BETWEEN : WILDTOWN HOLDINGS PTY LTD (ACN 086 336 281)

Corporations Law - Statutory demand - Defects - Genuine dispute and offsetting claims

B & M Quality Constructions Pty Ltd v Buyrite Steel Supplies Pty Ltd (1995) 13 ACLC 88

Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37

Chanter v Blackwood [1904] HCA 2; (1903) 1 CLR 39

Equuscorp Pty Ltd v Perpetual Trustees (WA) Limited (1998) 16 ACLC 12

John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 12 ACLC 716

L & D Audio Acoustics Pty Ltd v Pioneer Electronics Australia Pty Ltd (1982) ACLC 536

Levi v Guerlini & Ors (1997) 15 ACLC 913

PDR Pty Ltd v Cottesloe Constructions Pty Ltd [2000] WASCA 62

Project Blue Sky & Ors v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Re Globe New Patent Iron & Steel Co (1875) LR 20 Eq 337

Re M B Coogan Ltd (1953) NZLR 582

Sentinel Finance Management Pty Ltd v Entercorp Finance Pty Ltd (1997) 15 ACLC 201

South East Waters Ltd v Kitoria Pty Ltd (1996) 14 ACLC 1328

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 15 ACLC 1001

Texel Pty Ltd v Commonwealth Bank of Australia [1994] VicRp 62; (1993) 11 ACLC 1059

Topfelt Pty Ltd v State Bank of NSW Ltd [1993] FCA 589; (1994) 12 ACLC 15

1 MASTER BREDMEYER: The plaintiff has applied to set aside the defendant's statutory demand. The plaintiff has identified a number of defects in the demand and the supporting affidavit which it says are sufficient to have it set aside. I have heard legal argument on these defects by both sides and it makes good sense to rule on this before going to the other grounds of setting aside a demand, namely, genuine dispute and/or offsetting claims.

2 By s 459E of the Corporations Law the demand must specify the debt and the amount of the debt, or where there are more than one debt, the total of the amounts of the debt. The demand must be in writing and must be in the prescribed form. That is a reference to Form 509H of the Regulations. The demand "must" be accompanied by an affidavit that verifies that the debt, or the total of the debts, is due and payable, and complies with the rules. The relevant Corporations Rule is r 31 and Form 7.

3 There is said to be seven defects. The first is that the demand does not have the notes at the foot of it as required by Form 509H. I consider that not important. Those notes are for the assistance of the creditor, rather than telling the debtor of his rights. I do not regard their omission as a defect at all.

4 The second matter is that the statutory demand is dated 1 April 2001, whereas the affidavit in support is sworn 30 March 2001. In Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 16 ACLC 1371, the facts were the same. The affidavit in support was two days premature. Santow J thought it not a fatal defect, subject to an affidavit being filed updating the position. I think it not a fatal defect and do not require an updating affidavit. The plaintiff does not allege any payments were made within the two day period.

5 The third alleged defect is that the demand is accompanied by 38 pages of invoices annexed. Where there are a number of debts, the section requires the demand to specify the total of the debts. In this demand the schedule specifies 37 individual debts and the total. That is not wrong. To include the individual invoices which make up the total is, I think, helpful to the plaintiff. It saves him having to locate those invoices from his own records. It is wrong, however, that most of the invoices listed by number in the schedule do not have the same number in the attached invoice. For example, the third invoice in the schedule is Invoice PRE 513 for $31,921.39 dated 1 October 2000. The third invoice annexed is Invoice PRE 489 for $31,921.39 dated 1 October 2000. Although the invoice numbers given in the schedule differ from the annexed invoices, they correspond as to the amounts and the dates. No explanation is given in the demand or in the affidavit as to why these do not correspond. On the whole, the attachment of the invoices, even with the wrong numbers, is helpful to the plaintiff rather than unhelpful. It specifies in detail the debts claimed to be owing.

6 The fourth defect raised is that the supporting affidavit does not state the source of the deponent's belief that the money is owing. Form 7 in our Corporation Rules states in par 3 that the affidavit must state the source of the deponent's knowledge. It gives examples:

"I am the person who on behalf of the creditor company had the dealings with the debtor company that gave rise to the debt;"

"I have inspected the business records of the company in relation to the debtor's account with the company;"

"I have inspected the business records of the company in relation to the debtor's account with the company and I have spoken to Mrs Tracey Sulejmani, our Credit Services Manager, who has the day-to-day control of this account."

7 The fifth matter is that the defendant failed to say that there is no genuine dispute about the existence of the debt or the amount of the debt. That is required by par 5 by Form 7. That is a major defect. If the creditor knows there is a genuine dispute about the debt, or the amount of the debt, he should sue and not use the statutory demand procedure.

8 Had Mr Newman, who swore the affidavit, addressed his mind to these matters, I think he could have said those words. He would have been so advised by Mrs Sulejmani. She came back from an all-day meeting with the plaintiff's Mr Forbes on 15 February 2001, satisfied that he had no genuine dispute. She was also given two cheques from Mr Forbes totalling $125,000 which later bounced. I know Mr Forbes has his version of the disputed debts and offsetting claims, and his version of why he gave those cheques to Mrs Sulejmani, and this is not the appropriate point to weigh up those rival versions. The creditor needs to consider whether the debtor has any genuine dispute to avoid wasting the Court's time with a statutory demand. The creditor's view on this is necessarily subjective. Had Mr Newman thought about it, and consulted Mrs Sulejmani, I consider he could have said those words.

9 I contrast that with the position in Four Seasons Construction Pty Ltd v Eastern Metropolitan Regional Council [2000] WASC 277, a decision of Master Sanderson. There, the demand was for $161,000. The debtor had claimed against the creditor $414,000 in an arbitration hearing and the creditor had cross-claimed $161,000. The creditor had later issued a statutory demand for that sum and had omitted the words "I believe there is no genuine dispute about the existence or the amount of the debt". The progress of the arbitration in that case had been hampered by seven Supreme Court applications, including two visits to the Full Court. In one of those applications Hasluck J, in a judgment had summarised the dispute between the company and the Council over the company's claims against the Council and vice versa, arising out of the company's performance of a landfill contract. It would have been difficult in those circumstances for the creditor to say that there was no genuine dispute over the claimed debt. By issuing the statutory demand the creditor was hoping to side-step the bogged down arbitration process already underway. That is wrong. It was either an abuse of process or bordered on it.

10 The plaintiff's sixth point is that the last six invoices in the schedule all show a due date of 30 March 2001. The argument is that those amounts could not be due and owing on 30 March. They could be due on 30 March, but the creditor could only say that they were not paid in an affidavit sworn on 31 March or later. That is a fair point, but I regard the defect as minor. It relates to six out of 37 claims and the sums involved are not large.

11 The plaintiff's seventh point is that the affidavit in support adds some text at the bottom under the heading "IMPORTANT NOTE". Those words are not in Form 7. They are extra, they are not needed, they come from our old r 67 of the Supreme Court Amendment Rules No 4 of 1994 which were repealed by our present Rules, the Supreme Court Amendment Rules 2 of 2000 which came into force on 1 July 2000. The words themselves are not unhelpful to the debtor. The words are still legally correct and they do no harm.

12 I have considered seven alleged defects. In summary, points 2, 4, 5 and 6 are defects. The other three are not. Taking these four defects together, I do not consider they will cause substantial injustice to the plaintiff or provide other good reason why I should set aside the demand and I decline to do so.

13 Under s 459H(1) of the Corporations Law a statutory demand can be set aside if there is a genuine dispute about the existence or the amount of a debt to which the demand relates or if the company has an offsetting claim. The Full Court in Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd [1999] WASCA 294 at [27] per Owen J said that in determining whether there is a genuine dispute, a court is required to undertake an investigation that raises much the same sort of considerations as the "serious question to be tried criterion" which arises in an application for an interlocutory injunction, or for the extension or removal of a caveat. Further, to reach a finding that there was a genuine dispute the applicant must satisfy the court that:

(a) the dispute is bona fides and truly exists in fact; and

(b) the grounds alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived.

