In the Matter of Torrens Constructions Pty Ltd (No 2)

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
IN THE MATTER OF TORRENS CONSTRUCTIONS PTY LTD (No 2)
[2025] SASC 52
Reasons for Decision of the Honourable Justice Kimber
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PROCEDURE
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - OTHER MATTERS
On 26 August 2024, the first, second, and third respondents (the respondents) filed an application (FDN 113) seeking that the applicant pay further security for costs in the amount of $118,700. On 3 December 2024, I ruled on FDN 113 and ordered that the applicant pay further security for costs from the second day of trial in the amount of $85,580.
Following my ruling, the respondents applied for the applicant to pay the respondents’ costs of FDN 113 on a party-to-party basis, to be agreed or taxed. The applicant opposed that application, submitting that costs should be awarded in its favour or, alternatively, that no costs order should be made.
In exercising the discretion to order costs, it is relevant that:
•       The applicant made an offer to pay security for costs in the amount of $70,700;
•       The order made was substantially less than that sought by the respondents and significantly closer to the figure offered by the applicant than to that sought by the respondents;
•       The respondents made no efforts to engage with the offer of the applicant; and
•       The respondents pressed certain costs to which they were not entitled.

Held, with respect to the costs of FDN 113:
1. The application of the respondents is refused.
2. No order for costs will be made.
Supreme Court Act 1935 (SA) S 40(1); Uniform Civil Rules 2020 (SA) R 194.5(2), referred to.
Lyons v Legalese Pty Ltd (No 2) [2017] SASC 2, applied.
Re Torrens Constructions Pty Ltd [2023] SASC 25; Re Torrens Constructions Pty Ltd [2024] SASC 136, discussed.

IN THE MATTER OF TORRENS CONSTRUCTIONS PTY LTD (No 2)
[2025] SASC 52
Civil: Application
KIMBER J:

