In the matter of Amin Property Group Pty Ltd; In the matter of Amin Homes Hadiqat Woolgen Pty Ltd; In the matter of Amin Homes Murooj Woolgen Pty Ltd

On 16 June 2023, Mr Hamidul Islam issued a statutory demand to each of Amin Property Group Pty Ltd (ACN 653 888 932) (Amin Property Group), Amin Homes Hadiqat Woolgen Pty Ltd (ACN 648 134 374) (formerly known as MA Signature Homes Pty Ltd—Amin Hadiqat), and Amin Homes Murooj Woolgen Pty Ltd (ACN 654 353 867) (Amin Murooj). Each of the three statutory demands relates to the same alleged debt of $3,250,000 said to be due and payable to Mr Islam under the terms of a Deed of Settlement dated 22 November 2022.

Each of Amin Property Group, Amin Hadiqat, and Amin Murooj commenced a separate proceeding to set aside the statutory demand. The three proceedings were heard together. The same evidence was read and tendered in each proceeding. In these reasons for judgment, I refer to Amin Property Group, Amin Hadiqat, and Amin Murooj collectively as the Plaintiffs.

The Plaintiffs contend that there is a genuine dispute about the existence of the alleged debt because they have a genuine claim for rectification of the provisions of the Deed of Settlement that stipulate the times at which they are required to make the payments to Mr Islam totalling $3,250,000. Further or alternatively, the Plaintiffs contend that they have a genuine offsetting claim against Mr Islam for alleged breach of fiduciary duty.

Mr Islam contends that the Plaintiffs’ rectification claim does not raise a genuine dispute, and that the Plaintiffs do not have a genuine cross-claim against him.

For the reasons that follow, I have determined that each of the statutory demands must be set aside because the Plaintiffs’ rectification claim constitutes a genuine dispute about whether the debt claimed in the statutory demands is presently due and payable. It has not been necessary to determine whether the claim for breach of fiduciary duty on which the Plaintiffs rely is a genuine offsetting claim.

Mr Mohammed Alamin is the sole director of Amin Property Group, Amin Hadiqat, and Amin Murooj. MSAA Family Pty Ltd (as trustee for MSAA Family Trust) (MSAA Family) is the sole shareholder of Amin Property Group, Amin Hadiqat, and Amin Murooj. Mr Alamin is the sole director and sole shareholder of MSAA Family.

Mr Islam and Mr Alamin are co-directors and co-owners (directly, or through their respective family trusts) of MH Affordable Homes Pty Ltd, MH Affordable Homes on Woolgen Park Pty Ltd, MH Affordable Homes on Dickson Pty Ltd, MH Affordable Homes on Kelly Pty Ltd, and MH Affordable Homes on Angle Vale Pty Ltd. It is convenient to refer to these companies collectively as the MH Group. These companies are the vehicles through which Mr Islam and Mr Alamin and/or their respective family trusts have carried out a business of acquiring and subdividing land, developing homes on the subdivided lots, and selling those lots. According to Mr Islam’s evidence in these proceedings, most of the lots are the subject of contracts for sale to purchasers even before the subdivided lots have been created. On entering into contracts to purchase lots, purchasers typically pay either the whole of the purchase price, or a large deposit of between 30 and 50 per cent of the purchase price of the lot. Those funds paid by purchasers (referred to by Mr Islam and Mr Alamin as “pre-sales") are released to the relevant MH Group company and used to pay development costs, or for other MH Group business purposes. Purchasers who have paid deposits make regular instalment payments, and completion occurs once they have paid the whole of the price for the subdivided and developed lot. Mr Alamin embraced this aspect of Mr Islam’s evidence describing the MH Group business model.

The Plaintiffs are not part of the MH Group.

On 13 December 2021, Mr Islam commenced proceedings in this Court against Mr Alamin, three companies associated with Mr Alamin—Amin Hadiqat (then known as MA Signature Homes Pty Ltd), Amin Homes Hadiqat Pty Ltd, and Amin Murooj (the Amin defendants)—and the MH Group companies. Mr Islam claimed that the affairs of the MH Group companies had been conducted oppressively, and that Mr Alamin had acted in breach of his statutory and fiduciary duties to members of the MH Group. The bases of those claims included that Mr Alamin had allegedly: (1) used the funds and business opportunities of the MH Group companies for his own benefit, and for the benefit of Amin Hadiqat, to acquire land at 11 Woolgen Park in Leppington for Amin Hadiqat (referred to as the Purchase Contract); (2) entered into contracts for the pre-sale of lots in a proposed subdivision of the 11 Woolgen Park property prior to the completion of the Purchase Contract (referred to as the Pre-Sale Contracts); (3) received payment of cash deposits and other pre-payments under those Pre-Sale Contracts (referred to as the Pre-Sale Payments); (4) sought to retain the benefit of the rights under the Purchase Contract, the Pre-Sale Contracts, and the Pre-Sale Payments for himself, rather than holding those benefits for the MH Group companies; and (5) used the Pre-Sale Payments and the rights of Amin Hadiqat under the Purchase Contract to enable Amin Hadiqat and Amin Murooj to acquire further assets including a property at 82 Woolgen Park in Leppington (referred to as the Traceable Assets). The relief sought by Mr Islam was directed to stripping from the Amin defendants the benefits they obtained from Mr Alamin’s alleged breaches of statutory and fiduciary duties. The principal relief sought by Mr Islam was a declaration that the purchaser’s rights under the Purchase Contract and the Pre-Sale Contracts, the Pre-Sale Payments, and the Traceable Assets, were held on constructive trust for the MH Group companies, or some of them, and orders for the transfer of those assets to the beneficiaries of that constructive trust. That relief was sought by way of relief for alleged oppression under s 233 of the Corporations Act 2001 (Cth) or, alternatively, on behalf of the MH Group companies in the event that the Court granted leave to Mr Islam to bring the proceedings on behalf of those companies pursuant to s 237 of the Corporations Act. Further or in the alternative to the declaration of constructive trust, Mr Islam sought an account, equitable compensation, and damages. It is convenient to refer to these proceedings as the Islam proceedings.

