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[2026] NSWSC 749
Supreme Court of NSW
2026-06-26
Brereton J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Great Northern Developments Pty Ltd; In the matter of Ironbark Holdings Australia Pty Ltd (No 2) [2026] NSWSC 749
Hearing dates: On the papers
Date of orders: 26 June 2026
Decision date: 26 June 2026
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision: In 2026/1338: Plaintiff to recover costs.
In 2026/1339: Plaintiff to recover ordinary costs to the end of 14 May 2026 but thereafter to pay the defendants’ costs on an indemnity basis.
Catchwords: COSTS – related proceedings – plaintiff wholly successful in one proceeding – costs follow the event – plaintiff partially successful in second proceeding – where defendant made offer of compromise – whether rejection of offer unreasonable – where offer more favourable than outcome – plaintiff entitled to costs to date of offer and thereafter to pay defendants’ costs on indemnity basis
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586
In the matter of Citadel Financial Corporation Pty Ltd (No 2) [2019] NSWSC 221
In the matter of Great Northern Developments Pty Ltd; In the matter of Ironbark Holdings Australia Pty Ltd [2026] NSWSC 629
Johnston v Johnston [2016] NSWCA 52; 14 ASTLR 123
Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85
Texts Cited: N.A.
Category: Costs
Parties: 2026/1338:
Great Northern Developments Pty Ltd (plaintiff)
James Eric Packman (defendant)
2026/1339:
Ironbark Holdings Australia Pty Ltd (plaintiff)
James Eric Packman, Ann Carolyn Packman and Brian Anderson Packman as trustees for The Packman Retirement Fund (defendant)
Representation: Counsel:
J Hastie (plaintiffs)
D Creais (solicitor) (defendants)
Solicitors:
Mills Oakley (plaintiffs)
Bartier Perry (defendants)
File Number(s): 2026/1338; 2026/1339
Publication restriction: N.A.
On 3 June 2026, I made orders to:
set aside a statutory demand given to Great Northern Developments Pty Ltd by Mr James Packman on 11 December 2025; and
vary the statutory demand dated 10 December 2025 issued by Mr James Packman, Ms Ann Packman and Mr Brian Packman as trustees of The Packman Retirement Fund to Ironbark Holdings Australia Pty Ltd such that the debt is to read as the amount of $276,461 (in lieu of the amount of $1,176,461).
My reasons are published as In the matter of Great Northern Developments Pty Ltd; In the matter of Ironbark Holdings Australia Pty Ltd [2026] NSWSC 629.
The plaintiff’s application to set aside the statutory demand was wholly successful. There is no reason why costs should not follow the event.
The defendant submitted that the appropriate order is that each party bear their own costs. The defendant submitted that the plaintiff achieved only partial success because it is implicit in the judgment that the defendant succeeded in respect of what was called “the limitation period issue”. I did not expressly address the limitation period issue in my reasons because I did not need to do so. That was for two reasons. First, it was advanced as a fallback argument and the plaintiff succeeded on its primary argument. Second, I understood from the plaintiff’s oral submissions in reply that the limitation period argument fell away when the defendant, at a late stage, accepted that the loan agreement was in writing and was not oral (see in particular, T60.13-28). I do not consider that the plaintiff only achieved partial success.
The plaintiff in the Ironbark proceedings obtained a substantial measure of relief, but the defendants succeeded in maintaining the validity of the demand as to approximately 23.5% of the debt claimed.
The plaintiff accepted that some apportionment was appropriate and submitted that the defendants should pay 70% of the plaintiff’s costs. This was said to be consistent with the approach taken by White J in In the matter of Citadel Financial Corporation Pty Ltd (No 2) [2019] NSWSC 221 at [6]-[7].
