Supreme Court of Western Australia - Court of Appeal
Last Updated: 30 July 2002
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE FULL COURT (WA)
CITATION : WILDTOWN HOLDINGS PTY LTD -v- RURAL TRADERS COMPANY LTD  WASCA 196
CORAM : STEYTLER J
HEARD : 17 JUNE 2002
DELIVERED : 29 JULY 2002
FILE NO/S : FUL 139 of 2001
BETWEEN : WILDTOWN HOLDINGS PTY LTD (ACN 086 336 281)
RURAL TRADERS COMPANY LTD (ACN 067 536 207)
Practice and procedure - Appeal - Appeal from a Master of the Supreme Court
Corporations - Whether statutory demand should be set aside pursuant to s459G of the Corporations Law because of defects or for other reasons
Corporations Act 2001 (Cth), s 459E, s 459J, s 459G, s 459H
Rules of the Supreme Court 1971 (WA), O 81G
Appellant (Plaintiff) : Mr T Darbyshire
Respondent (Defendant) : Mr J R Lee
Appellant (Plaintiff) : Kott Gunning
Respondent (Defendant) : Wright Legal
Case(s) referred to in judgment(s):
Case(s) also cited:
Delta Beta Pty Ltd v Everhard Vissers (1996) 14 ACLC 941
First Line Distribution Pty Ltd v Paul Whiley (1995) 13 ACLC 1216
PDR Pty Ltd v Cottesloe Construction Pty Ltd  WASCA 62
Turner Corporation (WA) Pty Ltd v Blackburne & Dixon Pty Ltd  WASCA 294
Webster v Lampard  HCA 57; (1993) 177 CLR 598
1 STEYTLER J: I have had the advantage of reading the reasons for decision of Templeman J. Generally for those reasons, it seems to me that the appeal should be allowed and the statutory demand set aside.
2 The various deficiencies to which Templeman J has referred, when taken together, were, in my respectful opinion, such as to require the setting aside of the statutory demand.
3 I agree, also, that the respondent should be ordered to repay to the appellant the amount paid by the appellant pursuant to the demand.
4 The question raised in this appeal is whether a statutory demand, which was served by the respondent on the appellant under s 459E of the Corporations Law, should have been set aside on the appellant's application under s 459J of the Law.
5 The appellant, Wildtown Holdings Pty Ltd, carries on the business of the Kukerin General Store. Its directors are Robert James Forbes and his wife, Esther Denise Forbes.
6 The appellant's main business is selling farm merchandise. Much of that merchandise is supplied by the respondent, Rural Traders Company Ltd, pursuant to a General Agency Agreement of 14 May 1999.
7 In about February 2001, the respondent was pressing the appellant for moneys said to be owed by the appellant on its trading account. Matters came to a head when Ms Tracy Sulejmani from the respondent's debt recovery section visited the Kukerin General Store for the purpose of working out the amount due. Mr Forbes and Ms Sulejmani spent the best part of a day going through various records generated by both the appellant and the respondent. At the end of the day, according to Mr Forbes, he and Ms Sulejmani had made little progress in reconciling debits and credits on the appellant's account. However, Ms Sulejmani said she would not leave without a cheque for $125,000.
8 It is not in dispute that Mr Forbes gave Ms Sulejmani two cheques; one for $75,000, the other for $50,000. According to Mr Forbes, he told Ms Sulejmani not to present the cheques as there were insufficient funds in the appellant's account to meet them. That is disputed by Ms Sulejmani. The cheques were presented but were dishonoured.
9 On about 23 February 2001, the appellant received a letter from the respondent's solicitors demanding payment of $131,512.25. The appellant instructed its solicitors to respond. They did so by letter dated 1 March 2001 in which they requested accounts verifying the moneys claimed by the respondent.
10 The respondent did not provide such an account. Instead, on 23 April 2001 it served a statutory demand on the appellant, pursuant to s 459E of the Law. The demand, in an amount of $131,139.01, was supported by the affidavit of Mr Stephen Newman, the respondent's finance manager. Although the demand was dated 1 April 2001, Mr Newman's affidavit was sworn on 30 March, two days earlier.
11 The appellant applied to have the statutory demand set aside pursuant to s 459G on the grounds that the demand was defective and that there was a genuine dispute as to the amount due.
