Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : DIPLOMA CONSTRUCTION (WA) PTY LTD -v- PRAVENKAV GROUP PTY LTD [2013] WASC 138

Statutory demands - Statutory demand set aside - Whether an initial supporting affidavit under s 459G of the Corporations Act 2001 (Cth) must contain evidence sufficient to permit the Court to quantify an offsetting claim - Sufficiency of affidavit evidence concerning offsetting claim - Whether there was a genuine dispute concerning the total amount of a 'progress claim'

Corporations Act 2001 (Cth)

185L6 Pty Ltd v Strata Corporation 07176 Inc [2011] SASC 164

20*20 Pty Ltd v D&G Developments Pty Ltd [2009] WASC 343

A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 13 ACLC 896

Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59

Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2007] VSCA 121; (2007) 63 ACSR 300

Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344

Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638

Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5

Commonwealth Bank of Australia v Garuda Aviation Pty Ltd [2013] WASCA 61; (2013) 45 WAR 92

Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85; (2009) 71 ACSR 602

David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265

Devaugh Pty Ltd v Lamac Developments Pty Ltd [1999] WASCA 280

Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91

Diploma Construction (WA) Pty Ltd v Pravenkav Group Pty Ltd [2013] WASC 138

Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 1366; (1997) 25 ACSR 675

Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 468; (1997) 24 ACSR 194

Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669; (1994) 12 ACSR 785

Finance & Equity Pty Ltd v Leveraged Equities Pty Ltd [2007] NSWSC 886

Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306

First Equilibrium Pty Ltd v Bluestone Property Services Pty Ltd (in liq) [2013] FCAFC 108

Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452

Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103; (2007) 61 ACSR 321

Hardel Pty Ltd v Burrell & Family Pty Ltd [2009] SASC 77; (2009) 103 SASR 408

Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372

Kerslake Superannuation Pty Ltd v C & L Building Pty Ltd [2010] NSWSC 424

Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360

Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd [2001] WASC 76

Mibor Investments v Commonwealth Bank of Australia [1994] 2 VR 290

National Telecoms Group Ltd v Bulldogs Rugby League Club Ltd [2003] NSWSC 654

No 96 Factory Bargains Pty Ltd v Kershel Pty Ltd [2003] NSWSC 146

ORH Contracting Pty Ltd v CGS Solutions Pty Ltd [2009] WASC 273; (2009) 74 ACSR 185

Pravenkav Group Pty Ltd v Diploma Construction (WA) Pty Ltd [2013] WASCA 271

Pravenkav Group Pty Ltd v Diploma Construction (WA) Pty Ltd [No 2] [2014] WASCA 106

Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170

Royal Premier Pty Ltd v Taleski [2001] WASCA 48

Sewmail (Aust) Pty Ltd v Booby Traps Pty Ltd (1997) 23 ACSR 339

Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272

Touma Family Super Fund Pty Ltd v McNiece [2013] NSWSC 752

TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67

Westpoint Management Pty Ltd v Goakes [2002] WASCA 317

Zenaust Imports Pty Ltd v Alembic Chemicals Works Co Ltd (1998) 28 ACSR 465

1 The respondent, Diploma Construction, entered into a sub-contract with the appellant, PG, for the design, supply, delivery, installation, and completion of secondary glazing works by PG at a site in Hay Street, Perth. The sub-contract sum was $128,000 plus GST. A dispute arose concerning alleged defects in the work performed by PG or PG's contractors. On 17 September 2012, Diploma Construction emailed PG alleging 'extensive damage' to the Hay Street premises from the work performed by PG. Photographs were attached.

2 On 20 September 2012, three days after the allegations of damage, PG issued a 'progress claim number 3' to Diploma Construction for $103,461. This progress claim 3 was for the entire sum under the sub-contract less the amount previously paid.

3 On 27 September 2012, Diploma Construction wrote to PG, again with photographs, referring to the 17 September 2012 letter and phone calls. Diploma Construction said that no further rectification action had taken place by PG. Diploma Construction directed PG to rectify the defects by 29 September 2012.[1]

4 There was some acknowledgement of defects by PG. On 16 November 2012, PG admitted that some work was incomplete and that a small percentage of the amount due could be withheld by Diploma Construction.[2] On 20 November 2012, PG acknowledged that they were disputing invoices provided by their contractors whose works had been rejected. PG said that '[t]hese people are not skilled work[ers] as they claimed'.[3]

5 On 28 November 2012, Diploma Construction emailed PG saying that the PG's system had been 'rejected due to not being fit for purpose or as specified and requiring extensive remedial works to achieve the level of acceptance in accordance with the Specification'.[4]

6 On 30 November 2012, in the course of correspondence with one of the two directors of PG, Mr Farrelly (the site manager of the Hay Street works) said that he could not meet with PG until he returned to Perth in the New Year. He also said that there would be no further correspondence until PG provided a bill of lading and import documentation that Diploma Construction had requested.[5]

7 On 5 December 2012, PG issued Diploma Construction with a statutory demand for $113,807.24 which consisted of the amount of progress claim number 3 (the entirety of the sub-contract sum that had not been paid), together with GST. Evidence given by one of the two directors of PG was that PG issued the statutory demand because the director had concluded that there was no genuine dispute in relation to the progress claim.[6]

8 Diploma Construction applied to set aside the statutory demand. The learned master set aside the statutory demand on the basis that Diploma Construction had an offsetting claim of at least the value of the debt alleged in the statutory demand. PG appealed that decision. Diploma Construction cross-appealed and filed a notice of contention.

9 For the reasons which follow, the appeal should be dismissed. The parties proceeded on the basis that leave to appeal was required. If leave is required then it should be refused. But the parties' assumption that leave is required may not be correct. It is not necessary to consider that point, which was not argued. For the reasons below, even if leave is not required, the overall result would be that the decision of the learned master must be upheld.

The statutory demand and the application to set it aside

10 In the schedule to PG's statutory demand, the alleged debt was described as follows:[7]

The GST inclusive amount of the unpaid balance of the Sub-Contract Sum and approved variations less the agreed 5% retention under sub-contract no. 1036/1478 between [PG] and the creditor for works at 726 Hay Street Perth as set out in the creditor's Progress Claim No.3 a copy of which is attached and mark [sic] 'A'.

11 There was no attachment 'A' to the statutory demand.[8] The progress claim number 3 was contained in affidavit evidence filed by Diploma Construction.

12 On 20 December 2012, Diploma Construction applied to set aside PG's statutory demand. The application was for orders setting aside the statutory demand under s 459H of the Corporations Act 2001 (Cth).

13 The application by Diploma Construction to set aside the statutory demand was supported by an affidavit from Mr Bishop, sworn on 20 December 2012.

14 Mr Bishop is a contract administrator for Diploma Construction. He described the sub-contract entered into between Diploma Construction and PG in relation to the Hay Street works. He explained that the contract sum was $128,000 (ex GST).

15 He said that Diploma Construction denies that the money demanded by PG ($113,807.24) is due. He explained that Diploma Constructions relied upon cl 5.1, cl 5.4 and cl 5.12 of the sub-contract. Those clauses are set out below. He also raised matters including the following:

(1) The terms of the sub-contract did not give PG an automatic entitlement to be paid the full amount of any progress claim.[9]

(2) Progress claims were required to be submitted monthly with a completed and duly authorised statutory declaration.[10]

(3) Progress claims must be made in writing and must fully detail all work carried out and itemise all adjustments claimed to the sub-contract sum.[11]

(4) On 17 September 2012, Mr Farrelly, the site manager for Diploma Construction at the Hay Street site, had emailed directors of PG, alleging that extensive damage had occurred at the Hay Street site as a result of PG's internal delays in work. Photographs were attached to the email and contained in Mr Bishop's affidavit. The damage alleged included missing frames, damage to walls, and damage to window sills.[12]

(5) On 18 September 2012, PG submitted progress claim number 3 for the period ending 20 September 2012, to Diploma Construction. The progress claim was for $103,461.13.[13]

(6) On 27 September 2012, Mr Bishop sent an email to an officer of PG attaching a letter which referred to the defects in respect of the Hay Street works and which requested immediate rectification of those defects by close of business on 29 September 2012.[14] In Mr Bishop's 27 September 2012 letter, Mr Bishop explained the concerns that Diploma Construction had with the double glazing works performed by PG. Mr Bishop then asserted that under cl 4.18(d) of the sub-contract, PG was 'required to implement the rectification process forthwith, at no additional cost to Diploma Construction'.[15]

