Silcocks Road Estate Pty Ltd v Pat Delaney Investments Pty Ltd

Federal Court of Australia|2022-08-19|Before: Mr J, Moshinsky J

The plaintiff's application for review of the decision of the Judicial Registrar made on 20 July 2022 (being the application contained in paragraph 2 of the plaintiff's interlocutory application filed on 26 July 2022) be dismissed.
The plaintiff pay the defendant's costs of the application for review (including the costs of the plaintiff's interlocutory application filed on 26 July 2022 and the costs reserved on 26 July 2022). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This is an application for review of a decision of a Judicial Registrar made on 20 July 2022. 2 The proceeding was commenced on 31 March 2022, by the plaintiff, Silcocks Road Estate Pty Ltd (Silcocks) filing an originating process seeking an order that a creditor's statutory demand served by the defendant, Pat Delaney Investments Pty Ltd (PDI), dated 5 March 2022 (the Demand) be set aside. 3 In his decision of 20 July 2022, the Judicial Registrar dismissed Silcocks's application to set aside the Demand and ordered Silcocks to pay PDI's costs of the proceeding. 4 Silcocks has applied for review of the Judicial Registrar's decision. The review is conducted as a hearing de novo. 5 The Demand describes the debt as being: funds loaned in the amount of $2.2 million pursuant to a loan agreement between PDI (as lender) and Silcocks (as borrower) dated 13 May 2021; interest on the loan in the amount of $471,342.47 (calculated to 13 February 2022); and further interest on the loan in the amount of $34,356.18 (calculated to 4 March 2022). The total amount is $2,705,698.65. A copy of the loan agreement is annexed to the Demand. 6 Silcocks contends that there is a genuine dispute between Silcocks and PDI about the existence or amount of a debt to which the Demand relates (see s 459H of the Corporations Act 2001 (Cth)). Silcocks's principal contention is that there has been a "forgery or falsification" of the loan agreement underlying the Demand. Silcocks contends that the loan agreement annexed to the Demand is different from the loan agreement it executed. It submits that the loan agreement it executed did not include a clause 1.3, while the loan agreement annexed to the Demand does include a clause 1.3. 7 Clause 1.3 of the loan agreement annexed to the Demand is headed "GST Refund" and provides that the borrower (Silcocks) must pay to the lender (PDI) the GST refund on its acquisition of the property at Lots 1 and F Silcocks Road, Churchill (the Silcocks Road Property) within seven days of receipt of the refund from the Australian Taxation Office in reduction of the principal sum. 8 Silcocks contends that, in the circumstances, there is a genuine dispute as to whether Silcocks is indebted to PDI under the loan agreement relied on to support the Demand. 9 Silcocks also contends that there is "some other reason" why the Demand should be set aside, namely that the Demand was issued for the purpose of commercial leverage. 10 For the reasons that follow, I am not satisfied that there is a genuine dispute between Silcocks and PDI about the existence or amount of a debt to which the Demand relates. I am also not satisfied that there is "some other reason" why the Demand should be set aside. Accordingly, the application for review of the decision of the Judicial Registrar is to be dismissed.

The originating process 11 Silcocks's originating process states that its application is made under ss 459G, 459H and 459J of the Corporations Act. 12 Insofar as the originating process seeks a declaration that the Demand was not properly served on Silcocks, this is not pressed. 13 Further, insofar as the originating process relies on an offsetting claim within the meaning of s 459H(1)(b), this is not pressed.

Material before the Court 14 Silcocks relies on: (a) three affidavits of Tanya Graham, the sole director of Silcocks, dated 31 March 2022, 21 June 2022 and 5 July 2022; and (b) an affidavit of John Graham, an officer of Silcocks (and the father of Ms Graham), dated 5 July 2022. 15 PDI relies on: (a) an affidavit of Grant Darling, the principal solicitor of MW Law, the solicitors acting for PDI, dated 27 April 2022; (b) two affidavits of Christopher Mayne Young, the principal solicitor of Chris Young Legal, the solicitors who acted for both parties in the preparation of the loan agreement, dated 28 April 2022 and 20 June 2022; (c) an affidavit of Joseph Lidonnici, of Coghlans Accountants, the accountants who act for PDI, dated 28 April 2022; and (d) an affidavit of Patrick Delaney, the sole director of PDI, dated 12 July 2022.

