In the matter of Streetscape Projects (Australia) Pty Limited

[2012] NSWSC 653

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Streetscape Projects (Australia) Pty Limited [2012] NSWSC 653
Hearing dates:	1 June 2012
Decision date:	15 June 2012
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	Originating Process dismissed. Plaintiff to pay the costs of and incidental to the proceedings.
Catchwords:	COSTS - Indemnity costs - Application for indemnity costs - Whether application was hopeless.
Legislation Cited:	- Corporations Act 2001 (Cth) ss 459H, 459J
Cases Cited:	- ACN 001 891 103 Pty Ltd v Reiby Street Apartments Pty Ltd [2007] NSWSC 1345 - Cranney Farm Pty Ltd v Corowa Fertilizers Pty Ltd [2011] NSWSC 9
Category:	Principal judgment
Parties:	Streetscape Projects (Australia) Pty Limited (Plaintiff) The Council of the City of Sydney (Defendant)
Representation:	Counsel: M.R. Aldridge SC (Plaintiff) D. Robinson SC/D.L. Cook (Defendant) Solicitors: Colin Biggers & Paisley (Plaintiff) Holding Redlich (Defendant)
File Number(s):	12/64716

Judgment - EX TEMPORE

1. This matter was argued before me on 1 June 2012 and concerned an application brought by the Plaintiff, Streetscape Projects (Australia) Pty Limited ("Streetscape"), to set aside a creditor's statutory demand dated 7 February 2012 ("Demand") served by the Defendant, the Council of the City of Sydney ("Council"). The Demand was for payment of an amount of $12,123,470.90 and relied on the judgment of this court delivered in City of Sydney v Streetscape Projects (Australia) Pty Limited on 11 October 2011 and orders giving effect to that judgment made on 1 February 2012.

1. When the matter was listed before me today for judgment, Mr Aldridge, who appears for Streetscape, properly drew to my attention to the fact that an Amended Notice of Appeal had been filed by Streetscape in the appeal proceedings, since the matter was argued before me; and that, even if that amended appeal were successful, a significant money judgment would remain against Streetscape. Mr Aldridge properly accepted that, as a result of this development, the application to set aside the Demand could not now succeed and would not be pressed. In that situation, there is no utility in my delivering judgment as to the matters which had been argued before me.

1. The question of costs remains. Mr Aldridge accepted that, in the ordinary course, costs would follow the event and Streetscape should be ordered to pay costs of the proceeding before me. Mr Cook, who appears for the Council, pressed for an order for indemnity costs, which he pointed out had been sought when the matter was argued before me.

1. In my view the proper approach to costs is to have regard to the position when the matter was argued before me. At that time, Mr Aldridge had properly conceded that there was authority that a genuine dispute could not be established, by the commencement of an appeal, for the purposes of s 459H of the Corporations Act 2001 (Cth), although he had made a formal submission to the contrary. The parties and the Court had therefore not wasted any time in respect of that issue. Mr Aldridge had directed his submissions to the question whether an appeal on genuinely arguable grounds could have established some other reason to set aside the Demand for the purposes of s 459J of the Corporations Act, but had also properly acknowledged that the bulk of the authorities suggested that security would need to be provided for the judgment in order to establish a basis to set aside the Demand on that basis.

1. But for the subsequent narrowing of the appeal, I would have had to address the question as to whether I should have made an order to set aside the Demand conditional on, for example, an order that monies be paid into court to secure the amount of the judgment: see, for example, Cranney Farm Pty Ltd v Corowa Fertilizers Pty Ltd [2011] NSWSC 9. I would have had to address the question whether it was open to me to make such an order in circumstances that a stay application had been brought in the Court of Appeal and had been unsuccessful, where that is a factor which would tend against the exercise of jurisdiction under s 459J of the Corporations Act in Streetscape's favour: ACN 001 891 103 Pty Ltd v Reiby Street Apartments Pty Ltd [2007] NSWSC 1345 at [17].

1. I do not think that the application brought by Streetscape before me was hopeless. It was unlikely, perhaps, that I would have found that a genuine dispute was established without ordering payment of monies into court. There would be a difficult question whether I could have ordered the payment of monies into court, without, in substance, granting the stay which the Court of Appeal had declined. That question no longer falls for determination. It is at least possible, had that question had to be decided, that an order setting aside the Demand might have been made on that basis, and I therefore do not consider that it can be said that Streetscape's application before me was hopeless.

1. For this reason, I do not think that a basis for indemnity costs is established. Streetscape should be ordered to pay, and it has conceded it should be ordered to pay, costs of the Council on an ordinary basis. Accordingly, the proper order is that:

1. The Originating Process be dismissed.

2. The Plaintiff, Streetscape Projects (Australia) Pty Limited pay the costs of and incidental to the proceedings.

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