Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd (No 2)

Category: Costs

Parties: Alto Pty Ltd (Plaintiff)
General Motors Australia and New Zealand Pty Ltd (First Defendant)
General Motors Holden Australia NSC Pty Ltd (Second Defendant)
Mark Bernhard (Third Defendant)

Representation: Counsel:
MS Henry SC with DJ Delany (Plaintiff)
J Giles SC with H Mann (Defendants)
Solicitors:
Dentons (Plaintiff)
Norton Rose Fulbright (Defendants)

File Number(s): 2021/187724

Publication restriction: Nil

JUDGMENT

1. On 18 December 2025, this Court made orders and published its reasons dismissing the claims pressed by the plaintiff (Alto) in these proceedings: Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd [2025] NSWSC 1566 (Substantive Judgment). This judgment assumes familiarity with the Substantive Judgment. Terms defined in the Substantive Judgment have the same meaning in this judgment.

2. Upon delivery of the Substantive Judgment, I directed that the parties file and serve submissions as to costs and that costs be determined on the papers unless otherwise ordered. Both Alto and the defendants have now filed submissions as to costs, together with supportive affidavit evidence; Alto relies on an affidavit of Louise Massey affirmed 13 February 2026 (the Massey Affidavit), with annexures, and the defendants on an affidavit of Peter Edmund Cash affirmed 5 February 2026 (the Cash Affidavit), with exhibit PEC-4.

3. The defendants seek the costs of the abandoned breach of contract and implied representation claims advanced against NSC, and NSC’s costs as a whole, on an indemnity basis. In the alternative, noting the numerous offers made by the defendants to Alto to settle the proceedings, the defendants seek costs on an indemnity basis assessed from 5 June 2020, 22 September 2021, 22 March 2022 or 31 July 2025. Alto accepts that it must pay the defendants’ costs of the proceedings, but denies that there is any warrant for indemnity costs or to disturb existing interlocutory costs orders in the plaintiff’s favour.

Indemnity Costs - the breach of contract and November 2017 Representation claims

4. In its written closing submissions, Alto abandoned a claim against NSC for breach of the DSSA entered into between Alto and NSC in early 2018 (the breach of contract claim). In those submissions, Alto also abandoned a claim against NSC for misleading and deceptive conduct under ss 18(1) and 236 of the Competition and Consumer Act 2010 (Cth), Sch 2 (the ACL). That claim was premised upon an alleged implied representation by NSC in November 2017 (the November 2017 Representation claim) when NSC offered to enter into a further DSSA with Alto, that it would continue to supply Holden motor vehicles and parts until 31 December 2022 (that is, until the end of the term of that DSSA).

5. As already indicated, the defendants contend that, in abandoning these claims, Alto has implicitly accepted that they were doomed to fail, because the alleged contractual promise did not exist and the alleged implied representation could thus not have been made, and because no damage was suffered by Alto. They contend, further, that that conclusion also necessarily flows from the decision of Nichols J in Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd [2025] VSC 125; 108 MVR 490, a class action which Alto did not join.

6. As noted above at [3], Alto denies that there is any warrant for indemnity costs to be ordered in respect of these claims. Alto relies upon the following passage in the judgment of Mitchelmore JA (Meagher JA and Simpson AJA agreeing), in Cappello v Homebuilding Pty Ltd [2023] NSWCA 109 at [47]-[48]:

For an order of indemnity costs to be made, the conduct of the party against whom such costs are sought must usually exhibit some special or unusual feature: Collier [Collier v Country Women’s Association of New South Wales [2018] NSWCA 36] at [117]. The focus is on the way the litigation was conducted: Mead v Watson [2005] NSWCA 133 at [8]-[9]. For example, the discretion may be enlivened where a party persists in what should have been seen to be a hopeless case, such as where the case was unduly prolonged by groundless contentions: Ferella [Ferella v Stomo [2017] NSWCA 268] at [36]; Liverpool City Council v Estephan (Executor and Administrator of the Estate of the late Jocelyn Estephan and Ors) [2009] NSWCA 161 at [93] (“Liverpool City Council”). It has also been said that indemnity costs may be awarded where the unsuccessful party’s conduct was unreasonable or delinquent: Amirbeaggi v Matrix Group Co Pty Ltd [2021] NSWCA 21 at [18].