Applicable principles 16 Section 459G(1) provides that a company may apply to the Court for an order setting aside a statutory demand served on the company. 17 Section 459H(1) provides that the section applies where, on an application under s 459G, the Court is satisfied of either or both of the following: (a) that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates; (b) that the company has an offsetting claim. Section 459H(2) provides for the calculation of the substantiated amount of the demand. If the substantiated amount is less than the statutory minimum, the Court must set aside the demand: s 459H(3). 18 Section 459J(1) provides that, on an application under s 459G, the Court may set aside the demand if it is satisfied that: (a) because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or (b) there is some other reason why the demand should be set aside. 19 The applicable principles in relation to s 459H(1)(a) were summarised by Gleeson J in Zyber Holdings Limited v Bakos, in the matter of Zyber Holdings Limited [2020] FCA 387 at [24]-[28]. Referring to the test in s 459H(1)(a), her Honour stated: 24 That test has been variously formulated as requiring that the dispute is not "plainly vexatious or frivolous" or "may have some substance" or involves "a plausible contention requiring investigation" and is similar to that which would apply in an application for an interlocutory injunction or a summary judgment: In the matter of UGL Process Solutions Pty Ltd [2012] NSWSC 1256 at [6]. 25 In Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 at 464, the Full Court held that a "genuine dispute" must be bona fide and truly exist in fact, and the grounds for that dispute must be real and not spurious, hypothetical, illusory or misconceived. 26 In CGI Information Systems v APRA Consulting Pty Ltd [2003] NSWSC 728 at [16], Barrett J explained: [T]he task faced by the company challenging a statutory demand on the genuine dispute grounds is by no means at all a difficult or demanding one. The company will fail in that task only if it is found, upon the hearing of its s 459G application, that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The Court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that on rational grounds indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger. 27 In TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70 at [71], Dodds-Streeton JA observed that a company which seeks to establish a genuine dispute (or offsetting claim): ... is required to evidence the assertions relevant to the alleged dispute or off-setting claim only to the extent necessary for that primary task. The dispute or off-setting claim should have a sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. ... [I]t is not necessary for the company to advance, at this stage, a fully evidenced claim. Something "between mere assertion and the proof that would be necessary in a court of law" may suffice. 28 In Re Country Spring Water Co Pty Ltd [2013] NSWSC 1660 at [18], Black J observed that a genuine dispute would not arise in respect of the payment of the purchase price due under a sale contract unless some legal basis were articulated on which the alleged matters "invalidated any obligation of the purchaser to pay the balance due under the contract".

The evidence 20 Ms Graham (who is the sole director of Silcocks) states in her first affidavit that there is a dispute about whether the loan agreement relied upon by PDI in support of the Demand is the same version of the loan agreement that was executed by Silcocks. She states that Silcocks contends that "the version of the Loan Agreement being relied upon by [PDI] was never executed by [Silcocks]". It is convenient to note at this point that Ms Graham does not dispute that Silcocks executed a version of a loan agreement; her contention is that the version Silcocks executed was different from the version annexed to the Demand. 21 Ms Graham states in her first affidavit that, in or around December 2020, her father (John Graham), Ms Graham and corporate entities associated with them engaged the services of Chris Young of Chris Young Legal to assist them with the purchase of properties and in relation to certain loans to purchase those properties. The loan money was to be advanced by PDI. She states that, throughout the relevant period, Chris Young Legal also acted for PDI in relation to the associated loans. She states that Chris Young Legal was responsible for the preparation of the relevant loan and security documents on behalf of PDI. She states that Chris Young Legal asked her to engage a separate lawyer, William R Holloway, to sign a certificate attesting to Mr Holloway having given her advice in relation to the loan agreements. 22 Ms Graham gives the following evidence in her first affidavit: 23. On 12 May 2021, I along with my father and Mr William Holloway attended at the office of Chris Young Legal with a view to executing a loan agreement between the Plaintiff and the Defendant associated with the purchase of Lot 1 and Lot F at Silcocks Road, Churchill, Victoria (Silcock Road Property). This is the loan agreement that is the subject of the Statutory Demand. 24. At the time of meeting with Mr Young on 12 May 2021, Mr Young and I had a conversation during which words to the following effect were spoken: I said: "Is there anything in particular I should know about this agreement?" Mr Young said: "It's the same as the Crinigan Road loan agreement."

