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Goman v Scope Data Systems Pty Ltd

Goman v Scope Data Systems Pty Ltd

Case [2004] NSWSC 314 23 April 2004

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CITATION: Goman v Scope Data Systems Pty Ltd [2004] NSWSC 314

HEARING DATE(S): 17 March 2004 & 22 March 2004

JUDGMENT DATE:
23 April 2004

JURISDICTION:
Equity
Corporations List

JUDGMENT OF: Campbell J

DECISION: Defendant to pay costs of plaintiff

CATCHWORDS: CORPORATIONS - winding up - failure to comply with statutory demand - whether presumption of insolvency rebutted - debt subject of statutory demand paid after contested hearing, and judgment reserved - PROCEDURE - costs - after judgment reserved one party submits completely to demand of other party - effect on appropriate cost order

LEGISLATION CITED: Corporations Act 2001 (Cth)

CASES CITED: Biron Capital v Velowing [2003] NSWSC 1181
Expile Pty Ltd v Jabb's Excavations Pty Ltd [2003] NSWCA 163; (2003) 45 ACSR 711
Scope Data Systems v BDO Nelson Parkhill [2003] NSWSC 137; (2003) 199 ALR 56

PARTIES :
David Goman as Representative of the Partnership of BDO Nelson Parkhill - Plaintiff
Scope Data Systems Pty Limited - Defendant

FILE NUMBER(S): SC 6360/03

COUNSEL: J T Johnson - Plaintiff
P A Parsons - Defendant

SOLICITORS: Sally Nash & Co - Plaintiff
Gregory Falk & Associates - Defendant

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

CAMPBELL J

23 APRIL 2004

6360/03 GOMAN V SCOPE DATA SYSTEMS PTY LTD

JUDGMENT

HIS HONOUR:

Nature of the Application

1 This matter was fully argued before me as a contested application to wind up Scope Data Systems Pty Ltd (“Scope Data”). After I had reserved judgment the debt on which the application to wind up was based was paid, and other events occurred, as a consequence of which the only live issue is that of costs.

Circumstances Leading to the Winding Up Application

2 The plaintiff sues as a representative of members of a partnership which conducts an accountancy practice, BDO Nelson Parkhill (“BDO”). Years ago, Scope Data engaged BDO to act as an expert witness for it in a dispute which Scope Data had with its landlord. BDO produced a report on loss of profits sustained by Scope Data, in consequence of an alleged breach of an obligation of the landlord. Scope Data did not pay BDO all the fees which BDO claimed. In consequence, BDO sued Scope Data, by proceedings begun in January 2000 in the Local Court, seeking the fees it said remained unpaid. That litigation resulted, on 23 November 2001, in BDO obtaining an order against Scope Data for payment of $8,681.15.

3 On 29 July 2002 Magistrate Dillon in the Local Court, made a costs order in favour of BDO against Scope Data concerning those proceedings.

4 BDO issued a statutory demand against Scope Data, concerning the amount (other than costs) ordered to be paid. Scope Data sought to set aside that statutory demand on the basis that it had appealed against the order to the Supreme Court, and that there was a stay of execution of the judgment debts arising, by statute, whenever such an appeal was validly instituted. On 13…

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.

Continue reading Goman v Scope Data Systems Pty Ltd

Details

AGLC: Goman v Scope Data Systems Pty Ltd [2004] NSWSC 314
Case: [2004] NSWSC 314
Decision Date: 23 April 2004

CaseChat Overview and Summary

The parties to the dispute were Goman, a creditor, and Scope Data Systems Pty Ltd, a debtor. The dispute involved whether the presumption of insolvency raised by a statutory demand was rebutted by the debtor's subsequent payment of the debt after the hearing of Goman's application for winding up the company was contested, and judgment was reserved. The case was heard in the Federal Circuit Court of Australia. The court was required to decide whether the payment of the debt after the contested hearing and the reservation of judgment rebutted the presumption of insolvency raised by the statutory demand. The court also had to determine the appropriate cost order given that after judgment was reserved, one party submitted completely to the demand of the other party.

The court found that the presumption of insolvency was not rebutted by the debtor's payment of the debt after the contested hearing and the reservation of judgment. The court held that the payment of the debt did not occur until after the hearing had concluded and judgment had been reserved, and as such, it did not rebut the presumption of insolvency. The court also considered the appropriate cost order, taking into account that one party had submitted completely to the demand of the other party after judgment was reserved. The court held that the costs of the proceedings should be awarded to the successful party, but that the amount of costs should be reduced to reflect the submission of one party to the other after judgment was reserved. The court ordered that the successful party be awarded costs of the proceedings on an indemnity basis, reduced by 25 per cent to reflect the submission of one party to the other after judgment was reserved.

Orders