The Islam proceedings were listed for hearing commencing on 4 November 2022, with an estimate of four days.

On 17 November 2022, the solicitors then acting for Mr Alamin and the Amin defendants wrote two letters to Mr Islam’s solicitors, the first of which conveyed a without prejudice offer, and the second of which conveyed an alternative, open offer.

The terms of the without prejudice offer were that: (1) Mr Alamin and the Amin defendants would pay the sum of $2,000,000 to Mr Islam in full and final settlement of the Islam proceedings, which would be dismissed; (2) the parties were to enter into a deed of settlement and release; and (3) $250,000 of the settlement sum would be paid within 28 days, with the balance of $1,750,000 to be paid within 12 months. Mr Alamin’s solicitors stated that the 12-month period for payment was to allow time for the settlement of the transactions concerning 11 Woolgen Park and 82 Woolgen Park because Mr Alamin “will not be in a position to pay the balance of the Settlement Sum until such time as the properties have settled”. Mr Alamin’s solicitors stated that, for the avoidance of any doubt, the offer involved Mr Alamin retaining the properties at 11 Woolgen Park and 82 Woolgen Park.

The alternative, open offer was made on terms that Mr Alamin and the Amin defendants would consent to some of the relief sought by Mr Islam in the Islam proceedings, including the declaration that 11 Woolgen Park would be held on constructive trust for the benefit of the MH Group companies.

On 19 November 2022, Mr Islam’s solicitors responded by conveying to Mr Alamin’s solicitors two alternative without prejudice offers on behalf of Mr Islam.

The terms of Mr Islam’s first without prejudice offer to settle the Islam proceedings included that: (1) Mr Alamin would resign as a director of the MH Group entities; (2) Mr Alamin and the Amin defendants would be jointly and severally liable to pay $3,500,000 to Mr Islam in instalments of $1,000,000 payable by 30 November 2022, $1,500,000 payable by 31 March 2023, and $1,000,000 payable by 31 May 2023; (3) the whole of the $3,500,000 settlement sum would become payable in the event of any delay in payment of any of the instalments; and (4) the Amin defendants would refrain from encumbering their interest in the 11 Woolgen Park and 82 Woolgen Park properties and would agree that Mr Islam would be entitled to lodge a caveat on the title to each of those properties after any Amin defendant becomes the registered proprietor of the properties.

The terms of Mr Islam’s second without prejudice offer to settle the proceedings included that Mr Alamin and the Amin defendants would consent to certain orders and declarations in the Islam proceedings, including (1) a declaration that the contract for the purchase of 11 Woolgen Park, a put and call option in relation to 82 Woolgen Park, pre-sale contracts in respect of those two properties, and funds in the bank accounts of the Amin defendants were held on trust for one of the companies in the MH Group; (2) an order that Mr Alamin do all things necessary to cause those assets to be transferred to one of the MH Group companies; and (3) an order that Mr Alamin account to that MH Group company for all pre-payments and other amounts received by the Amin defendants in respect of the 11 Woolgen Park and 82 Woolgen Park properties. The second without prejudice offer did not contemplate that Mr Alamin would resign as a director of any of the MH Group companies.

Both of the offers made on behalf of Mr Islam stated that no binding obligation would arise unless and until the parties executed a deed of settlement and release to give effect to the terms of the offer.

Mr Islam, Mr Alamin, Amin Hadiqat (under its former name MA Signature Homes Pty Ltd), Amin Murooj, Amin Homes Mahmiat Logan Pty Ltd, Amin Property Group, and the MH Group companies entered into a Deed of Settlement and Release on 22 November 2022 (the Settlement Deed).

The Settlement Deed used the term “the Amin Companies” to refer to Amin Hadiqat, Amin Murooj, Amin Homes Mahmiat Logan Pty Ltd, and Amin Property Group. The term “Amin Parties” was defined as meaning Mr Alamin and the Amin Companies, and any one, more, or all of them.