(7) On 2 October 2012, Mr Bishop again emailed the director of PG attaching another letter. Mr Bishop said that since PG had not commenced rectification work in accordance with cl 4.18(d) of the sub-contract and the direction of 27 September 2012, Diploma Construction would be appointing other contractors to rectify the defects and associated costs would be set off against any amount owing to PG.[16]

(8) There was no response to the 2 October 2012 letter. On 6 October 2012, Mr Farrelly of Diploma Construction wrote to PG saying that the rectification work had begun and information was required on where to purchase particular material. On 8 October 2012, an officer from PG replied with relevant information.[17]

(9) On 16 November 2012, PG referred to there being 'a few panels incomplete' in level 3, and informed Diploma Construction that '[y]ou can hold a small percentage of the amount due and should release the balance according to the Contract Clause'.[18]

(10) On 13 November 2012, Diploma Construction told PG that due to the matters raised on 27 September 2012 and 2 October 2012, Diploma Construction was proceeding with rectification of the glazing work and that when this was complete the associated costs would be set off against amounts owing under the sub-contract.[19]

(11) Rectification of the work is now complete.[20]

(12) The work that PG contracted with Diploma Construction to perform at the Hay Street site was not performed to the satisfaction of Diploma Construction or to the satisfaction of Diploma Construction's client under the head contract. Any amounts which are said by PG to be owing to Diploma Construction under progress claim number 3 are not payable until the rectification costs have been collated in accordance with cl 5.12 of sch 5 and the amount of those costs deducted from any amount payable.

16 Subsequent to Mr Bishop's affidavit, Mr Farrelly swore an affidavit in support of the application on 17 January 2013. As we have mentioned, Mr Farrelly was the site manager employed at the Hay Street site. He was responsible for matters including safety and supervision of the works.[21]

17 In that affidavit, Mr Farrelly annexed further correspondence between PG and Diploma Constructions, some of which was described in the introduction to these reasons. Mr Farrelly also elaborated upon matters raised by Mr Bishop, including referring again to the requirement that a progress claim be accompanied by a statutory declaration that[22]

required [PG] to verify that all materials and labour supplied to the project site complied with relevant specifications and that all employees, sub-contractors and suppliers had been paid all moneys properly due and payable to them at the date of [the] progress claim in respect of work under the contract.

18 Mr Farrelly said that he believed that the statutory declaration was not attached to progress claim number 3 because PG was not able to verify that materials and labour supplied to the Hay Street site were compliant with relevant specifications and that all employees, sub-contractors and suppliers had been paid all money due and payable to them in respect of work they did under the contract.[23] Mr Farrelly provided detail of all the rectification costs (said to total $80,155.78 excluding GST) and costs of debtors who he said had not been paid by PG ($35,652.50 excluding GST).

19 On 4 February 2013, Mr Farrelly swore a second affidavit. He corrected his previous affidavit which had referred to rectification costs that had been paid by Diploma Construction. He said that he had been mistaken that all costs had been paid at that time but that he had now been informed by the Chief Financial Officer and Company Secretary of Diploma Construction that all of the invoices and costs had been paid.[24]

20 An affidavit, dated 18 February 2013, was also filed from Mr Rethnam on behalf of PG. That affidavit assumed little significance on this appeal, although it is clear from his affidavit that almost all of the claims by Diploma Construction are disputed.

21 The sub-contract between PG and Diploma Construction was entered on 29 November 2011. A copy was annexed to Mr Bishop's affidavit.[25] The relevant terms are as follows.

22 Clause 4.18, to which Mr Bishop referred in his 27 September 2012 email, provides as follows:

(a) The Defects Liability Period commences on the Date of Practical Completion of the Works.

(b) Unless otherwise stated in this Subcontract, the Defects Liability Period expires on the expiration of the defects liability period under the Head Contract, as may be varied under the Head Contract, or if there are several defects liability periods under the Head Contract, on the expiration of the last of those defects liability periods.

(c) As soon as possible after the Date of Practical Completion of the Works, the Subcontractor must rectify any defect or omission in the Works existing and known to the Subcontractor at that date.

(d) At any time prior to the 21st day after the expiration of the Defects Liability Period, Diploma may direct the Subcontractor to rectify any omission or defect in the Works existing at or discovered following the Date of Practical Completion of the Works which becomes apparent prior to the expiration of the Defects Liability Period.

(e) The direction referred to in clause 4.18(d) must identify the omission or defect and state a date by which the Subcontractor must complete the work or rectification and may state a date by which the work of rectification must commence.

(f) If it is necessary for the Subcontractor to carry out work of rectification, the Subcontractor must do so at times and in a manner which causes as little inconvenience as is reasonably possible to the Head Contract Works and to the occupants and users of the Site and Head Contract Works.

(g) Any rectification work performed, or to be performed under clause 4.18 is subject to a further defects liability period of 12 months, commencing upon the date on which, in Diploma's opinion, the rectification work has been satisfactorily completed. The whole of the terms of clause 4.18, including subclause (g) apply to the rectification work and for this purpose a reference to Defects Liability Period will be treated as a reference to the further defects liability period.

Diploma's additional rights on default:

(a) if the Subcontractor fails to pay any money or do or effect any thing, for 3 days beyond the date by which the Subcontractor has undertaken to pay, do or effect it, Diploma may pay the money, or do effect the thing itself, at the Subcontractor's cost.

(b) clause 8.2 is without prejudice to any other rights and powers of Diploma in respect of the Subcontractor's default.

24 The clause which was a heavy focus of this appeal and cross-appeal, as well as the hearing before the learned master, was cl 5.4:

5.4 Progress Claims

(a) The Subcontract Sum is payable by way of progress payments in the manner set out in this clause.

(b) Progress claims must be submitted monthly by the Subcontractor by the date referred to in Item 17 and must be submitted with the completed and duly authorized Schedule 9 - Statutory Declaration.

(c) Progress claims must be made in writing and must fully detail all work carried out and itemize all adjustments claimed to the Subcontract Sum.

(d) Diploma may agree the value with the Subcontractor, or where no value is agreed, must assess the progress claim by reference to the value of the work completed on Site and the Subcontract Sum. Unless otherwise agreed by Diploma, no payment will be made for materials off site or unfixed materials on site.

(e) Diploma must provide the Subcontractor with written notice of either the value agreed or its assessment of the progress claim and any deductions or set offs, together with payment of such amount within the time referred to in Item 17. The notice must itemize all claimed adjustments to the Subcontract Sum and either the agreed value or the assessment of each. To the extent the value assessed by Diploma is lower than the progress claim, the progress claim is disputed.

(f) The assessment of any progress claim under clause 5.4(d) is provisional only and does not constitute approval of any work. Diploma may, if it reasonably considers the circumstances warrant it, adjust its assessment of any progress claim and issue a revised notice under clause 5.4(e).

(g) In consideration of the Supplier agreeing to make supplies to Diploma, and Diploma agreeing to receive such supplies from the Supplier/Sub-contractor on or after 1st July 2000, the parties agree as follows:

• Diploma hereby elects to issue a recipient created tax invoice ('RCTI') in respect of any supply made by the Supplier to Diploma for the above project. Diploma may change this election by notice in writing. Until notice changing Diploma's election is given, Diploma will issue RCTI's for all supplies made to it by the Supplier.
• The Supplier/Sub-contractor will not issue a tax invoice in respect of any supply of which Diploma has elected to issue an RCTI.
• The Supplier acknowledges that it is currently registered for GST and agrees to notify Diploma if it ceases to be registered.
• Diploma acknowledges that it is currently registered for GST and agrees to notify the Supplier if it ceases to be registered or if it ceases to satisfy any of the requirements of any determination of the Commissioner of Taxation in respect of RCTI's made under Section 29-70(3) of A New Tax System (Goods and Services Tax) Act, 1999.
• Any expression used in this agreement which is defined A New Tax System (Goods and Services Tax) Act, 1999 has the same meaning as given in that Act.

25 Finally, a clause which was relevant to the proceedings before the Master was cl 5.12 which provides as follows:

Diploma may withhold payment where there are reasonable grounds to suspect concealed work may be defective or where materials used or work methods employed may give rise to defects at a later date. Diploma may instruct for the works to be uncovered and the cost if [sic] this and remedial repairs shall be by the subcontractor.

26 Part 5.4 of the Corporations Act creates a scheme that was described by Gummow J in David Grant & Co Pty Ltd v Westpac Banking Corporation[26] as 'a legislative scheme for quick resolution of the issue of solvency and the determination of whether the company should be wound up without the interposition of disputes about debts unless they are raised promptly'. The scheme in pt 5.4 is based around the service of a statutory demand on the company (s 459E(3)), and the failure to comply with the statutory demand by the company creates a rebuttable presumption of insolvency: s 459C(2)(a).

27 Section 459G(1) of the Corporations Act provides that a company may apply to the Court for an order setting aside a statutory demand served on the company. The application can only be made within 21 days after the statutory demand is served: s 459G(2). Section 459G(3) then provides that:

(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 Section 459H provides that if the Court is satisfied that there is a genuine dispute about the existence or amount of a debt to which the demand relates or that the company has an offsetting claim then, by s 459H(2), the Court 'must calculate the substantiated amount of the demand in accordance with the formula Admitted Total - Offsetting total'.

29 By s 459H(2), an offsetting claim, for the purposes of calculating the offsetting total, is defined to mean 'a genuine claim that the company has against the respondent by way of counterclaim, set-off or cross-demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demand relates)'.

30 Section 459H(3) and s 459H(4) provide as follows:

(3) If the substantiated amount is less than the statutory minimum, the Court must, by order, set aside the demand.

(4) If the substantiated amount is at least as great as the statutory minimum, the Court may make an order:

(a) varying the demand as specified in the order; and

(b) declaring the demand to have had effect, as so varied, as from when the demand was served on the company.

31 The statutory minimum is $2,000 (s 9; no greater amount has been prescribed).

32 Section 459H is subject to s 459J (see s 459H(6)). Section 459J provides that, on an application under s 459G, the court may, by order, set aside the demand (including on conditions: s 459M) because of a defect in the demand unless the demand is set aside, or that there is some other reason why the demand should be set aside.

33 As to whether there was a 'genuine dispute' within s 459H(1)(a) of the Corporations Act, the learned master said that the procedure in the sub-contract involved a mechanism by which PG renders a progress claim (that must satisfy the requirements of cl 5.4(c)). Then the onus shifts to Diploma Construction to give a written notice. That written notice was not given. Hence, he concluded, Diploma Construction had not complied with the contractual requirements of cl 5.4 concerning disputing a progress payment and it 'cannot be said any genuine dispute arose'.[27]

34 In relation to whether there was an 'offsetting claim' by Diploma Construction within s 459H(1)(b), the learned master summarised the evidence from Mr Bishop as well as the relevant terms of the sub-contract. He explained that cl 5.12, upon which Diploma Construction had relied, was not applicable to this dispute because that clause was concerned with a situation where concealed work was defective and where defects may not be obvious. But in the case before him, he concluded that any defects were obvious and it could not be reasonably argued cl 5.12 had any application.

35 The learned master then considered the issue arising from the rectification works. The learned master also relied on the evidence from Mr Farrelly and concluded that the rectification costs were $127,389.11 inclusive of GST. He concluded that the offsetting claim is greater than the amount in the statutory demand.[28]

36 In paragraphs which were a dominant focus of the appeal the learned master said the following:

[12] On behalf of the defendant it was submitted the affidavit of Mr Bishop founding the application did not quantify the amount of the rectification works and therefore the subsequent evidence of Mr Farrelly was inadmissible on what is generally referred to as the 'Graywinter principle': see Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452.

[13] In my view that submission is without merit. It is the case that Mr Bishop's affidavit is cryptic. Mr Bishop does not specify how it is the plaintiff could have, on 27 September 2012, required rectification of the works. Further he does not specify the cost of the rectification works. But what is important is Mr Bishop does indicate there is an offsetting claim and he does indicate how in contractual terms that offsetting claim arises. The affidavit of Mr Farrelly fleshes out the claim. But Mr Farrelly is not raising a matter which is new and which was not flagged in the affidavit of Mr Bishop. It is permissible for Mr Farrelly to give evidence and quantify the offsetting claim.

[14] Having reached that point it is only necessary to decide whether or not the offsetting claim is genuine. That is what is required by the terms of the legislation. There is also authority to suggest there is a requirement of good faith in determining the genuineness of an offsetting claim: see Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 [18] (Palmer J). Applying these criteria it is apparent the offsetting claim is genuine and made in good faith. It is unnecessary for me to examine the position in detail. Clearly the defendant does not accept the plaintiff is entitled to make any offsetting claim. But that is not the test. Any dispute between the parties on this issue must be resolved in a different forum.

Grounds 1 and 2: The minimum content of the supporting affidavit

37 As counsel for PG accepted on this appeal, PG's first two grounds raise the same issue. They are concerned with whether Mr Bishop's affidavit was an 'affidavit supporting the application' within the meaning of s 459G(3). If not, then Diploma Construction did not file an affidavit supporting the application within 21 days of the statutory demand and the subsequent quantification evidence from Mr Farrelly was inadmissible to cure this defect.

38 PG submits that Mr Bishop's affidavit was not an 'affidavit supporting the application' because 'Mr Bishop's affidavit says nothing about the quantum of [Diploma Construction's] offsetting claim or the way in which it is calculated. It was silent and bereft of any evidence in that regard and did not enable the Court to determine whether the offsetting claim was equal to or exceeded the amount of the statutory demand'.[29]

39 PG relied upon the decision at first instance of Re Infratel Networks Pty Ltd.[30]

40 Before considering the first instance decision in Re Infratel, two preliminary observations may be made about PG's submission.

41 First, Mr Bishop's affidavit was not 'silent and bereft of evidence' as to the way in which Diploma Construction's offsetting claim was calculated. Relevantly, Mr Bishop's affidavit:

• annexed the relevant contract between the parties;
• annexed contemporaneous communications, with photographs, alleging defective and incomplete work by PG;
• annexed communications dated 27 September 2012 and 2 October 2012, the effect of which (arguably in light of the provisions of the contract) gave Diploma Constructions the right under the contract to have the works remedied and completed at PG's cost;
• in effect, stated that the remedial and other necessary works had been completed and that the costs of them were being collated and that once collated, they would be offset against progress claim No 3.

42 In other words, although the amount of the costs and, therefore, the amount of the offsetting claim was not provided, Mr Bishop's affidavit disclosed the legal basis upon which the offsetting claim was being asserted, and the basis for the calculation of that offsetting claim, being the costs actually incurred in remedying and completing the work.

43 Secondly, it is not correct to suggest that a supporting affidavit under s 459G(3) must be one which enables the court to determine whether the offsetting claim is equal to or exceeds the amount of the statutory demand. There are at least three reasons for this. One is that even if the offsetting claim is less than the amount in the statutory demand, the statutory demand must be set aside if the substantiated amount is less than the statutory minimum: s 459H(3). The second is that even if the statutory demand is not set aside, the court may vary the demand if the substantiated amount is at least as great as the statutory minimum: s 459H(4). The third is that, for reasons which will be developed later, it is, in any event, unnecessary for the initial supporting affidavit itself to contain all the material upon which the quantum of the offsetting claim can be determined.

44 We turn then to the decision on which PG relied: Re Infratel.[31] In that case, Black J said:[32]

There is authority that an offsetting claim will be sufficiently raised by an affidavit filed within the 21-day period required by s 459G of the Corporations Act where that affidavit states that the amount of that claim is greater than the amount of the debt, even if it does not provide further indication of the quantum of that claim, and this will be sufficient to allow further evidence to be led outside the 21-day period to supplement the evidence contained in the initial affidavit: Zenaust Imports Pty Ltd v Alembic Chemicals Works Co Ltd (1998) 28 ACSR 465; Endeavour Film Management Pty Ltd v Fox Studios Australia Pty Ltd [2003] NSWSC 1056 at [10] - [11]. In Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd, Gzell J noted that an initial affidavit which stated that the company had suffered loss due to defective wine and had an offsetting claim but said nothing about the quantum of that claim or whether it exceeded the debt ... did not satisfy the requirement in s 459H(2), which 'requires evidence to be put on within the statutory 21-day period enabling the Court to make a determination of the offsetting claim' and required that some evidence of quantum must be contained in the affidavit to enable the Court to take that course. His Honour there noted that the initial affidavit would be insufficient 'if it does not contain material from which a Court ... can make an estimate of the amount of an offsetting claim', and, while that did not require the party to provide a final proof of those matters, it did require:

'sufficient material indicating the nature of the off-setting claim and the way in which it is calculated to enable the statutory exercise under Corporations Act 2001 (Cth), s 459H(2) to be carried out by the Court.'