14 Under s 459H(5) "offsetting claim" means a genuine claim that the company has against the respondent ... ." So, much the same considerations apply as on the determination of a genuine dispute.

15 I turn now in some detail to examine the plaintiff's case for a number of genuine disputes and/or offsetting claims. The plaintiff, through Mr Robert James Forbes, has filed two affidavits sworn 10 May and 7 June 2001 which I will refer to as "P 1 and 2". The defendant's Ms Tracy Sulejmani has sworn two affidavits dated 22 May and 21 June 2001 which I will refer to as "D 1 and 2". The demand lists 26 invoices in the schedule, which I will refer to as "the schedule". Those 26 invoices are attached to Mr Forbes' first affidavit D1. I should also say that the defendant issued monthly statements of the plaintiff's account, called "Merchandising Statements" and "Interest Statements" and they are annexed to D1. The defendant has also produced two transaction history reports and they are TS3 and TS4 to D1.

16 The plaintiff says in par 8 of P1 that an account statement at 90 shows a credit for four invoices which are claimed in the statutory demand. It is a false argument. The credit is only shown because the plaintiff gave a cheque to Ms Sulejmani for $75,000 on 15 February 2001 which was later banked and bounced. It was credited against those early invoices.

17 Invoice PRE 513 is wrongly shown in the demand as for $31,921.39. The correct number is PRE 489: see D1 at par 16. The plaintiff correctly states that PRE 513 is for sheep drench for $410.40. It is at 40 of P1. I consider it later.

18 The plaintiff says, in par 9(a) of P1, that three invoices mentioned in the schedule relate to a farmer named Mycock and should not be paid by the plaintiff. I consider the plaintiff has raised a genuine dispute regarding the first of those invoices - No 0931177 for $1,684.55 - dated 12 October 2000. I note that the invoice at 19 of P1 quotes the customer order number "3300/MYCOCK". The reference to Mycock is evidence that the order was in some way related to Mycock. The order has not been produced. The invoice is for 6.3 tonnes of stud ruminant cubes - bulk, plus 7 Bulka bags and is dated 12 October 2000. The defendant in D2, at 61, has produced an order from Milne Feeds, dated 2 May 2000, addressed to RTC Agribusiness, Midland, for these products. The order is dated 2 May 2000 and the delivery instructions are for Wednesday 3 May 2000 to RTC Kukerin, W E & T J Mycock, Bladondale, Kukerin. So the order and the delivery were early May, whereas RTC's invoice to the plaintiff is dated 12 October. I am puzzled by that delay. In the absence of customer order number 3300 and faced with this delay, I consider the plaintiff has raised a genuine dispute in relation to this invoice.

19 The other two Mycock invoices - No 0931178 for $5, 213.65 and No 0931859 for $1,189.78 - are conceded by the defendant as wrongly charged to the plaintiff and credit is given for these invoices in TS3 at 27 and TS4 at 36. I consider they are part of the credits of $8,6012.42 shown in the schedule.

20 The plaintiff says the second and third items on this invoice - 38 of P1 - were never received. The defendant agrees and says that it has already given the plaintiff a credit for these items. The credits are $959.28 and $1,022.36, shown on TS3 at 28 and on TS4 at 36 and 37. I consider they, too, are part of the total credits of $8,612.42 given to the plaintiff in the schedule.

21 This invoice dated 22 November 2000 for $410.40 is found at 40 of P1. The plaintiff says that the goods in this invoice were never received by it. I note that the invoice refers to 1 x Cydectin Sheep Drench, 10 litres, price $410.40. It refers to customer order No 94020. The defendant has produced that order - see D1 at 38. It appears to be in the plaintiff's handwriting, although it is not signed. It was faxed on 18 June 2000. It includes eleven different items, including two 10 litre drums of Cydectin. At 39 and 40 of the same affidavit, is an invoice dated 13 June 2000 which lists all the goods in order 94020, except that it invoices one 10 litre Cydectin sheep drench instead of two.

