FEDERAL COURT OF AUSTRALIA

Grocon Constructors (Qld) Pty Ltd v Dexus Funds Management Limited as Trustee for the Dexus 480Q Trust (No 2) [2019] FCA 1117

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 459H of the Corporations Act 2001 (Cth), the statutory demand dated 29 January 2019, served on the plaintiff by the defendant, be set aside.

2.    Subject to paragraph 3, there be no order as to costs.

3.    If either party seeks a variation of the costs order in paragraph 2, it may provide a written submission (of no more than two pages) within seven days of these orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 459H of the Corporations Act 2001 (Cth), the statutory demand dated 29 January 2019, served on the plaintiff by the defendant, be varied so that the amount of the debt is $13,910,008.99.

2.    Subject to paragraph 3, there be no order as to costs.

3.    If either party seeks a variation of the costs order in paragraph 2, it may provide a written submission (of no more than two pages) within seven days of these orders.

4.    There be liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    There are two proceedings before the Court. In the first proceeding, the plaintiff is Grocon Constructors (Qld) Pty Ltd (Grocon (Qld)). In the second proceeding, the plaintiff is Grocon Constructors (Vic) Pty Ltd (Grocon (Vic)). I will refer to the plaintiffs together as the Grocon entities. In each proceeding, the relevant Grocon entity applies pursuant to s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand dated 29 January 2019, served on the Grocon entity by the defendant (Dexus). I will refer to the two statutory demands as the Current Statutory Demands.

2    In March 2016, Grocon (Qld) and Grocon (Vic) entered into leases and licences of various parts of a building at 480 Queen Street, Brisbane (the Building). Dexus was the landlord in relation to the leases and licences. The leases and licences ran for 7 to 10 years.

3    On 1 May 2018, the Grocon entities and Dexus entered into a deed of surrender in relation to the leases and licences (the Deed of Surrender). Under the Deed of Surrender, Dexus agreed to release Grocon (Qld) and Grocon (Vic) from their obligations under the leases and licences for the remainder of the terms, in consideration for certain payments. The Current Statutory Demands relate to amounts that are claimed to be due and payable by the Grocon entities to Dexus pursuant to the terms of the Deed of Surrender.

4    The amounts claimed in the Current Statutory Demands are significant. The statutory demand issued to Grocon (Qld) is for $14,626,538.60. The statutory demand issued to Grocon (Vic) is for $28,561,910.14. There is an overlap in the amounts claimed in the Current Statutory Demands, in the sense that certain amounts are claimed against both Grocon (Qld) and Grocon (Vic) on the basis that they are jointly and severally liable for those amounts.

5    The Grocon entities contend that the Current Statutory Demands should be set aside. The three main contentions advanced orally on behalf of the Grocon entities were that:

(a)    the Current Statutory Demands should be set aside because they are an abuse of process;

(b)    the amounts (or certain amounts) claimed in the Current Statutory Demands were not due and payable at the date of the demands; and

(c)    there was a genuine dispute about certain amounts that were the subject of the Current Statutory Demands.

6    In support of the application, the Grocon entities rely on two affidavits of Matthew Leyshon. In opposition to the application, Dexus relies on two affidavits of Jaime Burnell and two company searches.

7    For the reasons that follow, I have concluded that there is a genuine dispute as to whether certain amounts (namely the amount referred to below as the Initial Amount and the interest on the Initial Amount) were due and payable at the date of the Current Statutory Demands. It follows from this conclusion that the statutory demand issued to Grocon (Qld) is to be set aside and that the statutory demand issued to Grocon (Vic) should be varied by, in effect, excising the Initial Amount and the interest on that amount. Further, Dexus concedes that an amount of $25,362.55 should be excised from the amount claimed from Grocon (Vic). Apart from these matters, I do not accept the contentions of the Grocon entities.

8    Accordingly, I will make orders to the effect that:

(a)    the statutory demand issued to Grocon (Qld) be set aside; and

(b)    the statutory demand issued to Grocon (Vic) be varied so that the amount of the debt is $13,910,008.99.

Applicable principles

9    Section 459G of the Corporations Act provides:

(1)    A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2)    An application may only be made within 21 days after the demand is so served.

(3)    An application is made in accordance with this section only if, within those 21 days:

   (a)    an affidavit supporting the application is filed with the Court; and

(b)    a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.

