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Category: Costs

Parties: Nicholas Francis John Bolton (Plaintiff)
Keybridge Capital Limited (Defendant)

Representation: Counsel:
J Stoljar SC w T Goldberg (Plaintiff)
M R Pesman SC w D Krochmalik (Defendant)
Solicitors:
Speed and Stracey Lawyers (Plaintiff)
Gadens (Defendant)

File Number(s): 2026/163283

Publication restriction: N/A

JUDGMENT

1. On 21 May 2026, I delivered reasons for judgment in this proceeding: Bolton v Keybridge Capital Limited [2026] NSWSC 562 (Primary Judgment). These reasons assume familiarity with the Primary Judgment and adopt defined terms used therein.

2. In the Primary Judgment, I determined that Mr Bolton was entitled to be paid his costs of defending the Primary Proceeding and the Italian Proceedings, as and when they are incurred, pursuant to cl 3.1 of the Director’s Deed, subject to Keybridge’s entitlement to recover those costs from Mr Bolton in the event that it is subsequently established (by reason of the outcome of those proceedings) that he was not entitled to be so indemnified.

3. At the time of delivering the Primary Judgment, I directed the parties to confer regarding orders to give effect to my reasons for judgment, and also to confer regarding any orders for interest and costs. The parties were unable to agree on a proposed set of orders and consequently provided to my Chambers competing orders and written submissions, following which there was a further short hearing on 28 May 2026.

4. There were a number of matters on which the parties were able to reach consensus. In particular:

5. Mr Bolton sought, and Keybridge did not oppose, that the declaration in the Primary Judgment at paragraph [152] be varied so as to specify (for the avoidance of doubt) that the costs of defending the Primary Proceeding include the costs of any mediation;

6. Keybridge sought, and Mr Bolton did not oppose, a further declaration so as to reflect my finding in the Primary Judgment at paragraphs [94]-[95] that Mr Bolton will be obliged, pursuant to cl 3.3(d) of the Director’s Deed, to repay amounts paid to him in respect of his costs of the Primary Proceeding and the Italian Proceedings, in the event that it is established in the Primary Proceeding that he owes a liability to Keybridge (such that he is not entitled to be indemnified in respect of those costs);

7. Mr Bolton and Keybridge agreed the terms of an order concerning the payment of any further costs incurred by Mr Bolton in defending the Primary Proceeding, as and when they are incurred; and

8. the parties sought, and I will grant, liberty to apply in the event that there is any issue regarding the interpretation or operation of the orders that are set out below.

9. There remain five issues for determination:

10. first, whether the amounts paid by Keybridge in respect of Mr Bolton’s costs of the Italian Proceedings should include the amount payable by Mr Bolton to Keybridge and WAM Active Limited in respect of a costs order made in those proceedings;

11. secondly, whether the orders should provide for the sums which are payable by Keybridge in respect of Mr Bolton’s presently incurred liabilities to be paid, via the trust account of Mr Bolton’s solicitors, to the various law firms to whom Mr Bolton has incurred those liabilities;

12. thirdly, whether there should be an order for interest and, if so, in what amount;

13. fourthly, whether Mr Bolton should be awarded his costs of this proceeding, or whether he should be awarded only 50% of his costs so as to reflect his mixed success; and

14. fifthly, whether the orders should be stayed for a short period so as to allow Keybridge to bring an appeal from these orders (which it intends to do).

Amount of costs liability in the Italian Proceedings

6. In the Primary Judgment, I determined that the quantum of liabilities presently incurred by Mr Bolton in respect of the Italian Proceedings is €131,892.28. This total includes an amount of €51,865.32 owing to Keybridge and WAM in respect of a costs order made in the Italian Proceedings (Primary Judgment, paragraphs [107]-[109], [115]-[116]).

7. Keybridge proposed that the amount of this costs liability be excluded from the total amount paid to Mr Bolton in respect of the liabilities incurred in the Italian Proceedings, on the basis that Mr Bolton owes this liability to Keybridge and Keybridge does not require that the liability be discharged prior to the conclusion of the Primary Proceeding.

8. Mr Bolton submitted that a statement of Keybridge’s present intentions, made in written submissions, was of little comfort to Mr Bolton, particularly since the costs liability is owed by Mr Bolton to both Keybridge and WAM.

