HAVILAH RESOURCES LIMITED v RADFORD EARTHMOVERS PTY LTD (No 2) [2026] SASC 68

Applicant: HAVILAH RESOURCES LTD Counsel: MR B ROBERTS KC WITH MR A BAILLIE - Solicitor: THOMSON GEER Respondent: RADFORD EARTHMOVERS PTY LTD Counsel: MR M HOFFMANN KC WITH MR S URE - Solicitor: FINLAYSONS Hearing Date/s: 18/12/2025 File No/s: CIV-25-003394 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. HAVILAH RESOURCES LIMITED v RADFORD EARTHMOVERS PTY LTD (No 2) [2026] SASC 68 Judgment of the Honourable Chief Justice Stein 14 May 2026 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - OTHER PARTICULAR CASES The respondent was successful at trial. The respondent applied for an order for indemnity costs relying on a filed offer. Held (declining to make an order for indemnity costs): 1. The respondent’s offer did not involve genuine compromise in an all or nothing case. 2. It was not unreasonable for the applicant to reject the offer in all of the circumstances. 3. The applicant is to pay the respondent’s costs of and incidental to the proceedings on the standard basis to be agreed or taxed. Uniform Civil Rules 2020 (SA) r 132.10, referred to. Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368; Kmart Australia Ltd v Marmara (No 2) [2025] NSWCA 48; Fabre v Lui (No 2) [2015] NSWCA 312; Hobartville Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358; Trinity College v Commissioner of State Taxation (No 2) [2024] SASC 41, considered. -- 1 of 6 -- -- 2 of 6 -- HAVILAH RESOURCES LIMITED v RADFORD EARTHMOVERS PTY LTD (No 2) [2026] SASC 68 Civil: Application 1 STEIN CJ: After delivery of judgment in favour of the respondent following a trial, the respondent applied for an order for indemnity costs relying on a filed offer. The question for consideration in the trial of the action was whether the final payment for the purchase price of shares had fallen due. That question depended on the proper construction of a contractual clause which varied the trigger for payment of the final instalment of the purchase price. On the applicant’s case, the final instalment had fallen due and it was entitled to payment of the sum of $3.8 million. The respondent’s defence, which succeeded at trial, was that the contractual clauses did not have the effect of accelerating the obligation to make final payment. Rather, that final payment will fall due at some time in the future once certain mining production targets are achieved. 2 The respondent’s position is that it is entitled to indemnity costs because it filed a relevant offer within the meaning of r 132.10(1) of the Uniform Civil Rules 2020 (SA) (“UCR”). The applicant disputes that the formal offer was a relevant offer on the basis it did not involve “genuine compromise” as required by r 132.10(1)(d). Alternatively, for the same reasons, the applicant contends the Court ought to exercise its discretion not to make an indemnity costs order given the nature and extent of the offer made. 3 For the reasons which follow I have determined not to make an order for indemnity costs. This was an all or nothing case 4 The respondent’s position is that despite succeeding, it remains liable to pay the final payment to the applicant if the production revenue milestone is reached and consequently the case cannot be characterised as an all or nothing case. Rather, the formal offer amounted to the payment of a sum of money plus costs in addition to the remaining right to the applicant to receive payment upon achievement of the production revenue milestone. The respondent’s position is thus, while acceleration of the payment of the final payment had some value, its value is difficult to assess. 5 In my view, this was an all or nothing case. 6 Regency Media Pty Ltd v AAV Australia Pty Ltd,1 (“Regency Media”) involved an “all or nothing” case. The New South Wales Court of Appeal observed that is often so in proceedings involving an issue of contractual interpretation: there 1 [2009] NSWCA 368. -- 3 of 6 -- [2026] SASC 68 Stein CJ 2 is no process of evaluation or assessment which could result in an outcome varying over a range and either one or the other party will be correct.2 7 In my view, that is the correct characterisation of the dispute in this case. Either the applicant was correct in its interpretation, or it was not. In the event it was correct, it was entitled to immediate payment of $3.8 million. If it was not correct, it did not have that entitlement. Rather, it would have an entitlement to payment based upon the satisfaction at a future time of a particular condition. The offer did not involve genuine compromise 8 I have concluded that the respondents’ offer did not involve genuine compromise in an all or nothing case. 9 In Kmart Australia Ltd v Marmara (No 2) (“Kmart”),3 the New South Wales Court of Appeal referred to the concept of “compromise” for the purposes of the New South Wales Uniform Civil Procedural Rules 2005 as connoting that a party gives something away.4 The Court observed that the purpose of an offer of compromise is not to trigger an automatic award of costs on an indemnity basis in favour of every successful party that does $1 better than its offer.5 10 The language used in the UCR is “genuine compromise”.6 The descriptor “genuine” simply reinforces the requirement for a formal offer to contain a real element of compromise. 