Austin Corp Pty Ltd v Blanford - [2010] NSWSC 964

CITATION: Austin Corp Pty Ltd v Blanford [2010] NSWSC 964

HEARING DATE(S): 16/08/10

JUDGMENT DATE :
16 August 2010

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 16 August 2010

DECISION: 1. Make order 1 of the originating process.
2. Order that the plaintiff pay the defendant's costs.
3. The exhibits may be returned after 28 days.

CATCHWORDS: CORPORATIONS – application to set aside statutory demand – common ground that statutory demand should be set aside – COSTS – determination of appropriate costs orders – whether to award indemnity costs against defendant – relevant considerations in statutory demand proceedings – where statutory demand based on judgment debt – where grounds for setting aside statutory demand not adjudicated – where plaintiff contended that defendant obtained default judgment and served statutory demand because induced by defendant to believe that action would not be taken without plaintiff’s knowledge – where plaintiff disputed debt based on alleged compromise agreement or existence of valid offsetting claim – plaintiff’s failure to repay money under alleged compromise agreement and to offer to pay remainder of debt into court from outset put defendant to unnecessary expense in defending application – plaintiff to pay defendant’s costs

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW)
Corporations Act 2001 (Cth)

CATEGORY: Procedural and other rulings

CASES CITED: Jem Number Four Pty Ltd v Southern Cross Construction (NSW) Pty Ltd [2006] NSWSC 602
Gee Ha Pty Ltd v Dera Developments Pty Ltd [2007] NSWSC 95
Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622
Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772
Eumina Investment Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454
Midas Management Pty Ltd v Equator Communications Pty Ltd [2007] NSWSC 759; (2007) 25 ACLC 1038

PARTIES: Plaintiff: Austin Corp Pty Ltd ACN 078 081 893
Defendant: Adam John Blanford t/as Blanford Balancing & Commissioning ACN 912 956 466

FILE NUMBER(S): SC 2010/91379

COUNSEL: Plaintiff: R Jefferis
Defendant: G Penhall

SOLICITORS: Plaintiff: Church & Grace
Defendant: Penhall & Co

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Monday, 16 August 2010

2010/91379 Austin Corp Pty Ltd ACN 078 081 893 v Adam John Blanford t/as Blanford Balancing & Commissioning ACN 912 956 466

JUDGMENT

1 HIS HONOUR: This is an application to set aside a statutory demand. It is common ground that the statutory demand should be set aside. The argument has been as to costs. The statutory demand is dated 24 March 2010. In it the defendant (“Mr Blanford”) demanded payment of a debt of $38,557.51 described as a judgment debt recovered by him against the plaintiff (“Austin”) in the Local Court at Burwood on 13 March 2010 and entered on 23 March 2010.

2 The statement of claim in the Local Court was served on 19 October 2009. It claimed $39,043.25 as moneys due pursuant to the service by Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NSWSC 964
Decision Date: 16 August 2010

CaseChat Overview and Summary

In Austin Corp Pty Ltd v Blanford, the defendant, Blanford, sought to set aside a statutory demand issued by Austin Corp Pty Ltd, which was based on a judgment debt. The court was required to determine whether the statutory demand should be set aside and, if so, the appropriate costs orders, including whether to award indemnity costs against the defendant. The plaintiff alleged that Blanford had obtained a default judgment and served the statutory demand because Blanford was induced to believe that no action would be taken without the plaintiff's knowledge. The plaintiff also disputed the debt based on an alleged compromise agreement or the existence of a valid offsetting claim.

The court considered the relevant considerations in statutory demand proceedings, particularly where the grounds for setting aside the demand had not been adjudicated. The court noted that the plaintiff's failure to repay money under the alleged compromise agreement and to offer to pay the remainder of the debt into court from the outset had put the defendant to unnecessary expense in defending the application. The court found that the plaintiff had not established the alleged compromise agreement or the existence of a valid offsetting claim, and that the plaintiff's conduct in not offering to pay the remainder of the debt into court had been unreasonable.

The court determined that the statutory demand should be set aside and that the plaintiff should pay the defendant's costs. The court further found that the plaintiff's conduct warranted an award of indemnity costs against the plaintiff. The court held that the plaintiff's failure to repay money under the alleged compromise agreement and to offer to pay the remainder of the debt into court from the outset had put the defendant to unnecessary expense in defending the application, and that the plaintiff's conduct had been unreasonable. The court ordered the plaintiff to pay the defendant's costs on an indemnity basis.

Orders