Ford Motor Company of Australia Limited v Arrowcrest Group Pty Ltd

REASONS FOR JUDGMENT 1 The respondent ("Arrowcrest") served on the applicant ("Ford") a demand pursuant to s 459E(1) of the Corporations Act 2001 (Cth) ("the Act") claiming that Ford owed Arrowcrest $905,278.68 being the total amount of 26 debts described in the demand by reference to specified invoice numbers and dates. The demand was served on Ford on 10 February 2003. On 3 March 2003 Ford filed an application with the Court pursuant to s 459G and s 459J(1)(b)of the Act seeking to have the demand set aside or the time within which it was to be complied with extended. 2 Shortly prior to the time when the application came on for hearing, the parties resolved by agreement two of the three categories of debt claimed in the demand. Arrowcrest conceded that there was a genuine dispute in relation to the remaining category, the amount claimed for stock obsolescence, and accepted that in those circumstances the demand should be set aside. 3 The only outstanding issue relates to the costs of the application. Ford submitted that as the demand is to be set aside, the costs order should follow the event. Arrowcrest submitted that although it conceded that there was a genuine dispute in relation to the amount for the stock obsolescence items, that would not have been sufficient to have had the demand set aside without Arrowcrest's agreement on the other matters, because the invoices relating to stock obsolescence comprised only $179,413.00 of the total claimed in the demand of around $905,000.00. 4 If there had not been agreement between Ford and Arrowcrest in relation to the amounts claimed for the items specified in the demand other than for stock obsolescence, it does not follow that the demand would have been set aside because of the genuine dispute in relation to the stock obsolescence items. It would have been open to the Court, in substance, to vary the demand in accordance with s 459H of the Act. As the parties reached agreement in relation to the items other than the stock obsolescence items I do not have the benefit of argument in relation to whether there was a genuine dispute in relation to those items. 5 In all these circumstances, I consider that the appropriate order to make is that Ford and Arrowcrest bear their own costs of and incidental to the application and that there be no order as to costs. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg J.