Mr Delaney's account of this conversation is uncontradicted. He testified to a "clear impression" that "as a result of the conversation, there had been an agreement by both companies not to pursue final adjustment payments".
10 Three issues of significance are thus identified. First, there is a factual issue as to the conversation between Mr Brown and Mr Delaney recorded in the former's handwritten note of 30 May 2000 and, if such a conversation took place, there is a question as to its contractual significance. Second, there is a factual issue as to the date of delivery of Fieldstone's letter of 29 August 2000 expressing reservations about the accounts and, if that letter was delivered on or before 31 August 2000, there is a question whether the accounts put forward as the completion accounts in reality had that character. Third, there is a question as to the legal effect of the restaurant conversation uncontradicted evidence of which was given by Mr Delaney: did it, in truth, give rise to a valid and binding contract whereby each party agreed to release and forego claims against the other including, in the case of Fieldstone, claims based on the invoices for Mr Brown's services which are the subject of the statutory demand?
11 The issue for determination in these proceedings is whether there exists a "genuine dispute" between Oxley and Fieldstone "about the existence or amount of" the debt described in the statutory demand. The "genuine dispute" concept has been the subject of discussion in many cases. It is sufficient to refer to four of them.
12 In Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290, Hayne J said, after referring to certain factors which identify the summary nature of the s.459G 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."
13 In Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, 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."
14 The formulation preferred by Northrop, Merkel and Goldberg JJ in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 is as follows:
"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."
15 In Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601, Thomas J emphasised that it is not the task of the court, in a case such as this, to "examine the merits or settle the dispute"; and that
"beyond a perception of genuineness (or 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."
16 I have reservations about whether the attempts by Oxley to include the sums invoiced by Fieldstone for Mr Brown's services in the general accounting between the parties provided for in the deed of May 2000 is justified. At the same time, however, there are sufficient uncertainties of fact about the ancillary or supplementary arrangement under which Mr Brown was to perform services after termination of the joint venture to cause those reservations to remain no more than reservations, without detracting from the reality that Oxley's attempts are not fanciful or spurious.
17 Of quite clear significance to the "genuine dispute" inquiry, however, is the evidence of the conversation between Mr Delaney and Mr Scalia on 19 October 2000, coupled with the fact that, in the following eleven months, Fieldstone apparently took no steps at all to pursue with Oxley the debt which became the subject of the statutory demand dated 17 September 2001. Those circumstances seem to me to provide grounds on which Oxley may cogently assert a dispute about the existence of the debt which is "real and not spurious, hypothetical, illusory or misconceived".
18 Particularly in light of the factual issues which, in the present state of the evidence, remain in an unsatisfactory state, the claim which Fieldstone considers itself to have against Oxley as briefly outlined in the statutory demand is one which ought properly to be litigated in an appropriate forum, with rights being thereby firmly established, rather than being allowed to give rise to the presumption of insolvency as a basis for winding up.
19 In terms of s.459H, I am satisfied that the "substantiated amount" is less than the "statutory minimum", with the result that the Court must proceed in accordance with s.459H(5). It is therefore ordered that the statutory demand be set aside.
20 On the subject of costs, it was submitted on behalf of Oxley, by reference to comments of Santow J in Polaroid Australia Pty Ltd v Minicomp Pty Ltd (1997) 16 ACLC 529 and Austrac Rail Pty Ltd v Hunter Premium Funding Ltd [2001] NSWSC 654, that Fieldstone should be ordered to pay indemnity costs. His Honour there warned that, with the hurdle to be cleared by companies seeking to have statutory demands set aside being so low, creditors persisting with the defence of such applications need to consider carefully whether there are valid grounds for their taking up court time and putting the company to expense by doing so. That remains a salutary warning but, in this case, I do not consider the creditor's insistence on putting the company to proof of its case to warrant the sanction of indemnity costs. The defendant must pay the plaintiff's costs on the party and party basis.
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