Bowen Energy Limited v 2KD Drilling Pty Limited

[2009] FCA 796

FEDERAL COURT OF AUSTRALIA

Bowen Energy Limited v 2KD Drilling Pty Limited [2009] FCA 796

BOWEN ENERGY LIMITED v 2KD DRILLING PTY LIMITED

NSD 473 of 2009

STONE J
30 JULY 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 473 of 2009

BETWEEN: BOWEN ENERGY LIMITED
Plaintiff

AND: 2KD DRILLING PTY LIMITED
Defendant

JUDGE:	STONE J
DATE OF ORDER:	30 JULY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The defendant pay the plaintiff’s costs of this proceeding.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 473 of 2009

BETWEEN: BOWEN ENERGY LIMITED
Plaintiff

AND: 2KD DRILLING PTY LIMITED
Defendant

JUDGE:	STONE J
DATE:	30 JULY 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This proceeding was commenced on 26 May 2009. The plaintiff sought to set aside a statutory demand dated 5 May 2009, served on the plaintiff by the defendant.  There was apparently some correspondence between the legal representatives of the parties, in the course of which the plaintiff invited the defendant to withdraw the demand, on the basis that there was a substantive dispute between the parties.

2. The defendant refused to withdraw the demand, and the application was set down for hearing on 12 June 2009.  On that date the matter was adjourned, following the defendant’s submission that it wished to file affidavits in support of its position.  The plaintiff was given its costs for the appearance on that date, and the matter was then listed for hearing on 2 July.  On 2 July the Court, with the consent of the parties, ordered that the statutory demand be set aside.  Neither party made it a condition of its consent that there be any particular order as to costs, or that there should be no order as to costs.

3. The question of costs was reserved for decision on a separate date, and I have heard the parties on this issue today.  The starting position, it seems to me, is that the plaintiff has succeeded in obtaining an order, albeit by consent, that the statutory demand be set aside.  The other order sought in its originating process was an order that the defendant pay the plaintiff’s costs.  In the normal course of events the plaintiff, having been successful, would be entitled to its costs.  The plaintiff, however, seeks indemnity costs, relying on delays in the hearing, and in part on the strength of its claim that there was a substantive issue to be determined between the parties.  The defendant submitted that, in considering the question of costs, the Court should take into account:

   (a)       The nature and legitimacy of the debt claimed in the statutory demand;

   (b)The nature and legitimacy of the relief claimed by the plaintiff in the main proceeding, NSD 475 of 2009;

   (c)The correct interpretation of a disputed drilling contract between the parties, dated 7 April 2008.

4. I have not accepted this submission.  In my view the statutory demand raises an entirely separate question from the questions raised in the main proceeding.  In order for the plaintiff to have succeeded, had the issue gone to determination by the court, it would only have been necessary for the plaintiff to show that there was a real dispute between the parties, and it would not have been necessary, or appropriate, for the court to have considered the strength of the competing claims.  In the circumstances, I see no reason why the question of costs in relation to the statutory demand should be deferred pending the outcome of the main proceeding.

5. Similarly, I do not accept that the court should take into account any issues relating to the substance of the claim, or, indeed, even whether there is a real dispute between the parties in dealing with the plaintiff’s application for costs.  The parties consented to the statutory demand being set aside.  That may have involved a concession by the defendant that there was a real question between them.  It may, however, have been a forensic decision that it was better to get on with the main proceeding, and not be distracted by issues in relation to statutory demands.

6. In the circumstances, I do not think that the plaintiff is entitled to indemnity costs, and as an exercise of my discretion I do not propose to order them.  The orders of the Court are that the defendant pay the plaintiff’s costs of this proceeding.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment hereinof the Honourable Justice Stone.

Associate:

Dated: 30 July 2009

Counsel for the Plaintiff:	J Tobin
Solicitor for the Plaintiff:	Gadens Lawyers
Counsel for the Defendant:	N Dragojlovic
Solicitor for the Defendant:	Cahills

Date of Hearing:	30 July 2009
Date of Judgment:	30 July 2009