In the matter of Lets Build NSW Pty Ltd

Category: Principal judgment

Parties: Lam Concepts Pty Ltd (First Plaintiff)
Lets Build NSW Pty Ltd (Second Plaintiff)
Foodeology Pty Ltd (Defendant)

Representation: Counsel:
Mr E A Walker (First and Second Plaintiffs)
Mr P Farrell (Defendant)
Solicitors:
Mars Legal (First and Second Plaintiffs)
SBA Lawyers (Defendant)

File Number(s): 2026/279522

JUDGMENT – EX TEMPORE (Revised 28 October 2026)

Nature of the application

1. By Originating Process filed on 7 July 2026 two Plaintiffs, Lam Concepts Pty Ltd (“LCPL”) and Lets Build NSW Pty Ltd ("LB"), applied to set aside two creditor’s statutory demands issued by the Defendant, Foodeology Pty Ltd ("FPL") to them. The application brought by LCPL has been dismissed, where no evidence was led to support it. It now remains to deal with the application brought by LB to set aside the creditor’s statutory demand dated 2 June 2026 ("Demand") issued by FPL to LB.

2. The Demand is in evidence (Ex P1) and FPL there claims that LB owes it the amount of $777,125, being the debt described in the schedule. The schedule refers to a principal loan advance of $350,000 on 18 January 2024, implicitly by FPL to LB, and an amount of interest calculated from January 2024 to the end of May 2026 at a rate of 1.25% per week, being $4,375 for 123 weeks, less amounts of $4,375 paid by LB at approximately weekly intervals between 23 January 2024 and 7 July 2024.

3. As will emerge from the evidence below, there is no dispute as to aspects of the financial transactions. An amount of $350,000 was paid by FPL to LB and weekly amounts of $4,375 were paid by LB to FPL in a subsequent period. There is a question, which I will briefly note, as to whether the loan had been repaid by July 2024, and there is a more substantial question as to whether any debt was owed by LB to FPL or, as LB contends, any debt was owed by LB to LCPL. I pause to note that, although the amount of interest payable on the loan is calculated at an extraordinarily high annual rate, no point was taken by LB as to that matter and there was no suggestion that any genuine dispute arose from the rate of interest which was claimed in respect of the loan.

Affidavit and other evidence

4. I now turn to the affidavit and other evidence on which the parties relied in the application. LB reads the affidavit dated 7 July 2026 of its director, Ms Divna Kilibarda. Significant parts of that affidavit took the form of assertion, and were admitted under the less demanding principles which apply in respect of the admissibility of evidence in applications to set aside creditor’s statutory demands, setting out LB's contention that there was a genuine dispute as to the asserted loan and the amount claimed in the Demand.

5. Ms Kilibarda's evidence is that LB is a building and construction company which undertakes building contracts with the New South Wales State Government for construction work at schools, and obtains short term loans from lenders which are repaid once progress claims are paid by the government. Ms Kilibarda contends that, in particular, LB obtains loans from LCPL, which, as I noted above, is the First Plaintiff in these proceedings and also sought to set aside a creditor’s statutory demand issued by FPL to it. Ms Kilibarda refers to her dealings with a representative of LCPL, Mr Lam, and claims that that arrangement, implicitly involving loans from LCPL, suited LB as loans were quickly provided although a high rate of interest was payable. Ms Kilibarda's evidence is also that she had organised short term loans with LCPL since 2022 and always paid them back, and relevant loan advances were made on terms that interest would be paid on a weekly basis of 1.25% until the full principal was paid back.

6. Ms Kilibarda then refers to an advance of $350,000 in January 2024, which coincides with the amount paid by FPL to LB, which she characterises as a loan organised by Mr Lam of LCPL with an "investor of his", implicitly FPL. Ms Kilibarda contends that Mr Lam told her that he would organise for "a person", presumably FPL, to pay LB directly but "the loan would still be with [LCPL]", and that Mr Lam also advised that interest payments of that loan were to be made to FPL. That evidence highlights the core of the dispute raised by LB, which contends that the loan arrangement was between LB and LCPL, notwithstanding that the amount lent was paid by FPL to LB and interest payments were made, Ms Kilibarda claims, at LCPL's direction, by LB to FPL. Ms Kilibarda's evidence, admitted with a limiting order as to her understanding, is that her understanding was that LB was here borrowing from LCPL under the previous arrangement between them. She refers to LB making interest payments of $4,375 weekly to FPL as instructed by LCPL.

7. Ms Kilibarda claims to have repaid LCPL the amount of $350,000 advanced in early July 2024 and to have then stopped making the interest payments. There is no documentary or other evidence of that asserted repayment of the loan, including no bank record recording any repayment, and it is unlikely that a bare assertion of repayment would have given rise to any genuine dispute as to the debt claimed in the Demand. In any event, LB relies less on the proposition that the loan was repaid, although that proposition is put in Ms Kilibarda's evidence, than on the proposition that the loan arrangement existed between LCPL (as distinct from FPL) and LB, although the funds were paid by FPL and interest was paid to FPL, and that FPL (as distinct from LCPL) has no basis on which to issue the Demand against LB.

8. That position is reflected by Ms Kilibarda’s evidence, again admitted with limitations, that LB did not at any relevant time seek a loan from FPL, or have correspondence or contact with FPL, or agree that LCPL or Mr Lam could act on its behalf to obtain a loan from FPL for it. Ms Kilibarda contends, in evidence admitted also with a limiting order as submission only that:

"I deny [LB] owes [FPL] any funds whatsoever.

[LB] has never had any agreement with [FPL].

At the time [LB] was making repayments to [FPL], it was making payments pursuant to loan [sic] with [LCPL] as instructed by [LCPL]".

9. Ms Kilibarda was cross-examined, pursuant to leave which I granted, in accordance with the principles identified in Re Diveva Pty Ltd [2015] NSWSC 794 since FPL contends that LB's position is a recent invention and does not in truth give rise to a genuine dispute as to the debt claimed by FPL. Ms Kilibarda largely maintained the position advanced in her affidavit held in cross-examination, namely that she accepted LB received funds from FPL, and accepted that LB paid interest to FPL, but steadfastly maintained that any relevant arrangement was with LCPL rather than FPL and that the payments which LB made to FPL were made at LCPL's direction. Ms Kilibarda did not present as a particularly forthcoming witness in that respect, but it is important to recognise that it is here not the Court's role to assess Ms Kilibarda's credit generally, where these are not substantive proceedings but a summary procedure to determine whether there is a genuine dispute as to the debt which FPL claims against LB, so that the Demand should be set aside. I also bear in mind that there is nothing intrinsically implausible about a proposition that LB continued to deal with LCPL in this transaction on the same basis as it had previously dealt with LCPL, although the loan was here funded by FPL, implicitly under a separate arrangement between LCPL (rather than LB) and FPL. I will return to other evidence relating to that possibility below.

10. LB also tenders banking records of FPL, which record payments by FPL to LB and by LB to FPL which were undisputed for the purposes of this application. Those banking records record the amount of the payment by FPL of $350,000 to LB; and record subsequent weekly payments of $4,375 from LB to FPL, broadly consistent with the position expressed in the Demand, as a credit against the amount claimed in the Demand. Ms Kilibarda accepted in cross-examination that those payments were made, but again contended that they were made in that manner on LCPL’s instructions. She claims to have paid no particular attention to the source of the funds or to whom the payments were made. It is not necessary or appropriate in an application of this kind to reach a credit assessment as to Ms Kilibarda’s evidence in that regard.

11. Those bank statements also record that, after a payment of $4,375 was paid by LB to FPL, FPL generally remitted the amount of $3,500 to LCPL, apparently reflecting an arrangement that LCPL would ultimately receive 80% of the interest paid by LB. Again, that is a somewhat unusual arrangement, but it casts little light upon the legal character of the dealings between LB on the one hand and FPL on the other.

12. FPL reads the affidavit dated 27 July 2026 of Mr Mayank Sharma, who is the sole director of FPL. Mr Sharma outlines conversations which he had with Mr Lam, the director of LCPL, in relation to FPL entering the money lending business, in which LCPL was already engaged. Mr Sharma contends that the result of those conversations was that FPL made a loan to LB, which is the subject of the Demand issued to LB and the subject of these proceedings. He refers to documentation of the transfers of funds, but, as I have noted above, the payments as between LB and FPL are not disputed and do not much assist in the characterisation of the arrangements between them. Mr Sharma also refers to exchanges, by WeChat, between Mr Lam and Mr Sharma as to the preparation of a proposed loan agreement between FPL and LB, and I will refer below to an unexecuted loan agreement between FPL and LB. Mr Sharma acknowledges an arrangement between FPL and LCPL by which FPL would pay LCPL a sum equal to 80% of the interest received from LB, and that appears to be reflected in the payments that I have noted above.

13. Mr Sharma also refers to interest payments made by LB to FPL, which are documented in the bank records to which I have referred above, and to another amount of $200,000 which was paid by FPL to LB and apparently subsequently repaid by LB and is not the subject of the Demand or this application. Mr Sharma's contention is that the loan advance of $350,000 to LB has never been repaid. As I noted above, Ms Kilibarda's position, by way of bare assertion, is that that amount was repaid to LCPL rather than to FPL, because the loan arrangement was between LB and LCPL.

14. An exhibit to Mr Sharma's affidavit includes voluminous WeChat exchanges which indicate, among other things, that Mr Lam provided Mr Sharma with the description which was to be applied to the initial payment by FPL to LB and which was subsequently used in interest payments by LB to FPL. The WeChat exchanges also include, on the first day, a discussion as to how the payments should be recorded, in which Mr Lam advised Mr Sharma to:

"Book it as a loan out to Lets Build, so you would open an accounts receivable account for them, right."

15. That description is equivocal as to the nature of any legal relationship, since the substance of the economic relationship was in any event to be a payment by FPL to LB, with interest payments then made by LB to FPL.

16. In a subsequent exchange, Mr Sharma observed, "So the agreement will be under her and my company, right?" Mr Lam responded:

"Na, she's just showing me the purchase orders just for my record of where the funds are being allocated to. You just pay into the bank details that I showed you before, bro."

17. That exchange is somewhat obscure, but it does not include any immediate acceptance by Mr Lam that an agreement would be created between LB and FPL. I will refer below to steps which were taken, but possibly not completed, to document such an agreement.

18. Numerous subsequent exchanges followed and, on the day after advances were made, Mr Lam indicated that he would get agreements done over the weekend, apparently contemplating an agreement between LB and FPL in respect of the relevant transaction, and I will refer to the position in that respect further below. There was also reference in those WeChat exchanges to the way in which the payments made by FPL to LCPL of the 80% share of interest was to be treated and recorded. On 8 March 2024, Mr Lam advised Mr Sharma, again somewhat obscurely, that:

"Yeah, I got [Ms Kilibarda] to email me in writing the added terms on top of the 350k from [FPL] and amended the docs."

19. It is plainly possible, but hardly certain, that that exchange referenced the completion of an executed loan agreement between FPL and LB, which is otherwise not in evidence.

20. The exhibit to Mr Sharma's affidavit also included an unexecuted Facility Agreement: Commercial Loan between FPL and LB, which plainly contemplated the documentation of the relevant arrangement as a direct agreement between FPL as lender and LB as borrower, and relevantly recited FPL's agreement to provide the facility on the terms set out in that document to LB. The terms recorded in the schedule of that agreement, including as to the principal advanced of some $350,000 and the applicable interest rate, appear to correspond to the arrangement in issue in these proceedings, although that agreement also referred to FPL taking security, and there is no evidence that ever occurred. Although the parties to that agreement were recorded as FPL and LB, oddly, the addresses for service recorded in that agreement were for LCPL and LB, perhaps suggesting that the document had not been thoroughly revised from a previous version. In any event, and importantly for present purposes, the document was not executed, or at least an executed version of it is not in evidence.

21. FPL also reads an affidavit dated 27 July 2026 of its solicitor, Mr Stephen Blanks, which exhibits further documents to which little attention was given in the course of the hearing. FPL also tenders an exchange with a third party, by the name of "Vanessa J" who apparently provided assistance to LB with loans to LB, which plainly contemplated that a document between LB and FPL would be executed by DocuSign, and noted that Ms Kilibarda was waiting to receive a version of that document for execution by DocuSign. I accept that it is plainly possible, and perhaps likely, that the document to be executed was the loan agreement to which I have referred above, although the fact that that matter was contemplated does not establish that it occurred.

Applicable principles

22. With this evidentiary background, I now turn to the applicable principles, which were common ground between the parties, and addressed in written but largely not in closing oral submissions.

23. Obviously enough, the Court has power to set aside a creditor's statutory demand under s 459H(1)(a) of the Corporations Act 2001 (Cth) where there is a genuine dispute between a company and the issuer of the demand about the existence or amount of the debt to which the demand relates.

24. In Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 at 464; [1997] FCA 681, the Full Court of the Federal Court observed that a genuine dispute must be bona fide and truly exist in fact, and the grounds for it must be real and not spurious, hypothetical, illusory or misconceived. The courts have often recognised that the threshold to establish a genuine dispute is not high, and I proceed on the well-established basis that, once a genuine dispute arises for determination, then the Court does not undertake any balancing exercise in respect of the strength of the claim put by LB on the one hand and FPL on the other. I should add, to my oral judgment, a reference to Paneltech Industries (Australia) Pty Ltd v Australian Sky Ridge Equipment Pty Ltd (No 2) [2003] NSWSC 896 at [18] in that regard. I should also add that, in Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd (2013) 85 NSWLR 601; [2013] NSWCA 344, in dealing with an offsetting claim, the Court of Appeal undertook a comprehensive review of the cases referable to establishing whether a genuine dispute was established and emphasised (at [36]) that the evidence necessary to establish a genuine dispute “need not conclusively prove the claim or otherwise be incontrovertible or substantially non-contestable” and also observed (at [46]) that:

“[i]n determining whether there is evidence of a genuine dispute as to the debt … except in extreme cases, the court is not concerned to engage in an enquiry as to the credit of the deponent of the affidavit filed in support of the application [to set aside the demand].”

25. The Court of Appeal there emphasised (at [47]) that the court’s role was, in such an application:

“… to determine whether there was plausible evidence to establish the existence of a genuine dispute, not whether the evidence was disputed or even likely to be accepted on a final hearing of any such claim.”

26. I should also recognise that the case law addresses the approach to be adopted in a dispute as to the parties to a contract: Mills v Walsh [2022] NSWCA 255 at [73]; Ben Furney Flour Mills Pty Ltd v Nonna’s Bakehouse Pty Ltd [2025] NSWSC 749 at [96]; Zhou v Li [2026] NSWSC 258 at [223]; and, in the context of a successful application to set aside a creditor’s statutory demand, where such a dispute existed: Re MTL Construction Group Pty Ltd [2025] NSWSC 1294 at [22].

27. Returning to my oral judgment, I recognise that, in Ligon 158 Pty Ltd v Huber (2016) 117 ACSR 495; [2016] NSWCA 330 at [8]ff, after approving my observations as to the content of the concept of "genuine dispute" in Re Wollongong Coal Ltd (2015) 110 ACSR 134; [2015] NSWSC 1680 at [9]ff, Barrett AJA observed that the Court was required to distinguish a genuine dispute on the one hand from "one that is merely a constructed response to the claim advanced through the statutory demand" on the other. Similarly, in Creata (Aust) Pty Ltd v Faull (2017) 125 ACSR 212; [2017] NSWCA 300 at [47] (“Creata”), Barrett AJA distinguished between the aspect of a genuine dispute that is concerned with identifying a serious question to be tried or a plausible contention requiring investigation and another aspect, which his Honour noted was no less important, that the genuine dispute or plausible contention not be merely created or construed "in response to the pressure represented by the service of the statutory demand". In Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd (2019) 99 NSWLR 397; [2019] NSWCA 60 at [95] (“Grandview”), White JA referred to Creata and observed (at [96]), that on the facts of Grandview, the asserted offsetting claims in that case were constructed in response to the service of a creditor's statutory demand and were not genuine on that basis.

The parties’ submissions and determination

28. Here, I have had the benefit of detailed and careful written submissions, which reviewed the relevant authorities as to the concept of a genuine dispute and the circumstances in which a dispute might be found to be not genuine or manufactured, and which addressed the question whether there was or was not a legal relationship between LB and FPL (as distinct from between LB and LCPL) which would support FPL’s claim for the debt against LB.

29. Mr Walker, who appears for LB, points to the fact that Ms Kilibarda's evidence, both in her affidavit and in her cross examination, was that she understood the relevant relationship to exist between LB and LCPL, and not LB and FPL. While I could not say that I have any particular confidence in Ms Kilibarda's evidence in that respect, I remind myself that this is not a substantive hearing, and the question here is whether a genuine dispute exists as to the amount claimed in the Demand, which should then properly be resolved by substantive proceedings rather than by a summary procedure which is only available for undisputed debts.

30. Mr Walker also points to the fact that no executed loan agreement between FPL and LB is in evidence. I recognise that some of the evidence, including the exchange with “Vanessa J” to which I referred above, suggests that there may have been an intention that such an agreement be executed, and possibly, depending upon the reading that is given to the WeChat exchanges with Mr Lam, that Mr Lam may have understood that one was executed, but it remains that no such agreement is in evidence. It is also important to recognise, as Mr Walker points out, that there is not a single exchange, in the WeChat exchanges or other documents that I have been taken to, that involves any clear acknowledgement by LB of a relationship with FPL, and all of the exchanges which deal with the nature of the relationship took place between LCPL and FPL, without LB’s apparent involvement.

31. Third, Mr Walker points to the limited threshold which LB here needs to reach, in order to establish a genuine dispute. I bear in mind that it is not implausible, as I noted above, that an arrangement could continue between LCPL on the one hand and LB on the other, notwithstanding that a particular advance within that arrangement was funded by FPL, by a side arrangement between FPL and LCPL, and repayments were made by LB to FPL at LCPL’s direction. Conversely, it is also not implausible that, as Ms Kilibarda maintains, she continued on the usual basis of dealings between LCPL and LB, rather than entering a separate loan agreement with a party that was relevantly a stranger to LB in that regard.

32. Mr Farrell, who appears for FPL, points to the fact that advances were made, or at least that funding was provided, by FPL to LB; that interest was paid by LB to FPL; and that it was intended that a loan agreement be executed between FPL and LB, and Mr Farrell goes further to contend that an inference should be drawn that that occurred, notwithstanding that that agreement is not available. Mr Farrell contends, on that basis, that the asserted genuine dispute is a late invention, or is not genuine, or is brought into existence under the pressure of the Demand. That proposition has an obvious difficulty here. This is not a case, for example, where LB has previously acknowledged the existence of a loan arrangement with FPL and subsequently reversed its position, where there would be a stronger basis to find that that reversal of position did not reflect a genuine position. As I noted above, there is here no significant contemporaneous documentation as to the nature of the relationship exchanged between FPL and LB, other than for the receipt of funds by LB and the payment of interest by LB to FPL; and, when the Demand was issued at a later stage, it was contested by LB.

33. Returning to fundamental principles, as I have noted above, it is sufficient to set aside a creditor's statutory demand that there is a genuine dispute between a company, relevantly LB, and the issuer of the demand, relevantly FPL, about the existence of the debt to which the demand relates. Once that dispute exists, it is not the Court's role in an application of this kind to assess the strength of the dispute, or who would be likely to succeed if the case was determined in a proper forum for it, on the merits, rather than in a summary procedure. It seems to me that a genuine dispute is established here, where the asserted loan arrangement between LB and FPL is not documented; there is no correspondence between LB and FPL, at the relevant time, that provides any clear acknowledgement of the existence of a legal relationship between LB and FPL, as distinct from the relationship between LB and LCPL; and it is not implausible that the arrangement could have been structured in the way that Ms Kilibarda contends, although I do not have any affirmative conviction in the truth of the evidence by which she contends it. In these circumstances, it does not seem to me to be possible to conclude that the position now advanced by LB is a late invention. I again recognise that, in setting aside the Demand, the Court does not determine the merits of the underlying dispute but merely determines that the dispute is one which ought properly be the subject of contested proceedings, where it can be determined on the merits, rather than be dealt with by a summary procedure for undisputed debts.

34. I am satisfied here that the dispute cannot be characterised as spurious and is genuine in the limited sense to which I have referred, notwithstanding that FPL might ultimately prevail in a substantive hearing on the merits.

Order

35. For these reasons, I make the following orders, including, at the parties’ request, orders allowing a further opportunity for submissions as to costs:

36. The creditor’s statutory demand dated 2 June 2026 issued by Foodeology Pty Ltd to Lets Build NSW Pty Ltd be set aside with costs.

37. Reserve liberty to each party which contends that some different costs order should be made, to serve and send to the Associate to Black J the evidence on which it relies and its submissions limited to eight pages in Arial font 12, one and a half spacing, by 4pm on 3 November 2026.

38. The other party in respect of any such costs application to serve and send to the Associate to Black J any evidence in response and its submissions by 4pm on 10 November 2026, also limited to eight pages in Arial font 12, one and a half spacing.

39. The exhibits be returned.

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