FEDERAL COURT OF AUSTRALIA

AX Business Systems Pty Ltd (ACN 072 265 635) v

Quality Image Pty Ltd (ACN 006 295 825) [2004] FCA 724

CORPORATIONS – statutory demand for payment of unpaid agency fees – application for review of decision of registrar refusing to set aside statutory demand – dispute as to defendant’s application of moneys paid by plaintiff – running account not produced in totality – whether there is a genuine dispute as to the existence of the debt or an offsetting claim within the meaning of s 459H of the Corporations Act 2001 (Cth).

Corporations Act 2001 (Cth):  ss 459H, 459J

Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 – applied

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 – applied

Moyall Investments Services Pty Ltd v White (1993) 12 ACSR 320 – referred to

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

Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (No 2) (1994) 122 ALR 717 – referred to

Odyssey Re (Bermuda) v Reinsurance Australia (2001) 19 ACLC 987 – referred to

St George Wholesale Finance Pty Ltd v Spalla (2000) 181 ALR 682 – distinguished

Jones v Dunkel (1959) 101 CLR 298 – referred to

AX BUSINESS SYSTEMS PTY LTD (ACN 072 265 635) v QUALITY IMAGE PTY LTD (ACN 006 295 825)

V 3089 of 2003

GOLDBERG J

15 JUNE 2004

MELBOURNE

THE COURT ORDERS THAT:

1.         The application for review of the decision of Deputy District Registrar Efthim made on 15 December 2003 be dismissed.

2.         The period for compliance with the statutory demand dated 7 April 2003 served by the defendant on the plaintiff pursuant to s 459E of the Corporations Act 2001 (Cth) be extended to 22 June 2004.

3.         The plaintiff pay the defendant’s costs of and incidental to the application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction

1                     The applicant, AX Business Systems Pty Ltd (“AX”), has applied to the Court to review the decision of Deputy District Registrar Efthim, made on 15 December 2003 dismissing AX’s application to set aside the respondent’s (“Quality Image”) statutory demand dated 7 April 2003 pursuant to s 459G of the Corporations Act 2001 (Cth) (“the Act”).  The applicant seeks an order that the statutory demand be set aside pursuant to s 459H of the Act and that the period for compliance with the statutory demand be extended.

Background

2                     The application arises out of the operation of a business in Orange, New South Wales, known as “The Xerox Shop”, which engaged in the sale of photocopier equipment and the supply of consumables and services associated with that equipment.  The Xerox Shop was operated by Quality Image until June 2000.  Quality Image is the holder of a Fuji Xerox sales and service dealership licence for a designated region of Victoria and New South Wales, and is the only entity able to grant a sub‑licence in that region.

3                     The relationship between AX and Quality Image was one of agent and sub‑agent, although there is an issue between the parties as to the circumstances out of which the sub‑agency arose.  What is agreed is that in August 1999 Mr Edward Watts, a director of Quality Image, contacted Mr Steven Anderson, the sole director of AX, who was working in Tasmania as a photocopier salesman, and proposed that Mr Anderson take over the operation of the Xerox Shop in Orange as a sub‑agent of Quality Image.  The substance of Mr Watts’ proposal is in dispute but it is not necessary to resolve that dispute for present purposes.

4                     According to Mr Anderson, Mr Watts offered him a sub‑agency for $100,000 on a “walk‑in, walk‑out” basis including stock‑in‑trade and plant and equipment used in the conduct of the business.  Mr Anderson said that Mr Watts told him that he would have to employ staff, operate the business and pay Quality Image a monthly agency fee.

5                     Mr Watts said that he did not say that Mr Anderson would have the right to operate as a sub‑agent for $100,000, but had explained to Mr Anderson that he would require approximately $100,000 in order to start up the sub‑agency, purchase stock, parts and office equipment and cover the lease of premises, vehicles and salaries.  According to Mr Watts he told Mr Anderson that the initial fee for the sub‑agency would be $125,000, with monthly payments of $10,000.