9. In response, during the course of oral submissions, Senior Counsel for Keybridge proffered an undertaking, on behalf of each of Keybridge and WAM, not to enforce any costs order in the Italian Proceedings pending the ultimate resolution of the Primary Proceeding.

10. In light of that undertaking, I accept Keybridge’s submission that the Court should not require Keybridge to make a payment to Mr Bolton in respect of the costs order made in the Italian Proceedings. That is particularly so in circumstances where I have determined, for reasons explained below, that the orders made by the Court should provide for the amounts which Keybridge must pay in respect of Mr Bolton’s presently incurred liabilities to be paid into the trust account of Mr Bolton’s solicitors, and then to be paid from that account to the persons to whom those liabilities are owed. There is no utility in making an order that Keybridge pay funds to Mr Bolton’s solicitors, in order that those funds can then be paid to Keybridge in respect of a costs order which Keybridge and WAM have undertaken not to enforce until the Primary Proceeding is resolved.

Orders regarding payment of presently incurred liabilities

11. It was common ground that the order requiring Keybridge to pay the amount of Mr Bolton’s presently incurred liabilities should be framed so as to specify that such payment was to be made pursuant to the declaration made by the Court. This was in order to address the issue that was raised in paragraph [150] of the Primary Judgment.

12. It was also common ground that such payments should be made, at least in the first instance, into the trust account of Mr Bolton’s solicitors, Speed and Stracey.

13. Keybridge sought an order directing Speed and Stracey to make payments from that trust account, following the receipt of such payments, to the various firms to whom the incurred liabilities for costs are owed by Mr Bolton, namely:

14. Hamilton Locke in the sum of $171,175.96;

15. Cornwalls in the sum of $34,144.74; and

16. DWF in the sum of €80,026.96.

17. Mr Bolton submitted that the Court should not make an order requiring Speed and Stracey, who are not parties to the proceeding, to take any step. However, as Senior Counsel for Mr Bolton acknowledged, this issue can be addressed by an order directing Mr Bolton to give instructions to Speed and Stracey for such payments to be made.

18. Leaving aside that objection to the form of the orders, Mr Bolton contended that no order should be made regarding what should happen to the funds after their receipt by Speed and Stracey. In particular, Mr Bolton submitted that it was too late for Keybridge to propose that the orders provide for the moneys in question to be paid to the persons to whom the liabilities were owed, on the basis that “evidence might have been led in relation to what invoices have or have not been paid, or what arrangements have been made”.

19. There are two main problems with this submission.

20. First, as Senior Counsel for Mr Bolton conceded, the existence of any such arrangements is a matter peculiarly within the knowledge of Mr Bolton and he could have, if he wished, led evidence of any such arrangements in response to Keybridge’s proposed orders, but chose not to do so.

21. Secondly, and more importantly, the hearing on 18 May 2026 proceeded on the basis that Mr Bolton has existing liabilities in respect of the amount of the invoices issued to him, which are due and payable, such that he has “incurred” liabilities within the meaning of cl 3.1 of the Director’s Deed. If there are “arrangements” with Hamilton Locke, Cornwalls or DWF, which have the effect that Mr Bolton is not required to pay the full amount of those invoices or is not required to render any payment unless or until some event occurs, then that is a matter which could and should have been addressed at the hearing.

22. As matters stand, the evidence is that Mr Bolton is liable to pay the amounts set out at paragraph [13] above to the law firms in question. He sought indemnity under cl 3.1 of the Director’s Deed in order to be put in funds to meet these presently incurred liabilities, which are due and payable. In those circumstances, a form of orders which provides for the funds payable by Keybridge in respect of those liabilities to be paid, via Mr Bolton’s solicitors, to the third parties to whom those liabilities are owed is a form of orders which does not prejudice Mr Bolton. Instead, it is a form of order which vindicates the claim made by Mr Bolton in this proceeding. It will result in the liabilities of Mr Bolton, in respect of which Keybridge is required to indemnify Mr Bolton in full pursuant to cl 3.1 (subject to its rights under cl 3.3(d)), being met in full from the moneys paid by Keybridge.

23. Accordingly, I will make an order in the form proposed by Keybridge but, as explained above, will frame the order such that it is directed to Mr Bolton, rather than to Speed and Stracey.

