Auset Pty Ltd v Vassallo a.t.f. The Kurrajong Trust [2010] NSWSC 291

New South Wales Supreme Court

CITATION : Auset Pty Ltd v Vassallo a.t.f. The Kurrajong Trust [2010] NSWSC 291

HEARING DATE(S) : 15 March 2010

JUDGMENT DATE : 15 March 2010

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 15 March 2010

DECISION : No order as to costs.

CATCHWORDS : CORPORATIONS – STATUTORY DEMAND – COSTS – Statutory Demand withdrawn after Originating Process filed – who should bear costs – both parties acted reasonably in attempting to resolve dispute.

CATEGORY : Principal judgment

PARTIES : Auset Pty Ltd (Plaintiff) Tammy Vassallo a.t.f. The Kurrajong Trust (Defendant)

FILE NUMBER(S) : SC 2009/291484

COUNSEL : J.V. Gooley (Plaintiff) G. George (Defendant)

SOLICITORS : Guardian Lawyers (Plaintiff) Reimer Winter Williamson (Defendant)

2009/291484 Auset Pty Ltd v Vassallo a.t.f. The Kurrajong Trust

JUDGMENT – Ex tempore

15 March, 2010

1 This is a dispute relating to the costs of proceedings which have been compromised. The Plaintiff filed an Originating Process on 24 November 2009 seeking an order setting aside a Statutory Demand served by the Defendant. On the return of the Originating Process, the Defendant said that it would withdraw the Statutory Demand. The proceedings are therefore at an end save as to the appropriate costs order. 2 The Plaintiff says that, as the Defendant agreed to withdraw the Statutory Demand in the face of what was obviously a genuine dispute as to the existence of the debt claimed, the proper order is that the Defendant should pay the Plaintiff's costs of the proceedings. 3 The Defendant, on the other hand, says that the Statutory Demand was served as part of an on-going commercial dispute between the parties as to the existence and the terms of a complicated loan between them and that the Statutory Demand was served as part of the means whereby the parties were trying to resolve that dispute. The Defendant says that this is a case in which the proceedings have been disposed of without a final determination on the merits and in the circumstances, the appropriate order is that each party be left to bear its and her own costs. 4 In my opinion the Defendant's submission ought to be accepted. It is clear that there was an agreement between the parties in April 2008 for the loan of a considerable sum from the Defendant, who is the trustee of a trust, to the Plaintiff. However, whether that agreement finally resulted in a binding agreement or contract and as to what the precise terms of that contract may be is very much a matter of ongoing dispute between the parties and has been for some time. 5 The Defendant served a Statutory Demand in September 2009 claiming a payment due under the alleged loan agreement. A payment was made by the Plaintiff in answer to that Demand, without admissions, and the parties agreed to endeavour to negotiate a settlement of their dispute. That attempt was unsuccessful and a second Statutory Demand was served by the Defendant on 30 October 2009. The Demand claimed a debt owing of a similar amount to that which had been claimed in the first Statutory Demand. 6 The Plaintiff then filed an Originating Process seeking to set aside the Statutory Demand. Correspondence between the parties ensued. It was acknowledged, I think by both sides, that the dispute between them was an ongoing one and that it would probably be resolved one way or another by means of proceedings commenced in the District Court whereby the present Defendant sought to obtain judgment against the guarantors of the alleged loan. 7 In short, it is clear that the parties have been in dispute for a considerable time as to the terms of the alleged loan. It is clear that they have endeavoured to resolve their dispute without success. It is clear also that the two Statutory Demands served were served in an endeavour to bring some focus to the dispute. 8 I cannot say that either side to the dispute has conducted itself in these circumstances unreasonably. It seems to me that the justice of the costs order really depends upon the ultimate result in proceedings brought to enforce the alleged loan agreement. 9 This is a case in which I do not think it appropriate to make a costs order awarding victory, as it were, to one side or the other. Each party should bear its own costs of the proceedings. – oOo –