10    Section 459H of the Corporations Act provides in part:

(1)    This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following:

(a)    that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;

   (b)    that the company has an offsetting claim.

11    Section 459J of the Corporations Act 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.

12    In Citation Resources Ltd v IBT Holdings Pty Ltd (2016) 116 ACSR 274 at [17], McKerracher J provided the following summary of the principles relevant to the meaning of the phrase “genuine dispute” as found in s 459H(1)(a):

In short then:

(a)    For there to be a genuine dispute, there must be a ‘plausible contention requiring investigation’. It raises the same sort of considerations as the ‘serious question to be tried’ criterion applicable to interlocutory injunctions.

(b)    The company will fail in that task only if it is found upon the hearing of its s 459G application that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow.

(c)    The Court is not called on to determine the merits of, or to resolve, the dispute.

(d)    The threshold is not high or demanding; however the claim must have some merit and be genuine. That requirement has been described variously as the claim must be ‘real and not spurious’, the claim must have ‘a real chance of success’, there must be ‘a serious question to be tried’.

(e)    The Court does not engage in any form of balancing exercise between the strengths of competing contentions.

(f)    The essential task is relatively simple — to identify the genuine level of a claim (not the likely result of it).

  (g)    A mere assertion of an oral agreement will not necessarily suffice.

See also Easy Stay Mining Accommodation Pty Ltd v Grounded Construction Group Pty Ltd [2018] FCA 519 at [18]; Aussie Hoist Property Pty Ltd v Mulqueen [2018] FCA 1493 at [56].

13    Also of relevance are the following statements of general principle outlined by the Full Court (Gordon, Griffiths and Farrell JJ) in First Equilibrium Pty Ltd v Bluestone Property Services Pty Ltd (in liq) (2013) 95 ACSR 654 at [21]:

(1)    The phrase “a genuine dispute” uses ordinary English words and its meaning in any particular set of circumstances must be a question of fact: Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd [2013] VSCA 176 at [5].

(2)    There must be some evidence to support the factual allegations that go to make up the claim: Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 at [18].

(3)    It is insufficient for the facts to be asserted in the supporting affidavit or by annexing a copy of the statement of claim: Endeavour Film Management Pty Ltd v Fox Studios Australia Pty Ltd [2003] NSWSC 831 at [13].

(4)    The relevant evidence does not need to be admissible at a final hearing on the merits of the case (Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 at 460; 21 ACSR 581 at 588) but the evidence needs to be sufficient to satisfy the court that the claim has a proper factual basis: John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253.

(5)    For there to be a genuine dispute, there must be a “plausible contention requiring investigation”. It raises the same sort of considerations as the “serious question to be tried” criterion applicable to interlocutory injunctions. At this stage, the court is not called on to determine the merits of or to resolve the dispute: Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787.

(6)    The threshold is not high or demanding: Kirrak Pty Ltd v Compass Scaffolding & Plant Hire Pty Ltd [2007] NSWSC 1002 at [3]; Roadships Logistics Ltd v Tree (as trustee for the Tree Superannuation Fund) (2007) 64 ACSR 671; [2007] NSWSC 1084 at [24]. However, the claim must have some merit and be genuine. That requirement has been described variously as the claim must be “real and not spurious”, the claim must have a “real chance of success”, there must be a serious question to be tried and, in some cases, it has been said that there is a requirement of good faith: see Abadeen at [33].

(7)    A useful analogy to the burden on the party asserting the claim is that of an alleged debtor resisting an application for summary judgment. If the Court sees any factor that, on rational grounds, indicates an arguable case, it must find that a genuine dispute exists even where any case apparently available to be advanced to the contrary seems stronger: see Product People (International) Pty Ltd v Box Seat Company Pty Ltd (in liq) [2013] FCA 277 at [25].