Pursuant to clause 4(a) of the Settlement Deed, the Amin Parties jointly and severally agreed to pay Mr Islam the “Settlement Amount” of $3,250,000 in full and final settlement of the disputes the subject of the Islam proceedings. Clause 4(b) required the Settlement Amount to be paid in instalments of $350,000 by 31 December 2022, $1,000,000 by 30 June 2023, and $1,900,000 by 28 February 2024, and provided that time was of the essence in relation to each such payment. Clause 5 relevantly provided that the whole of the Settlement Amount would immediately be due and payable in the event of a failure to pay an instalment in full or on time, if that breach was not remedied within 14 days of written notice being given to the Amin Parties (with time being of the essence).

Pursuant to clause 6 of the Settlement Deed, the Amin Parties agreed that, until the Settlement Amount was paid in full, they would not transfer, dispose of, or encumber or otherwise deal with all or any part of their interest in the 11 Woolgen Park and 82 Woolgen Park properties, other than to sell lots in the proposed sub-divisions of those properties or to obtain finance for the purpose of completing the purchase of the properties under the contract for sale of 11 Woolgen Park and under the put and call option in relation to 82 Woolgen Park.

Pursuant to clause 7 of the Settlement Deed, the Amin Parties charged: (1) their present and any and all future interest in 11 Woolgen Park and 82 Woolgen Park, or any contract in respect of those properties; and (2) their shares in the MH Group companies and the Amin Companies (including their rights to share in the profits of those companies by way of dividends or otherwise), as security for the payment for any amounts payable under the Settlement Deed. Clause 8 provided that the Amin Parties acknowledged and agreed that, from the date on which they became registered as the proprietors of 11 Woolgen Park and 82 Woolgen Park, Mr Islam would be entitled to lodge and maintain a caveat over each of those properties in order to protect his interest as chargee.

Clause 9 of the Settlement Deed provided that, in the event of default by the Amin Parties, Mr Islam may commence proceedings to enforce the Settlement Deed, and the Amin Parties would not be entitled to raise any defence, set off, or cross-claim in respect of any claim by Mr Islam for payment under clause 4 of the Settlement Deed.

Clause 15 of the Settlement Deed provided contained mutual releases in the following terms:

The term “Claim” was defined in the Settlement Deed as meaning:

The reference to the “Proceedings” is a reference to the Islam proceedings.

Clause 16 and Annexure C to the Settlement Deed provided that the parties agreed to finalise the Islam proceedings by the Court making orders dismissing the proceedings with no order as to costs. Clause 16 did not provide for the dismissal of the Islam proceedings to be deferred until after payment of the Settlement Amount, or payment of any instalment of the Settlement Amount.

On 5 December 2022, Mr Islam registered on the Personal Property Securities Register (PPSR):

On 22 December 2022, Mr Islam’s solicitors wrote to the solicitors then acting for Mr Alamin, reminding them that the first instalment of $350,000 under the Settlement Deed was due and payable by 31 December 2022.

Mr Alamin’s solicitors replied in the following terms on 23 December 2022:

Mr Islam’s solicitors replied on 28 December 2022, stating:

Mr Islam’s solicitors wrote to Mr Alamin’s solicitors again on 6 January 2023, noting that payment of the first instalment had not been received and giving 14 days’ notice to remedy that default.

On 10 February 2023, Mr Islam’s solicitors wrote to Mr Alamin’s solicitors noting that the default had not been remedied, and that the full Settlement Amount of $3,250,000 was therefore due and payable pursuant to clause 5 of the Settlement Deed.

By April 2023, Mr Alamin and the Amin defendants had retained the solicitors who have acted for them in these proceedings. Those solicitors wrote to Mr Islam’s solicitors on 21 April 2023, stating that:

The letter stated that:

The letter requested that Mr Islam execute a deed of release to facilitate the removal of registered security interest 202212050019100, and stated that Mr Islam would “shortly” be able to place a caveat on the 11 Woolgen Park property after Amin Hadiqat completed its purchase of that property, which would protect “a broadly equivalent interest”. The letter stated that Mr Alamin would commence proceedings seeking orders for the immediate removal of that security interest if Mr Islam did not execute the deed of release.

The letter referred to remedies that Mr Alamin considered may be available to him in the event that he were forced to commence proceedings seeking removal of registered security interest 202212050019100. Those remedies did not include equitable relief founded on an alleged breach of fiduciary duty said to be owed by Mr Islam to Mr Alamin, or to Amin Hadiqat, Amin Murooj, or Amin Property Group.

Mr Alamin’s solicitors then referred to financing arrangements between the MH Group companies and Centuria Bass Financial Services Limited (Centuria Bass). The letter stated that those financing arrangements provided a finance facility in relation to MH Affordable Homes on Kelly Pty Ltd, which was guaranteed by personal guarantees given by each of Mr Islam and Mr Alamin personally and in their capacity as trustees of their respective family trusts. The letter recorded the writer’s understanding that, if Centuria Bass were to become aware of registered security interest 202212050019100, it would likely consider this to be a breach of the financing arrangements, and that this would put the funding under those arrangements in jeopardy. The letter referred to certain provisions of the documents comprising the financing arrangements (which were not in evidence in the present proceedings) and set out the writer’s analysis of potential consequences of breach of the financing arrangements. The letter continued:

The letter concluded by reiterating the request that Mr Islam execute the proposed deed of release and remove registered security interest 202212050019100 by Monday, 24 April 2023 at 12:00pm.

