JUDGE:	Steffensen AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 July 2024
DATE OF RULING:	7 November 2024
CASE MAY BE CITED AS:	Re Roberts Construction Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 679

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CORPORATIONS – Application to set aside statutory demand under s 459H by reason of a genuine dispute or offsetting claim – Where the statutory demand states the debt arises from shop drawings delivered pursuant to a contract and subsequently issued payment claim and tax invoice – Whether the defendant is permitted to argue an alternative legal basis of the debt under the Building and Construction Industry Security of Payment Act 2002 (Vic) – CM Luxury Pty Ltd v Menzies Civil Australia Pty Ltd [2023] WASC 340 considered – Where plaintiff claims parties agreed the payment was in the nature of deposit – Where plaintiff issued a payment schedule accepting the payment claim and debt – Where defendant prepared shop drawings but did no further work and did not purchase materials - Where contract terminated and plaintiff issued further payment schedule reducing amount owed by reference to the asserted deposit – Genuine dispute or offsetting claim established as to whether parties agreed the payment was to be a deposit – No genuine dispute established with respect to the second payment schedule – Genuine offsetting claim for legal costs not established – Service of demand not an abuse of process under s 459J(1)(b) – Substantiated amount calculated and demand varied – Corporations Act 2001 (Cth) ss 459G, 459H, 459J; Building and Construction Industry Security of Payment Act 2002 (Vic) ss 15, 17.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	A Carruthers	Eidelweisz Lawyers Pty Ltd
For the Defendant	S Rubenstein	Merton Lawyers

TABLE OF CONTENTS

A.. Introduction

B.. Does the demand claim a SOP Act debt?

B.1 Applicable principles
B.2 Consideration

C.. Is there a genuine dispute or offsetting claim?

C.1          Applicable principles
C.2          Is there a genuine dispute or offsetting claim re the payment being a deposit?
C.3          Is there a genuine offsetting claim for costs?

D.. Was the demand an abuse of process?

E... What is the substantiated amount?

F... Other Issues

G.. Orders

HER HONOUR:

A Introduction

This is an application pursuant to ss 459G and 459H of the Corporations Act2001 (Cth) (‘CorporationsAct’) to set aside a statutory demand on the basis that there is a genuine dispute and/or offsetting claim in respect of the debt the subject of the demand, or alternatively, that it should be set aside for ‘some other reason’ under s 459J on the basis that it was served in an abuse of process.
The plaintiff and the defendant…

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 Roberts Construction Group Pty Ltd

Details

AGLC: Re Roberts Construction Group Pty Ltd [2024] VSC 679
Case: [2024] VSC 679
Decision Date: 7 November 2024

CaseChat Overview and Summary

Roberts Construction Group Pty Ltd applied to set aside a statutory demand issued by its creditor. The dispute centred around whether a debt of $187,574.66, arising from shop drawings and a payment claim and tax invoice, was genuinely disputed or if there was an offsetting claim. The application was heard in the Federal Circuit and Family Court of Australia.

The central legal issues before the court were whether the defendant could argue an alternative legal basis for the debt under the Building and Construction Industry Security of Payment Act 2002 (Vic) and whether a genuine dispute or offsetting claim existed. The court had to determine if the defendant could present an alternative legal basis for the debt, in light of the statutory demand asserting the debt arose from shop drawings and a payment claim and tax invoice. The court also had to examine if the defendant's claim that the payment was a deposit and not the full amount due constituted a genuine dispute or offsetting claim.

The court found that the defendant could argue an alternative legal basis for the debt but ruled that there was a genuine dispute regarding whether the payment was a deposit. The court concluded that the statutory demand was not an abuse of process and varied the demand to reflect the substantiated amount. The court held that the genuine dispute as to the nature of the payment did not extend to the second payment schedule, and no genuine offsetting claim for legal costs was established. The court's decision was influenced by the case CM Luxury Pty Ltd v Menzies Civil Australia Pty Ltd [2023] WASC 340.

The court ordered that the statutory demand be varied to reflect the substantiated amount of $116,574.66 and dismissed the application to set aside the statutory demand in part. The court found that while a genuine dispute existed regarding the nature of the payment, it did not extend to the second payment schedule or the claim for legal costs. The court's decision was based on the evidence presented and the applicable sections of the Corporations Act 2001 (Cth) and the Building and Construction Industry Security of Payment Act 2002 (Vic).

Orders