Interest

19. Mr Bolton sought statutory pre-judgment interest, with the amount of such interest being payable to him. In response, Keybridge contended any award of interest should be limited to the amount of interest (if any) which Mr Bolton is liable to pay to his former solicitors in respect of the outstanding invoices.

20. Mr Bolton submitted, by reference to Falkner v Bourke (1990) 19 NSWLR 574 at 576, that successful plaintiffs who obtain a money judgment will almost invariably be awarded interest; and noted that in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2010] FCAFC 16 (which was referred to in the Primary Judgment at [56], [71]), the Full Court of the Federal Court held (at [68]) that the company was required to pay interest on the sums payable to its indemnified former director.

21. As was acknowledged by Mr Bolton in his submissions, the power to award pre-judgment interest pursuant to s 100(1)-(2) of the Civil Procedure Act 200**5 (NSW) is discretionary. Principles relevant to the exercise of this discretion include that:

22. the basis for an award of interest is that the defendant has kept the plaintiff out of his or her money;

23. there is a “need to avoid over-compensation which would ‘improve the plaintiff’s position’”;

24. the exercise of the power “should correspond with reality”; and

25. interest will be refused where there is no “real or practical loss”.

26. (Screenco Pty Ltd v R L Dew Pty Ltd (2003) 58 NSWLR 720; [2003] NSWCA 319 at [41]-[43], Handley JA (with whom Sheller JA agreed), and the cases there cited.)

27. The Court must be persuaded that it is just, between the plaintiff and defendant, to make an order of interest in relation to each of the elements referred to in s 100 of the Civil Procedure Act, namely the rate, the sum to bear interest, and the period for which interest is to accrue: Pheeney v Doolan (No 2) (1977) 1 NSWLR 601 at 605 per Moffitt P.

28. I accept that, if there was evidence that Mr Bolton had already paid the amounts invoiced by the respective law firms (set out at paragraph [13] above), then he would have been entitled to interest on those amounts. That is because, in such a scenario, Keybridge’s failure to perform its obligations under cl 3.1 of the Director’s Deed would have resulted in Mr Bolton being kept out of his money, because, if those obligations had been performed, Mr Bolton would have received from Keybridge – or been reimbursed for – the amounts which were instead paid from his own funds. (It is unclear, from the Full Court decision in Rickus, whether this was the position in that case.)

29. However, as matters stand, Mr Bolton has not paid those invoices. If Keybridge had performed its obligations under cl 3.1 of the Director’s Deed as and when those liabilities were incurred, Mr Bolton would have had the “use” of that money in the sense that he would have been able to use those funds to pay those liabilities, and thereby would have avoided any interest on those liabilities. It follows that Mr Bolton has not been adversely affected by being kept out of the money that was payable in respect of his incurred legal expenses, except to the extent that he has, as a result of non-payment, become liable to pay interest on those invoices.

30. There is evidence that interest is payable to Hamilton Locke at a rate of 2% per annum above the cash target rate as at the date of the invoice. The application of this interest rate to the amount of Mr Bolton’s presently incurred liabilities to Hamilton Locke results in a total amount of interest of $5,548.68 as at the date of these orders.

31. Keybridge submitted, and Mr Bolton did not dispute, that Cornwalls is prohibited from charging interest on its tax invoice, pursuant to s 195(3) of the Legal Profession Uniform Law 2014 (NSW), by reason that Cornwalls’ bill of costs did not contain a statement that interest is payable and of the rate of interest.

32. There is no evidence that interest is payable to DWF.

33. If Mr Bolton were to receive an award of interest, at Court rates, on the whole of the amounts which were payable pursuant to cl 3.1 of the Director’s Deed in respect of his presently incurred liabilities to these law firms, the result would not be just as between Mr Bolton and Keybridge. That is because Mr Bolton would be over-compensated by receiving an amount which was, according to his proposed orders, more than 250% greater than the amount of interest which, on the evidence before the Court, has accrued in respect of those liabilities. If Keybridge had paid the amounts which it was obliged to pay under cl 3.1 of the Director’s Deed, as and when the relevant liabilities were incurred, those moneys would not have been retained by Mr Bolton, but instead would have been used to discharge his liabilities (such that interest would have ceased accruing on them). In those circumstances, the just result is that Keybridge pay Mr Bolton the amount of interest which has been shown to have in fact accrued.