22 So, from the invoices, the defendant says that the plaintiff got the two lots of Cydectin ordered - one invoiced with the other goods on 13 June and the other at some later date invoiced in PRE 513 of 22 November. That invoice came a long time after delivery of the first quantity of Cydectin. That delay and the plaintiff's assertion that he did not get it, raises a genuine dispute.

23 At par 9(d) of P1 the plaintiff's Mr Forbes says that these three invoices are correctly chargeable to Loxton's Garage at Kukerin and not to his company. He said the goods were ordered for Loxton's Garage. The first invoice, at 43 of P1, No 0936802 is for $57.31 and is dated 20 December 2000. It refers to Order No 1969. The invoice is for 20 porcelain reels, 75 wood post insulators and 30 Curlon steel brackets. The plaintiff has produced an order form for the identical goods. It is found at 91 of P1. It is a pro forma invoice No 94053 of 20 December 2000. It is signed by Mr Forbes and the customer is stated as "Loxton's Garage, c/- PO Kukerin 6350, delivery details via Kukerin General Store". I consider this order relates to the same goods, despite the different customer order number on the invoice. The defendant, at par 24 of D1, states:

"The invoices referred to by the debtor are not notarised as being goods ordered by Loxton's Garage. However, we note that Loxton's Garage has, quite separately, been charged directly by RTC for similar products. The debtor has not shown that these purchasers were the same as those made by Loxton's Garage."

Given that the goods shown in the invoice are the same as those ordered in Order No 94053, I think it possible that the goods so ordered for Loxton Garage are shown on the invoice. The defendant has not produced Order No 1969 shown in the invoice, nor has it produced the invoices issued to Loxton's Garage for similar products. I consider the plaintiff has raised an arguable dispute in relation to this invoice.

24 The other two invoices are good. I consider the plaintiff has raised no genuine dispute in relation to them. One of them - No 0940274 at 48 of P1 - unlike the invoice No 0936802 just discussed, makes no reference to Loxton Garage. Moreover, that invoice refers to a customer Order No 1885. That order might clarify who ordered goods. Neither party has produced it. It may have assisted the plaintiff's case if it was an order placed by Mr Forbes on behalf of Loxton. I consider the plaintiff has not raised a genuine dispute here.

25 Mr Forbes said he returned 63 x 110 litre drums on 21 September 1999 to the suppliers via an intermediary, Drum Services WA Pty Ltd - see docket at 94 of P1. He says the credits for these drums were payable to RTC and should be then repaid to him. He says he has been paid for 33 of these drums, leaving 30 drums unpaid. On 13 July 2000 he said he returned 68 drums in the same way - see docket at 92 of P1. And, on 15 January 2001, he said he returned 44 drums - see docket at 93 of P1. The plaintiff seeks reimbursement for these 142 drums. He says that for 30 of them the deposits are $80 each and 112 drums, the deposit is $110 each, making a total of $14,240. He claims that as an offsetting sum.

26 The defendant's witness at par 26 of D1 says that the defendant is only responsible for accrediting the debtor for drum deposits which have been charged to and paid by the debtor. The defendant's records show that the debtor has only been charged for 40 x 110 litre drum deposits between October 1999 to date. At 42 and 43 of D1 are invoices showing these 40 drum deposits charged to the debtor. The affidavit continues:

"A credit for those drum deposits is not due to the debtor until RTC has received a credit note from the supplier. No credit notes have been received from the supplier for the drum deposits."

27 Ms Sulejmani has also deposed to these matters in D2. The defendant has produced two invoices dated 31 May 2000 for 35 drum deposits paid at $110 each and an invoice dated 2 June 2000 stating five drum deposits made at $80 each. The deposits total $4,250. I consider that the defendant's evidence on this is convincing and that the plaintiff can only expect a deposit for drums returned where he has paid a deposit on those drums. I consider that the plaintiff has a genuine offsetting claim for those two deposits. The defendant's view that the plaintiff should not be paid until it has itself received a credit from its supplier is unconvincing. These drums were supplied to the plaintiff at Kukerin in May and June 2000 and returned by the plaintiff, probably in October 2000 and January 2001, according to his dockets. It is, I consider, a poor excuse to say that the defendant has not yet got its refund from the supplier. It should have chased that up and got those refunds by now. I consider that the plaintiff has no genuine offsetting claim for a further 102 drums, as claimed. If he, in fact, paid deposits to the defendant on a total of 142 drums and not 40 as claimed by the defendant, he should track through his invoices and be able to establish that. He has not done so. His allegation is therefore vague and misconceived.

