POS Media v B Family

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5851/02 POS MEDIA ONLINE LTD V B FAMILY PTY LTD JUDGMENT 1 HIS HONOUR: The plaintiff is an Australian listed public company. The defendant is a proprietary company the sole director and shareholder of which is Mr Kevin Bostridge. By an originating process filed on 9 December 2002, the plaintiff seeks an order setting aside a statutory demand dated 12 November 2002, served upon it by the defendant on 18 November 2002. It is not disputed that the application was made within the 21 day time limit set by s 459G(3) of the Corporations Act 2001 (Cth). 2 An affidavit by Boris Patkin, a director of the plaintiff, made on 9 December 2002 was filed by the plaintiff with the originating process. A subsequent affidavit by Mr Patkin was relied upon at the hearing, but the second affidavit was outside the 21 day time period. 3 The statutory demand claimed that the plaintiff owed the defendant $150,000, being the total of the amounts of the debts describing the schedule to the demand. The Schedule said: "$150,000 - monies due pursuant to Put and Call Option Agreement dated 30 June 2000." 4 The evidence shows that the plaintiff owns 72% of the share capital of BrandATM Pty Ltd, and the defendant owns 3% of the share capital of that company (evidently shares transferred to it on 30 June 2000). The correct title of the company seems to be a matter of some uncertainty, although the various names used in documents ("BrandATM AU Pty Ltd", "brandATM AU Pty Ltd" and "BrandATM Pty Ltd") all refer to the same ACN number and I therefore assume there is only one company involved. 5 On 30 June 2000 the plaintiff transferred 100 shares in BrandATM to the defendant for $200,000. On the same day the plaintiff and the defendant entered into an agreement called a "Put and Call Option Agreement". The agreement contained a put option and a call option with respect to up to 100 ordinary shares in BrandATM (referred to in the agreement as "the Property"). The shares to which the option agreement applied were apparently the shares transferred to the defendant on the same day. Essentially the put option entitled the defendant to place the shares with the plaintiff on the Principal Date (defined in the agreement as 31 December 2000) for the "Put Exercise Amount", and the call option entitled the plaintiff to call for the shares from the defendant on the Principal Date for the Call Exercise Amount. The Put Exercise Amount and the Call Exercise Amount were the same figure, namely $2,600 per share. Thus, if the plaintiff exercised the call option for all of the 100 shares, it would have to pay the defendant $60,000 more than it had received for the shares when it transferred them on 30 June 2000; and if the defendant exercised the right to put all of the 100 shares, it would be entitled to receive $60,000 more than it had paid for them on 30 June 2000. 6 It is the put option rather than the call option that is in issue in the present case. The following are the relevant provisions of the agreement: "2.1 Put Option In consideration for the agreement and undertakings made by B.Family herein, POSMedia hereby irrevocably offer to purchase the Property from B.Family for the Put Exercise Amount upon the terms and conditions specified in this Agreement on the Principal Date." "2.5 Purchase POSMedia shall, on the principal date or within three business days of the delivery by B.Family of a Notice of Acceptance if the notice is given less than 3 business days before the Principal Date, in accordance with clause 2.1 purchase the number of Ordinary Shares indicated in such Notice of Acceptance (Schedule One) from B.Family subject to the terms and conditions specified in this Agreement." 7 By Notice of Exercise dated 30 November 2000, the defendant gave notice that it exercised the put option in respect of all of the 100 shares. No transfer of the shares pursuant to the exercise of the put option has ever taken place or been offered, although Mr Bostridge has given evidence on the part of the defendant that the defendant has at all material times been ready to transfer the shares upon payment. 8 On 28 March 2001 the defendant's solicitors made a demand for payment of $260,000 pursuant to the agreement, claiming that the amount was by that time three months overdue, and threatening to issue a statutory demand. The plaintiff paid the defendant $110,000 on about 27 April 2001, and also some payments of interest were made in respect of the remaining $150,000. On 7 November 2002 the defendant's solicitors made a claim for the remaining $150,000 and again threatened to issue a statutory demand. On 11 November 2002 Mr David Diamond, a director of the plaintiff, replied, saying that at a board meeting of the plaintiff in the previous week, concerns had been expressed about the arrangement with Mr Bostridge (then a director of the plaintiff), and he referred to "an advantage to Mr Bostridge that the Board advised required specific member approval, which has not occurred", and he asserted that the claim was therefore not payable at that time. The letter expressed the hope that the company's situation would be resolved within a short time. 9 Mr Patkin's affidavit of 9 December 2002 annexed the statutory demand, a company search of the defendant showing that Mr Bostridge had been the sole director and shareholder since 1997, a company search of the plaintiff showing that Mr Bostridge was a director of the plaintiff from 22 July 1999 to 31 August 2001, and a copy of the demand for payment made by the defendant's solicitors on 28 March 2001. In the affidavit Mr Patkin denied that the sum of $150,000 as claimed in the statutory demand was due and payable pursuant to the agreement or at all. He explained the ownership of BrandATM and outlined the negotiations for sales of shares in BrandATM by the plaintiff to the defendant and to another party, subject to put and call option agreements. 10 The affidavit gave only limited information about the Put and Call Option Agreement between the plaintiff and the defendant. It explained that in June 2000, Barton Capital Group, the plaintiff's financial adviser, structured a transaction whereby the plaintiff would sell to interested investors a total of 150 shares in BrandATM for $300,000, to be paid on or before 13 June 2000. He then said: "12. A Put Option allowing the investors to put the 150 shares back into the plaintiff for $390,000 on 31 December 2000, underwrote investor risk." 11 He noted that Barton Capital Group prepared the documentation and that identical documents (save for the quantum of shares) were executed by the defendant and the other party. However, he did not annex the agreement between the plaintiff and the defendant or give any other information about its terms. 12 Mr Patkin's affidavit then concluded in the following manner: "19. In December 2000 both the defendant and [the other party] issued valid notices to the Plaintiff, pursuant to their respective Put Option Agreements. 20. The Plaintiff subsequently negotiated with both the Defendant and [the other party] to move the due date for the Put to 1 January 2001 rather than the initial date being 31 December 2000. 21. Annexed hereto and marked "D" is a copy of a letter received by the Plaintiff, from Roxburgh & Co, Solicitors, dated 28 March 2001. 22. Upon receiving annexure "D", advice was sought from the solicitors for the Plaintiff, LMG Solicitors, regarding the collection of the Put Option by the Defendant. 23. The transaction giving rise to the subject matter of the Statutory Demand for Payment of Debt is one falling within Chapter 2E of the Corporations Act, 2001 and as such required compliance with Sections 218 through to 226 of the Corporations Act. There was no compliance with the relevant Sections. Accordingly, the transaction, the subject of the Statutory Demand, may be unlawful and the Defendant's entitlements are questionable as the matter raises questions of directors duties and possible infringement of section 208 of the Corporations Act and further, the improper use of the position of director to gain advantage for himself or someone else. 24. There is a genuine dispute arising as a consequence and the Plaintiff accordingly is not in a position to make the payment set out in the Statutory Demand." Genuine dispute 13 When the application to set aside the statutory demand came before me for hearing, counsel for the plaintiff abandoned any assertion of an offsetting claim based on an allegation of improper use by Mr Bostridge of his position as a director of the plaintiff to gain advantage for himself or someone else. The plaintiff's case is that there is, for the purposes of s 459H(1)(a), a genuine dispute between it and the defendant about the existence of the debt to which the statutory demand relates. If there is such a genuine dispute, then there is no "substantiated amount" for the purposes of s 459H(2) and consequently the Court must, by order, set aside the demand under s 459H(3). 14 There is no dispute about the test to be applied to determine whether there is a genuine dispute for the purposes of these provisions. A convenient and often cited formulation was provided by McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, 787: "In my opinion that expression ['genuine dispute'] 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." 15 The plaintiff's case was put on two bases, which I shall consider in turn: (i) breach of the related party provisions in Chapter 2E of the Corporations Act; and (ii) that there was no debt owing by the plaintiff to the defendant. The related party provisions 16 Section 208(1) of the Corporations Act provides, to the extent relevant: "208(1) For a public company … to give a financial benefit to a related party of the public company: (a) the public company … must: (i) obtain the approval of the public company's members in the way set out in sections 217 to 227; and (ii) give the benefit within 15 months after the approval; or (b) the giving of the benefit must fall within an exception set out in sections 210 to 216." 17 The plaintiff is a public company for the purposes of this section because it is a company that is not a proprietary company (definitions of "company" and "public company" in s 9). There is at least a plausible contention requiring investigation as to whether the Put and Call Option Agreement and/or the defendant's exercise of the put option under that agreement gave Mr Bostridge a financial benefit, having regard to the wide definition of those words in s 229 and the fact that he was at all relevant times the sole shareholder and director of the defendant. For a period beginning before the agreement was negotiated and ending after the option was exercised and payment demanded and partly received, Mr Bostridge was a director of the plaintiff, and was therefore a related party under s 228(2)(a). 18 The approval of the plaintiff's shareholders has not been obtained in satisfaction of s 208(1)(a), and there is at least a plausible contention requiring investigation as to whether any of the exceptions in ss 210 to 216 is applicable. As to the "arm's length terms" exception in s 210, the premium payable to the defendant on exercise of the put option makes it arguable that the terms of the financial benefit would not be reasonable if the parties were dealing at arm's length, and were more favourable to Mr Bostridge than the terms that would have been obtained in an arm's length negotiation. 19 All things considered, therefore, there is a plausible contention requiring investigation as to whether either the making of the agreement or the exercise of the put option, or both, gave rise to any contravention of s 208(1). 20 However, the fact that a transaction contravenes s 208(1) does not affect the validity of any contract or transaction connected with the giving of the benefit, according to s 209(1). Consequently it is not plausibly arguable that the mere fact of contravention would prevent the defendant from claiming payment of a debt otherwise due and payable under the contravening transaction. The plaintiff seeks to overcome this difficulty by asserting that the Put and Call Option Agreement contained an implied term to the effect that shareholder approval would be first obtained before completion of the exercise of the put option (or, presumably, the exercise of the call option). 21 I can see nothing in the express wording of the Put and Call Option Agreement that would justify the implication of any such term. The alleged term does not satisfy the well-known criteria for the implication of a contractual term under Australian law: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20, 26; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 347. The proposed implied term was neither necessary to give business efficacy to the contract, which was effective without it, nor so obvious that it would go without saying. It would be plausible for parties in the shoes of the plaintiff and the defendant to negotiate an agreement that did not require compliance with Chapter 2E, in reliance on the fact that the agreement would not be invalidated by lack of shareholder approval. 22 My conclusion is that the plaintiff has failed to establish, to the Eyota standard, that any contravention of Chapter 2E has given rise to a genuine dispute as to the existence of the debt claimed by the defendant. No debt 23 The plaintiff also submitted that completion of the transaction still remains pending, and the defendant retains ownership of the shares that are the subject of the put option. The plaintiff says that in these circumstances, the defendant's appropriate course of action would be either to seek specific performance (an order for which would require transfer of the shares in return for payment of the balance of the purchase price), or to terminate (after serving a notice to complete making time of the essence, if that is necessary) and sue for damages. According to the plaintiff's argument, the defendant cannot ignore its failure to offer to transfer the shares and sue in debt. 24 In my opinion the plaintiff's contention is of sufficient substance to satisfy the Eyota test for a genuine dispute. It is theoretically possible for a contract for the purchase of property to provide that the purchase money is unconditionally payable on a specified date regardless of whether the property has been delivered or transferred to the purchaser at that time - although such a provision would be very unusual, to say the least, where the property is realty. The proper characterisation of the purchaser's obligation depends upon careful construction of the contract that the parties have chosen to make. Here the plaintiff had the obligation, when the put option was validly exercised, stipulated by clauses 2.1 and 2.5 of the agreement. Its obligation was to "purchase" for the Put Exercise Amount the number of shares stipulated in the notice of exercise, on 31 December 2000, on the terms and conditions of the agreement. There is at least a plausible contention requiring investigation as to whether this obligation was nothing more than an obligation to exchange the purchase price for a duly executed instrument of transfer of the shares in the proper form, and therefore did not arise unless the transfer of the shares was offered on the stipulated date. The plaintiff's evidence is that no such offer to transfer was made. 25 Therefore, subject to an important qualification, I would hold that the plaintiff had established, to the Eyota standard, that the nature of the contract between the parties gave rise to a genuine dispute as to the existence of the debt claimed by the defendant. The qualification arises out of a limiting principle asserted on behalf of the defendant, which I shall describe as the Graywinter principle. The Graywinter principle 26 The principle asserted by the defendant is that the plaintiff cannot succeed on the "no debt" ground, because that ground was not set out in Mr Patkin's affidavit of 9 December 2002, and cannot be characterised as an extension of the grounds set out in that affidavit. 