6                     Mr Anderson arrived in Orange around September 1999 and initially worked for Quality Image as a salesman in the business.  Towards the end of October 1999, AX became the sales agent for Quality Image.  It obtained equipment from Quality Image on consignment and sold it on Quality Image’s behalf to Quality Image’s customers.  Upon the sale of the equipment, payment was made to Quality Image, which was to account to AX for AX’s commission on the sale.  It was agreed that at this stage that AX paid an agency fee of $6,500 per month and that AX received 100% commission on profit from sales.  Quality Image contended that this was an interim arrangement in order to assist AX who was having trouble liquidating assets and to ascertain its ability to run the business.  This arrangement operated until 1 July 2000.

7                     Prior to July 2000 the parties had discussions regarding the terms of the sub‑agency agreement.  The figure of $100,000 was discussed, which according to AX was a fee for the purchase price of the business.  Mr Watts asserted that the $100,000 was a figure used by him in order to give Mr Anderson an estimate of the cost of purchasing stock, office equipment, taking over the lease of the premises and covering other expenses.  Mr Watts said that he discussed with Mr Anderson that there was also a capital payment to be made for the right to operate as a sub‑agent and that Mr Anderson did not have that capital available to him.

8                     Subsequently, around May or June 2000, the parties agreed that AX would takeover the business on 1 July 2000 but that the invoices rendered for payment would require payment to be made to Quality Image which would account to AX in respect of the commission due to it.  It was agreed that Quality Image could take 30% of the sales commission payments due to AX and apply it in reduction of the $100,000 payable by AX.  According to AX, this application of the commission was to enable AX to pay off the $100,000 purchase price whereas Mr Watts contended that it was used for the purpose of paying the costs of stock on hand, office, equipment leases, lease of premises and initial employee wages, which was in the order of $100,000.  The agency fee was increased from $6,500 per month to $10,000 per month.  AX was to render invoices to Quality Image, who would in turn account to AX for commission due under the agreement.  The agreement was never committed to writing.

9                     On 1 July 2000 AX began to operate the Xerox Shop pursuant to the agreement. Mr Anderson said that by November he had paid $80,000 in part payment of the purchase price in three instalments (“the bulk payments”) but that Quality Image did not provide him with any acknowledgement as to the purpose for which the payments were received.  He said that by March 2001 Quality Image had received the remaining $20,000 due by its retention of 30% of the sales commission otherwise due to AX.

10                  Mr Watts acknowledged that Quality Image had received some lump sum payments, but said that they were applied in reduction of other liabilities and payments due by AX.  They were not applied in discharge of the debt of $100,000, being the capital payment outstanding.  Quality Image’s name had not been removed from equipment and other leases and AX began to fall behind on payments due in respect of those leases.  Quality Image, as the leaseholder, paid the accounts on behalf of AX. 

11                  Mr Anderson asserted that Quality Image did not account to AX for the bulk payments or indicate the purpose for which they were received.  In response, Mr Watts asserted that an accounting was made of all monies owed by AX and that AX was informed where money was retained on account of the 30% commission and where it was applied to AX’s outstanding debt.  Mr Anderson asserted that the balance of the purchase price was paid in or around March 2001.  This was denied by Mr Watts.

12                  By early 2001 the parties were in dispute about the application of monies paid by AX to Quality Image and the ownership of the business.  The amount of commission to be retained by Quality Image in reduction of outstanding debts was reduced from 30% to 15%.

13                  In August 2001 the parties entered into a written trial agency agreement which provided for the indebtedness of AX to Quality Image to continue to be reduced by Quality Image retaining 15% commission on sales.

14                  Mr Anderson asserted that following the written agreement he continued to query where the 15% commission offsets were being applied and that Mr Watts ignored him.  Mr Watts said that his staff continually gave Mr Anderson written information as to the allocation of the commission and any other payments to be made against the outstanding debts of AX.  The agency fee was reduced from $10,000 to $7,000 in May 2002.

15                  From late 2001 to early 2003 AX began to withhold agency fees at those times where it felt that Quality Image was not giving it the requisite information regarding the allocation of commission offsets.