34. I will therefore make an order that an amount of $5,548.68 be paid into Speed and Stracey’s trust account in respect of the interest payable to Hamilton Locke, with such amount to be paid from that trust account to Hamilton Locke.

35. Otherwise, I will not make any order for interest.

Costs of this proceeding

31. Mr Bolton sought his costs on a party-party basis, on the grounds that he has achieved substantial success in this proceeding, and that costs should follow the event.

32. Keybridge submitted that Mr Bolton should be awarded only 50% of his costs, to reflect his mixed success in this proceeding and, in particular, his failure to establish that Keybridge was obliged, pursuant to cl 3.3(a) of the Director’s Deed, to advance his expected future costs of defending the Primary Proceeding.

33. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that if the Court makes any order as to costs, the Court is to order that costs follow the event, unless it appears to the Court that some other order should be made as to the whole or any part of the costs.

34. The “event” typically refers to the event of the claim or counter-claim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward JA (as her Honour then was), Emmett and Gleeson JJA).

35. Generally, a successful party should be entitled to the whole of its costs of the proceeding, including costs on an issue on which it has failed. However, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues. Relevant circumstances in which apportionment across different issues has been said to be appropriate include where a successful party has, in respect of one or more issues, unfairly, improperly or unnecessarily increased costs; where the bulk of the time has been taken on an issue on which the unsuccessful party has succeeded; or where a particular issue or group of issues is clearly dominant or separable: see Access Training Group Ltd v Jane [2024] NSWCA 204 at [190]-[191] per Ward P (with whom Payne JA agreed).

36. Mr Bolton has achieved substantial success in the proceeding, in that he has established his entitlement to be paid his costs of defending the Primary Proceeding and the Italian Proceedings as and when they are incurred, subject to Keybridge’s entitlement (which Mr Bolton at all times acknowledged) to be repaid those amounts in the event that it is subsequently established that Mr Bolton is not entitled to be indemnified in respect of those costs.

37. Although Mr Bolton failed to establish that Keybridge is obliged to advance to him the amount of the reasonable costs expected to be incurred in defending the Primary Proceeding pursuant to cl 3.3(a) of the Director’s Deed, I do not consider that his failure on this issue provides a sufficient basis for making a proportionate reduction in the award of costs in Mr Bolton’s favour.

38. The question of the proper construction of cl 3.3 was not a clearly dominant or separable issue. Instead, as explained in the Primary Judgment (at [69]-[76]), the proper construction of cl 3.3 was an issue that arose in determining the proper construction of cl 3.1.

39. The time spent in arguing the proper construction of cl 3.3(a) by reference to the terms “Relevant Proceedings” and “Relevant Period” did not add significantly to the time which was spent in arguing the proper construction of cl 3.1 by reference to the terms of cl 3.3. That is particularly so, since Keybridge relied on the definition of “Relevant Period” in response to the claims made by Mr Bolton under each of cl 3.1 and 3.3(a) (see Commercial List Response, [29] and [31]).

40. Keybridge submitted that, in respect of the claim under cl 3.3(a), Mr Bolton relied on a lengthy affidavit of his solicitor, Mr Stewart, and an extensive documentary tender which was largely irrelevant to the determination of his claim pursuant to cl 3.1 of the Director’s Deed.

41. I do not accept this submission, for the following reasons.

42. First, the affidavits upon which Mr Bolton relied were prepared to address not only the merits of the claim, but also the need for an urgent hearing of this matter having regard to, inter alia, Mr Bolton’s financial position and the status of the Primary Proceeding and the Italian Proceedings. Much of the material exhibited to those affidavits went to the latter issue, which was addressed by the proceeding being heard on an expedited basis.

43. Secondly, a significant part of the documentary tender consisted of court documents relating to the Primary Proceeding and the Italian Proceedings, the invoices addressed to Mr Bolton, and his various requests for indemnity and the responses to them. This was all material which was directly relevant to Mr Bolton’s claim pursuant to cl 3.1 of the Director’s Deed.

44. Thirdly, and by way of contrast, there was a relatively limited amount of evidence directed to Mr Bolton’s expected future costs of defending the Primary Proceeding (which was a matter that was the subject of comment in the Primary Judgment at [144]-[146]).

45. Finally, while there was some material to which objection was taken by Keybridge on the basis of relevance, I allowed such material into evidence on the basis that it was relevant to the determination of an issue raised by Keybridge (namely, whether any obligation to advance funds to Mr Bolton would be contrary to the related party provisions in Chapter 2E of the Corporations Act 2001 (Cth) and, if so, whether the Court should, in its discretion, refuse to grant relief to Mr Bolton). This issue was abandoned by Keybridge at the hearing, when Senior Counsel for Mr Bolton had largely completed his oral address on the issue.

46. For those reasons, I will order Keybridge to pay Mr Bolton’s costs of this proceeding on the ordinary basis, as agreed or assessed.

Stay

43. Keybridge sought a “brief stay” of the orders which I will make in order to allow it to lodge an appeal on the making of orders (which it intends to do) and, if required, to seek a stay in the Court of Appeal. Mr Bolton resisted this course, including on the basis that “the defendant’s prospects on appeal are hopeless”.

44. In circumstances where Keybridge has given instructions for an appeal to be lodged, it is undesirable for me to express any views on the prospects of such an appeal. I indicated to the parties that I would frame the orders in terms such that Keybridge is not required to pay any amount pursuant to those orders for a period of some three business days after the orders are made. In circumstances where Keybridge has had the Primary Judgment for over a week, that will give Keybridge sufficient time to lodge an appeal and make any application for a stay in the Court of Appeal.

Orders

45. For those reasons, I make the following declarations and orders:

46. Declare that cl 3.1 of the Director’s Deed dated 2 January 2013 requires the Defendant to pay the Plaintiff’s costs (including any costs orders made against him) of defending:

(a) Supreme Court proceeding 2024/00065373 (Primary Proceeding) including any mediation; and (b) Court of Milan proceedings RGAC 45476/2025 and RG 351/2026 and the proceeding initiated by a Deed of Foreclosure filed in the Tribunal of Como and dated 17 April 2026 (Italian Proceedings);

as and when those costs are incurred, on the basis that the Defendant has a right to recover those payments from the Plaintiff in the event, and to the extent, that it is subsequently established that the Plaintiff is not entitled to indemnity in respect of such amounts.

2. Note the undertaking by the Defendant and by WAM Active Limited not to enforce any costs order in the Italian Proceedings pending the ultimate resolution of the Primary Proceeding.
3. Order that, pursuant to the declaration in order (1) above, the Defendant transfer $210,839.38 and €80,026.96 to the Speed and Stracey Lawyers Pty Limited Statutory Trust Account by 3 June 2026.
4. Direct that the Plaintiff provide instructions to Speed and Stracey to make, within three business days of receipt of the amounts referred to in order (3) above, payments to:

(a) Hamilton Locke in the sum of:

(i) $171,175.96 in respect of the tax invoices at pages 631 to 674 of the Court Book; and (ii) $5,548.68 in respect of interest on the invoices referred to in paragraph (i) above;

(b) Cornwalls in the sum of $34,114.74 in respect of the outstanding balance of the invoice at page 680 of the Court Book (after taking account of the sum of $46,000 which has already been paid in respect of that invoice); and (c) DWF LLP Studio Legale Associato in the sum of €80,026.96 in respect of the tax invoices at pages 792 to 793 of the Court Book.

5. Order that amounts to be paid to the Plaintiff pursuant to the declaration in order (1) above are to be paid by the Defendant:

(a) within three business days to the extent the hearing dates for the Primary Proceeding remain 23-26 June 2026; (b) within three business days to the extent the invoices are provided to the Defendant at a time that is within one month of alternative final hearing dates for the Primary Proceeding; and (c) otherwise, within seven business days.

6. Declare that, if it is established in the Primary Proceeding that the Plaintiff owes a liability to the Defendant such that the Plaintiff is not entitled to the indemnity under cl 3.1 of the Director’s Deed, the Plaintiff must repay the amounts paid to him by the Defendant pursuant to the declaration in order (1) above, within 90 days of a request by Keybridge.
7. Order that the Defendant pay the Plaintiff’s costs of this proceeding on the ordinary basis, as agreed or assessed.
8. Grant liberty to apply.

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