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[2026] NSWSC 933
Supreme Court of NSW
2026-08-07
Brereton J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Venroy Pty Limited (Costs) [2026] NSWSC 933
Hearing dates: On the papers
Date of orders: 7 August 2026
Decision date: 07 August 2026
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision: The defendant is to pay the plaintiff’s costs on a lump sum basis in the amount of $25,000
Catchwords: COSTS – where plaintiff was successful in application to set aside statutory demand – where plaintiff sought lump sum costs order – where plaintiff contended costs were disproportionate and inappropriate in context – where costs assessment was likely to be contested and further increase costs – where defendant contended he acted reasonably and grounds raised were arguable – where it is appropriate for costs to follow the event – defendant to pay plaintiff’s costs on a lump sum basis
Legislation Cited: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Electronic Transactions Act 2000 (NSW)
Supreme Court (Corporations) Rules 1999 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43
Devonworth Enterprises P/L v Sydney Olympic Sporting Club Ltd; Windereen Holdings Pty Ltd v Sydney Olympic Sporting Club Ltd [2001] NSWSC 834
Fitness First Australia Pty Ltd v Dubow (2011) 251 FLR 241; [2011] NSWSC 531
Hamod v New South Wales [2011] NSWCA 375
In the matter of B & B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 587; 176 ACSR 17
In the matter of B&B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 656
In the matter of LIG Australia Pty Ltd; In the matter of Success Aluminium Pty Ltd [2015] NSWSC 892
In the matter of Venroy Pty Limited (Recusal Application) [2026] NSWSC 932
Kisimul Holdings Pty Ltd v Clear Position Pty Ltd [2014] NSWCA 262
LawCover Pty Ltd v Swart [2007] NSWSC 306
Manariti Plumbing Pty Ltd v University Property Group Pty Ltd (No 2) [2025] NSWCA 185
Saferack Pty Ltd v Marketing Heads Australia Pty Ltd [2007] NSWSC 1317
Smits v B & B Legal Pty Ltd t/as Borthwick & Butler [2026] NSWCA 57
Texts Cited: N.A.
Category: Consequential orders
Parties: Venroy Pty Limited (plaintiff)
Geoffrey James Finch (defendant)
Representation: Counsel:
D Edney (plaintiff)
G J Finch (self-represented litigant) (defendant)
Solicitors:
Deutsch Miller (plaintiff)
File Number(s): 2026/134896
Publication restriction: N.A.
On 14 May 2026, I made an order that a statutory demand served by Mr Geoffrey Finch on Venroy Pty Limited be set aside. The statutory demand concerned an alleged debt of $10,000 arising from what was said to be the settlement of proceedings in the Small Claims Division of the Local Court of New South Wales.
Venroy seeks an order that Mr Finch be ordered to pay the costs of the proceedings on a gross sum basis in the amount of $30,000 (or such other amount as the Court sees fit), or if not on a gross sum basis then on an indemnity basis.
Venroy had foreshadowed an application for a gross sum costs order. On 12 May 2026, it filed and served an affidavit of Mr Chris Stevens (the solicitor on the record for Venroy) in support of an application for a gross sum costs order. It also filed and served written submissions.
At the conclusion of the hearing on 14 May 2026, I made directions giving Mr Finch an opportunity to file and serve evidence and submissions in response to the application for a gross sum costs order.
Mr Finch subsequently made a written submission by which he sought that I should recuse myself from dealing with the question of costs because of apprehended bias. I rejected that application: see In the matter of Venroy Pty Limited (Recusal A**pplication) [2026] NSWSC 932.
Mr Finch also made written submissions on the issue of costs. He submitted that there should be no order as to costs and that if there is to be a costs order, costs should be paid on the ordinary basis. He opposes a gross sum costs order.
For the following reasons, there will be an order that Mr Finch pay Venroy’s costs in the amount of $25,000.
The statutory demand was served on 27 March 2026. It demanded payment of a debt of $10,000 said to arise from an agreement to settle claims made by Mr Finch against Venroy in the Local Court.
There was no accompanying affidavit. That meant the statutory demand did not comply with s 459E(3) of the Corporations Act 2001 (Cth), which provides:
Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and
(b) complies with the rules of court.
