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The Queensland Supreme Court recently considered a number of issues concerning the use of a statutory demand in pursuing amounts owed to a builder under a building contract. A statutory demand is a process where a creditor issues a demand to the debtor company, requiring payment within 21 days or an application to be filed in the Supreme court to set it aside within that period (setting out all grounds relied on), failing which the debtor company is deemed insolvent and might be wound up. In this case, a builder had commenced an action against a developer for money and damages under its contract. It also had issued a payment claim under the BIFSA for money under the contract, and issued a statutory demand for payment. These matters considered included : (a) whether the application relied on a ground which was additional to the grounds set out in the initial application – see paras 6 – 9; (b) whether there was a genuine dispute as to the debt – paras 36 – 37; (c) whether the failure to lodge a payment schedule to the builders payment claim had the result that the debt could not be disputed – paras 44 – 51; and (d) whether the statutory demand process was an abuse of process given that a claim had already issued for the debt – paras 55 – 58. The decision is interesting and worth ready for its detailed backgrounding of the way in which courts approach these questions https://archive.sclqld.org.au/qjudgment/2022/QSC22-274.pdf Perhaps the most interesting part of the judgment for building matters is the consideration of whether the failure to lodge a payment schedule and dispute a payment claim through the BIFSA processes has the result that a genuine dispute could not be raised in the application to set aside the statutory demand. While His Honour found it unnecessary to decide, he indicated his agreement with decisions to the effect that the only dispute that could be raised in those circumstances would be as to whether the developer was obliged to dispute the payment claim through the BIFSA processes, and that if those processes applied and were not followed, then the existence of the debt is conclusive. For advice in relation to statutory demands and building disputes, please contact Justin Mathews at justinm@qbmlawyers.com.au. Justin has specialist accreditation in commercial litigation, and is a registered adjudicator.

The recent Queensland District Court decision of Pro Wealth Corporation Pty Ltd v Property Investment Advisory Pty Ltd [2022] QDC 257 contains an interesting discussion of the various ways in which an employer can seek competition for a former employee using their materials or breaching the restraint.  The employer in this case characterised claims against their former employees (and in the case of one, his wife) in a number of different ways – The claim was made both under the employment agreement itself (which contained obligations in respect of confidential information and restraints) and equitable obligations of confidence.  Claims for breach of statutory duty under the Corporations Act were not pursued as they cannot be conducted through the District Court. Employers often claim that employees owe to them fiduciary duties (ie duties of good faith).  Employees will owe fiduciary duties in some circumstances, but more often their obligations are the lesser obligations of fidelity and loyalty.  In this case, it was found that the employees had obligations to keep information confidential, and that obligation continued after the ending of their employment.  It was also found that the restraints against competition were effective.  His Honour found that the Defendants had breached their obligations of confidence and had breached restraints, and further, that the former employees had engaged in misleading conduct.  The decision contains a useful discussion of the rights of employers against former employees and can be found here https://www.sclqld.org.au/caselaw/QDC/2022/257 For advice on employment issues, contact Peter Muller peterm@qbmlaw.com.au or Justin Mathews justinm@qbmlaw.com.au

The current unfair contract terms legislation has the effect that consumers and small businesses (currently businesses with less than 20 employees) can seek to avoid unfair terms in contracts. A term of a standard contract is potentially unfair if it: (a) causes a significant imbalance between the rights of the parties; (b) is not reasonably necessary to protect the legitimate interests of the party; and (c) would cause financial or other detriment if it was relied upon. Under amendments recently passed, the 20 employee threshold is to be increased to 100 employees and the monetary thresholds done away with. Furthermore, courts will have the power to impose penalties on persons attempting to impose unfair contract terms, rather than simply declaring the term void. Unfair contract terms are still very common in business to business standard form contracts. Businesses using standard form contracts should assess what provisions are necessary, and take advice on their contracts. For advice on business matters and dealings, please contact Peter Muller peterm@qbmlaw.com.au or Megan Hanneman meganh@qbmlaw.com.au