AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED v URBAN ACTIVATION PTY LTD [2025] SADC 12

Applicant: AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED Counsel: MR E BELPERIO - Solicitor: DMAW LAWYERS Second Applicant: GLOBAL LINK PROPERTIES SDN.BHD Counsel: MR E BELPERIO - Solicitor: DMAW LAWYERS Respondent: URBAN ACTIVATION PTY LTD Counsel: MR L GENTRY - Solicitor: 1878 ELIX LAWYERS Hearing Date/s: File No/s: DCCIV-19-308 B DISTRICT 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. AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED & ANOR v URBAN ACTIVATION PTY LTD (No 3) [2025] SADC 12 Judgment of his Honour Judge Slattery 17 February 2025 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTERPRETATION OF PARTICULAR COSTS ORDERS - TAXED COSTS Following the dismissal of the applicants’ claims and the upholding in part, of the cross claims of the respondent, the respondent seeks orders:- 1. For indemnity costs 2. For costs thrown away on the adjournment of the trial and for other ancillary orders. Held: 1. The respondent is not entitled to an order for indemnity costs. 2. The respondent to have the costs of the claim and the cross claim to be taxed if not agreed. 3. The application by the respondent for an order for the costs of the adjournment of the first date for trial to be paid by the applicant as costs thrown away is rejected. 4. Further orders including in relation to interest. Uniform Civil Rules 2020 (SA), referred to. -- 1 of 7 -- Austral Pacific Investment (H.K) Limited & Anor v Urban Activation Pty Ltd [2024] SADC 115; Austral Pacific Investment (H.K) Limited & Anor v Urban Activation Pty Ltd (No.2) [2025] SADC 10; Calderbank v Calderbank [1975] 2 All ER 333; Pirotta v Pirotta v Citibank Limited [1998] 72 SASR 259; Davies v Chicago BootCo Pty Ltd [No.2] [2011] SASC 97; BHP Billiton Ltd v Parker [2012] 113 SASR 206 , considered. -- 2 of 7 -- AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED & ANOR v URBAN ACTIVATION PTY LTD (No 3) [2025] SADC 12 1 In my first judgment in this matter1 I dismissed the applicant’s claim and ordered the parties to make further submissions in relation to the respondent’s cross claim. I reserved the question of costs. 2 There were a number of issues that arose in connection with the respondent’s cross claim which, as I set out in my first judgment, were not satisfactorily addressed in the course of the trial. I found that the respondent took a number of inconsistent positions in connection with the cross claim and those matters required resolution. 3 In my second judgment2 I made orders for judgment for the cross-claimant, Urban in the sum of $74,900 against the cross respondent, Austral. I further ordered judgment for the cross-claimant, Urban in the sum of $100,000 against the cross respondent Global and I dismissed the balance of the cross claim of Urban. I ordered parties file minutes of order to reflect each of my decisions and any submissions on interests and costs. The parties have now filed their submissions. 4 The respondent Urban now seeks a number of orders which are discussed below. 5 The respondent has filed an affidavit of David Matthew Elix Solicitor dated 14 February 2025 (FDN 144). The affidavit addresses the calculation of interest and for costs thrown away on the vacation of a trial under orders made by Judge Burnett of this Court. On 5 June 2023, his Honour made orders requiring the applicants to make further and better discovery of a number of categories of documents and that an order for costs of and incidental to the application be made in favour of Urban. On 19 June 2023, Austral and Global produced a further one hundred and seventy-two documents. The trial of the action was scheduled to commence on 3 July 2023 and five days had been set aside. On 23 June 2023, the respondent’s solicitors requested Austral and Global to agree to the vacation of a trial. On 25 June 2023, that request was rejected. On the application of the Urban, Judge Burnett made an order on 30 June 2023 that the trial scheduled to commence on 3 July 2023 be vacated and reserved the question of costs. His Honour made an order that the applicants provide further and better discovery by 31 July 2023 and on that date, the applicants produced a further nineteen documents in bundles comprising some 8,993 pages. At the time, Judge Burnett did not make an order 1 Austral Pacific Investment (H.K) Limited & Anor v Urban Activation Pty Ltd [2024] SADC 115; 25 September 2024. 2 Austral Pacific Investment (H.K) Limited & Anor v Urban Activation Pty Ltd (No.2) [2025] SADC 10; 12 February 2025. -- 3 of 7 -- [2025] SADC 12 2 that the applicant pay the respondents cost thrown away but rather reserved those costs. 6 The respondent now seeks an order for costs thrown away by reason of the trial being vacated. The only order for costs in favour of Urban related to the first date upon which Judge Burnett made an order for further discovery. For those reasons, I consider that there is a deficiency in the application of Urban in relation to those matters. I will consider them later. 7 On 1 August 2023, Urban put a letter to the applicant’s solicitors offering to resolve the whole of the claim, the cross claim on the basis that:- 1. Each party walk away and bear own costs; 2. Each party release any obligation to satisfy any costs orders made against the other party in the proceedings; 3. Each of the claim and cross claim be discontinued with no order as to costs; and 4. The monies paid by the applicant into the courts suitors fund by way of security for costs be returned to the applicants together with any interests accrued. 8 The form of the letter is Exhibit DME-24 to the affidavit of Mr Elix (FDN 144). 9 The offer is dated 1 August 2023. As far as I can tell, it was delivered by mail to the firm of solicitors Mills Oakley at a post office box address in Melbourne. In his affidavit, Mr Elix does not inform the court whether that letter was emailed to those solicitors. In the absence of that matter being separately dealt with by Mr Elix, I will presume that the letter was delivered by ordinary mail. That being so, I would not expect that letter to have been received by the solicitors until about Friday, 4 August 2023, having regard to the well-known exigencies of surface mail. The solicitors for Urban were well aware that the officers of the applicants lived overseas and there would be a delay between the time that the applicant’s officers could be contacted, give consideration to the offer and give instructions to their solicitors. I have significant doubts whether the applicants would have had any more than a day or two to give proper commercial consideration to the offer, to receive advice and then make their decisions about the merits or otherwise of their offer. I consider this period of time to be inappropriate and far too short in the context of a million-dollar claim. I also consider that so much is known or should have been known by Urban and those who were advising it. Even if I am wrong about the mail, for the same reasons I consider that the time allowed of eight days was too short and so was unreasonable. 10 The offer of Urban was not made under the rules of Court (UCR 132.4), it was not a Formal Offer, it did not for example, allow 14 days for a response to be -- 4 of 7 -- [2025] SADC 12 3 received. This is the period of time allowed for under Uniform Civil Rules, UCR 132.6. 11 The contents of the letter must be considered under general costs principles (UCR 194.5). The offer is, as the letter suggests, reliant on the principles of Calderbank v Calderbank.3 12 The discretionary factors concerning orders for costs are those set out in UCR 194.6. Under UCR 194.6(e) I may give consideration to the non acceptance by a party of an offer made by another party to resolve the proceeding. I am satisfied that a discretionary factor which I may take into account is whether such an informal offer has been made, the circumstances surrounding the making of a formal offer, issues of fairness connected with the demand under such as the time period under the formal demand and the parties’ positions generally. 13 I am unable to accept the proposition that merely because a Calderbank offer is unreasonably rejected, a presumption of an entitlement of indemnity costs arises. In my view, the content of the operation of Rule 132 and its counterparts is connected with the making of a formal offer pursuant to the rules. It sets out a prescription in relation to the contents of the offer, the timing of the offer, a response to the offer and the consequences of a failure to comply with the rules. Differently, under UCR 194.5 and UCR 194.6, a matter that a court may take into account is the making or not making of an offer by a party to resolve proceedings. And, I consider that I am bound by the Full Court decision in Pirotta v Citibank Limited.4 Although the comments of Debelle J in that decision were obiter, his Honour decided that until the issue was properly raised, the unreasonable rejection of a Calderbank offer should be regarded as only a discretionary factor (at page 266). Despite the judgment of Sulan J in Davies v Chicago Boot Co Pty Ltd [No.2]5 (that the presumption in favour of indemnity costs was a starting point), the Full Court of the Supreme Court of South Australia in BHP Billiton Ltd v Parker6 held that the court must always bear in mind that it is exercising a very broad discretion as to costs, the making of an offer of settlement is merely one of a number of matters relevant to the exercise of the discretion and merely because there is a Calderbank letter in existence does not lead to a presumption that a court order the recipient of the letter to pay costs on a basis other than between party to party. That is, there is no presumption in favour of a an indemnity costs order. I consider that I am bound by the decision in Pirotta and in BHP Billiton Ltd v Parker. The position reached is that, as a matter of policy and principle, if a party has rejected a Calderbank offer that is one factor to be taken into account and weighed in the balance in the exercise of the courts broad and utterly unfettered discretion as to costs. In my opinion, to hold otherwise would create unnecessary confusion in the context of the consideration of costs issues. 