When Mr Young was referring to the "Crinigan Road loan agreement" during the above conversation, he was referring to the agreement referred to in paragraph 14 above. 26. I then proceeded to execute the agreement. Mr Holloway and my father witnessed the execution of this agreement. As I was signing the document, Mr Young said to me words to the following effect: "You don't need to date the document because Pat Delaney needs to sign it first. After he signs it, I will send it to you for your records." 27. I then left the office of Chris Young Legal with my father and Mr Holloway. I did not receive a copy of the signed Loan Agreement until around 1 June 2021. A copy of the Loan Agreement that is being relied upon by the Defendant is at pages 37 to 45 of Exhibit TG-1. This is the same agreement that has been annexed to the Statutory Demand. 28. Upon examining the copy of the signed Loan Agreement received from Mr Young in June 2021, I noted that clause 1.3 "GST Refund" on page 2 had been added to the Loan Agreement. This clause did not exist on the version of the loan agreement that I signed on 12 May 2021. An unsigned copy of the Loan Agreement that I did sign on 12 May 2021 is at pages 46 to 54 of Exhibit TG-1. 29. I also subsequently discovered that the Defendant had already signed the loan agreement prior to 12 May 2021 (on 10 May 2021). 30. I would not have agreed to sign the loan agreement on 12 May 2021 had I known that it included an onerous clause (clause 1.3) which required the Plaintiff to pay the GST refund it would receive on its purchase of the Silcock Road Property to the Defendant. 31. I believe that clause 1.3 was added to the loan agreement after I signed the document and as such the loan agreement has been tampered with, either by replacing the page in a previous agreement, amending the page and replacing it, or through other means. The Defendant may have assisted with, caused or instructed Chris Young Legal to enable this to occur. If this is correct, this may mean that the Loan Agreement was induced by fraud or by means of a fraudulent misrepresentation which could disaffirm or otherwise render the entire Loan Agreement void and unenforceable. 23 I note that Ms Graham refers in paragraph 26 to Mr Holloway and her father witnessing the execution of the agreement. Insofar as this suggests that they formally witnessed the agreement by signing the agreement as witnesses, it does not appear to be correct. The execution clause in the loan agreement (whether the version annexed to the Demand or the version Ms Graham says she signed) does not make provision for witnesses. 24 Exhibit TG-1 to Ms Graham's first affidavit includes two versions of the loan agreement: (a) an executed version that appears to be the same as that annexed to the Demand (at pp 37-45); and (b) an unexecuted version in the form that Ms Graham says she signed (at pp 46-54). 25 In relation to the first version of the loan agreement (at pages 37-45 of Exhibit TG-1), I note the following. This version is dated 13 May 2021 and executed by both PDI (by its sole director and sole secretary, Mr Delaney) and by Silcocks (by its sole director and sole secretary, Ms Graham). The document was executed as a deed. The signatures are not witnessed. Clause 1 of the agreement deals with definitions and interpretation. The next clause, also numbered clause 1, deals with the advance and repayment. It is in the following terms:
1. ADVANCE AND REPAYMENT 1.1 Repayment The Borrower must repay to the Lender the Principal Sum (less the amount paid pursuant to Clause 1.3) together with accrued interest and all other moneys payable under this Agreement on the Repayment Date set out in Item 5 of the Schedule 1.2 Voluntary Repayment to Borrower The Borrower may at any time after 1 month from the Commencement Date and after giving 1 month's written notice to the Lender, repay the whole of the Principal Sum, and all other moneys payable under this Agreement. 