45 Black J said that the initial supporting affidavit did not contain either a general statement that the quantum of any offsetting claim exceeded the debt, or any basis for calculation of the amount of the offsetting claim and that it did not satisfy the requirements of s 459G(3) 'since it [did] not allow any assessment of the magnitude of the offsetting claim'.[33]

46 As Black J explained, his decision was partly based upon the earlier decision of Gzell J in Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd.[34] In that extempore decision, Gzell J referred to the decision in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund.[35] Gzell J effectively held that since s 459H(2) requires a calculation to be made about the value of the offsetting claim, this 'requires evidence to be put on within the statutory 21-day period enabling the Court to make a determination of the offsetting total. That means that some evidence of quantum must be contained in the affidavit to enable the Court to take that course'.[36]

47 A second decision upon which Black J relied was Kerslake Superannuation Pty Ltd v C & L Building Pty Ltd.[37] In that case, Barrett J said:[38]

This raises a question about the extent to which it is necessary, in accordance with the Graywinter principle, for the quantum of an offsetting claim to be established by the affidavit filed and served within the 21-day period. I have been taken to the statement in one decided case (Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd ... [28] that may be thought to suggest that a precise quantification is needed at that point. In my view that is not the position. In order to be a supporting affidavit within s 459G, the affidavit must raise grounds. In an offsetting claim case, all that is needed in the initial affidavit is some indication that the offsetting claim is of a magnitude that can sensibly be compared with the amount of the statutory demand. There is room for some measure of uncertainty, but the uncertainty will, of course, work to the detriment of the party seeking to establish the offsetting claim.

48 It may be that, by these remarks, Barrett J was not suggesting that the initial supporting affidavit needed to provide evidence from which a quantification of the offsetting claim could take place. Instead, the remarks might be understood as suggesting that there must be a basis from which the magnitude of the offsetting claim can be compared with the amount of the statutory demand, although that basis might be provided in subsequent evidence.

49 A third decision upon which Black J relied was 185L6 Pty Ltd v Strata Corporation 07176 Inc.[39] In that case, after referring to authorities including Broke Hills Estate Pty Ltd, Blue J held that:[40]

Where the deponent of the original supporting affidavit deposed to quantum exceeding the debt, it was held to be sufficient, and where he did not, it was held to be insufficient, to permit the court to receive a subsequent affidavit on quantum.

50 Black J's decision in Re Infratel is to be read in the context of the particular circumstances of that case. Re Infratel was a case in which the company (Infratel) applied to set aside a statutory demand issued by one of its subcontractors (Gundry's). The initial affidavit in support, filed within the 21 day period specified in s 459G, was sworn by Infratel's solicitor. The background[41] was that Infratel had contracted with a principal (Ericsson) to provide upgrades at various Telstra sites for a project described as the Telstra project. Infratel had also contracted with another company (Nokia) to provide certain works for another project, called the Optus Project. Infratel engaged Gundry's in a sub-contract to carry out rigging works as an aspect of the works to be undertaken on the two projects. The head contracts with Ericsson and Nokia were not in evidence. The affidavit by Infratel's solicitor stated that each of the principals under the head contracts had issued to Infratel a number of 'non-conformance reports' which (it appears) alleged that work done at the sites under the head contracts did not conform with the requirements of the head contracts. The non-conformance reports were not in evidence. There was no evidence as to the scope of the subcontracting work required to be undertaken, and in fact undertaken, at the sites by Gundry's.[42] The solicitor's affidavit stated, in effect, that as a consequence of the non-conformance reports, Infratel had not been paid under the head contract, but there was no documentary evidence to that effect.[43] On the question of an offsetting claim, Infratel relied on the solicitor's affidavit which relevantly stated:[44]

Infratel has been forced to rectify the [non-conformance reports] at its own cost and expense to enable the Sites to be completed and funds released by Ericsson.

51 There was no reference in the solicitor's affidavit to rectification works in relation to the Optus Project.[45]

52 Black J's decision in Re Infratel not to set aside the statutory demand was upheld on appeal.[46] Reasons for judgment in the Court of Appeal were given by Young AJA, with whom Hoeben JA and Ward J agreed. Young AJA said that the 'basal problem' for the appellant in that case was that the 'so called supporting affidavit [was] so bare of detail'.[47] His Honour also referred to a number of the authorities in this area, including the decision of Blue J in in 185L6 Pty Ltd. In relation to that case, Young AJA said:[48]

I do not consider it wise to rely on Blue J's summary as being a comprehensive test. One does not merely check the boxes to see if certain form has been observed, but looks to see whether the affidavit supports the claim by expressly or impliedly identifying the real dispute.

53 Young AJA concluded, relevantly, that whatever test was applied within either the wording of the statute or one of the mainstream authorities, Black J's ruling was unarguably correct.[49]

54 Consistently with the broad approach of Young AJA which focused upon whether the initial supporting affidavit expressly or impliedly identifies the real dispute, there are a number of intermediate appellate court authorities which have assumed, or held, that evidence from which the Court can calculate an offsetting total need not be contained in the initial supporting affidavit on an application brought under s 459G to set aside a statutory demand due to an offsetting claim or genuine dispute.[50]

55 For instance, in the Full Court of the Supreme Court of Western Australia in Royal Premier Pty Ltd v Taleski,[51] Ipp J held that although it was not necessary for evidence as to damages in relation to an offsetting claim to be given in 'meticulous detail', he said that 'there must be at least some material upon which the court can conclude that some damage has been sustained and which will enable the court to make a reasonable assessment as to the amount thereof'. The decision of Ipp J can be understood as involving a concern that the evidence as a whole be sufficient for the court to make an assessment of the offsetting claim. In Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd,[52] Pullin JA referred to Taleski[53] but drew no distinction between the first and second affidavits provided in support of the application.[54] In Equuscorp Pty Ltd v Perpetual Trustees WA Ltd,[55] an offsetting claim allegedly arose under a term (cl 17) of a loan agreement. At the time the statutory demand was served, the offsetting entitlement had not arisen. French, Kiefel and Sundberg JJ said, with reference to the decision of the primary judge:[56]

[A]s at the time of the statutory demand it appears that no off-setting entitlement had arisen under clause 17 of the Loan Agreements. But as his Honour said in his judgment:

'The amount of the offsetting claim, including accrued interest, has to be considered as at the time the Court is determining the application under s 459(G). This follows from the ordinary language of the statute and the use of the present tense. Section 459H(1) speaks of the Court being satisfied that there is a genuine dispute between the company and the creditor. Similarly the definition of "offsetting claim" refers to a genuine claim that the company has against the creditor. Moreover s 459H(4) assumes that the Court may vary the amount in the demand, which necessarily contemplates that the Court may take into account variations in the debt which have occurred since the service of the demand, for example by payment on account.'

His Honour's view is in accord with the ordinary English construction of the relevant provisions of s 459H.

56 These intermediate appellate court authorities are consistent with the proposition that the amount of the offsetting claim for the purposes of s 459H is to be decided as at the date of the hearing of the application to set aside, and not at some earlier time.

57 The question that is directly relevant to the first two grounds of appeal is whether an initial supporting affidavit must contain sufficient evidence to permit the Court to estimate the amount of an offsetting claim for the purposes of s 459H. If, and to the extent that any of the first instance decisions in Re Infratel, Broke Hills Estate Pty Ltd, Kerslake Superannuation Pty Ltd, and 185L6 Pty Ltd suggest that this is required, then with respect they should not be followed on this point. There are three reasons why the initial supporting affidavit under s 459G does not require evidence from which the Court can calculate the substantiated amount of the demand.