28 The plaintiff at par 16 and following of P1 states that he returned three consignments of chemicals to the defendant but has not, so far as he is aware, received a credit for those returned items. The consignment notes relating to those returns are found at 97 and 98 of P1. He says the value of the chemicals itemised in the above invoices is $52,883. He believes that the plaintiff was charged for these chemicals but has not yet received a credit for them and he claims that as an offsetting sum. I consider this claim is spurious and fanciful. It is clear from the agency agreement and from the defendant's evidence that, in addition to goods sold by the defendant to the plaintiff, the defendant supplies goods to the plaintiff on consignment. The plaintiff is not charged for these goods. If he sells them he gets a commission. If he returns them there is, of course, no refund payable.

29 The three invoices or dockets referred to by the plaintiff are most unconvincing. The first, at 97, is undated and refers to 11 pallets of chemicals returned. It is a note from Fagan's Transport, Esperance, showing that these goods were returned or were to be transported from Kukerin General Store to RTC, Midland. The chemicals are not itemised, nor is their value. The second invoice, at 98, is also from Fagan's Transport and is undated. It refers to four pallets of "cement". The defendant says this is a mistake, he has never returned cement and it should be a reference to chemicals. Again, there is no itemisation of the chemicals, nor of their value. The third invoice, on 98 and 97, is also from Fagan's Transport and was billed to the plaintiff at Kukerin. It is dated 30 June 2000. It lists a number of goods sent somewhere, which include some chemicals. It appears not to relate to the other two invoices. Again, there was no description of the chemicals given, nor of their value. I find this evidence totally unconvincing. If the plaintiff had been invoiced by the defendant for chemicals supplied, and returned those chemicals, I would expect the plaintiff to document that very carefully by reference to invoice numbers, description of chemicals and prices, to ensure that he got proper credit for the chemicals returned. The undetailed nature of these three dockets strongly confirms the accuracy of the defendant's contention that these were chemicals returned from consignment. I reject this offsetting claim as spurious.

30 Mr Forbes, at par 21 and following of P1, claims livestock commissions:

"21. Pursuant to the General Agency Agreement dated 4 May 1999, the Plaintiff was appointed the Defendant's agent to 'identify and procure opportunities to provide livestock agency services, including preparation and submission of contract documentation to RTC Agribusiness where appropriate'. Pursuant to Annexure 'C' of the Agency Agreement there are three types of transactions which entitle the Plaintiff to a commission; 'spotter', procurement of livestock for sale by public auction and procurement of livestock for sale by private treaty.

22. When the Agency Agreement was signed most of the farmers in the Kukerin area sold their livestock through Wesfarmers. To the best of my knowledge there are no farmers from the Kukerin area who have sent livestock to the Defendant's yards in Katanning who did not do so as a result of procurement by me acting on behalf of the Plaintiff.

23. Although the Plaintiff is entitled to 20% of the gross commission earned by the Defendant on all livestock from the Kukerin area sold by the Defendant, the Plaintiff has never received livestock commissions from the Defendant. I know from my experience working for the Defendant that livestock are sold in Katanning, and each batch of livestock sold is identified according to the farmer and area of origin. I therefore believe that the Defendant has all the information it needs to remit livestock commissions to the Plaintiff. However, as many farmers send their livestock direct to Katanning without reference to me, I have no way of calculating what commissions are owed to the Plaintiff.

24. In the first year of the Agency Agreement I made numerous telephone calls to the Defendant on this issue. The last telephone call which I made on this issue was approximately 12 months ago. On the occasions which I called I was told that the person in charge of the matter was away or that it was being looked into."

31 Under the Agency Agreement livestock commissions were payable as follows, and I quote from 79 of P1:

Identify and procure opportunities to provide livestock agency services, including preparation and submission of contract documentation to RTC Agribusiness, where appropriate.

1. Spotter - RTC Agribusiness to follow up and provide marketing services

2. Procurement of livestock for sale by public auction

3. Procurement of livestock for sale by private treaty (on-farm)

1. 10% of gross commission earned by RTC Agribusiness

2. 20% of gross commission earned by RTC Agribusiness

3. 40% of gross commission earned by RTC Agribusiness

32 The defendant denies that any livestock commissions are payable to the plaintiff because no livestock sales were procured by him. The plaintiff has submitted no contract documentation to RTC describing his procurement of livestock for sale by public auction which would justify the 20 per cent of commission claimed. Neither has he produced contract documentation which might justify the 10 per cent spotter's commission. The defendant, at par 39 of D1, states that RTC has only one client from Kukerin who conducts his livestock business through RTC, but that client is serviced by another representative. I do not consider that the plaintiff's claim for livestock commissions is a genuine one or based on any real evidence.

33 The plaintiff states that he is entitled to fertiliser commission for each tonne of fertiliser sold, procured by him, calculated on a sliding scale set out in the Agency Agreement. He says, in effect, that he has not received any cheques or credits for fertiliser commission. By a fax dated 4 August 2000, and repeated on 31 October 2000, he claimed fertiliser commission in respect of a number of customers. He said that fax relates only to sales made in the year 2000 and does not take into account the sales in 2001. The fax is at 102 of P1 and lists 15 farmers. Against the names of the first 10 farmers is a tonnage:

"RVC Davidson 7 tonne

Fitton & Sons 110 "

JO & KL Cook 156 "

BG & L Ward 70 "

DN & DS Clarke 697 "

A & L Gray 320 "

Fitton & Son 56 "

RW & BM Bahr 266 "

CP & JA Smith 4 "

IC & C Faulkner 25 "

... "

The total of those 10 amounts totals 1,711 tonnes. The tonnage is not given for the five other farmers whose names are given. The defendant says that it has given the plaintiff fertiliser commissions for the period March 1999 to April 2001, totalling $11,511.10. Details of that are set out at 67 of D1. The total tonnage involves 4,877. Details of four of the cheques are given. A further cheque - No 064505 - for $815.25 was sent, but not presented, and has now been credited to his account - see TS4 at 37 - on 17 May 2001. A further cheque - No 070825 - for $2,435.11 was credited to his trading account on 6 December 2000 - TS4 at 36. The balance of $4,889.05 was credited to his trading account on 17 May 2001 - see TS4 at 37.

34 I am satisfied that the defendant's figures and documentation are correct. The commissions are paid for a tonnage which vastly exceeds that claimed by the plaintiff. If the plaintiff wishes to dispute these figures he should present more detailed documentation of the fertiliser sold. I note, too, that the rate of commission paid by the defendant exceeds that in the Agency Agreement.

35 The defendant, at 46 of D2, states that the credit of $4,889.05 for fertiliser commission shown as a credit on 17 May 2001, after the issue of the statutory demand which is dated 1 April 2001, is part of the credit shown as $8,612.42 in the schedule to the demand. Mrs Sulejmani states:

"While the processing of this credit did not occur until the following month, as is normal practice, I wanted to ensure that the Plaintiff was given the benefit of any credits that were due to be processed prior to the issue of the statutory demand."

I am unconvinced by that explanation. When I look at TS3 and TS4, the amount of the credits shown between 1 October 2000 and 21 March 2001 - the period covered by the 26 invoices which make up the demand - exceed $8,612.42, without reference with this particular credit. In referring to credits, I am referring to credits allowed by the defendant, not to cheques paid to the plaintiff. I consider that the plaintiff has established a good offsetting claim for the sums of $815.25 and $4,889.05, both fertiliser credits and both shown as credited to him on 17 May 2001 - see TS4 at 37.

36 The plaintiff's final claim is for insurance commissions. Under his Agency Agreement with RTC insurance commissions were payable as follows:

Procure appointment of RTC Agribusiness as insurance broker and writing of insurance policies.