1.3 GST Refund The Borrower must pay to the Lender the GST Refund on its acquisition of the property at Lots 1 & F Silcocks Road, Churchill within 7 days of receipt of same from the Australian Taxation office in reduction of the Principal Sum. 26 Clause 2 deals with interest. Clause 3 relates to default. Clause 4 deals with costs and duties. Clause 5 concerns assignment. Clause 6 is a notice provision. Clause 7 deals with miscellaneous matters (including severance). The Schedule contains a series of items as follows: (a) Item 1 - the principal sum: $2.2 million; (b) Item 2: (i) the lower interest rate: 25% per annum; and (ii) the higher interest rate: 30% per annum; (c) Item 3 - the commencement date: the date upon which the principal sum, or any part of it, is advanced to the borrower by the lender; (d) Item 4 - the interest payment date: monthly in arrears from the commencement date; and (e) Item 5 - the repayment date: two months from the commencement date. 27 In relation to the second version of the loan agreement (at pages 46-54 of Exhibit TG-1), I note the following. This version of the loan agreement is not dated or executed. It appears to contain the same text as the loan agreement described above, save that it does not include clause 1.3 and items 2 and 5 of the Schedule have not been completed. Clauses 1.1 and 1.2 are in the same form as quoted above (including the reference, in clause 1.1, to clause 1.3). Given that items 2 and 5 of the Schedule have not been completed in this version of the loan agreement, I do not accept Ms Graham's evidence (at paragraph 28 of her first affidavit, quoted above) that this is an unsigned copy of the loan agreement that she signed on 12 May 2021. It is most unlikely that she signed a version of the loan agreement in which two items in the Schedule had not been completed. 28 Ms Graham states in her first affidavit that, on 14 May 2021, two days after she executed the loan agreement as described earlier in her affidavit, the sale of the Silcocks Road Property was completed via the electronic property settlement platform, PEXA. 29 At paragraphs 37 to 40 of her first affidavit, Ms Graham gives evidence about correspondence she received on 14 May 2021 from Chris Young Legal in relation to the completion of the purchase, including that the following amounts that had been deducted upon completion in relation to Lot F: (a) an amount of $78,650 had been paid in respect of stamp duty; (b) an amount of $4,040.59 had been paid to Chris Young Legal, for a description of "this file"; (c) an amount of $21,947.75 had been paid to Chris Young Legal, for a description of "loan file"; and (d) an amount of $18,150 had been paid to Coghlans Accountants as a "50% share of Establishment Fee". 30 In relation to Lot 1, an amount of $50,050 had been paid in respect of stamp duty. 31 Ms Graham gives evidence that she did not give informed consent to Chris Young Legal to apply the funds in the manner set out above. 32 Ms Graham gives evidence at paragraphs 41 to 46 of her first affidavit about issues relating to stamp duty and issues relating to payments to Chris Young Legal and Coghlans Accountants. Further, at paragraph 47, she gives evidence that, consequently, the interest payable under the loan agreement has been incorrectly calculated in the Demand. 33 Exhibit TG-2 to Ms Graham's second affidavit includes emails exchanged between Ms Graham and Mr Graham (on the one hand) and Mr Young (on the other) in the period from 1 June to 4 June 2021. These are located at pages 50 to 53 of the exhibit. The sequence of emails can be summarised as follows: (a) On 1 June 2021 (at 1.27 pm), Mr Young sent an email addressed to John (who I take to be Mr Graham). The email was also sent to an email address which appears to be used by Ms Graham. The email stated in part: "Please find attached as requested a copy of the signed Loan Agreement between Silcocks Road Estate Pty Ltd and Pat Delaney Investments Pty Ltd." The exhibit does not include the attachment to this email, but it appears from Ms Graham's first affidavit (in particular, paragraphs 27-28, quoted above) that the version of the loan agreement attached to this email is the same as that annexed to the Demand and included clause 1.3. (b) On 3 June 2021 (at 11.48 am), Mr Young sent a further email to Mr Graham and Ms Graham. It seems that this email was sent after an issue had been raised about clause 1.3 of the loan agreement. Mr Young's email of 3 June 2021 stated: Hi John and Tanya Here is an unsigned copy of the Loan Agreement that I prepared on 10 May 2021 at 11.57am. I am the only one with access to my computer and it confirms that to be the last date that the document was worked on. You are more than welcome to check my computer yourself. Clause 1.3 was in the document the day it was signed and in accordance with the terms of the loan that was arranged. I reiterate my advice today that no change was made to that agreement after it had been signed by Tanya. It was dated 13 May to be in accordance with the dates in the Guarantee and Mortgages. Kind regards Chris Young Although Mr Young, in this email, invited Mr Graham and Ms Graham to check his computer, there is no evidence to suggest that they took up this offer. (c) On 3 June 2021 (at 5.14 pm), Ms Graham