14    A statutory demand will be set aside for “some other reason” under s 459J(1)(b) of the Corporations Act where the conduct of the creditor in issuing the statutory demand is unconscionable, an abuse of process, or gives rise to substantial injustice. Conduct falling within this category includes using the statutory demand process by a creditor as a debt collection device. The reasons for this were explained by Martin CJ (with whom Owen and Miller JJA agreed) in Createc Pty Ltd v Design Signs Pty Ltd (2009) 71 ACSR 602 at [2] as follows:

The issue of the statutory demand, and the appeal from the decision of the master setting it aside, reflect a fundamental misconception as to the purpose of the statutory demand process created by Pt 5.4 of the Corporations Act. That purpose is to provide a means whereby the insolvency of a company may be established for the purposes of an application to wind up that company. Its purpose is not to provide a means whereby those claiming a genuinely disputed debt can avoid the obligation of establishing their entitlement to that debt in a court of appropriate jurisdiction by placing commercial pressure on the party resisting payment. There is a clear inference from the evidence that Createc’s purpose in issuing the statutory demand was the improper purpose of using the statutory demand process to enforce payment of a debt which it knew to be genuinely disputed. That is an abuse of process.

15    Martin CJ also stated, at [48]-[50]:

48    Following the introduction of Pt 5.4, doubts were expressed as to whether the statutory procedures provided an exclusive code for the resolution of proceedings brought as a result of the issue of a statutory demand. However, in David Grant & Co Pty Ltd v Westpac Banking Corp (1995) 184 CLR 265; 131 ALR 353; 18 ACSR 225; [1995] HCA 43 (David Grant), Gummow J, with whom the other members of the High Court agreed, expressed the following view (at CLR 279; ALR 362; ACSR 234):

It also may transpire that a winding-up application in respect of a solvent company is threatened or made for an improper purpose which amounts to an abuse of process in the technical sense of that term, as explained in Williams v Spautz. However, in an appropriate case, injunctive relief may then be available to the company in a court of general equity jurisdiction. [Footnotes omitted]

49    Since that decision, it has generally been accepted that the court retains a residual jurisdiction to restrain reliance on the statutory demand procedure on the ground of an abuse of process: see House of Tan Pty Ltd v Beachiris Pty Ltd (1996) 21 ACSR 527 at 528: SMEC at [35]; Roberts at [54]-[58]; and State Bank of New South Wales v Tela Pty Ltd (No 2) (2002) 188 ALR 702; [2002] NSWSC 20 at [5]. In Roberts, the jurisdiction was exercised on the grounds of impropriety of purpose, and a winding-up application was dismissed with costs. Similarly, in Old Kiama Wharf Co Pty Ltd v DCT (2005) 55 ACSR 223; [2005] NSWSC 929, an application to set aside a statutory demand was upheld because the court concluded that the process was being used to “attempt to apply pressure to a taxpayer to force payment of a debt”: at [42].

50    Adopting the criterion from Williams v Spautz (1992) 174 CLR 509; 107 ALR 635; [1992] HCA 34 (Williams), suggested by Gummow J in David Grant, there will be an abuse of process if the purpose of the party issuing the statutory demand is not the purpose of pursuing the statutory demand to wind up the company on the ground of insolvency, but rather to use the process as a means of obtaining an advantage for which the process is not designed or to obtain some collateral advantage beyond what the law offers – such as the application of pressure to compel payment of the disputed debt.

16    A statutory demand will liable to be set aside (either under s 459H(1)(a) or s 459J(1)(b) of the Corporations Act) in circumstances where it includes a debt or debts that are not due or payable or there is a genuine dispute as to whether the debt or debts is or are due and payable: see NT Resorts Pty Ltd v Deputy Commissioner of Taxation (1998) 153 ALR 359 at 363-367 per Finkelstein J.

Background facts

17    There was no real dispute between the parties as to the background facts, which may be summarised as follows.

18    Between March and July 2016, Grocon (Qld) and Grocon (Vic) entered into various leases and licenses with Dexus in respect of the Building.

19    In about September 2017, the Grocon entities entered into discussions with representatives from the Department of Veterans’ Affairs (the DVA) in relation to DVA leasing parts of the Building which had been leased to Grocon (Vic). During these discussions, the DVA stated that it preferred to enter into leases directly with Dexus rather than subleases with Grocon (Vic).

20    In November and December 2017, the Grocon entities and Dexus entered into discussions in relation to the DVA entering into lease arrangements with Dexus directly and the surrender of the various leases and licences between Grocon (Qld) and Grocon (Vic) and Dexus.

21    On or about 1 May 2018, the Grocon entities and Dexus entered into the Deed of Surrender.

22    On 3 January 2019, Dexus served on both Grocon (Qld) and Grocon (Vic) statutory demands dated 2 January 2019 (the Previous Statutory Demands).

23    On 21 January 2019, the then solicitors for the Grocon entities sent correspondence to the solicitors for Dexus outlining various grounds of objection to the Previous Statutory Demands.

24    On 22 January 2019, the solicitors for Dexus confirmed that the Previous Statutory Demands would be withdrawn.

25    On 24 January 2019, the Grocon entities received letters from the solicitors for Dexus enclosing invoices issued to Grocon (Qld) (the Grocon (Qld) Invoice) and Grocon (Vic) (the Grocon (Vic) Invoice). The Grocon (Qld) Invoice and the Grocon (Vic) Invoice stated that the amounts claimed were due on the date that the invoices were issued (i.e. 24 January 2019).

26    On 25 January 2019, the then solicitors for the Grocon entities sent a letter to the solicitors for Dexus “disputing the liability for the amounts … as set out in your client’s invoices including for the reasons previously articulated to you” and noting there was a “genuine dispute in respect of the matters claimed”.

27    On 29 January 2019, the solicitors for Dexus sent an email to the then solicitors for the Grocon entities attaching a copy of the Current Statutory Demands.

28    On 8 February 2019, the then solicitors for the Grocon entities sent a letter to the solicitors for Dexus objecting to the Current Statutory Demands on the basis set out in previous correspondence.

29    On 15 February 2019, the current solicitors for the Grocon entities sent a letter to the solicitors for Dexus providing further details in relation to the grounds upon which the Grocon entities dispute the amounts claimed in the Current Statutory Demands.

30    During the course of the hearing, senior counsel for Dexus handed up an ‘aide memoire’ that itemised the component parts of the amounts claimed in each of the Current Statutory Demands. The aide memoire was to the following effect:

COMPARISON OF AMOUNTS CLAIMED IN VIC AND QLD DEMANDS

Consideration

31    As noted above, the Grocon entities advanced three main contentions in oral submissions at the hearing. I will now consider each of these in turn.

Abuse of process

32    The Grocon entities submitted that the Current Statutory Demands should be set aside on the basis that they are an abuse of process. They submitted that, on the evidence before the Court, the “only inference available” is that the Current Statutory Demands were issued for the collateral or improper purpose of putting pressure on the Grocon entities to make payment of the amounts claimed in the Current Statutory Demands. It was submitted that this constituted an impermissible use of the statutory demand procedure.

33    The Grocon entities relied on the following facts and matters:

(a)    The Previous Statutory Demands were served by Dexus on 3 January 2019, during the New Year holiday period.

(b)    The Current Statutory Demands were issued in circumstances where Dexus knew that the Grocon entities disputed the amounts sought to be claimed and had already issued and withdrawn the Previous Statutory Demands.

(c)    The Current Statutory Demands were issued without Dexus providing any substantive response to the matters raised by the Grocon entities in relation to why there was a genuine dispute about the existence of the claimed debts.

(d)    The Current Statutory Demands were issued on 29 January 2019, only two business days after the issue of the Grocon (Qld) Invoice and the Grocon (Vic) Invoice, meaning that none (or at least a significant proportion) of the amounts claimed in the Current Statutory demands were due or payable.

(e)    The total amount claimed in the Current Statutory Demands is $43.2 million, far exceeding the maximum total amount payable under the Deed of Surrender. This is apt to mislead and should be viewed as conduct designed to place commercial pressure on the Grocon entities.

(f)    Dexus has other options available to it. For example, it holds a $3.1 million bank guarantee which has not been called upon and remains outstanding.

(g)    There is no evidence before the Court that Grocon (Qld) or Grocon (Vic) is insolvent.

34    I am not persuaded that the “only inference available” is that the Current Statutory Demands were issued for the collateral or improper purpose of putting pressure on the Grocon entities to make payment of the amounts claimed. In the circumstances, which included that the Grocon entities had not paid amounts outstanding for rent for a considerable period of time, it may be inferred that Dexus issued the Current Statutory Demands as a means of testing the solvency of the Grocon entities. Under the Deed of Surrender, Base Rent of $537,733.50 was due each month during the period July 2018 to December 2018. There is no dispute that those amounts were payable. None of those amounts has been paid.

35    I therefore reject the Grocon entities’ first contention.

Due and payable contention

36    The Current Statutory Demands are founded on the Grocon (Qld) Invoice and the Grocon (Vic) Invoice. These invoices were issued on 24 January 2019 and stated that the amounts were due on the same day. The Current Statutory Demands were issued on 29 January 2019, only two business days after the date of the invoices (28 January 2019 was a public holiday).

37    The Grocon entities submitted that they should have been provided with a reasonable time to comply with the two invoices. It was submitted that, given the significant sums involved, the Current Statutory Demands were issued before the expiration of a reasonable period of time, and that the amounts the subject of the Current Statutory Demands were therefore not due and payable.

38    The Grocon entities also made a more particular submission in relation to the amount payable under cl 4.1 of the Deed of Surrender (the Initial Amount) and the interest on that amount. Those amounts were included in both of the Current Statutory Demands: see Dexus’s aide memoire set out at [30] above. (The figures in the aide memoire are GST inclusive figures.) Clause 4.1 of the Deed of Surrender is in the following terms:

4.1    Payment as at 31 May 2018

The Tenant must use its best endeavours to pay the Landlord the sum of $12,700,000 (plus GST) (Initial Amount) on or before 31 May 2018. Without limiting the Landlord’s other rights under this deed or at law (including the right for the Landlord to sue the Tenant for the missed or late payment), if the Tenant has not made payment in full on or before 30 June 2018, the Tenant must pay the Landlord interest at the Default Interest Rate on the Initial Amount from 1 July 2018 until the date it is paid in full. The interest must be included with the late payment.

39    The Grocon entities submitted that: cl 4.1 did not specify a date for payment; the first sentence of the clause merely provided that the Tenant must use its best endeavours to pay the Initial Amount before 31 May 2018; while the clause provides for interest to be payable if the amount has not been paid on or before 30 June 2018, no date for payment is specified. In the course of discussion at the hearing, counsel for the Grocon entities accepted that payment could not be deferred indefinitely. It was submitted that if Dexus required payment (after 30 June 2018), it needed to provide reasonable notice. The Grocon entities submitted that it was sufficient for them to show that there is a plausible argument that the relevant amounts were not due and payable at the date when the Current Statutory Demands were issued.

40    In response, Dexus submitted that cl 4.1 required payment of the Initial Amount by 30 June 2018. This construction was said to be “inescapable”. Dexus relied, in particular, on the reference to the right of the Landlord “to sue the Tenant for the missed or late payment” if payment had not been made on or before 30 June 2018. Dexus submitted that it was not necessary for Dexus to demand payment of the Initial Amount in order for that amount to be due and payable, and that the invoices that were issued were, strictly, unnecessary. Alternatively, Dexus submitted that, if a reasonable period of time was required to be given, what constituted a reasonable period of time was indicated by cases such as Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491 at 502-503; Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286 at 295, 317-319; and Parras Holdings Pty Ltd v Commonwealth Bank of Australia [1998] FCA 682. These cases refer to the concept of reasonable time being directed to the mechanics of complying with the demand. Dexus submitted that, in the circumstances, including the giving of the Previous Statutory Demands, reasonable notice was provided.

41    In my view, there is a plausible argument that, on the true construction of cl 4.1 of the Deed of Surrender, the Initial Amount and interest on the Initial Amount are payable only on the giving of a reasonable period of notice. The clause does not expressly stipulate that payment must be made by a specified date. Rather, the clause (at least arguably) contemplates that the Initial Amount may not be paid until after 30 June 2018 and provides for interest to be payable in such circumstances. The clause does not state, for example, that the Initial Amount “must be paid on 30 June 2018”. This is to be contrasted with other clauses in the Deed of Surrender which state that a party “must pay” a particular amount by a specified date (see, eg, cl 4.8(b)). (I note that cl 16 provides that time is of the essence, but I do not consider this to affect the analysis.)

42    Further, in my view, there is a plausible argument that the period of time between the date of the invoices and the date of the Current Statutory Demands (two business days) was not a reasonable period of time. The present context is different from those in the cases relied on by Dexus (which concerned the banker-customer relationship and amounts payable “on demand”). In the present context, as described above, there is at least a plausible argument that a reasonable period of time was more than two business days. I do not consider the giving of the Previous Statutory Demands to detract from this analysis. Those demands were withdrawn. The question of what constitutes a reasonable time is to be determined in relation to the invoices dated 24 January 2019.

43    Accordingly, there is a genuine dispute as to whether or not the Initial Amount and the interest on the Initial Amount were due and payable at the date when the Current Statutory Demands were issued.

44    I do not otherwise accept the Grocon entities’ contentions as to when amounts were due and payable.

45    The other amounts claimed in the Grocon (Vic) Invoice were due and payable on specific dates pursuant to the Deed of Surrender. Those dates were earlier than the date of the Current Statutory Demands. I do not accept that the issuing of the invoice to Grocon (Vic) meant that a further period needed to be given in relation to these amounts.

46    It follows from the above that the statutory demand issued to Grocon (Qld) is to be set aside. The amount claimed in that statutory demand related entirely to the Initial Amount and interest on that amount. In relation to Grocon (Vic), it follows from the above that the statutory demand should be varied by excising the Initial Amount and the interest on that amount.

47    Dexus conceded that, as contended by the Grocon entities, there was a genuine dispute in relation to the amount of $25,362.55 claimed for “Outgoings – Prior yr adjustments” in the statutory demand issued to Grocon (Vic). Accordingly, this amount should also be excised from the statutory demand issued to Grocon (Vic).

Genuine dispute

48    The Grocon entities contended that there was a genuine dispute in relation to the Initial Amount (which is the subject of both of the Current Statutory Demands). It was submitted that, on the proper construction of the Deed of Surrender, the Initial Amount is not a joint and several liability. (The Current Statutory Demands have been prepared on the basis that liability for the Initial Amount is joint and several.) It is unnecessary to determine this issue as I have concluded that there is a genuine dispute as to whether the Initial Amount was due and payable at the date of the Current Statutory Demands. However, had it been necessary to determine the issue, I would have concluded that there is no genuine dispute as to whether the Initial Amount is a joint and several liability. Clause 4.1 of the Deed of Surrender provides that the Initial Amount is to be paid by the “Tenant”. Both Grocon (Qld) and Grocon (Vic) are defined as the “Tenant” in the list of parties on the first page of the Deed of Surrender. Clause 1.2(e) of the Deed of Surrender provides that, unless the context requires otherwise, “an obligation under this deed on the part of two or more persons binds each person individually and all of them jointly”. There is nothing in the context of cl 4.1 to require otherwise (in this regard, see Barak Pty Ltd v WTH Pty Ltd (2003) 11 BPR 20,687; [2003] NSWSC 15 at [16]-[17]). Accordingly, I do not consider there to be a plausible argument that the obligation to pay the Initial Amount is several rather than joint and several.

49    In oral submissions, the Grocon entities submitted that the same contention applied to other amounts that are the subject of the statutory demand issued to Grocon (Vic), in particular, the Special Rent amount. However, I am not persuaded that there is a plausible argument that these amounts are not payable by Grocon (Vic). Either the obligation to pay is joint and several (for the reasons outlined above), or it has not been shown that there is a plausible argument that the amount is not payable by Grocon (Vic).

50    I note for completeness that in their written submissions the Grocon entities submitted that there is a genuine dispute in relation to the interest figure of $656,538.60 (being the interest on the Initial Amount). It is unnecessary to deal with this issue in light of the conclusions I have reached above (that there is a genuine dispute as to whether the Initial Amount and the interest on that amount were due and payable at the date of the Current Statutory Demands). Nevertheless, I note that: Dexus accepted that the interest calculation in the Current Statutory Demands was incorrect; Dexus provided details of the correct interest calculation in a schedule to its submissions; and Dexus noted that, as the Current Statutory Demands calculated interest only to 31 December 2018, by the date of the demands the interest claimed was less than that which was then payable. I accept the calculation in the schedule to Dexus’s submissions. It follows that, had it been necessary to decide this point, I would not have accepted that it gave rise to a genuine dispute.

Conclusion

51    For the reasons set out above, I will make orders to the effect set out in [8] above. In relation to costs, I note that the two proceedings were run together and each side has had a measure of success. In these circumstances, it appears to be appropriate that there be no order as to costs in each proceeding. I will make orders to this effect, but will give the parties a short period of time to make a submission on costs if they wish to seek a different order.

Associate:

Dated:    22 July 2019