The essential task is relatively simple - to identify the genuine level of a claim (not the likely result of it) and to identify the genuine level of an off-setting claim (not the likely result of it).'
25 I respectfully agree with those statements.
26 Having set out his conclusion as to what it meant, his Honour returned to the question which he had earlier addressed as to whether I was right not to make a finding on the credit of the witness. He agreed with my decision on that aspect in these terms:
"In the light of these considerations, I consider that the Master was correct in finding that there was a genuine dispute in respect of the $200,000. The evidence of Dr. Grammat was not so inherently improbably or otherwise defective as to preclude any need for further investigation. It raised a genuine dispute within the meaning of S.459H and the Master was right to decline to make a finding on the question of Dr. Grammat's credit and to determine the merits of the dispute."
27 It is, of course, the plaintiff's contention that the defendant's story is so inherently improbable that I should, notwithstanding the conversation, conclude there was a genuine dispute. In support of this contention it points to the following:
"1. The fact the first time there was any assertion of a rollover occurred after the issue of the statutory demand.
2. That the first assertion of it in the affidavit of Mr Downes of 23 December 2004 should not be accepted because that affidavit contains a patently false statement as to whether there had been any requests for repayment before the statutory demand.
3. The fact that Mr Higgins' money on the documents produced was not used for the Blue Haven project."
28 It is plain that the first assertion of a rollover is after the statutory demand. There had been numerous communications by the defendant to the plaintiff before that demand on 28 October 2004 and there was a letter sent by fax requesting the return of the money by the plaintiff. He said he received a call and was promised he would get it in thirty days. He waited until 19 November. He sent another reminder and threatened to take legal action within ten days. There was no reply to this letter.
29 On 2 December his solicitor wrote a letter to the plaintiff. It was a formal letter of demand and required an immediate response and payment. The response came the next day and it was that the director was away until the 9th and it would be dealt with by then. This did not occur and the defendant still waited.
30 There is not a skerrick of any suggestion to these very specific demands that there had been a rollover. It would be the most easy and natural thing for the company to have done.
31 It is clear from the documents produced on subpoena that the costs of the land and buildings of the Blue Haven project were about $220,000 and that it had a loan for the project of $226,000 which was used at least up to the amount of $206,000. This led to the suggestion that in those circumstances the allegation that the moneys were put into the project is spurious.
32 Unfortunately, however, it is not whether the money actually went into the project which is of real concern in the present argument. The question is whether it was agreed to be put in. If it was agreed to be put in then it is linked to the project and it may or may not, depending on the terms of the document, give an interest in the project, notwithstanding the moneys supplied simply went into the coffers of the plaintiff company.
33 Accordingly, I do not think that point is a particularly good one which really does not go to whether there is a genuine dispute.
34 The other matter was the affidavit of Mr Downes in which he swore in par 12:
"I further say that the plaintiff has not received any demand or request for payment from the defendant at all until the service of the statutory demand hearing."
35 It is perfectly plain from the documents which I have recounted earlier that the company had received demands, some three of them at least, clear, explicit and in writing before that date asking for the money to be paid back.
36 That may be so. The one reply that there is was not signed by Mr Downes. Notwithstanding this one could imagine that if one had cross-examination much could be made of credit or, alternatively, there could be some explanation Mr Downes may have as to why he should make that statement on the information which he had.
37 However, I do not think, having regard to the role which I have to play in determining whether there is a genuine dispute that I should decide a question of credit and put to one side the conversations, firstly the parts of his affidavit in par 5 which refer to the rollover agreement, and the consequential matters which he puts in par 6 relying upon that.
38 As I have said in this matter it is not appropriate to have cross-examination and these matters do not lend themselves to dealing with these credit issues. One is simply left with the failure to make assertions prior to he demand being issued.
39 In those circumstances, I do not think that the claim is too fanciful and can be dismissed without fuller investigation. It is one which I think will require further investigation and I am satisfied there is a genuine dispute as to when the money is repayable. This means the case will have to be decided elsewhere, somewhere where no doubt the truth of the allegations to which people have sworn will be tested and if found to be without foundation will lead to other proceedings of quite a different nature. That unfortunately is not my task and it is not appropriate for me to say any more.
40 It is suggested I might make a conditional order that the sum should be paid as a condition of setting aside the demand. The basis of this was what was described as the paucity of the plaintiff's case and linking that with the matters in relation to the affidavit to which I have already referred. In my view this would be simply doing by the back door what it is not my task to do by the front door.
41 However, matters are appropriate for conditional orders but I do not think that the real question of whether there is a genuine dispute - and I find there is a genuine dispute - that I should turn around and impose a condition of the payment in of the amount.
42 Accordingly, I set aside the demand made by the defendant on the plaintiff of 8 December 2004. I order the defendant to pay the plaintiff's costs.
(Counsel addressed on the question of costs.)
43 There is one exception I will make to the costs order, and that is it will not include any hearing costs in respect of the appearance before the court on 18 March 2005.