In the matter of Nahas Construction Pty Limited [2012] NSWSC 797

Procedural Posture

Originating Process Seeking Declarations and Injunctions Under the Corporations Act 2001 (cth) Concerning a Statutory Demand and Possible Winding Up Proceedings / Ex Tempore Decision on Dismissal of the Originating Process by Consent and Disputed Costs

Legal Issues

1. 1 ['Whether Nahas Construction should receive its costs, including indemnity costs, despite consenting to dismissal of the Originating Process.' 'Whether Nu-Glass and Mr Smith should receive their costs on the basis that costs follow the event.' 'Whether, where proceedings were dismissed without a hearing on the merits and had become moot, any order as to costs should be made.']

Ratio Decidendi

Because the Originating Process was dismissed without an adjudication on the merits after the statutory presumption of insolvency had expired, the dismissal was not a substantive success for Nu-Glass and Mr Smith. Nahas Construction had a strongly arguable case that winding it up on debts owed by another entity would be an abuse of process, but it was not inevitable that Nahas Construction would have succeeded, including because its solvency evidence was dated and discretionary considerations arose from the name changes and contractual confusion. Nu-Glass and Mr Smith had not acted unreasonably, but that justified refusing costs against them rather than awarding costs in their favour. The...

Court Disposition

Originating Process dismissed. No order as to costs.

Orders

• ['The Originating Process be dismissed.' 'There be no orders as to costs.']