- CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Ltd

Judgment 1By application filed on 28 August 2013, the Plaintiff, Country Spring Water Company Pty Limited ("Company") seeks to set aside a creditors' statutory demand ("Demand") issued by Springfield Natural Resources Pty Limited ("SNR") dated 7 August 2013. The Demand stated that the Company owed SNR the amount of $162,000 described in the schedule as: $162,000 being an amount to be paid by Country Spring Water Pty Ltd to Springfield Natural Resources Pty Ltd pursuant to the terms and conditions of a contract for the sale of a business dated 30 September 2011." The Demand was supported by an affidavit dated 7 August 2013 sworn by Mr Simon Andrews, a director of SNR, which deposed that he had regard to SNR's books and records in respect of the debt owed by the Company and believed that the amount of $162,000 was due and payable and that there was no genuine dispute about the existence or amount of the debt. 2The Company contends that there is a genuine dispute as to the relevant debt for the purposes of s 459H of the Corporations Act 2001 (Cth) and also relies on s 459J of the Corporations Act for the application to set aside the Demand. The evidence 3The application to set aside the Demand is supported by an affidavit of a former director of the Company, Mr Gregory Skennar, dated 28 August 2013. Mr Skennar's evidence is, in summary, that the Company purchased the "Springfield Water" business from SNR by contract dated 30 September 2011 and the contract provided for the purchase price to be paid by instalments. Mr Skennar's evidence is that the contract was entered into as a result of representations made by Mr Andrews of SNR as to, inter alia, the number of active customers, turnover and profitability. Mr Skennar contends that those representations were untrue because a considerable number of customers on the customer list later advised that they were not active or regular customers; some customer details were incorrect and customers could not be contacted; the turnover of the business was less than half of what was represented; and the expected profit was affected by reason of those matters and was less than had been represented. Mr Skennar also gives evidence of a conversation in June 2002 when, he says, he proposed to Mr Andrews a payment of $1,000 per week, less than the amount of instalments contemplated by the contract, after, he says, he become aware that the representations were not true and his evidence is that the Company made 15 - 20 payments under those arrangements until late September 2002 when a previous creditor's statutory demand was served and it ceased to make such payments. 4Mr Skennar gives evidence of his belief that there is a genuine dispute as to the existence of the whole of the debt as a result of these matters and annexes a letter from the Company's solicitors identifying that dispute in relation to an earlier demand. That letter stated, inter alia, that: "[SNR] sold its business to the Company based on certain representations about the number of active customers, turnover and profitability which have proved to be false. It may be open to the liquidator to pursue a claim for misleading and deceptive conduct against [SNR] and/or its director." 5Mr Andrews, a director of SNR, responded to Mr Skennar's affidavit of 28 August 2013 by his affidavit dated 24 September 2013. Mr Andrews denies the substance of Mr Skennar's evidence, including denying that he made representations as to profitability, either verbally or in writing; denying that specified conversations set out in Mr Skennar's affidavit took place; denying that a compact disc containing the actual customer list was provided to Mr Skennar, although acknowledging that information of that kind was provided on a USB drive; denying that a considerable number of the customers on the customer database were not active or regular customers; denying that customer details were incorrect; and giving evidence that Mr Skennar had not mentioned any allegation as to misrepresentation until after the commencement of these proceedings. Mr Andrews' affidavit also annexes emails passing between the parties in the period from January 2003, in which Mr Skennar appears to have contemplated that further payments would be made depending on events in respect of a Tasmanian property development and a possible bank loan in respect of that development. 6Mr Skennar's affidavit annexed a copy of the contract apparently signed by Mr Andrews and another director of SNR as vendor. Mr Andrews' affidavit also annexed a copy of the contract for the sale of business signed on the first page by Mr Skennar on behalf of the Company as purchaser. Both copies of the contract were dated 30 September 2011. The terms of the contract, to the extent that they are in common between the two versions in evidence - an issue to which I will refer below - indicate that the purchase price for the business was $520,000 to be apportioned between goodwill of $200,000 and equipment of $320,000. 7Clause 5 of the contract provides that, inter alia, either party has certain rights "prior to completion", including if a party has a summons for its winding up presented against it. The factual prerequisite of that clause is satisfied in the present case, because SNR commenced winding up proceedings against the Company following the service of the Demand and prior to the determination of the application to set it aside. The reference to "completion" in that clause is uncertain, because the front page of the contract specifies the completion date as 1 September 2011, although the contract is not itself dated until 30 September 2011, and clause 19 of the contract dealing with the "completion date" appears to contemplate that it will occur after and not before the contract is signed. The schedule of payments in the version annexed to Mr Skennar's affidavit, but not in the version annexed to Mr Andrews' affidavit, specifies the completion date as 1 September 2011, consistent with the first page of the contract. 8Clause 22 of the contract, on which the Company relies, provides that: "22. The purchaser's default If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice and after the termination - 22.1 keep or recover the deposit (to a maximum of 10% of the price); 22.2hold any other money paid by the purchaser under this contract as security for anything recoverable under this clause - 22.2.1 For 12 months after the termination; or 22.2.2 If the vendor commences proceedings under this clause within 12 months, until those proceedings are concluded; and 22.3 Sue the purchaser ... 22.3.2 To recover damages for breach of contract." Clause 23 of the contract in turn provides for rescission of the contract in certain circumstances. 9Clause 6 of the special conditions to the contract, on which SNR relies, provides that: "The purchaser acknowledges that he has had the full opportunity to inspect the subject business and the manner in which it has been conducted and to inspect such books and records as are kept by the vendor and the purchaser acknowledges that they entered into this agreement relying on their own inspection and judgement and upon their own independent advice and that no representation or warranty is made by the vendor in relation to the profitability of the subject business. The purchaser does rely upon the documents provided by the vendor annexed hereto and marked "C" and "D" and "E" respectively." That clause has been amended, in hand, to delete the words "takings" prior to the word "profitability" and to delete the words "or otherwise" after that word, and to add the last sentence. That amendment suggests that the Company was seeking to reserve reliance on representations in respect of takings and upon the annexed documents. Neither of the copies of the contract in evidence contain the documents that are said to be annexed to it. 10Clause 10 of the special conditions to the contract in turn provides that: "The purchaser agrees that the ownership of the goods referred to in the attached inventory shall not pass to the purchaser until payment by the purchaser of the final instalment with respect to the payment of the purchase price as set out in the annexed schedule of payments." That inventory is also not attached to the contracts in evidence. Clause 14 of the special conditions to the contract provides that: "The vendor warrants and agrees that within 12 months from the date of this Agreement, the vendor will cause the name of the vendor to change, by deleting from its name the word 'Springfield'. Should the vendor not comply with the above, the purchaser will be entitled to suspend the payment of further instalment payments until the vendor complies with the above. This special condition shall not merge upon completion." 11It emerged during the course of the hearing before me that, for reasons that are not explained by the evidence, the schedules of when instalments were due annexed to the two versions of the contract in evidence are in radically different terms. For example, the schedule of payments annexed to Mr Skennar's affidavit has a first payment of $25,000 due on 1 September 2001 and the copy annexed to Mr Andrews' affidavit describes that payment as due "upon completion"; the copy annexed to Mr Skennar's affidavit has a payment of $20,000 due on 1 October 2011 and the copy annexed to Mr Andrews' affidavit has that payment due on 30 November 2011; subsequent payments are in different amounts and shown as due on different dates in the two schedules; and the last payment recorded in the schedule annexed to Mr Skennar's affidavit was stated to be $30,000 due on 1 December 2002 and the last payment in the schedule annexed to Mr Andrews' affidavit was stated to be $28,000 due on 28 February 2013. The copy of that schedule annexed to Mr Skennar's affidavit is not signed by either party; the copy of the schedule annexed to Mr Andrews' affidavit is signed by Mr Skennar but apparently not by Mr Andrews; and neither copy of the schedule is signed by both parties. In the ordinary course, this level of uncertainty as to critical payment terms under the contract in issue might well be sufficient to give rise to a genuine dispute as to a claim for debt based on that contract. However, that point was not taken before me, where this issue only emerged in the course of the hearing, and I should not and do not determine the application on this basis. 12The Company relies on a further affidavit of Mr Skennar dated 2 October 2013 in support of the application to set aside the Demand. Mr Di Michiel, who appears for SNR, took objection to the admission of a substantial part of that affidavit by reference to the principle in Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452; 21 ACSR 581 at 587, and requested that that objection be dealt with at the time the affidavit was read rather than the material being admitted subject to objection and that objection determined in the final judgment. I ruled that the relevant evidence was not excluded under the Graywinter principle for the reasons set out in a separate judgment. Mr Skennar refers in that second affidavit to a copy of the customer list which is said to have been provided to him prior to the Company's entry into the contract to acquire the business and the representations that are said to have been made as to customer buying patterns. Mr Skennar also gives evidence that the Company subsequently actively contacted customers on that list in about June 2012, after, he says, it became apparent over several months of trading that a significant number of customers had not made contact for water deliveries, and gives evidence that it became apparent that 30% of the customers on the list were not active or regular customers and a further 20% of those customers only purchased water infrequently. Mr Skennar also refers to the alleged representations as to the turnover of the business and gives evidence that the actual turnover of the business was substantially less than "promised" by Mr Andrews. Mr Skennar's further affidavit also deals with information provided as to the level of bulk water purchased by the Company and responds to matters addressed in Mr Andrews' affidavit of 24 September 2013. Whether a genuine dispute is established for the purposes of s 459H(1)(a) of the Corporations Act 13Section 459H(1)(a) of the Corporations Act 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. Neither party devoted substantial submissions to the concept of a "genuine dispute" which is well established in the case law. That test 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; Re UGL Process Solutions Pty Ltd [2012] NSWSC 1256 at [6]. In Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452 at 464; (1997) 24 ACSR 353, the Full Court of the Federal Court that a "genuine dispute" must be bona fide and truly exist in fact, and the grounds for that dispute must be real and not spurious, hypothetical, illusory or misconceived. 14In CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728; (2003) 47 ACSR 100, Barrett J helpfully summarised the principle as follows: "The task faced by the company challenging a statutory demand on the genuine dispute grounds is by no means at all a difficult or demanding one. A company will fail in that task only if it is found, upon the hearing of its s 459G 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. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The Court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that on rational grounds indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger." In Roadships Logistics Ltd v Tree [2007] NSWSC 1084; (2007) 64 ACSR 671 at [24], Barrett J similarly observed that: "Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The Court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor on rational grounds that indicates an arguable case on the part of the company it must find that a genuine dispute exists even where any case, even apparently available to be advanced against the company seems stronger." 15In 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." 16In 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 459H(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." 17Mr Martin, who appears for the Company, identifies four areas in which he contends that a genuine dispute is established in respect of the debt claimed by SNR against the Company. The first is, he contends, that there is a clear factual dispute as to whether the representations were made and, if made, whether they were false or misleading in a particular way. It seems to me plain that such a dispute exists, in circumstances that Mr Skennar asserts the making of the relevant representations, and Mr Andrews denies that matter, without advancing any substantial alternative account of what occurred in respect of the transactions. It is apparent that the accuracy, or otherwise, of Mr Skennar's allegations could only be determined in a contested factual hearing with the benefit of cross-examination. It is, however, less clear that such a dispute gives rise to a "genuine dispute" as to the debt claimed by SNR under the contract (were it otherwise not genuinely disputed) as distinct from an offsetting claim under the misleading and deceptive conduct provisions which might, if established, equal or exceed the amount of the claimed debt. The Company did not seek to set aside the statutory demand on the basis that it had an offsetting claim under s 459H(1)(b) of the Corporations Act, as distinct from a genuine dispute under s 459H(1)(a) of the Act, and did not seek to quantify the amount of any damages recoverable under such an offsetting claim as would have been necessary to set aside the Demand on that basis. 18Mr Martin submitted that a "genuine dispute" existed because the Company contended that, by reason of the misrepresentations, the business was not worth what was due to be paid for it and disputed that there was an obligation to pay the balance. I do not accept that that matter would, in itself, give rise to a genuine dispute as to the obligation to pay the amounts claimed, unless some legal basis were articulated on which the alleged representations, or sale of the business at overvalue, invalidated any obligation of the purchaser to pay the balance due under the contract. That might, in some circumstances, occur because there were a total failure of consideration under the contract; or because a case to set aside the contract for fraud were established; or because the Court might grant relief setting aside the relevant contractual obligations under the misleading and deceptive conduct provisions. However, Mr Martin did not submit that the Company relied on any such cause of action, and I do not consider that I can find a genuine dispute to be established on that basis where those matters were not relied upon. 19Mr Di Michiel, who appears for SNR, submits that no genuine dispute as to the existence of the debt can arise from the alleged misrepresentations, because paragraph 6 of the special conditions of the contract provides that the Company acknowledged that it entered into the agreement relying on its own inspection and judgment and independent advice and that no representation or warranty was made by the vendor with regard to the profitability of the business. It does not seem to me that this provision would exclude the existence of a genuine dispute if it were otherwise established by reason of the alleged misrepresentations. First, a provision of this kind is generally not effective to exclude a misleading and deceptive conduct claim, if reliance on the misleading and deceptive conduct can be established in fact. Second, as I noted above, the relevant provision was qualified so as to apparently not exclude reliance on representations as to turnover and on the annexed documents. 20Second, Mr Di Michiel contends that a genuine dispute is not established by reason of the alleged misrepresentaions because, when the Company allegedly became aware that representations as to the business were untrue, in May or June 2012, it did not negotiate any change in the contractual figure owing, or commence proceedings, but instead made payments at a lower rate and continued to do so for a further 15-20 weeks. It may be that these matters would weaken a claim for misleading and deceptive conduct, but it does not seem to me that they would exclude a genuine dispute in the relevant sense if it were otherwise established. 21Third, Mr Di Michiel contends that a genuine dispute is not established, because Mr Andrews denies making any representations of the kind alleged; annexes copies of the documents which he contends were provided to Mr Skennar prior to the sale of the business; contends that Mr Skennar had never mentioned any misrepresentation prior to the application to set aside the statutory demand; and because there exists email correspondence from Mr Skennar referring to arrangements to make the relevant payments. It seems to me that Mr Andrews' evidence denying the relevant representations, and giving contrary evidence of the circumstances leading to the sale, emphasises the existence of a dispute as to those circumstances. Mr Martin contends, and I accept, that the emails between the parties referred to in Mr Andrews' evidence may well weaken the Company's case at a final hearing, but do not so undermine the Company's case as to make it implausible or justify a conclusion that the claim was not genuine. 22Mr Martin also relied on the alleged misrepresentations as the explanation for why the Company has not paid the amount claimed to be due under the contract. He contends that, as a result of the failure to pay that amount, there is a breach of contract and that clause 22 of the contract (to which I referred above) deals with what occurs in that situation. Mr Martin relies on the decision of Barrett J in CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Limited above, where Barrett J observed that: "The statutory demand procedure made available by s 459E may be availed of by a person in respect of a 'debt that the company owes to the person'. A debt is a sum certain owing, as distinct from a right to recover damages for breach of contract. The assertion of the defendant ... is that the relevant debt 'arises from' a breach of contract. Such an assertion might, in concept, be correct where a contract requires a stated sum to be paid on a stated day or event and payment is not then made." His Honour went on to note that, where a contract has a different structure, then breach gives rise to a right to sue for damages for breach of contract, the damages being such as are found by a Court to be necessary to compensate the innocent party for the loss flowing from the breach. It does not seem to me that this passage supports the proposition which Mr Martin seeks to draw from it; to the contrary, the payments due on specified dates, as set out in the schedule of payments annexed to the contract (assuming for this purpose that its content could be established where no party attended to the contrary) are capable of being debts, notwithstanding that the failure to make those payments would also constitute a breach of contract. 23Mr Martin contends that the contract nonetheless provides, in clause 22, for what is to occur when there is a default, by reason of a non-payment of the amount specified, and permits, as I noted above, SNR to keep the deposit, keep any other money paid by the Company under the contract as security for anything recoverable under it, and otherwise to recover damages for breach of contract. In essence Mr Martin contends that that clause exhaustively specifies the relief available for a breach of contract, to the exclusion of any remedies otherwise available at general law. On the other hand, Mr Di Michiel contends that the relevant contractual provisions do not prevent SNR relying on the debt owed to it so as to found a statutory demand. In my view, there is nothing in clause 22 of the contract to raise even an arguable possibility that it is an exclusive remedy, and the only properly available construction of that clause is that it permits, but does not require, the vendor to terminate the contract and take the steps specified in it. There is nothing in that clause that could be read as preventing the vendor, consistent with general contract law, from choosing not to terminate the contract but instead to keep it on foot, and in that case claiming the amounts which are due under it. It appears that SNR has done so. 24Mr Martin's next submission relies on clause 5 of the special conditions of the contract, to which I referred above, which provides that, if a summons for winding up is presented against either party prior to completion: "This contract shall immediately become null and void and the provisions of clause 27 of this contract shall apply and bind the parties." The reference to clause 27 is itself uncertain, because clause 27 of the contract deals with the situation where premises are subject to a lease. It may be that the intended reference is to clause 23 of the contract, dealing with rescission. As I noted above, SNR has in fact brought an application to wind up the Company, notwithstanding that the application to set aside the statutory demand has not yet been determined. Mr Martin contends that there is a genuine dispute as to the operation of clause 5 of the special conditions, since the "completion date" was not a date prior to entry into the contract as specified on the front page of it; title to the relevant goods would not pass to the Company until all payments in the payment schedule had been made; and, in those circumstances, it is at least arguable that "completion" of the contract did not take place prior to title to the relevant equipment having passed to the purchaser. 25On the other hand, Mr Di Michiel contends that the completion date for the relevant contract was to be 30 September, being the same date as the contract was signed; while that may be a logical reading of the relevant provisions, it is inconsistent with the reference to a completion date of "1 September" on the terms of the contract; is not supported by any evidence before the Court; and, even if it were the subject of such evidence, would not exclude the existence of a dispute so far as the Company contends that completion did not, on the proper construction of the contract, take place until after the transfer of title to the equipment which constituted a substantial part of the purchase price had occurred. 26It does not seem to me that the Company's argument relying on clause 5 of the Special Conditions is a particularly strong argument, and it is potentially inconsistent with clause 9 of the contract which appears to contemplate that completion is the point at which the purchaser commences to carry on the business. Nonetheless, I do not think I can say that this contention is so devoid of substance that no further investigation is warranted, given the lack of clarity in the relevant contractual provisions, and I consider that I must accept that a genuine dispute as to the debt is established on that basis. 27Next, Mr Martin noted that clause 14 of the special conditions, to which I have referred above, required a change of name of the vendor within a 12 month period, and relied on a company search of SNR to point out that that change of name had not occurred. This final submission turned on a matter which was not directly raised in Mr Skennar's initial affidavit, although he annexed a copy of the contract and that may have been sufficient to comply with the requirements of the Graywinter principle, so far as arguments of construction arose from that contract: NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd [2010] NSWCA 210; (2010) 79 ACSR 544. In any event, Mr Di Michiel took no objection to this point being taken by reference to the Graywinter principle. 28Mr Di Michiel responded by contending that the operation of clause 14 of the Special Conditions had been waived, and SNR reopened its case so as to tender correspondence between the respective parties' solicitors dated 23 September 2011. An email dated 23 September 2011 from SNR's solicitors to the Company's solicitors stated that: "I am instructed that our respective clients have previously discussed this issue and it has been agreed that this is not a necessary requirement as our the Vendor [sic] is a non-trading entity." However, a subsequent letter from SNR's solicitors to SNR dated 11 October 2011 is apparently inconsistent with that position, since it reminds SNR that: "Special condition 14 of the Agreement for Sale requires that you change the name of the Vendor company by deleting from its name the word "Springfield" within 12 months of the date of the contract, namely 30 September 2011. In the absence of that change of name taking place then the purchaser shall be entitled to suspend further instalment payments until such time as the change of name has taken place." It seems to me that this correspondence confirms, rather than excluding, the existence of a genuine dispute as to such an obligation and a potential breach of it which would, under the terms of the contract, led to a suspension of the Company's obligation to pay the instalments of the purchase price. 29It appears that the level of instalment payments paid by the Company was reduced, in about mid June 2012, prior to the time for a change of name having elapsed, but ceased in late September 2012 when a creditor's statutory demand was issued by SNR. That date is, perhaps coincidentally, about the time at which the time permitted for a change of name would have expired, and the Company would, on the terms of the contract, at least arguably have been entitled to suspend the payment of further instalment payments by reason of the failure to change SNR's name. In these circumstances, I must also find that a genuine dispute is established in respect of the amount claimed in the Demand on this basis. 30I note that, in written submissions, Mr Di Michiel made detailed submissions as to whether an offsetting claim was established in the relevant circumstances. With no disrespect, I do not address those submissions because the Company, as I noted above, sought to support its application to set aside the Demand on the basis of a genuine dispute, and not on the basis that an offsetting claim was established, so the latter question is not in issue before me. Whether the Demand should be set aside under s 459J of the Corporations Act 31The Company also relies on s 459J(1)(b) of the Corporations Act in order to seek to set aside the Demand. 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] 32The Company contends that the Demand should be set aside on the basis that it was issued for the purpose of debt collection and contested factual matters should be resolved by a tribunal of fact which can determine issues of credit and accuracy of the witnesses' recollection. 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. Where I have held that a genuine dispute is in fact established in this case, it is sufficient that the Demand should be set aside on that ground. Had I not found that a genuine dispute had been established, I would not have set aside the Demand under s 459J of the Corporations Act. Orders and costs 33Accordingly, I am satisfied that the Demand should be set aside on the basis that a genuine dispute is established for the purposes of s 459H(1)(a) of the Corporations Act. In the ordinary course, costs will follow the event. I therefore order that: 1 The creditor's statutory demand issued by the Defendant dated 7 August 2013 be set aside. 2 The Defendant pay the Plaintiff's costs of the proceedings as agreed or as assessed. 34I should add that, in separate proceedings commenced in March 2013, SNR also brought an application to wind up the Company on the grounds of insolvency under s 459P of the Corporations Act. Those proceedings were amended, by Amended Originated Process filed on 30 August 2013, to rely only upon the service of the Demand and the Company's failure to comply with that Demand by paying the sum demanded or securing or compounding for it to SNR's satisfaction. Had the statutory demand not been set aside, a question would have arisen as to whether it was open to SNR to take that course, having regard to the decisions in Woodgate v Garrard Pty Limited [2010] NSWSC 508 and Golden Plantation Pty Ltd v TQM Design & Construct Pty Ltd [2010] NSWSC 1453. Mr Di Michiel has advanced detailed submissions as to that matter in those other proceedings. 35It does not seem to me that that matter will now require determination, since the Demand has been set aside and no presumption of insolvency is capable of arising from it. Those proceedings are listed before me for directions on 26 November 2013, but it is open to the parties to submit consent orders dealing with them, and with the question of costs in them, if they are able to reach agreement as to those matters in the meantime.