Writing of insurance policies, RTC Agribusiness to provide policy and claims administration services and manage all policy documentation

25% of commission earned by RTC Agribusiness on policies written.

37 The plaintiff took over the Kukerin Store on 29 March 1999. In December 1999 the insurance arrangements changed. EBM Insurance Brokers Pty Ltd took over the insurance business of RTC. Under that arrangement the Kukerin General Store became a sub-agent of EBM and money and commission earned by the store was paid by EBM directly on a monthly basis when the balance in the sub-agent's account totalled more than $50: see letter at 69 of D1. The commission arrangements were changed too. Details of them are given in a document from EBM at 59 and 60 of D2 and I quote:

"Summary of Sub-agency Conditions

Earnings Agents

Earnings are paid to the referring sub-agent on the completion of the insurance premium payment by the insured and will be paid monthly to the sub-agent after our month end close off. The sub-agent income is only payable on leave that I've converted into actual insurance clients.

NB: Amounts less than $50 will be carried forward to the following month.

Crop insurance will be treated as New Business each year.

New Business 20% (of net commission earned by RTC/EBM)

Renewals 10% (of net commission earned by RTC/EBM)

Requirements

To receive the abovementioned income rates the sub-agent is required to supply the regional manager with a qualified lead with no less than the following information:

No advice, recommendations or quotations are to be given by the sub-agent."

38 Mr Forbes, at par 29 and following of P1, states:

"29. During the time I was employed by the Defendant [I add this was before he took over the store] I sold a great deal of insurance on behalf of the Defendant. In fact I won various performance incentives, namely a trip to Rottnest and a trip to Bali, for the insurance sales which I procured.

30. During the first year after I became the proprietor of the Kukerin General Store, I was told by Mr Paul Byrnes, the insurance representative for RTC, in about January 2000 that I on behalf of the Plaintiff had procured more crop insurance that year for the Defendant than anyone else in the State.

31. I also wrote additional new policies last year. In addition to the new policies, the Plaintiff is entitled to a percentage of renewals of policies when they are renewed.

32. The Plaintiff has never been paid any commissions for insurance sales and as far as I am aware no commissions have ever been credited to the Plaintiff. I pursued Mr Paul Byrnes about commissions until about six months ago but have done nothing further about it since then. The information necessary to calculate the insurance commissions owed by the Defendant to the Plaintiff is held solely by the Defendant."

39 The defendant denies that the plaintiff is entitled to any insurance commissions up to December 1999 and rightly says that thereafter any insurance commissions are to be paid direct by EBM. Prior to December 1999 the plaintiff was entitled under the agency conditions, which I have quoted, to 25 per cent of commission earned by RTC on policies written. He was required to procure the appointment of RTC as the insurance broker and write the insurance policies. The plaintiff has produced no documentation of policies written by him. I reject his claim that it was up to the defendant to go through its records and try and ascertain what policies were written by the plaintiff. I think the shoe is on the other foot. The plaintiff had a contractual obligation to document policies written by him. The plaintiff should know that, having been a former insurance salesman. He has never submitted any documentation to justify insurance commissions and I regard his claim for them as spurious and misconceived.

40 In summary, I have noted that a number of credits were properly due to the plaintiff and have been included in the credit of $8,612.42 shown in the schedule to the demand. That credit is shown at the top of the page opposite the date 1 October 2000. It is only shown thus because of the defendant's accounting package. It was a credit, applied as at about 31 March 2001 when the statutory demand was issued. Because of the accounting package it is shown as a credit against the earlier invoices instead of a credit as at 31 March. It is a summary of a number of credits.

41 In addition to that, I have said that the plaintiff has raised a genuine dispute, or a genuine offsetting claim, in relation to a number of items which I now list:

Invoice 931177 Mycock $1,684.55

PRE 513 Cydectin drench 410.40

Invoice 0936802 Loxton Garage 57.31

Drum deposits 4,250.00

Fertilisers commissions 815.25

4,889.05

TOTAL $12,106.56

42 I propose to reduce the statutory demand by this amount which gives a net figure of $119,032.45, but otherwise dismiss the application.