58 First, there is nothing express in s 459G that requires that the initial supporting affidavit filed with the application must contain evidence permitting the court to quantify the amount of the offsetting claim. The section only requires that the affidavit be one which is 'supporting the application'. Nor is there any such express requirement in s 459H which, as French, Kiefel and Sundberg JJ observed in Equuscorp, speaks in the present tense and is concerned with the time that the Court is determining the application under s 459G. There is no express provision that an affidavit can only 'support' an application in relation to s 459H if all the requirements of s 459H are met by the 'supporting' affidavit.

59 Secondly, there is no basis in pt 5.4, or s 459H, for an implication that the initial supporting affidavit must contain evidence permitting the court to quantify the amount of the offsetting claim.

60 A reason why an implication should not be made is that s 459G does not require all material to be contained in the initial supporting affidavit. Subsequent affidavit evidence is admissible at the hearing in addition to the initial supporting affidavit. There is no reason for any implication to be made into s 459G to the effect that an initial affidavit can only 'support' an application under s 459G if the initial supporting affidavit contains sufficient information to allow a Court to make an estimate of an offsetting claim. As Newnes JA observed in Commonwealth Bank of Australia v Garuda Aviation Pty Ltd,[57] the reforms which introduced pt 5.4 of the Corporations Act 'were designed to minimise the delay and attendant legal costs which were a common feature of the battle of tactics in insolvency practice under the pre-existing scheme'. This is one reason why some cases have scrutinised the initial affidavit to determine if it truly 'supports' the application. But examples can be given to show that, despite the need for expediency and minimising costs, the intention of Parliament could not be taken to require an initial affidavit to contain evidence to permit the Court to estimate an offsetting claim. One example might be a case of unliquidated damages where sufficient expert evidence to quantify the claim, even on a broad brush basis, could not be obtained within 21 days.

61 Thirdly, as explained above, any implication from s 459H that a supporting affidavit must contain evidence permitting the court to quantify the amount of the offsetting claim is inconsistent with the approach taken to affidavit evidence in s 459G applications in intermediate appellate courts.

62 Further, to the extent that the first instance decisions discussed above suggested or held that an initial supporting affidavit must contain material from which the offsetting claim could be quantified, those decisions were all influenced by the decision of Sundberg J in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund.[58] In that case, his Honour referred to 'minimum requirements' for a supporting affidavit. His Honour said that in an application that alleges a 'genuine dispute' about the existence or amount of a debt (s 459H(1)(a)) the supporting affidavit must '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'.[59]

63 Some decisions, and authors, subsequent to Graywinter spoke of the 'Graywinter principle'.[60] It can be a mark that a principle is opaque when the principle is named after a case. In any event, as Young AJA has observed in Infratel Networks, later cases modified the so-called Graywinter principle.[61] Young AJA described the 'most authoritative' of these cases as the decision of the Full Court of the Supreme Court of Western Australia, in Financial Solutions Australasia Pty Ltd v Predella Pty Ltd.[62] In that case, Parker J said that there was no[63]

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 459G(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.

This passage has been approved in subsequent cases.[64]

64 In summary, as we have mentioned, the focus on the precise terms of the statutory duty makes it clear that although the initial affidavit must 'support' the application, the application is not limited to the initial supporting affidavit. Hence, a Court can consider additional affidavit evidence filed outside the 21 day period in order to supplement the initial supporting affidavit.[65] There is no reason why, in an appropriate case, that additional affidavit evidence cannot supplement the initial supporting affidavit by providing evidence of quantum necessary where the basis of the application is a genuine dispute or offsetting claim under s 459H.

65 For these reasons, the evidence from which the Court must calculate the substantiated amount of a statutory demand, in accordance with s 459H, need not always be contained in the supporting affidavit filed under s 459G.

66 Mr Bishop's affidavit was a sufficient initial supporting affidavit within the meaning of s 459G. Mr Bishop annexed the sub-contract between the parties. And he said that amounts said to be owing under progress claim number 3 were not payable until the rectification costs had been collated and those costs deducted from any amount payable. The later evidence of those rectification costs was admissible.

67 Mr Bishop also raised matters concerning an allegation that there was no 'genuine dispute'. These are considered separately below in relation to the notice of contention and cross-appeal.

Ground 3: Sufficient evidence of an offsetting claim?

68 Ground 3 alleged that the learned master erred in finding that PG's claim was an offsetting claim for the purposes of s 459H because:

(a) there was no evidence before the Court of the rectification work that Diploma Construction required to be undertaken;

(b) there was no evidence before the Court of the rectification work that Diploma Construction instructed to be carried out;

(c) there was no evidence upon which the Court could conclude that the rectification costs claimed by Diploma Construction were costs of rectifying defects alleged by PG;

(d) the insufficiency of evidence in (a) to (c) above did not permit the Court to conclude that the alleged offsetting claim was genuine or advanced in good faith; and

(e) the evidence available to the Court did not support a finding that the alleged offsetting claim was genuine or advanced in good faith.

69 In a passage cited on many occasions[66] in Eyota Pty Ltd v Hanave Pty Ltd,[67] McLelland CJ in Equity said:

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 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 enquiry 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 [Pty Ltd v Commonwealth Bank of Australia [1994] VicRp 61; (1993) 11 ACSR 362, 366 - 367)] Hayne J said ...

'These matters taken in combination, suggest that at least in most cases, it is not expected that the Court will embark upon any extended enquiry 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.'

70 An example from this jurisdiction is Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd.[68] In that case, the applicant had relied upon an affidavit containing only two paragraphs relevant to the dispute, of some complexity, concerning whether the application was entitled to retain the funds paid to it.[69] On appeal, the Full Court of the Supreme Court of Western Australia held that there was enough in the first affidavit to show a genuine dispute, although in the words of Steytler J, the first affidavit 'barely limped over the line in that respect'.[70]

71 As to particulars (a) and (b) above, the evidence in Mr Bishop's initial supporting affidavit of the rectification work that Diploma Construction required to be undertaken, or instructed to be carried out, included the following:

(1) On 17 September 2012, Mr Farrelly at Diploma Construction emailed PG describing extensive damage continuing as a result of PG's internal glazing work at the Hay Street site. Eleven photographs were attached. The email described the defects in each photograph including missing frames, and damage to walls and window sills.[71]

(2) On 27 September 2012, a project manager at Diploma Construction emailed PG saying that five issues required '[PG's] immediate attention or do not comply' in accordance with the sub-contract agreement. The issues were:

(ii) 'H & S issues where framing and plastic has & is falling off and exposed sharp edges where joints do not meet adequately, resulting from poor workmanship';

The letter enclosed thirteen photographs. Diploma Construction referred to the 17 September 2012 email and telephone calls to PG and said 'we confirm that no further action has taken place and therefore forces us to issue this non-conformance notification'. Diploma Construction said that PG was 'required to implement the rectification process forthwith, at no additional cost to Diploma Construction'.[72]

72 As to particular (c), there was evidence upon which the Court could conclude that the rectification costs claimed by Diploma Construction were costs of rectifying defects alleged by PG. That evidence was principally evidence from Mr Farrelly who, as we have said, was the site manager for Diploma Constructions at the Hay Street site. Mr Farrelly explained in his affidavit that where a fact was true to the best of his information and belief, the fact is stated and the source of his information and belief is identified.[73] Mr Farrelly explained that he had asked Mr Bishop to locate the emails and invoices that demonstrated Diploma's rectification costs.[74] He also instructed Diploma Construction's solicitors, and Mr Bishop, to prepare a schedule of those costs.[75] Mr Farrelly then said that the 'costs incurred and paid by Diploma to rectify [PG's] installation of the magnetic double glazing system to the timber windows [as part of the Hay Street Works] ... fall into six categories'.[76] Mr Farrelly then described each of those six categories and annexed the invoices relevant to each category. In his second affidavit, Mr Farrelly said that it was his understanding that all of the costs incurred in rectifying PG's installation had been paid. He confirmed that all those costs, except an administration cost for overheads, had been paid. He said that he had been told that these costs had been paid by the Chief Financial Officer of Diploma Construction.[77]

73 Counsel for PG submitted that Mr Farrelly's evidence was hearsay, and that Mr Farrelly had not given any evidence that the particular invoices were associated with rectification work undertaken. On this appeal, the parties proceeded on the basis, supported by authority, that the proceedings below were interlocutory.[78] That approach is followed at first instance in this jurisdiction.[79] Hearsay evidence is admissible where an affidavit 'is made for the purposes of interlocutory proceedings'.[80] For the reasons above, there was sufficient evidence that supported the conclusion of the learned master that the offsetting claim was genuine and was made in good faith.[81]

74 Counsel for PG also made detailed submissions alleging that the evidence, considered in very close detail, revealed that the claim was not 'genuine' or 'in good faith'. These submissions might be relevant to the merits of the dispute. But they fall short of establishing that the claim is not genuine or was not in good faith. Diploma Construction's evidence as a whole is not equivocal or so lacking in precision or inconsistent with undisputed contemporary documents or otherwise inherently improbable in itself that it could not be said to have sufficient prima facie plausibility as to merit further investigation as to its truth.

