Plaintiff v EASTWOOD CRANBOURNE PTY LTD

1. The Company has filed and relies upon the following:

(a) Originating Process dated 27 January 2026;

(b) affidavits of Julian Minter affirmed 27 January 2026, 2 February 2026 and 17 February 2026;

(c) affidavit of Angus Angelatos sworn 2 February 2026;

(d) affidavit of Shaila Khan (Ms Khan) affirmed 17 February 2026 (Khan affidavit);

(e) bundle of authorities dated 17 February 2026;

(f) written submissions dated 17 February 2026; and

(g) paras [14] to [19] of the Khan affidavit.

1. Eastwood has filed and relies upon the following:

(a) affidavit of Mackenzie Smyth affirmed 5 February 2026;

(b) affidavit of Yufeng Shi (Mr Shi) affirmed 10 February 2026 (Shi Affidavit);

(c) bundle of authorities dated 24 February 2026; and

(d) written submissions dated 24 February 2026.

1. On 2 August 2018, the Company and Eastwood entered into a contract for the development of land located at 40 Cameron Street, Cranbourne East, Victoria (Land) that was varied in or around August 2020 (Development Agreement).[1]
2. As part of the Development Agreement, the Company agreed to pay a 'Development Fee' in consideration for Eastwood developing the Land, and marketing and selling associated residential lots, as well as an additional GST amount to the extent that the Development Fee constituted consideration for a taxable supply by Eastwood.
3. The Demand seeks payment of $1,848,557.46, comprising GST said to be payable on invoices issued by Eastwood to the Company between 31 October 2020 and 31 August 2021.
4. On 15 February 2021, Ms Khan, Finance Operations Manager for the Company, wrote to Eastwood confirming the Company's calculation of the GST owing under four invoices:

... We will transfer the $1,355,770 GST refund to you once we have received the same from the ATO.

1. In and around August 2021, Erica Moon (Ms Moon), on behalf of Eastwood, wrote to Ms Khan on various occasions following up on payment of the GST.
2. On 13 and 27 August 2021, Ms Khan responded to Ms Moon and subsequently arranged for a meeting.
3. On 30 August 2021, a meeting between representatives of the Company and Eastwood took place. Mr Shi has deposed that at the meeting, Ms Khan confirmed that the Company would arrange for payment of the GST.
4. On 25 January 2023, Ms Moon wrote to Ms Khan following up on payment of the outstanding GST, stating:

We are not aware of any outstanding issues or reasons for non-payment...

1. On 28 June 2024, Eastwood issued a statutory demand to the Company for the outstanding GST. The Company applied to set aside that demand, in order to allow for dispute resolution provisions to take place under the Development Agreement. Eastwood alleges that the Company subsequently refused or failed to take part in dispute resolution procedures.
2. On 23 December 2025, Eastwood issued the Demand the subject of these proceedings.
3. On 27 January 2026, the Company filed the Originating Process.
4. On 2 April 2026, I heard the application.

1. The Company contends that the Demand is capable of being reduced by way of an offsetting claim pursuant to s 459(2) of the Act, as a result of 'loss and damage' suffered by Eastwood's 'negligent' act of dumping soil at the site of the Land.
2. The negligent act was characterised at the hearing before me as a negligent omission in failing to remove the soil upon repeated requests by the Company. The Company alleges that as a result of Eastwood's negligence, which falls within cl 13.5 of the Development Agreement, the Company was unable to proceed with the development in a timely manner.
3. The Company claims $686,075.40 (including GST), comprising:

(a) liquidated damages of $257,950;

(b) legal costs in accordance with cl 8.4(e)(3) of the Development Agreement of $6,050; and

(c) indemnity costs pursuant to cl 13.5 of the Development Agreement of $422,075.40.

1. Eastwood contends that the Company has failed to particularise its evidence in support of its offsetting claim.
2. Eastwood accepts that there was a stockpile of soil at the Company's 'medium density site', but that the stockpile was removed by May 2021. Eastwood denies that the stockpile caused any delay in the completion of works.
3. In the event the Company is entitled to an offsetting claim, Eastwood contends the Development Agreement limits the claim solely to liquidated damages.
4. Eastwood nonetheless contends that the offsetting claim is not 'genuine' such that the claim could succeed.

1. Section 459G(1) of the Act provides that a company may apply to the Court for an order setting aside a statutory demand served on the company. The grounds upon which a court may set aside a statutory demand are those referred to in ss 459H and 459J of the Act.
2. The two grounds provided for setting aside a statutory demand in s 459H of the Act are: (a) that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates; and (b) that the company has an offsetting claim. Section 459H of the Act makes provision for the Court to calculate the 'substantiated amount' of the debt claimed in the demand, and for variation of the demand, where the 'substantiated amount' is at least as great as the 'statutory minimum'.
3. Section 459J of the Act provides that on an application under s 459G of the Act, the Court may set aside the demand if it is satisfied that: (a) because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or (b) there is some other reason why the demand should be set aside.

1. In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd,[2] Dodds-Streeton JA explained what is required to establish a genuine dispute or offsetting claim:

As the terms of s 459H of the Corporations Act and the authorities make clear, the company is required, in this context, only to establish a genuine dispute or off-setting claim. It is required to evidence the assertions relevant to the alleged dispute or off-setting claim only to the extent necessary for that 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. As counsel for the appellant conceded however, 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. A selective focus on a part of the formulation in South Australia v Wall [(1980) 24 SASR 189], divorced from its overall context, may obscure the flexibility of judicial approach appropriate in the present context if it suggests that the company must formally or comprehensively evidence the basis of its dispute or off-setting claim. The legislation requires something less.

1. The Company initially sought to set aside the Demand on the basis of four genuine disputes, three offsetting claims and one 'other reason'. However, at the hearing before me, the Company confined its grounds for setting aside the Demand to what is referred to in the material as the 'First Offsetting Claim'.

1. There are two parts to the 'First Offsetting Claim':

(a) first, a claim for legal costs and liquidated damages pursuant to cl 8.4(e) of the Development Agreement (as varied); and

(b) second, a claim pursuant to the indemnity provided by cl 13.5 of the Development Agreement.

1. Clause 8.4(e) of the Development Agreement (as varied) provides that:

(1) the Landowner agrees to enter into the Section 173 Agreement;

(2) the Landowner must execute (or authorise the Developer to execute on behalf of the Landowner pursuant to the Power of Attorney) the Section 173 Agreement immediately upon:

(i) receipt from the Developer of a copy of the deed of variation (Deed) under which this clause 8.4(e) was inserted into this agreement executed by the Developer; and

(ii) payment by the Developer of the costs referred to in clause 8.4(e)(3);

(3) the Developer must pay to the Landowner $5,500, plus GST, towards the Landowner's legal costs in connection with the Section 173 Agreement, the Deed and the dispute referred to in the recitals; and

(4) if the Intersection Works (as defined in the Section 173 Agreement) are not completed (in accordance with the terms of the Section 173 Agreement) by the date which is 12 months after the date of the Section 173 Agreement (Sunset Date), the Developer must pay to the Landowner a sum of $500 per day (exclusive of GST) from and including the date after the Sunset Date to and including the date on which the Intersection Works are completed (in accordance with the terms of the Section 173 Agreement or otherwise satisfied by Casey City Council). Any such amount must be paid weekly in arrears until completion of the Intersection Works by the Developer or Casey City Council (in accordance with the terms of the Section 173 Agreement). The parties acknowledge and agree that this amount represents the Landowner's genuine pre-estimate of the losses that it will suffer due to non-completion of the Intersection Works (in accordance with the terms of the Section 173 Agreement) by the Sunset Date, and its inability to sell the Medium Density Site as a result. ...

1. The date which is 12 months after the date of the agreement made between the Company and the Casey City Council (Council) pursuant to s 173 of the Planning and Environment Act 1987 (Vic) (Section 173 Agreement) is 11 August 2021 (Sunset Date). The 'Intersection Works' (as defined in the Section 173 Agreement) were completed on 24 November 2022. Accordingly, liquidated damages are payable from and including the date after the Sunset Date to and including the date on which the Intersection Works were completed.
2. The defendant accepts that legal costs in connection with the Section 173 Agreement, the Deed and the dispute referred to in the recitals are payable pursuant to cl 8.4(e)(3) of the Development Agreement (as varied). An offsetting claim of $6,050 (incl GST) is established for the purposes of s 459H of the Act.
3. The defendant accepts that liquidated damages are payable pursuant to cl 8.4(e)(4) of the Development Agreement (as varied) for the period 11 August 2021 to 24 November 2022. An offsetting claim of $257,950 (incl GST) is established for the purposes of s 459H(1)(b) of the Act.
4. The claims in respect of legal costs and liquidated damages arise irrespective of whether the defendant caused delay in the performance of the Intersection Works.

1. The Company claims that as a result of the defendant's actions in dumping soil on the Land, it was unable to proceed with its development application in a timely manner and, consequently, missed the Sunset Date for the purposes of the Section 173 Agreement.
2. Clause 13.5 of the Development Agreement provides that:

(a) The Developer indemnifies the Landowner against any Damage suffered or incurred by or brought against the Landowner to the extent arising out of or in respect of:

(1) the Landowner doing or not doing anything pursuant to this agreement or at the request of the Developer; and

(2) a negligent act or omission of the Developer or a breach by the Developer of its obligations under this agreement, except to the extent such Damage is caused or contributed to by the negligent act or omission of the Landowner, or any of its employees, agents, contractors or invitees.

(b) The Landowner, to the extent that it is within the Landowner's control and at the Developer's cost, agrees to use its reasonable endeavours to mitigate any Damage to the Landowner as contemplated in clause 13.5(a).

1. The Company contends that the defendant's failure to remove soil from the Land constitutes a 'negligent act or omission of the Developer', giving rise to a right to indemnity under cl 13.5 of the Development Agreement.
2. The elements of the Company's claim appear to be as follows:

(a) The defendant dumped soil on the Land, which was owned by the Company.

(b) The defendant failed to remove soil from the Land.

(c) At some point, possibly 16 November 2022,[3] the Company requested that the soil be removed from the Land.

(d) In December 2022 and January 2023, the Company removed the soil from the Land at a cost of $200,000.

(e) The failure to remove soil caused the Company loss and damage in that:

(i) the Company was 'unable to proceed with its development application in a timely manner' with the consequence that:

• (A) it missed the Sunset Date for the purposes of the Section 173 Agreement (11 August 2021);
• (B) it was required to expend $427,245.37[4] to remove the Section 173 Agreement.

(f) The Company has a right to recover that loss and damage from the defendant pursuant to cl 13.5 of the Development Agreement.

1. I have some difficulty with the Company's formulation of the claim as one arising pursuant to cl 13.5 of the Development Agreement. It is unlikely that a failure to remove soil placed on land with the consent of the owner[5] would give rise to a claim for damages for 'negligent omission'. It is more likely that such a claim would be for breach of a licence or bailment agreement, or possibly in nuisance. To the extent that the claim arises from an agreement, the Company has paid little attention to establishing the terms of the agreement, including by reference to what was said by the parties at the time when the soil was dumped.
2. While the defendant acknowledges that it had dumped soil on the Land, the defendant claims that the soil was removed by May 2021. It contends that the Company's claim, that soil remained on the Land after May 2021 and caused loss, is not supported by evidence and is not genuine.
3. The following is a short chronology setting out the critical evidence:

(a) On 31 May 2018, planning permit 'PLnA00536/17.A' issued in respect of lot 2 on PS332227T authorised the development of lot 2 for a multi-lot subdivision in three stages. Condition 25A provided that prior to the issue of a statement of compliance for stage 3, the Cameron Street/Elmslie Drive intersection must be constructed to the satisfaction of the Responsible Authority.

(b) On 2 August 2018, the parties entered into the Development Agreement.

(c) On 11 August 2020, the Company and the Council entered into the Section 173 Agreement. The agreement was expressed to end on the latter of the completion of the Intersection Works to the satisfaction of the Council and the repayment of any remaining bond to the payee.

(d) Mr Shi has deposed that during the development of the Site, the defendant had a stockpile of soil on the Company's medium density site adjacent to the Site. He deposed that 'I believe that the Stockpile was removed by May 2021'. He annexed an invoice dated 26 May 2021 issued by Rokon.

(e) On 26 May 2021, Rokon issued a tax invoice to the defendant in the amount of $66,000 (incl GST) for '0316 Cameron St (Eastwood intersection works)-Disposal of Material - REVISED'.

(f) On 11 August 2021, the Sunset Date was reached.

(g) Between 30 June 2022 and 30 November 2022, Spot Planning issued a series of tax invoices to the Company in respect of work done removing the Section 173 Agreement.

(h) On 16 November 2022, Mr Lai, director of Kaleida, sent an email to Mr Buckland, Senior Development Manager of Risland, stating:

...

Following our discussions regarding the fill remaining on the MD site, we require both mounds to be removed from site by the end of November 2022.

It was previously advised to us in June 2021 that the larger stockpile was removed, but it clearly has not been.

We allowed CG/Risland to use the MD site in good faith during construction and expect that the site be returned to us without this burden.

If the mounds are not removed by the end of November 2022, we will have to remove the mounds at Risland/CGs expense.

(i) Mr Shi has deposed that the Intersection Works were completed at the latest by 24 November 2022, being the date the Section 173 Agreement was removed.

(j) On 24 November 2022, the Section 173 Agreement was removed.

(k) On 28 November 20222, Mr Lai sent an email to Mr Buckland stating:

...

Further to my email and discussions, we have obtained quotes to clear the site.

The expense will be in the range of $160,000 to $200,000 depending on what the makeup of the fill is. Note that this could be more if further contamination or waste is discovered in the fill during removal.

Given we haven't received a quote and commitment from your team to remove the fill we will proceed to do so ourselves at your cost.

(l) On 29 November 2022, Mr Buckland sent an email to Mr Lai, which provided:

The stockpile generated by Risland during civil construction was removed in May 2021 with only a small quantity of third party dumping by builders/others remaining on the site. Are you able to share a copy of the quote including the estimated quantity of what is currently on site, as it seems far in excess of what we have already removed and would suggest this is new dumping occurring more recently? I have attached a photo of the site from when the original stockpile was removed showing the work was completed.

Risland's position is that the stockpiles generated from civil construction were removed and we should not be liable for third party dumping. I also question the reasoning behind seeking additional damages for dumping removal when there are already liquidated damages in place to compensate for the delays.

Happy to discuss further when we close this out. Has there been any further progress on the S173 removal?

(m) The photograph attached (which purports to show the Land after the removal of soil in May 2021) showed a site that is mostly cleared, but with two moderate sized piles of soil on it (Photo).

(n) On 21 December 2022, GRN Built issued a tax invoice to the plaintiff in the amount of $183,864.92 (incl GST) in respect of 'agreed works for 40 Cameron St, Cranbourne East'.

(o) On 30 January 2023, GRN Built issued a tax invoice to the plaintiff in the amount of $18,210.48 (incl GST) in respect of 'agreed works for 40 Cameron St, Cranbourne East'.

1. A significant shortcoming in the Company's material is that no person on behalf of the Company has deposed in any detail to the dumping of soil on the Land by the defendant, a request by the Company to remove the soil (save for in the 16 November Email) or as to the removal of the soil. The direct evidence, such as it is, is expressed in the most general terms:

The First Offsetting Claim relates to a claim the plaintiff has against the defendant for damages suffered as a result of the defendant's dumping of soil on the [Land].

1. The Company seeks to establish its claim by the defendant's admission (that it did dump some soil on the Land) and by inference from documents, specifically tax invoices issued in December 2022 and January 2023, which are said to be for the removal of the soil, but describe the work as 'agreed works for 40 Cameron St...'. It relies on the 16 November Email and the Photo to establish that defendant did not remove all of the soil on the Land in May 2021.
2. Against this, Mr Shi directly addresses the removal of the soil by expressing the 'belief' that it was removed by May 2021. He annexes an invoice which corroborates this to some extent, by its reference to 'removal of material'.
3. The defendant relies on the Photo to verify the claim made that the soil had been removed by May 2021. However, the photograph shows a largely cleared site with two relatively modest piles of soil. I regard that photographic evidence as equivocal. It neither completely corroborates the defendant's claim of soil removal in May 2021, nor establishes the Company's offsetting claim. What is missing is some evidence from a person on behalf of the Company explaining what soil was dumped on the Land, what soil was removed and what soil remained. I do not regard the reference to 'both mounds' in the 16 November Email, and its correspondence to the two mounds in the Photo, is sufficient proof to establish a genuine offsetting claim.
4. To the extent the Company's claim arises from a failure to remove the soil upon a request, the only evidence of a request to remove soil in the evidence is in the 16 November Email, which is more than one year after the Sunset Date. A failure to remove soil following that request could not have caused the Company to miss the Sunset Date and suffer the consequential loss claimed by it (apart from the costs of removal which I do not consider are established by sufficient evidence).
5. The gaps in the evidence identified above are such that I am unable to conclude that the asserted claim is genuine. I am not satisfied the Company has established that the offsetting claim has a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, or that it has sufficient factual particularity to exclude the merely fanciful or futile. My conclusion is reinforced by the Company's admission as to liability for the debts claimed in the Demand and its failure to raise the alleged offset at an earlier point in time. The offsetting claim based upon failure to remove soil is not established.

1. In the premises, the Company has established an offsetting total of $6,050 in respect of legal costs and $257,950 in respect of liquidated damages. I am not satisfied that the Company's claim in respect of the soil dumping has been established. In these circumstances, the offsetting total is $264,000, the admitted total is $1,848,557.46, and the substantiated amount of the Demand is $1,584,557.46.

1. For the purpose of s 459H(1) of the Act, the substantiated amount of the Demand is $1,584,557.46. Pursuant to s 459H(4), I shall order that the Demand be varied to reflect the substantiated amount and declare that the Demand, as varied, to have had effect as from when it was served. My preliminary view is that the defendant should pay a proportion of the Company's costs to reflect the extent of its success and the fact that costs have been thrown away by grounds that were abandoned. I will leave it to the parties to see if they can reach agreement on a costs disposition. If the parties cannot agree upon the costs disposition, I will list the proceeding for a short hearing on the question of costs.

[1] The plaintiff referred to as the 'Landowner' and the defendant as the 'Developer'.

[2] [2008] VSCA 70; (2008) 66 ACSR 67, 79 (Neave and Kellam JJA agreeing at [1] and [2]) (emphasis added).

[3] Email dated 16 November 2022 from Daoren Lai, director of Kaleida, and sent to Jason Buckland, Senior Development Manager of Risland (16 November Email).

[4] Comprising fees payable for Town planning, Lawyer, Council application, Civil Works and Project Management.