In the matter of Navair Pty Ltd

By Originating Process filed on 10 September 2025, the Plaintiff, Navair Pty Ltd (“Navair”) applied to set aside a creditor’s statutory demand dated 20 August 2025 (“Demand”) issued by the First and Second Defendants, Mr and Ms Crown, to Navair. On 24 September 2025, the Corporations Registrar listed the application before the Corporations List Judge on 29 September 2025 and reserved costs. On 29 September 2025, the proceedings were adjourned to 13 October 2025 for directions. On 13 October 2025, I noted that the Demand was withdrawn by the Defendants and that the Defendants would consent to an order for costs on the ordinary but not the indemnity basis. At the Plaintiffs’ request, I made orders for evidence and submissions as to their application for indemnity costs on that occasion, on the basis that that application would be determined in Chambers.

On 3 November 2025, the Defendants’ solicitor filed a notice of ceasing to act. On 7 November 2025, the Plaintiff served an affidavit dated 7 November 2025 of Ms Pegus, who is the sole director of Navair, an exhibit to that affidavit and submissions in support of an order for indemnity costs. By that affidavit, Ms Pegus referred to Navair’s engagement to provide services in respect of a charter flight for the Defendants in mid-2024 and referred to a tax invoice for a substantial deposit for the flight which contemplated a substantial cancellation fee. Ms Pegus refers to the circumstances in which that flight was later cancelled and to discussions about an alternative flight, which did not proceed, and the basis on which Navair pressed its claim to the cancellation fee. Ms Pegus also referred to the service of the Demand, for the amount of the deposit less an amount owed by Mr Crown to Navair for a previous charter flight. Ms Pegus also refers to subsequent correspondence in which Navair’s solicitors took issue with the Demand and Mr and Mrs Crown did not respond to that correspondence. Navair relies on Mr Crown’s not having agreed a consent judgment setting aside the Demand and to Navair’s previously having articulated the basis on which it sought to set aside the Demand, in support of an application for indemnity costs.

Mr Stan, a solicitor acting for Navair, refers in submissions to circumstances in which the Court may make an order for indemnity costs and submits that the Demand was not properly issued by Mr and Mrs Crown and that an order for indemnity costs should be made on that basis, although he recognises that there has been no determination of the merits of the application to set aside the Demand.

I recognise that there are cases where indemnity costs have been allowed, typically after the determination of a contested application to set aside a creditor’s statutory demand, where it was evident that the debt was disputed or where a creditor’s statutory demand was pursued after it became apparent that it would be set aside on the evidence: CGI Information Systems and Management Consultants Pty Ltd v APRA Consulting Pty Ltd (2003) 47 ACSR 100; [2003] NSWSC 728; Soudan Lane Pty Ltd v Green Bradshaw t/as Specific Coast Digital [2007] NSWSC 772 at [4]–[5]; Re Scahill v Co Pty Ltd [2016] NSWSC 712. I am not persuaded that I should make an order for indemnity costs here, where the Demand was served, then challenged, then withdrawn reasonably promptly and Mr and Mrs Crown then accepted that they should pay costs of the application on an ordinary basis. It is here not possible to reach a conclusion as to whether Mr and Ms Crown acted unreasonably in respect of the Demand, without determining the merits of the proceedings and the Court will ordinarily not take that course in order to determine an application for costs, still less an application for costs on an indemnity rather than on the ordinary basis: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6.

For these reasons, the Plaintiff’s application for an order for indemnity costs is dismissed, and I will order costs on the ordinary basis, consistent with the position which Mr and Mrs Crown had accepted should be made. Had Mr and Mrs Crown participated in the application, I would have ordered that the Plaintiff pay their costs of the application, but no such order is necessary where they did not participate in it.

I make the following additional order as to the costs of the proceedings: