Federal Court of Australia

Kailash Lawyers Pty Ltd v Patial [2025] FCA 884

ORDERS

THE COURT ORDERS THAT:

1. The plaintiffs have leave to file an amended originating process containing the following amendments to the originating process:

On the facts stated in the supporting Affidavit of Amit Pall sworn/affirmed 16 17 June 2025:

1.     The First Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the First Plaintiff on 30 May 2025 be set aside.

2.    The Second Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

3.    The Third Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Third Plaintiff on 30 May 2025 be set aside.

4.    The Fourth Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

2. The amended originating process be filed within 48 hours of these orders.

3. Pursuant to s 459H and s 459J of the Corporations Act 2001 (Cth) the statutory demand dated 29 May 2025 and served by the defendant on the first plaintiff on 30 May 2025 be set aside.

4. Pursuant to s 459H and s 459J of the Corporations Act 2001 (Cth) the statutory demand dated 29 May 2025 and served by the defendant on the second plaintiff on 30 May 2025 be set aside.

5. Pursuant to s 459H and s 459J of the Corporations Act 2001 (Cth) the statutory demand dated 29 May 2025 and served by the defendant on the third plaintiff on 30 May 2025 be set aside.

6. Pursuant to s 459H and s 459J of the Corporations Act 2001 (Cth) the statutory demand dated 29 May 2025 and served by the defendant on the fourth plaintiff on 30 May 2025 be set aside.

7. The defendant be restrained, prior to the final determination of proceeding NSD1016/2021, from serving a demand under s 459E of the Corporations Act 2001 (Cth) upon any of the plaintiffs, without a prior grant of leave from this Court to do so.

8. The defendant pay the plaintiffs’ costs on an indemnity basis, as agreed or taxed.

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

ORDERS

THE COURT ORDERS THAT:

1. The proceeding be dismissed.

2. The plaintiff pay the defendant’s costs on an indemnity basis, as agreed or taxed.

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

ORDERS

THE COURT ORDERS THAT:

1. The proceeding be dismissed.

2. The plaintiff pay the defendant’s costs on an indemnity basis, as agreed or taxed.

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

ORDERS

THE COURT ORDERS THAT:

1. The proceeding be dismissed.

2. The plaintiff pay the defendant’s costs on an indemnity basis, as agreed or taxed.

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

ORDERS

THE COURT ORDERS THAT:

1. The proceeding be dismissed.

2. The plaintiff pay the defendant’s costs on an indemnity basis, as agreed or taxed.

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

REASONS FOR JUDGMENT

GOODMAN J:

A.    Introduction

1 These reasons for judgment deal with the latest chapter in a long-standing dispute between Mr Prateek Patial on the one hand and Mr Amit Pall on the other. The present chapter concerns:

(1) an application by four companies under the control of Mr Pall, in proceeding NSD970/2025, to set aside demands under s 459E of the Corporations Act 2001 (Cth) dated 29 May 2025 and served on them by Mr Patial on 30 May 2025; and

(2) applications by Mr Patial across four proceedings to wind up the companies. Those four proceedings are numbered NSD1041/2025, NSD1042/2025, NSD1043/2025 and NSD1044/2025 (together, the winding up proceedings).

2 Proceeding NSD970/2025 and the winding up proceedings were heard together, with evidence in each proceeding being evidence in each of the other proceedings. That hearing took place on 18 July 2025. On 21 July 2025, the parties were invited to provide any further short submissions they wished to provide concerning Part 1.2AA of the Act, which appeared to me on reflection to be relevant, but which had not been addressed during the hearing. Such submissions were provided. However, the submissions of Mr Patial addressed topics beyond Part 1.2AA and I have not had regard to those submissions to the extent they travelled beyond Part 1.2AA.

3 For the reasons developed below, each demand should be set aside, and each of the applications by Mr Patial for the winding up of the companies should be dismissed. Further, an order preventing Mr Patial from serving further statutory demands upon the companies before the conclusion of proceeding NSD1016/2021 should be made.

B.    Background

4 Before addressing the questions for determination, it is necessary to set out in some detail some of the history of the dispute between Mr Patial on the one hand and Mr Pall and his companies on the other. The background set out below is taken from the evidence relied upon at the hearing, namely:

(1) for Mr Patial, (a) an affidavit affirmed by him on 15 July 2025 in proceeding NSD970/2025; (b) three affidavits affirmed by him on 15 July 2025 in each of the winding up proceedings; and (c) an affidavit affirmed by him on 25 June 2025 in each of the winding up proceedings;

(2) for the companies, (a) affidavits of Mr Pall affirmed on 17 June 2025 and 16 July 2025 in proceeding NSD970/2025; (b) an affidavit of Mr Gaurav Sareen, the solicitor for the companies, sworn on 28 July 2025 in proceeding NSD970/2025; (c) an affidavit of Ms Paulene Hill, a process server, affirmed on 23 June 2025 in proceeding NSD970/2025; and (d) an affidavit of Mr Pall affirmed on 28 June 2025 in each of the winding up proceedings;

(3) various exhibits to the above affidavits; and

(4) an extract from an affidavit made by Mr Pall in proceeding SYG2899/2024 in the Federal Circuit and Family Court of Australia (Division 2).

B.1    The Agreement and events during the Agreement period

5 Mr Pall is the sole director of the companies, namely:

(1) Kailash Lawyers Pty Ltd, a company which trades as Kailash Lawyers;

(2) Koala Investments Property Pty Ltd;

(3) Kuber Investment Group Pty Ltd; and

(4) Kailasam Holdings Pty Ltd.

6 On 17 April 2019, Mr Patial and Kailash executed a document titled “Agreement for General Use”. Mr Patial is described as “Prateek” in the Agreement. Clauses 2, 4 and 5 of the Agreement provide (as written):

2. Operative provisions

(a)    It is expressly understood and agreed between Prateek and Kailash that:

i)    Prateek is going to undertake his supervised legal training with Kailash for 12 months (or any other time agreed between the parties) of the date of this agreement;

ii)    Kailash has agreed to provide the supervised training in the legal areas the practice undertakes legal work;

iii)    Kailash shall provide with essential infrastructure considered necessary at its discretion for this purpose;

iv)    Prateek shall undertake all the work diligently, keeping utmost confidentiality of the clients and the work being undertaken;

v)    Prateek shall work on the client files to gain diverse experiences;

vi)    It is expressly understood and stated that the parties do not form an employer-employee relationship. Kailash do not owe any employer obligations towards Prateek including but not limited to remuneration, salary, superannuation etc. The pure and simple objective of this agreement for the parties is conduct and receive supervised training with certain benefits to both the parties arising out of this relationship.

vii)    To provide training, infrastructure and related resources, Kailash shall charge 60% of the gross professional fee (excluding disbursements) generated by Prateek up to the total income of $100,000 per annum. Should the fee grow above $100,000.00 per annum in the increments of $10,000, the Kailash percentage shall decrease to 50% of the gross professional fee (excluding disbursements) on anything above $100,000, in the increments of $10,000;

viii)    The term of this agreement is for one year from the date of this agreement. To provide certainty to the agreement, this is an essential term;

ix)    Prateek will conducts itself in a proper, prudent, and professional manner that is required form a duly registered legal practitioner to operate in the circumstances. He will ensure that he fulfils the licencing and qualification requirements to legally perform his duties, including registration with law society, undergoing annual CPD points and strictly adhere to Solicitors Conduct Rules and code of ethics.

x)    Both parties shall use their best endeavours to promote the business of the law practice; and

xi)    Kailash reserves its right at its sole discretion and assessment of the factual circumstances to offer partnership in the legal practice on the terms decided at the end of the term.

…

4. Entire agreement

This agreement is the entire agreement and understanding between the parties on everything connected with the subject matter of this agreement, and supersedes any prior understanding, arrangement, representation or agreements between the parties as to the subject matter contained in this agreement.

5. Amendment

An amendment or variation to this agreement is not effective unless it is in writing and signed by all the parties.

(bold emphasis in original; italic emphasis added)

7 It is common ground that between about April 2019 and 28 August 2020 (Agreement period), Mr Patial performed work. However, there is a contest as to the company or companies for whom such work was done, what work was done, and the terms of any remuneration for such work.

8 Mr Patial contends that he provided:

(1) legal services as a solicitor to Kailash;

(2) services related to a logo (logo services), which were provided only to Kailasam; and

(3) a series of other services to all of the companies. I will refer to these other services – which related to information technology, distributing calendars, assembling furniture, removing old furniture, moving files to Kennards Storage, shifting furniture and a Deepawali Event – as the shared services.

9 It appears that during the Agreement period:

(1) the hourly rate charged by Kailash to its clients for work undertaken by solicitors (including Mr Patial) was $300.00 per hour plus GST; and

(2) Mr Patial rendered invoices to Kailash for legal services that he had provided (contemporaneous invoices). The contemporaneous invoices in evidence are all addressed to Kailash.

10 The companies contend that the only operative agreement or arrangement was the Agreement, pursuant to which Mr Patial was to and did provide services and receive remuneration in accordance with cl 2(a)(vii) of the Agreement.

11 The companies’ evidence, via Mr Pall, is that:

During his period of supervised legal training under the Agreement with Kailash, Mr. Patial would at generally regular intervals, render invoices for legal work completed to Kailash (Contemporary Invoices). The Contemporary Invoices Mr Patial rendered for legal work whilst the Agreement was on foot, and their covering emails are at … He was paid 40% of the amount of the unit cost as stated in the invoice, as per the Agreement. As we were a small, collegiate office, it would often be the case that my staff, including Mr Patial, would assist me with general office tasks which were on an unpaid basis, however, I would re-imburse them for minor expenses incurred by them in assisting me, for example, see … where I reimbursed Mr Patial for minor expenses incurred in assisting me with general office tasks outside the scope of the Agreement.

Relevantly, there was no mention of any partial payment in the [contemporaneous invoices], which Mr Patial refers to in [the demand issued to Kailash]. Further, the [contemporaneous invoices] are all rendered to Kailash only. Further, the [the demand issued to Kailash] raises new invoices for legal work completed during the time of the Agreement which Mr Patial did not render during the time the Agreement was on foot.

(emphasis in original)

B.2    The 31 August 2020 invoices and a dispute raised

12 On 28 August 2020, Mr Pall purported to terminate the Agreement.

13 On 31 August 2020, Mr Patial sent to Mr Pall various documents including a series of invoices (31 August 2020 invoices). Mr Pall’s evidence is that those invoices were addressed only to Kailash; and this is consistent with the invoices that are in evidence. The 31 August 2020 invoices are summarised in the table below:

14 The 31 August 2020 invoices do not appear to identify how the unit cost has been calculated (including, for example, hourly rates).

15 No invoices rendered at this time for distributing calendars or for the logo services appear to be in evidence.

16 Mr Pall’s evidence is that:

Some of [the 31 August 2020 invoices] were purportedly for amounts for outstanding payments for IT work, Deepavali (sic) Event, Assembling Office New Furniture, Shifting Office Furniture, Storage Box and Adjustment. The amounts allegedly outstanding under these invoices are different to the amounts claimed in the [the demands and the 20 May 2025 invoices]. During the time the Agreement was on foot Mr Patial never invoiced Kailash for these items as there was no agreement or arrangement on foot for him to perform these services on a paid or remuneration basis. This was because it would often be the case that my staff, including Mr Patial, would assist me with general office tasks, such as those mentioned in at the beginning of this paragraph on an unpaid basis, bar minor expenses incurred by them in assisting me that I would reimburse them for …

(emphasis added)

(The 20 May 2025 invoices, which are discussed at [41]ff below, are relied upon by Mr Patial to found the demands.)

17 On 1 September 2020, Mr Pall wrote to Mr Patial:

…

Bank cheques

I note that few of the invoices were created on the last day of your employment. These invoices were created randomly and are frivolous, ridiculous, and baseless in nature and it appears the sole purpose of some of the invoices is to annoy, harass or achieve another wrongful purpose …

(emphasis in original)

B.3    The Commission proceeding

18 On 4 September 2020, Mr Patial filed an application pursuant to s 394 of the Fair Work Act 2009 (Cth) (FW Act) in the Fair Work Commission. Kailash was the only respondent to that application.

19 On 9 and 30 March, 20 April and 20 May 2021, Commissioner McKenna of the Commission heard the application and, on 6 August 2021, she dismissed it, essentially on the basis that Mr Patial was not, as he had contended, an employee of Kailash, in circumstances where the Agreement expressly provided that he was not an employee: Prateek Patial v Kailash Lawyers Pty Ltd T/A Kailash Lawyers and Consultants [2021] FWC 4167.

20 On 27 August 2021, Mr Patial sought leave to appeal the Commissioner’s decision. On 8 October 2021, a Full Bench of the Commission heard Mr Patial’s application for leave to appeal. On 24 November 2021, the Full Bench dismissed that application: see Prateek Patial v Kailash Lawyers Pty Ltd T/A Kailash Lawyers and Consultants [2021] FWCFB 6055.

B.4    Proceeding NSD1016/2021 and the initial statement of claim

21 On 29 September 2021, Mr Patial commenced proceeding NSD1016/2021 in this Court, by filing an originating application and a statement of claim. The respondents to that statement of claim are Kailash, Koala and Kuber.

22 Part F of that statement of claim includes an allegation that Mr Patial’s average hourly rate was $30.24. Part N of the statement of claim deals with the shared services and is, relevantly, in the following terms (as written):

N. Outstanding Payments for Additional Work including IT Services – Deepawali Event – Distributing Calendars – Assembling Office Furniture – Removing Office Furniture – Moving Office Files to Kennards Storage Box Wentworthville – Shifting Office Furniture …

N.1. IT Services

59.    From 17 April 2019 to 26 August 2020, [Mr Patial] worked additional hours on an average of 20 hours per week to maintain and manage the staff computers for [the respondents].

60.    From 17 April 2019 to 26 August 2020, [Mr Patial] did 1,420 hours.

N.2. Deepawali Event

61.    On 12 June 2019 Mr Pall, told [Mr Patial] that he wanted to put the stall at the Hindu Diwali Mela for [the respondents].