3 [1975] 2 All ER 333. 4 [1998] 72 SASR 259. 5 [2011] SASC 97. 6 [2012] 113 SASR 206 at 265. -- 5 of 7 -- [2025] SADC 12 4 14 I turn to the matter about which I am required to make a decision. First, in relation to the ‘Calderbank’ offer I do not think that the offer was in fact open for only eight days. I consider that it was open for an unreasonably short period of time and that would be the case even if, for example, the letter was communicated by email (about which perhaps, a presumption may arise). Urban was aware that the applicants’ officers were in Singapore, there was a time delay between Australia and Singapore, time would be needed to allow the officers to fully understand the offer and then to give instructions. I have earlier mentioned that under UCR 132.10(1)(b) an offer is required to be remain open for 14 days. 15 Some emphasis was placed by the applicants upon the failure of the respondent to identify weaknesses in their case. That may be so, but I think that feature does not necessarily attract particular weight in the circumstances of this case. This trial turned on a narrow point of law. I consider that it was possible to argue that even having regard to the common law on the issue, there was some factual distinction between the position of the applicants and the factual circumstances involving the decided cases which comprised the common law. It was not unreasonable for the applicants to proceed with their claim. I consider that there is no basis to award costs on any other basis than a standard party and party costs. 16 Turning then to the other matters raised by Urban which are in contention. It is perhaps a little surprising that on 21 July 2023, the applicants produced a further nineteen documents described as ‘bundles’ comprising of some 8,993 pages. This was after a further order had been made by Judge Burnett after the vacation of the first trial date for further and better discovery to be made by the applicants. Even in those circumstances, I am not satisfied on the material before me, that the costs thrown away by the respondent on its application to vacate the first trial date should be paid by the applicants. The relevant chronology is that the application by Urban for further and better discovery by the applicant was made on 2 May 2023; the application was listed for argument before his Honour Judge Burnett on 16 May 2023 and following argument, his Honour made orders requiring further and better discovery on 5 June 2023. Urban then had the benefit of a costs order on Judge Burnett’s orders for further and better discovery. That has not changed. 17 Following the delivery of a further 172 documents, on 19 June 2023, an enquiry was made by Urban on 23 June 2023 about whether the applicants would agree to the vacation of the trial date set for 3 July 2023. That request was rejected by the applicants on 25 June 2023 and the following day, 26 June 2023, an urgent application was taken by Urban for vacation of the trial date. I have read the transcript of proceedings before Judge Burnett on 30 June 2023. As best as I can judge, his Honour vacated the trial date on the application of Urban and, it appears, by agreement with the applicants. At page 2 of the transcript, his Honour refers to the receipt of a letter and then announces without any objection by the applicants that he will vacate the trial date. It is apparent that neither party was prepared or was able to proceed on the due date. There is no basis for ordering that the costs reserved on that date be Urban’s costs. No order should be made in favour of Urban -- 6 of 7 -- [2025] SADC 12 5 for the costs thrown away by reason of the vacation of the trial date on that basis. No other basis has been made out before me. The appropriate order is costs in the cause. 18 An order was earlier made by the court in favour of Urban for security for costs in the sum of $70,000. Urban seeks the payment out of that amount in its favour, prior to the taxation of costs. I am not prepared to make that order. I am satisfied that costs do not become due and payable until they are taxed or agreed and that has not occurred. As well, prior to taxation (or agreement) the quantum of the costs is unknown. I reject the application of Urban for the payment out of those costs. 19 My final orders are as follows:- 1. The applicant’s claims are dismissed. 2. Judgment for Urban on the Cross Claim against Austral in the sum of $74,900. 3. Judgment for Urban on the Cross Claim against Global in the sum of $100,000. 4. The balance of the Cross Claim is dismissed. 5. Pre-judgment interest on the judgment sum owed by Austral in the amount of $29,790.71. 6. Pre-judgment interest on the judgment owed by Global in the amount of $40,092.48. 7. The respondent have the costs of the claim and the cross claim on a party and party basis to be taxed if not agreed. -- 7 of 7 --