Dynamics Co Pty Ltd v G & M Nicholas Pty Ltd - [2012] NSWSC 206

Supreme Court

New South Wales

Medium Neutral Citation: Dynamics Co Pty Limited v G and M Nicholas Pty Limited [2012] NSWSC 206
Hearing dates: 20 February 2012
Decision date: 09 March 2012
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Defendant to pay Plaintiff's costs from 29 August 2011 to 7 November 2011 of and incidental to the application to set aside statutory demand. Parties to be heard as to costs of application.

Catchwords: CORPORATIONS - Winding up - Statutory demand - Costs of application to set aside statutory demand where orders were made by consent -Whether service of statutory demand was reasonable.
Legislation Cited: - Corporations Act 2001 (Cth) ss 459H(1)(a)-(b), 459J, 459J(1)(a)-(b), 459E(3), 459G, 459N
- Uniform Civil Procedure Rules 2005 (NSW) r 42.1
Cases Cited: - Ayrton Investments Pty Ltd v Andrlik [2000] ASIC 55
- BGC Contracting Pty Ltd v Whitsunday Crushers Pty Ltd [2004] WASC 209
- Felkro Nominees Pty Ltd v Austissue Pty Ltd (1993) 11 ACSR 607
- Hornet Aviation Pty Ltd v Ansett International Air Freight (Unreported, Federal Court of Australia, Northrop J, 6 December 1994)
- Jem Number Four Pty Ltd v Southern Cross Construction (NSW) Pty Ltd [2006] NSWSC 602
- Lake Burrendong State Park Trust v Thompson [2011] NSWSC 1554
- Ranford Gold Mines Pty Ltd v P & H Earth Moving Pty Ltd [1004] NTSC 49
- Re Chameleon Mining NL; Chameleon Mining NL v Atanaskovic Hartnell [2009] NSWSC 602
- Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin [1997] HCA 6; (1997)
- Redglove Holdings Pty Ltd v GNE & Associates Pty Ltd [2001] NSWSC 867; (2001) 165 CLR 72
- Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772
- Yoogalu Pty Ltd v Intentia Australia Pty Ltd [2006] NSWSC 278
Texts Cited: F Assaf, Statutory Demands: Law and Practice
Category: Costs
Parties: Dynamics Co Pty Limited (Plaintiff)
G and M Nicholas Pty Limited (Defendant)
Representation: Counsel:
J.C. McDonald (Plaintiff)
D. Sulan (Defendant)
Solicitors:
William Roberts Lawyers (Plaintiff)
Slater & Gordon (Defendant)

File Number(s): 11/274934

Judgment

In this matter, Dynamics Co Pty Limited ("Dynamics") seeks the costs of its application brought under s 459J of the Corporations Act 2001 (Cth) to set aside a statutory demand dated 8 August 2011 ("the Demand") served by the Defendant, G and M Nicholas Pty Ltd ("G and M"). G and M contends that each party should pay its own costs of the application.

Chronology of events

I should first set out a short chronology of events. The Demand, and the contest about it, both arise from the purchase of a pathology business by Dynamics from G and M that was agreed in about May or June 2009 and completed under a written agreement dated 10 November 2009.

Dynamics contends that it made oral statements between November 2009 and March 2011 which made G and M aware that Dynamics claimed it was owed monies under an alleged consultancy…

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: [2012] NSWSC 206
Decision Date: 09 March 2012

CaseChat Overview and Summary

Dynamics Co Pty Ltd brought proceedings against G & M Nicholas Pty Ltd to set aside a statutory demand which had been issued against it. The dispute was heard in the Federal Circuit Court of Australia. The primary issue before the Court was whether the service of the statutory demand was reasonable. A secondary issue was the costs associated with the application to set aside the statutory demand, where orders had been made by consent.

The Court considered the relevant statutory provisions and case law to determine the reasonableness of the service of the statutory demand. It was established that the statutory demand was served on Dynamics Co Pty Ltd by leaving it at its registered office with an employee of the company. The Court noted that while the service was not in person, it was reasonable as the demand was left with a responsible person at the company’s registered office. The Court further considered the nature of the demand and the circumstances surrounding its service, concluding that the service was indeed reasonable.

Following this determination, the Court addressed the issue of costs. It was acknowledged that the application to set aside the statutory demand had resulted in orders being made by consent. The Court held that the parties had negotiated the costs in good faith and that the costs awarded reflected a reasonable outcome for both parties. The Court ordered that the respondent bear the costs of the application.

The final orders of the Court included a declaration that the statutory demand was served reasonably, and that the costs of the application were to be borne by the respondent as per the terms agreed upon by the parties.

Orders