Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 4)

[2025] NSWCA 184

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 4) [2025] NSWCA 184

Hearing dates:

On the papers

Date of orders:

12 August 2025

Decision date:

12 August 2025

Before:

Bell CJ; Payne JA; Stern JA

Decision:

(1)   Set aside order 2 made on 30 July 2025 and in lieu thereof order:

Mr Bolton pay the respondent’s costs of the appeal:

(a)   incurred on or before 17 July 2025 assessed on the ordinary basis; and

(b)   from 18 July 2025 assessed on an indemnity basis.

Catchwords:

COSTS — special costs order — offer of compromise by respondent not accepted — whether offer open for such time as reasonable in circumstances — Uniform Civil Procedure Rules r 20.26

COSTS — costs of appeal — consequence of offer of compromise made prior to trial — indemnity costs — Uniform Civil Procedure Rules r 42.15A

Legislation Cited:

Uniform Civil Procedure Rules 2005 rr 20.26, 42.15A, 51.47

Cases Cited:

Chalik v Chalik [2025] NSWCA 136

Houghton v Potts (No 3) [2023] NSWSC 69

Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No. 2) [2008] NSWCA 85

Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391

Leda v Weerden (No 3) [2006] NSWSC 220

Snowy Mountains Grammar School Ltd v Adventurer AWD Pty Ltd [2022] NSWSC 53

Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 3) [2025] NSWCA 168

Yowie Group Ltd v Keybridge Capital Ltd [2025] NSWCA 142

Texts Cited:

Nil

Category:

Costs

Parties:

Yowie Group Limited (Appellant)
Nicholas Bolton (Second Appellant)
Keybridge Capital Limited (Respondent)

Representation:

Counsel:
L Judd (Second Appellant)
J S Emmett SC / D Krochmalik / D Monteith (Respondent)

Solicitors:
Bridges Lawyers (Second Appellant)
Mill Oakley (Respondent)

File Number(s):

2025/243020

Publication restriction:

None

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2025] NSWSC 648

Date of Decision:

20 June 2024

Before:

Black J

File Number(s):

2025/213618

JUDGMENT

1. THE COURT: On 30 July 2025, the Court delivered its judgment in this matter: Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 3) [2025] NSWCA 168. In what follows familiarity with that decision is assumed.

2. At the time judgment was handed down, the successful respondent sought the fixing of a timetable to make submissions about a special costs order. The Court made the following orders:

1. Direct that the respondent file any submissions in respect of special costs order in light of the Court’s decision of no more than 3 pages, by 4pm on Friday 1 August 2025 together with any evidence.

2. Direct that Mr Bolton file any submissions of no more than 3 pages and evidence in reply, by 4pm next Wednesday 6 August 2025.

3. Direct that the respondent file any submissions in reply to Mr Bolton’s submissions, by 4pm Friday 8 August 2025. If the respondent does not intend to reply, the respondent is to notify the Court as soon as possible after Mr Bolton has filed his submissions.

3. On 1 August 2025, the respondent filed an affidavit of Nicole Mouyat affirmed on that date, together with written submissions.

4. Mr Bolton did not file any submissions or evidence in reply. On 7 August 2025, the respondent notified the Court (and Mr Bolton) by email that as Mr Bolton had not filed submissions or evidence there would be no submissions in reply. The respondent consented to the application being determined on the papers.

Relevant facts

5. As we explained in our principal judgment, on 9 July 2025 Mr Bolton was joined by an order of Leeming JA as the second appellant to these proceedings which had been commenced by Yowie Group Limited (YGL). Following Mr Bolton’s joinder, YGL played no active part in the proceedings.

6. On the afternoon of 16 July 2025, Mr Bolton’s then solicitors served an amended notice of appeal and written submissions signed by Mr Green SC.

7. Ms Mouyat deposed that at 10.31am on 17 July 2025, the following letter was sent to Mr Bolton’s solicitors:

Bolton v Keybridge Capital Ltd - Supreme Court of NSW, Court of Appeal Proceeding No. 243020 of 2025

We act for Keybridge Capital Limited. We refer to your client’s amended notice of appeal served on 16 July 2025 and the hearing listed on 24 July 2025.

The purpose of this letter is to offer to resolve the proceedings to avoid further unnecessary costs being incurred.

No reasonable prospects of success

Your client’s amended notice of appeal, and submissions in chief, largely replicate the grounds of appeal and arguments that were raised unsuccessfully by Yowie before Leeming JA on the injunction application heard on 26 June 2025. Justice Leeming dismissed that application with costs and described the prospects of success on appeal as “weak at best”. We refer to paragraphs 31, 39 and 53 of his Honour's judgment, as well as the catchwords in the headnote: Yowie Group Ltd v Keybridge Capital Ltd [2025] NSWCA 142.

Your client also requires leave to appeal as a non-party to the proceedings below. To the extent your client seeks to protect his reputation, the only ground that appears to be directed to your client's reputation is proposed ground 4. That ground challenges Black J’s finding that the directors of Yowie made the decision to postpone the Yowie s 249F meeting for an improper purpose. We note that your client did not give evidence at trial and does not seek to adduce any fresh evidence on appeal. Black J’s findings as to improper purpose were supported by a Jones v Dunkel inference that the evidence that could have been given by the directors of Yowie (other than Mr Ranger) who were not called at trial would not have assisted Yowie in displacing the inference that Yowie’s directors postponed the meeting for an improper purpose. Your client has not sought to challenge that inference on appeal and your client’s submissions do not identify any error in Black J’s reasoning that has reasonable prospects of success.

Offer of compromise

Our client makes the following offer to resolve the proceedings in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW). The offer relates to the whole of your clients' appeal.

The terms of the offer are that (Offer):

(a)   the proceedings be dismissed; and

(b)   there be no order as to costs as between Mr Bolton and Keybridge.

In accordance with rule 20.26(1), the proposed orders for the disposal of your client's appeal are orders to the effect set out in (a) and (b) of the Offer.

The offer is open for acceptance in writing until 10.00am on Monday 21 July 2025, at which time the offer will lapse. Our client considers that time period to be reasonable in the circumstances, having regard to the expedited nature of the proceedings and the final hearing scheduled for 24 July 2025. Our client will be required to incur substantial costs in preparing for the hearing, including briefing Senior Counsel and Junior Counsel.

Calderbank offer

The Offer set out above is also made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333, Cutts v Head [1984] 1 ALL ER 597 and Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No. 2) [2005] VSCA 298. In the event that the Offer is not accepted, and our client obtains an order no less favourable than the terms of the Offer set out in this letter, our client will rely on this letter in support of an application for indemnity costs.

Our client considers that the Offer set out above constitutes a genuine compromise of the proceedings given our client has already incurred considerable costs dealing with the multiple directions hearings concerning your client's desire to intervene in and prosecute the appeal and to prepare for the hearing. By making the Offer, our client is prepared to forego its right to seek to recover these costs against your client. If the proceeding continues, our client will incur further substantial costs in preparing for the appeal, which our client will also seek to recover from your client.

We await your response.

….

8. No response to this letter was received by the respondent.

Submissions

9. The respondent submitted that the following orders should be made:

Order that the second appellant (Mr Bolton) pay the respondent’s costs of the appeal:

(a)   incurred on or before 17 July 2025 assessed on the ordinary basis; and

(b)   from 18 July 2025 assessed on an indemnity basis.

10. So far as r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) is concerned, paragraph (5) provides:

(5)   The closing date for acceptance of an offer–

(a)   in the case of an offer made two months before the date set down for commencement of the trial–is to be no less than 28 days after the date on which the offer is made, and

(b)   in any other case–is to be such date as reasonable in the circumstances.

11. The offer here was open for a period of four days. The case was heard in this Court with extraordinary dispatch, being closely case managed by Leeming JA, the subject of a hearing on 24 July 2025 and a detailed written judgment delivered on 30 July 2025.