16                  On 18 February 2003, Mr Anderson wrote to Mr Watts informing him that he felt he was left with no choice other than to relinquish the Xerox Shop agency.  On 21 February 2003 the solicitors for Quality Image wrote to AX claiming that it owed money to Quality Image and informing AX that it could no longer represent itself as an agent of Quality Image and that it must cease to have any association with the Xerox Shop.  The Xerox Shop was subsequently closed by AX.  According to AX this was because of the solicitor’s letter, whilst Quality Image said that AX had relinquished the agency in its letter dated 18 February 2004.

17                  The statutory demand dated 7 April 2003, and served on AX Business Systems on 8 April 2003, required AX to pay Quality Image $125,205.30 for agency fees under the agreement between Quality Image and AX in relation to the operation of the business trading as “The Xerox Shop” in Orange, New South Wales.

18                  Mr Anderson was unsure why the invoices the subject of the statutory demand were not consecutive and whether the amounts claimed had been paid by AX.  He said that Quality Image had not provided receipts for many of the payments made by AX from July 2000 to February 2003, and that in that time AX had paid Quality Image in excess of $500,000.  Mr Watts said that the invoices only related to unpaid agency fees, and that they were not consecutive because some of the agency fees had in fact been paid.  It was these unpaid agency fees that became the subject of the statutory demand.  Quality Image asserted that it had properly accounted for monies received by it and had produced a reconciliation, which showed that AX owed Quality Image the sum of $520,486.32.  AX denied that it was indebted to Quality Image.

Is there a genuine dispute?

19                  Under s 459H(1) of the Act, where the Court is satisfied that there is either a genuine dispute or an offsetting claim, the Court must calculate, according to the formula established in s 459H(2), the amount of the demand in question.  Where the Court’s calculation of the demand is less than the statutory minimum the Court must set aside the demand (s 459H(3)). Where it is the same as the statutory minimum or more, the Court is empowered to make an order varying the demand, effective as from the original date of service of the demand (s 459H(4)).

20                  The construction of the phrase “genuine dispute” has been the subject of considerable judicial discussion.  In Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, McLelland CJ said at 787:

“In my opinion that expression connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the ‘serious question to be tried’ criterion which arises on an application for an interlocutory injunction or for the extension or removal of a caveat.  This does not mean that the court must accept uncritically as giving rise to a genuine dispute, every statement in an affidavit ‘however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be’ not having ‘sufficient prima facie plausibility to merit further investigation as to [its] truth’ (cf Eng Mee Yong v Letchumanan [1980] AC 331 at 341), ‘or patently feeble legal argument or an assertion of facts unsupported by evidence’:  cf South Australia v Wall (1980) 24 SASR 189 at 194. 

But it does mean that except in such an extreme case, a court required to determine whether there is a genuine dispute should not embark upon an inquiry as to the credit of a witness or a deponent whose evidence is relied on as giving rise to the dispute.  There is a clear difference between, on the one hand, determining whether there is a genuine dispute and, on the other hand, determining the merits of, or resolving, such a dispute.”

21                  In Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 at 464, after considerable discussion of the formulations used by courts to determine the existence of a genuine dispute, the Full Court formed the view that a genuine dispute requires that:

“•        the dispute be bona fide and truly exist in fact;

  •        the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived.”

The Full Court also held that although the formulations in the cases are useful, they should not be used as a substitute for the words of the statute (at 365).

22                  It is for the plaintiff to establish the existence of a genuine dispute:  Moyall Investments Services Pty Ltd v White (1993) 12 ACSR 320 at 324.  The claim must not be merely vexatious or frivolous and there must be some substance that is more than a mere assertion of a claim in order to satisfy the provision:  Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 at 39.

23                  AX submitted that there was no genuine dispute as to the existence of the debt for agency fees, the subject of the statutory demand.  Rather it stated that a genuine dispute existed as to whether those debts have been satisfied.  It contended that because it had paid Quality Image $500,000 or thereabouts, which Quality Image asserted had been applied to debts in respect of which there may or may not have been a dispute, that it was arguable that had the monies had been applied to the debts for agency fees then such debts would have been satisfied.  AX contended that Quality Image had failed to produce a running ledger to show how the monies received had been applied the debts and liabilities.  AX noted that Quality Image had not addressed the issue of invoices for agency fees of AX not being for consecutive months or the manner in which Quality Image had applied the $500,000 paid to it by AX.  The reconciliation produced by Quality Image was said to be insufficient to show the application of the $500,000.

24                  Quality Image contended that there was no genuine dispute and that, with the exception of Exhibit, SJA‑4, exhibited to the affidavit of Mr Anderson, there was no material to substantiate any of the allegations made by AX.  Exhibit SJA‑4 is a statement purporting to list the outstanding invoices rendered to Quality Image by AX.  Quality Image submitted that SJA‑4 should not be accepted for a number of reasons:  first, it was dated three days after service of the statutory demand; secondly, it was only a summary document which attached only self‑serving invoices; and thirdly, there was no evidence as to who produced it and the bulk of the off‑setting claim arose from an invoice rendered on the final day of occupation of the Xerox Shop.

25                  It is clear from the evidence before the Court that there was no dispute between the parties as to the existence of the liability that is the subject of the statutory demand, that is the obligation to pay agency fees.  Indeed the liability of AX to pay agency fees to Quality Image was conceded by Mr Anderson.  The dispute that was said to exist related to the satisfaction of the debt, rather than the existence of the debt itself.  The highest Mr Anderson could put the matter was to say that he was unsure why the invoices upon which the statutory demand was based were not for consecutive months and unsure whether the amounts claimed had been paid.  He acknowledged that some amounts claimed in the invoices had not been paid.  The fact that monies paid to Quality Image may have been applied to other debts of AX about which a genuine dispute may exist is not a relevant consideration for the Court in this instance where it is the agency fees which are outstanding.  Even if AX had not conceded that the debt existed, I would not be satisfied, on the evidence before the Court, that the claim that there is a genuine dispute moved beyond mere assertion of a claim.  If there be a dispute, the material before the Court shows that it relates to other debts or offsetting claims to which I turn.

Offsetting Claim

26                  An “offsetting claim” is defined in s 459H(5) of the Act as:

“a genuine claim that the company has against the respondent by way of counterclaim, set‑off or cross‑demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demandrelates) …”

For the claim to be a “genuine claim” the Court must be satisfied that it is made in good faith, and is not fictitious, merely colourable, frivolous or vexatious:  Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (No 2) (1994) 122 ALR 717 at 721, Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (supra).  This places a more onerous burden on the party seeking to maintain the statutory demand than the test for the existence of a genuine dispute.

27                  AX submitted that its offsetting claim consisted of the commission deducted by Quality Image over and above the sum of $20,000 (totalling approximately $100,000 according to Mr Anderson) and of unpaid commissions, totalling around $135,529.96, on sales made by AX for which Quality Image has received payment.  However, at the hearing AX submitted that it had paid in excess of $500,000 to Quality Image over a period of time and that those payments were best characterised as offsetting payments, rather than payments going to the issue of the existence of a genuine dispute.  AX submitted that Quality Image had not accounted for either the receipt or the application of moneys paid by AX.

28                  AX submitted that there was a genuine claim in relation to the $135, 529.96 on unpaid commissions on sales, and in support of its claim it relied upon Exhibit SJA‑4, the statement of the outstanding invoices issued by AX to Quality Image.  It further submitted that Quality Image had applied money owed to AX to offset debts alleged to be owing by AX to Quality Image, and that where those offsets took place subsequent to the issuing of the statutory demand they should be taken into account as valid offsetting claims.  Quality Image submitted that there was no bona fide offsetting claim and pointed to the paucity of documentary evidence produced by AX in support of such a claim.

29                  Quality Image relied upon the affidavit of its accountant, Ms Natasha Tighe, who addressed each invoice referred to in Exhibit SJA‑4, giving a detailed explanation of the history of each transaction with supporting documentation.  Ms Tighe rebutted the liability of Quality Image to pay the invoices, largely on the grounds that transactions were cancelled or that monies were allocated towards other outstanding debts of AX.  Ms Tighe’s affidavit concluded that no money was owed to AX by Quality Image.

30                  Quality Image submitted that the further affidavit of Mr Anderson, which purported to reply to the issues raised in Ms Tighe’s affidavit, did not deal with those issues in any substantive way, save to deny the truth and substance of her analysis.

31                  Although AX asserted that an offsetting claim existed in respect of unpaid commissions and has supported that assertion by reference to copy invoices sent by AX to Quality Image, a close examination of the affidavit material in rebuttal, in particular the affidavit of the accountant, Ms Tighe, answers the assertion that there is an offsetting claim.  Ms Tighe’s response to the invoices listed in Exhibit SJA‑4 is detailed and supported by a considerable body of documentation.  Further, AX’s other claim that Quality Image owed AX for commission deducted by way of offsets over and above the sum of $20,000, for which Quality Image has never accounted and which Mr Anderson estimated would be in excess of $100,000, was no more than unsubstantiated assertion.

32                  The difficulty is that on the one hand AX submitted that it has paid an amount in excess of $500,000 to Quality Image over a period of time for which Quality Image failed to account.  But at the same time, AX has conceded that this $500,000 was not by way of a cheque or one‑off payment and that it does not know the manner in which Quality Image accounted for the monies paid to it.  The only evidence put in support of an off‑setting claim is Exhibit SJA‑4, a statement tendered to prove the existence of a debt of $135,529.96 owed to AX.  However each of the outstanding amounts listed on that statement are explained and rebutted in substance by the evidence of Ms Tighe.  I take but three examples.

33                  The first relates to a claim by AX of an outstanding debt of $2,447.20 in respect of an invoice rendered for commission on the sale of a photocopier.  AX invoiced Quality Image for $9,247.70, in respect of which AX acknowledged payment by Quality Image of $6,800.50 but maintained that the unpaid $2,447.20 remained outstanding.  In reply Ms Tighe said AX had incorrectly calculated the buy price and commission in its invoice and that the correct amount owed to AX was $6,800.50, which had been paid.  Ms Tighe said that AX’s calculations were incorrect because they were based on prices that were inclusive of GST, being $31,496.00, when they should have calculated the commission on prices exclusive of GST, that is $28,632.72.  Ms Tighe set out the correct calculations in her affidavit.  Mr Anderson’s response to her assertion is that he thought that the $31,496.00 was the price exclusive of GST.  Ms Tighe, in her responding affidavit exhibited the invoice rendered by Quality Image to Fuji Xerox which makes it clear that $28,632.72 was the GST‑exclusive sale price and that the commission owing to AX was $6,800.50.

34                  The second example relates to a $2,541.00 commission claim by AX on the sale of a photocopier to a company known as Smiths Transport.  The usual practice was for AX to effect the sales, but for Quality Image, who paid Fuji Xerox for the machine, to be paid by the customer and for AX to invoice Quality Image for the commission owing to it on the sale.  According to Ms Tighe, AX sold the photocopier to Smiths for $4,070.00 (including GST) and invoiced the customer directly for the sale price, in contrast to the usual practice of the customer paying Quality Image.  Accordingly Quality Image did not receive payment for the sale, and no money was owed to AX.  Ms Tighe exhibited the invoice from AX to Smiths, which showed that the invoice had been paid by cheque No 504573.  In response, Mr Anderson agreed that AX received $4,070.00 from Smiths, but said that Quality Image subsequently invoiced AX for the entire amount of the transaction.  Importantly, Mr Anderson did not say whether the invoice was ever paid by AX.  Ms Tighe said that the commission owing to AX on the Smiths Transport sale would have been $1,441.00.  Mr Anderson also denied that the correct amount of commission owing was $1,441.00, as asserted by Ms Tighe, and claimed that $2,541.00 was outstanding from Quality Image.  Ms Tighe said the invoice for $2,541.00 was not paid because it was for an incorrect amount.

