Global v Sensis

[2007] NSWSC 967

CITATION:	Global v Sensis [2007] NSWSC 967
HEARING DATE(S):	27 August 2007
JUDGMENT OF:	Hammerschlag J
EX TEMPORE JUDGMENT DATE:	27 August 2007
DECISION:	The defendant is to pay the plaintiff's costs of the proceedings.
CATCHWORDS:	COSTS - statutory demand set aside by consent after judgment upon which demand was based set aside on appeal - no good reason why costs should not follow the event.
LEGISLATION CITED:	Corporations Act 2001 (Cth).
CASES CITED:	Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 Midas Management Pty Ltd v Equator Communications Pty Ltd [2007] NSWSC 759
PARTIES:	Global Alliance Network Sensis Pty Ltd
FILE NUMBER(S):	SC 2299/2007
COUNSEL:	T. P. Sperber (Solicitor) (Plaintiff) M. W. Hadley (Defendant)
SOLICITORS:	Swaab Attorneys (Plaintiff) Holman Webb (Defendant)

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

HAMMERSCHLAG J

27 AUGUST 2007

2299/2007 GLOBAL ALLIANCE NETWORK –V- SENSIS PTY LIMITED

JUDGMENT

1 HIS HONOUR: The only issue remaining in these proceedings to set aside a statutory demand is costs.

2 The defendant served a statutory demand on the plaintiff relying on a judgment of the District Court of New South Wales.

3 The demand was served after the plaintiff had instituted an appeal to the Court of Appeal from that Court.

4 The appeal succeeded.

5 The statutory demand has, by consent, been set aside.

6 The judgment debt was for $125,491.11. There is apparently an undisputed amount of $20,513.90 which the plaintiff owes the defendant, but which is likely to be either wholly or in part offset by cost orders which the plaintiff has against the defendant.

7 The demand thus has no utility in any event.

8 Where a party has judgment against another and there is no stay, the debt is res judicata between them and cannot be the subject of a genuine dispute within the provisions of section 459H of the Corporations Act, 2001 (Cth) (“the Act”).

9 However, the court may nevertheless set the demand aside on the basis that there is “some other reason” within section 459J(1)(a) of the Act to do so. It may do so where there is on foot a bona fide appeal. See, for example, Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 at 459.

10 Under s 459M of the Act, the court may impose conditions which may include requiring the judgment debtor to pay money into court; see for example Midas Management Pty Ltd v Equator Communications Pty Ltd [2007] NSWSC 759. Before disposition of the appeal that course may have been appropriate in this case.

11 On 7 May 2007, before the appeal had been disposed of, the defendant proposed to the plaintiff that it would agree to the stay of its judgment on payment by the plaintiff to it of the undisputed amount of the judgment namely, $20,513.90, and that the application to set aside the statutory demand be dismissed.

12 It was put that this was a reasonable offer the refusal of which warrants departure from the usual rule that costs follow the event.

13 The offer, however, did not entail a payment into court but payment to the defendant itself.

14 Also, the plaintiff’s quest to impeach the demand ultimately succeeded because the defendant relied on a judgment to which it was not, as subsequent events have demonstrated, entitled.

15 It seems to me that the defendant took the risk of utilising the statutory demand procedure based on a judgment which was on appeal and where the plaintiff had good grounds.

16 In those circumstances there seems to be no good reason why costs should not follow the event.

17 The demand has been set aside.

18 The defendant is to pay the plaintiff's costs of these proceedings.

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