sent an email to Mr Young as follows: Hi Chris This is not the document that I signed as we were aware from the previous documentation that clause 1.3 was missing. Bill [i.e. Mr Holloway], Dad and I had discussions about this before meeting you for signing in the minutes before we came to your office. Immediately after signing the three of us all discussed it over coffee and know that this clause was not there and the documentation was undated. We again all confirmed 1.3 was not there. I just received this document and we will now have to go through everything and have these [forensically] examined. This does raise extremely serious issues about this whole process. We may have to take this further but want to give you the opportunity to resolve this. I think it makes this document unenforceable. Regards Tanya Graham (d) On 4 June 2021(at 9.41 am), Mr Young sent an email to Mr Graham and Ms Graham: Hi John and Tanya I attach a copy of my Word and PDF computer records as to the preparation of the Loan Agreement on 10 May 2021. It clearly notes that there were no changes made after initial preparation on that day. My file notes of 10 May 2021 clearly record that the loan was for $2.2m at 25% for 60 days. They also clearly [record] that the BAS refund was to be paid to the Lender if received before the loan was repaid. This proposal was advised to John by telephone on the morning of that day which he accepted. This call was made in the presence of Joe Lidonnici who had received his clients instructions to proceed. I then immediately proceeded to prepare the loan documents. I suspect that you have compared this loan Agreement with that for Crinigan's Road where there was not a GST issue as those acquisitions were of "Going Concerns". The Loan Agreement is the same as the original loan for Emerald Court where the GST was to be refunded to the Lender. I welcome any forensic examination of my computer and file to vindicate my position on this matter. Kind regards Chris Young Although Mr Young invited Mr Graham and Ms Graham to have his computer forensically examined, there is no evidence to suggest that they took up this offer. 34 Exhibit TG-1 to Ms Graham's first affidavit includes, at page 55, a letter from Mr Holloway to the Legal Services Board and Commissioner dated 18 June 2021. This letter is consistent with and supportive of the propositions in Ms Graham's email dated 3 June 2021 and Ms Graham's affidavit evidence. I note that Mr Holloway did not provide an affidavit for the purposes of this proceeding. 35 Exhibit TG-1 to Ms Graham's first affidavit also includes, at pp 56-63, a report from Kevin Cotter of Van Cotter Partners, Certified Practising Accountants, dated 3 February 2022. Mr Cotter's report includes the preliminary opinion that "[p]rima facie the cover page and pages 1 to 6 of Annexure C [a copy of the loan agreement dated 13 May 2021] were likely not printed and or scanned at the same time and or on the same machine as the signed pages 7 and 8". Mr Cotter expresses the opinion that this "gives rise to the question" as to the "congruent validity of the document and likelihood that a fraud or malfeasance cannot be ruled out". The basis of this opinion is expressed at page 4 of the report, where Mr Cotter states that the cover page and pages 1 through to 6 are "printed in a way that the text appears perfectly horizontal when reviewed left to right". On the other hand, pages 7 and 8 "are printed in a way that the text appear[s] to have a distinct slope when reviewed left to right". It does not appear that Mr Cotter has expertise in relation to the detection of forgery or falsification in documents. In these circumstances, these aspects of his report are to be given little weight. Further, on the copy of Annexure C included in Exhibit TG-1, it is difficult to see a distinct difference between the slope of the cover page and pages 1 to 6 (on the one hand) and pages 7 and 8 (on the other). 36 Mr Young, the solicitor who acted for both parties to the loan agreement, has affirmed two affidavits. He gives evidence, at paragraph 9 of his first affidavit, about a meeting on 3 May 2021. Mr Young's evidence is that he "relayed" an offer from PDI that included repayment of GST upon receipt. Mr Young's evidence is that Mr Graham accepted the terms. Mr Young gives further evidence about the 3 May 2021 meeting in paragraph 8 of his second affidavit, and exhibits a file note of the meeting (at page 15 of Exhibit CY-2). The file note refers to a "Loan proposal". The file note includes: "GST @ $200,000 to be repaid once BAS lodged". 