On 3 December 2024, following an application (FDN 113) by the first, second, and third respondents (the respondents), I ordered that the applicant pay security for costs from the second day of trial in the amount of $85,580.[1]
[1] Re Torrens Constructions Pty Ltd [2024] SASC 136.
Following that order, the respondents made an application for the applicant to pay the respondents’ costs of FDN 113 on a party‑to‑party basis, to be agreed or taxed. The applicant opposes that application. The primary submission of the applicant is that the respondents should pay the costs of the applicant. In the alternative, the applicant submits that no costs order should be made.
For the reasons that follow, no costs order will be made with respect to FDN 113.
The proceedings
A brief overview of the proceedings is set out in the reasons for decision delivered on 3 December 2024[2] and need not be repeated.
[2] Ibid.
The interlocutory application – FDN 113
FDN 113 was filed on 26 August 2024 against the following background.
On 24 February 2023, another judge of this Court made an order in favour of the respondents for security for costs up to the first day of the trial. At a listing conference on 20 June 2024, the matter was set down for trial for 15 days commencing on 3 February 2025.
On 12 August 2024, the respondents wrote to the applicant seeking their position with respect to security for costs from the second day of the trial. The respondents sought the amount of $118,700.
On 16 August 2024, the applicant responded expressing the view that there was no urgency with respect to security for costs for the trial given the trial date and the costs order already in place with respect to preparation for trial. Otherwise, the applicant did not indicate its position on the question of security for costs from the second day of trial.
On 21 August 2024, the respondents sought the position of the applicant on the amount of security for costs which the applicant was prepared to agree. The respondents sought a response by 23 August 2024 and indicated that, in the absence of what they considered to be a sufficient response, an interlocutory application would be made. That interlocutory application became FDN 113.
On 26 August 2024, the applicant advised the respondents that their desire to resolve the security for costs issue was premature and that the applicant would respond further in 21 days. Notwithstanding the applicant, in effect, was seeking a further 21 days and the trial was listed to commence on 3 February 2025, on 26 August 2024 the respondents filed FDN 113 seeking the amount of $118,700.
On 25 September 2024, the applicant offered to pay security for costs in the amount of $70,700 by 29 November 2024. On 27 September 2024, the respondents indicated that they hoped to respond to that offer within 14 days. It is not apparent to me that the respondents did so by suggesting an amount less than that sought in FDN 113 or indicating a willingness to negotiate. Certainly, the respondents pressed FDN 113 to a hearing and maintained the appropriate order was in the amount of $118,700.
As I understand it, after 27 September 2024, neither the applicant, nor the respondents, proposed amounts other than those set out above.
The hearing with respect to FDN 113 took place on 13 November 2024. Consistent with its correspondence with the respondents, the applicant did not dispute that an order should be made. The issue was the appropriate estimate of the length of the trial. The offer made by the applicant remained $70,700. The application of the respondents remained $118,700. Among the submissions of the applicant was that the conduct of the respondents during the proceedings should result in a reduction in the amount that might otherwise be ordered. For reasons that do not need to be repeated, such a reduction had been made in the order delivered on 24 February 2023.[3]
[3] Re Torrens Constructions Pty Ltd [2023] SASC 25.
As set out above, on 3 December 2024, I made an order for security for costs in the amount of $85,580. In so doing, I ordered that the sum be paid into Court by 22 January 2025, rather than the second day of the trial as sought by the applicant. In making those orders, I declined to reduce the amount on the basis sought by the applicant.
The submissions with respect to costs
The respondents submit that they should be awarded costs because they were substantially successful in FDN 113 since the application was granted; the amount ordered was above that offered by the applicant; and the amount was ordered to be paid by 22 January 2025 rather than the second day of the trial. The respondents also submit that the applicant behaved unreasonably in contending in correspondence that FDN 113 was premature; in submitting there should be a reduction in the amount appropriate on the grounds sought by the applicant; and in seeking to have payment made on the second day of the trial.
As earlier set out, the applicant submits that the respondents should pay the costs of the applicant. In the alternative, the applicant submits that no order for costs should be made.
In support of its position, the applicant submits that the respondents acted unreasonably by making the interlocutory application when they did; forcing the matter to a hearing despite the offer of the applicant; and by not engaging in any negotiation with the offer of the applicant. The applicant further submits that the amount of the order ultimately made was substantially less than that sought by the respondents and was significantly closer to the offer of the applicant.
Principles
What orders, if any, should be made with respect to the costs of FDN 113 is discretionary.
Section 40(1) of the Supreme Court Act1935 (SA) provides:[4]
[4] Supreme Court Act 1935 (SA) s 40(1).
40—Power of court with regard to costs
(1)Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.
The general rule is that costs follow the event.[5] In Lyons v Legalese Pty Ltd & Ors,[6] Hinton J said:[7]
There is no absolute rule. The discretion must be exercised judicially and not capriciously, having regard to all relevant factors, and upon the facts leading up to and connected with the litigation, and, in the light thereof, the application of the general rule is considered.
[5] Uniform Civil Rules 2020 (SA) r194.5(2).
[6] Lyons v Legalese Pty Ltd (No 2) [2017] SASC 2.
[7] Ibid [9].
Discussion
I reject the submission of the respondents that the applicant acted unreasonably in submitting that the payment be made on the second day of the trial, a date later than that the subject of my order. The relevant costs order related to costs from the second day of the trial. In that context, the submission of the applicant was a reasonable one. Further, it was a submission which occupied no substantial time in a hearing which was almost entirely devoted to submissions about the likely length of the trial and the amount that should be ordered. The submission of the applicant that the amount awarded should be reduced due to the past conduct of the respondents was rejected. Nevertheless, it is also the case that the amount awarded was substantially less than that sought by the respondents and significantly closer to the figure offered by the applicant.
Given the respondents did not submit that, once the applicant made its offer, they sought to negotiate a resolution without a hearing, I am not satisfied that the respondents had any appetite to engage in negotiations. That has significance given the order made was substantially less than was sought. Further, an aspect of the amount sought by the respondents was inappropriate as it did not relate to costs from the second day of the trial. An aspect of the amount of $118,700 sought by the respondents was for costs relating to the preparation by its expert for the trial.
Of course, the matters immediately above must be viewed bearing in mind that the amount awarded was ultimately greater than that offered by the applicant. Not only do those matters weigh in favour of the application of the respondents, but it is also a consideration which means the primary submission of the applicant (i.e. – that it have an order for costs in its favour) should be rejected. In my view, the real issue is whether the respondents should have an order in their favour.
Conclusion
In the exercise of my discretion, I am not satisfied that any order for the costs of FDN 113 should be made.
While the respondents were awarded a greater amount than that offered by the applicant and the respondents successfully resisted submissions made by the applicant about their conduct during the proceedings being of enduring relevance, the order made was ultimately much closer to that offered by the applicants. In some instances, that may not be a matter which is material. However, I am not satisfied that the respondents made any effort to negotiate with the applicant about its offer. Also material is that the respondents also pressed for costs with respect to preparation for the trial to which they were not entitled.
Order
1.The application of the respondents for costs with respect to FDN 113 is refused.
2.I decline to make any order for costs with respect to FDN 113.

[2025] SASC 52

24 April 2025