AGC (Advances) Ltd v West

alia) Pty Ltd (1993) 11 ACSR 601; 11 ACLC 919 - Re 2 Roslyn Street Pty Ltd [2011] NSWSC 512 - Re UGL Process Solutions Pty Ltd [2012] NSWSC 1256 - TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67 Category: Principal judgment Parties: Tesrol Holdings Pty Ltd (Plaintiff) Westpac Banking Corporation (Defendant) Representation: Counsel: G.D. McDonald (Plaintiff) J. Williams (Defendant) Solicitors: Malcolm Johns & Company (Plaintiff) Allens (Defendant) File Number(s): 2013/102554

Judgment 1By Originating Process dated 4 April 2013, the Plaintiff, Tesrol Holdings Pty Limited ("Tesrol") applied under ss 459G(1) and 459H(1)(a) of the Corporations Act 2001 (Cth) to set aside a statutory demand dated 14 March 2013 ("Demand") issued by the Defendant, Westpac Banking Corporation ("Westpac"). In written submissions served prior to the commencement of the hearing, the Plaintiffs sought to amend that application also to rely on s 459J(1)(b) of the Corporations Act. With the consent of both parties, I granted leave to file an Amended Originating Process in Court, reserving the question whether the amendment should be permitted to this judgment. I will address that question below. 2I should first note the background facts, which did not appear to be controversial. A wholly owned subsidiary of Tesrol, Epivision Pty Limited ("Epivision") entered into a Commercial Bill Acceptance and Discount Facility ("Facility Agreement") with a facility limit of $20,453,000 with St George Bank Limited dated 24 September 2009 (Tran 15.5.2013 Ex VT1 pp 1-50). Tesrol had guaranteed Epivision's indebtedness to St George, by a guarantee and indemnity dated 1 December 2006 ("Guarantee") (Tran 15.5.2013 Ex VT1 pp 51-64) which, by an acknowledgement dated 29 September 2009, Tesrol acknowledged extended to Epivision's obligations arising under the Facility Agreement (Tran 15.5.2013 Ex VT1, pp 65-79). Epivision's obligations under the Facility Agreement were also secured by a mortgage over a property in Seven Hills (Tran 15.5.2013, Ex VT1, pp 90-111). On or about 1 March 2010, Westpac succeeded to St George Bank's liabilities and assets. 3Epivision defaulted in repaying the amounts due under the Facility Agreement and Westpac appointed receivers and managers over all of Epivision's rights, property and undertaking pursuant to a fixed and floating charge ("Charge") given by Epivision (Tran [14], Ex VT1, pp 112-134). The receivers and managers subsequently sold Epivision's Seven Hills property in two transactions in December 2011 and January 2012 (Tran 15.5.2013 [30]-[32]) and the proceeds of sale were credited to Epivision's account. 4By letter from Westpac's solicitors dated 26 February 2013, to which reference is made in Ms Tran's affidavit verifying the Demand, Westpac demanded payment by Tesrol of the amount of $4,609,088.67, the amount also stated in the Demand. The letter also referred to and enclosed copies of the relevant agreements to which reference was made in the Demand. It set out the relevant history and set out a reconciliation of the amount claimed in the letter of demand (and subsequently in the Demand) to the amount owed by Epivision on maturity of the facility provided to it on 11 February 2010. That reconciliation recorded credits for deposits, including distributions by the receivers and managers appointed by Westpac to Epivision's assets, which in turn included the proceeds of sale of the Seven Hills property. That reconciliation referred to receivers' fees of $393,130.87, consistent with Ms Tran's affidavit supporting the Demand, and referred to the terms of the Facility Agreement on which Westpac relied to debit those fees to Epivision's account. There was an error in that reconciliation, repeated in Ms Tran's affidavit in support of the Demand, in respect of the amount of receivers' fees included as a component of the amount claimed in that letter of demand and subsequently in the Demand. The reconciliation also noted a credit to the amount claimed in respect of legal fees which were not then pressed by Westpac. 5The Demand, which as I noted above was dated 14 March 2013, was also for the amount of $4,609,088.67. A schedule to the Demand described the relevant debt as the amount payable by Tesrol to Westpac pursuant to the Facility Agreement, the Guarantee, an acknowledgement given by Tesrol dated 1 September 2009, and the letter of demand from Westpac's solicitors to Tesrol's solicitors dated 26 February 2013. The Demand was verified by an affidavit of Ms Vanessa Tran dated 14 March 2013 which referred to those documents; stated that detailed particulars of the debt were provided to Tesrol by letter dated 26 February 2013; and noted that the debt included an amount of $393,130.87 owing by Tesrol to Westpac in respect of fees charged by the receivers and managers appointed by Westpac to the secured assets of Epivision. Ms Tran's affidavit also indicated that she or someone on her instructions had reviewed invoices from the receivers and managers and believed the fees charged by them were reasonable. Ms Tran also indicated her belief that there was no genuine dispute about the existence or amount of the debt. There was, as I will note below, an error in Ms Tran's affidavit as to the amount of the receivers' fees which were included as a component of the amount claimed, arising from a misclassification of one invoice rendered by the receivers. 6It is useful at this point to note the manner in which Tesrol formulated the objection to Westpac's claim, after service of the letter of demand and the Demand. (I do not consider that the correspondence relating to earlier calculations of the amount claimed and to an earlier creditor's statutory demand which Westpac served but did not press provides any real assistance in that regard, since it is not directed to the debt which was claimed or to the manner in which it was described in the letter of demand and in the Demand). By letter dated 5 March 2013 Tesrol's solicitors responded to the letter of demand as follows: "We have been corresponding with your client and yourselves on the subject since at least May 2012, and yet with respect you continue to parrot earlier so-called demands without addressing and supplying the particulars to which our client is patently entitled. Those particulars have been requested in earlier correspondence. As a singular example, we refer you to item 6 on page 2 of our letter to Ms Tran dated 8 June 2012 where we asked (inter alia) for an itemised copy of every tax invoices for ... Receivers and Managers fees. In the schedule to your letter under reply you refer to invoice #108800 of PPB Advisory. Surely it is a simple matter to supply us with a copy of that invoice (and all other material still outstanding). Again, you have not explained how or why there is a very significant disparity in the fees claimed as having paid to PPB. In annexure B to your letter to ourselves dated 15 August 2012, the amount is stated to be $461,000 and yet in the Schedule to your letter under reply the amount is said to be $52,023.30. Before our client can address the demand made, your client must accurately particularise its claim and provide the previously requested supporting documentation. Unless or until it does so, our client will treat any so-called demand as otiose." 