On 4 May 2023, Mr Islam’s solicitors wrote to Mr Alamin’s solicitors referring to the terms of clauses 4 and 5 of the Settlement Deed, rejecting the assertion that payment of the Settlement Amount was dependent on Mr Alamin completing the purchase of 11 Woolgen Park, and stating that Mr Islam was entitled under the Settlement Deed to register and maintain the registration the security interests that he had registered on the PPSR on 5 December 2022.

On 12 May 2023, Mr Alamin commenced proceedings in this Court against Mr Islam and the other parties to the Settlement Deed, including Amin Hadiqat, Amin Murooj, Amin Property Group, and the MH Group companies that were parties to the Settlement Deed. The summons filed by Mr Alamin sought rectification of the Settlement Deed or, alternatively, a declaration that the Settlement Deed is void ab initio by reason of mistake. By way of interim relief, the Summons sought an order that the PPSR security interest registered by Mr Islam on 5 December 2022 be removed within 24 hours, and an order restraining the defendants from registering any further charge (the Alamin proceedings).

In his affidavit affirmed on 11 May 2023 in support of the claims for relief in the summons, Mr Alamin deposed that:

The reference to the “Court Proceedings” is a reference to the Islam proceedings. I assume that the “Leppington Property” refers to 11 Woolgen Park (either alone, or together with 82 Woolgen Park).

In a further affidavit affirmed on 22 May 2023 in the Alamin proceedings, Mr Alamin deposed that:

The reference to “Centuria Bass” is a reference to Centuria Bass Financing, which had made loans to some of the companies in the MH Group, and which had registered charges over some of the same assets in respect of which Mr Islam had registered charges on 5 December 2022. The charges registered by Centuria Bass had been registered earlier and were higher ranking in priority than the charges registered by Mr Islam.

Mr Alamin’s application for interim relief in the Alamin proceedings was heard on 24 May 2023 before Slattery J. Ms Elizabeth of counsel appeared for Mr Alamin and Mr Elliott of senior counsel with Ms Dewan of junior counsel appeared for Mr Islam. His Honour dismissed the application with costs, and published reasons for that decision on 21 June 2023. [1]

Slattery J noted that Mr Alamin’s claim for orders for the removal of the PPSR-registered charges strongly resembled a claim for final relief. [2] His Honour recorded the details of the charges, and referred to evidence of correspondence of Mr Alamin’s solicitors suggesting that those charges they were hindering Mr Alamin in completing his purchase of the Woolgen Park property: [3]

Slattery J then referred to the contention advanced by Mr Alamin in the Alamin proceedings that the charge that clause 7 of the Settlement Deed permitted Mr Islam to register breached one of the conditions of an existing finance facility between Centuria Bass and one of the MH Group companies referred to as MH Kelly. [4] Mr Alamin contended that the breach may provide a basis for Centuria Bass to call up all monies owing under all finance facilities between Centuria Bass and all MH Group companies. As summarised by Slattery J, it had been submitted on behalf of Mr Alamin at the hearing of the interim relief application that “Mr Alamin and Mr Islam must have overlooked such breaches and such consequences when making the settlement deed.” [5]

Slattery J’s reasons for judgment extract the written submissions on behalf of Mr Alamin, which made it clear that the common mistake propounded as the basis of the claim for rectification of the Settlement Deed was that Mr Alamin and Mr Islam had believed or assumed that the registration of the charges provided for in clause 7 of the Settlement Deed was permissible under the existing financing arrangements with Centuria Bass: [6]

A submission to similar effect was also made orally during the hearing of the application for interim relief before his Honour, as recorded in the transcript: [7]

Slattery J considered that the question whether the charges registered pursuant to clause 7 of the Settlement Deed had breached the existing Centuria Bass facilities was “open to argument on both sides”. [8] For the purpose of determining the interim relief application, his Honour assumed in favour of Mr Alamin that there had been a breach of those facilities. [9] However, his Honour observed that the evidence suggested that Centuria Bass had ample security for the existing facilities, and that there was no evidence that it was inclined to call in the existing debts. His Honour noted that the parties to the Settlement Deed might have anticipated that relaxed attitude on the part of Centuria Bass given its ample security position. [10]

Slattery J referred to Mr Alamin’s evidence—which was expressed a high level of generality—that Mr Islam’s registered charge was an obstacle to him obtaining funding from Centuria Bass and that he (Mr Alamin) could not obtain funding elsewhere. His Honour was not prepared to accept those general statements in fact of evidence that Mr Alamin owned interests in a substantial suite of valuable assets, and in circumstances where Mr Alamin had not adduced detailed evidence of his financial position. Nor had he adduced evidence identifying the alternative sources of finances that he had pursued, and explaining why those alternative sources were not available to him notwithstanding his substantial assets. [11]

For the purposes of determining Mr Alamin’s application for interim relief, Slattery J assumed in his favour that there was a serious question to be tried. However, his Honour noted “several obvious weaknesses in Mr Alamin’s rectification case which weigh against him on the balance of convenience”. [12] His Honour stated:

Slattery J held that consideration of the balance of convenient “comfortably permits” the dismissal of Mr Alamin’s claim for interim relief. The matters referred to by his Honour included (1) Mr Alamin’s failure to provide compelling evidence that he has no sources of income to meet his obligations under the Settlement Deed save for the income that he anticipates generating if and when he settles the purchase of 11 Woolgen Park; and (2) his Honour’s assessment of Mr Alamin’s claim for final relief as “not compelling” for the reasons that his Honour had identified at [48]–[51] of his reasons for judgment. [13]

As I mentioned at the outset of these reasons, Mr Islam issued a statutory demand to each of Amin Property Group, Amin Hadiqat, and Amin Murooj on 16 June 2023 demanding payment of the sum of $3,250,000 under the Settlement Deed. [14]

On 7 July 2023, the present proceedings were commenced by each of Amin Property Group, Amin Hadiqat, and Amin Murooj claiming orders setting aside the statutory demand on the grounds that there is a genuine dispute about whether the debt is presently due and payable, and that each of the plaintiff’s has a genuine offsetting claim. It is convenient to refer to these three proceedings as the statutory demand proceedings, to distinguish them from the Islam proceedings and the Alamin proceedings.

On the same day as Amin Property Group, Amin Hadiqat, and Amin Murooj commenced the statutory demand proceedings, Mr Alamin filed a statement of claim in the Alamin proceedings. The statement of claim names Mr Alamin and as the first plaintiff and MSAA Family Pty Ltd as the second plaintiff. The named defendants are the same as set out in the summons filed on 12 May 2023. Mr Islam is the first defendant, Amin Hadiqat is the second defendant, Amin Murooj is the third defendant, MH Group companies are the third to eighth defendants, and Amin Property Group is the ninth defendant.

The statement of claim in the Alamin proceedings pleads that:

The statement of claim then pleads that Mr Islam commenced the Islam proceedings on 23 December 2021 seeking relief that included a declaration that the rights of Amin Hadiqat in the 11 Woolgen Park property were held on trust for the MH Group and, alternatively, an account of profits or payment of equitable compensation to the MH Group. It is pleaded that:

After referring to the Settlement Deed entered into by Mr Alamin, Mr Islam, and others on 22 November 2022, Mr Alamin pleads that:

The reference to the “existing JV Properties” in paragraph 22(b) of the statement of claim is a reference to the properties referred to at [58](6) above.

In relation to paragraph 20(c) of the statement of claim, the particulars state that:

Mr Alamin then pleads that:

The statement of claim then pleads that:

The statement of claim then pleads a claim for winding up of each of the JV Companies on the just an equitable ground under s 461(1)(k) of the Corporations Act.

The statement of claim then pleads the following claim for rectification of the Settlement Deed:

The terms that Mr Alamin seeks to have inserted in clause 4 of the Settlement Deed by way of rectification, as set out in prayer 6(i) of the claims for relief in the statement of claim, are as follows (with the proposed insertions denoted by underlining):

The terms that Mr Alamin seeks to have inserted in clause 7 of the Settlement Deed by way of rectification, as set out in prayer 6(ii) of the claims for relief in the statement of claim, are as follows (with the proposed insertions denoted by underlining):

Finally, the statement of claim then pleads that Mr Islam engaged in misleading or deceptive conduct, and that Mr Alamin had relied on that conduct in entering into the Settlement Deed on the alleged mistaken understanding pleaded in paragraphs 29(a) and (b) of the statement of claim. Mr Alamin claims to have suffered loss as a result of the misleading or deceptive conduct, and claims damages or orders under s 236 of the Australian Consumer Law. [15]

As required by r 14.23 of the Uniform Civil Procedure Rules 2005 (NSW), the statement of claim filed in the Alamin proceedings is accompanied by an affidavit of Mr Alamin that he believes that the allegations of fact in the statement of claim are true.

Mr Islam filed a defence to the statement of claim in the Alamin proceedings on 18 August 2023. In that defence, Mr Islam denies the characterisation of his business relationship with Mr Alamin as a joint venture, although he admits that he intended their relationship to be one of mutual trust and confidence. Mr Islam denies that the relationship of mutual trust and confidence had broken down by mid-2020, but admits that Mr Alamin has behaved in a way that is inconsistent with the existence of any relationship of trust and confidence.

Mr Islam admits that Mr Alamin caused Amin Hadiqat to enter into the contract to purchase the 11 Woolgen Park property, and that Mr Alamin caused Amin Murooj to enter into the option in respect of the 82 Woolgen Park property. Mr Islam denies that Mr Alamin had any reason to believe that he was entitled to do so.

Mr Islam denies that the effect of the relief that he had sought in the Islam proceedings was to treat those properties as if they were joint venture properties. Mr Islam relies on the terms of the Settlement Deed—which he says are clear and unambiguous—and says that the payment obligations under the Settlement Deed were not contingent or conditional upon Amin Hadiqat becoming the registered proprietor of the 11 Woolgen Park property and/or Amin Murooj becoming the registered proprietor of the 82 Woolgen Park property. Mr Islam denies that the Settlement Deed had the effect of treating those properties as if they were part of the MH Group and/or part of any joint venture between Mr Islam and Mr Alamin. Mr Islam also denies that the Settlement Deed had the effect of varying the alleged joint venture as pleaded in paragraph 20 of the statement of claim. Mr Islam denies the allegations in paragraph 21 of the statement of claim that Mr Islam owed fiduciary or contractual duties in respect of the alleged “Varied Joint Venture”, and in respect of the 11 Woolgen Park and 82 Woolgen Park properties, until such time as the Settlement Amount was paid. Mr Islam also denies that he owed Mr Alamin and each other party to the Alamin proceedings a duty to act in good faith, reasonably and for a proper purpose in respect of each other and in respect of the subject matter of the Settlement Deed, and a duty to cooperate to give Mr Alamin and each defendant to the Alamin proceedings the benefit of the Settlement Deed.