12 The application was heard by Master Bredmeyer, who dismissed it. The learned Master accepted that there were defects in the demand but held that these did not justify setting it aside. The Master held also that although there was a genuine dispute as to part of the moneys claimed, it was not appropriate to set the demand aside on that ground. Instead, the Master reduced the amount of the statutory demand by $12,106.56. This was an amount which the Master held was either genuinely in dispute or the subject of an offsetting claim.
13 The result was that the amount of the statutory demand was reduced to $119,032.45 and the application was otherwise dismissed.
14 The appellant now appeals from Master Bredmeyer's decision.
15 Before turning to the grounds of appeal, it will be convenient to refer to those provisions of the Corporations Law governing statutory demands and applications to set them aside.
16 By s 459E(1) a person may serve on a company a demand relating to one or more debts owed by the company. The debts must be at least equal to the statutory minimum amount and must be "due and payable".
17 Section 459E(2) prescribes the contents of a demand. It is in the following terms:
(a) if it relates to a single debt – must specify the debt and its amount; and
(b) if it relates to 2 or more debts – must specify the total of the amounts of the debts; and
(c) must require the company to pay the amount of the debt, or the total of the amounts of the debts, or to secure or compound for that amount or total to the creditor's reasonable satisfaction, within 21 days after the demand is served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor."
18 Section 459E(3) provides that: Unless the debt or each of the debts is a judgment debt, the demand must be accompanied by an affidavit that:
"(a) verifies that the debt, or the total of the amount of the debts, is due and payable by the company; and
(b) complies with the rules."
19 The relevant rule in the present case is O 81G r 31 of the Rules of the Supreme Court. The rule provides:
"For the purposes of section 459E(3) of the Law, the affidavit accompanying a statutory demand relating to a debt, or debts, owed by a company must –
(a) be in accordance with Form 7 and state the matters mentioned in that Form;
(b) be made by the creditor or by a person with the authority of the creditor or creditors; and
(c) not state a proceeding number, or refer to a court proceeding, in any heading or title to the affidavit."
20 Form 7 (Seaman par ) requires the affidavit to state the name of the creditor(s) and the name of the debtor company. The form then requires the deponent to state his or her relationship to the creditor. The deponent may be the creditor or one of a number of creditors. If the creditor is a company, the deponent may be a director. A deponent who is not the creditor, must state the facts entitling him or her to make the affidavit.
21 The deponent is then required to identify the debt and to state
• the source of his or her knowledge of the matters stated in the
affidavit in relation to the debt;
• that the debt (or total amount of the debts) ... is due and payable by the debtor company; and
• that he or she believes that there is no genuine dispute about the existence or amount of the debt(s).
22 Although r 31 is couched in mandatory terms, it takes effect subject to O 81G r 5 which provides that it is "sufficient compliance" with O 81G in relation to a prescribed form, if the document:
"is substantially in accordance with the form required or has only such variations as the nature of the case requires."
23 When an application is made under s 459G of the Law to set aside a statutory demand, s 459J applies. Section 459J(1) provides that 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." [my emphasis]
Section 459J(2) provides that except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect.
24 I have emphasised that under par (a) of s 459J(1), the Court is concerned only with the demand. The Court is not concerned, under that paragraph, with the supporting affidavit.
25 This is confirmed by the relevant definitions in s 9 of the Law. There, "a statutory demand" means:
"(a) a document that is, or purports to be, a demand served under s 459E; or
(b) such a document as varied by an order under subsection 459H(4)."
The term "defect", in relation to a statutory demand, is defined to include:
"(a) an irregularity; and
(b) a misstatement of an amount or total; and
(c) a misdescription of a debt or other matter; and
(d) a misdescription of a person or entity."
26 It may be convenient to describe an affidavit which does not comply with O 81G as being "defective". In my view, however, that is an inappropriate expression. An affidavit contains evidence. If it is sworn properly, an affidavit cannot be defective. An affidavit which does not contain the evidence required to verify a statutory demand, may be inadequate for that purpose, and thereby deficient, but it cannot be said, strictly, that it is a defective affidavit.
27 In Four Seasons Construction Pty Ltd v Eastern Metropolitan Regional Council  WASC 277; (2001) 19 ACLC 419 at par  Master Sanderson held that the purpose of the affidavit which accompanies a statutory demand is twofold:
"First the corporation is advised that the debt is outstanding and is assured that the party serving the demand has no doubts that the debt is owed. Secondly, and perhaps more importantly, when the matter comes before the court, either on an application to set aside a statutory demand or on a winding-up application, the Court, by reference to the accompanying affidavit can be sure the party issuing the demand has taken steps to satisfy themselves that the debt is outstanding. This may have particular importance on an uncontested winding-up. But even on a contested application to set aside a statutory demand, if there is compliance with the rules in relation to the accompanying affidavit, the court can be satisfied that there is a sound basis on which to begin. The respondent should say there is a debt, that it is still owed and about which there is no genuine dispute. It is then up to the applicant to show that the demand ought be set aside either because there is a genuine dispute or for some other reason. An accompanying affidavit which refers to the deponent's belief that there is no genuine dispute about the debt is important if the issues between the parties are to be clearly delineated."
28 Master Sanderson's decision was upheld by this Court: Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd  WASCA 299. Although the above extract from Master Sanderson's judgment was not cited, it is clear from the decision of Miller J, with whom the other members of the Court agreed, that the Court accepted Master Sanderson's approach as correct.
29 In my view, the question which arises when an affidavit accompanying a statutory demand does not comply substantially with O 81G, is not whether that is a defect which will cause a substantial injustice. That is because, as I have noted above, that part of s 459J applies only to defective demands. Rather, the question is whether there is some other reason why the demand should be set aside.
30 Against that background, I turn to the grounds of appeal in the present case.
31 In ground 1, the appellant contends that Master Bredmeyer erred in finding that certain defects in the statutory demand did not constitute defects in the demand which would cause substantial injustice unless the demand was set aside, or did not constitute some other reason why the demand should be set aside for the purpose of s 459J of the Law.
32 One of those matters is the fact that the affidavit accompanying the statutory demand was sworn prematurely. For the reasons I have set out above, I do not regard that as a defect in the demand itself. It is a matter which is raised in a later ground. I shall deal with it in that context.
33 The other matters in ground 1 are the annexing of 38 pages of invoices to the statutory demand and the fact that six of those invoices showed a due date of 30 March 2001.
34 Master Bredmeyer said it was not wrong to include the various invoices in the statutory demand: rather, that it was helpful to the appellant. It saved Mr Forbes from having to locate the invoices from the appellant's own records.
35 The Master went on to refer to the fact that most of the numbers identifying the invoices listed in the schedule to the statutory demand did not correspond with the numbers on the invoices themselves. No explanation for this lack of correspondence was given in the demand or in the accompanying affidavit. Although the Master regarded that as wrong, he concluded:
"On the whole, the attachment of the invoices, even with the wrong numbers, is helpful to the (appellant) rather than unhelpful. It specifies in detail the debts claimed to be owing."
36 I agree that although the invoices do not correspond with the numbers in the schedule, the invoices can be identified from the amounts claimed in the schedule. However, there is obviously an error in invoice PRE489 (shown as invoice PRE513 in the schedule). It relates to seed dressing in the amount of $923.80 and spray in an amount of $37.88. Although the total of those two amounts is $961.68, the total shown to be due on that invoice is $31,921.39. That is the amount shown in the schedule to the demand.
37 It is true that where several debts are owed by a company, a statutory demand need show only the total. Provided that is done, there can be no objection to the relevant invoices being annexed to the demand. As Master Bredmeyer said, that can only be helpful to the recipient.
38 However, where, as here, the amount claimed is derived from invoices, and it appears from those invoices that the amount has been overstated, the consequence must be that the demand is defective. That is because a demand can only be made in respect of a debt that is due and payable.
39 In Topfelt Pty Ltd v State Bank of New South Wales Ltd  FCA 589; (1993) 12 ACLC 15 at 20, Lockhart J quoted from a passage in the second reading speech relating to the Corporations Bill by the then Attorney-General of the Commonwealth in the House of Representatives on 3 November 1992. The extract contains the following:
"Companies will no longer be able to resist statutory demands on purely technical grounds such as a minor misstatement of the quantity of a debt. Demands will be able to be set aside only where injustice would otherwise be caused."