7On 3 April 2013, Tesrol's solicitors wrote to Westpac's solicitors stating that: "The contents of our letter to you dated 5 March 2013 are repeated save for the rider that our client confirms that the amount of $4,215,957.80 is genuinely disputed not the least because despite requests your client has persistently refused to supply adequate information to enable our client to properly assess whether that or any amount is in fact owing. The affidavit of Ms Vanessa Tran affirmed on 14 March 2013 is patently incorrect in that she could not reasonably form the belief that there is no genuine dispute about the existence or amount of the debt given the extensive correspondence that has passed between us. Further, Ms Tran's contention that detailed particulars of the debt were provided ... is but her subjective assessment unsupported by our client's continuing requests for proper and adequate particulars. The statutory demand process must not be invoked as a debt collecting tool in circumstances such as the present matter. It is an abuse of process so to do. The proper course for your client is to commence proceedings against our client in the Supreme Court of New South Wales so that the genuine issues between the parties can be litigated and our client can if considered appropriate bring a cross-claim against your client, and others." Affidavit evidence 8Tesrol relied on an affidavit of its sole director, Mr Graham Young, dated 4 April 2013 in support of its application to set aside the Demand. That affidavit referred to an earlier demand issued by Westpac on 15 May 2012; subsequent correspondence between the parties in respect of that demand; advice provided by Westpac's solicitor at one point that the amount outstanding under the facility at 7 May 2012 was $9,581,952.02; and a creditor's statutory demand in the amount of $4,484,983.16 subsequently issued by Westpac on 5 December 2012 which was later withdrawn immediately prior to the hearing of an application to set it aside. These matters, and the existence of disputes between the parties in respect of earlier demands, may be of peripheral significance in respect of the question whether there was a genuine dispute in respect of, or other reason to set aside, the Demand. 9Mr Young's evidence in respect of the Demand was that, following receipt of the further letter of demand on 26 February 2013, to which I referred above, Tesrol's solicitors had, by letter dated 5 March 2013, requested particulars and reiterated previous requests for supporting documentation including, for example, itemised copies of tax invoices for the receivers and managers' fees. Mr Young's affidavit also annexed a letter dated 15 March 2013 from Westpac's solicitors serving the Demand, which identified reasons that Westpac did not consider there was a proper basis for a dispute as to the receivers' fees, but nonetheless invited Tesrol to pay the balance of the amount claimed if those fees were disputed. Tesrol did not take up that invitation, and Tesrol's solicitors responded that the balance of the amount claimed was also disputed because Westpac had refused to supply adequate information to enable Tesrol properly to assess whether that amount was owing. The contention that the amount claimed, other than the receivers' fees and interest on them, was genuinely disputed was not pressed in the hearing before me. 10In particular, Mr Young's affidavit dated 4 April 2013 stated that: "It is my belief that, since the issue of the December Demand, [Westpac] has not provided any particulars to warrant the issue of the March Demand and, without this information, [Tesrol] remains in a position where it cannot determine whether the debt claimed in the March Demand is actually due and payable." This statement, in effect, reserves Tesrol's position as to whether the debt claimed in the Demand is or is not due and payable, which it treats as depending upon any further information that is provided to Tesrol. 11Mr Young also noted that there was nothing in the relevant agreements that disentitled Tesrol from an assessment of the receiver's fees and noted that: "[Tesrol] continues to dispute the necessity for and the quantum of the receiver's fees. [Westpac's] refusal to provide [Tesrol] with an itemisation of the Receiver's fees means that [Tesrol] is unable to assess the reasonableness of the fees or necessity for the quantum and is unable to exercise any right, as a third party payer, to have such costs independently assessed." Mr Young further noted that: "It is [Tesrol's] position that the failure of [Westpac] to supply the information requested by [Tesrol's solicitors] gives rise to the inference that the information supplied by [Westpac] to date is not capable of substantiation through the additional information sought by [Tesrol's solicitors]. On this basis [Tesrol] disputes that the amount claimed by [Westpac] is due and payable, as claimed. It is [Tesrol's] position that the amount claimed in the Demand is inadequately particularised with in the March Demand and the Accompanying Affidavit, and by reason of [Westpac's] refusal to provide further and better particulars requested by [Tesrol's solicitors] in the annexed correspondence [Tesrol] disputes that the amount claimed in the March Demand is actually due and payable." I will address that contention, also advanced in submissions before me, below. 12Tesrol relies on a second affidavit of Mr Young dated 3 May 2013 which set out its calculation of the fees paid to the receivers as $511,680.91, based on the information that had been provided to it with the letter of demand dated 26 February 2013. Mr Young annexed, to his second affidavit, the relevant statements of account which had been provided with the letter of demand, and which (together with the amount of $52,023.30 referred to in the letter of demand) disclosed the correct amount of the receivers' fees. At least by that date, Tesrol had recognised an error as to the amount of those fees contained in that letter of demand and in Ms Tran's affidavit in support of the Demand. 13In his second affidavit, Mr Young also stated that: "I have obtained professional advice from a registered Liquidator and as a result of that advice, it is my view that the total amount charged of $393,130.87 (or $511,680.91 ...) is excessive because the main task completed by the receiver was only to oversee the sale of Epivision's property at ... Seven Hills ... which was capable of being a simple process." Mr Williams (who appears for Westpac) objected to that statement; Mr McDonald (who appears for Tesrol) contended that it was admissible to identify the basis on which Tesrol sought to set aside the Demand; and I admitted that statement subject to a limitation under s 136 of the Evidence Act 1995 (NSW) that it identified the asserted dispute and was not proof of the asserted facts. Tesrol also relied on expert evidence of a liquidator in this application, to which I will refer below, but that evidence did not seek to establish that the receivers' fees were in fact excessive for the reasons stated by Mr Young. Mr Young's affidavit also set out, at some length, criticisms of the sale process adopted in respect of the Seven Hills property; those paragraphs were not read and those criticisms were not pressed in this application. 14Westpac also relied on an affidavit of Ms Tran dated 15 May 2013 which set out her experience and the history of the dealings between Westpac and Epivision. Ms Tran gave evidence, an objection to part of which was withdrawn, that: "On each occasion when [Westpac] received an invoice from the receivers, I or someone under my supervision reviewed the invoice. I considered that the fees and costs charged by the receivers to [Westpac] were properly incurred and I recommended to the Asset Structuring Group's Credit Controllers that the invoices should be paid." 15Ms Tran also acknowledged that the amount of $393,130.87 to which I referred above, being the amount referred to as receivers' fees in the letter of demand and in her affidavit supporting the Demand, did not include an amount of $118,550 debited to Epivision's account in respect of receivers' fees, which had incorrectly been included in the letter of demand under the heading "other debits". As I noted above, Mr Young had already identified the fact of that other amount paid to the receivers in his affidavit dated 3 May. That amount did not affect the total amount claimed in the letter of demand or the Demand, as distinct from the correctness of one component of it, the amount of receivers' fees, identified in the letter of demand and in Ms Tran's affidavit in support of the Demand. I will return to the significance of this matter below. Ms Tran also seeks to calculate, on what she describes as a conservative basis, the amount of interest referable to the receivers' fees; she acknowledges that calculation is not precisely correct, but contends it reflects assumptions favourable to Tesrol in determining the maximum amount of interest that could potentially be charged. 16Mr Young's third affidavit dated 4 June 2013 in turn refers to invoices issued by the receivers which are exhibited to Ms Tran's affidavit and his evidence is that they contain "insufficient detail to enable me to assess the adequacy of the fees referred to" in them. He contests the view expressed by Ms Tran that the receivers' fees were properly incurred by reason of the level of information provided to support them and expresses the view that this "difference of opinion is the essence of the dispute between the parties (or part of the dispute)". (It might be noted, in passing, that the propositions that a matter is either the essence of a dispute or is part of a dispute are not wholly consistent). Mr Young does not identify any particular charge which Tesrol says was improper and continues, in effect, to reserve Tesrol's position as to whether the fees charged were correct, in the absence of further information to support them. Mr Young also points to different calculations of the amount of the receivers' fees by Westpac at different times, including referring to the difference between the amount of $393,180.87 (in the Demand) and the amount of $511,680.91 contained in Ms Tran's affidavit of 15 May 2013 (which is consistent with his earlier calculation in his affidavit of 3 May 2013). Mr Young also takes issue with the calculation of interest on the receivers' fees in Ms Tan's affidavit. That affidavit also expands upon the challenge to the sale process of the Seven Hills property, in several paragraphs which were not read where that challenge is not now pressed. 17Finally, Tesrol relies on an expert report of Mr Robert Whitton dated 4 June 2013. Mr Whitton notes that he has had access to the invoices issued by the receivers and not their timesheets or client billing records, but fairly acknowledges that this reflects the "normal standards between a [r]eceiver and his appointer". He provides information as to the usual means of time recording in insolvency firms; he identifies, perhaps not surprisingly, that errors can occur in time recording in various ways, although he does not express any view as to whether such errors occurred in this matter. He expresses the view that it is not common practice among firms of the relevant size and nature for tasks to be performed by more senior staff that could have been performed by more junior staff at a cheaper rate. Mr Whitton also responds to a question as to whether it is possible to form an opinion that the receivers' invoices are correct or otherwise, as stated in Ms Tran's affidavit, as follows: "From the information provided in itself I do not believe that such an opinion can be formed. I would expect that Ms Tran and/or others review the invoices would have been aware of the charge-out rates agreed with [the receivers] and in addition would have applied business experience to determine whether the billed fees are commensurate with the size and complexity of the particular matter." That comment recognises, fairly, that Ms Tran and her staff may well have exercised their business judgment in forming the view that she expressed and, perhaps more significantly, provides no support for any submission by Tesrol that the receivers' fees were incorrect or inappropriate, based on the available information. As I noted above, Mr Young's affidavit had not in terms advanced such a view, as distinct from reserving the position pending further information. Whether a genuine dispute has been established under s 459H(1)(a) of the Corporations Act 18Tesrol contends that the Demand should be set aside under s 459H(1)(a) of the Corporations Act 2001 (Cth), which provides that a creditor's statutory demand may be set aside when the Court is satisfied that there is a genuine dispute about the existence or amount to which that demand relates. Mr McDonald made clear in submissions that the dispute for which Tesrol contended was in respect of the amount of the receivers' fees, and not now in respect of other components of the debt claimed against it, and interest charged on those fees. 19The test for a "genuine dispute" used in s 459H of the Corporations Act has been variously formulated as requiring that the dispute is not "plainly vexatious or frivolous" or "may have some substance" or involves "a plausible contention requiring investigation" and is similar to that which would apply in an application for an interlocutory injunction or a summary judgment: Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290; (1993) 11 ACSR 362; Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787; Edge Technology Pty Ltd v Lite-On Technology Corporation [2000] NSWSC 471; (2000) 34 ACSR 301 at [28]; Re UGL Process Solutions Pty Ltd [2012] NSWSC 1256 at [6]. 20In Eyota Pty Ltd v Hanave Pty Ltd above at 787, McLelland CJ in Eq noted that a genuine dispute required a "plausible contention requiring investigation" and that (at [28]) that: "... does not mean that the Court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit "however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the deponent, or inherently improbable in itself, it may be", not having "sufficient prima facie plausibility to merit further investigation as to [its] truth" ... or "a patently feeble legal argument or an assertion of facts unsupported by evidence"." 21In Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 at 39, Lockhart J observed that: "The notion of a 'genuine dispute' ... suggests to me that the court must be satisfied that there is a dispute that is not plainly vexatious or frivolous. It must be satisfied that there is a claim that may have some substance. On the other hand the court must be careful, because if all an applicant has to do is to assert both a claim and some basis for it, without more, it would mean in almost every case that the court would set aside statutory demands where application is made to that effect. Plainly that is not what the legislature intended by introducing this new regime." That point might be made, a fortiori, if the applicant did not need to assert a claim that a debt was not properly founded, but merely identify a question as to whether or not it was properly founded or a lack of satisfaction as to its proper basis. 22In Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896 at [17], Barrett J noted that the test for a genuine dispute involved a "plausible contention requiring investigation" which was "real and not spurious, hypothetical, illusory or misconceived" and a "perception of genuineness (or lack of it)". His Honour also noted that the test for a genuine dispute, applied in the context of a summary procedure where it is not expected that the Court will embark on any extended enquiry, means that the task faced by a company challenging a statutory demand on the "genuine dispute" ground is by no means at all a difficult or demanding one, and that the company will fail in that test only if it is found, upon the hearing of its application, that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. 23In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67 at [71], Dodds-Streeton J observed that a company which seeks to establish a genuine dispute or off-setting claim: "... is required to evidence the assertions relevant to the alleged dispute or off-setting claim only to the extent necessary for the primary task. The dispute or off-setting claim should have a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. ... It is not necessary for the company to advance, at this stage, a fully evidenced claim. Something 'between mere assertion and the proof that would be necessary in a Court of law' may suffice." 24In Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 at [9], Murphy JA (with whom Buss JA agreed) observed that: "The expression 'genuine dispute' within the meaning of s 459H(1)(a) of the [Corporations] Act, connotes a plausible contention requiring investigation: Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85 at [44]. The demand will be set aside if there is a bona fide disputed issue of fact or law, which is not based on spurious, hypothetical, illusory or misconceived grounds: Createc v Design Signs; Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59 at [35]. Once such a dispute is raised, it is not necessary for a company to satisfy the court as to where the merits of the dispute lie: Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 at [30]. The court will not attempt to weigh or examine the merits of any dispute: Createc v Design Signs; Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290 at 295." 25In Re 2 Roslyn Street Pty Ltd [2011] NSWSC 512 at [70], Ward J summarised the test as that: "A genuine dispute is therefore one which is bona fide and truly exists in fact and is not spurious, hypothetical, illusory or misconceived. It exists where there is a plausible contention which places the debt in dispute and which requires further investigation." 26In Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 92 ACSR 27 at [44], Young AJA with whom Hoeben JA and Ward J agreed) referred to Eyota Pty Ltd v Hanave Pty Ltd above and noted that the question for a primary judge, in determining an application to set aside a statutory demand under s 459J(1)(a) is: "To determine whether there was a genuine dispute, that is one in which a plausible contention has been raised by the company on which the statutory demand was served." 27Tesrol submits that it disputes "the amount of the debt that is the subject of the Demand". The term "dispute" is arguably used here in a particular sense, in that Tesrol does not itself affirmatively contend that the amount of the debt that is the subject of the Demand is incorrect, or at least does not do so other than on the basis that an inference to that effect should be drawn from the fact that Westpac had not chosen to provide all of the information that Tesrol has sought to obtain from it. Tesrol also submits that it has a genuine dispute as to the amount of the debt claimed in the Demand, that dispute being real and not spurious, hypothetical, illusory or misconceived. It submits that: "[Tesrol] has expressly raised, since May 2012, long before the Demand was served, the issue of the [r]eceivers' fees ... as more fully described in these submissions and the evidence. This is not a last minute claim by the debtor [Tesrol]. [Tesrol] has expressed its dissatisfaction with the lack of information supplied by [Westpac] to substantiate its claim. ... The amount of the [r]eceivers' fees has also regularly changed over time. It can be inferred from the tone and context of the continued exchange of correspondence that [Tesrol] has disputed the amount of the debt and therefore the obligation to pay it as claimed. ... It is submitted that the Court can infer that the consistent demands of [Tesrol] for more information and, in particular the ongoing argument about the amount of [r]eceivers' fees and legal fees, indicate that [Tesrol] disputes that [Westpac] is entitled to what it is demanding." 28Tesrol further submits that: "It is submitted that the evidence of the dispute between the parties, in respect of the [r]eceivers['] fees and expenses, shows a genuine real cogent dispute as to the following: (a) what is the reasonable amount of the [r]eceivers' fees; (b) has [Tesrol] been provided with sufficient information to form any opinion about the reasonableness of the fees; ... (c) why is there a conflict in the evidence ... about the application of GST to the [r]eceivers' fees; ... (d) what is the right of [Tesrol] to challenge the amount of the legal fees contained within the debt; (e) what is the right of [Tesrol] to challenge the amount of the [r]eceivers' fees contained within the debt." 29So far as the first of the issues (or, more precisely, questions) raised by Tesrol is concerned, Westpac contends that no genuine dispute is established because Epivision was liable for the receivers' fees actually incurred, and not only 'reasonable' fees, and Tesrol was liable for that amount as guarantor. In this regard, Westpac relies on clause 19.4 of the Charge, which provides that Epivision was responsible for any conduct of the receivers and for the receivers' remuneration and costs, and contends that that clause is consistent with the general law position that a receiver is the company's agent although appointed by the secured creditor. The remuneration of the receivers is in turn dealt with in clauses 5.1 and 5.2 of the Charge. Westpac contends that, although the first two invoices issued by the receivers were addressed to St George Bank, all subsequent invoices were addressed to Epivision as the debtor. It contends that, on their face, the first two invoices also related to fees due to the receivers from Epivision as debtor, which was contractually obliged to meet those fees. 30Westpac submits that Epivision was therefore directly liable to pay the receivers' fees and did so when the relevant charges were debited to its account. Westpac submits that, on that analysis, no question arises of Westpac passing on receivers' fees to Tesrol, whether in a reasonable amount or otherwise, because those fees were directly incurred by Epivision as borrower and debited to its account and Tesrol has guaranteed the amount of Epivision's liability to Westpac. It seems to me that this argument may well be found to be correct at a final hearing; nonetheless, it does not seem to me sufficient to exclude the possibility of a genuine dispute, to the low threshold that is necessary, if a genuine dispute were otherwise established as to the reasonableness of the receivers' fees as a matter of fact. 31Alternatively, Westpac contends that, if the relevant events are properly characterised as Westpac paying the receivers and passing those costs onto Epivision under clause 50.1 of the Facility Agreement or clause 14.1 of the Charge, each of those provisions is directed to the actual costs and remuneration of the receivers, not merely the amount of any reasonable costs and remuneration. In particular, clause 14.1 of the Charge provides that Epivision was obliged to pay: "our reasonable costs, and any receiver's costs, and remuneration in administering (including enforcing, attempting to enforce or taking any other action in connection with our or any receiver's rights) and terminating this charge or another arrangement with us." (emphasis in original). By clause 2.1 of the Guarantee, Tesrol unconditionally and irrevocably guaranteed the payment of the guaranteed money by Epivision. A definition of "guaranteed monies" was in turn defined in wide terms, and clause 2.1 required Tesrol to pay the guaranteed money on demand, if Epivision did not do so on time and in accordance with any arrangement. 32On the other hand, Mr McDonald draws attention to AGC (Advances) Ltd v West (1984) 5 NSWLR 301 at 305, where Hodgson J noted that there may be an implied qualification to a borrower's liability for receivers' fees, requiring that those fees must be reasonably incurred. It is not necessary or appropriate to reach any final view as to the strength of this argument, or whether it could be extended beyond borrowers for consumer purposes to corporate borrowers, for the purposes of this application. It seems to me that proposition is genuinely arguable to the relatively low threshold required for the purposes of establishing a genuine dispute. The proposition that Westpac was arguably only entitled to recover the receivers' reasonable fees is necessary to Tesrol's establishing a genuine dispute in respect of the reasonableness or otherwise of the receivers' fees actually charged; however, it is not sufficient to establish such a dispute, which turns upon the basis of any challenge by Tesrol to the amount of those fees. 33Tesrol draws attention to the fact that Ms Tan, in the affidavit accompanying the Demand, specifically commented on the subject matter of the receivers' fees, and seeks to infer from this matter that there was a genuine dispute as to the receivers' fees. It is, of course, obvious that Westpac was aware that there was a dispute as to the receivers' fees, in the limited sense that Tesrol was resisting the claim for payment of those fees unless the further information it had required was provided. It does not, of course, follow that there is a "genuine dispute" as to the receivers' fees in the relevant sense, unless some basis for that dispute is articulated by Tesrol in this application. Tesrol also submits that Westpac's: "failure to adequately particularise what costs make up the debt so demanded and, on what basis those costs have been incurred, is indicative of [Westpac's] inability to substantiate its claim." I do not accept that any such failure would give rise to such an inference, unless it were established that Westpac was under an obligation to provide further information. In the absence of such an obligation - which Tesrol did not seek to establish - Westpac's failure to provide such information indicates only that it, at least initially, chose not to do what it is not obliged to do. (I say "initially" because substantial information was in fact provided in the course of this application.) 34On the other hand, Westpac contends that Tesrol: "has not met the threshold for establishing a genuine dispute about the quantum of the [r]eceivers' fees. It has done no more than refuse to accept them and assert that they are disputed. It has put forward no credible material to cast any real doubt about the reasonableness of the [r]eceivers' fees." Mr Williams draws attention to the uncontroversial proposition, for which the decision of the Court of Appeal of the Supreme Court in Victoria in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2007] VSC 121; (2007) 61 ACSR 300 at [140] is authority, that a company served with a statutory demand bears the onus of showing that any statutory demand should be set aside. Mr Williams submits that an exchange of correspondence between a creditor and a debtor, in which the debtor does not accept the existence or amount of the debt, is not itself sufficient to establish that the debt is genuinely disputed. I accept that submission, since the concept of a "genuine dispute" requires the debtor to provide at least some material to establish that it has a genuine basis for disputing the debt claimed: John Holland Construction & Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250. 35I have referred in paragraphs 6-7 above to the manner in which Tesrol formulated its challenge to the receivers' fees in the period after the letter of demand and Demand, and have also referred above to the manner in which that challenge is formulated in affidavit evidence on which Tesrol relied. The evidence on which Tesrol originally relied to support an affirmative claim that the receivers' fees were excessive, having regard to the process of sale of the Seven Hills property, was not read at the hearing before me. It does not seem to me that the remaining contentions establish a plausible contention that the receivers' fees in this case were unreasonable (as distinct from the proposition that Tesrol is not yet satisfied that they were reasonable, until provided with further information) even to the standard required to establish a "genuine dispute". To put the proposition another way, a "genuine dispute" as to a debt, in the relevant sense, requires more than that the party claimed to owe the debt is not yet satisfied - even genuinely or in good faith - that the debt is due. It requires that there be at least a plausible and genuine claim that the debt is not due on some identified basis which warrants further investigation, not merely that the plaintiff is not yet satisfied as to the basis of the creditor's claim. 36Tesrol also points to a suggested inconsistency between the amount of fees stated in Ms Tran's affidavit and that stated in the receivers' accounts lodged with ASIC. Mr Williams submits that Mr Young's first affidavit supporting the application to set aside the Demand does not identify, even by implication, any suggestion that that matter is relied upon to seek to set aside the Demand, and submits that the point is therefore not open to Tesrol under the principle in Graywinter Properties v Gas and Fuel Corp Superannuation Fund (1996) 70 FCR 452; (1996) 21 ACSR 581 at 587. That principle has effect that, before a ground of opposition may be relied upon to set aside a creditor's statutory demand, that ground must be identified expressly or by reasonably available inference in the affidavit supporting the application to set aside the demand filed within the 21 day period specified in the s 459G of the Corporations Act: Hopetoun Kembla Investments Pty Ltd v JPR Legal Pty Ltd [2011] NSWSC 1343; (2011) 87 ACSR 1 at [36]; Infratel Networks Pty Ltd v Gundry's Telco and Rigging Pty Ltd above at [27]ff. In my view, this matter is not raised, directly or by any reasonable implication, by Mr Young's affidavit filed within that 21 day period and is not open as a basis for setting aside the Demand. 37In any event, Westpac also points out that the relevant figures are reconciled in Ms Tran's affidavit dated 1 July 2013, [10]-[12]. Ms Tran points out that the receivers' accounts lodged with ASIC total $439,931.60, which she contends (in a paragraph admitted as a submission only) reconciles to the receivers' fees claimed in the Demand once GST, disbursements, and an invoice rendered after the receivers' retirement are included. The same reconciliation could be performed from the invoices annexed to Mr Young's second affidavit filed in the proceedings. I do not understand Tesrol to advance any affirmative contention that that explanation of the difference between the receivers' fees stated in the accounts lodged with ASIC and the fees relied upon in the Demand is incorrect and this matter also does not in any event seem to me to give rise to a genuine dispute as to the claimed debt. 38After this matter was argued before me, and on the day before judgment was due to be delivered, the Court of Appeal delivered its judgment in Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344. I deferred my judgment in the matter to allow the parties an opportunity to make further submissions as to any relevance of that judgment to the determination of this case. In that case, the Court of Appeal undertook a detailed examination of the case law relating to whether a genuine dispute was established for the purposes of s 459H(1)(a) of the Corporations Act. Their Honours also referred to the observations of McLelland CJ in Eq in Eyota and of Dodds-Streeton J in TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd to which I have referred above. The Court of Appeal noted that the observations in the case law referring to the requirement for a "plausible and coherent basis" for a genuine dispute required no more than the test stated by McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd above, namely that there be a plausible contention requiring investigation and raising the same sort of considerations as a "serious question to be tried" criterion. 39Mr McDonald submitted that Britten-Norman supported Tesrol's submission that the test to be applied to determine whether there was a genuine dispute was whether there was a "serious question to be tried", "an issue deserving of a hearing" or a "plausible contention requiring investigation". That submission perhaps required no further support, since tests of that character have been established since at least Eyota Pty Ltd v Hanave Pty Ltd above, and any difficulty arises not in their formulation but in their application. Mr Williams responded, correctly in my view, that Britten-Norman did not effect any change to the relevant test for determining whether a genuine dispute existed. 40Mr McDonald also submitted that Britten-Norman also indicated that the Court should not enter into an assessment of the credibility and weight of the evidence which is more than is required for the applicant to satisfy that test. That too seems to be an uncontroversial proposition. However, it leaves open the question what inquiry is required in a particular case to determine whether an asserted dispute is in fact a "genuine dispute", by contrast with one that (to use the language of Eyota) is "equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the deponent, or inherently improbable in itself" or does not have "sufficient prima facie plausibility to merit further investigation as to [its] truth" or is "a patently feeble legal argument or an assertion of facts unsupported by evidence" or that lacks the qualities identified by Lockhart J in Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd as being "not plainly vexatious or frivolous" and having "some substance". Some filter of that nature is necessary, unless the mere fact that a claim is made is to be treated as conclusive of its genuineness with the consequence that, as Lockhart J noted, "in almost every case ... the court would set aside statutory demands where application is made to that effect." 41Mr McDonald submitted that Britten-Norman also supported Tesrol's submission that the continued exchange of correspondence in which Tesrol disputed the amount of the debt and its "consistent demands ... for more information" demonstrated that there was a genuine dispute, implicitly without any need for Tesrol itself to show any arguable case that that amount was incorrect. Mr Williams responded that, by contrast with Britten-Norman, this was not a case where Tesrol led evidence of facts or oral representations claimed to establish that the receivers' fees were excessive or unreasonable. Tesrol also contended that Britten-Norman establishes that the Court cannot give "excessive weight" to Westpac's evidence seeking to support the amount claimed in the Demand. 42It does not seem to me that these propositions assist Tesrol, which has not sought to establish a plausible and genuine claim that the receivers' fees are not due on some identified basis which warrants further investigation, as distinct from asserting that Westpac has not yet provided the information that would satisfy it of their correctness. It does not seem to me that, adopting the criterion in Eyota, a "serious question to be tried" as to the existence of a debt would be established by, in effect, a non-admission of its correctness, rather than a claim on an identified basis that it is not established. Indeed, the decision in Britten-Norman itself referred (at [41]) to Graywinter Properties Pty Ltd v Gas Fuel Corp Superannuation Fund above as authority that "a mere assertion of a dispute" in the initial affidavit supporting an application to set aside a statutory demand "was not sufficient nor was a statement that the debt was disputed", and what was required was an affidavit disclosing "material facts" showing that a genuine dispute existed. 43In Britten-Norman, the Court of Appeal also placed weight on the absence of cross-examination of the person who asserted the dispute, observing that that case was one of the rare cases in which leave to cross-examine could have been granted if sought, by contrast with the many cases where such leave has been refused. The emphasis placed by the Court of Appeal on the absence of cross-examination of the person asserting the genuine dispute was potentially relevant to this case since Westpac did not cross-examine Mr Young, nor did Tesrol cross-examine Ms Tran, who was working in Singapore at the time of the hearing. However, neither party took any point as to this matter in supplementary submissions and it is not necessary for me further to address this point. Treatment of GST 44The third issue identified by Tesrol, in the list of questions set out in paragraph 28 above, relates to the treatment of GST in respect of the receivers' fees. Mr McDonald accepted in oral submissions that that issue was also not raised in Mr Young's affidavit supporting the application to set aside the Demand, and submits that this matter only came to Tesrol's attention subsequently as a result of Ms Tran's affidavit evidence. A question arises as to the extent to which the Graywinter principle applies to information that becomes available to an applicant after the date of service of the Demand. It is not strictly necessary to decide that matter, given the view that I reach below in respect of the substance of the suggested dispute. Nonetheless, it seems to me that the better view is that the Graywinter principle, which reflects the requirements of s 459G(3) of the Corporations Act, would apply to prevent reliance on a ground not raised in the affidavit supporting the application to set aside the creditor's statutory demand, even if it was unknown to the applicant at the time that affidavit was required to be filed. It would, however, then potentially be open to the applicant to rely on that ground to resist a later winding up application under s 459S of the Corporations Act, since it arguably could not be characterised as a ground that could have been relied upon to set aside the statutory demand when it was not available to the applicant at the relevant time. 45In any event, in her affidavit dated 15 May 2013, Ms Tran noted that the amounts debited to Epivision's account were less than the amounts of the invoices issued by the receivers, because Westpac had only debited 25% of the applicable GST to the account. I do not consider that matter is capable, without more, of giving rise to a "genuine dispute" as to the amount claimed. It does not seem to me that the fact that a creditor has claimed (whether deliberately or by inadvertence) less than the amount that may be due to it is capable of giving rise to a genuine dispute as to the lesser amount claimed. An amount, if not disputed for any other reasons, is no less due to a creditor because other amounts are also due but were not claimed. The parties did not draw my attention to any authority suggesting the contrary view. (I note, for completeness, that the recent decision of the Court of Appeal of the Supreme Court of Western Australia in Commonwealth Bank of Australia v Garuda Aviation Pty Ltd [2013] WASCA 61; (2013) 93 ACSR 168 is at least not inconsistent with that view, although I do not rely on it for that view where it was not the subject of submissions before me.) Assignment 46In submissions, Tesrol also referred to a Deed of Assignment and Assumption dated 7 June 2012 between Epivision and Westpac, which is annexure "A" to Ms Tan's affidavit dated 1 July 2013, and contended that that assignment appeared to assign Epivision's debts to Westpac for no consideration, and that "[t]here is no evidence that such document or transaction was made known to [Tesrol] at any time during the many months of communications between the parties. [Tesrol] also disputes the propriety of this transaction". 47Westpac contends that it is also not open to Tesrol to rely on that matter, where it was not raised by it in the affidavit seeking to set aside the Demand, under the Graywinter principle. It is also not necessary to decide that question for the purposes of this application, because it does not seem to me that any genuine dispute can arise from this matter. Tesrol does not itself identify any basis for the suggested dispute as to the propriety of the transaction, and there is no obvious impropriety in an assignment made by deed if the proceeds of the assigned debt were then applied to reduce Epivision's debt to Westpac, as Ms Tan's affidavit indicates. 48For these reasons, Tesrol has not satisfied the onus of establishing that a genuine dispute exists in respect of the amount claimed by the Demand, or specifically the amount of the receivers' fees, in the sense contemplated by s 459H(1)(a) of the Corporations Act. Variation of the Demand under s 459H(4) of the Corporations Act 49I should, for completeness, refer to the question whether the Demand should be varied under s 459H(4) of the Corporations Act. Westpac contends that if, contrary to its submissions, a genuine dispute as to the reasonableness of the receivers' fees were established, the Court would nonetheless determine the amount of the debt which was not the subject of a genuine dispute under s 459H(4) of the Corporations Act. Tesrol contends that any variation of the Demand under s 459H(4) of the Corporations Act is discretionary, and that the Court should not exercise its discretion to vary the Demand. 50Section 459H(2) of the Corporations Act provides that, if the court is satisfied that there is a genuine dispute as to the existence or amount of a debt to which the demand relates, the court is required to calculate the "substantiated amount" of the demand by deducting any disputed amounts from the admitted amount of the debt, being that part of the debt as to which no genuine dispute exists. The court must set aside a statutory demand if the substantiated amount is less than the statutory minimum: s 459H(3). If the substantiated amount is at least as great as the statutory minimum, the court can make an order varying the demand as specified in the order and declaring the demand to have had effect, as so varied, as from when the demand was served on the company: s 459H(4). In Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 at 605; (1993) 11 ACLC 919, Thomas J observed that the intention of these provisions is that: "a company should pay the undisputed part of a demanded debt even if the demand may have been excessive, but that it should not be placed under pressure of being wound up with respect to any part of the debt that is genuinely disputed, or where there is any genuine contra claim, whether or not it arises out of the same transaction as the debt to which the demand relates." 51Tesrol submits that the information before the Court is not sufficient to allow it to determine the amount which should be deducted under s 459H(4) of the Corporations Act, because of the manner in which Ms Tran has approached the correction for interest calculated in respect of the Receivers' fees. Ms Tran's affidavit dated 15 May 2013, to which I referred above, set out a basis on which, she contended, the amount claimed by Westpac could be adjusted if receivers' fees and interest claimed in them were excluded. Ms Tran acknowledges that the adjustment is not the actual sum of interest charged, and her evidence is that it was calculated on assumptions favourable to Tesrol as to the date on which the receivers' fees and costs were debited and the amount of interest charged, so as to overstate rather than understate the amount of interest. Tesrol accepts that this calculation is favourable to it, but nonetheless contends that the Court could not make an adjustment other than by reference to the actual sum of interest charged on receivers' fees, rather than the conservative estimate of that sum made by Ms Tran. 52It is not necessary to determine this question where I have found that a genuine dispute as to the amount of the receivers' fees has not been established. It is therefore also not necessary to deal with the dispute between the parties as to the amount of any adjustment that should be made to interest claimed, to reflect the deduction of receivers' fees on which interest had been charged. Whether the Demand should be set aside for some other reason under s 459J of the Corporations Act 53As I noted above, in written submissions served prior to the commencement of the hearing, the Plaintiffs sought to amend that application also to rely on s 459J(1)(b) of the Corporations Act. Westpac contended that Tesrol's reliance on matters raised under s 459J(1)(b) to set aside the Demand was not open to it by reason of the Graywinter principle. I granted leave to file a proposed Amended Originating Process to raise the claim under s 459J(1)(b) of the Corporations Act, but the parties sensibly agreed that both the objection on the basis of Graywinter, and whether the amendment should be permitted in consequence should be determined in this judgment. Mr Williams, who appeared for Westpac, in turn addressed submissions to the matters raised by Tesrol under s 459J(1)(b) of the Corporations Act, against the contingency that the amendment should be allowed. 54I will grant leave to make the amendment sought by Tesrol. One of the propositions relied on to set aside the Demand under s 459J(1)(b) of the Act - that a statutory demand could not be used as a debt collection process - was raised in correspondence from Tesrol's solicitors to Westpac's solicitors which was annexed to Mr Young's first affidavit in support of the application to set aside the statutory demand. That is sufficient to permit that matter to be relied on in the application to set aside the Demand, under the Graywinter principle, and it is in turn sufficient to support the amendment to rely on s 459J(1)(b) of the Corporations Act. Westpac did not suggest that it would otherwise be prejudiced by the amendment. 55It is nonetheless necessary to address the question whether the other matters raised are open to Tesrol. Mr McDonald submits that the principle in Graywinter applies only to restrict the matters that may be relied upon to set aside a creditor's statutory demand on the basis of a genuine dispute under s 459H(1)(a) of the Corporations Act, but not the matters that may be raised to establish some other reason to set aside the statutory demand under s 459J of the Corporations Act. Mr McDonald also contends that the Graywinter principle is directed to whether a party can file and rely upon additional evidence and that Tesrol's submissions in respect of s 459J of the Act do not rely upon any additional evidence filed by it. I have previously held that the Graywinter principle is applicable in respect of an application to set aside a creditor's statutory demand under s 459J of the Corporations Act: Re Hoatson Maxwell (No 1) Pty Ltd [2012] NSWSC 563 at [9]. It seems to me that result follows from the requirement under s 459G(3) of the Corporations Act that the relevant affidavit support the application to set aside a demand, and that the principle is directed to the grounds which may be relied upon in the application, consistent with the requirement in s 459G(3) of the Act, and not only to the filing of additional evidence. 56I turn now to the scope of s 459J of the Corporations Act. In Re UGL Process Solutions Pty Ltd above at [43] I observed that: "The Court may set aside a statutory demand under s 459J(1)(b) of the Corporations Act if it is satisfied that there is some other reason that the demand should be set aside. The Court's power under that section exists to maintain the integrity of the process provided under Pt 5.4 of the Corporations Act and is to be used to counter an attempted subversion of the statutory scheme, but is not exercised by reference to subjective notions of fairness: ... A statutory demand may be set aside under that section where it involves conduct which is unconscionable or an abuse of process: .... In First State Computing Pty Ltd v Kyling (1995) 13 ACLC 939, Santow J observed that a statutory demand could be set aside under s 459J(1)(b) by reason of a substantial overstatement in the amount claimed, and that, where a statutory demand has been so grossly inflated as to comprise matters which it should have been obvious from the outset were in genuine dispute between the parties at the time the demand was served, then an order under s 459J(1)(b) setting aside that statutory demand may well be required to prevent such an abuse of the regime under Pt 5.4 of the Act." [references omitted] 57Tesrol submits that there is a deficiency in Ms Tan's affidavit accompanying the Demand, which should be treated as some other reason to set aside the Demand under s 459J(1)(b) of the Corporations Act. Tesrol contends that that deficiency is that that affidavit is incorrect as to the amount of the receivers' fees, as is evident from Ms Tan's correction to that amount in her subsequent affidavit dated 15 May 2013 filed in the proceedings. Mr McDonald, properly, did not contend that the error in Ms Tran's affidavit supporting the Demand involved any intention to mislead the Court or any lack of good faith on Ms Tran's or Westpac's part. Nonetheless, Mr McDonald submits that: "An error in the accompanying affidavit, other than something incident[al] or immaterial, will be reason for the Court to set aside the Statutory Demand for 'some other reason'." 58Westpac submits that this claim is also not open to Tesrol, by reason of the Graywinter principle. This issue was first expressly raised in Mr Young's further affidavit dated 3 May 2013 which, as I noted above, annexed the relevant bank statements and identified the difference in the amount of the receivers' fees charged and the figure stated in Ms Tran's affidavit in support of the Demand. I do not consider the fact that Mr Young's first affidavit attached the statutory demand and supporting affidavit, without more, impliedly raised that issue. If the contrary view were taken, s 459G(3) and the Graywinter principle would be deprived of most or all of their substantive content, since all potential attacks on the Demand or the content of the supporting affidavit of whatever kind would be treated as implicit in an initial affidavit filed by the Plaintiff that annexed those documents. The position in that regard is different from, for example, annexing a relevant contractual document which may be sufficient to raise arguments of construction that arise from it: NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd [2010] NSWCA 210; (2010) 79 ACSR 544. I therefore do not consider it is open to Tesrol to rely on this matter in this application. 59I should, nonetheless, address the substance of the application in case an appellate court were to take a contrary view. I have referred above to Mr McDonald's contention that the error in Ms Tran's affidavit is material and therefore a basis to set aside the Demand under s 459J(1)(b) of the Act. Mr Williams responds that: "The fact that the accompanying affidavit made an error in identifying the total amount of the receivers' fees, not by way of proving the debt but simply to give further information as to its component part, cannot in any way affect the validity of the Demand." 60A non-compliance of an affidavit accompanying a statutory demand with the rules of the Court may be sufficient to set aside a statutory demand under s 459J(1)(b) of the Act: B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1994) 15 ACSR 433. In Portrait Express (Sales) Pty Ltd v Kodak (A'Asia) Pty Ltd (1996) 20 ACSR 746; (1996) 14 ACLC 1095 at 1105, Bryson J, observed that: "An affidavit which is incorrect has a different and higher order of importance to a Demand which is incorrect. There are some deficiencies in procedure which the Court should not allow to be successful, whether or not they have any practical significance in terms of justice between the parties in the instant case." I do not, however, understand his Honour to have been expressing a view that any error in an affidavit supporting a statutory demand, as distinct from the fundamental errors which his Honour was addressing in that case, warrants an order setting aside the statutory demand. In Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 25 ACSR 675 at 695, the Full Court of the Federal Court emphasised that a discretion to set aside or vary a statutory demand should be exercised having regard to all the circumstances of the case, and that there is "no ironclad rule that a defective affidavit will mandate the setting aside of the demand." I should follow that decision, which is a decision of an appellate court dealing with this issue, and is also in my view plainly correct. 61Tesrol submits that the relevant rules require that the affidavit be truthful. Accepting that a requirement that the affidavit be truthful arises from the fact that it is sworn or affirmed by its deponent, it does not seem to me that a lack of truthfulness in an affidavit is established, in the present case, by an error of classification in it which is subsequently corrected by a further affidavit. Tesrol also submits that the error in the accompanying affidavit is "material and significant", because there was an existing dispute as to the amount of the receivers' fees. I accept that, in some circumstances, a significant error in respect of the quantification of a component of the amount claimed in the affidavit supporting a creditor's statutory demand may give rise to some other reason to set aside that demand. However, I do not consider that such other reason is established in the present case, where it is apparent that Tesrol was provided with the information necessary to calculate, and in fact calculated, the amount of receivers' fees due, at a relative early stage in its application to set aside the Demand, and had an opportunity to address, and did address, that error in its evidence. The letter of demand dated 26 February 2013, to which I referred above, enclosed copies of bank statements for Epivision which recorded the debits to Epivision's account for fees rendered by the receiver between September 2011 and 28 March 2012, and that letter also referred to a further invoice rendered by the receiver after 31 May 2012 in the amount of $52,023.30. That information allowed Tesrol to recognise, and Mr Young had in fact recognised at least by the date of his second affidavit dated 3 May 2013 filed in this application, that the total for the amount of receivers' fees in that letter of demand and in Ms Tran's affidavit accompanying the Demand was incorrect, and allowed it to calculate (and Mr Young in fact calculated) the correct amount of those fees. 62I accept that, as Tesrol contends, there is no need for Tesrol to establish "substantial injustice" in order to establish a basis to set aside the Demand for some other reason under s 459J(1)(b) of the Corporations Act. However, it is necessary for Tesrol to establish that there is a "proper reason viewed in the circumstances of the parties taking into account the purposes of Pt 5.4" in order to establish that the Demand should be set aside on that basis: Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24 at [52]. I do not consider that either conduct of Westpac inconsistent with the objectives of Pt 5.4 of the Act, or any other proper reason to set aside the Demand, has been established on this ground. It might be added that any proposition that a creditor's statutory demand should necessarily be set aside because of an error in the categorisation of its components in the supporting affidavit, notwithstanding that the total of the amount claimed in the Demand was correct, would have the surprising and apparently perverse result that a creditor's statutory demand would generally not be set aside where it and the supporting affidavit were incorrect as to the amount of the debt, and that amount was varied under s 459H of the Corporations Act, but would be set aside under s 459J of the Act where it and the supporting affidavit was correct as to the total amount owing but the supporting affidavit was incorrect as to its components. 63Mr McDonald also raised a point as to whether Ms Tran's affidavit complied with Pt 80A r 15 of the Supreme Court Rules 1970 (NSW); however, Mr Williams pointed out, and I understand Mr McDonald now accepts, that that rule has no continuing application in this case. Rule 5.2 of the Supreme Court (Corporations) Rules 1999 (NSW) requires a verifying affidavit to be in accordance with Form 7 of the Supreme Court (Corporations) Rules and Ms Tran's affidavit complied with that form or at least substantially did so where it added further information. As Mr Williams points out, r 1.3 of the Corporations Rules has effect that those rules apply to proceedings commenced on or after the commencement of those rules on 1 March 2000, to the exclusion of Pt 80A of the Supreme Court Rules which was applicable to proceedings commenced prior to that date. 64Mr McDonald also submits that the Demand should be set aside under s 459J(1)(b) of the Corporations Act because the creditor's statutory demand procedure should not be used in respect of disputed debts. Mr Williams responds that the debt is owing and has not been paid, and that Westpac is entitled to serve a statutory demand in respect of the debt and no allegation of impropriety in that regard is properly open. I accept that a statutory demand may be set aside where it is served exclusively or primarily in respect of a disputed debt: First State Consulting Pty Ltd v Kyling (1995) 13 ACLC 939; Fitness First (Australia) Pty Ltd v Dubow [2011] NSWSC 605 at [50]. However, it seems to me that the proposition that a creditor's statutory demand should not be used to collect a disputed debt necessarily depends upon it being established that the relevant debt is in fact a genuinely disputed debt. That has not been established in the relevant sense in this case, for the reasons noted above. Conversely, it does not seem to me that there is any impropriety in a creditor relying on the creditor's statutory demand procedure, where a genuine dispute has not been raised, merely because the relevant debtor is not prepared to acknowledge that the debt is owing. There would be little utility in a statutory regime for the service of a creditor's statutory demand if that regime could not be relied upon by a creditor as soon as the relevant debtor advised that the creditor had not established to the debtor's satisfaction that the debt was owing. 65Tesrol also contends that some other reason to set aside the Demand is established because it refers to the letter of demand from Westpac's solicitor dated 26 February 2013, in identifying the basis of the relevant debt. Tesrol contends that its liability arises from the Guarantee and Indemnity which it had given and not from the letter of demand. Mr McDonald accepts that the complaint in respect of reliance on the letter of 26 February 2013 in the Demand and accompanying affidavit was also not raised in the affidavit originally filed by Tesrol in support of the application, and it is therefore not open under the Graywinter principle. In any event, as Mr Williams points out, the liability of Tesrol as guarantor only arose after a demand was made by Westpac under clause 2.1 of the Guarantee. The letter of demand is therefore an essential step in establishing the relevant debt and this is sufficient to support the reference to the letter of demand dated 26 February 2013 in the Demand. Orders 66For these reasons, Tesrol's Originating Process dated 4 April 2013 should be dismissed. In the ordinary course, costs will follow the event, and Tesrol should pay Westpac's costs of the proceedings. I make orders accordingly.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 November 2013