The categories of circumstances in which the discretion may be exercised are not closed: Liverpool City Council at [93]. Ultimately, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on the ordinary basis: Liverpool City Council at [93].

7. Further, as Alto contends, it is uncontroversial that it is necessary to assess whether a claim is hopeless without hindsight, and, as Wigney J observed in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 at [11]:

[…]the deficiencies must be sufficiently manifest and clear such that it can be inferred that the losing party would or should have appreciated them when the action was commenced or continued, at least if they had given proper consideration to, or been properly advised about, the merits of their case.

8. In its written and oral opening submissions at trial, Alto contended that there were compelling reasons to depart from the reasoning in Beecham Motors*,* as the conclusion reached in that case was erroneous. Alto also relied upon the fact that there was an extant appeal against the decision of Nichols J. Alto contended that the implied term upon which it relied was necessary to give business efficacy to the DSSA given the extent of Alto’s obligations under the DSSA and the commercial purpose underlying that agreement. In oral opening submissions, Senior Counsel for Alto contended that “no one would suggest, we say, that Alto assumed the risk that Holden would never supply cars [under the DSSA]”. As the November 2017 Representation claim was premised upon the supply by NSC to Alto, and upon the terms, of the DSSA, Alto’s contentions as to the proper construction of the DSSA to some extent went also to the November 2017 Representation claim, although Alto also contended that the mere fact of supplying the DSSA with a term from 1 January 2018 to 31 December 2022 conveyed that Holden vehicles would be supplied over that term.

9. Alto’s abandonment of the November 2017 Representation claim was likely also informed by the oral evidence of Mr Altomonte that he did not read the DSSA or the disclosure agreement that was sent to Alto in late 2017. That evidence significantly diminished any prospect of Alto proving reliance upon the November 2017 Representation.

10. Overall, having regard to the matters set out above and to the matters relied upon in support of these claims at trial, whilst I would characterise Alto’s breach of contract and the November 2017 Representation claims as weak, they were not claims that Alto should have appreciated were hopeless. The claims were, quite properly, abandoned in closing submissions, and Alto’s conduct in pressing those claims until that point in the proceedings was not such to warrant an order that costs be paid on an indemnity basis.

Indemnity Costs – offers made by the defendants to Alto

11. The defendants’ submissions in favour of indemnity costs being awarded refer to correspondence in which the defendants clearly articulated their position in respect of Alto’s allegations and made a series of offers to Alto to settle the proceedings. The defendants contend that Alto unreasonably failed to accept each of these offers. In light of the Substantive Judgment, acceptance of any of the offers would have resulted in Alto being in a better position than it was following that judgment.

12. The defendants rely upon an offer which they made to Alto on 5 June 2020 and upon Calderbank offers they made to Alto on 22 September 2021, 22 March 2022 and 31 July 2025.

13. Failure to accept a Calderbank offer, that is, one which complies with the requirements set out in Calderbank v Calderbank (1976) Fam 93, does not automatically entitle the offeror to indemnity costs, even where the party making the offer receives a result more favourable than that offered: Jones v Bradley (No 2) [2003] NSWCA 258 at [9]. As explained in Leichhardt Municipal Council v Green [2004] NSWCA 341 at [14], the rationale underlying Calderbank offers is to:

[…] facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore […] it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants.

14. The reasonableness of any rejection of a Calderbank offer is the centrally important question going to the exercise of the court’s discretion as to costs: SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] (Giles JA). The question is whether there was a genuine offer of compromise and whether the offeree acted unreasonably in all the circumstances in refusing the offer, with the issue of reasonableness being assessed at the time the offer is made and not with the benefit of hindsight: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [11] (Basten JA).

5 June 2020 email

15. By email of 5 June 2020, prior to proceedings being issued, the first and second defendants made Alto an offer of compensation in the sum of $978,848. This email did not engage with the merits of any claim by Alto. It was sent as part of GM Holden’s “Transition Support Program” through which it offered compensation to Holden dealers. Prior to this email, there had been communications between HWL Ebsworth Lawyers, acting on behalf of a number of Holden dealers including Alto, and the defendants, in which HWL Ebsworth Lawyers contended that NSC had repudiated DSSAs and the “GM Entities” (referring collectively to GMC, GM Holden and NSC) engaged in misleading and deceptive conduct, but this correspondence fell well short of articulating the detailed matters upon which Alto’s claims in these proceedings relied. Thus, the denials of misleading and deceptive conduct in a letter of 5 May 2020 to HWL Ebsworth Lawyers from Norton Rose Fulbright, solicitors for the defendants, similarly did not engage substantively with the matters relied upon by Alto in these proceedings.

16. Alto did not accept this offer.

17. Given the level of generality at which this offer was made, and its timing, Alto did not act unreasonably in not accepting this offer. Its claims had yet to be formulated and it was not yet aware of the way in which such claims would be responded to.

22 September 2021 Calderbank offer

18. By letter of 22 September 2021, the first and second defendants made a Calderbank offer of $850,000 plus costs on the ordinary basis. The offer was open for a period of 14 days and was made after both the Commercial List Statement (on 30 June 2021) and the Commercial List Response (on 10 September 2021) had been filed. The Commercial List Response, as at 22 September 2021, included a detailed response to Alto’s claim and identified the bases upon which GM Holden had reasonable grounds for making the March and May 2017 representations, including public statements by Mr Ammann and matters evidencing GM Holden’s ongoing commitment to its business and GMC’s commitment to the business in Australia. Some, but not all, of the matters ultimately relied upon by the defendants were referred to in this iteration of the Commercial List Response.

19. Documents referred to in the Commercial List Response were provided to Alto for its consideration on 28 September 2021 (the day after the solicitors for Alto wrote rejecting the offer on the basis that those documents had not been provided to Alto).

20. Alto did not accept this offer.

21. The letter of 22 September 2021 explained why it was that the defendants had reasonable grounds for making the representations which Alto alleged to be misleading or deceptive. This included because the March 2017 representations were based upon public statements by Mr Ammann and that GMC was making investments in Holden. However, this was prior to affidavit evidence being served (affidavit evidence in chief was not served by the defendants until 29 November 2021), discovery (which took place between 19 October 2022 and 21 December 2022) and production of documents from GMC (which took place on 16 March 2024 and 19 December 2024).

22. The gravamen of the defendants’ responses to Alto’s claims was exposed to Alto at the time of the 22 September 2021 letter. However, as is apparent from the Substantive Judgment, the resolution of Alto’s misleading and deceptive conduct claims required a detailed consideration of the affidavit evidence and the documentary material which went to the matters relied upon by the defendants as providing reasonable grounds for the alleged representations. The question of whether the May 2017 representations were made turned ultimately upon Mr Altomonte’s oral evidence, the affidavit evidence relied upon by the defendants and the documentary evidence which shed light on what occurred at the 23 May 2017 meeting attended by Mr Altomonte, Mr Bernhard, Mr Alchi and Mr Jamieson, in particular Mr Alchi’s email sent at 1.27 pm on 23 May 2017 to Mr Bernhard and others: Substantive Judgment at [251]. Further, the issue of whether there were reasonable grounds for making the March and May 2017 representations turned upon what was said in the defendants’ affidavit evidence, but also the many underlying documents going to the reality and extent of GMC’s commitment to Holden, and to Holden’s understanding of that commitment at material points in time. As set out in the Substantive Judgment at [188]-[195], the presence or absence of reasonable grounds for a representation is tested objectively. This was particularly important in circumstances where the March 2017 representation went to the character and extent of GMC’s commitment to Holden as at that point in time. In these circumstances, Alto did not act unreasonably in not accepting the offer conveyed by the 22 September 2021 letter.

22 March 2022 Calderbank offer

23. By letter of 22 March 2022, the defendants made a further Calderbank offer of $750,000 inclusive of costs. That offer was open for 14 days and was made after affidavit evidence in chief was served by Alto and the defendants, but before discovery or production of documents from GMC. By this date, Alto had received Mr Alchi’s affidavit and the 23 May 2017 email setting out Mr Alchi’s near contemporaneous account of the 23 May 2017 meeting.

24. Alto did not accept this offer.

25. As to timing, as noted by Stevenson J in Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd (formerly GM Holden Pty Ltd) [2022] NSWSC 853 (Alto Discovery Decision), on 25 March 2022 Alto filed a notice of motion seeking discovery including five broad categories, being:

(a) documents relevant to the approval by General Motors US of the defendants’ budgets;

(b) documents relevant to the “comprehensive strategy … laid out in 2015” referred to in General Motors US’s announcement on 16 February 2020;

(c) documents relevant to the location from where the defendants would source Holden cars;

(d) documents relevant to the Lang Lang Proving Ground’s upgrade; and

(e) documents relevant to the proposed headquarters at Fishermen’s Bend.