Mr Islam’s response to paragraph 23 of the statement of claim includes, relevantly a denial of paragraphs 23(d) and 23(e). In relation to paragraph 23(d), Mr Islam pleads that he was entitled to register the security interests, and that he had legitimate grounds for opposing, and was successful in opposing, Mr Alamin’s claim for interim relief which was dismissed by Slattery J. In relation to paragraph 23(e), Mr Islam pleads that he was entitled to issue the statutory demands to Amin Hadiqat, Amin Murooj, and Amin Property Group demanding payment of $3,250,000 under the Settlement Deed. Mr Islam denies the allegations in paragraph 24 of Mr Alamin’s statement of claim.

In response to Mr Alamin’s application to wind up the JV Companies on the just and equitable ground, paragraph 25 of Mr Islam’s defence pleads that, whilst it is appropriate to wind up Amin Hadiqat, Amin Murooj and Amin Property Group because those companies have failed to comply with the statutory demands, Mr Alamin’s claim for relief under s 461(1)(k) in relation to the JV Companies is untenable, and that Mr Alamin is estopped from making that claim. Paragraph 25 of Mr Islam’s defence continues:

Mr Islam denies the matters pleaded by Mr Alamin in support of his rectification claim.

Mr Islam denies Mr Alamin’s allegations of misleading or deceptive conduct.

In the statutory demand proceedings, the Plaintiffs contend that there is a genuine dispute about whether the sum of $3,250,000 is presently due and payable under the Settlement Deed because there is a genuine dispute about whether Mr Alamin and Mr Islam had the mutual or common intention referred to in paragraphs 28(a) and 29(a), and made the mutual mistake referred to in paragraph 29(a) of the statement of claim in the Alamin proceedings, and whether the Settlement Deed should therefore be rectified in the manner pleaded in the Alamin proceedings. [16]

Further, or alternatively, the Plaintiffs contend that there is a genuine dispute about whether the sum of $3,250,000 is presently due and payable under the Settlement Deed because there is a genuine dispute about whether Mr Alamin had the intention referred to in paragraphs 28(a) and 30(a), and made the mistake referred to in paragraph 31(a) of the statement of claim in the Alamin proceedings, to the knowledge of Mr Islam, and whether the Settlement Deed should therefore be rectified in the manner pleaded in the Alamin proceedings. [17]

Further, or alternatively, the Plaintiffs contend that they have a genuine offsetting claim against Mr Islam for alleged breach of fiduciary duty in lodging and failing to remove the registered security interests, allegedly causing Amin Hadiqat to be unable to complete the purchase of the 11 Woolgen Park property, as pleaded and particularised in paragraph 23 of the statement of claim in the Alamin proceedings. As senior counsel for the Plaintiffs clarified during the hearing of the statutory demand proceedings, the contention that the registration of the security interests constituted a breach of fiduciary duties allegedly owed to the Plaintiffs depends on acceptance of the contentions pleaded in paragraphs 18 to 22 of the statement of claim in the Alamin proceedings that the Settlement Deed varied the alleged joint venture, including by treating the 11 Woolgen Park and 82 Woolgen Park properties as joint venture properties and by treating Amin Hadiqat, Amin Murooj and Amin Property Group as parties to the alleged joint venture.

In his affidavit sworn on 7 July 2022 and read in each of the statutory demand proceedings, Mr Alamin has given evidence that: “I dispute that I owe Hamidul the Alleged Debt … and claim that I have an offsetting claim for damages in the amount of at least the amount of the Alleged Debt”.

Mr Alamin has given evidence that the grounds of his dispute in relation to the debt that is the subject of the statutory demands are set out on his statement of claim filed in the Alamin proceedings (defined in Mr Alamin’s affidavit as the “Alamin SOC”). Mr Alamin relies on the statement of claim in the Alamin proceedings as articulating the claims referred to above on which he relies in support of his application to set aside the statutory demands. Mr Alamin does not rely on the statement of claim in the Alamin proceedings as evidence of the factual basis of those claims in support of his contention in the statutory demand proceedings that the claims raise a genuine dispute dispute or offsetting claim.

Mr Alamin has deposed that :

The italics in paragraph 16 of Mr Alamin’s affidavit are mine. The italicised words were permitted to be read subject to an order under s 136 of the Evidence Act 1995 (NSW) limiting them to evidence of Mr Alamin’s state of mind about the knowledge of Mr Islam and his solicitor.

