40 I agree with the Plaintiff that the tenor of this letter, especially the last paragraph under the heading "Work Progress" indicates that the parties had not agreed on payment of the full amount of BB Enterprises invoices. It is written in a confrontational style clearly recording that a considerable amount of work still requires to be completed and that was not expected to occur before 31 March 2000. The letter also indicates that BB Enterprises understood that it would be paid only after Walter Constructions approved the works and paid the Plaintiff. I am satisfied, at a prima facie level, that indeed was the basis upon which the work proceeded.
41 The foregoing review of the evidence is the clearest example one could find of an attempt to buttress a statutory demand based on a debt where there was substantial evidence pointing to that debt not being due for payment either in part or whole. In any event, there could hardly be a clearer case of a direct conflict of evidence which could not be resolved until a final trial. I am satisfied that leaves the Plaintiff with at the least a plausible contention requiring further investigation insofar as the Plaintiff disputes that there was any variation to the contractual arrangements originally constituted by the acceptance of the Defendant's quotation. Merely to produce invoices by the Defendant with a different mode of payment could not, without more, refute that contractual basis for payment or establish that there was not even a plausible contention as earlier stated.
42 There is some conflict in the authorities as to what happens where part of the debt, the subject of the statutory demand, is manifestly not payable at the date of the affidavit verifying the debt under s459E of the Corporations Law. In Portrait Express (Sales) Pty Ltd v Kodak (Australasia) Pty Ltd (1996) 14 ACLC 1,095 Bryson J held that the claim of the plaintiff that the statutory demand should be set aside on this ground was not meritorious, as the greater part of the debts covered by it were undoubtedly already due for payment. He held that it was merely fortuitous that the plaintiffs were able to point to other proponents of the claimed debt which were not due for debt, they having since fallen due for payment after the date of the affidavit verifying.
43 Here of course it is not just the two last invoice payments that were manifestly not due for payment, totalling $14,846. Even putting aside the claims in respect of defective workmanship, the work was not yet complete leaving the Plaintiff with at least a plausible contention that payment was not due as of right, until the whole work was completed, and, I would add, completed satisfactorily; that is, in the absence of contractual stipulation to the contrary.
44 In NT Resource Pty Limited v Deputy Commissioner of Taxation (1998) 16 ACLC 957 Finkelstein J was in disagreement with the decision of Bryson J and expressed the opinion (at 962) that where a creditor serves a statutory demand that related to a whole debt that is not due and payable, this is a deficiency of such a fundamental character as to invoke s459J(1)(a), namely: "Because of a defect in the demand, substantial injustice will be caused unless the demand is set aside." I would concur.
45 In Olympic Holdings Pty Limited v Interwest Investments Pty Limited (1998) 16 ACLC 1242 Master Sanderson was faced with whether or not to set aside a statutory demand where a debt was due but not yet payable. This was a deficiency in respect of the whole debt and not merely part thereof. In that case the relevant clause in the contract between the parties provided the payment could be withheld unless, after a request has been made, a statutory declaration outlining a number of relevant facts was provided by the Contractor to the Principal within two days of the request. Such a request was made in relation to the amount the subject of the statutory demand. Given that the statutory declaration was not provided, the debt though owing was not due until the statutory declaration was provided (at 1246).
46 Master Sanderson was of the opinion that the statutory demand was not to be set aside on the basis of a bona fide dispute but rather because of the defect in the demand rendering substantial injustice under s459J(1)(a). At 11 he said:
"The legislative scheme of a statutory demand procedure seems to me to anticipate that the debt will be due and payable during the entire time of the period available for compliance. The fact that it is due but not payable seems to me to mean that if the statutory demand were not set aside there would be substantial injustice to the applicant. In my view, this substantial injustice arises simply from the fact that the applicant did not have the benefit of the full period for compliance. It is not necessary for the applicant to show that it has suffered particular injustice."