26. It is apparent that, at around the time of the offer of 22 March 2022, Alto was actively pursuing documents which it contended were relevant to the issues arising in the proceedings, going in particular to the issue of whether, considered objectively, there were reasonable grounds for the March and May 2017 representations.

27. Whilst in many, perhaps most cases, it might not be reasonable to await discovery before deciding whether to accept an offer of compromise, in the somewhat unusual circumstances of this case, it was not unreasonable for Alto to do so as regards the 22 March 2022 offer. This is a case in which the documentary material was, for the reasons already set out, of considerable significance in determining whether Alto had reasonable grounds for the March or May 2017 representations. There was every likelihood that there would be documents held by Holden and GMC going to this question. Contrary to the defendants’ contention, Alto should not be characterised as having relied “on a hope that discovery would improve its case”. Rather, Alto acted reasonably in seeing how, if at all, available documents supported (or did not support) the defendants’ contentions in the Commercial List Response as to reasonable grounds, noting that these were particularised by reference to a range of matters including the “actions” of GMC in relation to Holden (at [24](a)(II)) and GM Holden’s ongoing commitment to its business (at [24](a)(III)).

28. The matters relied upon by the defendants as objectively showing reasonable grounds were addressed in the defendants’ affidavit evidence, sometimes at a level of generality. However, given that reasonable grounds are tested objectively, the issue of reasonable grounds necessarily turned upon what was disclosed by the relevant documents.

29. By way of example, one matter which gave important context to the March and May 2017 representations was the sale of Opel, by GMC to PSA, announced on 6 March 2017. As Mr Bernhard explained in his 26 November 2021 affidavit at [62], this announcement attracted considerable media attention in Australia because the Astra Hatch was then manufactured by Opel and the next generation Commodore was to be manufactured by Opel. He did not, in this affidavit, explain what, to his knowledge, GMC proposed to do in relation to these vehicles, explaining instead that, based upon his own knowledge and experience, he thought “we could get [these vehicles] from somewhere else within the General Motors family”: at [64]. Documents going to the question of what, if any, arrangements had been put in place to source vehicles for Holden after the Opel sale was likely to cast material light on the issue whether the defendants had reasonable grounds for the March and May 2017 representations. Documents going to that issue were within one of the categories of discovery sought by Alto (and in fact ordered by Stevenson J in the Alto Discovery Decision).

31 July 2025 Calderbank offer

30. By letter of 31 July 2025, the defendants made a further Calderbank offer of $2,250,000 inclusive of costs. This offer was open for acceptance until 4 pm on 14 August 2025.

31. Alto did not accept this offer.

32. This offer was made following discovery, service of further evidence and a mediation. The offer set out, in some detail, why the defendants said that Alto’s claims would fail. Whilst, as Alto contends, I ultimately gave considerable weight, in the Substantive Judgment, to the oral evidence when dismissing Alto’s claims, by 31 July 2025 Alto had all of the material necessary for it to make an informed assessment of prospects. That included all of the defendants’ affidavit lay evidence relied upon at trial and all of the documents produced on discovery and from GMC. Alto also had access to its own witnesses and could take instructions from Mr Altomonte and test his evidence in conference. Alto also knew what its costs were as at that date.

33. In the circumstances, I am satisfied that it was unreasonable for Alto not to accept this offer and that this warrants an order that indemnity costs be paid from 15 August 2025 (being the date immediately after the expiry of this offer).

Existing interlocutory costs orders in Alto’s favour

34. Alto contends that existing costs orders in its favour should not be disturbed. The defendants do not address this in their submissions. I accept Alto’s contention. There is no reason to disturb existing costs orders in Alto’s favour.

Conclusion

35. Given that the defendants have succeeded only in part in their contentions on costs, the proper order is that each party bear its own costs of the issue of costs.

36. My orders are:

37. The plaintiff is to pay the defendants’ costs of the proceedings on an ordinary basis up to 14 August 2025 and on an indemnity basis thereafter, save that:

(a) Existing costs orders in the plaintiff’s favour are not to be disturbed; and (b) Each party bears its own costs of the issue of costs.