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In the matter of Dalski Pty Ltd

In the matter of Dalski Pty Ltd

Case [2025] NSWSC 99 25 February 2025

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Dalski Pty Ltd [2025] NSWSC 99
Hearing dates: On the papers, last submissions 10 February 2025
Date of orders: 25 February 2025
Decision date: 25 February 2025
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Defendant, Zen Haus Group Pty Ltd, pay the costs of these proceedings, including the costs of the costs applications, as agreed or as assessed.

Catchwords:
COSTS — Party/Party — General rule that costs follow the event — Where application to set aside statutory demand did not proceed – Where no determination of proceedings on the merits.

Legislation Cited:
- Civil Procedure Act 2005 (NSW) s 98(4)

Cases Cited:
- Ayrton Investments Pty Ltd v Andrlik (2000) 34 ACSR 643; [2000] ACTSC 55
- Felkro Nominees Pty Ltd v Austissue Pty Ltd (1993) 11 ACSR 607
- One.Tel v Deputy Commissioner of Taxation (2001) 101 FCR 548
- ReBell Potter Securities Ltd [2023] NSWSC 1528
- ReKaloriziko Pty Ltd [2021] NSWSC 1276
- Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6

Category: Costs
Parties: Dalski Pty Ltd (Plaintiff)
Zen Haus Group Pty Ltd (Defendant)
Representation:
Counsel:
Solicitors:
CCS Legal Pty Ltd (Plaintiff)
MLH Lawyers (Defendant)

File Number(s): 2024/270688

Judgment

Background and affidavit evidence

This is an application for costs in respect of an application to set aside a creditor’s statutory demand which was not determined on its merits.
By way of background, on 3 July 2024, the Defendant, Zen Haus Group Pty Ltd (“Zen Haus”) issued a creditor’s statutory demand (“Demand”) to the Plaintiff, Dalski Pty Ltd (“Dalski”). On 12 July 2024, Dalski’s solicitors wrote to Zen Haus requesting that the Demand be withdrawn and referring to a letter which set out the matters on which Dalski relied to contend that Zen Haus’s product was not compliant with the National Construction Code (“Code”) and to advance a claim of misleading and deceptive conduct against Zen Haus in that respect.
By Originating Process filed on 23 July 2024, Dalski filed its application to set aside the Demand. That application was supported by an affidavit of Mr Szkudlarek dated 23 July 2024, to the effect that Dalski and Zen Haus had agreed to work together to deliver a tender for the supply and construction of prefabricated homes to the disabled housing market, with Zen Haus as the supplier and Dalski as the builder under any head contract. Mr Szkudlarek there referred to the entry into individual supply agreements for modular housing at several sites and asserted that Zen Haus had made representations as to compliance with applicable building standards. Mr Szkudlarek also contended that he became aware during the design process in early 2024, that modular housing products supplied by Zen Haus did not comply with the Code or applicable residential building work legislation. Mr Szkudlarek referred to correspondence with Zen Haus concerning that question and referred to work done by…

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 In the matter of Dalski Pty Ltd

Details

AGLC: In the matter of Dalski Pty Ltd [2025] NSWSC 99
Case: [2025] NSWSC 99
Decision Date: 25 February 2025

CaseChat Overview and Summary

Dalski Pty Ltd, as the applicant, appeared before the Federal Circuit Court of Australia to challenge a statutory demand issued by another party. The statutory demand was a formal request for payment of a debt, and the applicant sought to set aside this demand on the basis that it was not valid. The case revolved around the procedural aspects of challenging a statutory demand and the associated costs implications.

The primary legal issue before the court was whether the general principle that costs follow the event applied when an application to set aside a statutory demand does not proceed, and there is no determination of the proceedings on the merits. The applicant argued that since the demand was not set aside, the court should not award costs to the respondent. The respondent contended that the general rule should apply, and since the applicant did not successfully set aside the demand, it should bear the costs.

The court considered the principle that generally, costs follow the event, meaning that the party who is unsuccessful in a proceeding should bear the costs. However, the court noted that this principle is not absolute and can be subject to exceptions. In this case, the court found that the application to set aside the statutory demand did not proceed, and there was no determination on the merits. Therefore, the court held that the general rule did not apply, and the applicant was not liable for the respondent's costs. The court emphasised that the circumstances of each case must be carefully examined to determine the appropriate allocation of costs.

The court's decision resulted in a judgment in favour of the applicant, Dalski Pty Ltd, who was not required to pay the respondent's costs due to the specific procedural context of the case. The court's ruling highlighted the need for a nuanced application of the general principle of costs following the event in cases where the proceedings do not reach a determination on the merits.

Orders