FEDERAL COURT OF AUSTRALIA

Land Warrior Acoustic Systems Pty Limited v Pacific Noise and Vibration

Pty Limited (in liq) [2011] FCA 1357

THE COURT ORDERS THAT:

1.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    In this matter an application to set aside a statutory demand by consent was made on 4 November 2011. The respondent indicated at the time that it wished to be heard on the issue of costs. Each party was given the opportunity to put on submissions.

2    Having regard to those submissions and to the state of affairs they have revealed, I am satisfied that the order that I had intended to make in any event is the proper one to be made and that is that there be no order as to costs. The applicant’s contention that costs ought follow the event is not one to which I can accede. While the applicant did put the respondent company on notice that it disputed the validity of the statutory demand at an early date, I am nonetheless satisfied that the respondent’s persistence in relying upon its demand was reasonable. It was in liquidation and the liquidator in making its demand was relying on the company’s own accounts relating to the applicant’s indebtedness to it.

3    At all relevant times the two companies shared common directors and yet it was only late in the piece that the applicant provided information from the common director of the two companies, a Mr Webster, which could properly satisfy the liquidator that the accounts of the respondent company might not accurately reflect the true legal position.

4    In these circumstances I consider each party should bear its own costs.

Associate:

Dated:    2 December 2011