Rhodium Australia Pty Ltd v STATEWAY Pty Ltd
[2012] WASC 205
•20 JUNE 2012
RHODIUM AUSTRALIA PTY LTD -v- STATEWAY PTY LTD [2012] WASC 205
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 205 | |
| Case No: | COR:21/2012 | 5 JUNE 2012 | |
| Coram: | MASTER SANDERSON | 20/06/12 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | No order as to costs | ||
| B | |||
| PDF Version |
| Parties: | RHODIUM AUSTRALIA PTY LTD STATEWAY PTY LTD |
Catchwords: | Practice and procedure Appropriate order for costs where application to set aside statutory demand conceded after default judgment on which it was based set aside |
Legislation: | Nil |
Case References: | Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772 TQM Design and Construct Pty Ltd v MI Kitchen Design Pty Ltd [2011] NSWSC 800 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
STATEWAY PTY LTD
Defendant
Catchwords:
Practice and procedure - Appropriate order for costs where application to set aside statutory demand conceded after default judgment on which it was based set aside
Legislation:
Nil
Result:
No order as to costs
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr D K J Skender
Defendant : Mr D W Thompson
Solicitors:
Plaintiff : DLA Piper Australia
Defendant : David Thompson
Case(s) referred to in judgment(s):
Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772
TQM Design and Construct Pty Ltd v MI Kitchen Design Pty Ltd [2011] NSWSC 800
(Page 3)
1 MASTER SANDERSON: On 23 January 2012, the defendant served a creditor's statutory demand on the plaintiff. The demand was based upon a judgment obtained by the defendant in the Magistrates Court of Western Australia on 20 October 2011. The amount of the demand was $22,470.14. By originating process filed 13 February 2012, the plaintiff applied to set aside the demand.
2 Around the same time the application was made in this court, the plaintiff applied in the Magistrates Court to set aside what was a default judgment. The matter was first returned in chambers on 6 March 2012. I made orders programming the matter through to a special appointment. By that stage, the parties had been advised the application to set aside the default judgment in the Magistrates Court would be heard on 21 May 2012. The programming orders anticipated a special appointment date after the decision in the Magistrates Court. The timetable for provision of affidavits and submissions was subsequently revised, but still anticipated a date for hearing of the application after 21 May 2012.
3 In the event, the learned magistrate did set aside the default judgment. It was common ground between the parties the judgment had been regularly entered. It was set aside, one might reasonably assume, because the magistrate was satisfied the present plaintiff had a defence on the merits. Consistent with the general practice when a regular default judgment is set aside, the plaintiff in these proceedings (the defendant in the Magistrates Court proceedings) was ordered to pay the costs of the application and the costs thrown away as a consequence of the entry of judgment.
4 Once the Magistrates Court judgment was set aside, the defendant in this action advised it would concede the plaintiff's application. It took this step immediately, thus avoiding any further costs being incurred after 21 May 2012. The parties could not agree on the appropriate costs order. It was that question which was argued at the special appointment.
5 Both parties agreed the starting-point in a case such as this was the High Court decision in Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622. McHugh J, dealing with the question of costs when there has been no trial of an action, said (at 624 - 625):
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the
(Page 4)
- exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. ...
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried ... But such cases are likely to be rare. (citations omitted)
6 These principles apply to an application to set aside a statutory demand: see Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772 [4].
7 It is clear a party who continues to resist the setting aside of a statutory demand after a judgment upon which it is based is set aside or stayed risks an order for indemnity costs. That was the position in TQM Design and Construct Pty Ltd v MI Kitchen Design Pty Ltd [2011] NSWSC 800. It is not difficult to see why this should be the case. By way of example, here, the magistrate has decided there is a genuine dispute such as would warrant a regularly entered judgment being set aside. It must follow a statutory demand would be set aside on the basis there was a genuine dispute as to the debt. To hold otherwise would produce inconsistency between the courts which would bring the administration of justice into disrepute.
8 In this case, the defendant acted entirely properly. As soon as it became aware the judgment upon which the statutory demand was founded was set aside, it conceded the application. Up to that point, it was entirely reasonable for the defendant to resist this application. After all, it had a judgment. It had not conceded the judgment ought be set aside. That issue was argued and when the defendant lost, it moved quickly to deal with this application. I see no reason why, in the circumstances, it should be penalised as to costs.
9 In my view, the proper order in this case is there be no order as to costs. The plaintiff had, at the date the statutory demand was served, standing against it a regularly default judgment. On the face of it, the defendant's demand was unanswerable. It would be inappropriate to order
(Page 5)
- costs against the defendant for any of the steps taken by the plaintiff up to the date the judgment was set aside. As the defendant conceded the application after that date, it would also be inappropriate to order costs against the defendant for any steps taken after the application was conceded. It must also be accepted that the plaintiff did succeed in its application. It would therefore not be appropriate, in my view, to order costs in the defendant's favour against the plaintiff. To do so, would fail to recognise the plaintiff succeeded in its application.
10 Accordingly, there will be no order as to costs. This will also cover the costs which were reserved at the chambers hearing.
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