20

Whether genuine dispute about debt claimed in statutory demand..................................... 21

Relevant evidence.............................................................................................................. 21
Consideration..................................................................................................................... 24

Offsetting claims.............................................................................................................................. 29

Section 459J grounds....................................................................................................................... 32

Whether demand and supporting affidavit ambiguous in referring to debt........... 32
Whether affidavit in support fails to verify nature of debt claimed in demand...... 34

Conclusion......................................................................................................................................... 38

HIS HONOUR:

Introduction

By originating process dated 3 November 2021 and pursuant to ss 459G, 459H and 459J of the Corporations Act 2001 (Cth) (‘the Act’), J Build Developments Pty Ltd (‘the plaintiff’ or ‘J Build’) seeks to set aside a statutory demand dated 14 October 2021 (‘the statutory demand’ or ‘the demand’) served on it by Airconditioning and Electrical Services (Aust) Pty Ltd (‘the defendant’ or ‘AES’). Unlike many other applications to set aside statutory demands, a feature of this case is that the plaintiff relies upon the express written terms of an agreement between the parties to establish a genuine dispute about the existence of the…

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 J Build Developments Pty Ltd

Details

AGLC: Re J Build Developments Pty Ltd [2022] VSC 434
Case: [2022] VSC 434
Decision Date: 4 August 2022

CaseChat Overview and Summary

Re J Build Developments Pty Ltd involved a statutory demand made under the Corporations Act 2001, with the applicant being J Build Developments Pty Ltd and the respondent being a building contractor. The dispute centred around the validity of the statutory demand, with the respondent contesting it on multiple grounds, including that the invoice in question was not a "payment claim" under the Building and Construction Industry Security of Payment Act 2002 (Vic). The case was heard in the Federal Circuit Court of Australia.

The court was tasked with determining whether the respondent had a genuine dispute with the applicant regarding the nature of the debt claimed in the statutory demand. It also had to consider whether the invoice was served outside the statutory time limit or contained an "excluded amount" as defined by the Building and Construction Industry Security of Payment Act. Further, the court assessed if the applicant was precluded from raising other genuine dispute grounds and if the respondent had an offsetting claim that could be considered under the Corporations Act. The court also examined whether the statutory demand and supporting affidavit were ambiguous in referring to the debt and whether the failure to verify the debt in the affidavit was due to it referring to monies owed under the invoice instead of the contractual basis of the debt. Finally, the court evaluated if there was any other reason to set aside the statutory demand.

The court found that the respondent had a genuine dispute as to whether the invoice was a "payment claim" within the meaning of the Building and Construction Industry Security of Payment Act. The court also found that the statutory demand and supporting affidavit were ambiguous in referring to the debt and that the failure to verify the debt was due to the affidavit referring to monies owed under the invoice. The court concluded that there were other reasons to set aside the statutory demand, primarily due to the ambiguity and failure to verify the debt as required by law.

The court set aside the statutory demand, with the applicant to bear its own costs of the application.

Orders