The affidavit that was required to accompany the statutory demand had to verify that the debt is due and payable. The verifying affidavit had to comply with the rules of court, including the Supreme Court (Corporations) Rules 1999 (NSW) (see r 1.3(a)) Rule 5.2 of those rules requires that, for the purposes of s 459E(3) of the Corporations Act, the affidavit accompanying a statutory demand relating to a debt must be in accordance with Form 7 in schedule 1 of the Corporations Rules and state the matters provided for in that form. Form 7 provides that the affidavit must state that the deponent believes that there is no genuine dispute about the existence or amount of the debt.
The affidavit accompanying a statutory demand serves an important function. It provides a significant measure of assurance that the objectives of Part 5.4 of the Corporations Act are being observed by the creditor: see Kisimul Holdings Pty Ltd v Clear Position Pty Ltd [2014] NSWCA 262 at [34] (Barrett JA). In Fitness First Australia Pty Ltd v Dubow (2011) 251 FLR 241; [2011] NSWSC 531, Ward J observed (at [98]):
The purpose of the requirement for a verifying affidavit is to enable the court to be satisfied that there is a solid basis for the claim as to the existence of the debt…
The failure to serve an affidavit with the statutory demand cannot be described as a mere technical omission.
By email dated 27 March 2026, Venroy’s solicitors sent a detailed letter to Mr Finch. The letter gave a series of reasons as to why the statutory demand was defective and was liable to be set aside. One of the reasons given was that the statutory demand was not accompanied by a verifying affidavit. The letter also gave extensive reasons as to why Venroy contended that the debt asserted in the statutory demand did not exist. Mr Finch was urged to withdraw the statutory demand before Venroy commenced proceedings to have the statutory demand set aside.
Mr Finch declined to withdraw the statutory demand. Venroy commenced these proceedings on 2 April 2026. The originating process was supported by a document that, at least, appears to be an affidavit sworn by Mr Sean Venturi, who is Venroy’s sole director. It was witnessed by Mr Callum Ellison, a solicitor at the firm Deutsch Miller, who act for Venroy. There is a notation that it was “signed and witnessed over audio visual link in accordance with section 14G of the Electronic Transactions Act 2000 (NSW)”.
Mr Finch took issue with whether the affidavit was properly executed. But even putting that to one side, the affidavit explained in considerable detail why the statutory demand should be set aside. It explained that the statutory demand was not accompanied by an affidavit. It set out correspondence between the parties that appeared to provide strong support for the contention that there had been no binding settlement of the Local Court proceedings.
By email dated 30 April 2026, the solicitors for Venroy sent Mr Finch an open letter offering to settle the proceedings. The letter drew Mr Finch’s attention to a number of decisions that supported the proposition that a statutory demand that was not accompanied by an affidavit will be set aside. The letter asserted that if Mr Finch maintained his opposition, he could expect to be ordered to pay costs on an indemnity basis. The letter offered to settle the proceedings on the basis that the statutory demand would be set aside and Mr Finch pay Venroy’s costs on the ordinary basis.
Venroy drew Mr Finch’s attention to a passage in In the matter of LIG Australia Pty Ltd; In the matter of Success Aluminium Pty Ltd [2015] NSWSC 892, where Black J observed (at [16]): “A creditor’s statutory demand that relates to a debt other than a judgment debt will be set aside where it is not verified by an affidavit in support.” Venroy drew attention to LawCover Pty Ltd v Swart [2007] NSWSC 306, where Barrett J held (at [4]): “Indeed, if there is a debt but it is not a judgment debt, the entire absence of accompanying affidavit would of itself lead inevitably to an order setting aside the demand”.
Mr Finch’s attention was also drawn to the following passage from the decision of Santow J in Devonworth Enterprises P/L v Sydney Olympic Sporting Club Ltd; Windereen Holdings Pty Ltd v Sydney Olympic Sporting Club Ltd [2001] NSWSC 834:
[1] The Plaintiff, ultimately without opposition to-day, has obtained orders that the Defendant’s Statutory Demands should be set aside. That result was inevitable given that the relevant Statutory Demands were not accompanied by any affidavit verifying the debt, the subject of such Demands, as is mandatorily required by s459E of the Corporations Act. This is where the debt is not a judgment debt, as clearly it is not.