37 In paragraph 10 of his second affidavit, Mr Young refers to a telephone discussion with Mr Graham on 10 May 2021 at which the substantive elements of the proposed loan were finalised. Mr Young exhibits his (one page) file note of the discussion (at page 17 of Exhibit CY-2). The top half of the page refers to a conversation by telephone with Mr Delaney and sets out a number of points including "BAS to be repaid on receipt". The bottom half of the page refers to a telephone conversation with John (presumably Mr Graham) and includes the words: "Advised the above" and "He confirms to proceed". 38 In his first affidavit, Mr Young states at paragraph 24: A copy of the Silcocks Loan Agreement (dated 13 May 2021) which I had prepared and which was used as the basis for the Plaintiff's Loan settling on 14 May 2021, is at pages 1 to 10 of Exhibit CY-1. 39 The loan agreement at pages 1 to 10 of Exhibit CY-1 appears to be the same as the loan agreement annexed to the Demand. Mr Young's affidavits do not, however, squarely respond to Ms Graham's evidence that the version of the loan agreement that she signed did not include a clause 1.3. 40 In Mr Graham's affidavit, he responds to Mr Young's evidence about the meeting on 3 May 2021 and the conversation on 10 May 2021. At paragraphs 4 to 7 of his affidavit, Mr Graham states that there was no discussion of GST at the meeting on 3 May 2021. At paragraph 8 of his affidavit, Mr Graham states that he did not discuss GST with Mr Young on 10 May 2021. 41 In paragraph 9 of his affidavit, Mr Graham gives evidence of a meeting with Mr Delaney on 16 June 2021. Mr Graham gives evidence that he had a conversation on that day with Mr Delaney that included an exchange to the following effect: I said: We also have proof that the version of the loan agreement that Tanya signed did not include a clause relating to the GST refund. Pat Delaney said: You can keep the GST refund. I don't need it. The clause makes no difference anyway.

42 Mr Graham states that, after the meeting on 16 June 2021, he sent a letter dated 17 June 2021 to PDI. A copy of that letter is annexed to his affidavit. As he did not receive a response, he sent an email to Mr Delaney on 24 June 2021. A copy is annexed to his affidavit.

Consideration 43 I will start by addressing the issue of whether there is a genuine dispute within the meaning of s 459H(1)(a). 44 Silcocks contends that it did not sign a loan agreement in the form relied on by PDI, and points to another version of the loan agreement. Silcocks submits that clause 1.3 of PDI's version of the loan agreement was inserted without Silcocks's knowledge or consent. Put another way, Silcocks denies that it entered into a contract with PDI in the terms alleged. 45 Silcocks notes that this aspect of the dispute was expressly conveyed to PDI well in advance of the issue of the Demand. Silcocks submits that this supports the proposition that the dispute is genuine and not mere bluster or spurious assertion: cf TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67 at [71] per Dodds-Streeton JA. Further, Silcocks submits, this calls into question the bona fides of the Demand and the accompanying affidavit. 46 Silcocks submits that, in the circumstances, there is a cogent and plausible contention that is worthy of investigation, namely whether Silcocks is indebted to PDI under the contract relied upon to support the Demand. 47 I am not satisfied that there is a genuine dispute between Silcocks and PDI about the existence or amount of the debt to which the Demand relates. 48 The evidence relied on by Silcocks to suggest that the version of the loan agreement executed by Silcocks did not contain a clause 1.3 is, in my view, very weak. It is worth noting that Silcocks has not produced an executed copy of the loan agreement without clause 1.3. The version of the loan agreement that Silcocks contends it executed, being the version at pages 46 to 54 of Exhibit TG-1 to Ms Graham's first affidavit, is unexecuted. Moreover, it is incomplete - items 2 and 5 of the Schedule have not been completed. In light of this, I do not accept that this version of the loan agreement is the same as the version signed by Ms Graham on 12 May 2021. Thus, Silcocks has not been able to produce an exact copy (executed or unexecuted) of the loan agreement it says it executed on 12 May 2021. 49 The file notes exhibited to Mr Young's evidence (discussed above) strongly support the proposition that the GST refund clause was to be included in the loan agreement. 50 Mr Young's emails dated 3 June 2021 and 4 June 2021 (set out above) strongly support the proposition that the version of the loan agreement executed by Silcocks on 12 May 2021 did include clause 1.3. Mr Young invited Ms Graham and Mr Graham to check his computer to confirm that the version he prepared on 10 May 2021 included clause 1.3 and that no changes were made to the document after that date, but there is no evidence to suggest that this invitation was taken up. 51 Having regard to the above, I consider Silcocks's contention that the version of the loan agreement executed by Silcocks on 12 May 2021 did not contain a clause 1.3 to be implausible and not worthy of investigation. 52 Further, even if (contrary to the conclusion expressed above), there is a plausible contention that the version of the loan agreement executed by Silcocks did not include a clause 1.3, I would not be satisfied that there is a genuine dispute about the existence of the debt to which the Demand relates. There is no question that Silcocks executed a version of a loan agreement on 12 May 2021; the only issue is whether the version it executed contained a clause 1.3. In my view, even if it were established that the version executed by Silcocks did not include a clause 1.3, there is no plausible contention that the principal and interest referred to in the loan agreement are not due. There is no evidence of any real weight of fraud or malfeasance. Whether or not clause 1.3 was in the version of the loan agreement executed by Silcocks, the (objectively ascertained) intention of the parties was most likely to enter into a contract containing the other terms of the loan agreement. I do not consider the contrary argument to be plausible. The GST refund clause (clause 1.3) merely affects the timing of the repayment of the principal sum; it does not affect the amount of the principal sum. Accordingly, there is no genuine dispute as to the existence of the debt to which the Demand relates. The fact that the version of the loan agreement annexed to the Demand includes clause 1.3 does not affect this analysis. The Demand and the accompanying affidavit correctly identify the debt as arising under the loan agreement between the parties dated 13 May 2021. 53 Insofar as Silcocks contends that the amount of the debt is overstated on the basis that certain amounts were deducted at completion without Silcocks's informed consent (see the evidence of Ms Graham summarised at [29]-[32] above), I do not accept that contention. In my view, if there is an issue as to whether those deductions were properly made, it is an issue between Silcocks and Chris Young Legal. I do not consider there to be a plausible contention that, in making these deductions, Chris Young Legal was acting on behalf of PDI and that PDI is therefore responsible if these deductions were not properly made. This analysis applies also to the interest on the amounts deducted at settlement (referred to in Ms Graham's first affidavit at paragraphs 47 and 48). 54 I note for completeness that, insofar as Ms Graham's first affidavit, at paragraphs 49 to 52, contains evidence to support a contention that the interest clauses are unenforceable as a penalty, Silcocks's counsel stated at the hearing that this contention is not pressed. 55 I turn now to consider whether there is "some other reason" why the Demand should be set aside. Silcocks submits that PDI knew of the fraud/malfeasance allegations and chose to serve the Demand anyway. Silcocks submits that PDI's conduct "bespeaks an attempt to circumvent ordinary court processes by resorting to the coercive machinery of the statutory demand regime". Silcocks submits that this amounts to an abuse of process and provides a reason of itself to set aside the Demand. Silcocks also submits that the Demand was issued for the purpose of commercial leverage, amounting to an abuse of process. 56 I do not accept those submissions. As stated above, there is no evidence of any real weight of fraud or malfeasance. The contention that the version of the loan agreement executed by Silcocks was not the same as the version annexed to the Demand is very weak. In these circumstances, I do not consider the conduct of PDI in serving the Demand to bespeak an attempt to circumvent ordinary court processes or to constitute an abuse of process. I am also not satisfied that the demand was issued for the purpose of commercial leverage such that it amounts to an abuse of process.

Conclusion 57 For these reasons, the application for review of the decision of the Judicial Registrar is to be dismissed. There is no apparent reason why costs should not follow the event. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky.

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