27 The principle is said to arise out of s 459G, which states: "459G (1) A company may apply to the Court for an order setting aside a statutory demand served on the company. (2) An application may only be made within 21 days after the demand is so served. (3) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company." 28 In David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 the High Court of Australia held that an application to set aside a statutory demand is to be made within 21 days of service of the demand, and not at some time thereafter, and that to treat s 1322 as authorising the Court to extend the 21 day period would be to deprive the word "only" in s 459(2) of effect (per Gummow J at 276). The David Grant case implied that the plaintiff must file and serve, within the 21 day period, not only the application but also an affidavit falling within the description of "an affidavit supporting the application"; in assessing whether these requirements have been satisfied, the Court is not to have regard to any supplementary affidavit filed and served by the plaintiff at a later time. 29 Section 459G does not prescribe the content of the application. That is left to the Rules of Court, which are now substantially uniform. The application is made by an originating process, which according to Rule 2.2 of the Corporations Rules of the various Courts, and the associated Form 2, must set out the relief sought and the sections of the Corporations Act under which the proceeding is brought, but need not plead the grounds upon which the relief is sought. The defendant's interest in knowing the plaintiff's claim is catered for by the general rules of Court regarding particulars, and the Court's power to order that the matter proceed by pleadings or points of claim in an appropriate case. 30 In the absence of authority, one might have thought that an affidavit would "support" such an application if it deposed to facts that would (alone or together with other evidence) justify the grant of some such relief as the application sought, once the plaintiff articulated (at the hearing, if not earlier) the reasoning by which those facts would warrant that relief. One would not expect the supporting affidavit to supply the intermediate reasoning, in the nature of a pleading. Assertions in an affidavit in the nature of submissions are normally held inadmissible, if challenged. 31 However, the law has taken rather a different course. In Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452, Sundberg J was dealing with an application to set aside a statutory demand on the basis that there was a genuine dispute as the existence of the debt. Perhaps influenced by a supplementary Federal Court Rule in force at the time, he said (at 459): "In a s 459H(1)(a) case, the affidavit must in my view disclose facts showing there is a genuine dispute between the parties. A mere assertion that there is a genuine dispute is not enough. Nor is a bare claim that the debt is disputed sufficient. It follows from the fact that the affidavit need not go into evidence, which is the customary function of affidavit, that it may read like a pleading." 32 Those observations have been taken up and applied frequently in first instance decisions - for example, Zenaust Imports Pty Ltd v Olympic Chemicals Works Co Ltd (1998) 28 ACSR 465; Z-Tek Computers Pty Ltd v Aus Linx International Pty Ltd (1997) 15 ACLC 1233; SMEC International Pty Ltd v CEMS Engineering Inc (2001) 38 ACSR 595. In the Zenaust case, however, Santow J added (at 469) the qualification that an affidavit in support of a notice to set aside a statutory demand could not fairly be expected to rise higher than the level of articulation of the claimed debt in the statutory demand. 33 These cases dealt with the minimum content requirements for the affidavit in support of the application. A corollary of their reasoning is that if the affidavit discloses certain grounds only, the plaintiff should be limited to those grounds at the hearing. That proposition was accepted in D & S Group of Companies Pty Ltd v O'Connor Investments Pty Ltd (1997) 15 ACLC 1794, where Perry J remarked (at 1798), in respect of an affidavit filed on behalf of the plaintiff well after the expiration of the period of 21 days, "in so far as it raises any ground offered in support of the application not identified in the affidavit … filed within time, [it] could not be taken into account in determining the application". The same point was accepted by Mandie J in Missay Pty Ltd v Seventh Cameo Nominees Pty Ltd (in liq) [2000] VSC 397. 