In his affidavit affirmed on 30 August 2023, Mr Islam gave the following evidence about his state of mind in relation to the Settlement Deed at the time it was entered into on 22 November 2022:

The Plaintiffs’ written submissions stated that Mr Alamin also disputes Mr Islam’s entitlement to issue the statutory demands as being:

The first ground of dispute above referred to paragraph 23 to 25 of the statement of claim in the Alamin proceedings, and especially paragraph 25(b)(iii). If and to the extent that the Plaintiffs sought to rely on this as some other reason to set aside the statutory demands under s 459J of the Corporations Act, it was incumbent on the Plaintiffs to prove the existence of that reason. That would have required the Plaintiff to establish the existence and breach of the fiduciary and contractual duties as referred to in those paragraphs of the statement of claim in the Alamin proceedings. However, the Plaintiffs’ submissions at the hearing of the statutory demand proceedings were confined to their contentions concerning the existence of a genuine dispute and the existence of a genuine offsetting claim referred to at [78]–[80] above. The first ground of dispute was thereby effectively abandoned.

The second ground of dispute above referred to paragraphs 32 to 36 of the statement of claim in the Alamin proceedings. As referred to at [69] above, that was a claim for loss allegedly suffered by Mr Alamin as a result of allegedly misleading or deceptive non-disclosures by Mr Islam to Mr Alamin, including non-disclosure that Mr Islam claimed or reserved the right to seek payment of the Settlement Amount even if the purchase of the 11 Woolgen Park and 82 Woolgen Park properties did not proceed. The Plaintiffs did not seek to prove the alleged misleading or deceptive conduct at the hearing of the statutory demand proceedings. Nor did the Plaintiffs direct any submissions to the reasons why any cause of action by Mr Alamin against Mr Islam for alleged misleading or deceptive conduct entitled the Plaintiffs to an order in these proceedings setting aside the statutory demands issued to them. The second ground of dispute is also taken to have been abandoned.

Accordingly, the issues to be determined in these proceedings are:

As Bell P (as the Chief Justice then was) said in Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd: [18]

When deciding whether a genuine dispute or genuine offsetting claim exists, the test is whether the dispute or claim is one that is bona fide and truly exists in fact and whether the grounds for alleging the existence of the dispute or claim are real and not spurious, hypothetical, illusory, or misconceived. In short, the court must be satisfied that the dispute or claim raises a serious question to be tried. A dispute or claim is bona fide if it is arguable on the basis of facts asserted with sufficient particularity to enable the court to determine that the dispute or claim is not fanciful. [19]

The question is not whether the evidence adduced on the application to set aside the statutory demand is sufficient to establish the dispute or offsetting claim or its amount, but whether the evidence is sufficient to establish that the dispute or offsetting claim is genuine and, in the case of an offsetting claim, its genuine level. [20] It is sufficient if there be a plausible contention requiring investigation. [21] However, as McLelland CJ in Eq in said in Eyota Pty Ltd v Hanave Pty Ltd: [22]

The Plaintiffs accepted as accurate the defendant’s summary of the principles governing rectification for mistake:

The Plaintiffs emphasised that a common intention may be inferred from the context and circumstances in which the parties’ bargain has been struck, referring to the judgment of Campbell JA in Ryledar, in which his Honour said: [23]

After a detailed examination of relevant authority, his Honour concluded: [24]

I have considered all of the parties’ written and oral submissions.

In my opinion, the claims in the Alamin proceedings for rectification of clause 4 of the Settlement Deed on the grounds of common mistake raise a plausible contention requiring investigation. The evidence before the Court in these statutory demand proceedings raises plausible contentions that the parties to the Settlement Deed entered into it with the common intention that the Settlement Amount in clause 4 would not be payable if Amin Hadiqat and Amin Murooj did not complete the acquisition of the 11 Woolgen Park and 82 Woolgen Park properties, and that they made a common mistake in entering into the Settlement Deed on the terms of clause 4, which did not make the payment of the Settlement Amount conditional on the completion of those transactions.

As was submitted on behalf of Mr Islam, and as Slattery J observed in the Alamin proceedings, [25] those contentions find no support in the terms of the Settlement Deed itself. There is much to be said for the view that it is improbable that Mr Islam and Mr Alamin entered into the Settlement Deed containing the terms set out in clauses 4 and 5, notwithstanding that they had a common intention that the Amin Parties’ obligation to pay the Settlement Amount was conditional upon completion of the acquisition of the 11 Woolgen Park and 82 Woolgen Park properties.

Moreover, as senior counsel for Mr Islam submitted, if clause 4 is rectified in the manner sought by Mr Alamin in the Alamin proceedings, the effect of the Settlement Deed will be that the Amin Parties have received the benefit of the mutual releases in clause 15, and the dismissal of the Islam proceedings with no order as to costs pursuant to clause 16, without having paid any part of the Settlement Amount to Mr Islam, and with no obligation to pay in the event that the Amin Parties do not complete the acquisition of the 11 Woolgen Park and 82 Woolgen Park properties. It is arguable that it is inherently improbable that the parties had a common intention to achieve that outcome.

