The Court may look at the substance of the dealings between a creditor and debtor when determining the existence of a genuine dispute.

This principle was discussed in the recent case of In the matter of Bonheur Holdings Pty Limited [2019] NSWSC 1434.

In Bonheur, the creditor sought to enforce the terms of a deed where the creditor loaned $730,000 to Bonheur. The deed contained numerous typographical errors, including an error in the name of the document. The deed was also improperly executed by the parties.

The creditor issued a statutory demand against Bonheur and Bonheur sought to set the demand aside arguing that the deficiencies in the deed amounted to a genuine dispute.

The Court, however, inferred that the conduct of the parties (that the monies were loaned to Bonheur) outweighed the deficiencies in the deed.

Bonheur were unsuccessful in setting the demand aside.

The decision in Bonheur tests the low threshold of a genuine dispute and is proof that the Court may look into the conduct of the parties to determine the existence of a genuine dispute.