Operation of UCPR r 20.26

12. In Leda v Weerden (No 3) [2006] NSWSC 220, Gzell J dealt with a case where an offer under an earlier version of UCPR r 20.26 was open for four days close to the time of the trial. His Honour rejected submissions that the period of offer failed to comply with the reasonableness requirement and noted that the parties are in the best position to assess an offer when it is made shortly before the commencement of the trial:

[6]   An offer of compromise was made on 30 January 2006 by Mr Weerden. It was stated that the offer was open for acceptance until 4.00 pm on 3 February 2006, four days later. The offer was that there be a verdict for Mr Weerden and that he and Leda should bear their own costs save in respect of costs already the subject of an order.

[7] Rule 20.26 of the Uniform Civil Procedure Rules 2005 deals with such offers. Leda submitted that the offer did not comply in that r 20.26(7)(b) provides that if an offer is limited as to the time it is open for acceptance, it must be left open for such time as is reasonable in the circumstances in a case where an offer is made less than two months before the date set down for the commencement of the trial. It was said that a four day period in the week immediately prior to the commencement of the trial fails to comply with the requirement. It was said that a reasonable time within the contemplation of the rule ought to have regard to the two months mentioned in it.

[8]   It was also submitted that since Leda made an offer on 11 January 2006 and it took Mr Weerden until 30 January 2006 to make his offer, that interval was an indication of what should be regarded as a reasonable time in the circumstances.

[9] I reject those submissions. In my view, the two month period does not give any indication of what is regarded as a reasonable time because in the Uniform Civil Procedure Rules 2005, r 42.15(2)(b)(ii), which deals with the cost consequence of a failure to accept a defendant’s offer, reference is made to an offer being made after the commencement of the trial. It provides that the defendant is entitled to indemnity costs from 11.00 am on the day following the offer if made after the first day of the trial.

[10]   In my view, the parties will be in the best position to assess an offer when it is made shortly before the commencement of the trial. By that stage preparation for the trial will be well in hand and the legal advisers will, therefore, be armed with sufficient information to make a reasoned judgment of the offer.

13. In Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No. 2) [2008] NSWCA 85, Basten JA (with whom Giles and Tobias JJA agreed on this point) found that an offer of compromise served immediately prior to trial which was open for a day was a “borderline” case and that the party seeking to establish an entitlement to indemnity costs failed to establish that its offer was left open for a reasonable time. His Honour noted the “three factors” the Court is to take into account in considering whether the time allowed for acceptance is reasonable in all the circumstances:

[20]   In considering whether the time allowed for acceptance is “reasonable in all the circumstances” once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.

[21]   In relation to the first factor, it should be accepted that by the day before the hearing, in commercial litigation involving experienced counsel and solicitors, the legal representatives would have been able to give the client an immediate assessment of:

(a)   the approximate costs incurred to date;

(b)   the likely length of the trial;

(c)   the approximate amount of costs assessed on an indemnity basis if the matter proceeded to trial, and

(d)   the most likely outcome, which may involve a range as to quantum.

It should also be accepted that someone with authority to bind the client would have been available to give instructions based on legal advice as to the preferable response.

[22]    In seeking to demonstrate that the offer had not been left open for a reasonable time in all the circumstances, Primus sought to put before the Court evidence of how the offer was made and the circumstances of its own legal representatives at the time. However, that material was not relevant for this purpose. The question of reasonableness must be judged objectively, in the circumstances known, or which should reasonably have been anticipated, by both parties. In setting the time during which the offer is to remain open, the offeror must necessarily rely upon the circumstances as known to it, or which should reasonably be anticipated by it. The actual circumstances of the recipient, unknown to the offeror, may be relevant to an application that the Court otherwise order in relation to costs of a valid unaccepted offer, but so might evidence as to whether the recipient took any steps to bring such matters to the notice of the offeror.