35                  In the third example, AX invoiced Quality Image for $18,661.50, being the commission owed to AX on the sale of a photocopier to Evans Shire Council (“the Evans Shire commission”).  According to AX, the Evans Shire commission remained outstanding on 11 April 2003.  In response, Quality Image submitted that its practice was, at times, to withhold commission due to AX in respect of certain sales and to apply it to debts outstanding to Quality Image from AX.  Quality Image exhibited a statement which showed that the Evans Shire commission was withheld and allocated against three different debts in the amounts of $5,657.30, $7,249.00 and $5,755.20 respectively.  Quality Image then produced its records or statements, similar to an extract of a running account, which showed that the monies were in fact allocated towards certain other debts, such debts having arisen where AX had accepted payment directly from the customer.  Mr Anderson stated that AX was not consulted as to the manner in which Quality Image applied, allocated or off‑set commission due to AX, and that he had not seen the documents that showed that these allocations had taken place.  However, Quality Image produced a facsimile from Quality Image to AX, dated 7 February 2003, in which Ms Tighe notified AX of the manner in which the Evans Shire commission had been allocated.

36                  Although AX asserted that there was an offsetting claim of around $100,000 owed to AX, that allegation was not supported by any documentation.  AX also relied upon on Exhibit SJA‑4, which is a statement issued to Quality Image listing the series of invoices rendered and the sums that remain outstanding in respect of unpaid commission. The affidavits of Ms Tighe, however, comprehensively answer each and every allegation that money is owed to AX.

37                  In such circumstances I am not satisfied that AX has a genuine offsetting claim in respect of the amount claimed in the statutory demand.

Failure to provide a running ledger

38                  At the conclusion of the hearing the parties were invited to submit further contentions in relation to the implications of Quality Image’s failure to provide a running ledger of the debts incurred by AX and the application of payments made by AX to Quality Image.

39                  AX contended that the failure to account or to provide a running ledger, in circumstances where such an account would provide knowledge of matters relevant to the question of the continued existence of the liability in debt, should raise a “plausible contention as to doubt about liability” within the meaning of Eyota (supra) and Odyssey Re (Bermuda) v Reinsurance Australia (2001) 19 ACLC 987 at [20]. 

40                  Section 459J provides that:

“(1)     On an application under section 459G, the Court may by order 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.

 (2)      Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect.”

AX contended that the failure to provide a running ledger should, at least, be considered a sufficient “other reason” to set aside the statutory demand pursuant to s 459J(1).  AX also relied upon St George Wholesale Finance Pty Ltd v Spalla (2000) 181 ALR 682, where a failure by the party issuing the bankruptcy notice to provide an explanation for the disparity between the debt claimed and the receiver’s accounts resulted in Heerey J using the principle in Jones v Dunkel (1959) 101 CLR 298 to infer that the party issuing the bankruptcy notice was not itself sure of what was really owing.  AX submitted that the Court should set aside Quality Image’s statutory demand on the same principle, or at least for ‘some other reason’ pursuant to s 459J(1)(b) of the Act.

41                  Quality Image submitted that the decision in Odyssey (supra)was distinguishable on a number of grounds; the case turned on different facts and there was an express contractual right to provide access to documents.  Quality Image contended that the decision in St George Wholesale Finance (supra) was irrelevant because it pertained to a different statutory regime; it related to a situation where the debtor did not have access to any of his own company records and the bankruptcy notice was admitted by the creditor, at the hearing of that case, to be overstated by half.  I accept these submissions; I do not consider that the decision in St George Wholesale Finance is applicable in the present circumstance such as to warrant the conclusion of a genuine offsetting claim.

42                  Having regard to the detail of the explanation given by Ms Tighe as to the matters raised by AX, I am not satisfied that the failure of Quality Image to provide a running account or ledger is a sufficient “other reason” under s 459J to set aside the demand.

Conclusion

43                  For the reasons above, AX has not satisfied the Court that either a genuine dispute or an offsetting claim exist within the meaning of s 459H of the Act.  The application will be dismissed with costs.

Associate:

Dated:              15 June 2004