40 The inference is that a substantial misstatement could cause injustice: although it might not do so where the debtor sought to raise a genuine dispute about the existence or magnitude of the debt in any event.
41 Applying that principle to the present case: I do not regard an error of some $31,000 in a total of some $131,000 as "a minor misstatement of the quantity of a debt". I consider that an obvious error of that magnitude, if not productive of injustice, at least constitutes some other reason why the demand should be set aside. I have little sympathy for a creditor whose accounting records are such that it cannot calculate the amount of indebtedness to a high degree of accuracy. I appreciate that a creditor is not obliged to provide an analysis of the debt. However, if a creditor chooses to do so in a way which demonstrates the inadequacy of the information, he cannot be heard to complain about the consequences.
42 In my view, the position is not dissimilar from that considered by Lockhart J in Topfelt Pty Ltd v State Bank of New South Wales Ltd (supra). There, a demand was defective because it did not make clear the basis on which interest was claimed or calculated. Lockhart J noted there was no evidence from the debtor company of any specific injustice it had suffered or might suffer because of the defects in the statutory demand. However:
"It is in the public interest that provisions of the Corporations Law which require a statutory demand to state the amount of a debt that is due and payable, should be observed." (p 28)
In those circumstances, Lockhart J was satisfied that the defects in the statutory demand constituted good reasons why the demand should be set aside under s 459J(1)(b).
43 The next part of ground 1 arises from the fact that six of the invoices attached to the statutory demand showed a due date of 30 March 2001. In par  of his reasons, the Master said:
" ... 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 6 out of 37 claims and the sums involved are not large."
44 The total amount of those six invoices was $2,270.03 or 1.7 per cent of the total. I agree with the Master that this is a minor matter. However, I do not regard it as a defect in the demand, which was dated 1 April 2001. In my view, it reflects a deficiency in the affidavit accompanying the demand. If that were the only deficiency, I should nevertheless consider that there had been substantial compliance with O 81G r 31. However, there were far more serious deficiencies in the affidavit, to which I shall refer below.
45 In ground 2, the appellant contends that the failure to itemise credits in the sum of $8,612.42 in the statutory demand was a defect which would cause substantial injustice unless the demand was set aside, or constituted some other reason why it should be set aside.
46 The credit appeared on the schedule to the statutory demand as an amount paid against invoice PRE489. That invoice is numbered wrongly. The correct number is PRE486.
47 It is not clear from the schedule when the amount of $8,612.42 was said to have been paid. It emerged from evidence filed on behalf of the respondent that the sum did not reflect any payment or payments relating to that invoice. It was the total of a number of credits owed to the appellant which were applied to that invoice by the respondent without any explanation.
48 Master Bredmeyer referred to the credit in his reasons. He noted that it had been shown as a single amount "because of the (respondent's) accounting package". The Master said it was a credit applied at about 31 March 2001 when the statutory demand was issued and that it was a summary of a number of credits.
49 In my view, dealing with a number of credits in this way, without any explanation to the debtor company, constitutes a defect in the statutory demand. That is because it is not possible for the debtor, from its own records, to identify the basis of the credit. Indeed, it would have been impossible in this case because the credit appears to reflect a single payment when that was not the case.
50 I do not regard as trivial a defect constituted by an amount of some $8,600 in a total demand of $131,000, or 6.6 per cent. In my view, it provides another reason for setting the demand aside.
51 Grounds 3 and 4 raise what are said to be defects in the affidavit which accompanied the statutory demand. For reasons which I have given above, I should prefer to describe these matters as deficiencies in the affidavit. Grounds 3 and 4 are as follows:
"3. The Learned Master erred in finding that each of the following defects in the affidavit supporting the statutory demand did not constitute some other reason why the demand should be set aside for the purpose of s 459J(1) of the Corporations Law:
(a) The swearing of the affidavit in support of the statutory demand 2 days prior to the date of the statutory demand
(b) The failure of the affidavit in support of the statutory demand to state the Deponent's belief that the money claimed in the statutory demand was due and owing
(c) the failure of the affidavit in support of the statutory demand to set out the Deponent's belief that there was no genuine dispute about the existence of the debt or the amount of the debt.