[2] The withdrawal of opposition occurred only today, the date of the hearing, notwithstanding that on 13 August 2001 by letter from the solicitors for the Plaintiffs to the Defendants that fatal defect in the Statutory Demand was clearly pointed out; it was described, correctly, as “defective in form and content”. The Defendant was requested to withdraw the Statutory Demands but nothing was done till to-day to do so. That of itself bears upon whether indemnity costs should be awarded against at least the First Defendant, the Company now in at least strained financial circumstances if not insolvent, that issued the relevant Statutory Demands.
[3] Regrettably the Court’s time has been wasted by the matter proceeding to its present hearing. The only question before me is whether indemnity costs should be awarded as distinct from party and party costs, and whether these should be awarded not only against the First Defendant but also against the Second Defendant being the Director and Secretary who caused the issue of the Statutory Demand…
[4] Debate took place as to whether, without more, the facts as I have recounted them would justify indemnity costs at least against the First Defendant. It is fundamental that a Statutory Demand which threatens the ultimate consequence of winding-up be based upon a properly verified debt. Moreover, that verification is no mere technical matter but goes fundamentally to whether or not the issue of the Statutory Demand is an abuse of process. That the Statutory Demand issued, containing in an unverified schedule broad reference to the basis for the alleged debt, falls well short of the mandatory verification by affidavit, with the sanctions that attend a false affidavit.
[5] That is why, without more, I would conclude that indemnity costs are properly payable.
Venroy’s solicitors also asserted that it is an abuse of process for Mr Finch to propound a statutory demand on the basis that the Local Court proceedings had settled, giving rise to a debt, and at the same time continue to pursue the Local Court proceedings: see Saferack Pty Ltd v Marketing Heads Australia Pty Ltd [2007] NSWSC 1317 at [8]-[10] (Barrett J). The proceedings in the Local Court are apparently being pressed by Mr Finch and are fixed for hearing in December 2026.
Mr Finch did not accept Venroy’s offer of 30 April 2026 to settle the proceedings. Rather, he vigorously defended the claim, including by maintaining a 21-paragraph notice to produce, by which he sought to require Venroy to provide comprehensive disclosure of (amongst other things) financial, banking and taxation records spanning numerous years. At the hearing on 14 May 2026, Mr Finch relied on written submissions and an affidavit he affirmed on 14 May 2026.
Mr Finch submits that he believed on reasonable grounds that there had been a settlement of the Local Court proceedings and that Venroy had agreed to pay him $10,000. The material before me does not support the contention that Mr Finch could have reasonably believed that the Local Court proceedings had been settled in a legally binding way on the basis of an agreed payment of $10,000. Venroy had made an offer to settle the Local Court proceedings on payment of $10,000 which was conditional upon execution of a deed, and made provision for the timing of payment. It is uncontroversial that no deed was executed. The parties did not appear to ever agree on the time for payment. At its highest, it appears that there was a settlement in principle but that the settlement fell apart before it became binding.
Mr Finch could not have reasonably made an affidavit that: (a) verified that the debt that was the subject of the demand was due and payable; and (b) stated that he believed that there was no genuine dispute about the debt. Mr Finch’s affidavit affirmed on 14 May 2026 would not have met the requirements of s 459E(3). It did not verify that the debt (being the $10,000 to settle the Local Court proceedings) was due and payable, or that Mr Finch believed that there was no genuine dispute about the existence of the debt. It is difficult to see how Mr Finch could give that verification and explain how, in those circumstances, he was pursuing the Local Court proceedings. The affidavit stated that Mr Finch believed that Venroy was unable to pay its debts as and when they fall due. That is not the belief that matters.
The affidavit also states that the amount owing to him has been overdue since June 2025. That is inconsistent with the statutory demand, which is for payment of a debt said to have arisen from the purported settlement of the Local Court proceedings in March 2026. There is an important distinction between the alleged debt that arose from services rendered in mid-2025, which led to the initiation of the pending Local Court proceedings, and the alleged debt of $10,000, which is said to have arisen from an agreement to compromise those proceedings. That distinction is lost in Mr Finch’s submissions. It appears that his underlying grievance is that Venroy did not pay him the debt he says was incurred for the work he performed in mid-2025.
