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[2003] NSWSC 832
plaintiff. The statutory demand was set aside, and the defendant was ordered to pay the plaintiff’s costs on a party-and-party basis; indemnity costs were refused.
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The court did not decide who ultimately owed the brickwork debt. It decided that the evidence raised plausible, unresolved questions about which Mainlink company had contracted with BAM and whether BAM had accepted $25,000 in full settlement. Because those questions amounted to genuine disputes, the statutory demand was set aside. The defendant had to pay ordinary party-and-party costs, but not indemnity costs.
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1,863 words · generated 01/10/2026
In Mainlink Developments Pty Limited v BAM (Australia) Pty Limited [2003] NSWSC 832, Mainlink Developments applied to set aside a statutory demand issued by BAM. The demand, dated 23 June 2003, sought $31,713.60 as a balance said to be owing for brickwork at properties in Cheltenham and Fairfield. Master Macready heard the application in the Equity Division of the Supreme Court of New South Wales on 9 September 2003.
Mainlink relied on two asserted disputes. First, it said that it was not the company that had contracted with BAM. Second, it said the parties had compromised the amount owing at $25,000, which had been paid. The Master considered each ground separately and found that each raised a genuine dispute. He set aside the demand and ordered BAM to pay Mainlink's costs on a party-and-party basis ([1], [9], [16]).
There is a chronological inconsistency in the judgment's opening description: paragraph 1 describes the brickwork as occurring between July 2002 and November 2003, although the hearing and judgment were on 9 September 2003. The judgment does not explain that inconsistency, so the date should not be silently corrected.
The companies' identities mattered. The evidence described Mainlink Developments as a developer that did no building work and Mainlink Constructions as the company that entered into the arrangement with BAM ([4]). The latter company had previously been called Mainlink Developments Pty Limited, adding a potential source of confusion. Some invoices from BAM's Mr Day were addressed to “Mainlink Pty Limited”, which the Master described as unrelated to the companies in issue ([5]).
The alleged compromise arose from discussions between Peter Birch and Day. Day's evidence was that he was presented with a cheque for $25,000 and a document stating that the payment was in full satisfaction of money due from several named parties, including Mainlink Developments and Mainlink Constructions. He said that he signed the document “No way”, then identified himself as a director, accepted the cheque and later banked it ([11]–[12]). Those events left open questions about what his signature and conduct meant, and whether the payment discharged the claim.
The Master began with the approach to “genuine dispute” in s 459H described in Eyota Pty Limited v Hanave Pty Limited. He adopted the formulation that the expression means “a plausible contention requiring investigation” ([2]). That threshold is not an invitation to conduct a trial within the statutory-demand application. The court distinguishes deciding whether a dispute genuinely exists from deciding its merits or resolving it ([2]).
The judgment also stresses that the threshold is not satisfied automatically by any affidavit assertion. An assertion may be too equivocal, inconsistent with contemporary documents, inherently improbable or unsupported to warrant further investigation. But, outside such an extreme case, the court should not conduct an extended inquiry or assess a witness's credibility simply to decide whether a genuine dispute exists ([2]). The Master also agreed with the passage from Re Morris Catering (Australia) Pty Limited that the court identifies whether a genuine dispute exists, not which party is more likely to win or what the eventual account between them will be ([3]).
On the contracting-party question, the evidence was not conclusive in either direction. Birch's affidavit identified Mainlink Constructions as the party that made the arrangement ([4]). Day's evidence included an account of a conversation in which he was told that Mainlink Developments was the relevant company, but the timing and context of that conversation were unclear ([6]–[7]). The invoices were directed to an unrelated company, and an affidavit passage relied on by BAM did not, in the Master's view, admit that Mainlink Developments was the builder or contracting party ([5], [8]). In that setting, the competing material supported an issue for investigation, rather than a conclusion on the contract's merits. The Master expressly found a genuine dispute about whether Mainlink Developments was the contracting party ([9]).
The alleged compromise supplied another ground. The first issue was whether Day intended to bind BAM when he signed in the unusual manner described, accepted the cheque and banked it. The Master considered that question debatable, not resolved ([12]–[13]). The second issue was consideration. The Master regarded prompt payment, made by a particular form of cheque in circumstances where the relevant building company was in financial difficulties, as arguably capable of providing consideration ([14]–[15]). These were not findings that the compromise was ultimately binding or supported by consideration. They were reasons why the asserted compromise was sufficiently arguable to constitute a genuine dispute at this stage ([16]).
