In the matter of B&B Legal Pty Ltd trading as Borthwick and Butler Solicitors

1. [1]

   I delivered reasons and made orders in these proceedings on 6 June 2025: see In the matter of B & B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 587. The statutory demand dated 11 December 2024 served by the defendant on the plaintiff was set aside. The parties were given an opportunity to make written submissions (limited to two pages) regarding costs. I indicated in my reasons that unless there was good reason to do otherwise, a decision concerning costs would be made on the papers. Neither party sought an oral hearing.

2. [2]

   The plaintiff filed submissions, comprising two pages. It seeks an order that the defendant pay its costs, as agreed or assessed, and that those costs be payable on the indemnity basis for the entirety of the proceedings. In the alternative, the plaintiff seeks an order that the defendant pay its costs on the ordinary basis up to and including 25 April 2025 and on an indemnity basis thereafter.

3. [3]

   The defendant filed submissions comprising five pages. Those submissions begin as follows: “The defendant requests leave to exceed the page limit for these submissions, with a view to eliminating or reducing the scope of an Appeal on costs”. It was not appropriate for the defendant to proceed as if it had leave. Any application should have been made before the submissions were filed. Nevertheless, I have read the submissions. They raise an array of matters, including submissions that there should be no order as to costs, that costs should be limited in particular ways, that the claimed costs are excessive and that enforcement of any costs order should be stayed.

4. [4]

   For reasons that follow, I will order that the defendant is to pay the plaintiff’s costs on the ordinary basis.

Plaintiff’s application for indemnity costs

1. [5]

   The plaintiff commenced these proceedings by an originating process filed on 24 December 2024. That document outlined the bases upon which the statutory demand was disputed: it asserted that there was a genuine dispute as to the existence of the debt and that there is “some other reason” it should be set aside, including that the defendant did not depose that he believed there was no genuine dispute in relation to the purported debt. These were grounds that were upheld. The plaintiff contends that this application put the defendant squarely on notice as to the reasons why the statutory demand was liable to be set aside.

2. [6]

   The plaintiff also relies on two letters sent to the defendant on a without prejudice basis. The first was a letter dated 17 February 2025 which again identified the bases on which the purported debt was disputed. The letter also addressed the defendant’s assertions regarding ineffective service of the plaintiff’s originating process. The plaintiff made an offer in this letter, inviting the defendant to: withdraw its statutory demand, provide a written undertaking and to pay the plaintiff’s costs in an agreed amount. The letter was not expressed to be made pursuant to the Calderbank principles. It cannot be said that the offer did include much, if any, compromise.

3. [7]

   The plaintiff also relied on a letter dated 11 April 2025, which was stated to be made pursuant to the Calderbank principles. The offer was as follows:

4. [8]

   The plaintiff relies on the principles applicable to an award of indemnity costs for s 459G applications as outlined by Black J in In the matter of Modern Wholesale Jewellery Pty Ltd; In the matter of Global Austral Pty Ltd; In the matter of Modern Wholesale Jewellery Pty Ltd [2017] NSWSC 236 at [48]:

5. [9]

   While there was force in the application for indemnity costs, I do not propose to make an order for indemnity costs in this case. My reasons are as follows. First, if the defendant had succeeded in establishing that the originating process had not been served in time, it would have succeeded, regardless of whether there was a genuine dispute about the debt or there was some other reason to set aside the demand. Much of the case concerned the question of service, which was an issue anterior to the issue about whether there was a genuine dispute. The principles discussed by Black J in Modern Wholesale Jewellery do not apply with the same force in that context. Second, while the arguments advanced by the defendant on the question of service failed, I did not consider them to be so hopeless that he should be visited with an order for indemnity costs. Third, while the plaintiff has been successful in its application to set aside the statutory demand, it advanced some arguments that I did not accept (as can be seen from my earlier reasons). Fourth, the Calderbank offer involved only a modest amount of compromise.

Defendant’s applications

1. [10]

   As I have noted, the defendant made a variety of submissions. I can deal with them briefly.

2. [11]

   First, the defendant made submissions that concerned the amount of costs claimed. He submitted that the costs advanced by the plaintiff were “grossly excessive”. That is not a matter for me to consider because I am not being asked to quantify the costs. That is a matter for the costs assessor, if costs are not otherwise agreed. The defendant made various other arguments that concern the manner in which costs should be assessed and do not concern the character of the costs order I am being asked to make.

3. [12]

   Second, the defendant submitted that any order for costs will end up being punitive or futile because he is surviving on a pension due to his serious medical conditions. I reject this submission. The defendant’s inability to pay any costs he is ordered to pay is not a reason to decline to make a costs order. Nor is there any proper basis to decline to make an order on the basis that it will be punitive. An adverse costs order is an ordinary incident of failure and is to be expected by any litigant.

4. [13]

   Third, the defendant submitted that costs should be limited to issues decided in favour of the plaintiff. The fact that the plaintiff advanced arguments that were unsuccessful was a factor I took into account in deciding that an order for indemnity costs should not be made. However, I do not consider that this is a case where the Court should otherwise differentiate between the issues on which the plaintiff succeeded and those on which it failed. The issues on which the plaintiff failed were inextricably bound up with those on which it succeeded. They were not discrete: see Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].

5. [14]

   Fourth, the defendant requests a stay of enforcement of any costs order until final disposition of an intended appeal “as otherwise he will suffer serious, irreversible prejudice, loss and harm”. The request is not supported by any evidence and is not an appropriate application to be entertained by me in this context.

6. [15]

   Fifth, the defendant made submissions opposing any order for indemnity costs. I have addressed the question of indemnity costs above.

7. [16]

   None of the matters advanced by the defendant lead me to depart from the usual position that costs follow the event (see UCPR r 42.1). Other than to specify the basis upon which costs are to be assessed, no other orders should be made.

Order

1. [17]

   The defendant is to pay the plaintiff’s costs of the proceedings on the ordinary basis.