Sand 4 U Supplies Pty Ltd v BSC Assets Pty Ltd

Sand 4 U Supplies Pty Ltd (the applicant) sought to set aside a statutory demand issued by BSC Assets Pty Ltd (the respondent). The dispute concerned whether the applicant had a genuine dispute about the existence of the debt claimed in the statutory demand, or whether the applicant had a right of set-off against the debt. The application was heard in the Supreme Court of Victoria.

The primary legal issue before the Court was whether the applicant had demonstrated a "genuine dispute" regarding the debt, as contemplated by section 459H(1)(a) of the Corporations Act 2001 (Cth). This required the Court to consider whether the applicant's grounds for disputing the debt were substantial and arguable, rather than merely vexatious or frivolous. A secondary issue was whether the applicant possessed a right of set-off that would extinguish or reduce the debt to below the statutory threshold.

Justice Nicholas Smith found that the applicant had failed to establish a genuine dispute. The Court analysed the evidence presented by both parties regarding the alleged defects in the goods supplied by the respondent, which formed the basis of the applicant's counterclaim and set-off claim. The Court concluded that the applicant's assertions were not supported by sufficient evidence to raise a real question as to the existence of the debt. The alleged defects were not substantiated to a degree that would warrant setting aside the statutory demand, and the purported set-off was not sufficiently established.

Consequently, the Court dismissed the application to set aside the statutory demand.