Venroy responded to the statutory demand in a reasonable fashion. Venroy’s email dated 27 March 2026 gave Mr Finch detailed reasons as to why the demand was defective and should be withdrawn before Venroy applied to set it aside. When Mr Finch declined to do so, it was reasonable for Venroy to take swift steps to apply to have the statutory demand set aside. That is particularly so having regard to the strict time limits imposed by s 459G: see David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 277; [1995] HCA 43 and the consequences that flow where a statutory demand is not set aside (see s 459S). Faced with a statutory demand that had not been withdrawn, it was reasonable for Venroy to take steps to have it formally set aside, rather than wait to see if Mr Finch would file a winding up application and then defend any such application. It does not become unreasonable merely because Venroy could expect to pay more in legal fees than it would incur if it paid the amount that was demanded by Mr Finch.
Mr Finch submitted that the statutory demand was incapable of founding a presumption of insolvency as Venroy faced no immediate risk. This submission appears to acknowledge that the statutory demand was ineffective. That being so, his intransigence in refusing to withdraw the statutory demand is inexplicable on any reasonable basis. Mr Finch previously asserted (in submissions on the application for recusal) that Venroy should have waited for a winding-up application, rather than “litigating offensively”. The true position is that Mr Finch should never have served the statutory demand and should have withdrawn it at the first opportunity. He forced Venroy’s hand.
Mr Finch submits that it is disproportionate for Venroy to expend over $30,000 in legal costs where the debt was only $10,000. It is unfortunate that Venroy’s expenditure on legal fees exceeds the amount that Mr Finch claims to be owed. But the blame lies with Mr Finch, not Venroy. While it may be said that Venroy could have paid the money demanded by Mr Finch, even though the demand was invalid, Venroy was within its rights to take formal steps to set aside an invalid statutory demand in circumstances where Mr Finch refused to withdraw it. Venroy could reasonably take the view that payment of $10,000 to Mr Finch would mean it succumbed to an abuse of process and that, as a matter of principle, it was not prepared to so succumb.
The present case should never have proceeded to hearing. Mr Finch should not have served the statutory demand without a verifying affidavit. He was given a detailed explanation by Venroy as to why the statutory demand was invalid and was given an opportunity to withdraw it before any costs were incurred. That is what he should have done. Immediately after Venroy commenced proceedings, he should have agreed to withdraw the statutory demand, in light of the matters advanced in Mr Venturi’s affidavit. He did not. The offer to settle the proceedings made on 30 April 2026 did not include much compromise. However, the letter explained why Mr Finch’s defence was doomed to fail. It was not reasonable for Mr Finch to reject the offer.
There is no basis for Mr Finch to resist a costs order. Venroy was successful in the proceedings and there is no reason why costs should not follow the event. The only question concerns the character of the costs order.
Section 98 of the Civil Procedure Act confers power to make a gross sum costs order before costs are referred for assessment. The discretion to make a gross sum costs order is unconfined and apt to be exercised whenever the circumstances warrant it: Manariti Plumbing Pty Ltd v Univers**al Property Group Pty Ltd (No 2) [2025] NSWCA 185 at [30] (Free JA; McHugh and Ball JJA agreeing). A gross sum costs order may be ordered where there is a lack of proportionality between the likely complexity and cost of an assessment process and the amount at stake, or where the costs of litigation are already disproportionate and will likely become even more disproportionate if referred for assessment: Manariti at [38].
Mr Finch no doubt feels strongly aggrieved by Venroy’s refusal to pay him what he says is owed to him. His underlying claim that is before the Local Court may have merit. That is not something I have had to consider. However, Mr Finch’s sense of grievance appears to have led him to serve and maintain a statutory demand when it is clear he should not have done so. His determination to stand by his statutory demand was unreasonable. There is every reason to suppose that if the matter goes to assessment, the costs will become even more disproportionate.
When making a gross sum costs order, the Court is not expected to go into the detail of a formal assessment. It is rather to proceed on a “broad brush” basis, and typically would allow “an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment”: Manariti at [35]-[38].