Particulars

WhatsApp chat on 12 June 2019

62.    From 12 June 2019 to about November 2019 for the Deepawali events [Mr Patial] worked an additional approximately 250 hours (worked extended hours from 6 am to 9 pm on the weekends to organise, arranged and work at the stalls):

a.    On 13 October 2019 (Sunday) at Rouse Hill Town Centre New South Wales;

b.    On 20 October 2019 (Sunday) at Bellavista Farms New South Wales; and

c.    On 3 November 2019 (Sunday) at Strathfield Park, New South Wales.

N.3. Distributing Calendars

63.    In late 2019, after the Deepawali event, approximately 3,500 fridge magnetic calendars were left, with the [respondents’] details.

64.    Mr Pall told [Mr Patial] to distribute these magnetic calendars at Sikh Temple Glenwood New South Wales, Sydney Murugan Temple Mays Hill New South Wales, Hindu Temple Sri Mandir Auburn New South Wales and Sai Hindu Temple Regents Park New South Wales.

65.    From December 2019 to about February 2020, [Mr Patial] spent approximately 100 hours distributing the magnetic calendars for [the respondents] at the above places.

N.4. Assembling Office Furniture

66.    In or about February 2020, Mr Pall bought the new office furniture, including tables and chairs from the Officeworks, for [the respondents].

67.    In March 2020, Mr Pall told [Mr Patial] to assemble the office furniture.

68.    [Mr Patial] spent an average of approximately 30 hours assembling the office furniture.

N.5. Removing Old Office Furniture

69.    In March 2020, Mr Pall told [Mr Patial] to remove the old office furniture of [the respondents].

70.    [Mr Patial] used his car to remove the old furniture from the office and kept the old furniture in his garage for council pickups.

71.    [Mr Patial] spent approximately 8 hours removing the old office furniture.

N.6. Moving Office Files to Kennards Storage Box Wentworthville

72.    In or about June 2020, Mr Pall told [Mr Patial] to move the office files boxes of the [respondents’] leftovers from Deepawali event and banners to Kennards Storage Box Wentworthville.

73.    [Mr Patial] used his car and made two round trips from the office to Kennards Storage Box Wentworthville.

74.    [Mr Patial] spent approximately 8 hours moving the office files and materials for [the respondents].

N.7. Shifting Office Furniture

75.    In May 2019, Mr Pall told [Mr Patial] to swap [Kailash’s] office space with [Koala’s] office space.

76.    [Mr Patial] spent approximate 8 hours swapping the places and moving the furniture of [Kailash’s] office space with [Koala’s].

77.    In or about July 2019, Mr Pall again told [Mr Patial] to reorganise [Kailash’s] office furniture. In the same room, including paralegal desks on the corner and solicitor tables on different sides.

78.    [Mr Patial] spent approximate 6 hours reorganising the office furniture for [Kailash].

79.    [Mr Patial] spent a total of approximate 14 hours shifting and reorganising the office furniture for [Kailash] and [Koala].

(emphasis in original)

23 The loss claimed for the alleged non-payment for the provision of these services is set out at [137] of the statement of claim:

137.    And [Mr Patial] claims:

…

g.    Unpaid payment of IT services for 1,420 hours    $42,940.80

h.    Unpaid payment of Deepawali Event for 250 hours    $7,560.00

i.    Unpaid payment of Distributing Calendars for 100 hours    $3,024.00

j.    Unpaid payment of Assembling Office Furniture for 30 hours    $907.20

k.    Unpaid payment of Removing office furniture for 8 hours    $241.92

l.    Unpaid payment of Moving Office Files Kennards    $241.92

Storage Box Wentworthville for 8 hours

m.    Unpaid payment of Shifting Office Furniture for 14 hours    $423.36

…

24 The amounts claimed appear to be the product of: (1) the hours allegedly worked; and (2) an hourly rate of $30.24. The total of these amounts is $55,339.20 (1,830 x $30.24).

25 The statement of claim does not appear to refer to the logo services, perhaps because Kailasam is not named as a respondent.

26 On 9 June 2022, I made orders striking out the statement of claim in proceeding NSD1016/2021, with limited leave to replead (including with respect to the allegations in Part N of that statement of claim). My reasons for doing so are set out in Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants [2022] FCA 662 (Patial (No 1)). At [44] to [49] of Patial (No 1) I stated:

Part N (including the case pleaded against the second and third respondents)

44    I consider Part N separately because it purports to plead an entitlement to remuneration for work done for each of the respondents.

45    In Part N, the applicant pleads that between 17 April 2019 and 26 August 2020, he did additional work for [Kailash, Koala and Kuber] ([58]) and in particular:

(1)    maintenance or management of staff computers ([59]-[60]);

(2)    arranging and working at stalls at the Hindu Diwali Mela ([61]-[62]);

(3)    distributing magnetic calendars at various temples ([63]-[65]);

(4)    assembling office furniture ([66]-[68]);

(5)    removing old office furniture ([69]-[71]);

(6)    moving office files and other items to a storage facility ([72]-[74]); and

(7)    shifting and re-organising office furniture ([75]-[79]) (for [Kailash and Koala] only).

46    The manner in which Part N has been pleaded renders it difficult to determine the basis of the applicant’s claims against particular respondents.

47    Reading Part N in the context of the whole of the Statement of Claim, it appears to be a claim that during the course of his employment by [Kailash], [Kailash] required the applicant to undertake additional work which work benefitted each of the respondents in the manner described above.

48    Such a conclusion is supported by the following: the only employment relationship pleaded is as between the applicant and [Kailash]; the period 17 April 2019 to 26 August 2020 corresponds exactly to the period of the applicant’s alleged employment by [Kailash] (Part B, [19] and Part C, [29]); the reference to “additional work” in paragraph [58] which assumes the existence of extant work; and the amounts claimed for the additional work in paragraphs [137.g-m] being the product of the additional hours worked and the average hourly rate of $30.24 alleged to have been payable to the applicant by [Kailash] as part of their employee/employer relationship (Part F, [43]-[44]).

49    Thus, Part N, as pleaded, is also reliant upon the proposition that the applicant was an employee of [Kailash]. It follows, for the reasons set out above, that it is an abuse of process and should be struck out.

(emphasis in original; the references to “the respondents” are to the respondents named in this initial iteration of the statement of claim)

B.5    The second iteration of the statement of claim

27 On 12 August 2022, Mr Patial filed an interlocutory application in proceeding NSD1016/2021 pursuant to which he sought leave to file a second iteration of his statement of claim. That application was placed in abeyance while Mr Patial’s appeal from Patial (No 1) was heard and determined. That appeal was dismissed: Patial v Kailash Lawyers Pty Ltd t/as Kailash Lawyers and Consultants [2023] FCAFC 155 (Rares, Jackson and Halley JJ).

28 The second iteration of the statement of claim bears a particular email address used by Mr Patial (Mr Patial’s email address). It also includes Mr Pall and each of the companies as respondents. Part F of that statement of claim is, relevantly, in the following form:

F. Outstanding Payments for Additional Work including IT Services – Deepawali Event – Distributing Calendars – Assembling Office Furniture – Removing Office Furniture – Moving Office Files to Kennards Storage Box Wentworthville – Shifting Office Furniture …

74.    From 17 April 2019 to 26 August 2020, [Mr Patial] did the following additional work for [the respondents].

F.1. IT Services

75.    From 17 April 2019 to 26 August 2020, [Mr Patial] worked additional hours on an average of 20 hours per week to maintain and manage the staff computers for [the respondents].

76.    From 17 April 2019 to 26 August 2020, [Mr Patial] did 1,420 hours for [the respondents].

77.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the IT services invoice to [Mr Pall] for the amount of $64,000.00.

78.    The amount on the invoice is incorrect. The correct amount is 1,420 * $148.50 = $210,870.00.

79.    [Mr Patial] has suffered a financial loss of $210,870.00 because [the respondents], didn’t pay [Mr Patial] for the IT work.

80.    [Mr Patial] claims $210,870.00 from [the respondents].

F.2. Logo – [Kailasam’s] Logo

81.    In or about August 2019, [Mr Pall] told [Mr Patial] to design the logo for [Kailasam].

82.    [Kailash’s] paralegal …, assisted [Mr Patial] in designing the logo for [Kailasam].

83.    In September 2019, [Mr Patial] purchased the logo maker application from his iPhone.

84.    [Mr Pall] refunded the cost of purchasing the logo maker application to [Mr Patial].

85.    [Mr Patial] spent approximately 10 hours designing [Kailasam’s] logos.

86.    [Mr Pall] and [Kailasam] did not pay [Mr Patial] for designing the logos of [Kailasam].

87.    [Mr Patial] has suffered a financial loss of 10 * $148.50 = $1,485.00 because [Mr Pall] and [Kailasam] didn’t pay [Mr Patial] for designing the logos.

88.    [Mr Patial] claims $1,485.00 from [Mr Pall] and [Kailasam].

F.3. Deepawali Events

89.    On 12 June 2019, [Mr Pall] told [Mr Patial] that he wanted to put the stall at the Hindu Diwali Mela for the [companies].

Particulars

WhatsApp chat on 12 June 2019

90.    From 12 June 2019 to about November 2019 for the Deepawali events, [Mr Patial] worked an additional approximately 250 hours (worked extended hours from 6 am to 9 pm on the weekends to organise, arrange and work at the stalls);

a.    On 13 October 2019 (Sunday) at Rouse Hill Town Centre, New South Wales;

b.    On 20 October 2019 (Sunday) at Bellavista Farms, New South Wales; and

c.    On 3 November 2019 (Sunday) at Strathfield Park, New South Wales.

91.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the Deepawali Event invoice to [Mr Pall] for the amount of $5,500.00.

92.    The amount on the invoice is incorrect. The correct amount is 250 * $148.50 = $37,125.00.

93.    [Mr Patial] has suffered a financial loss of $37,125.00 because [the respondents], didn’t pay [Mr Patial] for the work concerning Deepawali events.

94.    [Mr Patial] claims $37,125.00 from [the respondents].

F.4. Distributing Calendars

95.    After the Deepawali event, approximately 3,500 fridge magnetic calendars were left, with the [companies’] details.

Particulars

Magnetic Calendars

96.    [Mr Pall] told [Mr Patial] to distribute these magnetic calendars at Sikh Temple Glenwood New South Wales, Sydney Murugan Temple Mays Hill New South Wales, Hindu Temple Sri Mandir Auburn New South Wales and Sai Hindu Temple Regents Park New South Wales.

97.    From November 2019 to about February 2020, the Applicant spent approximately 100 hours distributing the magnetic calendars for the [companies] at the above places.

98.    [Mr Patial] has suffered a financial loss of 100 * $148.50 = $14,850.00 because [the respondents], didn’t pay [Mr Patial] for distributing magnetic calendars.

99.    [Mr Patial] claims $14,850.00 from [the respondents].

F.5. Assembling Office Furniture

100.    In or about February 2020, [Mr Pall] purchased the new office furniture, including tables and chairs from Officeworks, for [the respondents].

101.    [Mr Pall] told [Mr Patial] to assemble the office furniture.

102.    [Mr Patial] spent an average of approximately 30 hours assembling the office furniture.

103.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the assembling new office furniture invoice to [Mr Pall] for the amount of $2,000.00.

104.    The amount on the invoice is incorrect. The correct amount is 30 * $148.50 = $4,455.00.

105.    [Mr Patial] has suffered a financial loss of $4,455.00 because [the respondents], didn’t pay [Mr Patial] for assembling new office furniture.

106.    [Mr Patial] claims $4,455.00 from [the respondents].

F.6. Removing Old Office Furniture

107.    [Mr Pall] told [Mr Patial] to remove the old office furniture of the [companies].

108.    [Mr Patial] used his car to remove the old furniture from the office and kept the old furniture in his garage for council pickups.

109.    [Mr Patial] spent approximately 8 hours removing the old office furniture.

110.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the removing old office furniture invoice to [Mr Pall] for the amount of $700.00.

111.    The amount on the invoice is incorrect. The correct amount is 8 * $148.50 = $1,188.00.

112.     [Mr Patial] has suffered a financial loss of $1,188.00 because [the respondents], didn’t pay [Mr Patial] for removing old office furniture.

113.    [Mr Patial] claims $1,188.00 from [the respondents].

F.7. Moving Office Files to Kennards Storage Box Wentworthville

114.    In or about June 2020, [Mr Pall] told [Mr Patial] to move the office files boxes of the [companies’] leftovers from Deepawali Mela, banners to Kennards Storage Box Wentworthville.

115.    [Mr Patial] used his car and made two round trips from the office to Kennards Storage Box Wentworthville.

116.    [Kailash’s] paralegal … also assisted [Mr Patial] in moving the office files.

117.    [Mr Patial] spent approximately 8 hours moving the office files and materials for the [the respondents].

118.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the invoice for moving the office files to [Mr Pall] for the amount of $700.00.

119.    The amount on the invoice is incorrect. The correct amount is 8 * $148.50 = $1,188.00.

120.    [Mr Patial] has suffered a financial loss of $1,188.00 because [the respondents], didn’t pay [Mr Patial] for moving the office files to Kennards Storage Box Wentworthville.

121.    [Mr Patial] claims $1,188.00 from [the respondents].

F.8. Shifting Office Furniture

122.    In or about May 2019, [Mr Pall] told [Mr Patial] to swap [Kailash’s] office space with [Koala’s] office space.

123.    [Mr Patial] spent approximately 8 hours swapping places and moving [Kailash’s] office space furniture with [Koala].

124.    In or about July 2019, [Mr Pall] again told [Mr Patial] to reorganise the office furniture in the same room, including paralegal desks on the corner and solicitor tables on different sides.

125.    [Mr Patial] spent approximately 6 hours reorganising the office furniture for [Kailash and Koala].

126.    [Mr Patial] spent a total of approximate 14 hours shifting and reorganising the office furniture for [Kailash and Koala].

127.    On 31 August 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the Shifting Office Furniture invoice to [Mr Pall] for the amount of $2,000.00.

128.    The amount on the invoice is incorrect. The correct amount is 14 * $148.50 = $2,079.00.

129.    [Mr Patial] has suffered a financial loss of $2,079.00 because [the respondents], didn’t pay [Mr Patial] for reorganising the office furniture.

130.    [Mr Patial] claims $2,079.00 from [the respondents].

(as written; emphasis in original; references to “the respondents” is to the respondents named in the second iteration of the statement of claim)

29 The loss claimed for the alleged non-payment for such services is set out at paragraph [262] of the second iteration of the statement of claim, relevantly, as follows:

30 The total of those amounts is $273,240.00. The difference between this iteration of the statement of claim and the initial statement of claim (which sought $55,339.20 – see [24] above) appears to be due to: (1) the use of an hourly rate of $148.50, rather than $30.24; and (2) the inclusion of an amount of $1,485.00 for the logo services.

31 On 6 March 2024, I dismissed Mr Patial’s application for leave to file the proposed second iteration of his statement of claim in proceeding NSD1016/2021 and published my reasons for doing so: Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants (No 4) [2024] FCA 179 (Patial (No 4)). An application for leave to appeal that decision was dismissed: Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants [2025] FCA 113 (Bromwich J).

32 In Patial (No 4), I noted at [10] to [19] various fundamental flaws in the proposed second iteration of the statement of claim.

33 At [32] to [34] I stated:

32    Parts F.1 to F.10 of the PSOC are a miscellany of claims for what is described as “additional work”, allegedly undertaken by Mr Patial for all of the present and proposed respondents.

33    However, no cause of action – whether in contract or otherwise – has been pleaded. To the extent that it might be suggested that this work was done pursuant to an employment relationship between Mr Patial and Kailash Lawyers this would be an abuse of process. To the extent that it might be suggested that Mr Patial was in a contractual relationship with any of the present and proposed respondents, the material facts upon which that conclusion is based has not been pleaded.

34    Leave with respect to Parts F.1 to F.10 of the PSOC should be refused.

(emphasis in original)

B.6    The Supreme Court and District Court proceedings

34 On 2 August 2024, Mr Patial filed a statement of claim in Supreme Court of New South Wales proceeding 2024/00283199 (Supreme Court proceeding). The statement of claim bears Mr Patial’s email address. Kailash is the only defendant.

35 On 5 August 2024, Mr Patial filed a statement of claim in District Court of New South Wales proceeding 2024/00286813 (District Court proceeding). The statement of claim bears Mr Patial’s email address. Mr Pall is the only defendant.

36 The statements of claim in each of the Supreme Court proceeding and the District Court proceeding include an allegation that the Agreement was an unfair contract because it did not specify an hourly rate.

37 On 21 March 2025, the Supreme Court proceeding and the District Court proceeding were transferred, by order of the Supreme Court of New South Wales, to this Court: see Patial v Kailash Lawyers Pty Ltd [2025] NSWSC 219 (Schmidt AJ). I am case managing those proceedings alongside proceeding NSD1016/2021.

B.7    The bankruptcy notice

38 On 16 September 2024, a bankruptcy notice was issued at the request of Kailash to Mr Patial for $47,580.87, relating to a judgment debt arising from a judgment of Judge Humphreys in the Federal Circuit and Family Court of Australia (Division 2) on 12 March 2024. Kailash relies upon this judgment debt as the basis for an off-setting claim.

B.8    The prior demands

39 On 15 or 16 May 2025, Mr Patial served on each of the companies a demand under s 459E of the Act (prior demands) and a supporting affidavit he had made. The amounts demanded were: Kailash ($450,717.26); Koala ($269,511.00); Kuber ($15,031.50); and Kailasam ($18,331.50) – a total of $753,591.26.

40 On 19 May 2025, Mr Pall wrote to Mr Patial referring to the prior demands and stating:

…

In the context of the litigation currently before the Federal Court of Australia involving yourself and the above corporate entities, the above CSDs are clearly an abuse of process, see: Mann v Goldstein [1968] 1 WLR 1091 and Portfolio Projects Pty Limited v Oaks Building Co Pty Limited (1987) 5 ACLC 911.

In light of the above, we ask that you withdraw the CSDs by 4.00 pm on 21 May 2025. Failing such, we will file an application to set the above CSDs aside and will rely on this email in relation to seeking costs on indemnity basis.

(emphasis in original)

B.9    The 20 May 2025 invoices

41 On 20 May 2025, Mr Patial sent to Mr Pall a series of 45 invoices (20 May 2025 invoices). Each 20 May 2025 invoice bears a date of 20 May 2025 and states that the due date for payment is 27 May 2025. It also provides contact details for Mr Patial, including Mr Patial’s email address and an address in Midson Road, Epping, in Sydney (Midson Road address). The amounts said to be due for those invoices also appears to have been derived using an hourly rate of $330.00 ($300.00 plus GST). The Schedule to these reasons for judgment sets out more detail of the 20 May 2025 invoices.

42 The 20 May 2025 invoices fall into two broad categories. The first category comprises the first 17 invoices in the Schedule, being invoices addressed solely to Kailash and which state amounts said to be due for legal services provided by Mr Patial to Kailash during the Agreement period (and for sundries related to the provision of such services). These 17 invoices, which I will refer to as the legal services invoices, total $230,917.54.

43 The second category comprises invoices 18 to 45 in the Schedule. I will refer to these invoices as the shared services invoices. Each is in a similar form and states an amount said to be due for shared services provided by Mr Patial during the Agreement period. Each shared service invoice includes the following notation:

This invoice forms part of a shared service arrangement across four associated entities:

➢    Kailash Lawyers Pty Ltd (50%)

➢    Koala Investment Property Pty Ltd (45%)

➢    Kuber Investment Group Pty Ltd (2.5%)

➢    Kailasam Holdings Pty Ltd (2.5%)

Each invoice reflects the pro-rata share of the total services provided for the full period.

(emphasis added)

44 As is apparent, the shared services invoices are premised on the existence of a “shared service arrangement” across the companies (to which Mr Patial is presumably said also to be a party). During the hearing Mr Patial acknowledged that there is no written agreement to this effect, and he contended (from the bar table) that there is an oral agreement. There is, however, no evidence of such an agreement on this application and in particular as to the division of liability between the companies.

45 Mr Pall’s evidence is that there was no agreement concerning the shared services; and that no invoices were rendered by Mr Patial to Koala, Kuber and Kailasam during the Agreement period, and not until the 20 May 2025 invoices were rendered almost five years later.

B.10    Withdrawal of the prior demands and service of the demands

46 On 27 May 2025, Mr Patial (from Mr Patial’s email address) sent to Mr Pall notification of his withdrawal of the prior demands.

47 On 30 May 2025, Mr Patial served the companies with the demands. The demands each state that the company to which it is addressed owes an amount to Mr Patial, as set out in the schedule to that demand. Paragraph 6 of each demand is in the following form:

6.     The address of the creditor for service of copies of any application and affidavit is:

Prateek Patial

[the Midson Road address]

48 The Midson Road address has also been used by Mr Patial in various pleadings and affidavits filed in these proceedings.

49 The schedule to the demand addressed to Kailash (Kailash demand) is:

50 Although the total amount recorded on the Kailash demand is $452,037.26, the true total appears to be $454,347.26, a difference of $2,310.00. As explained in the Schedule, the invoice addressed to Kailash for the “Service Fee For Shifting Office Furniture …” recorded an amount of $2,310.00 rather than $4,620.00 (as shown in the penultimate entry in the schedule above). Kailash relies upon this difference to argue that the Kailash demand overstates the amount due in accordance with the 20 May 2025 invoices and as such is defective.

51 The schedule to the demand addressed to Koala (Koala demand) is:

52 The schedule to the demand addressed to Kuber (Kuber demand) is:

53 The schedule to the demand addressed to Kailasam (Kailasam demand) is:

54 The schedules to the demands reflect Mr Patial’s contentions that:

(1) Kailash (alone) is liable to him for 17 debts for legal services totalling $149,031.26;

(2) Kailasam (alone) is liable to him for a debt concerning the logo services of $3,300.00; and

(3) each of the companies is partially liable to him for another seven debts concerning the shared services, as summarised in the table below:

55 On 4 June 2025, Mr Pall sent an email to Mr Patial (as written):

We refer to our email dated 19 May 2025 at 16.05 pm, and withdrawal notices sent via email on 27 May 2025.

We further note that you have served a new set of Creditor’s Statutory Demands(CSD) on 30 May 2025 for the below companies:

1. Kailash Lawyers Pty Ltd;

2. Koala Investment Property Pty Ltd;

3. Kuber Investment Group Pty Ltd; and

4. Kailasam Holdings Pty Ltd, (together, the new CSDs).

In the context of the litigation currently before the Federal Court of Australia involving yourself and the above corporate entities, the new CSDs suffer the same flaw and are clearly an abuse of process, see: Mann v Goldstein [1968] 1 WLR 1091 and Portfolio Projects Pty Limited v Oaks Building Co Pty Limited (1987) 5 ACLC 911.

In light of the above, we ask that your withdraw the new CSDs by 4.00 pm on 6 June 2025. Failing such, we will file an application to set the new CSDs aside and will rely on this email in relation to seeking costs on indemnity basis.

(emphasis in original)

56 Mr Patial did not accede to the request that he withdraw the demands.

B.11    The third iteration of the statement of claim

57 On 13 June 2025, Mr Patial filed an interlocutory application for leave to file a third iteration of his statement of claim in proceeding NSD1016/2021. Both the application and the third iteration of the statement of claim bear Mr Patial’s email address. The third iteration of the statement of claim names each of the companies and Mr Pall as respondents.

58 This version of the statement of claim does not appear to seek recovery of amounts due for services rendered by Mr Patial. Rather it appears to claim an entitlement to superannuation calculated as a function of amounts invoiced by Mr Patial to the companies for services rendered by Mr Patial to the companies during the Agreement period.

59 For example, it contains:

(1) with respect to Kailash:

SUPERANNUATION OBLIGATIONS – SUPERVISED LEGAL TRAINING

16.    [Mr Patial’s] legal work, though framed as “training”, constituted labour rendered for the benefit of [Kailash] and falls within the extended definition of “employee” under:

i.    section 12(1) – standard employee;

ii.    section 12(3) – contractor principally providing labour;

iii.    section 12(8) – trainee/apprentice arrangements, of the Superannuation Guarantee (Administration) Act 1992 (Cth) (“SGAA”).

17.    Pursuant to section 16 SGAA, [Kailash] was required to make compulsory superannuation contributions for each quarter during [Mr Patial’s] engagement.

18.    The statutory contribution rate under section 19 SGAA for FY2019 and FY2020 was 9.5%, and no payments were made to [Mr Patial’s] nominated fund (REST).

19.    For legal work invoiced at $187,518.04, [Kailash] incurred a superannuation liability of $17,814.21.

20.    Pursuant to section 31 SGAA, a Superannuation Guarantee Charge (SGC) is imposed including:

i.    The unpaid superannuation,

ii.    10% nominal interest,

iii.    Administrative fees.

21.    Super liability under section 16 and section 19 amounts to $17,814.21 with interest of $8,233.58 from 28 October 2020 to 11 June 2025, totalling $26,047.79.

SUPERANNUATION OBLIGATIONS – MIGRATION AGENT WORK

22.    Between April 2019 and August 2020, [Mr Patial] also worked as a Registered Migration Agent for [Kailash].

23.    Services included the preparation and filing of Form 956, naming [Kailash] as the receiving entity and [Mr Pall] as the Principal Agent.

24.    As the work was personally performed and for the benefit of [Kailash], it is “labour” under section 12(3) SGAA.

25.    [Mr Patial] invoiced $34,984.50, on which [Kailash] failed to remit superannuation contributions totalling $3,323.50.

26.    Super liability under section 16 and section 19 amounts to $3,323.50 with interest of $1,536.09 from 28 October 2020 to 11 June 2025, totalling $4,859.59.

SUPERANNUATION OBLIGATIONS – GENERAL SERVICES

27.    [Mr Patial] performed various additional services from April 2019 to August 2020, including:

i.    IT support;

ii.    Distribution of marketing materials;

iii.    Assembly and relocation of office furniture;

iv.    Event organisation (e.g., Deepawali).

28.    This work, though not covered under any written agreement, was for the benefit of [Kailash] and constitutes “labour” within the extended definition of “employee”.

29.    These services, billed at $303,006.00, also fall within the meaning of labour under section 12(3) SGAA, as they were rendered personally and for the business benefit of [Kailash].

30.    Super liability under section 16 and section 19 amounts to 28,785.57 with interest of $13,304.45 from 28 October 2020 to 11 June 2025, totalling $42,090.02.

(emphasis in original) ;

(2) with respect to Koala:

35.    Between April 2019 and August 2020, [Mr Patial] rendered professional services to [Koala], including but not limited to:

i.    IT support services;

ii.    Distribution of corporate marketing material (e.g., calendars);

iii.    Assembly and removal of office furniture;

iv.    Relocation of office records and equipment to Kennards storage;

v.    Organisation and facilitation of company events, including Deepawali celebrations.

36.    The services were performed at the direction of, and for the benefit of, [Koala] in the ordinary course of its business operations.

37.    [Mr Patial] issued itemised invoices totalling $270,699.00 for these services between April 2019 and August 2020. ;

(3) with respect to Kuber:

45.    Between April 2019 and August 2020, [Mr Patial] performed services for [Kuber], including:

i.    IT support and technical assistance;

ii.    Distribution of company calendars;

iii.    Assembly and removal of furniture and other office fixtures;

iv.    Movement of archived files and supplies to Kennards Storage;

v.    Event assistance including Deepawali preparations.

46.    These services were rendered exclusively for the commercial benefit of [Kuber] and at its instruction or request.

47.    During the period of service, [Mr Patial] invoiced [Kuber] for $15,097.50, for labour and services personally provided. ; and

(4) with respect to Kailasam:

56.    Between April 2019 and August 2020, [Mr Patial] provided a series of services to [Kailasam], including:

i.    Provision of IT infrastructure and technical support;

ii.    Creation and/or refinement of the “Kailash Group” branding materials, including logo development;

iii.    Distribution of promotional calendars;

iv.    Assembly and removal of furniture and fixtures;

v.    Logistical services involving relocation of office materials to Kennards storage facilities;

vi.    Coordination and support of company functions including Deepawali events.

57.    These services were rendered exclusively for the benefit of [Kailasam’s] commercial operations and under its direct or delegated authority.

58.    For the provision of these services, [Mr Patial] issued invoices totalling $18,397.50 over the course of the aforementioned period.

60 Paragraphs 37, 47 and 58 of the third iteration of the statement of claim suggest that Mr Patial issued invoices totalling $270,699.00 to Koala, $15,097.50 to Kuber and $18,397.50 to Kailasam over the course of the Agreement period. To the extent that it is suggested that such invoices were rendered during the Agreement period, there does not appear to be evidence that this occurred. It may be noted these amounts correspond to the amounts claimed in the 20 May 2025 invoices and the demands issued to each of these three companies (see [51] to [53] and [54(3)] above). It may also be noted that Mr Pall’s evidence is that during the Agreement period: (1) the only invoices rendered by Mr Patial were the contemporaneous invoices; and (2) no invoices were rendered by Mr Patial to Koala, Kuber or Kailasam.

B.12    Commencement of the proceeding NSD970/2025 to set aside the demands

61 On 18 June 2025, the companies – as the first, second, third and fourth plaintiffs – commenced proceeding NSD970/2025 by filing: (1) an originating application (NSD970/2025 originating application); and (2) Mr Pall’s 17 June 2025 affidavit. I will refer to these documents together as the originating documents.

62 The NSD970/2025 originating application includes:

On the facts stated in the supporting Affidavit of Mr Amit Pall sworn/affirmed 16 June 2025:

1.     The First Plaintiff seeks an order under s 495H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the First Plaintiff on 30 May 2025 be set aside.

2.    The Second Plaintiff seeks an order under s 495H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

3.    The Third Plaintiff seeks an order under s 495H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Third Plaintiff on 30 May 2025 be set aside.

4.    The Fourth Plaintiff seeks an order under s 495H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

…

63 I pause to note that the NSD970/2025 originating application contains two errors. The first is that the reference to the date of Mr Pall’s affidavit should be to “17 June” rather than “16 June”. The second is that each of the orders is sought under “s 495H” of the Act (which does not exist) rather than s 459H of that Act. These errors are discussed at D. below as part of an application by the companies to amend the NSD970/2025 originating application and in the context of Mr Patial’s submission that a consequence of these errors is that the Court lacks jurisdiction in proceeding NSD970/2025.

64 Mr Pall’s 17 June 2025 affidavit includes the bases on which he contends that there is a genuine dispute with respect to the debts claimed in the schedules to each of the demands.

65 For Kailash, Mr Pall’s evidence includes that:

(1) as to the legal services invoices:

(a) the Agreement did not mention an hourly rate and Mr Patial was never engaged on an hourly rate basis under the Agreement;

(b) during the Agreement period, Mr Patial rendered only the contemporaneous invoices for legal work that he had performed;

(c) the contemporaneous invoices were paid in full and there was no mention in those invoices of partial payment (as is suggested in the Kailash demand – see [49] above);

(d) the 20 May 2025 invoices and the Kailash demand refer to legal work for which invoices were not rendered during the Agreement period;

(e) the 31 August 2020 invoices contain different amounts than the amounts now claimed in the 20 May 2025 invoices and the Kailash demand;

(f) the amounts, if any, owing for legal services provided by Mr Patial, are in dispute in proceeding NSD1016/2021;

(2) as to the shared services invoices:

(a) there was no shared services agreement or arrangement in place;

(b) Mr Patial was not engaged on a paid or remuneration basis to perform any of the shared services or the logo services;

(c) the 31 August 2020 invoices referred to various of the shared services but were addressed only to Kailash and not to Koala, Kuber or Kailasam;

(d) Mr Pall’s records do not show, and he does not recall, any invoices rendered by Mr Patial to Koala, Kuber or Kailasam for the shared services prior to the 20 May 2025 invoices;

(e) the amounts claimed in the shared services invoices are significantly more than the amounts claimed in the 31 August 2020 invoices and the first and second iterations of statements of claim for such services;

(f) the amounts, if any, owing for the shared services are in dispute in proceeding NSD1016/2021; and

(3) Kailash has a claim against Mr Patial for $47,580.87 with respect to the judgment debt (see [38] above).

66 For Koala, Kuber and Kailasam, Mr Pall’s evidence is that these companies dispute the debts claimed in the Koala demand, the Kuber demand and the Kailasam demand for the reasons set out at [65(2)] above.

67 Further, with respect to Koala, Mr Pall’s evidence is that: (1) the only written agreement between Mr Patial and Koala is a referral agreement; (2) he has searched his records but cannot find a copy executed by both parties; and (3) in any event, no work, was done under the referral agreement by Mr Patial, such that there was nothing for him to invoice.

B.13    Service of the originating application and affidavit in support

68 Returning to the chronology of events, on 18 June 2025 Ms Hill – the process server instructed by Mr Pall – placed a sealed envelope addressed to Mr Patial and containing the originating documents, within the letter box at the Midson Road address.

69 In his written submissions, Mr Patial suggested that the originating documents had been placed into his letterbox (but that this was insufficient to effect service). For example, Mr Patial submitted:

However, the process server’s conduct in this matter cannot be regarded as compliant with either personal service or ordinary service under the Rules. Specifically, the documents were placed in the letterbox in an unmarked envelope bearing only the Defendant’s name and address, with no indication of the sender or the nature of its contents.

70 Despite this, Mr Patial submitted during the hearing, based upon a particular construction of Ms Hill’s affidavit, that she had left some but not all of the pages to Mr Pall’s 17 June 2025 affidavit in the envelope placed into his letterbox. I accept that there is an ambiguity in Ms Hill’s affidavit, however, I am satisfied that she left the whole of Mr Pall’s 17 June 2025 affidavit in the letterbox in circumstances where: (1) a construction of her affidavit to the effect that she did so is well-open; (2) there is no apparent reason why a process server would serve some but not all of the pages of an affidavit; (3) there is no evidence from Mr Patial suggesting that only part of the affidavit was received, bearing in mind the principle in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 that all evidence should be weighed according to the capacity of each party to produce or contradict it. Mr Patial, as the recipient of the envelope was in a position to produce it, or to put on evidence as to its contents. He did neither and appeared to suggest from the bar table that he had not checked the envelope, that he had not read the documents within it, and that he had “thrown” it, relying instead upon the electronic copy; and (4) Mr Patial did not seek to cross-examine Ms Hill who was present in Court (such presence being the result, I infer, of a previous indication by Mr Patial that he wished to seek to cross-examine all of the companies’ witnesses).

71 Thus, I am satisfied that the originating documents were left at the Midson Road address on 18 June 2025.

72 On 19 June 2025, Mr Sareen – the companies’ solicitor – sent an email to Mr Patial’s email address attaching the originating documents (19 June 2025 email).

B.14    Commencement of the winding up proceedings

73 On 26 June 2025, Mr Patial commenced the winding up proceedings by filing an originating process in each of those proceedings (winding up originating processes). The winding up originating processes are expressed to be applications made under s 459P of the Act for various orders, including an order under s 459A of the Act that each defendant be wound up in insolvency. Part C of each winding up originating process includes:

A Statutory Demand dated 29 May 2025 was served on [the defendant], at its registered office on 30 May 2025, and was acknowledged in writing by the company’s representative.

The company has failed to comply with the statutory demand within the 21-day period required under section 459F(2) of the Corporations Act 2001, which expired on 20 June 2025.

The defendant has not validly filed an application under section 459G to set aside the demand. Although a consolidated application was filed under Federal Court File No. NSD970/2025 including the defendant as a co-plaintiff, it was not filed in the defendant’s sole name nor in compliance with section 459G.

…

74 On the same day, Mr Patial served upon the companies the winding up originating processes and an affidavit that he had affirmed on 25 June 2025 in support in each of the winding up originating processes. At [6A] of each affidavit Mr Patial avers:

6A.    [The defendant] has not made any application in its sole capacity pursuant to section 459G of the Corporations Act 2001 to set aside the statutory demand served upon it on 30 May 2025. However, I was served by email on 19 June 2025 at 5:33 pm with a copy of an application filed by Kailash Lawyers Pty Ltd & Ors (Federal Court File No. NSD970/2025), which includes [the defendant] as [a named] plaintiff, purporting to seek to set aside multiple statutory demands, including the one issued to [the defendant].

This application:

6A.1.    Does not satisfy the requirement that an application under section 459G be made by the company to whom the demand was addressed, in its own name and within time;

6A.2.    Was filed as a joint application by four companies, without a separate, distinct affidavit on behalf of the defendant company addressing its own circumstances;

6A.3.    Was not served personally nor under any substituted service order authorised by the Court.

Accordingly, there is no valid or competent application before the Court made by the defendant in compliance with section 459G of the Corporations Act 2001, and the statutory demand remains undisturbed and enforceable.

(emphasis added)

75 Also on 26 June 2025, Mr Pall wrote to Mr Patial:

We refer to your recent applications to wind up the following companies:

1. Kailash Lawyers Pty Ltd;

2. Kailasam Holdings Pty Ltd;

3. Koala Investment Property Pty Ltd;

4. Kuber Investment Group Pty Ltd

Your applications are devoid of any merit and are doomed to fail. In particular, the reasons asserted relating to service and the requirement for one application are against authority:

1. personal service of an application under s 459G is not required: Site Foreman Pty Ltd v Brand [2011] NSWSC 821. The four statutory demands were served by you on 30 May 2025. Our application to set aside those four statutory demands was served on you on 18 June 2025 in accordance with Site Foreman. Further, you attest to having received our application to set aside the statutory demands on 19 June 2025 by email. As such, our application to set aside your statutory demands was filed and served on you within 21 days; and

2. one application can be used to set aside multiple statutory demands: Remo Constructions Pty Ltd v Dualcorp Pty Ltd [2008] NSWSC 1172; 222 FLR 375; Heirloom Vineyards Wine Company Pty Ltd v Sante Wines Pty Ltd [2018] SASCFC 56; 131 SASR 150.

Further, we note that on 23 June 2025 at 15.42 pm you were informed via email from Mr Gaurav Sareen of Vexo Lawyers that our application to set aside the statutory demands has been listed for a case management hearing on 10 July at 9.30 am before Justice Goodman.

As such, we ask that you withdraw your winding up applications, failing such we will rely on this letter to see indemnity costs of your applications.

(emphasis in original)

76 On 27 June 2025, Mr Pall wrote to Mr Patial again requesting the withdrawal of the winding up originating processes.

77 Mr Patial did not accede to that request.

78 On (Sunday) 29 June 2025, during an urgently convened hearing before Justice Younan qua duty judge, in the winding up proceedings: (1) each company was granted leave to file an interlocutory process; (2) each company, on the basis of its provision of the usual undertaking as to damages, obtained orders restraining publication of a notice of the filing of the winding up applications; and (3) an interlocutory application made by each company for summary dismissal of the winding up proceeding against it was made returnable before me on 10 July 2025.

79 On 10 July 2025, I set down for final hearing on 18 July 2025 each of proceeding NSD970/2025 and the winding up proceedings.

80 On 15 July 2025, Mr Patial filed with the Australian Securities and Investments Commission (ASIC) a “Form 519” with respect to each of the winding up proceedings, giving notice of that proceeding.

C.    Issues for determination

81 The four questions that arise for determination are as follows:

(1) should the companies be granted leave to amend the NSD970/2025 originating application?;

(2) have the requirements of s 459G of the Act  been met for each demand?;

(3) if the answer to (2) is “yes”, then should the demands be set aside?; and

(4) if the answer to either (2) or (3) is “no”, then should each of the companies be wound up in insolvency in the winding up proceedings?

D.    The amendment application

82 As noted at [63] above, the NSD970/2025 originating application contains several errors.

83 During the course of the hearing, the companies sought to amend the NSD970/2025 originating application, by making changes to the following effect:

On the facts stated in the supporting Affidavit of Amit Pall sworn/affirmed 16 17 June 2025:

1.     The First Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the First Plaintiff on 30 May 2025 be set aside.

2.    The Second Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

3.    The Third Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Third Plaintiff on 30 May 2025 be set aside.

4.    The Fourth Plaintiff seeks an order under s 495H459H and/or s 459J of the Corporations Act 2001 (Cth) that Mr Prateek Patial’s statutory demand dated 29 May 2025 and served on the Second Plaintiff on 30 May 2025 be set aside.

84 Mr Patial opposed the amendment application and submitted that the use of “16 June” rather than “17 June” and the use of “s 495H” rather than “s 459H” had the effect that the NSD970/2025 originating application is defective and the jurisdiction of the Court has not been invoked.

85 I do not accept Mr Patial’s submissions and I  will grant leave to the plaintiff to file an amended originating application to give effect to the proposed amendments, for the following reasons.

86 First, s 467A of the Act provides that an application under Part 5.4 of that Act (which the NSD970/2025 originating application is) must not be dismissed merely because of a defect or irregularity in connection with that application unless the Court is satisfied that substantial injustice has been caused that cannot otherwise be remedied (for example, by an adjournment or an order for costs).

87 The use of “16 June” and “s 495H” is self-evidently the product of drafting errors. Those errors cannot have caused Mr Patial any prejudice or injustice, much less substantial injustice, in circumstances where it is clear – from, e.g., his written submissions in each proceeding – that he has proceeded on the basis that the NSD970/2025 originating application is an application under s 459G of the Act supported by Mr Patial’s 17 June 2025 affidavit. There is no suggestion in any correspondence or written submission that Mr Patial queried the basis of an application under “s 495G”, or asked for a copy of an affidavit sworn on 16 June 2025, or was operating on the basis that the application was brought otherwise than on the basis that orders were sought under s 459G for the reasons set out in Mr Pall’s 17 June 2025 affidavit. Rather, these issues were raised for the first time in oral submissions during the hearing. Mr Patial did not identify any substantial injustice that he would suffer.

88 Secondly, under r 8.21 of the Federal Court Rules 2011 (Cth) an applicant may apply to amend an originating application for any reason, including the correction of a defect or error that would otherwise prevent the Court from determining the real questions raised by the proceeding. The exercise of the Court’s power on such an application also has regard to the aim of determining the real questions in issue. As the High Court of Australia (McTiernan ACJ, Menzies, Gibbs and Mason JJ) explained in Clough v Frog (1974) 48 ALJR 481 at 482, adopting the statement of principle of Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710 to 711, the Court’s aim is to decide the rights of the parties, and is not to punish them for mistakes.

89 Thirdly, a grant of leave would be consistent with the approach taken in previous authorities. See for example, A & M Short Pty Ltd v Prestige Residential Marketing Pty Ltd [2005] NSWSC 872; (2005) 54 ACSR 760, where Young J (as his Honour then was) allowed an amendment to overcome an error which saw the application brought not in the name of the company seeking to set aside the demand, but in the name of another company.

90 Finally, the errors do not deprive the Court of jurisdiction. The NSD970/2025 originating application, as filed, sought orders for the setting of the demands. There is no requirement in s 459G that the date of the supporting affidavit, or a reference to s 459G itself, be included in the application made under that section.

E.    Have the requirements of s 459G of the Act been met for each demand?

91 I turn now to consider whether the requirements of s 459G of the Act have been met.

92 Section 459G provides:

459G  Company may apply

(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 the statutory period after the demand is so served.

(3)     An application is made in accordance with this section only if, within that period:

(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.

93 The “statutory period” as defined in s 9 of the Act, is 21 days. If the events required by s 459G do not occur within the statutory period, then the Court lacks jurisdiction to deal with the application: David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265 at 277 [28] (Gummow J, with whom Brennan CJ, Dawson, Gaudron and McHugh JJ agreed).

94 In Heirloom Vineyards Wine Co Pty Ltd v Sante Wines Pty Ltd [2018] SASCFC 56; (2018) 128 ACSR 212 Doyle J (with whom Parker and Lovell JJ agreed) explained at 242 to 243 ([159] to [160]):

Permissibility of composite proceedings

[159]     In the end, I have come to the conclusion that there is no general rule, whether founded in the text of s 459G or otherwise, that a proceeding or application to set aside a statutory demand under s 459G must deal only with one statutory demand. Rather, the only requirements imposed by the legislation are those found in the text of s 459G, namely that:

1.    the company make an application to the Court (s 459G(1));

2.    the application and supporting affidavit be filed and served within 21 days after service of the demand (s 459G(2) and (3));

3.    the application seek “an order setting aside [the] demand” (s 459G(1)); and

4.    the affidavit filed with the application is in truth an affidavit “supporting” the application to set aside the particular demand (s 459(3)(a)).

[160]     In the case of a proceeding seeking to set aside multiple demands, these requirements must be separately considered and met in respect of each demand. If the requirements are not met in respect of any particular demand or demands, then the proceeding will fail in respect of that demand or demands; but the proceeding will remain valid for any other demand or demands in respect of which the requirements have been met. The multiplicity of demands, or composite nature of the proceedings, is otherwise irrelevant in determining compliance with the requirements of s 459G. There is no prohibition against composite proceedings, and no requirement that each proceeding or application deal only with one demand.

(emphasis in original)

95 The companies rely upon Heirloom as authority for the proposition that an originating application under s 459G of the Act is not incompetent by dint of it having multiple plaintiffs. Mr Patial seeks to distinguish Heirloom on its facts, and in particular on the basis that it involved only one plaintiff. I accept that there is such a difference in the underlying facts. However, I do not accept that this renders inapplicable the reasoning in Heirloom to the circumstances in the present case.

96 Many permutations of plaintiffs, defendants and demands are possible, as I seek to illustrate in the table below:

97 The present case – which involves multiple plaintiffs, one defendant and one demand per defendant – is an instance of the fifth scenario. Heirloom – which involved one plaintiff, two defendants and one demand per defendant – is an example of the third scenario. The many cases reviewed by Doyle J in Heirloom include various permutations including, as his Honour explained at 241 [153], Femley Pty Ltd v Salken Engineering Pty Ltd [1999] NSWSC 334; (1999) 17 ACLC 828 (Santow J as his Honour then was) and Isaco Pty Ltd v Davey [2003] NSWSC 1043; (2003) 47 ACSR 483 (Barrett J, as his Honour then was), each of which involved multiple plaintiffs seeking to set aside multiple demands based upon jointly (or jointly and severally) owed debts. In each of those cases, the applications were allowed to proceed.

98 In Heirloom the Court held, inter alia, that there need not be a separate originating process for each demand (and the question whether there needed to be a separate originating process for each plaintiff did not arise). However, the reasoning in Heirloom did not turn on the particular permutation in that proceeding. Rather, it involved, with respect, a detailed and thorough analysis of the previous (at times conflicting) case law and then a detailed and thorough analysis from first principles of the requirements for an application to set aside a demand or demands to comply with s 459G: see, in particular 236 to 243 ([128] to [160]). Those requirements – which are set out at 242 [159] of that decision (see [94] above) – are applicable to all of the permutations set out in the table at [96] above. Whether those requirements are met in a particular case will depend upon the facts of that case.

99 I turn now to consider each of these requirements for each demand.

E.1    Has the company made an application to the Court (s 459G(1))?

100 The first requirement of s 459G of the Act is that the relevant company has made an application to the Court.

101 Mr Patial contends that to be a valid application under s 459G of the Act, an originating application filed in this Court must have only one plaintiff. That contention is based upon the proposition that the text of s 459G of the Act uses the singular form of expression, e.g., “A company”, “an order”, “the demand”, “a statutory demand”, “an application” and “the application”.

102 I do not accept this contention. It is contrary to the approach taken in Heirloom. At 236 ([130] to [132]), Doyle J stated the following (in terms which are of equal application to the question whether more than one application may be brought in the same proceeding):

[130]     In Help Desk, Young J attached some significance to the use of the singular in the reference to an order setting aside a statutory demand in s 459G(1). To this might be added the singular references to an application in s 459G(2) and (3). In my view, and even without recourse to s 23(b) of the Acts Interpretation Act, the use of the singular is of no significance in the present context. The text of the section merely provides that a plaintiff company seeking to set aside a demand served on it is empowered to, and (in order to comply with s 459G) required to, apply for an order setting aside that demand. The section thus provides that for a demand to be set aside there must be an application seeking an order that it be set aside. In describing the requirements that must be met in respect of each demand, it is entirely to be expected that it would be expressed in the singular.

[131]     Importantly, the section does not say that the plaintiff company cannot at the same time, or in the same proceeding, also pursue some other application or claim. In particular, it does not say that the same plaintiff cannot at the same time or in the same proceeding also pursue another application to set aside some other demand. Nor do I consider that the use of the singular carries any implication to that effect. But even if it did, the significance of this would, in my view, be overcome by the operation of s 23(b) of the Acts Interpretation Act. For the reasons that follow, I do not think there is anything in either the text or context of s 459G that warrants it being read in the way Heirloom contends.

[132]     In short, I do not consider that there is any basis in the text of s 459G for a general or abstract rule to the effect suggested by Young J in Help Desk, namely that any proceeding, or indeed application, to set aside a demand may only deal with one demand. It is true that for each demand there must be an application, but it does not follow (from the use of the singular or otherwise) that a single proceeding cannot be the vehicle for setting aside more than one demand.

Further, as his Honour said at 238 [139]:

Proceedings and applications pursuing multiple claims for relief simultaneously are commonplace in litigation. One would expect clear words to have been used if the legislature intended to preclude such an approach in the present context.

103 There being no basis in s 459G for a requirement that each plaintiff file a separate originating application, it is appropriate next to consider the operative rules of the Court. Rule 1.3(2) of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) provides in so far as is presently relevant:

1.3 Application of these Rules and other rules of the Court

…

(2)     The other rules of the Court apply, to the extent that they are relevant and not inconsistent with these Rules:

(a)     to a proceeding in the Court under the Corporations Act … that is commenced on or after the commencement of these Rules

104 Proceeding NSD970/2025 is plainly a proceeding in this Court under the Act. Thus, the Federal Court Rules apply to the extent they are relevant and not inconsistent with the Corporations Rules. Rule 9.02 of the Federal Court Rules provides:

9.02 Joinder in proceedings involving common questions etc.

(1)     Two or more persons may be joined (as applicants or respondents) in any proceeding:

(a)     if separate proceedings by or against each of them would give rise to a common question of fact or of mixed fact and law; or

(b)     if all rights to relief claimed in the originating application are in respect of, or arise out of, the same transaction or series of transactions; or

(c)     by leave of the Court.

(2)     Leave under paragraph (1)(c) may be granted before or after the originating application is filed.

(3)     If 2 or more persons are joined under subrule (1), the Court may at any stage of the proceedings order that proceedings by or against any party or parties be conducted separately.

105 Rule 9.02 expressly allows the joinder of two or more persons as applicants (defined in Schedule 1 to the Federal Court Rules as any party other than a cross-claimant claiming relief) where: (1) separate proceedings by each of them would give rise to common questions of fact or mixed fact and law; or (2) the rights to relief claimed in the originating application arise out of the same transaction or series of transactions. In the present case, each of the companies is an applicant as defined and each of (1) and (2) is satisfied. The common questions are whether there is a genuine dispute as to the debts claimed in the demands and whether there is an abuse of process. The relief sought relates to setting aside the demands, which are based in substantial part on invoices for the same contended work, with the companies allegedly each responsible for a fraction of the whole of the amount due.

106 Rule 9.02 is plainly relevant and it is not inconsistent with the Corporations Rules (see r 1.3(2)).

107 Also counting against Mr Patial’s argument is the ability of the Court to respond to any perceived or real difficulties concerning proceedings involving multiple plaintiffs (and multiple defendants and multiple demands). As Doyle J explained in Heirloom at 240 to 241 ([151] to [155]):

[151]     Even in cases where the grounds relied upon in seeking to set aside multiple demands differ in their factual or legal detail, there is no reason to think that this will be productive of any significant complexity or confusion, let alone complexity or confusion to such a degree that it can be inferred that the legislature would not have intended that it be permitted. Court documents are routinely required to address multiple causes of actions. There is no reason to think that an affidavit intended to support the setting aside of more than one demand cannot do so. To the extent it is not otherwise obvious from the nature of the matters deposed to, the affidavits (whether through the use of headings, appropriate explanatory text, or otherwise) can identify which evidence is intended to support which ground(s) of challenge to which demand(s).

[152]     There is always a risk that an affidavit will be so poorly drafted or structured that it fails to meet the description of an “affidavit supporting” an application to have a demand set aside for the purposes of s 459G(3). In my view, that risk is not materially greater in the case of an affidavit or affidavits intended to support a challenge to more than one demand. While a potential risk associated with a composite proceeding, which White J in Indigo Financial gave as a reason why plaintiffs might exercise caution before utilising a composite proceeding, I do not regard this as a reason for inferring an intention on the part of the legislature that they not be permitted. Nor do I regard the spectre of extraneous material in the affidavits as providing a reason for drawing such an inference. As long as it is reasonably apparent which material is intended to support which ground of challenge to which demand, the Court can readily pass over any material that is extraneous to determination of the issues arising in respect of any particular demand.

[153]     Indeed, as both White J in Indigo Financial and Ball J in Greenhills Securities emphasised, it is difficult to make any assumptions about how an attempt to set aside multiple demands might be most efficiently addressed. White J gave Femley and Isaco (both involving multiple plaintiffs seeking to set aside multiple demands based upon jointly, or jointly and severally, owing debts) as two examples of situations where one might assume it was more efficient and convenient, and certainly no more complex, to proceed by way of a composite proceeding. In other cases, where there is not a jointly owed debt, but nevertheless some overlap in either the parties, or factual or legal issues raised by multiple demands, there is at least some prospect that there will be scope for efficiency and convenience, without undue complexity, in composite proceedings.

[154]     As White J also pointed out in Indigo Financial, to the extent that a particular composite proceeding does give rise to undesirable complexity, the court’s procedural rules provide an armoury of powers with which to address that complexity. The court might decide, for example, to hive off one or more issues (or indeed all issues in relation to a particular demand or demands) for separate hearing.

[155]     The point is that I do not accept that it can be assumed that the permissibility of composite proceedings will be so productive of complexity or confusion, or will otherwise so undermine the regime intended in Pt 5.4, that it can be inferred that the legislature would not have intended that this would be permitted. To the contrary, I consider it more likely that the legislature, to the extent that it considered the issue at all, would have anticipated that composite proceedings might be productive of efficiency and convenience in some cases, but perhaps not all cases, and to have intended that the matter be left to the courts (through their armoury of procedural powers) to determine how best to address any complexity or confusion that might arise in a particular case.

(emphasis in original)

108 It follows that the filing of the NSD970/2025 originating application in a form in which each of the four companies was a plaintiff is orthodox and that this form of originating application is not outside the concept of an application for the purposes of s 459G of the Act. Each company has made an application in accordance with s 459G of the Act.

109 Mr Patial submits that David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] 2 VR 495; (1995) 15 ACSR 771 (Brooking, Smith and J D Phillips JJ) is authority for the proposition that distinct applications by each company are required. I do not read that case in that way. The issue of whether multiple plaintiffs are allowed did not arise for decision in that case.

E.2    Were the application and the supporting affidavit filed and served within 21 days after service of the demands (s 459G(2) and (3))?

110 The second requirement in s 459G of the Act is that for each demand the originating documents were filed and served within 21 days after that service of demand.

111 As noted above, the demands were served on the companies on 30 May 2025. Thus, any application to set aside the demands had to be filed and served within 21 days, or by 20 June 2025.

112 The evidence establishes that:

(1) on 18 June 2025, the originating documents were filed ([61] above);

(2) on the same day, the originating documents were left at the Midson Road address (being the address nominated on the demands as Mr Patial’s address for service – ([68] to [71] above); and

(3) on 19 June 2025 the 19 June 2025 email, attaching the originating documents, was sent by email to Mr Patial’s email address and received by him on that date ([72] above).

113 The companies contend, and Mr Patial denies, that the originating documents were served upon Mr Patial before 20 June 2025.

114 The short answer is that Mr Patial, as is evident from his admission ([74] above), received the originating documents on 19 June 2025. The position he has taken is encapsulated in the following passage of transcript (T30.1-7):

HIS HONOUR: But you are aware – or you’ve been aware since 19 June of the proceeding.  You seem to be taking a very technical point rather than a point of substance to say, “Despite the fact that I was aware of the proceeding, I’m going to take a technical point that I wasn’t made aware in a particular way” Is that – that’s the substance of it, isn’t it?

MR PATIAL: Yes, your Honour.