The defendants relied on an offer of compromise made on 14 May 2026, pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) or otherwise pursuant to the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586. That offer was in the following terms:
The defendant offers to compromise the whole of this claim on the following terms:
1. Orders that:
(a) pursuant to s 459H(4) of the Corporations Act 2001 (Cth), the creditor’s statutory demand dated 11 December 2025 served by the defendant on the plaintiff be varied so that the amount of the demand is $250,000; and
(b) the demand has effect as so varied as from when it was served on the plaintiff.
2. The originating process is otherwise dismissed.
3. The closing date for acceptance of this offer is Tuesday, 19 May 2026.
4. This offer of compromise is made in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW).
The defendants’ outcome in the proceedings was superior to that outcome because, as I have noted, the statutory demand was varied to the amount of $276,461.
The offer of compromise was served on 14 May 2026 and was open until 19 May 2026. That time was short, but I do not consider it to be unreasonable given that the hearing was fixed for 21 May 2026: see Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 at [20]-[21] per Basten JA. Nor was time too abridged because a separate offer (not otherwise relevant) was made on the same day.
The offer of compromise was silent as to costs. The plaintiff contended that the rejection of the offer was reasonable because it operated to require the plaintiff to pay all of the defendants’ costs up to the date of the offer, by reason of the operation of UCPR r 42.13A(3) or r 42.20(2). That was said to be unreasonable given that the bulk of those costs related to the part of the statutory demand that was, in effect, set aside.
The plaintiff’s reliance on r 42.13A(3) was misplaced. The relevant rule is 42.13A(2). Rule 42.13A is in the following terms:
(1) This rule applies if the offer—
(a) is accepted by the offeree, and
(b) does not make provision for costs in respect of the claim.
(2) If the offer proposed a judgment in favour of the plaintiff in respect of the claim, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim, assessed on the ordinary basis up to the time when the offer was made.
(3) If the offer proposed a judgment in favour of the defendant in respect of the claim (including a dismissal of a summons or a statement of claim), the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on the ordinary basis up to the time when the offer was made.
The offer of compromise in this case proposed orders in favour of the plaintiff (varying the statutory demand), with the originating process to be “otherwise dismissed”. The offer is properly understood as proposing a judgment in favour of the plaintiff within the meaning of r 42.13A(2). The order proposed by [2] of the offer of compromise (see above) does not make the offer a mixed one, in the sense considered in Johnston v Johnston [2016] NSWCA 52; 14 ASTLR 123 at [36]-[37]. The proposed “otherwise dismissed” order was incidental to the proposed first order, which contemplated success in the proceedings for the plaintiff.
If the plaintiff had accepted the offer, the plaintiff would have been entitled to an order for its costs up to the time the offer was made.
In those circumstances, I do not accept that rejection of the offer was reasonable.
Given that the offer was not accepted, r 42.15 is engaged. The rule applies where an offer is made by the defendant but is not accepted by the plaintiff. Rule 42.15(2) provides:
(2) Unless the court orders otherwise—
(a) the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and
(b) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis—
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
Unless the Court orders otherwise, the order that would follow from this rule is that the plaintiff is entitled to an order for its costs on the ordinary basis up to the beginning of 15 May 2026, being the day following the day on which the offer was made, and the defendants are entitled to an order for indemnity costs from that time.
The defendants submit that each party should bear its own costs up to 13 May 2026. It is not clear why the defendants identify 13 May, rather than 14 May. In any event, they contend that they were delayed in making the offer because the plaintiff was late in filing evidence and submissions. They also submit that the plaintiff should never have sought to set aside the statutory demand as to the $276,461, that the plaintiff abandoned its limitation period issue at the hearing, and that the plaintiff raised matters for the first time in reply.
None of these matters persuade me to depart from the ordinary operation of r 42.15. There were no transgressions of sufficient moment to warrant departure.
I make the following orders:
In proceedings 2026/1338, the defendant is to pay the plaintiff’s costs.
In proceedings 2026/1339:
(a) the defendants are to pay the plaintiff’s costs on the ordinary basis up to the end of 14 May 2026; and (b) the plaintiff is to pay the defendants’ costs on an indemnity basis from the beginning of 15 May 2026.
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