Binshell v Broadway

Supreme Court of NSW|2002-02-15|Before: Barrett J

CITATION : Binshell v Broadway [2002] NSWSC 54 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4836/01 HEARING DATE(S) : 11/02/02 JUDGMENT DATE : 15 February 2002

PARTIES : Binshell Pty Limited - Plaintiff Broadway Australia Pty Limited - Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr A. Lo Surdo - Plaintiff Mr D.R. Pritchard - Defendant SOLICITORS : Phillips Fox - Plaintiff Garland Hawthorne Brahe - Defendant CATCHWORDS : CORPORATIONS - winding up - application to set aside statutory demand - "genuine dispute" - tests to be applied - CONVEYANCING - matters arising between contract and completion - guarantee given for deposit - whether purchaser defaulted - whether termination by vendor wrongful - whether vendor entitled to recover deposit after expiration of guarantee - whether such entitlement is a "debt". LEGISLATION CITED : Corporations Act 2001 (Cth) Ashdown v Kirk [1999] 2 Qd R 1 Barclay v Messenger (1874) 43 LJ Ch 449 Bot v Ristevski [1981] VR 120 Cooper v Ungar (1958) 100 CLR 510 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Energy Equity Corp Ltd v Sinedie Pty Ltd [2001] WASCA 419 CASES CITED : Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 J R Stevens Holdings Pty Ltd v Von Begensey (1992) 5 BPR 11,534 Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1994) 2 VR 290 Process Machinery Australia Pty Ltd v ACN 057 260 590 Pty Ltd [2002] NSWSC 45 Rothwells Ltd v Nommack (No 100) Pty Ltd [1990] 2 Qd R 85 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 75 FCR 452 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 Trpkovski v Russell [2001] FCA 1871 DECISION : Application dismissed

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BARRETT J FRIDAY, 15 FEBRUARY 2002 4836/2001 - BINSHELL PTY LIMITED v BROADWAY AUSTRALIA PTY LIMITED JUDGMENT

1 The plaintiff, Binshell Pty Limited ("Binshell"), seeks an order under s.459H of the Corporations Act 2001 (Cth) setting aside a statutory demand dated 11 September 2001 which, on 13 September 2001, was served on it by the defendant, Broadway Australia Pty Limited ("Broadway"), in accordance with s.459E. The debt claimed by Broadway in the statutory demand is said to have arisen from a conveyancing transaction between Broadway as vendor and Binshell as purchaser. It is appropriate to go at once to the facts of that transaction as disclosed by the evidence.

The conveyancing transaction 2 On 27 October 2000, Broadway and Binshell became parties to a deed of option creating both a call option in favour of Binshell and a put option in favour of Broadway in respect of 18 lots in a strata plan. Broadway was designated "Vendor" and Binshell "Purchaser". The call option in favour of Binshell was expressed to be granted "in consideration of the Call Option Fee paid by the Purchaser to the Vendor (the receipt of which is hereby acknowledged)". The expression "Call Option Fee" was defined as meaning "the same amount as the Deposit payable under the Contract", that is, "the contract for the sale of the Property annexed to this agreement". The put option in favour of Broadway was expressed to be granted "in consideration of the Put Option Fee paid by the Vendor to the Purchaser (the receipt of which is hereby acknowledged)". The expression "Put Option Fee" was defined as the sum of one dollar. 3 It was further provided by the deed of 27 October 2000 that, upon the exercise of either option, the parties would "for all purposes be deemed to have entered into a binding and enforceable agreement for sale for the respective sale and purchase of the Property subject to and upon the terms and conditions of the Contract"; also that, in case of exercise of the call option, "the Call Option Fee shall become the deposit payable pursuant to the Contract". 4 On or about 27 October 2000 (the date of the deed of option), Binshell delivered to Broadway a document entitled "Deposit Guarantee" expressed to be executed for and on behalf of Trenwick International Limited. That document records its date of issue as 27 October 2000 and refers to a "Contract of Sale of Real Estate to which it is attached", the "it" being the deposit guarantee document itself. The operative part of the deposit guarantee is as follows: "Trenwick International Limited ARBN 088 657 416 ('Trenwick') guarantees the vendor that in the event of default by the purchaser under the Contract of Sale Trenwick will within 5 business days of a demand by the vendor under this Deposit Guarantee, pay to the vendor the Amount guaranteed. By accepting this Deposit Guarantee the vendor acknowledges acceptance of the conditions contained in this Deposit Guarantee." The "amount guaranteed" is stated to be $110,000. A space labelled "Expiry Date" has typed in it "December 19, 2000". 5 The evidence does not disclose whether this deposit guarantee was in fact attached to any contract for sale but if, as asserted, it was created and delivered on 27 October 2000, it could not have been attached to the contract for sale which later came into existence between Broadway and Binshell. This is because that contract is dated 18 December 2000. The deposit guarantee does, however, describe a contract by reference to parties and other features generally consistent with the contract dated 18 December 2000. I say "generally consistent" because, whereas the deposit guarantee identifies the settlement date under the contract as "On or before December 19 2000", the contract itself exhibits an element of uncertainty as to the completion date. In the space on the front page for "Completion date", there appears in handwriting what seems to be "19th December 2000", but with "19th" in heavy writing over "22nd", as if "22nd" had been written first and "19th" afterwards. Subsequent correspondence suggests that 22 December 2000 was the agreed date. For reasons which will become apparent, nothing turns on whether the stipulated date was 19 or 22 December. 6 Correspondence which is in evidence warrants an inference that the deposit guarantee was obtained by Binshell and furnished by it to Broadway on the basis that, because it had taken that action, Binshell would not be required to make payment of the "Call Option Fee" required by the option deed and that, on any exercise of the call option, the same arrangement would carry over to the deposit under the resultant contract for sale.

