QTM Enterprises (Qld) Pty Ltd v Palmgrove Holdings Pty Ltd trading as Carruthers Contracting (No 2)

In the Federal Circuit and Family Court of Australia, QTM Enterprises (Qld) Pty Ltd, the applicant, sought determination of the basis upon which the costs of its application to set aside a statutory demand should be assessed against the respondent, Palmgrove Holdings Pty Ltd trading as Carruthers Contracting. The applicant had previously succeeded in its application to set aside the statutory demand issued by the respondent. The central issue before the court was the appropriate basis for assessing costs in light of the applicant's successful application to set aside the statutory demand.

The court considered the appropriate basis for assessing costs in light of the applicant’s successful application to set aside the statutory demand. The court noted that in applications to set aside a statutory demand, the general rule is that costs follow the event, meaning the unsuccessful party bears the costs of the successful party. However, the court also recognised that in cases where there has been an abuse of process or improper conduct, costs may be assessed on an indemnity basis. The court found that the applicant had acted reasonably and in good faith throughout the proceedings and there was no evidence of abuse of process or improper conduct by the applicant. Accordingly, the court determined that the standard basis for costs assessment was appropriate.

Accordingly, the court ordered that the respondent pay the applicant’s costs of the application. The costs were to be assessed on the standard basis up to and including 26 April 2023 and on the indemnity basis from and including 27 April 2023. This decision underscores the importance of acting in good faith and without abuse of process in litigation, as it influences the basis on which costs are assessed.