Venroy submits that a gross sum costs order should be made in circumstances where an indemnity costs order would be justified. That is, it seeks a gross sum costs order that would reflect the amount of costs that Venroy would recover on the basis of an order that costs be paid on an indemnity basis. Mr Stevens has given evidence that on an indemnity-basis assessment a party would typically expect to recover about 90% of solicitor costs and 100% of disbursements, which in the present case would lead to a figure of $33,806.20. Mr Stevens’ affidavit gives evidence of the basis for that amount. Venroy has allowed a 10% discount upon that figure (to $30,425.58) and then further rounded down to $30,000.
In resisting an order for costs to be awarded on an indemnity basis, Mr Finch relied on my decision in In the matter of B*&*B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 656. In that case, I rejected an application for indemnity costs in a case where I set aside a statutory demand, including because the defendant had advanced some issues about service that were arguable. Mr Finch submitted that his position in the proceedings was at least arguable.
Mr Finch’s submissions as to his arguable position rested on three main points.
First, Mr Finch appears to contend that it was arguable that the statutory demand was not liable to be set aside notwithstanding the absence of an accompanying affidavit. For reasons given already, I do not accept this contention.
Second, Mr Finch contends that it was arguable that the originating process and supporting affidavit were not served personally as required by r 10.20 of the Uniform Civil Procedure Rules 2005 (NSW), with the consequence that the requirement of service under s 459G(3)(b) was not satisfied. This contention was not arguable because s 459G(3)(b) does not require personal service in accordance with UCPR r 10.20: see for example In the matter of B & B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 587; 176 ACSR 17 at [14] and Smits v B & B Legal Pty Ltd t/as Borthwick & Butler [2026] NSWCA 57 at [43]-[52]. There was no question that Mr Finch was provided with the originating process and supporting affidavit. He filed a notice of appearance within the statutory period (see s 459G(2)).
Third, Mr Finch submitted at the hearing on 14 May 2026 that Mr Venturi’s affidavit was sworn while he was overseas and there was no evidence as to its proper execution. This was later developed into an argument that the affidavit served with the originating process was not an “affidavit” within the meaning of s 459G(3)(a) because it was not sworn in accordance with s 14G of the Electronic Transactions Act 2000 (NSW). The argument was that the Court did not have jurisdiction to set aside the statutory demand because no application was made in conformity with s 459G: see David Grant v Westpac*.*
The “affidavit” of Mr Venturi appears to have been signed by the hand of the deponent and witnessed by a solicitor. As I have said, the affidavit bears a notation that it was “signed and witnessed over audio visual link in accordance with section 14G of the Electronic Transactions Act 2000 (NSW)”. There is no reason to doubt that notation. There is no reason to suppose that Mr Venturi did not swear that the contents of the document were true or that he did not sign the affidavit in the presence (established by audio visual link) of a solicitor of the Court. The affidavit was filed with the Court. Mr Stevens gave evidence that he arranged for the originating process and the supporting affidavit to be filed.
I am satisfied that this is an appropriate case for a gross sum costs order. There is enough in Mr Stevens’ affidavit for me to be able to identify an appropriate amount on an impressionistic basis. There is a lack of proportionality between the likely complexity and cost of an assessment process and the amount at stake. The costs of litigation are already disproportionate. They will likely become even more disproportionate if referred for assessment, including because of the risk that Mr Finch will take unreasonable positions.
I accept that when fixing a gross sum, I should fix an amount that would reflect what would otherwise be an entitlement to indemnity costs. The case is not relevantly distinguishable from that of Devonworth Enterprises (see [17] above), save that Mr Finch pressed his opposition to the orders. His conduct in pressing the statutory demand was unreasonable.
Venroy seeks an order for a gross sum in the amount of $30,000. As I have said, that figure allows some discounting in favour of Mr Finch. It is reasonable to allow an impressionistic discount of the costs incurred or estimated to take into account the contingencies that would be relevant in any formal costs assessment: Hamod v State of New South Wales [2011] NSWCA 375 at [820]. On this basis, I propose to allow a larger discount than was suggested by Venroy. I consider that a gross sum of $25,000 is reasonable in all the circumstances. That will give Mr Finch a comfortable buffer against the costs that he would likely be required to pay if costs were ordered against him on an indemnity basis.
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[2026] NSWSC 932
(1995) 184 CLR 265
(2011) 251 FLR 241