Case Note

Gippreal Ltd. v Kurek Investments [2009] VSC 344 (18 August 2009)

Solicitors who act for the creditors in the issuing of a statutory demand should pay particular attention to this decision of  Pagone J in which he affirmed the decision of Efthim AsJ that the solicitors who acted for the judgement creditor in the issue of a statutory demand pay the plaintiff’s (i.e. the alleged debtor’s) costs of the proceedings ,on an indemnity basis.

The court has the power to so order under Rule 63.23(1)(c) of the Supreme Court (General Civil Procedure) Rules 2005, and also under the court’s inherent jurisdiction.

This power is normally exercised with caution.  The successful plaintiff in this matter was not disputing that an order had been made against it by an Associate Justice  to pay an amount of $35,000 by way of interim taxed costs to the judgement creditor, but the Court held that no statutory demand should have been made in respect of this amount as it was known that the plaintiff had commenced proceedings against the judgment creditor seeking, amongst other things, damages said to be in excess of $80,000. 

His Honour held that the issuing of the notice was “improper and without reasonable cause in the circumstances of an offsetting dispute known to [them] at all relevant times”.  His Honour noted there was nothing in the evidence that indicated the  judgment creditor had “insisted” that the demand be issued.  His Honour went on to say that even if such evidence did exist, it would not, of itself, necessarily prevent a costs order being made against the solicitor personally.

G.S.BAKER

BARRISTER