In the matter of Zarzar Pty Ltd [2017] NSWSC 93

In the matter of Zarzar Pty Ltd [2017] NSWSC 93

Because the statutory demand was set aside by consent without a hearing on the merits, the court would not determine the disputed merits or fraud allegations. Evton was not shown to have acted unreasonably in maintaining the demand up to 16 August 2016, but it became unreasonable to maintain the demand after Evton pleaded the same debts as a set-off in the Local Court proceedings, thereby making the debts part of that litigation. Evton should then have withdrawn or consented to setting aside the demand. Its conduct did not amount to relevant delinquency warranting indemnity costs, so each party should bear its own costs up to 16 August 2016 and Evton should pay Zarzar's costs thereafter...

Jurisdiction
Australia
Judgment Date
17 February 2017
Procedural Posture
Application Under S 459 G of the Corporations Act 2001 (cth) to Set Aside a Statutory Demand / Costs Determination After Consent Order Setting Aside Statutory Demand and No Hearing on the Merits
Outcome
Costs ordered partly in favour of the plaintiff on the ordinary basis after 16 August 2016; no order as to costs before that date; indemnity costs refused.
Legal Topics
['statutory Demand' 'costs Where No Hearing on the Merits' 'ordinary Costs' 'indemnity Costs' 'parallel Debt Recovery Proceedings']
['civil Procedure' 'corporations Law' 'costs'] ['statutory Demand' 'costs Where No Hearing on the Merits' 'ordinary Costs' 'indemnity Costs' 'parallel Debt Recovery Proceedings']

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Procedural Posture

Application Under S 459 G of the Corporations Act 2001 (cth) to Set Aside a Statutory Demand / Costs Determination After Consent Order Setting Aside Statutory Demand and No Hearing on the Merits

Legal Issues

  1. 1 ['What costs order should be made where a statutory demand was set aside by consent without a hearing on the merits.' 'Whether Evton acted so unreasonably in maintaining the statutory demand that Zarzar should recover its costs.' "Whether Evton's conduct justified indemnity costs."]

Ratio Decidendi

Because the statutory demand was set aside by consent without a hearing on the merits, the court would not determine the disputed merits or fraud allegations. Evton was not shown to have acted unreasonably in maintaining the demand up to 16 August 2016, but it became unreasonable to maintain the demand after Evton pleaded the same debts as a set-off in the Local Court proceedings, thereby making the debts part of that litigation. Evton should then have withdrawn or consented to setting aside the demand. Its conduct did not amount to relevant delinquency warranting indemnity costs, so each party should bear its own costs up to 16 August 2016 and Evton should pay Zarzar's costs thereafter...

Court Disposition

Costs ordered partly in favour of the plaintiff on the ordinary basis after 16 August 2016; no order as to costs before that date; indemnity costs refused.

Orders

  • ['Make no order as to costs in respect of the period up to 16 August 2016 to the intent that each party bear its own costs up to that date.' "Order that the defendant pay the plaintiff's costs after 16 August 2016 such costs to be assessed on the ordinary basis."]