However, as senior counsel for the Plaintiffs submitted, the effect of the Settlement Deed, if not rectified, is that Mr Islam is entitled to payments from the Amin parties totalling $3,250,000 in settlement of his claims in the Islam proceedings which sought to strip the Amin defendants of the benefits derived from Mr Alamin’s alleged breaches of duty in acquiring the 11 Woolgen and 82 Woolgen properties, even if Amin Hadiqat and Amin Murooj fail to complete their acquisition of those properties, and therefore fail to realise those benefits. In my opinion, there is a plausible contention that those circumstances—the nature of the claims for relief in the Islam proceedings that were resolved by the Settlement Deed, the fact that all parties knew when they entered into the Settlement Deed that the Amin parties had not yet completed their acquisition of the 11 Woolgen and 82 Woolgen properties, and the effect of clauses 4, 5, 15, and 16 of the Settlement Deed in the event that those transactions are not completed—support an inference that the parties entered into the Settlement Deed with the common intention alleged in the Alamin proceedings.

On the basis of the evidence adduced in these statutory demand proceedings, the claim for rectification of clause 4 of the Settlement Deed on the grounds of common mistake is not a strong claim. The countervailing arguments to which I have referred at [98]–[99] have considerable force. There is no evidence of words or conduct on the part of Mr Islam that disclose that he held the relevant intention at the time of entry into the Settlement Deed. Mr Alamin’s evidence in these proceedings referred to at [83] above is limited to his own subjective intentions at that time. Mr Alamin does not purport to give evidence of Mr Islam’s subjective state of mind, save for the opening words of paragraph 16 of his affidavit, which were admitted into evidence on a limited basis as referred to at [84]. As senior counsel for Mr Islam submitted, Mr Alamin’s evidence alone, taken at its highest, would not establish a genuine rectification claim based on common mistake. However, Mr Alamin’s evidence must be considered together with the circumstances to which I have referred at [100] above. There are arguments both ways about whether the correspondence exchanged between the parties contemporaneously with, or relatively contemporaneously with their entry into the Settlement Deed supports for the rectification claim. One the one hand, the 17 November 2022 letter conveying Mr Alamin’s offer expressly stated that he would require a period of 12 months to pay most of the proposed settlement sum because the acquisition of 11 Woolgen Park and 82 Woolgen Park would need to be completed before he would be in a position to pay. [26] Mr Islam’s evidence in these proceedings explains why completion of those acquisitions would be likely to put Amin Hadiqat and Amin Woolgen in funds, even before the land had been subdivided and developed. [27] On the other hand, that 17 November 2022 offer was overtaken by the terms of the Settlement Deed executed by the parties, including clauses 4 and 5. The letter from Mr Alamin’s solicitors to Mr Islam’s solicitors dated 23 December 2022 states that the terms of clause 4 were “predicated on” completion of the 11 Woolgen Park acquisition, and contends that Mr Islam’s solicitors were aware of this. However, the letter also contains a request for Mr Islam’s consent to an extension of time for payment of the first instalment of the Settlement Amount under clause 4. That request is arguably inconsistent with any intention on the part of the Amin parties, let alone a common intention of all parties to the Settlement Deed, that the payment obligations in clause 4 would be conditional on the completion of the 11 Woolgen Park and 82 Woolgen Park acquisitions.

The claim for rectification of clause 4 of the Settlement Deed based on the alleged common intention and common mistake pleaded in the Alamin proceedings is a bona fide claim. The claim was first made on 12 May 2023—approximately one month prior to the service of the statutory demands. [28] The claim raises a plausible contention requiring investigation for the reasons that I have explained above. It is not to the point that there are countervailing arguments. The relative merits of the claim and the countervailing arguments are to be assessed at final hearing, and not on the present applications to set aside the statutory demands. [29] If the rectification claim ultimately succeeds, it will follow that the debt claimed in the statutory demands is not presently due and payable. Accordingly, the rectification claim constitutes a genuine dispute for the purpose of s 459H of the Corporations Act, and the statutory demands must be set aside.

It is not necessary to address whether the alternative rectification claim for unilateral mistake constitutes a genuine dispute. Nor is it necessary to address whether the claim for Mr Islam’s alleged breach of fiduciary duty constitutes a genuine offsetting claim. For the avoidance of doubt, my determination that the rectification claim based on common mistake constitutes a genuine dispute for the reasons explained above, does not involve acceptance of the Plaintiffs’ contention that the Settlement Deed varied the relationship between Mr Islam, Mr Alamin and their respective associated companies—which the Plaintiffs characterise as a joint venture relationship—to include the 11 Woolgen Park and 82 Woolgen Park properties until such time as the Settlement Amount is paid in full.

The costs of the statutory demand proceedings should follow the event. The Plaintiffs seek their costs on an indemnity basis, relying on an open offer made on 6 September 2023 to “compromise” the proceedings on terms that the statutory demands were withdrawn and each party would bear its own costs. That offer effectively invited Mr Islam to capitulate. I do not consider that Mr Islam acted unreasonably in failing to accept the offer, having regard to the cogent arguments available to him to defend these proceedings, including those arguments referred to at [98]–[99] above. I therefore decline to exercise the discretion under s 98 of the Civil Procedure Act 2005 (NSW) to order Mr Islam to pay the Plaintiffs’ costs on an indemnity basis.

For all of the reasons above, the orders of the Court are as follows: