Sunfrt Pty Ltd v Lithium Battery Storage Pty Ltd

Sunfrt Pty Ltd, the applicant, applied to the Court to set aside a statutory demand issued by Lithium Battery Storage Pty Ltd, the respondent, for a liquidated debt of $271,777.83. The applicant contends it has offsetting claims that exceed the amount of the debt owed. The main dispute is whether the applicant’s offsetting claims are genuine and quantifiable enough to set aside or vary the statutory demand. The court considered whether the applicant had established a genuine offsetting claim under section 459H of the Corporations Act 2001 (Cth), which requires a genuine cause of action, a claim advanced in good faith, and some evidentiary basis for the amount claimed.

The applicant argued it had an offsetting claim for unliquidated damages for breach of the exclusivity clause in the distribution agreement, which the respondent conceded for the purposes of this application. The applicant also raised various other claims, including claims for defective products and loss of profits. The Court found that the applicant failed to establish any of its claims as genuine offsetting claims because of inadequate evidence and lack of cogency in the submissions. The applicant’s primary claim for loss of sales in Victoria due to the respondent’s breach of exclusivity was also rejected because it was speculative and based on potential future breaches. The Court concluded that the applicant did not meet the threshold requirement of satisfying the Court that any of the claims were genuine offsetting claims. The Court will hear the parties as to costs.