115 In Carter v Australian Securities Investments Commission [2019] FCAFC 229; (2019) 274 FCR 677 – a case concerning a provision which (unlike the present case) did require personal service – the Full Court of this Court (Greenwood, Kerr and Burley JJ) stated at 684 to 685 ([16] to [17]):

16.    ... Proof of personal service ordinarily will be established if a party to be served expressly acknowledges that he or she has both received a document required to be served and has become aware of its terms. So too will a document be personally served if it is served on a solicitor who has authority to receive it on his or her behalf. In Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 at 544, Young J addressed the question of service in the context of s 459G of the Act:

Section 459G itself does not deal with what is service. The ordinary meaning of “service” is personal service, and personal service merely means that the document in question must come to the notice of the person for whom it is intended. The means by which that person obtains the document are usually immaterial. This is clear in cases that have been considered good law over the centuries, including Hope v Hope (1854) 4 De GM & G 328 at 341-345; 43 ER 534 at 539-540; R v Heron; Ex parte Mulder (1884) 10 VLR 314 at 315; Pino v Prosser [1967] VR 835 at 838. Some of those cases were complicated by the requirement in the former statutes that a person serving initiating process had to endorse the initiating process, but the principle is clear from them.

If this were not so, one would get the absurd situation referred to by McInerney J in Pino v Prosser (at 837), that the conclusion would be one which is:

… remarkable to the point of seeming absurdity, in that the defendant who, on his own affidavit admits that he received the writ … should be held not to have been served.

17.    This approach, which has been referred to as the “effective informal service rule” has been applied in many cases; see Woodgate v Garard Pty Ltd (2010) 239 FLR 339 at [42] (Palmer J) (and the many cases cited there), TCL Airconditioner (Zhongshan) Company Ltd v Castel Electronics Pty Ltd (2019) 369 ALR 192 at [41] (McKerracher J).

(emphasis added)

116 As Young J noted in Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542; (1996) 21 ACSR 440, in the above-quoted passage, the principle that the means by which a person who has notice of a proceeding was given such notice is immaterial, is one of some antiquity. In this regard, Young J referred to:

(1) Hope v Hope 4 De GM & G 328; 43 ER 534 in which, in 1854 the Lord Chancellor, Lord Cranworth said at 539 to 540:

The object of all service is of course only to give notice to the party on whom it is made, so that he may be made aware of and may be able to resist that which is sought against him; and when that has been substantially done, so that the Court may feel perfectly confident that service has reached him, everything has been done that is required. ; and

(2) Pino v Prosser [1967] VR 835, in which the process was served upon the defendant’s wife, rather than upon the defendant. However, the defendant acknowledged that he had received the process and had taken it to his solicitor for advice. The defendant nevertheless submitted that service had not been effected. At 837, McInerney J stated:

The accepted mode of personal service is that the copy writ must be delivered to, or left with, the person to be served. The person effecting service must, if the person served requires to see it, show the original writ to that person. There is some authority for the view that if the person effecting service refuses, on demand, to show the original writ, then all proceedings founded on the writ thereafter may be set aside : see Phillipson & Son v. Emmanuel (1887), 56 L.T. 858, and Jay v. Budd, [1898] 1 Q.B. 12. In the latter case, however, Collins, L.J., at p. 18, expressed the view that if at the time of service production of the original writ was not required, the service was good without it.

In the notes in the Annual Practice 1956 to 0. IX, r. 2, at p. 64, this passage appears: ''Service on the wife, or a known agent of the defendant is not good service (Frith v. Donegal (1834), 2 D.P.C. 527), though the latter undertakes to convey it to the defendant (Davies v. Morgan (1832), 2 C. & J. 237)." A passage to the same effect appears at p. 140 of Mr. Williams' book, Supreme Court Practice, adding as authority for that view the decisions of Edgely v. Rankin (1904), 21 W.N. (N.S.W.) 143, and Johnsen v. Duks, [1963] N.S.W.R. 730.

If that passage correctly states the law, the conclusion is, on the facts of this case, remarkable to the point of seeming absurdity, in that the defendant who, on his own affidavit admits that he received the writ on 28 March from his wife and instructed his solicitors on 10 April, should be held not to have been served.

(emphasis added)

117 As the Full Court in Carter noted at 685 [17] the “effective informal service rule” has been applied in many cases. See, also Mohamed v Farah [2004] NSWSC 482 at [42] to [45] (Barrett J, as his Honour then was); Parklands Blue Metal Pty Ltd v Kowari Motors Pty Ltd [2003] QSC 98; [2004] 1 Qd R 140 at 142 to 143 ([8] to [9]) (Helman J); and Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 at 58 (Hodgson JA, with whom Handley JA and Hunt AJA agreed).

118 More recently, in In the matter of New Wilkie Energy Group Limited [2024] NSWSC 942, Black J explained at [8] to [12]:

8    The principles that apply in circumstances of this kind are well established. Mr Gandar, who appears for BDO, refers to the decision of Helman J in Parklands Blue Metal Pty Ltd v Kowari Motors Pty Ltd [2003] 1Q d R 140; [2003] QSC 98 (“Parklands Blue Metal”), which addressed a factual situation which is virtually indistinguishable from this case. There, a creditor served a creditor’s statutory demand, intending to rely on s 109X of the Act which provides, inter alia, for service at the company’s registered office. The Court found, on an admission made by the company, that it had received a facsimile transmission of the statutory demand and accompanying affidavit prior to service of the demand at the registered office; the valid service of those documents occurred on the earlier date notwithstanding s 109X of the Act did not provide for that mode of service; and, in those circumstances, an application to set aside the creditor’s statutory demand, which was not filed within 21 days of the earlier date of service of the demand, did not establish the Court’s jurisdiction to hear the application. Helman J there referred to the consideration of the circumstances in which service could be effected informally by Young J in Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542, in that case dealing with the service of a summons seeking to set aside the creditor’s statutory demand.

9    Mr Gandar also draws attention to the observations of Palmer J in Woodgate v Garard Pty Ltd [2010] NSWSC 508, where his Honour held a statutory demand had come to the attention of a company through its director, who was authorised to deal with the demand, and the company was therefore validly served at the point at which that occurred. Each of those factors are established here, where it is plain that the Demand here had come to the attention of Mr Martino by 28 February 2024, and that he was authorised to deal with the Demand on NWE’s behalf, which he did by commencing correspondence in respect of the Demand from that date.

10    Mr Haines, who as I noted above appears for NWE, did not seek to contest the application of that case law, and there was no basis on which he could have done so, given the subsequent cases which have referred to and applied it. In V & M Daidovic Pty Limited v Professional Services Group t/a Rosier Partners Lawyers [2012] NSWSC 134, I also dealt with the position where service by creditor’s statutory demand had been effected by facsimile; I found that service in that manner was effective, in that case, where it brought a creditor’s statutory demand to the attention of the director of the company, although facsimile service was not one of the methods of service set out in s 109X of the Act and I followed Parklands Blue Metal, in holding that in the particular circumstances, the application to set aside the demand had not been brought within the 21 day period specified in s 459G(3) of the Act. I held (at [5]) that that was sufficient in that case to establish that the Court did not have jurisdiction to entertain the application to set aside the statutory demand, although I there went on to determine other aspects of the application.

11    The approach adopted in Parklands Blue Metal has since been applied in other contexts. In Clark v Murray [2017] WASCA 88, Mitchell JA referred to that decision, in holding that the receipt of a Court process amounted to personal service, where the party to whom it was directed had acknowledged that receipt, and observed that:

“Once the recipient receives the [document], the requirement for personal service has been achieved. A person who the evidence establishes has actually received the document cannot validly complain that he or she has not been personally served.”

12    That approach was followed, in this Court, in Smith v Shilkan (No 2) [2019] NSWSC 969, again in respect of the service of a Court document.

(emphasis added)

119 In circumstances where Mr Patial has acknowledged receipt of the 19 June 2025 email and that email attached the originating documents I am satisfied that service of those documents was effected on 19 June 2025. He has taken a position contrary to long-standing authority and one that was described in 1967 in Pino as absurd ([114] to [116] above). A fortiori now, when all parties are required by s 37N of the Federal Court of Australia Act 1976 (Cth) to conduct proceedings in a way that is consistent with the overarching purpose of facilitating the just resolution of disputes, inter alia, as quickly, inexpensively and efficiently as possible, including the efficient use of the Court’s finite resources.

120 Thus, it is not strictly necessary to consider Mr Patial’s argument that personal service is required, or the companies’ argument that service was otherwise effected. Nevertheless, I do so below (on the assumption, contrary to the above analysis, that service did not occur in accordance with the “effective informal service rule”) and conclude that personal service was not required; and that service was effected by means of the 19 June 2025 email and by the leaving of those documents at the Midson Road address on 18 June 2025.

E.2.1    Is personal service required?

121 Mr Patial contends, and the companies deny, that personal service of the originating documents is required. Mr Patial’s contention is not supported by reference to any authority, and is contrary to long-standing authority.

122 In Bioaction Pty Ltd v Ogborne, in the matter of Bioaction Pty Ltd [2022] FCA 436; (2022) 402 ALR 542, Justice Cheeseman explained at 548 to 549 ([36] to [40]):

[36]     Section 459G does not define what constitutes service. The term is not defined in s 9 of the Corporations Act.

[37]     The meaning of service in the context of s 459G was considered by Young J (as his Honour then was) in Howship Holdings Pty Ltd v Leslie (Nos 1 and 2) (1996) 41 NSWLR 542 at 544; 21 ACSR 440 at 442 (Howship Holdings) as follows:

Section 459G itself does not deal with what is service. The ordinary meaning of “service” is personal service, and personal service merely means that the document in question must come to the notice of the person for whom it is intended. The means by which that person obtains the document are usually immaterial…

[38]     Provisions which provide for a mode of service of documents on natural persons (s 28A of the Acts Interpretation Act 1901 (Cth)) and companies (s 28A of the Acts Interpretation Act and s 109X of the Corporations Act) are facultative not mandatory. In respect of s 28A of the Acts Interpretation Act see Deputy Commissioner of Taxation v ABW Design and Construction Pty Ltd (2012) 203 FCR 70; 291 ALR 127; [2012] FCA 346 at [20] (Logan J). In respect of s 109X of the Corporations Act see Intelogent Pty Ltd v Onthego Group Pty Ltd [2021] FCA 257 at [33]–[38] and the authorities cited therein (Farrell J).

[39]     Other means of service may be adopted, and if those other means result in the documents arriving at the nominated address within the statutory period then valid service will have been effected. What is critical is the result which is achieved by the plaintiff’s efforts, not the manner by which that result has been achieved: Newsnet Pty Ltd v Patching (2011) 81 NSWLR 104; [2011] NSWSC 690 (Newsnet) at [30] (White J, as his Honour then was); Re Seventh Cameo Nominees Pty Ltd (unreported, VSC, Chernov J, 24 April 1998, BC9802324) (Seventh Cameo Nominees); SGR Pastoral Pty Ltd v Christensen (2019) 2 QR 334; [2019] QSC 229 (SGR Pastoral) at [23] (Bowskill J, as her Honour, the Chief Justice then was). In SGR Pastoral, Bowskill J rejected a submission advanced by the creditor that personal service of the s 459G application on the creditors’ nominated agent is required, describing the submission (at [19]) as both counter-intuitive and inconsistent with authority, including Newsnet, Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648; 23 ACSR 380; 15 ACLC 570 (Rochester Communications) and Re World Square Realty Pty Ltd [2013] NSWSC 307 (World Square Realty).

[40]     Notwithstanding that the s 459G application is an originating process of the Court to which formal rules of service otherwise apply, personal service is not required: Players Pty Ltd v Interior Projects (1996) 133 FLR 265; 20 ACSR 189; 14 ACLC 918 at 922–3 (Players) (Lander J); SGR Pastoral at [18] (Bowskill J). As the statutory demand must nominate a place at which any s 459G application may be served on the creditor, the service requirement of the section is met when the documents are served to that address: Players at ACLC 921 (Lander J); approved in Rochester Communications at ACLC 589 (Beaumont J) and ACLC 599–600 (Moore J); SGR Pastoral at [17], [21] (Bowskill J); Newsnet at [23]–[30] (White J, as his Honour then was); World Square Realty at [16] (Brereton J, as his Honour then was); The Site Foreman Pty Ltd v Brand (2011) 81 NSWLR 96; [2011] NSWSC 451 (The Site Foreman) at [26] (Barrett J, as his Honour then was).

(bold emphasis added)

123 The absence of any requirement for personal service is confirmed by Division 2 of Part 1.2AA of the Act, which was introduced from 15 September 2023 by the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 (Cth). That Division – which is discussed in more detail below – provides for the service of various documents, including applications to set aside statutory demands, to be effected by means other than personal service.

E.2.2    Has service occurred?

124 As personal service is not required, the next question is whether service (other than personal service) has occurred. The companies contend, and Mr Patial denies, that such service has occurred both by electronic communication and by physical service.

125 The starting point for both electronic and physical service is Division 2 of Part 1.2AA, which deals with “Technology neutral sending of documents and related matters”. Within Division 2 are, relevantly for present purposes, the following provisions:

110C Documents to which this Division applies

Sending documents

(1)     This Division applies to any document covered by subsection (3) or (4) that is required or permitted under this Act to be sent by a person or entity (the sender) to another person or entity (the recipient).

…

Covered documents

(3)     This subsection covers a document that is required or permitted be sent by the sender to the recipient under:

…

(c)     Chapters 5 to 5D; or

…

(4)     This subsection covers a document that is in a class of documents specified in regulations made for the purposes of this subsection.

…

References to sending documents

(6)     This Division applies to a requirement or permission to send a document, whether the expression send, give, serve or dispatch, or any other expression, is used.

(7)     To avoid doubt, for the purposes of this Division, a document is not a document that is required or permitted under this Act to be sent merely because section 109X, 601CX or 1200R provides that the document may be served in a particular way.

110D   Technology neutral sending of documents

(1)     The document may be sent to the recipient:

(a)     by sending the document in a physical form; or

…

(c)     if subsection (2) is satisfied—by sending the document in electronic form by means of an electronic communication; or

…

Note:     A requirement for the sender to send a document to which this Division applies is met if the document is sent in accordance with this section and in accordance with any timing requirements under this Act.

(2)     This subsection is satisfied if, at the time the document is sent, it is reasonable to expect that the document would be readily accessible so as to be useable for subsequent reference.

…

Other ways of sending documents not limited

(4)     Subsection (1) does not limit the ways in which a person may send a document.

Note:     For example, a company’s constitution may set out other ways in which a document may be sent.

Address for sending document

(5)     Paragraphs (1)(a) and (b) apply only if:

(a)     where the recipient is covered by subsection (7)—the sending of the document mentioned in paragraph (1)(a), or the sending of the information mentioned in paragraph (1)(b), is to an address known to the sender because the recipient is a member or holder of securities mentioned in whichever of paragraphs (7)(a) to (f) applies; or

(b)     the recipient is not covered by subsection (7).

(6)     Paragraphs (1)(c) and (d) apply only if:

(a)     where the recipient is covered by subsection (7):

(i)     the sending of the document mentioned in paragraph (1)(c), or the sending of the information mentioned in paragraph (1)(d), is to an address known to the sender because the recipient is a member or holder of securities mentioned in whichever of paragraphs (7)(a) to (f) applies; and

(ii)     that address is a nominated electronic address of the recipient; or

(b)     where the recipient is not covered by subsection (7)—the sending of the document mentioned in paragraph (1)(c), or the sending of the information mentioned in paragraph (1)(d), is to a nominated electronic address of the recipient.

(7)     For the purposes of subsections (5) and (6), this subsection covers the recipient if:

(a)     the recipient is a member of the sender; or

(b)     where the sender is the responsible entity of a registered scheme—the recipient is a member of the scheme; or

(c)     where the sender is the corporate director of a CCIV—the recipient is a member of the CCIV; or

(d)     where the sender is a disclosing entity mentioned in subsection 111AC(2)—the recipient is a member of the managed investment scheme mentioned in that subsection; or

(e)     where the sender is the operator of a notified foreign passport fund—the recipient is an Australian member of the fund; or

(f)     where the sender is the bidder under a takeover bid—the recipient is a holder of securities in the target for the bid.

(emphasis in original)

126 Also relevant is s 105A of the Act, which provides in so far as is presently relevant:

105A When is an electronic communication sent and received

(1)     This section applies in relation to an electronic communication unless otherwise agreed between the originator and the addressee of the electronic communication.

(2)     An electronic communication is sent:

(a)     when the electronic communication leaves an information system under the control of the originator or of the party who sent it on behalf of the originator; or

(b)     if the electronic communication has not left an information system under the control of the originator or of the party who sent it on behalf of the originator—when the electronic communication is received by the addressee.

Note 1:     Paragraph (b) would apply to a case where the parties exchange electronic communications through the same information system.

Note 2:     The meaning of sent in Chapters 6 and 6A is not affected by this section: see the definition of sent in section 9.

(3)     Subsection (2) applies even though the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is taken to have been sent under section 105B.

(4)     An electronic communication is received when the electronic communication becomes capable of being retrieved by the addressee at the addressee’s nominated electronic address.

(5)     It is to be assumed that an electronic communication is capable of being retrieved by the addressee when it reaches the addressee’s nominated electronic address.

(emphasis in original)

127 Mr Patial submits that s 105A applies only when there is an agreement between the originator and the recipient. That submission is contrary to the text of the section and is rejected.

E.2.2.1    Service by electronic communication

128 I turn now to consider whether the originating documents were served by electronic communication within the meaning of Division 2 of Part 1.2AA.

129 It is necessary first to determine whether the originating documents are documents to which Division 2 applies.

130 The effect of s 110C(1) of the Act is to render Division 2 applicable to any document that: (1) is covered by subsection 110C(3) or (4) of the Act; and (2) one person or entity is required or permitted to “send” to another person or entity. The concept of “send” includes, relevantly, “serve”: s 110C(6) of the Act.

131 Each of the originating documents was required or permitted to be served within the statutory period of 21 days by dint of s 459G of the Act. As s 459G of the Act is within Chapter 5 of that Act, each of the documents is a document covered by s 110C(3)(c) of the Act. Thus, the requirements of s 110C(1) of the Act are satisfied and the originating documents are documents to which Division 2 applies.

132 As Division 2 applies, s 110D is operative. Section 110D(1)(c) provides that where both s 110D(2) and 110D(6) are satisfied, documents falling within Division 2 may be served by sending such documents in electronic form by means of an electronic communication.

133 Section 110D(2) is satisfied, if at the time the originating documents were sent, it was reasonable to expect that the originating documents would be readily accessible so as to be useable for subsequent reference. Such a reasonable expectation is readily established in the present case, when Mr Patial’s email address was the address used by him on the 20 May 2025 invoices and in other documents that were in existence prior to the 19 June 2025 email which was sent to Mr Patial’s email address (see [28], [34], [41], [46] and [57] above). Thus, s 110D(2) is satisfied.

134 Section 110D(6) is satisfied if (relevantly) the recipient is not covered by s 110D(7) and the document is sent to the “nominated electrical address of the recipient”. Mr Patial is not covered by s 110D(7) (as none of s 110D(7)(a) to (f) is satisfied). Thus s 110D(6)) will be satisfied provided that the sending of the originating documents was to “a nominated electronic address” of Mr Patial.

135 That expression  is defined in s 9 of the Act as follows:

“nominated electronic address”, in relation to the addressee of an electronic communication, means:

(a)      the most recent electronic address nominated by the addressee to the originator of the electronic communication as the electronic address for receiving electronic communications; or

(b)      if:

(i)    the addressee has nominated an electronic address as mentioned in paragraph  (a) and the originator knows, or there are reasonable grounds to believe, that the address is not a current electronic address for the addressee; or

(ii)    the addressee has not nominated an electronic address as mentioned in paragraph (a);

an electronic address that the originator believes on reasonable grounds to be a current electronic address for the addressee for receiving electronic communications.

136 In circumstances where:

(1) Mr Patial (as he asserts) did not nominate an electronic address to the companies as the electronic address for receiving electronic communication (such that subsection (a) and (b)(i) of the definition do not apply, but subsection (b)(ii) of the definition does); and

(2) for the reasons set out at [133] above, I am satisfied that Mr Patial’s email address is one that the companies, via Mr Pall, believed on reasonable grounds to be a current electronic address for receipt of electronic communications by Mr Patial,

it follows that Mr Patial’s email address is his “nominated email address”.

137 As ss 110D(2) and 110D(6) are satisfied, s 110D(1) is operative.

138 Service under s 110D(1)(c) occurs when the documents are sent to a recipient “in electronic form by means of an electronic communication”. “Electronic communication” is defined in s 9 of the Act as:

“electronic communication” means:

(a)      a communication of information in the form of data, text or images by means of guided and/or unguided electromagnetic energy; or

(b)     a communication of information in the form of speech by means of guided and/or unguided electromagnetic energy, where the speech is processed at its destination by an automated voice recognition system.

139 This requirement is plainly satisfied, where, as in the present case, the originating documents were sent by email.

140 Further, as the originating documents were sent by email they are taken to have been received when they reached Mr Patial’s “nominated electronic address” (i.e. Mr Patial’s email address ([136] above)): s 105A(4) and (5) of the Act.

141 Thus, I am satisfied that service occurred in accordance with s 110D(1)(c) of the Act. As it occurred within the statutory period, such service was effective for the purposes of s 459G.

142 Mr Patial submitted that he had made an election under s 110E(2) of the Act by nominating the Midson Road address as the place for service upon him and thus that service of the originating documents by email was ineffective. However, s 110E only applies if s 110E(1) is satisfied. It is plainly not satisfied (and Mr Patial offered no submission as to why it was). Thus, Mr Patial’s submission cannot be accepted.

E.2.2.2    Physical service

143 Section 110D(1)(a) of the Act also provides that documents falling within Division 2 may be served by sending such documents in a physical form.

144 Section 110D(1)(a) applies only if the requirements of s 110D(5) are satisfied. Where, as already noted, in the present case Mr Patial qua recipient is not covered by s 110D(7), s 110D(5)(a) is not satisfied, but s 110D(5)(b) (and thus s 110D(5)) is satisfied.

145 It follows that s 110D(1)(a) applies, with the result that service of the originating documents could occur by sending those documents in a physical form. This occurred when Ms Hill left the originating documents at the Midson Road address (being the address for service nominated by Mr Patial) on 18 June 2025 and thus within the 21 day statutory period.

146 Thus, service was effected by both electronic communication and in a physical form within the meaning of Part 1.2AA of the Act within the statutory period.

E.3    Does the application seek an order setting aside the demand (s 459G(1))?

147 The third requirement of s 459G of the Act is that the application seek an order setting aside the demand.

148 It is clear from the form of the orders sought in the NSD970/2025 originating application (see [62] above), that for each demand an order is sought by the company the subject of that demand, for it to be set aside. This requirement is satisfied.

E.4    Is the affidavit filed with the application in truth an affidavit “supporting” the application to set aside the particular demand (s 459G(3)(a))?

149 The final requirement of s 459G of the Act is that the affidavit filed with the application in truth support the application.

150 I am satisfied that Mr Pall’s 17 June 2025 affidavit is an affidavit that supports the application to set aside each of the particular demands, as is apparent from [10], [11], [16], [45] and [64] to [67] above.

E.5    Conclusion as to compliance with s 459G of the Act

151 For the reasons set out above, I am satisfied that the requirements of s 459G of the Act have been met.

F.    Should the demands be set aside?

152 As the answer to the first question is “yes”, it is necessary to consider the second question, namely whether the demands should be set aside. Each company contends that the demand addressed to it should be set aside because there is a genuine dispute as to the debts described therein; and because that demand constitutes an abuse of process.

F.1    Is there a genuine dispute?

153 Section 459H of the Act provides in so far as is presently relevant:

459H Determination of application where there is a dispute or offsetting claim

(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.

…

(6)     This section has effect subject to section 459J.

(emphasis in original)

154 As already determined or noted above, there is an application under s 459G of the Act on foot for each of the demands, and each company contends that there is a genuine dispute as to the existence of the debt asserted in the demand upon it.

155 The principles with respect to determining whether there is a genuine dispute are well-settled. In Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd [1997] FCA 681; (1997) 76 FCR 452 a Full Court of this Court (Northrop, Merkel and Goldberg JJ) considered various authorities, including Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, in which McLelland CJ in Eq explained 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 “a patently feeble legal argument or an assertion of facts unsupported by evidence”: cf South Australia v Wall (1980) 24 SASR 189 at 194.

156 Having considered those authorities, the Full Court expressed the following view at 464:

In our view 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.

We consider that the various formulations referred to above can be helpful in determining whether there is a genuine dispute in a particular case, so long as the formulation used does not become a substitute for the words of the statute.

157 Similar views have been expressed by other intermediate courts of appeal: see, e.g., CA Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31 at [35] (Buss P, Vaughan JA agreeing); MSA Renex Corp Pty Ltd v Create Environment Pty Ltd [2021] VSCA 178 at [28] (Ferguson CJ, Walker JA agreeing).

158 More recently, the Court of Appeal of the Supreme Court of Queensland (Mullins P, Morrison and Bond JJA) in Thomson v Australia and New Zealand Banking Group Limited [2024] QCA 73, provided the following overview of relevant principles at [40]:

By reference to established authority, the principles applicable to whether there is a genuine dispute for the purpose of s 459H of the Act have been summarised as follows:

(a)    for a dispute to be “genuine” it must be “bona fide and truly exist in fact”;

(b)    “the grounds for alleging the existence of a dispute … [must be] real and not spurious, hypothetical, illusory or misconceived”;

(c)    the dispute must have a “sufficient objective existence and prima facie plausibility to distinguish it from a merely spurious claim, bluster or assertion, and sufficient factual particularity to exclude the merely fanciful or futile. … Something ‘between mere assertion and the proof that would be necessary in a court of law’ may suffice”;

(d)    a genuine dispute may involve a “plausible contention requiring investigation” and raise the same sort of considerations as the “serious question to be tried” test that applies in the case of interlocutory injunctions;

(e)    the Court should not uncritically accept statements about an alleged genuine dispute which are “equivocal, lacking in precision, inconsistent with undisputed contemporary documents … or inherently improbable …”;

(f)    if the dispute appears to be something “merely created or constructed in response to the pressure represented by the service of the statutory demand”, then it is not advanced in good faith and will not be regarded as genuine; and

(g)    whilst the underlying nature of the dispute about the existence of a debt “must be exposed”, the Court will not deal with the merits and nothing of substance will be decided.

(footnotes omitted)

159 Thus, the Court’s task is not to resolve questions of fact, or any dispute, but instead to determine whether the companies have established the existence of a dispute which is bona fide and not based upon grounds that are spurious, hypothetical, illusionary or misconceived.

160 The task faced by any company seeking to establish a genuine dispute was conveniently summarised by Barrett J (as his Honour then was) in Panel Tech Industries (Australia) Pty Limited v Australian Skyreach Equipment Pty Limited (No 2) [2003] NSWSC 896 at [18]:

These tests, applied in the context of a summary procedure where it is not expected that the court will embark on any extended inquiry, mean that the task faced by a company challenging a statutory demand on the “genuine dispute” ground is by no means at all a difficult or demanding one. 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. The court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that, on rational grounds, indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger.

161 The evidence of particular relevance to determining whether there is a genuine dispute for each of the demands includes:

(1) Mr Pall’s evidence that the only operative agreement was the Agreement ([10] above);

(2) Mr Patial’s acknowledgement that there is no written agreement concerning the shared services, and his contention that there is an oral agreement ([44] above);

(3) the terms of the Agreement ([6] above);

(4) the contemporaneous invoices ([9] above);

(5) Mr Pall’s evidence as to the legal services and the shared services during the Agreement period ([11], [16] and [64] to [67] above);

(6) the 31 August 2020 invoices ([13] to [14] above);

(7) Mr Pall’s 1 September 2020 email disputing the 31 August 2020 invoices ([17] above);

(8) the allegations made by Mr Patial in each of the three iterations of his statement of claim in proceeding NSD1016/2021, including the differences in the amounts claimed for the shared services ([22] to [24], [28] to [30], [58] to [60] above and [164] below);

(9) the amounts set out in the 20 May 2025 invoices and in the demands, when compared to the amounts pleaded in the first and second iterations of Mr Patial’s statement of claim in proceeding NSD1016/2021 ([41] to [42] (including the Schedule) above and [164] below); and

(10) the apparent absence of invoices addressed to Koala, Kuber and Kailasam prior to 20 May 2025.

162 To the extent that the Kailash demand depends upon the legal services invoices, the following matters (at least) appear genuinely to be in issue:

(1) the legal foundation for the debts set out in the legal services invoices;

(2) if it is contended that such amounts are payable under the Agreement then:

(a) the basis on which the legal services invoices have been rendered when they refer to an hourly rate of $330.00 and the Agreement does not refer to an hourly rate;

(b) how the legal services invoices are to be reconciled with: (i) the contemporaneous invoices; and (ii) the 31 August 2020 invoices; and

(3) to the extent that the legal services are not alleged to have been rendered (and the debts are alleged to have arisen) pursuant to the Agreement, the basis on which those services were rendered and the debts arose.

163 To the extent that each demand depends upon the shared services invoices, the following matters (at least) appear genuinely to be in issue:

(1) the legal foundation for such debts noting, as explained above, that Mr Patial indicated that there is no written agreement, but there is an oral agreement; and Mr Pall’s position that there is no such agreement;

(2) the terms of any such oral agreement, including in particular as to:

(a) the hourly rate to be charged by Mr Patial and thus the amount payable for the shared services; and

(b) the suggested division of responsibility between the companies for payment, in circumstances where it appears that: there were no contemporaneous invoices dealing with the shared services; the 31 August 2020 invoices in evidence appear to have addressed some, but not all, of the shared services and all were billed to Kailash only; and the first invoices addressed to Koala, Kuber and Kailasam appear to be the shared services invoices rendered on 20 May 2025 (more than four and one-half years later).

164 The table below illustrates the changes in the amounts claimed by Mr Patial with respect to the shared services:

165 By way of illustration only of the genuine issue as to the amounts (if any) payable for the shared services, the charges for IT services were:

(1) apparently not billed during the Agreement period ([65(2)(d)] above);

(2) included in the 31 August 2020 invoices at $64,000.00 ([13] above);

(3) included in the first iteration of the statement of claim at $42,940.80 for 1,420 hours work ($30.24 per hour) ([22] to [23] above);

(4) included in the second iteration of the statement of claim at $210,870.00 for 1,420 hours work ($148.50 per hour) ([28] to [29] above); and

(5) included in the 20 May 2025 invoices and the Kailash demand at $468,600.00 ($330.00 per hour) ([41] above and Part B of the Schedule).

166 To the extent that the Kailasam demand seeks payment for the logo services, the following matters (at least) appear to be in issue:

(1) the legal foundation for the alleged debt, there being no agreement in evidence; and

(2) the terms of any agreement, including in particular as to the hourly rate to be charged by Mr Patial.

167 Again, there is an issue as to the amount payable for such services. The second iteration of the statement of claim suggests that Mr Patial is owed $1,485.00 for ten hours worked with respect to the logo services, but the 20 May 2025 invoice to Kailasam for his work (and the Kailasam demand) records an amount of $3,300.00. This again appears to be a reflection of a different hourly rate ($330.00, rather than $148.50).

168 Further, proceeding NSD1016/2021 is a proceeding on foot in which the amount payable for the shared services is (and has been since the inception of that proceeding) in issue. Although the proposed third iteration of the statement of claim does not appear to seek payment of an amount for the services allegedly provided by Mr Patial as such, it seeks payment of an amount of superannuation referable to underlying amounts said to be owing for such services. Thus, if leave were to be given to rely upon the proposed third iteration of the statement of claim then it would be necessary to determine the amount, if any, due for the provision of the shared services.

169 For the reasons set out above, I am satisfied that there is a genuine dispute with respect to each demand.

170 Mr Patial submitted that an absence of protest by the companies between 20 May 2025 (the date of the 20 May 2025 invoices) and 27 May 2025 (the date those invoices were stated to be due) was evidence of an absence of a genuine dispute. I do not accept this submission. It was already clear by 20 May 2025 that there was a genuine dispute between Mr Patial and the companies. Indeed, as recently as the prior day, 19 May 2020, the companies had requested that Mr Patial withdraw the prior demands (for very similar amounts as the demands) on the basis that by dint of the issues in proceeding NSD1016/2021 those demands were an abuse of process.

171 Thus, each of the demands should be set aside on the basis that there is a genuine dispute with respect to the existence of the debts in that demand.

172 It is unnecessary to address Kailash’s contention that it has an offsetting claim. It is also unnecessary to address its claim that the Kailash demand was defective.

F.2    Is there an abuse of process?

173 An abuse of process provides “some other reason why the demand should be set aside” within the meaning of s 459J of the Act.

174 In view of my finding that there is a genuine dispute with respect to the existence of the debts, it is strictly unnecessary to address the companies’ contention that the service of the demands constituted an abuse of process. Nevertheless, I will do so briefly.

175 In Createc Pty Ltd v Design Signs Pty Ltd [2009] WASCA 85; (2009) 71 ACSR 602, Martin CJ, with whom Owen and Miller JJA agreed, explained at  611 ([48] to [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.

176 In the present case, I infer that the demands were served not for the purpose of winding up the companies on the ground of insolvency, but rather in order to apply pressure for the payment of debts in respect of which Mr Patial was plainly on notice of a genuine dispute. Such an inference arises from Mr Patial’s service of the demands despite his knowledge of the following matters:

(1) Mr Patial’s assertions of amounts due to him from the companies for services performed during the Agreement period in the first and second iterations of the statement of claim in proceeding NSD1016/2021 and the resistance to such claims in that proceeding;

(2) the absence of any written shared services agreement and the absence of any evidence of an oral shared services agreement;

(3) the hourly rate – being a rate allegedly applicable during the finite Agreement period – being increased in documents created subsequently by Mr Patial;

(4) the absence of evidence of any invoices rendered to Koala, Kuber and Kailasam for work done during the Agreement period (which ended in August 2020) until 20 May 2025 (which as noted above is some four and one-half years later);

(5) the correspondence from the companies indicating that there was a genuine dispute ([17] and [40] above); and

(6) the hard-fought proceedings NSD1016/2021.

G.    Should the companies be wound up?

177 As the answer to questions (2) and (3) are each “yes”, it follows that the demands should be set aside. Thus, there is no basis for the winding up of the companies.

H.    Other orders sought by the companies

178 The companies seek several ancillary orders.

179 The first is an order that Mr Patial be restrained from issuing further statutory demands against the companies or Mr Pall which are based on the same underlying facts until proceeding NSD1016/2021 has been determined.

180 In view of the approach taken by Mr Patial to the issuance of the demands and in the present proceedings and the corresponding exposure of the companies to the incurrence of costs that should not have had to be incurred, an order is appropriate but not in the absolute terms suggested. Rather, Mr Patial should be restrained, but have the ability to apply to the Court for leave to issue a demand under s 459E of the Act. Further, I do not see a basis or a need for such an order to extend to action by Mr Patial against Mr Pall.

181 The second is an order under s 1322 of the Act to remove from ASIC’s registers any reference to the winding up proceedings. The companies call in aid the decision of Justice Finkelstein in Onesteel Reinforcing Pty Ltd v Westpoint Constructions Pty Ltd, in the matter of Westpoint Constructions Pty Ltd [2005] FCA 808; (2005) 23 ACLC 1384. I am not minded to accede to this application, which was made without notice to Mr Patial or ASIC, in circumstances where: (1) the evidence which is before the Court on the applications that were heard with notice is insufficient to justify such an order; and (2) the effect of s 470(1)(c) of the Act is to require Mr Patial to lodge a notice of the dismissal of the winding up originating process within two business days of their dismissal; and (3) there is no evidence (or submission) as to why any prejudice for which the companies contend would not be cured by the lodgement of such notices.

I.    Miscellaneous issues

182 Mr Patial made several submissions which I have not addressed. I consider it unnecessary to burden these already lengthy reasons for judgment with a refutation of points which are irrelevant or which are covered by the non-acceptance of other submissions which have been addressed.

183 However, it would be remiss not to mention that Mr Patial has made a series of allegations of misconduct against Mr Pall in this proceeding and has suggested that Mr Pall has contravened the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW). Such contraventions are said to flow from matters of fact which it has been unnecessary to determine but which on their face appear incapable of supporting allegations of such gravity. The peripheral relevance of the facts said to support those ad hominem attacks is demonstrated by Mr Patial’s decision not to seek to cross-examine Mr Pall despite foreshadowing an application to do so.

184 Regrettably, this is not the first occasion on which this has happened: see Patial (No 1) at [61] to [62].

J.    Costs

185 The companies seek an order for the payment of their costs on an indemnity basis, on the basis that the position that Mr Patial took in each proceeding was hopeless and doomed to fail. It is well-established that the commencement or continuation of proceedings that are doomed to fail may provide a basis for an award of costs on an indemnity basis: see, e.g., Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225 at 233 to 234 (Sheppard J).

186 In the present case, the context includes the nature of the proceedings and in particular the low threshold for establishing the existence of a genuine dispute (see [160] above). In In the matter of Modern Wholesale Jewellery Pty Ltd; In the matter of Global Austral Pty Ltd; In the matter of Modern Wholesale Jewellery Pty Ltd [2017] NSWSC 236, Black J explained at [48]:

... The case law permits an order for indemnity costs in respect of an application to set aside a creditor’s statutory demand which involves the improper use of the statutory demand procedure or persistence in the claim where it should have been apparent to the defendant that there was a genuine dispute as to the debt claimed. In CGI Information Systems and Management Consultants Pty Ltd v APRA Consulting Pty Ltd above at [19], Barrett J referred to the warning previously given by Santow J in several judgments that a creditor who issued a statutory demand in respect of a genuinely disputed debt was at risk of indemnity costs, where it put the applicant to set aside the statutory demand to expense by doing so. His Honour there noted that the party which issued a statutory demand might, in some circumstances, be entitled to test the other party’s claim that the debt was genuinely disputed, but also noted that that principle had a limit to it and that there were cases which were “so devoid of prospects of success as to be perverse” and that, if a defendant is put on notice of an “obvious and irremediable weakness in its position” and does not withdraw a statutory demand, it may well be appropriate for the court to award costs to the plaintiff on an indemnity basis. In Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772 at [4]–[5], White J again observed that creditors are often ill-advised to proceed with a statutory demand once plausible grounds for a dispute are asserted, and they risk an order for indemnity costs if they do so: see also Professional Advantage Pty Ltd v Australian Broadcasting Commission [2007] NSWSC 607; R2M Pty Ltd v Gourlay [2011] FCA 168; Re Suters Holdings Pty Ltd [2012] NSWSC 1051; Re Scahill & Co Pty Ltd [2016] NSWSC 712. In this case, Modern and Global have been put to the costs of these applications to set the three creditor’s statutory demands aside, heard over two days of substantive submissions (and a third day which was adjourned by reason of events affecting Mr Dimitriou), to which they would not have been exposed had the creditor’s statutory demands not been served or had those demands been promptly withdrawn.

(emphasis in original)

187 In Liberty Oil Convenience Pty Ltd v Golden Roo Company Ltd [2024] FCA 757, Wigney J observed at [8]:

The special features of proceedings under s 459G of the Act bear on the question of costs where the party which issued the statutory demand presses the demand and opposes the setting aside of the demand. Indeed, it has often been said that, because the “threshold for establishing a genuine dispute is low, creditors are often ill-advised to proceed with a statutory demand once plausible grounds for a dispute are asserted”: Sounden Lane at [5]. Indeed, they face the risk of indemnity costs if they do so: Polaroid Australia Pty Ltd v Minicomp Pty Ltd (1998) 16 ACLC 529 at 536; CGI Information Systems and Management Consultants Pty Ltd v APRA Consulting Pty Ltd (2003) 47 ACSR 100 at [19]; Souden Lane at [5]. A “defendant, on having an obvious and irremediable weakness in its position pointed out, ought to withdraw the statutory demand”: CGI Information Systems at [22].

(emphasis in original)

188 I am satisfied that indemnity costs orders are appropriate in each of the present proceedings because:

(1) the existence of a genuine dispute was pellucid;

(2) Mr Patial was put on notice that his position that the NSD970/2025 originating application was non-compliant was contrary to authority and that the service of the demands was an abuse of process ( [40], [55] and [75] above);

(3) Mr Patial’s position that service had not been effected despite his own evidence that he had received the originating documents within the statutory period was, as noted above, devoid of merit;

(4) as noted above, Mr Patial’s service of the demands and his commencement of the winding up proceedings in the face of his knowledge of the existence of a genuine dispute was an abuse of process; and

(5) by dint of the above positions, and steps, that were taken by Mr Patial, the companies were subjected to costs of litigation that ought never have been necessary to commence (in the case of proceeding NSD970/2025) or to defend (in the case of the winding up proceedings).

K.     Conclusion

189 For the foregoing reasons, the demands should be set aside and the winding up originating processes should be dismissed. The ancillary order discussed at [179] to [180] above should also be made. In each proceeding Mr Patial should pay the costs of the opposing party or parties on an indemnity basis. I will make orders accordingly.

Associate:

Dated:    4 August 2025

SCHEDULE TO [2025] FCA 884 - 20 MAY 2025 INVOICES AND AMOUNTS SAID TO HAVE BEEN PAID, AND AMOUNT SAID TO BE OWING AS PER THE 29 MAY 2025 DEMANDS

A. Legal services invoices

B. Shared services invoices

I note that:

(1) there is a discrepancy between the total amounts in the 20 May 2025 invoices and the demands as follows:

(2) the difference between the totals is due to the Kailash demand including an amount of $4,620.00 for “Shifting Office Furniture”, whereas the 20 May 2025 invoice to Kailash for “Shifting Office Furniture” (PP-KL-0525-SOFI-KLC) included an amount of $2,310.00 for that item; and

(3) the totals in (1) deal only with the legal services and the shared services. The logo services of $3,300.00 need to be added to obtain a total for the invoices of $756,231.26 and a total for the demands of $758,541.26, a difference of $2,310.00.

SCHEDULE OF PARTIES