11 In Regency Media, the Court said that while a marginal difference between an offer and the result may amount to a real and genuine offer of compromise in a personal injury context, that is not generally so in an all or nothing case.7 In Regency Media, an offer of $10,000 in respect of a claim of about $600,000 was characterised as an invitation to surrender rather than a form of commercial compromise. The offer reflected the strength of the party’s belief in its interpretation of the contract, which was fully vindicated by the Court. However, the offer could not be characterised as one of compromise and any element of compromise was at its highest of limited significance.8 The Court continued to observe that while there can be circumstances in which an offer which effectively amounts to an invitation to surrender can trigger indemnity costs mechanisms,9 the claim or defence would have to approach something tantamount to being frivolous or vexatious. If it were not so, the public policy to encourage settlement would 2 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [29]. 3 [2025] NSWCA 48. 4 Kmart Australia Ltd v Marmara (No 2) [2025] NSWCA 48 at [21] referring to Fabre v Lui (No 2) [2015] NSWCA 312 at [6]; Hobartville Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368 (Giles J). 5 Kmart Australia Ltd v Marmara (No 2) [2025] NSWCA 48 at [21]. 6 Uniform Civil Rules 2020 (SA), r 132.10(1)(d). 7 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [29]. 8 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [30]. 9 Referring to the New South Wales Rules. -- 4 of 6 -- [2026] SASC 68 Stein CJ 3 rarely be served in an all or nothing case10 and most contract interpretation disputes would result in an indemnity costs order if a formal offer was made at an early stage, even if the offer were laughable.11 The Court continued to observe that whether the rejection of the offer was reasonable should not be assessed with the benefit of hindsight and must be assessed at the time the offer was made.12 12 The respondent submits that it was unreasonable for the applicant not to accept the filed offer when the applicant’s construction of the contractual clauses was found to be erroneous and the respondent had pointed out the difficulties with the applicant’s contended construction. 13 However, while I ultimately accepted the respondent’s submissions and interpretation of the contractual clauses, the proceedings were not hopeless. The offer clearly reflected the strength of the respondent’s belief in its interpretation and that position was ultimately accepted. Nonetheless, the applicant’s interpretation of the clause was reasonably arguable. 14 If accepted, the respondent’s offer would have resulted in the applicant giving up its claimed entitlement to immediate payment of $3.8 million. The acceleration plainly had value because if successful, the applicant would have been guaranteed the payment of the final purchase price following judgment in its favour rather than having an entitlement to the potential of receiving a payment at an unknown future point in time if the production targets are ever met. While the contractual clause requires payment of $3.8 million upon certain mining production targets being met, there is no evidence before me about the likelihood the payment will ever become due. That it might not do so formed part of some of the applicant’s submissions at trial. I did not make any findings upon that topic. It was not unreasonable for the applicant to reject the offer 15 In the event an offer is not a relevant offer within the meaning of r 132.10(3), the Court’s broad discretionary considerations which were set out in Trinity College v Commissioner of State Taxation (No 2) apply.13 16 In my view, taking into account the potential outcome had the applicant succeeded, the fact this was an all or nothing contract interpretation case, the fact the applicant’s case was not unarguable, hopeless, frivolous or vexatious and that acceptance of the offer would be tantamount to complete capitulation, it was not unreasonable for the applicant to reject the offer in all of the circumstances. 17 Accordingly, I decline to order that the applicant pay the respondent’s costs from 24 June 2025, on an indemnity basis. 10 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [31]. 11 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [32]. 12 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [33]. 13 [2024] SASC 41 at [36]-[64]. -- 5 of 6 -- [2026] SASC 68 Stein CJ 4 Orders 18 I make the following order: 1. The applicant is to pay the respondent’s costs of and incidental to the proceedings on the standard basis to be agreed or taxed. -- 6 of 6 --