The judgment presents itself as applying an existing approach, not announcing a new legal test. Master Macready says that the appropriate principles are those stated by McLelland CJ in Equity in Eyota and quotes that decision's explanation of “genuine dispute” ([2]). He then quotes Re Morris Catering and expressly says, “I respectfully agree with those statements” ([3]). The central distinction in this judgment is therefore between screening for a real dispute and resolving the underlying claim.
The practical effect is that the statutory-demand application did not determine whether Mainlink Developments or Mainlink Constructions actually contracted with BAM. Nor did it determine whether BAM had accepted $25,000 in full settlement. The order set aside the demand because the evidence raised genuine disputes on those issues, not because the Master finally decided the underlying contractual rights ([9], [13]–[16]).
The judgment does not state that it changed the law or identify any later statutory amendment. Nor does the text establish the present operation of the statutory provisions or their later interpretation. Its account of the “before” position is limited to the authorities it quotes and adopts; a broader account of the law before or after 2003 cannot be established from this judgment alone.
At paragraph 2, the Master adopts the description of a genuine dispute as “a plausible contention requiring investigation”. In plain English, the question is whether the asserted dispute is credible enough to need proper examination, not whether the claimant has already proved it.
Also in paragraph 2, the judgment says there is a “clear difference” between determining whether a genuine dispute exists and deciding its merits. That means the statutory-demand application is not the place to choose between competing versions of events merely because one seems more likely.
Paragraph 3 explains that it is not helpful, at this stage, to decide which party is more likely to succeed or what the final account between them will be. The court's task is to identify whether there is a genuine claim or dispute, not to settle it.
At paragraph 9, the Master applies that approach to the company-identity evidence and finds a genuine dispute about whether Mainlink Developments was the contracting party. This is a finding about the existence of a dispute, not a final ruling that another company was the contracting party.
At paragraphs 13–15, the Master identifies two unresolved aspects of the alleged compromise. One concerns whether Day's signature and conduct bound BAM. The other is whether the payment involved consideration. The Master said consideration was “certainly arguable”, referring to prompt payment by a particular cheque in the circumstances described. “Arguable” here signals that the issue could not be treated as plainly resolved against the party relying on the compromise at the demand-setting-aside stage.
Finally, paragraph 16 records the operative outcome: the demand was set aside, and the defendant was ordered to pay costs. Paragraph 17 distinguishes ordinary party-and-party costs from the indemnity costs Mainlink sought. The Master declined indemnity costs because he considered the matters arguable and found no relevant delinquency.
The judgment is relevant to a statutory-demand dispute where the recipient points to a specific, evidence-supported uncertainty about who entered the contract underlying the debt. Here, there were separate but similarly named companies, a former company name, an affidavit identifying one company as the contracting party, other evidence pointing towards another, and invoices addressed to a third, unrelated company ([4]–[9]). The significance is not that every discrepancy establishes a genuine dispute. It is that conflicting evidence about the identity of the contracting party can warrant investigation where it is not merely an unsupported assertion.
The judgment is also relevant where a recipient says the debt was compromised or settled, but the evidence leaves open whether an agreement was reached. The facts here included a written receipt purporting to record full payment, a disputed account of the way it was signed, acceptance and banking of a cheque, and evidence from which consideration was said to arise ([11]–[15]). The decision indicates that uncertainty about intention and consideration can raise a genuine dispute; it does not establish that any payment or receipt automatically effects a compromise.
The case is less useful as authority for deciding the ultimate facts. The Master did not decide which company contracted, whether Day intended to bind BAM, or whether the compromise would succeed at trial. It illustrates the threshold inquiry and the limits of the court's role in this application.
The judgment supplied here contains no subsequent judicial history and no later cases applying, distinguishing, approving or criticising Mainlink. It therefore does not establish how later courts have treated the decision. The authorities that can be identified from this text are those the Master discussed in 2003.
Master Macready expressly adopted the approach in Eyota Pty Limited v Hanave Pty Limited ([2]) and said he agreed with the statements quoted from Re Morris Catering (Australia) Pty Limited ([3]). Eng Mee Yong v Letchumanan, South Australia v Wall and Mibor Investments appear within the passages reproduced in paragraph 2. The judgment does not provide enough information to describe any later treatment of those authorities.
For a professional research assessment of current precedential status, later judgments and current legislation would need to be checked separately. No claim about that later material can be grounded in the supplied judgment text.
The decision leaves the merits of both asserted disputes unresolved. It does not determine which Mainlink entity entered the arrangement, what effect should ultimately be given to invoices addressed to “Mainlink Pty Limited”, or whether the statements in the affidavits can be reconciled after fuller evidence ([4]–[9]).
On the compromise, the judgment does not finally interpret the document or determine whether Day had authority, intended to bind BAM, or did so by accepting and banking the cheque. It also does not decide whether the circumstances identified by the Master ultimately establish consideration ([11]–[15]). Those questions were relevant because they showed an arguable dispute, not because the judgment answered them.
The judgment also leaves unexplained the apparent conflict between the stated brickwork period ending in November 2003 and the September 2003 judgment date ([1]). It does not provide the full text of the statutory provisions or address subsequent changes in legislation or case law. Those matters lie beyond what can be established from the supplied reasons.
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CITATION : Mainlink Developments Pty Limited v BAM (Australia) Pty Limited [2003] NSWSC 832 HEARING DATE(S) : 09/09/03 JUDGMENT DATE : 9 September 2003 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION :
CATCHWORDS : Corporations Law. Application to set aside demand under s 459G of the Corporations Act. Demand set aside. No matter of principle PARTIES : Mainlink Developments Pty Limited v BAM (Australia) Pty Limited FILE NUMBER(S) : SC 3655/03 COUNSEL : J.T. Johnson for plaintiff. A.S., Patterson for defendant SOLICITORS : Dennis and Company for plaintiff Access Legal Pty Limited for defendant
3655/03 - MAINLINK DEVELOPMENTS PTY LIMITED v BAM (AUSTRALIA) PTY LIMITED
JUDGMENT 1 MASTER: This is an application to set aside a statutory demand dated 23 June 2003 claiming a sum of $31,713.60, being a balance due for performing brickwork at properties at Cheltenham and Fairfield between July 2002 and November 2003. The plaintiff says that a genuine dispute exists for two reasons: one, the company to whom the demand was addressed was not the contracted party, two, there was a compromise for the amount owing for $25,000 which amount was paid. 2 I think the appropriate principles in considering what is a genuine dispute are given by McLelland CJ in Equity in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACLC 669. At page 671 his Honour made the following comments respect of the expression "Genuine dispute": "It is, however, necessary to consider the meaning of the expression 'genuine dispute' where it occurs in s.459H. 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). But it does mean that, except in such an extreme case, a Court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between, on the one hand, determining whether there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute. In Mibor Investments (at ACLC 1066; ACSR 366-7) Hayne J said, after referring to the state of the law prior to the enactment of Division 3 of Part 5.4 of the Corporations Law, and to the terms of Division 3: 'These matters, taken in combination, suggest that at least in most cases, it is not expected that the Court will embark upon 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.'
3 In Re Morris Catering (Australia) Pty Limited (1993) 11 ACLC 919 at 922; (1993) 11 ACSR 601 at 605 Thomas J said: 'There is little doubt that Division 3 . . . prescribes a formula that requires the Court to assess the position between the parties, and preserve demands where it can be seen that there is no genuine dispute and no sufficient genuine offsetting claim. That is not to say that the Court will examine the merits or settle the dispute. The specified limits of the Court's examination are the ascertainment of whether there is a "genuine dispute" and whether there is a "genuine claim". It is often possible to discern the spurious, and to identify mere bluster or assertion. But beyond a perception of genuineness (or the lack of it) the Court has no function. It is not helpful to perceive that one party is more likely than the other to succeed, or that the eventual state of the account between the parties is more likely to be one result than another. The essential task is relatively simply - to identify the genuine level of a claim (not the likely result of it) and to identify the genuine level of an offsetting claim (not the likely result of it).' I respectfully agree with those statements."
4 I turn to the question of who was the contracting party. The evidence is that it was in July 2002 which is when these projects commenced. There have been two companies. One is Mainlink Developments Pty Limited and the other is Mainlink Constructions Pty Limited. That latter company had formally been called Mainlink Developments Pty Limited. In the affidavit of Peter Birch of 22 August 2002 he identifies the former company, Mainlink Developments, as a developer who did no building work. In para 3 he clearly identified the second company, Mainlink Constructions, as the one who entered into the arrangement with the defendant. 5 It is necessary, of course, to see what other evidence there might be touching on the question of identity. In Mr Day's affidavit of 8 August 2003 he annexes a number of invoices which he sent for the brickwork he had done. They were addressed to Mainlink Pty Limited, a company which is totally unrelated to either of the relevant companies in this matter. 6 In Mr Day's affidavit of 8 September 2003, in para 8, he says that he had a conversation with a Mr Flora of RSB Property Group Number 5 Pty Limited. How that company relates to the matter I do not know. It may well have been the owner of the project. The conversation which he had with that person indicates that Mr Day did not know precisely which company, but he was told it was Mainlink Developments Pty Limited. 7 The problem about that evidence is that it does not clearly date as to when the relevant contract occurred and what time the person is actually speaking of when he refers to hiring Mainlink Developments Pty Limited. Be that as it may, but assuming perhaps a favourable construction on the evidence that it was at the relevant time, it seems to me that there is thus perhaps two pieces of evidence which might suggest one way from one piece of evidence and one way from another. 8 It was submitted that para 3(a) of the affidavit in support of Peter Birch of 3 July 2003 was an admission that Mainlink Developments Pty Limited was the builder. In my view, there is no possible way of construing that as an admission that the plaintiff was the builder. The plaintiff was, in fact, a plaintiff because it was the one who received a notice of demand and has to take steps to set it aside. Just because it makes reference to payment of an amount that certainly does not identify who was the actual contracting party. It is very likely, of course, that if Mainlink Development was the developer that it may have been providing the finance. 9 In my view, I am satisfied on the evidence there is a genuine dispute as to whether the plaintiff was a relevant contracting party. 10 I turn to the question of the compromise. There was a meeting between Mr Birch and Mr Day to discuss payment and the next day a meeting between them again at the solicitor's office where Mr Hocking, the solicitor, participated. Annexure D to Mr Birch's affidavit of 3 July appears to be a calculation of what was then an amount owing of some $32,500 which appears to have been in initialled by both parties. 11 It is clear from the evidence that there were other discussions about whether there should be a payment of a lesser sum than this in order to compromise the matter. That information appears in para 25 of Mr Day's affidavit of 8 August 2003. He states that when he got to the meeting with the solicitor, Mr Birch placed in front of him a cheque for $25,000 and a document. The document which was placed before him was in the following form: "We BAM (Australia) Pty Limited acknowledge receipt of $25,000 in full payment of all and any money due and payable to us on any job with Mainlink Developments Pty Limited and Mainlink Constructions Pty Limited or Paul Birch or Peter Birch or Brett Deres, on this 21 day of January 2003. No further monies are owed to us by the above parties. For and on behalf of BAM (Australia) Pty Limited." 12 He was told he had to sign it and was asked if he did that whether he could get the rest of his money back and he was told he could not. He then refused to sign it and it seemed to be a stalemate. He had another look at the document and then signed it in a particular way. He signed it not by his name but using "No way". He then indicated he was a director. He was given the cheque. He left the meeting with the cheque and banked it in due course. 13 The actual matters that arise, I think, on the question of the compromise is certainly whether or not by signing in the way that he did he did mean and intend to bind himself or his company on whose behalf he was signing. If he did not then clearly it was a deception that was practised because he went away with the cheque. That is, I think, a debatable issue as to whether or not he did, in fact, bind the company to the compromise. 14 The other matter is the question of consideration for the compromise and the only evidence that there might be consideration appears in the evidence of what happened in the discussions the day before. There are allegations, according to Mr Day, that Mr Birch said any payment from Mainlink would be worthless because a liquidator would claim it back. He ultimately provided a third party cheque, made out to cash to make the payment. 15 I think it is certainly arguable that there is consideration for the $25,000 and that consideration is the prompt payment, and the payment by the particular form of cheque in the circumstances where the relevant building company was in financial difficulties. 16 In the circumstances, I think the question of a compromise does raise a genuine dispute which is another ground for setting aside the demand. Accordingly, I order that the statutory demand served by the defendant on the plaintiffs dated 23 June 2003 be set aside. I order the defendant to pay the plaintiff's costs. 17 There has been an application for indemnity costs in this matter. The basis is that before the demand expired there was an attempt to have the matter withdrawn. The defendant obviously did not withdraw the demand and was given notice that indemnity costs were to be sought. Although I have come to a conclusion about whether or not there is a genuine dispute, I do think the matters were arguable and accordingly I do not think there is a relevant delinquency. Costs will be on a party and party basis.
Last Modified: 10/07/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Mainlink Developments Pty Limited
BAM
(1980) 24 SASR 189
The statutory demand was set aside, and the defendant was ordered to pay the plaintiff’s costs on a party-and-party basis; indemnity costs were refused.