4. The Learned Master erred in making a finding about the state of mind of the Deponent of the affidavit in support of the statutory demand and placing weight on that finding."
52 In relation to 3(a) above, the Master said, in par  of his reasons:
" ...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 (appellant) does not allege any payments were made within the two day period."
53 It is true that in Dolvelle Pty Ltd v Australian Macfarms Pty Ltd (1998) 16 ACLC 1371 the facts were the same, in the sense that the affidavit accompanying the statutory demand was executed two days before the date of the demand. However, the application before Santow J was not to set aside the statutory demand: it was an application to wind-up the debtor company on the grounds of insolvency for failure to comply with the demand. The company opposed the application on the ground (inter alia) that because the affidavit had been executed before the statutory demand, the demand was defective and the winding-up application was therefore invalid.
54 Santow J did not accept that submission. He held that a winding–up application based on a statutory demand did not fall outside Part 5.4 of the Law:
" ... merely because the accompanying affidavit is two days premature. The requirement (of exact coincidence of date for verification of the statutory demand), though important is not to be treated as an essential integer of the relief sought; there is of course no dispute that the amount remains unpaid."
55 The reason for Santow J's conclusion lies in s 459Q of the Law, which sets out the requirements for a winding-up application based on a failure to comply with a statutory demand. The application must have a copy of the demand attached to it. It must also be accompanied by an affidavit verifying the debt and the fact that the debt is due and payable. However, the affidavit which accompanied the statutory demand is not itself relevant to the winding-up application. Hence, as Santow J said, an irregularity in the verification of the statutory demand is not fatal to a winding-up application based on a failure to comply with that demand.
56 This, I think, distinguishes Dolvelle (supra) from the present case.
57 It is noteworthy that despite the conclusion reached by Santow J, he required an affidavit to be filed "in conformity with s 459E(3) stating the up-to-date position". In other words, even though the inadequacy in the affidavit which accompanied the statutory demand was insufficient to invalidate the winding-up application, it was nevertheless necessary to comply with s 459E(3) of the Law.
58 In my view, the position is a fortiori in the present case. An affidavit executed two days before a statutory demand cannot verify that demand. The fact that no updating affidavit was filed is, in my view, another reason why the demand should be set aside pursuant to s 459J(1)(b). With all respect to the Master, I do not think it was open to him to waive compliance with a statutory requirement relating to the contents of an affidavit accompanying a statutory demand.
59 I turn to ground 3(b). The Master accepted that the fact that the supporting affidavit did not state the source of the deponent's belief that the money was owing was "a defect".
60 The Master set out the examples contained in Form 7 of the form of words which might be used by a deponent in these circumstances. They were as follows:
"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;"
62 The Master went on to add his own version, which was in the following terms:
"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 Tracy Sulejmani, our Credit Services Manager, who has the day-to-day control of this account."
63 The Master went on to express the view that if Mr Newman, who swore the affidavit, had addressed his mind to those matters, he could have said the words set out above.
64 Accepting, for present purposes, that Mr Newman could have sworn an affidavit in those terms, the fact is that he did not do so. He merely said:
"To my knowledge, the amount of the debt referred to in the ... statutory demand ... as $131,139.01 ... is due and payable by (the appellant) ... to (the respondent)."
65 In my view, the failure of Mr Newman to give even the slightest indication of his means of knowledge, must result in the conclusion that there was neither compliance nor substantial compliance with O 81G r 31.
66 As Miller J said in Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd (supra) at , of a failure by the deponent to indicate how he was aware that the debt the subject of a statutory demand was due and payable:
"That is a very important matter in the scheme of statutory demands and it would be quite unfair to their recipients not to insist upon observance of it. What is contained within the affidavit is a mere statement that, to the knowledge of the deponent, the amount is due and payable. No reference is made to any source from which that knowledge is derived."
67 For this reason also, I consider that the demand should be set aside.
68 Grounds 3(c) and 4 may be taken together. It is a requirement of Form 7 that the deponent to the affidavit accompanying a statutory demand should depose to his or her belief that there is no genuine dispute about the existence or the amount of the relevant debt or debts. Mr Newman's affidavit contained no such statement. The Master regarded that as "a major defect": and rightly so, in my view. The Master said:
"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."
