Superior Food Group Pty Ltd v Sands Contracting Pty Ltd

[2016] WASC 264

SUPERIOR FOOD GROUP PTY LTD -v- SANDS CONTRACTING PTY LTD [2016] WASC 264

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2016] WASC 264
Published:	23/08/2016
Case No:	COR:94/2016	Heard:	ON THE PAPERS
Coram:	MASTER SANDERSON	Delivered:	23/08/16
No of pages:	4	Judgment Part:	1 of 1
Result:	Defendant to pay plaintiff's costs of action including reserved costs
Category:	B
PDF Version

Parties:	SUPERIOR FOOD GROUP PTY LTD SANDS CONTRACTING PTY LTD
Catchwords:	Costs Application for adjournment of application to set aside statutory demand Demand levied on judgment which was snapped
Legislation:	Nil
Case References:	Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : SUPERIOR FOOD GROUP PTY LTD -v- SANDS CONTRACTING PTY LTD [2016] WASC 264 CORAM : MASTER SANDERSON HEARD : ON THE PAPERS DELIVERED : 23 AUGUST 2016 FILE NO/S : COR 94 of 2016 MATTER : Superior Food Group Pty Ltd

Section 459G of the Corporations Act 2001

BETWEEN : SUPERIOR FOOD GROUP PTY LTD

Plaintiff

AND

SANDS CONTRACTING PTY LTD
Defendant

Catchwords:

Costs - Application for adjournment of application to set aside statutory demand - Demand levied on judgment which was snapped

Legislation:

Nil

Result:

Defendant to pay plaintiff's costs of action including reserved costs

Category: B

Representation:

Counsel:

Plaintiff : No appearance
Defendant : No appearance

Solicitors:

Plaintiff : Jonathan Eastoe
Defendant : Metaxas & Hager

Case(s) referred to in judgment(s):

Nil


1 MASTER SANDERSON: By originating process lodged 9 May 2016 the plaintiff sought to set aside a statutory demand issued by the defendant. On 14 June 2016 I adjourned the originating process sine die on the plaintiff's application pending determination of whether an application to set aside a default judgment entered into the District Court and upon which the demand was based would be set aside. On 5 August 2016 the parties lodged a minute of consent orders pursuant to which the statutory demand was set aside with the costs of the application to be determined on the papers. Both parties filed written submissions. These reasons deal with the outstanding costs question.

2 The application to set aside the statutory demand was supported by an affidavit of Jonathan Eastoe the plaintiff's solicitor, sworn 13 June 2016. Attached to that affidavit was a copy of an affidavit of Craig Raymond Phillips sworn 10 June 2016. Mr Phillips' affidavit deals inter alia with the circumstances in which default judgment was entered by the defendant against the plaintiff. The relevant facts can be summarised in the following way.

3 On or about 11 February 2016 Superior Food Group was served with a writ of summons issued out of the District Court of Western Australia at Bunbury. In or about mid-February 2016 a copy of the writ was sent to its solicitor in Victoria. That solicitor contacted Mr Eastoe. On 3 March 2016 the Victorian solicitors sent by facsimile a letter to Max Owens and Co, solicitors for Sands Contracting Pty Ltd, stating that the proceedings would be defended and an appearance would be lodged by a Western Australian agent by the end of the week. This was followed up by a further letter to Max Owens and Co indicating that Mr Eastoe had been engaged and was arranging to file an appearance.

4 On 11 March 2016 Max Owens and Co advised that, despite the letter of 3 March 2016, judgment had been entered on 4 March 2016. The evidence is to the effect that Max Owens and Co did not notify Superior Food Group's Victorian solicitor before entering judgment.

5 There is no doubt that the defendant had the right to enter judgment when it did. The plaintiff had not complied with the time limit stipulated in the rules. But what the defendant's solicitor did was what used to be (and perhaps still is) described as 'snapping' judgment. The defendant's solicitor was well aware there was a dispute between the parties. If he was concerned the plaintiff had some sham defence to the District Court proceedings he could have spoken with Superior Food Group's Victorian solicitor, obtained some indication of the nature of the dispute and if he was not satisfied there was a real defence he could have indicated judgment would be entered within, say, 48 hours. To take such a step would have been to comply with the underlying principles of case flow management. It would also have reflected professional courtesy which, it is to be hoped, is not forgotten. It must have been obvious to the defendant's solicitor that if judgment was entered in default it could be set aside without much difficulty. Instead the defendant's solicitor ploughed on wasting time and money and advancing resolution of the dispute not one jot.

6 Furthermore, any fair reading of Mr Phillips' affidavit would indicate there was a genuine dispute between the parties. In saying that I am fully cognisant the matter was not argued and the defendant has not had the opportunity to put its case. But given the plaintiff has only to establish there is a serious question to be tried it is difficult to see how the evidence of Mr Phillips would not have carried the day. While that in and of itself may not have been enough to persuade the defendant not to press on with defending the application to set aside the demand it should have played a part in the defendant's approach to the matter. In summary, properly advised the defendant should have appreciated there was a strong possibility the District Court judgment would be set aside and an even stronger possibility the statutory demand would be set aside.

7 As has so often been said commercial litigation is not a forensic game. It is a means by which commercial disputes can be resolved. It is incumbent upon solicitors to deal with these disputes in a sensible commercial fashion which leads to timely resolution of the real dispute in a cost effective manner. Gone are the days - if those days ever existed - when a party can be rewarded simply because sharp practice has resulted in a use of the rules which is ultimately in no one's interest.

8 That being the case it is my view the defendant should pay the plaintiff's costs of this action including the reserved costs. In making these orders I have given serious consideration to making an order for indemnity costs. That is the order the plaintiff sought. However, I am not satisfied this is a case where indemnity costs were proper. The plaintiff should have entered an appearance on time and a failure to do so went directly to what followed. While those steps subsequently taken should not in my view have been taken at all they were nonetheless precipitated by a failure on the part of the plaintiff to comply with the time limit in the rules. That being so an indemnity costs order is not warranted.