Galaxy Resources Ltd v Arrinooka Pty Ltd

Galaxy Resources Ltd (the plaintiff) brought an application to set aside a statutory demand issued by Arrinooka Pty Ltd (the defendant) for $60,301.72, which the defendant claimed was owed by the plaintiff for services provided. The case was heard by Master Bredmeyer of the Supreme Court of Western Australia and a decision on costs was reserved. The plaintiff argued that the debt was genuinely disputed, and the defendant was aware of this prior to issuing the statutory demand. The defendant maintained that an oral agreement existed for the plaintiff to pay the claimed amount.

The legal issues for the court to decide were whether the statutory demand should be set aside and, if so, whether indemnity costs should be awarded to the plaintiff. The court considered whether the defendant knew the debt was disputed, whether the plaintiff had a genuine dispute about the existence of the oral agreement, and whether the plaintiff's offer to withdraw the application on certain conditions should have been accepted by the defendant.

The court found that the statutory demand should be set aside as the plaintiff had a genuine dispute about the existence of the oral agreement and the defendant was aware of this dispute. The court also found that the plaintiff's offer to withdraw the application on certain conditions should have been accepted by the defendant. The court awarded indemnity costs to the plaintiff, stating that special circumstances were needed to justify such an award and that the cumulative effect of the factors in the case warranted it.

The final orders were that the defendant pay the plaintiff's costs of the application, including any reserved costs, on an indemnity basis, to be taxed if not agreed.