75 One example of these submissions by counsel for PG was that particular invoices might not be associated with rectification work. For instance, painting costs were described for the period 26 September 2012 until 5 November 2012.[82] Counsel for PG submitted that this work was unlikely to have started before the 27 September 2012 letter from Diploma Construction. That hypothesis cannot be resolved in favour of PG in an application of this kind.

76 Another example was that counsel for PG said that a certificate of Practical Completion had been issued on 21 September 2012. How, he asked rhetorically, could there be more than $80,000 of rectification work required when practical completion had been certified? However, the certificate of practical completion, by its terms, appeared to envisage that a significant amount of additional work was still required.[83]

77 Another example was that counsel for PG effectively submitted that the quantum of the alleged rectification costs ($80,155.78 plus administration costs) in the context of a total contract sum of $128,000 demonstrated the unlikelihood that these costs were actually incurred in performance of the rectification work. The cogency of that assertion is impossible to assess without a detailed exploration of Diploma Construction's allegations of damage and the repairs allegedly effected in consequence of the alleged defective work. It suffices to say that there is no reason why the cost of rectifying defective work might not be a substantial part, or even exceed, the value of the contract. In Tabcorp Holdings Ltd v Bowen Investments Pty Ltd,[84] for instance, damages of $1.38 million for repairs by a landlord were upheld in circumstances in which the landlord's reversion was unaffected.

78 Counsel for PG also referred to the lack of specificity in the allegations of defects (although he made no submissions concerning the specificity of the photographs). He alleged that the rectification costs had included carpentry work when this was excluded from the sub-contract[85] (although this need not mean that rectification of damage might not require carpentry). He also referred to new allegations said to have been made in Diploma Construction's 27 September 2012 letter.

79 All of these matters would be appropriately raised at a trial of the merits of this dispute. Overall, the evidence of Mr Bishop, although sometimes expressed in broad and general terms, was sufficient to establish an offsetting claim and, together with the evidence of Mr Farrelly was sufficient to allow the Court to make an estimate of the quantum of any offsetting claim. The extent of that quantum is the subject of the fourth ground of appeal. Other grounds of genuine dispute are addressed in relation to the notice of contention and cross-appeal.

Ground 4: Sufficiency of evidence concerning the quantum of the offsetting claim

80 Ground 4 alleges that the Master erred in law in concluding that the offsetting claim was equal to or exceeded the amount of the statutory demand 'as there were no grounds under the sub-contract, or at law, entitling Diploma Construction to offset the unpaid debtors' costs to which it referred.

81 In relation to the content of any evidence concerning the quantification of an offsetting claim, precise quantification is unnecessary.[86] As Pullin JA expressed the point in Diploma Construction, the evidence need only be sufficient for the court to make 'an estimate of the amount of an offsetting claim' in monetary terms.[87]

82 Mr Farrelly's 17 January 2013 affidavit quantified Diploma Construction's rectification costs, to which reference had been made in Mr Bishop's affidavit, at $88,171.36 (including GST). This included an amount of $4,198.64 for 'overheads for the supervision and administration of the rectifications'.[88] This falls short of the amount in the statutory demand. The figure of $127,389.11 upon which the learned master had relied as an offsetting claim by Diploma Construction was the combination of two matters: (1) the rectification costs, and (2) costs of PG's unpaid debtors totalling $39,217.75 including GST.

83 In submissions by counsel for Diploma Construction, the relevance of PG's unpaid debtors was said to be as evidence concerning the lack of entitlement by PG to the amounts claimed in its progress claim number 3. In other words, if PG was not going to pay its contractors for work that they did on the Hay Street site on the basis that this work was defective, then on what basis could PG claim for the value of that work in a progress claim from Diploma Construction? On 20 November 2012, PG had acknowledged that they were disputing invoices provided by their contractors whose works had been rejected. PG said that '[t]hese people are not skilled work[ers] as they claimed'.[89] Counsel for PG also pointed to the affidavit evidence from one of the two directors of PG, Mr Rethnam. In his affidavit, Mr Rethnam describes the dispute that PG had with its contractors in relation to the work on site and said that there were 'certainly no ongoing demands for payment'.[90]

84 Counsel for Diploma Construction conceded on this appeal that this submission concerning the amount of money arising from unpaid debtors was a submission concerning a 'genuine dispute' (s 459H(1)(a)) about progress claim number 3, rather than an 'offsetting claim' (s 459H(1)(b)). He accepted that the obstacle faced by his submission on this point was the conclusion of the learned master that there was no genuine dispute because of Diploma Construction's failure to comply with the contractual mechanism in relation to progress payments in cl 5.4. For this reason, the learned master erred in concluding that the offsetting claim was equal to or exceeded the amount of the statutory demand. It is necessary to consider the cross-appeal and notice of contention in order to determine whether there was 'either or both' (s 459H(1)) of a genuine dispute or offsetting claim with a substantiated amount that equals or exceeds the amount of the statutory demand (less the prescribed amount of $2,000).

85 The issues raised by the notice of contention and cross-appeal overlap and were, conveniently, dealt with together in oral submissions. All the issues concerned the same essential issue. This was whether it was established before the learned master that there was a 'genuine dispute' between the parties 'about the existence or amount of a debt to which the demand relates' within s 459H(1)(a) of the Corporations Act. The learned master had found only that Diploma Construction had an 'offsetting claim' within s 459H(1)(b).

86 The first two bases upon which it was said that there was a genuine dispute concerned whether progress claim number 3 was payable (1) in circumstances in which there was absent from progress payment number 3 any accompanying statutory declaration, and (2) in the absence of itemisation of full detail of a (monthly) progress claim.

87 It was apparent from Mr Bishop's affidavit that Diploma Construction contended that the 'terms of the [s]ubcontract do not result in an automatic entitlement for [PG] to be paid the full amount of any progress claims'.[91] In support of this, specific reference was made to cl 5.1 (variations), cl 5.4 (progress claims), and cl 5.12 (defective work). As to cl 5.4, he set out only sub-clauses (a) to (e). These raise matters including the provisional nature of any progress claim assessment, as well as the requirement for a statutory declaration and itemisation. Mr Bishop also attached progress claim number 3 to his affidavit. On its face, that progress claim (1) was for almost the entire sub-contract sum, (2) was not itemised, and (3) was not accompanied by a statutory declaration.

88 It will not ordinarily be the case that the Court will engage in construction of a contract to determine whether there is a genuine dispute.[92] Consistently with this general approach, counsel on this appeal did not seek to develop detailed arguments concerning the proper construction of the sub-contract.

89 It is sufficient to observe that there is a real issue concerning whether a progress payment claim that does not comply with cl 5.4(b) ('must be submitted with the ... statutory declaration') or cl 5.4(c) ('must fully detail all work carried out') can create a debt that is due and payable.

90 Counsel for PG submitted that the form of a statutory declaration contained in the sub-contract to which reference was made in cl 5.4(b) did not require the statutory declaration to be provided with a progress payment claim because the form provided as follows:

All employees, sub-contractors and suppliers have been paid all moneys properly due and payable to them at the date of this Progress Claim in respect of work under this contract.

This declaration does not apply where there is defective work, disputed variations or where the sub-contractor/supplier has not properly fulfilled their contract obligations.

91 Counsel for PG submitted that this wording effectively meant that a progress claim could be submitted without a statutory declaration where PG was in a dispute with its sub-contractors or suppliers who had not fulfilled their obligations. It is, however, unclear whether the effect of the words of the second paragraph is to dispense with the need for a statutory declaration altogether, or whether those words have the effect that the statutory declaration in the previous paragraph (which, on one view, is still required for a progress claim) does not extend in so far as sub-contractors or suppliers have not been paid by PG due to their defective work or disputed variations.

92 It suffices to say that there is a genuine dispute on this point and it is not necessary to delve into the details of construction in an attempt to resolve this dispute.

93 There is also a genuine dispute concerning whether cl 5.4(c) ('must fully detail all work carried out') is satisfied. The progress claim number 3 was very brief. It did not appear to be a 'monthly' progress claim. It was for most of the contract sum. In the column for 'item number' it contained only the number 1. It contrasts with the considerable detail contained, for example, in the 'sub-contract price breakdown' in cl 6.0 of the sub-contract which itemises 120 different items. That price breakdown provides that it 'will be used for tender evaluation and for evaluating progress claims'.[93]

94 These two grounds both establish that there is a genuine dispute concerning the whole of the progress claim number 3 and therefore a genuine dispute concerning the whole of the amount of the existence of the debt asserted in the statutory demand. The consequence of this is that the learned master was required to set aside the statutory demand: s 459H(3) of the Corporations Act.

95 It is also alleged in the cross-appeal that the learned master erred in concluding that cl 5.4 of the sub-contract established a complete regime so that (if a progress claim is properly submitted) a progress payment invoice becomes due and payable if a cl 5.4(e) notice is not given by Diploma Construction.

96 Although a monthly progress claim has (by cl 5.4(b) and Item 17) a requirement of payment 45 days from the 20th of the month in which it is submitted, that requirement is expressly subject to cl 5.4(e) which requires Diploma Construction to provide PG with written notice of either the value agreed or its assessment of the progress claim and any deductions or set offs, together with payment of such amount within the time referred to in Item 17 (45 days). Diploma Construction contended that there was no express term dealing with the circumstance where Diploma Construction does not provide PG with written notice as required. In particular, Diploma Construction contended that it is significant that unlike (it says) 'many standard construction contracts'[94] the contract here contains no express provision to the effect that in the absence of any response to the submission of a progress claim, the whole of the amount claimed in the progress claim falls due for payment.

97 In considering whether an implication should be made that cl 5.4(b) requires payment in the absence of a cl 5.4(e) notice, Diploma Construction also contends that it is relevant that the sub-contract contains a dispute resolution regime (cl 13). One possibility, according to Diploma Construction, is that the failure to provide a cl 5.4(e) notice merely constitutes a breach of contract.

98 Although Diploma Construction did not provide the court with any 'standard construction contracts' to which it had referred in its submissions, it may nevertheless be noted that cl 5.4(e) may be compared, for example, with the provision in relation to the payment of progress claims considered by this Court in Devaugh Pty Ltd v Lamac Developments Pty Ltd.[95]

99 The contract in question must, of course, be construed as a whole and, as we have observed, ordinarily the court will not engage in the construction of a contract to determine whether there is a genuine dispute. It is unnecessary to decide this cross-appeal point concerning whether cl 5.4 is a complete regime in light of the conclusions reached earlier that there is a genuine dispute about whether progress claim number 3 created a debt that was due and payable. Nevertheless, it suffices to say that although the learned master's decision may well be found correct at any trial, the point of construction raised by Diploma Construction is sufficiently arguable to allow the conclusion that there is a genuine dispute as to the proper construction of cl 5.4.

Conclusion and leave to appeal and cross-appeal

100 There remains the question whether leave to appeal should be granted. The parties proceeded on the basis that leave was required. In light of the conclusions we have reached, the overall result is that the master's order would not be overturned whether or not leave is granted. Hence, in the absence of argument on the point, it is unnecessary and undesirable to decide whether, for appeal purposes, the master's order to set aside the statutory demand is an 'interlocutory order' for the purposes of s 60(1)(e) of the Supreme Court Act 1935 (WA).[96] On the parties' assumption that leave was required, for three reasons we consider that leave should be refused.

101 First, although PG has demonstrated legal error in relation to one ground of the appeal, our conclusion in relation to the legal issues raised by the notice of contention and cross-appeal shows that the overall result was correct.

102 Secondly, and in any event, even if PG had been wholly successful on this appeal, counsel for PG made only one submission concerning the prejudice to PG if leave were not granted. He submitted that the effect of a refusal of leave would be that the presumption of insolvency that would then arise would mean that PG was likely to get paid. But there was no evidence of this likelihood. PG filed no affidavit evidence concerning any prejudice it would face if leave were not granted or any likelihood that it would be paid, rather than having to take the step of winding up Diploma Construction and proving its debt in the insolvency.

103 Thirdly, when the dispute emerged between the parties PG could have sought to invoke the dispute resolution clause in the sub-contract. If it wished to bring legal action in court it might have issued a writ and statement of claim and sought summary judgment in the District Court. Instead, although the correspondence between the parties in September, October and November 2012 made it clear that PG's progress claim was disputed, PG chose to bring a statutory demand on 5 December 2012, perhaps as an attempt for rapid debt enforcement in the anticipation that it would not be contested within the subsequent 21 day period. If that were the reason why the statutory demand was brought then, in hindsight, this was a poor decision. Although the learned master dealt with the application efficiently and with considerable expedition, volumes of affidavit evidence were filed on the application. PG was deregistered when it commenced this appeal[97] and then subsequently re-registered. Security for costs was sought, contested, and ordered.[98] More than a year and a half after the issue of the statutory demand the parties have not yet resolved their dispute.

104 Counsel for Diploma Construction accepted that if leave to appeal were refused then no orders needed to be made in relation to the issues in the notice of contention and cross-appeal.

[1] Affidavit of Mr Bishop, 20 December 2012, attachment KB6 (GB 71).

[2] Affidavit of Mr Bishop, 20 December 2012, attachment KB11 (GB 99).

[3] Affidavit of Mr Farrelly, 17 January 2013, attachment JF13 (GB 206).

[4] Affidavit of Mr Farrelly, 17 January 2013, attachment JF1 (GB 121).

[5] Affidavit of Mr Farrelly, 17 January 2013, [9] (GB 109).

[6] Affidavit of Mr Rethnam, 18 February 2013, [82] (GB 232).

[7] Affidavit of Mr Bishop, 20 December 2012, attachment KB1 (GB 11).

[8] Affidavit of Mr Bishop, 20 December 2012, [6] (GB 3).

[9] Affidavit of Mr Bishop, 20 December 2012, [13] (GB 4).

[10] Affidavit of Mr Bishop, 20 December 2012, [11(b)] (GB 4).

[11] Affidavit of Mr Bishop, 20 December 2012, [11(c)] (GB 5).

[12] Affidavit of Mr Bishop, 20 December 2012, [14], attachment KB3 (GB 6, 53 - 84).

[13] Affidavit of Mr Bishop, 20 December 2012, [15(b)], attachment KB5 (GB 6, 69).

[14] Affidavit of Mr Bishop, 20 December 2012, [16] (GB 6 - 7).

[15] Affidavit of Mr Bishop, 20 December 2012, attachment KB6 (GB 71).

[16] Affidavit of Mr Bishop, 20 December 2012, [17] (GB 7).

[17] Affidavit of Mr Bishop, 20 December 2012, [18] - [19], attachments KB8 and KB9 (GB 87 - 92).

[18] Affidavit of Mr Bishop, 20 December 2012, attachment KB11 (GB ).

[19] Affidavit of Mr Bishop, 20 December 2012, [20] (GB 7 - 8).

[20] Affidavit of Mr Bishop, 20 December 2012, [21] (GB 8).

[21] Affidavit of Mr Farrelly, 17 January 2013, [6] (GB 108).

[22] Affidavit of Mr Farrelly, 17 January 2013, [11] (GB 110).

[23] Affidavit of Mr Farrelly, 17 January 2013, [18] (GB 111).

[24] Affidavit of Mr Farrelly, 4 February 2013, [7] - [8] (GB 219).

[25] Affidavit of Mr Bishop, 20 December 2012, attachment KB2 (GB 13 - 51).

[26] David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265, 270 (Gummow J; Brennan CJ, Dawson, Gaudron & McHugh JJ agreeing).

[27] Diploma Construction (WA) Pty Ltd v Pravenkav Group Pty Ltd [2013] WASC 138 [6].

[28] Diploma Construction (WA) Pty Ltd v Pravenkav Group Pty Ltd [2013] WASC 138 [11].

[30] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170.

[31] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170.

[32] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 178 [29].

[33] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 179 [32].

[34] Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638. See also National Telecoms Group Ltd v Bulldogs Rugby League Club Ltd [2003] NSWSC 654 [8] (Gzell J).

[35] Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452.

[36] Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638 [26].

[37] Kerslake Superannuation Pty Ltd v C & L Building Pty Ltd [2010] NSWSC 424.

[38] Kerslake Superannuation Pty Ltd v C & L Building Pty Ltd [2010] NSWSC 424 [10].

[39] 185L6 Pty Ltd v Strata Corporation 07176 Inc [2011] SASC 164.

[40] 185L6 Pty Ltd v Strata Corporation 07176 Inc [2011] SASC 164 [25].

[41] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 172 [4], 174 [14].

[42] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 172 - 173 [8] - [9].

[43] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 173 [10].

[44] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 178 [28].

[45] Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 174 [14], 179 [33].

[46] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372.

[47] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372, 378 [33].

[48] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372, 378 [40].

[49] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372, 378 [42].

[50] See also Sewmail (Aust) Pty Ltd v Booby Traps Pty Ltd (1997) 23 ACSR 339, 342 - 343 (Dubney J); Finance & Equity Pty Ltd v Leveraged Equities Pty Ltd [2007] NSWSC 886 [18] (Hammerschlag J).

[51] Royal Premier Pty Ltd v Taleski [2001] WASCA 48 [57].

[52] Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91.

[53] Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91 [90] (Pullin JA; Newnes & Murphy JJA agreeing).

[54] Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91 [29] - [36] (Pullin JA; Newnes & Murphy JJA agreeing). See also 20*20 Pty Ltd v D&G Developments Pty Ltd [2009] WASC 343 [12] - [17] (Murphy J); Zenaust Imports Pty Ltd v Alembic Chemicals Works Co Ltd (1998) 28 ACSR 465, 469 - 470 (Santow J).

[55] Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 1366; (1997) 25 ACSR 675.

[56] Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 1366; (1997) 25 ACSR 675, 697 (French, Kiefel & Sundberg JJ), affirming Equuscorp Pty Ltd v Perpetual Trustees WA Ltd [1997] FCA 468; (1997) 24 ACSR 194, 204 (Heerey J).

[57] Commonwealth Bank of Australia v Garuda Aviation Pty Ltd [2013] WASCA 61; (2013) 45 WAR 92, 96 - 97 [23] (Newnes JA; McLure P & Pullin JA agreeing). See also Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661, 674 (Spigelman CJ; Handley & Giles JJA agreeing).

[58] Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452.

[59] Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452, 459.

[60] See, eg, Assaf F, Statutory Demands and Winding Up in Insolvency (2012) 308 [6.31].

[61] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372, 377 [28] (Young AJA; Hoeben JA & Ward J agreeing).

[62] Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306.

[63] Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306, 316 - 317 [34] (Parker J; Anderson & Scott JJ agreeing).

[64] Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103; (2007) 61 ACSR 321, 327 [33] (White J); Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344 [44] (the Court); Touma Family Super Fund Pty Ltd v McNiece [2013] NSWSC 752 [39] (Young AJ).

[65] Financial Solutions v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306, 314 [20] (Parker J; Anderson & Scott JJ agreeing); Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344 [43] (the Court).

[66] For instance, Britten-Norman Pty Ltd v Analysis & Technology Australia Pty Ltd [2013] NSWCA 344 [46] (the Court); First Equilibrium Pty Ltd v Bluestone Property Services Pty Ltd (in liq) [2013] FCAFC 108 [21] (the Court); Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85; (2009) 71 ACSR 602, 604 [4] (Martin CJ; Owen & Miller JJA agreeing); TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70; (2008) 66 ACSR 67, 78 [64] (Dodds-Streeton JA; Neave & Kellam JJA agreeing); Financial Solutions Australasia Pty Ltd v Predella Pty Ltd [2002] WASCA 51; (2002) 26 WAR 306, 314 [22] (Parker J; Anderson & Scott JJ agreeing); Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360 [18] (Wallwork J; Steytler J & Pidgeon AUJ agreeing); Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 [11].

[67] Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACLC 669, 671; (1994) 12 ACSR 785, 787.

[68] Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd [2001] WASC 76.

[69] Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd [2001] WASC 76 [3] (Sanderson M).

[70] Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360 [34].

[71] Affidavit of Mr Bishop, 20 December 2012, attachment KB3 (GB 53).

[72] Affidavit of Mr Bishop, 20 December 2012, attachment KB6 (GB 71).

[73] Affidavit of Mr Farrelly, 17 January 2013, [4] (GB 108).

[74] Affidavit of Mr Farrelly, 17 January 2013, [20(a)] (GB 112).

[75] Affidavit of Mr Farrelly, 17 January 2013, [20(c)] (GB 112).

[76] Affidavit of Mr Farrelly, 17 January 2013, [21] (GB 112).

[77] Affidavit of Mr Farrelly, 4 February 2013, [7] - [8] (GB 219).

[78] Mibor Investments v Commonwealth Bank of Australia [1994] 2 VR 290, 296 (Hayne J); Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2007] VSCA 121; (2007) 63 ACSR 300, 303 [7] - [8] (Maxwell P & Neave JA), 321 [80] (Chernov JA), 332 [112] (Nettle JA), 336 [126] (Ashley JA); Hardel Pty Ltd v Burrell & Family Pty Ltd [2009] SASC 77; (2009) 103 SASR 408, 422 - 423 [39] - [41] (Kourakis J; Nyland & David JJ agreeing). But compare A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 13 ACLC 896; Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59 [7] (Kennedy J; Ipp J agreeing), [57] (Heenan J); Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 [8] (Templeman J).

[79] ORH Contracting Pty Ltd v CGS Solutions Pty Ltd [2009] WASC 273; (2009) 74 ACSR 185, 189 [20] (Sanderson M).

[80] Rules of the Supreme Court 1971 (WA), O 37 r 6(2)(c).

[81] Diploma Construction (WA) Pty Ltd v Pravenkav Group Pty Ltd [2013] WASC 138 [14].

[82] Affidavit of Mr Farrelly, 17 January 2013, attachment JF3 (GB 127).

[84] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272.

[85] Affidavit of Mr Bishop, 20 December 2012, attachment KB2 (GB 17).

[86] Kerslake Superannuation Pty Ltd v C & L Building Pty Ltd [2010] NSWSC 424 [10] (Barrett J); Re Infratel Networks Pty Ltd [2012] NSWSC 943; (2012) 91 ACSR 170, 179 [32].

[87] Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91 [78] (Pullin JA; Newnes & Murphy JJA agreeing); No 96 Factory Bargains Pty Ltd v Kershel Pty Ltd [2003] NSWSC 146 [27] (Barrett J).

[88] Affidavit of Mr Farrelly, 17 January 2013, [22] (GB 114).

[89] Affidavit of Mr Farrelly, 17 January 2013, attachment JF13 (GB 101).

[90] Affidavit of Mr Rethnam, 18 February 2013, [66] (GB 230).

[91] Affidavit of Mr Bishop, 20 December 2012, [13] (GB 6).

[92] Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd [2012] NSWCA 365; (2012) 297 ALR 372, 379 [46] (Young AJA; Hoeben JA & Ward J agreeing).

[93] Affidavit of Mr Bishop, 20 December 2012, attachment KB2 (GB 21 - 23).

[95] Devaugh Pty Ltd v Lamac Developments Pty Ltd [1999] WASCA 280 [23], [144].

[96] See, for example, the discussion in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2007] VSCA 121; (2007) 63 ACSR 300, 303 [7] - [8] (Maxwell P & Neave JA), 321 [80] (Chernov JA), 332 [112] (Nettle JA), 336 [126] (Ashley JA), and compare Hardel Pty Ltd v Burrell & Family Pty Ltd [2009] SASC 77; (2009) 103 SASR 408, 422 - 423 [39] - [41] (Kourakis J; Nyland & David JJ agreeing).

[97] See Pravenkav Group Pty Ltd v Diploma Construction (WA) Pty Ltd [2013] WASCA 271.

[98] Pravenkav Group Pty Ltd v Diploma Construction (WA) Pty Ltd [No 2] [2014] WASCA 106.