Australian Civil Infrastructure Group Pty Ltd v Murphy, McCarthy and Associates Pty Ltd

[2012] NSWSC 133

Supreme Court

New South Wales

Medium Neutral Citation:	Australian Civil Infrastructure Group Pty Ltd v Murphy, McCarthy & Associates Pty Ltd [2012] NSWSC 133
Hearing dates:	16 February 2012
Decision date:	16 February 2012
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	Proceedings dismissed. Plaintiff to pay Defendant's costs on an indemnity basis.
Catchwords:	COSTS - Indemnity costs - Whether Plaintiff should pay Defendant's costs on an indemnity basis where proceedings were objectively certain to fail.
Legislation Cited:	- Corporations Act 2001 (Cth) s 459G - Legal Profession Act 2004 (NSW)
Cases Cited:	- Carinda Homes Pty Ltd v Highlands Austral Pty Ltd [2003] FCA 275 - David Grant & Co Pty Ltd v Westpac Banking Corp [1995] HCA 43; (1995) 184 CLR 265 - Woodgate v Garard Pty Ltd [2010] NSWSC 508
Category:	Costs
Parties:	Australian Civil Infrastructure Group Pty Ltd (Plaintiff) Murphy, McCarthy & Associates Pty Ltd (Defendant)
Representation:	Solicitors: M. Stevens (Solicitor) (Plaintiff) S. Agosta (Solicitor) (Defendant)
File Number(s):	12/20822

Judgment - EX TEMPORE

1. In these proceedings the Plaintiff, Australian Civil Infrastructure Group Pty Limited ("ACIG"), filed an originating process seeking to set aside a statutory demand ("demand") served by the Defendant, Murphy, McCarthy & Associates Pty Limited ("MMAPL").

1. Agreement has been reached between the parties that that originating process should be dismissed. Agreement has also been reached, appropriately, that, ACIG should pay the Defendant's costs of the proceedings. The question that remains between the parties is whether those costs should be paid on an indemnity basis. It might be noted that arguments are sometimes had as to that question in circumstances where there may be little utility in them because the difference between party/party costs and indemnity costs is significantly less under the costs assessment regime now adopted by the Legal Profession Act 2004 (NSW) than under the former taxation regime. However, the question before me is not the utility of the argument before me but instead whether costs should be made on an ordinary basis or an indemnity basis.

1. The demand was sent by pre-paid ordinary post to ACIG's registered office on 22 December 2011 and received at the registered office on 23 December 2011. I have been informed from the bar table that the demand did not come to the attention of a director of ACIG until a later date. However, the Corporations Act 2001 (Cth) specifically permits the service of a statutory demand upon a registered office and companies need to have arrangements in place so that documents served in that manner are brought to the attention of an appropriate officer.

1. The solicitor for the Plaintiff, Mr Stevens, fairly points out that he has been recently appointed and he did not receive the entirety of his client's file from his client's former solicitor until a late date. However, an order for indemnity costs can be made, absent personal fault where, for example, proceedings are objectively certain to fail.

1. In my view, the application to set aside the statutory demand could not succeed in this matter. It could not succeed because it had not been filed within the 21 day period required by s 459G of the Corporations Act 2001 and it is well established following the High Court's decision in David Grant & Co Pty Ltd v Westpac Banking Corp [1995] HCA 43; (1995) 184 CLR 265 that the court has no jurisdiction to extend that time. The date on which the demand had been served would readily have been ascertained by the Plaintiff from the firm of accountants that maintained its registered office; indeed, it appears that the Defendant obtained that information by such an inquiry. The Defendant had taken fair steps to draw these matters to the Plaintiff's attention by an email dated 22 January 2012 and a second email dated 6 February 2012.

1. Although the Defendant at one point foreshadowed the possibility that it might rely upon what is known as the fair notice principle, which was summarised by Palmer J in Woodgate v Garard Pty Ltd [2010] NSWSC 508, I am not aware of that principle having been applied where a company has in fact received the statutory demand at its registered office, merely because the company's internal arrangements did not then bring the demand promptly to its officers' attention.

1. In these circumstances it seems to me that I should an order for indemnity costs for the reasons which were identified in Lindgren J in the decision in Carinda Homes Pty Ltd v Highlands Austral Pty Ltd [2003] FCA 275. Accordingly I will make orders in the form of the orders provided to me by the Defendants, namely that:

1. The proceedings be dismissed.

2. The Plaintiff pay the Defendant's costs on an indemnity basis.

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