34 Those decisions should be compared with Callite Pty Ltd v Adams [2001] NSW SC 52. In that case the statutory demand was by solicitors who sought to recover in respect of fees charged for legal work. At the hearing the plaintiff (the client) wanted to assert that there was a genuine dispute because the defendant (the solicitor) had not complied with mandatory requirements of the Legal Profession Act 1987 (NSW). The affidavit supporting the client's application to set aside the statutory demand annexed the relevant invoices but did not assert the ultimate facts that would allow the legal conclusion to be drawn that there had been no proper fee disclosure as required by the Legal Profession Act. However, it was evident on the face of the invoices that they did not comply with the requirements of that Act in various ways. Santow J held that it was unnecessary for the affidavit to point out explicitly that omissions had occurred, since it was self-evident from a perusal of the annexed accounts that they lacked certain mandatory inclusions. He concluded (at [12]) that "the legal consequences which follow are not required to be pleaded in such an affidavit". 35 We now have the benefit of three decisions by an intermediate appellate court. The Full Court of the Supreme Court of Western Australia has followed Sundberg J's observations and their corollary in Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360; Energy Equity Corporation Ltd v Sinedie Pty Ltd (2001) 166 FLR 179 and Financial Solutions Australasia Pty Ltd v Predella Pty Ltd (2002) 167 FLR 106. However, the Financial Solutions case has reduced the Graywinter "principle" to a more fact-specific inquiry. 36 The Meadowfield case applied Sundberg J's observations about the "minimum requirements" for the affidavit without adding anything of general application. In the Energy Equity case, the question was whether the plaintiff could seek to establish at the hearing that it had an offsetting claim in negligence in relation to a particular contract, when all that had been relevantly said in the affidavit filed within time was that there were "a string of off-setting claims". After examining the authorities Wallwork J (with whom Steytler J and Olsson A-UJ agreed) concluded (at 185, in a passage described in the Financial Solutions case as an obiter dictum): "In my view it now seems to be accepted that an affidavit filed outside the 21-day period which raises a new ground or grounds to set aside a statutory demand (as opposed to an affidavit which expands on grounds in an earlier affidavit which has satisfied the threshold test) cannot be used in an application of this nature." 37 In the Financial Solutions case, the plaintiff contended at the hearing that there was a genuine dispute as to the existence of the debt claimed in the statutory demand, for two reasons. First, the plaintiff said that the defendant claimed as assignee under a deed of assignment which mistakenly identified the deeds of loan to which the assignment related, and secondly, the plaintiff said that the defendant was not a permitted assignee under the terms of the deeds. The affidavit supporting the application said only that the plaintiff had not sighted the deed of assignment and genuinely believed that the assignment might be void and ineffective, and was seeking discovery of the documents referred to in the statutory demand in order to establish whether the defendant had a legally enforceable claim against it. 38 Applying the observations of Sundberg J in Graywinter, and also the views of Young J in John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716, Parker J (with whom Anderson and Scott JJ agreed) held (at 115) that the material facts on which the plaintiff intended to rely to show a genuine dispute were sufficiently, "though less than ideally", set out in the affidavit and its annexures. He observed, applying the views of Young J in the John Holland case, that the affidavit went beyond mere assertion. As to Sundberg J's observations, he said that they were apt to the circumstances with which Sundberg J was concerned, but "there is reason to hesitate and hold back from acceptance of the apparent effect of the submission for Financial Solutions that the concluding paragraph of the passages cited earlier from Sundberg J's reasons in Graywinter reveal a settled and universal principle, which must be satisfied by an affidavit before it can be accepted as 'supporting the application' within the meaning of s 4 59G(3)(a) and as satisfying the jurisdictional requirement being considered. The statutory yardstick remains that the affidavit should support the application. The precise nature of the application may well influence what this requires." 39 Barrett J of this Court carefully reviewed the case law in Process Machinery Australia Pty Ltd v ACN 057 260 590 Pty Ltd [2002] NSWSC 45, although his judgment was delivered before the Financial Solutions decision. Barrett J's conclusions were as follows: "[21] It is thus reasonably clear that the relevant concept of 'raising' or 'identifying' a particular ground involves some verbal delineation of that ground in the s 459G(3)(a) affidavit. If a debt of $10,000 were claimed as one year's interest under a contract providing for interest at the rate of 9% per annum on a principal sum of $100,000, it would not, in my opinion, be sufficient for the affidavit to annex the loan agreement and say no more. It would have to refer at least to the connection between the contract and the debt claimed and put in issue the calculation of interest - even if it merely said, 'The debt does not accord with the annexed contract'. [22] The real point is that the application and affidavit filed and served within the 21 day period must fairly alert the claimant to the nature of the case the company will seek to make in resisting the statutory demand. The content of the application and affidavit must convey, even if it be by necessary inference, a clear delineation of the area of controversy so that it is identifiable with one or more of the grounds made available by s 459H and s 459J. That process of delineation may not be extended after the end of the 21 day period, although it is open to the plaintiff to supplement the initial affidavit by way of additional evidence relevant to the area of controversy identified within the period." 40 With respect, these observations are a logical application of the principle enunciated in Energy Equity. However, they might arguably take Sundberg J's observations in Graywinter further than the Financial Solutions case would now take them, and be inconsistent with the decision in Callite. If it was unnecessary for the supporting affidavit in Callite to do anything more than annex the solicitor's invoices, on the face of which there were non-compliances with the Legal Profession Act, why would it be necessary for the supporting affidavit in Barrett J's hypothetical example to do anything more than annex the loan agreement showing a different rate of interest from the one claimed? 41 In the present case the ground for concluding that there is a genuine dispute as to the existence of the debt emerges from the terms of the Put and Call Option Agreement, which was referred to in the statutory demand and was put into evidence by the defendant at the hearing. As I have said, the question whether a vendor is entitled to demand payment of the purchase money otherwise than upon offering to transfer or deliver the property to the purchaser depends on the terms of the contract. In the present case clauses 2.1 and 2.5 of the agreement make it plausibly arguable that the defendant had no such entitlement and therefore that the debt claimed is not due and payable. 42 In my opinion Mr Patkin's affidavit of 9 December 2002, which was the only affidavit filed and served by the plaintiff within the 21 day time period, did not give the defendant the faintest inkling that any such argument would be made. It did not annex the agreement, and so the ground ultimately alleged at the hearing could not be said to have emerged from a perusal of the affidavit and its annexures. It did not give an account of the contents of the agreement sufficient to identify the ground. It did not expressly articulate the ground, either in paragraph 23 of the affidavit (where the related party ground was articulated) or anywhere else. Indeed, the terms of the affidavit seem inconsistent with the "no debt" ground, to the extent that paragraph 22 presents the issue as an issue about "collection" of the put option and paragraph 24 implies that the related party ground articulated in paragraph 23 is the only ground advanced. 43 The case would have been more difficult to decide if the affidavit of 9 December 2002 had annexed the agreement, for if that had happened then the affidavit filed within the 21 day period would have contained everything necessary to make out the "no debt" ground, and even though that ground was not articulated, one might argue that it was an obvious ground on the face of the document. It is unclear to me whether that argument is open, in light of the case law. Here, however, the affidavit contained nothing from which the "no debt" ground could emerge, as it were, of its own force. Whatever the precise limits of the authorities, they require me to conclude that in such circumstances it was impermissible for the plaintiff to raise the "no debt" ground at a later stage. Conclusion 44 Of the two grounds relied upon by the plaintiff to establish a genuine dispute at the hearing, the related party ground fails to establish any plausible contention requiring investigation, and the "no debt" ground is not available to the plaintiff because it was not advanced in the affidavit supporting the statutory demand. Therefore the plaintiff's application to set aside the statutory demand must fail. 45 No reason has been advanced for me to make an order extending the period for compliance with the demand. Under s 459F(2)(a)(ii) the period for compliance with the statutory demand will end seven days after the date of my orders consequent upon this judgment, which (subject to appeal) will be the day upon which the plaintiff's application is finally determined. I shall give the parties an opportunity to make submissions with respect to costs. **********

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