Mackay Computer Services Pty Ltd v Wi-Man Pty Ltd - [2008] QSC 221

SUPREME COURT OF QUEENSLAND

CITATION:

Mackay Computer Services Pty Ltd v Wi-Man Pty Ltd [2008] QSC 221

PARTIES:

MACKAY COMPUTER SERVICES PTY LTD
ACN 065 626 824
(Applicant)
v
WI-MAN PTY LTD
ACN 110 684 869
(Respondent)

FILE NO:

S 93 of 2008

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court in Mackay

DELIVERED ON:

19 September 2008

DELIVERED AT:

Rockhampton

HEARING DATE:

8 and 10 September 2008

JUDGE:

McMeekin J

ORDER:

1. That the respondent pay the applicant’s costs of the application on the standard basis, limited to the first day of the hearing.

CATCHWORDS:

PROCEDURE – COSTS – JURISDICTION – GENERAL – COMPROMISE OF PROCEEDINGS – where the respondent withdrew a statutory demand the day after the applicant applied to have it set aside – where the applicant claims costs for preparing the application and hearing – where the applicant claims the respondent had no basis for the statutory demand – where the respondent claims incorrect forms and affidavits were used

Corporations Act 2001 (Cth), s459G, s459N, s467A,

Acts Interpretation Act 1954 (Qld), s49

UCPR, r 681, r 995, Sch 1A

Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622, followed.

QUYD Pty Ltd v Marvass Pty Ltd [2008] QCA 257, followed

Walton v Gardiner (1993) 177 CLR 378, followed.

COUNSEL:

S Naylor (sol) for the Applicant

P Land (sol) for the Respondent

SOLICITORS:

Macrossan & Amiet Solicitors for the Applicant

SR Wallace & Wallace for the Respondent

McMEEKIN J: The dispute concerns whether and what order for costs should be made in these proceedings.

The application before the Court is to set aside a creditors statutory demand served on the applicant by the respondent pursuant to the Corporations Act 2001 (Cwlth) (“the Act”). The demand alleged a debt owing of $47,014.79. A director of the respondent swore an affidavit that he believed that there was “no genuine dispute about the existence of the debt”.[1]
[1]Affidavit Delahunty ex JAD 1 p5

On the day following the filing of the application the respondent withdrew the demand.[2] The applicant contends that an order should be made that its costs incurred in preparing the application and supporting material, and the subsequent two hour hearing over two days concerning the costs issue, be paid by the respondent and that the order be on the indemnity basis.
[2]In fact it was withdrawn at 8 pm on the night of filing and serving and so is deemed to be the next day – see Affidavit of Naylor filed by leave 8 September 2008 paras 2, 3 and 5

The applicant relies on s 459N of the Act which provides:

“Where, on an Application under Section 459G, the Court sets aside the demand, it may order the person who served the demand to pay the company’s costs in relation to the Application.”

Alternatively the applicant relies on r 681(1) UCPR which provides:

“Costs of…

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.

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Details

Case: [2008] QSC 221
Decision Date: 19 September 2008

CaseChat Overview and Summary

Mackay Computer Services Pty Ltd initiated proceedings against Wi-Man Pty Ltd in the Federal Circuit Court, contesting the validity of a statutory demand issued by the respondent. The crux of the dispute was whether the applicant was entitled to costs incurred in preparing and presenting the application to set aside the statutory demand, which the respondent withdrew on the day after the application was lodged. Mackay Computer Services sought costs on the standard basis, asserting that the statutory demand was without merit. Wi-Man Pty Ltd, on the other hand, contended that the applicant had used incorrect forms and affidavits in the application.

The court had to determine the applicable legal principles governing the award of costs in such circumstances and whether the applicant's claim was justified. The court considered the circumstances under which a statutory demand could be set aside and the principles guiding the award of costs when a party withdraws a demand. It also examined the procedural errors alleged by Wi-Man Pty Ltd to assess whether these errors warranted a reduction in costs or whether they were insignificant and did not justify the refusal of costs to the applicant.

In delivering the decision, the court found that while Wi-Man Pty Ltd had valid reasons to issue the statutory demand, the applicant's application to set it aside was meritorious. The court held that Mackay Computer Services was entitled to costs for preparing the application and the first day of the hearing. The court determined that the procedural errors identified by Wi-Man Pty Ltd did not significantly impact the proceedings or the merits of the application. Consequently, the court ordered Wi-Man Pty Ltd to pay the applicant’s costs of the application on the standard basis, limited to the first day of the hearing.

Orders

Orders of the court

1. That the respondent pay the applicant’s costs of the application on the standard basis, limited to the first day of the hearing.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Mackay Computer Services Pty Ltd v Wi-Man Pty Ltd [2008] QSC 221
PARTIES:	MACKAY COMPUTER SERVICES PTY LTD ACN 065 626 824 (Applicant) v WI-MAN PTY LTD ACN 110 684 869 (Respondent)
FILE NO:	S 93 of 2008
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court in Mackay
DELIVERED ON:	19 September 2008
DELIVERED AT:	Rockhampton
HEARING DATE:	8 and 10 September 2008
JUDGE:	McMeekin J
ORDER:	1. That the respondent pay the applicant’s costs of the application on the standard basis, limited to the first day of the hearing.
CATCHWORDS:	PROCEDURE – COSTS – JURISDICTION – GENERAL – COMPROMISE OF PROCEEDINGS – where the respondent withdrew a statutory demand the day after the applicant applied to have it set aside – where the applicant claims costs for preparing the application and hearing – where the applicant claims the respondent had no basis for the statutory demand – where the respondent claims incorrect forms and affidavits were used Corporations Act 2001 (Cth), s459G, s459N, s467A, Acts Interpretation Act 1954 (Qld), s49 UCPR, r 681, r 995, Sch 1A Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622, followed. QUYD Pty Ltd v Marvass Pty Ltd [2008] QCA 257, followed Walton v Gardiner (1993) 177 CLR 378, followed.
COUNSEL:	S Naylor (sol) for the Applicant P Land (sol) for the Respondent
SOLICITORS:	Macrossan & Amiet Solicitors for the Applicant SR Wallace & Wallace for the Respondent