7 It is not entirely clear that the contract for sale dated 18 December 2000 resulted from exercise of one or other of the options but the submissions made on behalf of Binshell in relation to the deposit guarantee and its significance in the context of the contract are consistent with the proposition that the deposit guarantee was intended by the parties to be held by Broadway in respect of the deposit under the contract. From that it may be inferred that the call option was exercised by Binshell so that the provision of the deed to the effect that the "Call Option Fee" would "become the deposit" under the resultant contract was seen by the parties as having operated by reference to the deposit guarantee. 8 There is evidenced by correspondence a subsequent agreement that the completion date be extended to 15 January 2001. Completion did not take place on that day. On 23 January 2001, Broadway's solicitors sent to Binshell's solicitors a notice to complete requiring completion by 8 February 2001 (3 pm). In response, Binshell's solicitors canvassed various matters relevant to settlement and said that Binshell "should be in a position to settle on Wednesday 7th February 2001". A settlement statement for that date was prepared and 2 pm was nominated as the time of settlement. 9 On 7 February 2001, Binshell's solicitors wrote to Broadway's solicitors saying that the incoming mortgagee required two clear days' notice to draw cheques, with the result that "we must re-schedule for Thursday or possibly Friday 9 February 2001". The letter continued: "We note that the Notice to Complete expires 3.00 pm 8 February 2001. Therefore, please confirm your client grants an extension to the Notice to Complete if required." 10 Agreement to such an extension was conveyed by letter on 8 February 2001 from Broadway's solicitors. There was, however, further delay and, on 9 February 2001, Binshell's solicitors informed Broadway's solicitors that "my client should be in a position to complete by 5 pm Friday 16 February 2001", at the same time requesting an extension of the notice to complete until that time. The response was that Broadway wished to receive evidence that loan arrangements were in place. On the same day, 9 February 2001, Binshell's solicitors sent to Broadway's solicitors a copy of a loan approval letter from Howard Finance Limited. Broadway's solicitors wrote to Binshell's solicitors on 13 February 2001 recording certain matters they had been informed on the telephone by Binshell's solicitors concerning finance and concluding: "We confirm that our clients on this basis have agreed to extend the time for expiration of the notice to complete until 4 pm on Friday 16 February 2001. We confirm that your client acknowledges that the notice to complete has been validly issued." 11 Yet another extension was sought by Binshell's solicitors' letter of 16 February 2001 "due to a delay in processing the mortgage documentation". The extension sought was until 23 February 2001. Broadway's solicitors replied that their client was only prepared to extend until 19 February 2001. Binshell did not complete by that deadline and, on 28 February 2001, Broadway's solicitors wrote to Binshell's solicitors asking "whether there is any likelihood of your client being able to complete this contract in the foreseeable future", at the same time reserving Broadway's right to terminate the contract. The response from Binshell's solicitors dated 2 March 2001 was that Binshell had then received an unconditional loan approval and sought an extension to 9 March 2001. 12 Broadway obviously acceded to that request since its solicitors wrote to Bishnell's solicitors on 22 March 2001 referring to correspondence or conversation in which they had been informed by Trenwick's representative of Binshell's need for a "further extension of the contract", in consideration of which Binshell would take certain steps, including "increase the deposit by a payment of $100,000 by bank cheque (this payment to be in addition to the Deposit Bond)". 13 Broadway was amenable to this arrangement but Binshell eventually declined to take the steps that had been proposed and, by letter dated 26 March 2001, Broadway's solicitors gave notice that their client terminated the contract "due to your client's breach of the terms of the contract". Binshell's solicitors replied on 27 March 2001 that Broadway was not entitled to terminate the contract as "the essential date for completion and your notice to complete have elapsed". They continued: "Your client has not elected to terminate the contract within a reasonable period after that period has elapsed and therefore the time for completion is no longer an essential time." 14 Broadway's solicitors replied as follows on 29 March 2001: "We refer to your facsimile of the 27th instant in which you dispute our client's entitlement to terminate the contract. We do not accept your client's entitlement to dispute the termination as since the notice to complete elapsed our client has been involved in correspondence with your firm in which it has sought to establish from your client whether there was any possibility of it being able to settle the transaction before it terminated the agreement. Despite your client's assurances to the various parties that it would be in a position to settle this matter it has not been able to produce any evidence that it is in a position or is likely to be in a position to complete the sale. We note that in addition to the above default your client is also in default under a further essential term of the contract as the deposit guarantee that was issued in respect of this sale expired on 27 January 2001. As a result, at this stage, no deposit has been paid under the contract and therefore our client is entitled to terminate the contract in accordance with the provisions of clause 2 of the contract. Our client is prepared to allow your client until 5pm on Friday to present a cheque for the deposit of $110,000.00 or a deposit guarantee to enable it to rectify that breach. Our client will not accept a deposit guarantee from Trenwick International Limited. On the basis that your client will rectify the deposit breach, and without waiving our client's rights if it does not, our client has instructed us to withdraw its termination notice and to issue your client with the enclosed notice to complete." Accompanying this letter of 29 March 2001 was a notice to complete appointing 3pm on Thursday, 12 April 2001 at the office of Broadway's solicitors as the time and place for completion. 15 Thereafter, on 3 April 2001 (that is to say, before the date which the new notice to complete purported to make essential for completion), Broadway's solicitors wrote to Binshell's solicitors saying that, as Binshell had not provided a cheque or bond for the deposit, "our client hereby terminates the contract". 16 Broadway subsequently served the statutory demand under s.459F of the Corporations Act the subject of these proceedings requiring payment by Bishnell of a debt in the sum of $110,000 described as: "Deposit moneys pursuant to a contract to purchase eighteen apartments Sydney Campus Apartments 185-211 Broadway, Ultimo."

Binshell's contentions 17 By originating process filed on 2 October 2001, Binshell made application pursuant to s.459G for an order under s.459H setting aside Broadway's statutory demand. It did so on the facts stated in the affidavit of its sole director, Malcolm Jeffrey Sharpe, sworn on 1 October 2001 and filed with the originating process. Mr Sharpe deposes to the facts as just related and concludes: "30. I am of the view that Binshell is not obliged to pay the amount demanded in the Demand on the basis that Broadway wrongfully terminated the contract. Further, the Notice to Complete served by Broadway and the essential date for completion had elapsed during which Broadway did not take any steps to terminate the contract within a reasonable time thereafter. 31. In the circumstances, Binshell's position is that the issue of the statutory demand should be set aside as there is a genuine dispute between the parties about the existence or amount of the debt to which the demand relates." 18 There is thus asserted a dispute about Binshell's liability for the debt claimed by the statutory demand, so that the case falls to be dealt with under s.459H(1)(a). That assertion has, at its base, an allegation by Binshell that Broadway's termination of the contract was wrongful and that, after the date for completion made essential had passed, Broadway did not, within a reasonable time, take steps to terminate. That being the totality of the assertion of dispute that may be gathered from the application and affidavit filed and served by Binshell within the period of 21 days referred to in s.459G, Binshell is confined to those grounds of arguing that there is a genuine dispute which should cause the court to make an order setting aside the statutory demand. 19 I mention this because there was subsequently filed and served a second affidavit of Mr Sharpe, being an affidavit sworn on 29 October 2001 which was after the end of the period of 21 days referred to in s.459G. In that later affidavit, Mr Sharpe supplemented the facts in the earlier affidavit by exhibiting certain documents. Then, after referring to the letter of 3 April 2001 from Broadway's solicitors (being the letter to which I have already referred and which was an annexure to his first affidavit), Mr Sharpe said: "… I was informed on a date soon after 3 April 2001 by my solicitor, Sevag Chalabian, that Broadway Australia Pty Limited ('Broadway') had sought to terminate the contract on the basis that Binshell Pty Limited ('Binshell') had not provided Broadway with a cheque for the deposit by a specified date. I did not accept that Broadway could terminate the contract on the basis of non-payment of the deposit and I did not feel bound to pay the deposit on behalf of Binshell as Broadway had repeatedly agreed to extend the date for completion of the contract notwithstanding that the deposit guarantee had lapsed." 20 To the extent that this may amount to a new ground on which Binshell seeks to have the statutory demand set aside, it is not open to Binshell to rely on it. Its case that there exists a genuine dispute of the kind which must cause the court to set aside the statutory demand may be advanced only by reference to grounds referred to in or discernible from the affidavit filed within the 21 day period to which s.459G refers, that is, the affidavit of 1 October 2001, paragraphs 30 and 31 of which (quoted above) state those grounds. That a company in the position of Binshell is restricted in this way was recently confirmed by the Full Court of the Supreme Court of Western Australia in Energy Equity Corp Ltd v Sinedie Pty Ltd [2001] WASCA 419 (20 December 2001) - see also the discussion of the cases in Process Machinery Australia Pty Ltd v ACN 057 260 590 Pty Ltd [2002] NSWSC 45 (13 February 2002). This is a by-product of the strict approach to the statutory demand provisions which emerges from the decision of the High Court in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265.

The issues 21 In the light of the delineation of the asserted dispute in paragraphs 30 and 31 of Mr Sharpe's affidavit of 1 October 2001, the issues to be explored upon this application break themselves down in this way: 1. Has Binshell shown to the requisite standard that Broadway's termination of the contract was wrongful? 2. If so, and having regard to (a) the provisions of the contract regarding the deposit of $110,000; and (b) the facts surrounding the deposit as disclosed in the evidence, has Binshell shown to the requisite standard that the sum of $110,000 was not, as at 11 September 2001, due and payable by Binshell to Broadway as a debt? 22 When I say that each inquiry is as to whether Binshell has shown the relevant matter "to the requisite standard", I am referring to the standard identified in discussion of the meaning of "genuine dispute" in cases such as Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1994) 2 VR 290 and Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785. 23 In Mibor, Hayne J said, after referring to certain factors which identified the summary nature of the procedure: "These matters, taken in combination, suggest that at least in most cases, it is not expected that the court will embark on any extended inquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the court conclude that there is a dispute and that it is a genuine dispute." 24 In Eyota, McLelland J said: "It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s.450H. In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the 'serious question to be tried' criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat. This 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 same deponent, or inherently improbable in itself, it may be' not having 'sufficient prima facie plausibility to merit further investigation as to [its] truth' (cf Eng Mee Yong v Letchumanan [1980] AC 331 at 341), or "a patently feeble legal argument or an assertion of facts unsupported by evidence": cf South Australia v Wall (1980) 24 SASR 189 at 194." 25 The position was summarised in the joint judgment of Northrop, Merkel and Goldberg JJ in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 in these terms: "In our view a 'genuine' dispute requires that · the dispute be bona fide and truly exist in fact; · the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived." The wrongful termination issue 26 Under clause 9 of the contract, a right to terminate accrues to the vendor if "the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect". It does not appear to be disputed that the notice to complete given by Broadway as vendor on 23 January 2001 was effective to require completion not later than 8 February 2001 (at 3 pm) and to make time, in that respect, of the essence. Nor is it disputed that Binshell did not comply with that requirement. Binshell's argument is, in substance, that Broadway's purported termination was not properly founded on default by Binshell because Broadway had agreed to forego the essential time requirement by indulgences and delay after 8 February 2001. 27 I do not consider that to be a correct characterisation of the result of events which occurred after 8 February 2001. At no point did Broadway abandon or elect to forego the right to rescind accruing to it in consequence of the time stipulation having become essential and Bishnell's failure to comply with it. The most that Broadway ever did was to grant extensions of time, thus making relevant the statement by Jessel MR in Barclay v Messenger (1874) 43 LJ Ch 449 (approved by Kitto J in Tropical Traders Ltd v Goonan (1964) 111 CLR 41) that "a mere extension of time under a contract making time of the essence, and nothing more, is only a waiver to the extent of substituting the extended time for the original time, and not an utter destruction of the essential character of the time." 28 It is true that some of the extensions were granted by Broadway with a clear view to obtaining the agreement of Binshell to things which would have resurrected the transaction. It is also true that Broadway expressed a willingness to abandon its rights to insist upon timely performance by Binshell if the transaction was improved in certain ways. Broadway's approach was conciliatory and constructive rather than combative. But Broadway's willingness to consider alternatives never had the consequence that it resiled from or compromised its rights in any way. It never went beyond granting extensions of the time limit which its notice to complete had made essential. 29 I consider the applicability to the present case of the principle stated by Jessel MR in Barclay v Messenger to be so compelling that the dispute asserted by Binshell in relation to Broadway's resort to the clause 9 right of termination cannot be regarded as possessing the degree of cogency necessary to satisfy the "genuine dispute" criterion. So much can be concluded without extended inquiry.

The payment of deposit issue 30 In light of this conclusion on the first issue made relevant by the grounds of objection to which the court may have regard, it may well be that the question whether Binshell has shown to the requisite standard that the sum of $110,000 was not due and payable as a debt does not arise. I shall proceed, nevertheless, to consider that question. 31 The most favourable view, from Binshell's perspective, of the circumstances concerning the deposit is that, when the contract for sale dated 18 December 2000 came into existence, Broadway agreed to accept the pre-existing deposit guarantee dated 27 October 2000 in the way contemplated by clause 2.6 of that contract: "If the vendor accepts a bond or guarantee for the deposit, clauses 2.1 to 2.5 and 3 do not apply." Indeed, Mr Lo Surdo of counsel who appeared for Binshell argued his case on the basis that clause 2.6 applied. 32 Clauses excluded from consideration by clause 2.6 concern the person to whom the deposit is to be paid, the time of payment, the method of payment, the consequences of non-payment and the arrangements which are to apply if the contract states that the deposit is to be invested. They are all clauses based on an assumption that the deposit will be paid in money and that the vendor will not agree to the alternative of a bond or guarantee for the deposit. Their exclusion is therefore understandable. 33 In the event of default by the purchaser of the kind relevant to this case, clause 9.1 confers on the vendor a right to "keep or recover the deposit (to a maximum of 10% of the price)." This is in a context where "the deposit" is defined as "$110,000.00 (5% of the price unless otherwise stated)". The contract's front page consists of two columns, one headed "TERM" and the other "MEANING OF TERM". In the second column, against "Deposit" in the first, the words and figures just quoted appear. The price being $2.2 million, $110,000 represents 5% of it. Clearly, therefore, references to "the deposit" are references to $110,000. 34 A question arises as to the meaning and operation in this clause 9.1 where, as here, the vendor, as contemplated by clause 2.6, "accepts a bond or guarantee for the deposit", particularly where the obligor or guarantor ceases to be liable to pay the relevant sum because of the expiration of the period for which the bond or guarantee is expressed to be operative. The deposit guarantee issued by Trenwick International Limited carried an "Expiry Date" of 19 December 2000, that is, the day coinciding with the handwritten completion date on the contract's front page (or three days before it, if "22nd" appeared rather than "19th"). 35 Clause 9.1 entitles the vendor to "recover" the deposit. The operation of a provision of this kind where the deposit is unpaid is described as follows at p.451 of Associate Professor Peter Butt's work, "The Standard Contract for Sale of Land in New South Wales", 2nd ed, 1998: "In conclusion, then, it now seems clear beyond doubt that a vendor who has terminated the contract for the purchaser's default can sue for and recover the amount of an unpaid deposit. This is so even where the amount of the vendor's actual loss is less than the amount of the deposit. The consideration for payment of the deposit is entry into the contract. In this, a deposit serves a different function than instalments of the purchase price. A vendor who terminates the contract for the purchaser's repudiation cannot claim overdue instalments of purchase money, or retain instalments of purchase money already paid, because the vendor's right to retain (or recover) the purchase money is conditional on subsequent completion of the contract by conveyance or transfer - and if the contract is not completed, the "consideration" fails totally. But the vendor's right to recover a deposit is not conditional in this sense. It is not "defeated or divested" by later discharge of the contract. There is no failure of consideration if the land is never conveyed or transferred, because the purchaser has had the benefit of the vendor's entry into the contract." 36 The deposit in this case was "unpaid", even though Broadway as vendor had agreed to accept the guarantee issued by Trenwick International Limited. Clause 2.6 deals with the situation where the vendor accepts a bond or guarantee "for the deposit" (emphasis added). Neither that nor any other clause contemplates the possibility that the furnishing of a bond or guarantee will of itself operate to satisfy the requirement that a deposit be paid. The bond or guarantee is not expressed to be the deposit nor is it contemplated that it is given and received "as" the deposit. All that is envisaged is that purchaser's liability in respect of the deposit may be secured by a third party instrument of a particular kind, in which event payment at inception will not be required. By giving, with the vendor's agreement, such an instrument "for" the deposit, the purchaser does not pay the deposit; rather, the purchaser puts the vendor in a position to seek payment from the third party (subject to the terms of the instrument itself) on the footing that any payment so received will satisfy pro tanto the purchaser's liability for the deposit. 37 Binshell was under an obligation to Broadway in terms of clause 9.1 of the contract notwithstanding Broadway's having accepted the guarantee "for" the deposit. The engagement of Trenwick International Limited was to pay $110,000 to Broadway in the event of default by Binshell under the contract. The guarantee itself thus contemplated (as guarantees typically do) that, notwithstanding its own existence, the contract between vendor and purchaser would be the source of a payment obligation owed by the latter to the former and that the guarantee would operate in relation to that payment obligation. 38 Clause 9.1 does not use the words "recover as liquidated damages": cf Cooper v Ungar (1958) 100 CLR 510. But that is clearly its meaning. "Recover", used in relation to a quantified sum - the sum of $110,000 identified by the contract as the deposit - carries a necessary connotation of liquidated claim. The authorities surveyed by Brooking J in Bot v Ristevski [1981] VR 120 support such an interpretation in this context. So do the remarks of Young J in J R Stevens Holdings Pty Ltd v Von Begensey (1992) 5 BPR 11,534, particularly his Honour's comment that a judgment upon such a claim for recovery of the deposit "is really a judgment for a debt". 39 In a case such as the present, the vendor sues for money the right to which is reserved by the contract, as distinct from claiming unliquidated damages for breach of contract. This is confirmed by the joint judgment of Fitzgerald P, McPherson JA and Ambrose J in Ashdown v Kirk [1999] 2 Qd R 1. In Trpkovski v Russell [2001] FCA 1871, (21 December 2001), Stone J (with whom Higgins and Gyles JJ agreed) said: "In light of the authorities I have considered it should now be regarded as settled that the fact that a deposit is unpaid at the date of termination does not preclude the recovery by the vendor of the relevant amount after termination pursuant to the purchaser's default." Earlier, her Honour had said: "The effect of termination, however, was to crystallise the vendors' right to be paid those amounts. Whether that accrued right is to be characterised as a debt or as liquidated damages is, to my mind, immaterial. The purchasers had an obligation to pay to the vendors a liquidated amount and the vendors were entitled to those liquidated amounts." 40 Such a crystallised right to be paid arose in this case. That right satisfies the description of "debt" adopted in the context of statutory demands by McPherson J in Rothwells Ltd v Nommack (No 100) Pty Ltd [1990] 2 Qd R 85: "A debt is a liquidated sum in money presently due, owing and payable by one person, called the debtor, to another person called the creditor." Conclusion 41 Binshell's contentions seeking to question the existence of the debt of $110,000 claimed in Broadway's statutory demand cannot be regarded as sufficiently cogent and arguable to constitute a "genuine dispute" of the kind which activates s.459H. Binshell's application for an order setting aside Broadway's statutory demand dated 11 September 2001 must be dismissed in accordance with s.459L. Binshell must pay Broadway's costs of the proceedings.

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