Global Mortgage Equity Corporation Pty Ltd v GBW Nominees Pty Ltd [2010] NSWSC 153 (22 February 2010)

Last Updated: 8 March 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Global Mortgage Equity Corporation Pty Ltd v GBW Nominees Pty Ltd [2010] NSWSC 153


JURISDICTION:
Equity Division
Corporations List

FILE NUMBER(S):
2010/00010965

HEARING DATE(S):
22 February 2010

JUDGMENT DATE:
22 February 2010

EX TEMPORE DATE:
22 February 2010

PARTIES:
Global Mortgage Equity Corporation Pty Ltd (Plaintiff)
GBW Nominees Pty Ltd (Defendant)

JUDGMENT OF:
Palmer J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Y. Shariff (Plaintiff)
C.M. Lawrence (Defendant)

SOLICITORS:
Gokani & Associates (Plaintiff)


CATCHWORDS:
COSTS – Application to set aside Statutory Demand – whether defendant should bear the costs of the proceedings after withdrawing original Statutory Demand.

LEGISLATION CITED:


CATEGORY:
Procedural and other rulings

CASES CITED:


TEXTS CITED:


DECISION:
Each party to bear its respective costs of the proceedings.



JUDGMENT:

2010/00010965 Global Mortgage Equity Corporation Pty Ltd v

GBW Nominees Pty Ltd

JUDGMENT – Ex tempore

24 February, 2010

1 On 23 December 2009, the Defendant served a Statutory Demand on the Plaintiff. The debt claimed was $160,704.50 comprising the amounts shown in two invoices numbered 5 and 6, dated 31 July 2009 and 31 August 2009 respectively. It was said that the invoices related to the provision of professional services by the Defendant to the Plaintiff.

2 An affidavit in support of an Originating Process filed on 12 January 2010 set out the purported grounds for setting aside the Statutory Demand. The proceedings have now been compromised, in the sense that the Defendant has agreed to withdraw the Statutory Demand. What has been debated before me today is as to who should pay the costs of proceedings.

3 The Plaintiff says that the Statutory Demand has been withdrawn because it was obvious that there was a genuine dispute relating to the whole of the amount claimed and that it was inevitable that the Statutory Demand would be set aside. The Defendant says that the Statutory Demand has been withdrawn by agreement because the Plaintiff conceded liability for a substantial amount of the amount claimed in the Statutory Demand.

4 In my opinion, each party should be left to bear its respective costs of these proceedings. My reasons are as follows.

5 The Statutory Demand claimed two debts founded on particular invoices. The affidavit in support of the Originating Process did not confine itself to dealing with a dispute relating to each of those separate invoices. The affidavit entered into a very long and complex history of dealings between the two parties stretching back for some many years. The affidavit endeavoured to show that there had been a history of complaint by the Plaintiff to the Defendant and the Defendant's predecessor about over-charging. It endeavoured to show that there had been a number of agreements reached as to capping of fees to be charged by the Defendant to the Plaintiff, and that some of these agreements had either not been honoured or had not come to fruition. In other words, rather than confining the material relied upon to the two debts claimed in the Statutory Demand, the affidavit traversed the whole history of the relationship endeavouring to show that the parties had been in dispute about whether or not fees were excessive, whether or not there should be capping and how there should be a commercial resolution to the dispute.

6 It is clear from the correspondence – which is voluminous, both before and after the issue of the Statutory Demand – that the negotiations between the parties to resolve their differences were continuing and fluid. The Plaintiff from time to time offered to pay certain amounts to the Defendant, not in discharge of particular invoices, but supposedly as a gesture of goodwill while continuing the negotiations to resolve all of the differences. It was in the context of this sort of continuing negotiation that the Plaintiff offered to pay a sum of $20,000 to the Defendant and a further sum of $135,000 to the Defendant. Neither of those offers related to either debt particularised in the Statutory Demand. They were payments in furtherance of resolution of all differences between the parties.

7 It seems to me that there would have been problems in the Plaintiff's case in pointing to a particular dispute relating to these particular debts if the matter had gone on for trial. But it also seems very clear that the parties regarded the whole of the relationship between them as somewhat complicated and confusing and that is the reason that they continued to strive for a global settlement of all differences. Whether or not they have achieved that or will achieve it remains to be seen, but I think that the withdrawal of the Statutory Demand recognises that there is a continuing state of negotiation between the parties which has not yet crystallised into a clear and definite position as to whether or not the two debts claimed in the Statutory Demand have been paid or have not been paid. One issue would be as to how the Defendant has appropriated any payments which it has received from the Plaintiff, i.e. in satisfaction of what, if any, particular debts.

8 In short, it seems to me that while the Plaintiff was justified in claiming that there was an overall genuine dispute about the existence of these debts, nevertheless both parties regarded the dispute as to these debts to be merely part of an ongoing negotiation.

9 In those circumstances, I do not think that the withdrawal of the Statutory Demand was a clear victory for the Plaintiff. It was a not forgone conclusion that the Statutory Demand would have been set aside if the proceedings had gone ahead. I think that what has happened is simply a facet of a commercial negotiation which continues. If it does not resolve, there will have to be specific litigation to determine any outstanding claims.

10 In those circumstances, the result should be that each party should be left to bear its respective costs of the proceedings. I so order.

– oOo –

LAST UPDATED:
6 March 2010