69 In my view, with all respect to the Master, that was not a proper basis on which to deal with this omission from the affidavit accompanying the statutory demand. I accept that the creditor's view that there is no genuine dispute about a debt is necessarily subjective. However, it is not for the Court to put words into the mouth of a deponent. And that is particularly so in the present case when, as the Master observed, Mr Forbes' account of the circumstances in which he gave the cheques totalling $125,000 to Ms Sulejmani directly contradicts her account. The Master was correct in saying that the application before him was not the appropriate point to weigh up the rival versions. Indeed, it would have been quite inappropriate to attempt any resolution given that the matter was proceeding (as it should) on affidavit evidence without cross-examination of the deponents.
70 There was, therefore, a major omission from the affidavit. As Miller J said in Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd (supra) at :
" ... The failure of the deponent to swear that there was no genuine dispute between the parties was a significant omission. It is essentially because there is no genuine dispute that the legislation has provided for the (statutory demand) procedure."
71 Again, in my view, as a result of this failure, it cannot be said that there was either compliance or substantial compliance with O 81G r 31. On that ground also, in my view, the statutory demand should have been set aside.
72 The remaining grounds of appeal arise from those parts of Master Bredmeyer's reasons for holding that there was no genuine dispute about a large portion of the debt.
73 For the reasons I have set out above, I do not think it was appropriate for the Master to have attempted to determine this issue when the statutory demand was so defective and the accompanying affidavit so inadequate. Indeed, the shortcomings were sufficiently serious, in my view, to warrant the conclusion that the respondent's defence of its position was an abuse of the Court's process, arguably justifying an award of indemnity costs: see Buddies Liquor Pty Ltd v Wah Lai Investment (Australia) Pty Ltd  VSC 570; (2001) 19 ACLC 848. In that case, Santow J ordered a creditor to pay the debtor's costs of applying to set aside an inappropriate statutory demand, even though the creditor withdrew the demand voluntarily. Although Santow J declined to order the payment of costs on an indemnity basis, he said (at par ) that he intended:
"to signal in the clearest way that those who issue statutory demands have a responsibility to ensure that there is a proper basis for doing so."
74 The respondent places considerable weight on the fact that Mr Forbes did provide cheques totalling $125,000 to Ms Sulejmani; thereby, it is submitted, acknowledging the appellant's indebtedness to that extent at least. But that submission takes no account of Mr Forbes' evidence that he gave the cheques under protest. On Mr Forbes' evidence, he did so because Ms Sulejmani refused to leave until the payment was made. He said the cheques should not be presented, because they would not be met: and he asked what would happen if the indebtedness proved to be only $50,000.
75 This is disputed by Ms Sulejmani who gives a different account of her conversations with Mr Forbes. However, the respondent has neither sued nor based its statutory demand on the cheques. That being so, the basis on which the cheques were given is important. As the Master rightly said, this is not a matter which can be resolved in these proceedings.
76 In my view, for the reasons set out above, the appeal should be allowed and the statutory demand set aside.
77 There remains the question raised by a late amendment to the grounds of appeal: whether the respondent should now be ordered to repay the amount paid by the appellant, it having failed to obtain anything beyond a short extension of time in which to make payment.
78 The amendment was made over objection by counsel for the respondent. It was based on a concession made by the respondent's solicitors in the appellant's (unsuccessful) application for a lengthy extension of time in which to make payment. The concession was, that if the statutory demand was set aside "there would be no legal basis upon which (the respondent) could retain the money".
79 It was accepted by counsel for the respondent that the Court has power to order repayment. In my view, it is appropriate to make that order, or the appeal would be pointless. It may also be appropriate to require the respondent to reimburse the appellant the costs of its borrowing incurred in making the payments. That is a matter about which I would be prepared to hear further argument.
80 There remains the question whether the respondent should ultimately bear its costs on whatever basis this Court orders that they be paid. I do not know what advice was given to the respondent by its solicitors. However, depending on the extent to which the respondent relied on its solicitors to ensure compliance with the Law and the rules, this may be a case for the imposition of a personal costs order, pursuant to O 66 r 5. Again, this is a matter which may warrant further consideration.
81 MILLER J: I have had the opportunity of reading in draft the reasons for judgment of Templeman J. I agree with everything contained within his Honour's reasons and with the orders proposed.