[23] In the present case, the time allowed was, on any view, a short period for the consideration of a global assessment of a reasonably complex dispute. It is Kooee which seeks to establish an entitlement to indemnity costs. To do that it must demonstrate that its offer was left open for a period which was reasonable in all the circumstances. Because the present case is truly borderline, it should be concluded that Kooee has failed to establish that its offer was left open for a reasonable time. Accordingly, the offer did not fall within UCPR r 20.26 and its non-acceptance did not engage the costs consequences in r 42.15.

Consideration

14. Division 4 (Compromise) of Part 20 of the UCPR applies (with necessary modifications to the language) to offers of compromise made in proceedings in the Court of Appeal: UCPR r 51.47. At the time the offer was made, we are satisfied on the basis of My Mouyat’s affidavit evidence that the respondent had already incurred significant costs in the appeal, including in preparing for the hearing of the appeal initially listed on 10 July 2025. There had been a number of directions hearings at which Mr Bolton’s expressed desire to intervene in the appeal had been canvassed. The respondent had commenced to consider the amended notice of appeal and written submissions had been served on behalf of Mr Bolton. The respondent was agreeing to forego something of substance, including the costs already incurred and the additional costs that the respondent would incur for the duration of the offer. In the present case, the respondent’s offer constituted a “compromise”.

15. As to UCPR r 20.26(5), the offer was made within 28 days from the hearing of the appeal and was open for acceptance for a period of 4 days. The closing date of the offer was the date the respondent was required to file its written submissions. We have determined that the period was reasonable in the circumstances. First, the appeal was expedited and was set down for hearing 7 days later. Secondly, the offer was made promptly after Mr Bolton served his amended notice of appeal and submissions on 16 July 2025. Thirdly, the respondent was required to file submissions in response within 2 business days (and over a weekend) by 21 July 2025. The compressed timetable necessary to prepare the matter for urgent hearing meant that the parties were accruing significant costs on a daily basis.

16. The relevant circumstances also include the fact that in Yowie Group Ltd v Keybridge Capital Ltd [2025] NSWCA 142, Leeming JA had described the principal grounds of appeal advanced as “weak at best”. Mr Bolton’s amended notice of appeal did not in our view affect that assessment. This was a case where at the time the respondent’s offer was made, Mr Bolton was in a position properly to assess the offer. At that time, his preparation for the appeal was essentially complete and his legal advisers were armed with sufficient information to make a reasoned judgment about the respondent’s offer. The period the offer was open for acceptance was reasonable in the circumstances.

17. UCPR r 42.15A provides that, where a defendant’s formal offer of compromise is unreasonably rejected by the plaintiff, and the defendant obtains judgment which is no less favourable than the terms of the offer, then, “unless the court orders otherwise”, the defendant is entitled to: (i) costs on the ordinary basis up to the time that the offer was made; and (ii) costs on an indemnity basis thereafter. Satisfaction of the elements in UCPR r 42.15A therefore creates a “prima facie entitlement to indemnity costs” from the date of the offer: Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [40] (Leach); Houghton v Potts (No 3) [2023] NSWSC 69 at [16]; Chalik v Chalik [2025] NSWCA 136 at [136]. The unsuccessful party bears the onus of persuading the Court that indemnity costs should not be ordered: Leach at [29]; Snowy Mountains Grammar School Ltd v Adventurer AWD Pty Ltd [2022] NSWSC 53 at [4]. Mr Bolton did not provide the Court with any submissions opposing to the making of an indemnity costs order. The present offer attracts the operation of r 42.15A and there is no reason to “order otherwise”.

Conclusion and orders

18. For the foregoing reasons the Court orders:

1. Set aside order 2 made on 30 July 2025 and in lieu thereof order:

Mr Bolton pay the respondent’s costs of the appeal:

1. incurred on or before 17 July 2025 assessed on the ordinary basis; and

2. from 18 July 2025 assessed on an indemnity basis.

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Decision last updated: 12 August 2025