Plaintiff v First Defendant

2 An initial interim injunction was granted by the Court on 12 December 2023 restraining the defendants from restricting Barfuss access to the Property for certain purposes until 5 September 2024.[1] The proceeding had a long interlocutory history before Barfuss' claims for relief, in an Amended Originating Motion,[2] proceeded to final hearing in March this year. On 14 August 2025, I delivered judgment in which I gave reasons for refusing Barfuss' claims for relief.[3] I heard the parties on the final orders, and on costs on the following day. The defendants filed an affidavit exhibiting an Offer of Compromise dated 30 January 2025 which had been served on the plaintiff, and subsequent counter offers between the parties that followed.[4] Both parties made submissions on costs and I made some observations as to my preliminary views. The plaintiff sought further time to provide brief written submissions on costs, given the long history of the proceeding and the need to address the effect of the Offer of Compromise and subsequent offers made between the parties. I made directions permitting them to do so and both parties filed submissions on 22 August 2025.[5]

(a) The defendants pay the plaintiff's costs of the proceeding on a standard basis up to and including the hearing on 12 December 2023.

(b) Each party bear their own costs of the proceeding in the period from 13 December 2023 to 18 October 2024.

(c) The plaintiff pay the defendants' costs of the proceeding from 19 October 2024 up to 11am on 3 February 2025 on a standard basis.

(d) The plaintiff pay the defendants' costs of the proceeding from 11am on 3 February 2025 on an indemnity basis.

4 The Reasons for judgment delivered on 14 August 2025 describe in detail the developments in the proceeding from the time that it was instituted in early November 2023 until the trial of the proceeding on 11 and 12 March 2025.[6] I refer to that history and do not repeat it in full here.

(a) On 12 December 2023, I granted the interim injunction in favour of Barfuss.

(b) On 4 April 2024, Barfuss sought a further injunction seeking to restrain the defendants from restricting Barfuss from accessing certain buildings and locations on the Property, as there had been further disagreements about the scope of Barfuss' entitlement to access the Property. Barfuss' initial position as stated in its evidence was that it owned mining equipment and buildings on the Property. During hearings on 15 April and 9 May 2024, I made observations as to the inadequacy of the evidence to establish any entitlement to access the equipment and the buildings, and gave Barfuss the opportunity to file more specific evidence as to the work that it was required to do to prepare a work plan, which is a precondition under the Act to the performance of any mining work. On 9 May 2024, I vacated the interim injunction orders and granted an injunction to Barfuss in more limited terms, restraining the defendants from restricting Barfuss' access to the land for the purposes (only) of preparing a work plan, and ordered that Barfuss' servants or agents were not permitted to enter the residence or any other locked building on the Property without the defendants' consent.

(c) On 7 June 2024, I determined that it was not appropriate to grant any further injunction.[7] I was not satisfied that there was adequate evidence as to the statutory foundation for the activity Barfuss sought to undertake on the Property, and in particular, that it was necessary for Barfuss to undertake the activities in order to prepare the work plan. I was not satisfied that it was appropriate to grant any access to the sheds and equipment on the Property, to which access was sought, as it had been accepted by Barfuss that as abandoned mining plant it had, by reason of s 114 of the Act, become the property of the Crown. The Crown, which was the owner of the abandoned mining plant to which Barfuss sought access, was not party to the proceeding and had not been heard on that matter. [8] The balance of convenience favoured the refusal of any further injunction, as the defendants had legitimate safety concerns about some of the activities Barfuss sought to undertake.

(d) After further disputes between the parties as to access, and evidence indicating that Barfuss had not taken appropriate steps open to it to progress the preparation of a work plan, I made orders requiring that Barfuss serve the material filed in the proceeding on the Department of Infrastructure, Transport, Regional Development, Communications and the Arts.[9] I declined to extend the injunction further beyond 5 September 2024.

6 Barfuss was represented by counsel throughout the proceeding. The defendants were represented by senior counsel at the hearing of the injunction in December 2023 and had solicitors retained, but these solicitors ceased to act on 10 January 2024. In all subsequent hearings and mentions prior to trial, Ms King appeared for herself and for Ms Miles.[10] They were then represented by solicitors from 16 January 2025,[11] and by solicitors and counsel at the final hearing on 11 and 12 March 2025.

7 On 18 October 2024, I made orders granting leave to Barfuss to file and serve an Amended Originating Motion, setting a trial date and making directions in preparation for trial.[12]

8 The Amended Originating Motion sought the following substantive relief: [13]

A declaration that the plaintiff is the holder of mining licence MIN5561 (Licence) in respect of the [P]roperty...

A declaration that under the terms of the Licence and section 40 of the Mineral Resources (Sustainable Development) Act 1990 ('the Act'), the diamond core drilling and mineral sampling work that Barfuss seeks to do at the Property in order to prepare the work plan is 'low impact exploration work' within the meaning of the Act and is permitted without the need for a work plan.

An injunction restraining the defendants from restricting or denying the plaintiff's right to access to the Property in accordance with the plaintiff's access rights under the Licence and the Act.

9 None of this relief was granted in the final outcome.

The main conclusions in the judgment on the final hearing

10 The key conclusions reached in my judgment were described at [12] of the Reasons, as follows:

(a) The proposed diamond core drilling and activity ancillary to it does not constitute 'low impact exploration' as defined by the Act.

(b) The proposed diamond core drilling is not activity which is necessary to obtain the information required in a work plan as required by s 40 of the Act, so that a valid work plan could be prepared without information obtained from a drilling program.

(c) The diamond core drilling and activity ancillary to it is 'work' for the purposes of s 42(1) of the Act, and must comply with the requirements in that section including the consent or compensation requirements of s 42(1)(h).

(d) It is inappropriate, given these findings, to grant the second declaration sought by Barfuss. There is no utility in granting the first declaration as the fact of the licence is undisputed. It would not be appropriate to grant any other declaration as to sampling along or other matters, given that no other declaration had been identified in advance of the hearing with specificity and the evidence was insufficient to support the making of a declaration.

(e) It is not appropriate to grant the injunction sought or any other injunction.

11 The Reasons included findings with respect to Barfuss' lack of progress towards the various work involved in preparing a work plan, some of which did not involve access to the Property or any intrusive activity on it, and would not have required the defendants' consent.[14]

12 At the costs hearing on 15 August 2025, the defendants relied on the affidavit of their instructing solicitor which exhibited the Offer of Compromise served by the defendants on 30 January 2025, a Calderbank offer of the same date, and subsequent correspondence which included offers exchanged between the parties on a without prejudice save as to costs basis.

13 The Offer of Compromise served by the defendants was in the following terms:

The First and Second Defendants offer to compromise the entirety of the proceeding as follows.

1. The parties consent to the proceeding being dismissed with no orders as to costs.

2. The parties bear their own costs.

1. This offer of compromise is open to be accepted by the Plaintiff for fourteen (14) days after the day on which it is served.
2. This offer is served in accordance with Order 26 of the Supreme Court (General Civil Procedure) Rules 2015 and is made on a without prejudice (save as to costs) basis.
3. This offer is made in settlement of the proceeding, inclusive of interest and costs.

14 The Calderbank offer was in a letter dated 30 January 2025. It stated the defendants' view that Barfuss' claims were 'misconceived, lacking utility and are otherwise unlikely to succeed at trial' on the basis that:

(a) Barfuss' own material contains evidence that its proposed diamond core drilling and sampling work is not essential for the preparation of its work plan, and which shows that Barfuss already has, from family history of mining on the Property, knowledge of its mining potential;

(b) the Act provides no support for Barfuss' contention that a work plan is not required, and it is clear that Barfuss intends to do more than 'low impact exploration work'; and

(c) section 42(1) of the Act prohibits any work being carried out on the land unless Barfuss satisfies all the requirements in subsections (a) to (h), none which have been satisfied.

15 The letter offered to settle the proceedings on terms substantially the same as those in the Offer of Compromise:

(a) The proceedings be dismissed by consent with no orders as to costs.

(b) The parties bear their own costs.

(c) The parties release one another from all claims, liabilities or causes of action arising from or in connection with the subject matter of this proceeding.

(d) The parties execute a mutual Deed of Settlement and Release to this effect.

16 The letter stated the offer was made in accordance with 'the principles in Calderbank v Calderbank [1975] 3 WLR 586, and subsequent decisions such as Ugly Tribe Company v Sikola [2001] VSC 109 and Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435', and if the defendants were successful at trial, they would rely on it in support of an application for indemnity costs.

17 The evidence was that this offer was not accepted, but subsequent offers followed, commencing with an offer made by Barfuss through its solicitors in a letter dated 14 February 2025. That letter made an offer for compensation in the following terms:

Commencing upon execution of a compensation agreement and payable on the anniversary thereof, Barfuss will pay AUD $20,000 per annum to Ms King and Ms Miles as compensation for any loss or damage that may be sustained as a direct, natural and reasonable consequence of the approval of the work plan and doing of work under mining licence MIN5561 (Licence) (Compensation Offer).

18 That offer was expressed to be subject to various conditions including that on payment of the first instalment of the compensation, Barfuss would be entitled to 'full and uninterrupted access to all of the Property that falls within the Mining Licence', would be permitted to undertake diamond core drilling and sampling, and have uninterrupted access to all mining infrastructure on the Property, including 'all buildings on the Property [including] the office, which your clients refer to as the residence'.[15]

19 The defendants sought further information about the 14 February offer in a letter dated 20 February 2025, which also identified certain matters which were said to be inconsistent with aspects of the Act.[16] No further information was provided by Barfuss.

20 The defendants made a counteroffer by letter dated 26 February 2025. The offer proposed a 'preliminary compensation agreement'.[17] The key elements of this offer involved permitting Barfuss to enter the Property to perform the diamond core drilling and exploration work,[18] on certain conditions, in return for payment to the defendants of $100,000 as compensation and a security bond of $30,000 for any necessary restoration of the Property. The conditions included that Barfuss was required to provide, in advance of any works, a report from a licensed land surveyor that confirms that the proposed drilling locations comply with Schedule 4A of the Act, and other conditions directed to accommodating the defendants' work with the sheep on their Property.

21 That offer was rejected by Barfuss in a letter dated 28 February 2025, by which a Calderbank offer was made, again offering $20,000 per annum to the defendants in return for being permitted to conduct 'low impact exploration' for the preparation of a work plan including diamond core drilling and mineral earth sampling. However, the plaintiff no longer sought access to the mining plant and equipment as an element of the offer.[19]

22 That offer was rejected by the defendants by letter dated 7 March 2025. The defendants made a counteroffer which was substantially the same as their offer of 26 February 2025, but differed in the financial component in requiring Barfuss to pay the defendants an 'upfront compensation payment' of $5,000 within two business days of the date of execution of any preliminary compensation agreement, and an 'ongoing compensation payment' of $5,000 per month until the exploration works are completed.[20] The counteroffer also included the requirement that a survey be conducted by a licensed land surveyor to confirm that the proposed drill locations complied with Schedule 4A of the Act.

23 On 10 March 2025_,_ the day before the trial, the defendants' solicitors emailed the plaintiff's solicitors stating that the plaintiff's proposed modifications to the 7 March 2025 offer constituted a rejection of that offer and invited the plaintiff to make a counteroffer.[21] Barfuss' solicitors responded on the same day with a counteroffer, to resolve the matter on the terms set out in the defendants' offer made on 7 March 2025, save for an amendment to the terms regarding the land survey, to restrict the survey to whether the proposed drill locations comply with subsections 1(k)(i) and (ii) of Schedule 4A of the Act.[22]

24 A further offer was made by Barfuss by letter dated 11 March 2025 and received by the defendants' solicitors at 6.12pm, after the first day of trial was heard that day.[23] That offer was not accepted by the defendants before the trial reconvened the following day.

25 The defendants had foreshadowed at the costs hearing that it would seek orders based on its Offer of Compromise, in accordance with the provisions of Order 26 of the Supreme Court (General Civil Procedure) Rules 2015, and sought the costs of the proceeding, first on a standard basis and on an indemnity basis after the service of the Offer of Compromise.

26 In its written submissions, Barfuss contended that the Court should order that:

(a) the defendants pay the plaintiff's costs of the proceeding from 6 November 2023 to 9 May 2024 on a standard basis;

(b) the parties bear their own costs, if any, between 10 May 2024 to 15 January 2025;

(c) the plaintiff pay 50% of the defendants' costs of the proceeding from the period between 16 January 2025 to 12 March 2025 on a standard basis; and

(d) the parties bear their own costs in respect of the submissions on costs.[24]

27 Barfuss contended that the parties had 'enjoyed mixed success in the proceeding', with the plaintiff having succeeded in its injunction application, and that it 'enjoyed partial success' in the final adjudication relying on observations in the Reasons that Barfuss was entitled to enter the Property for non-intrusive activity such as walk-around inspections and surveying.[25] It also relied on the fact that the Reasons offered useful guidance to the parties on disputed issues in the context of a complex legislative scheme.[26] Barfuss submitted that the consequences in O 26.08, or of the making of a Calderbank offer, should not follow because 'they were merely "walk away and bear own costs" offers with no real element of compromise'.[27]

Principles applicable to offers of compromise and Calderbank offers

28 Order 26 of the Supreme Court Rules deals with offers of compromise. Rule 26.02 sets out the requirements of an offer of compromise, as follows:

(1) A party may, in respect of any claim in a proceeding, serve on another party an offer of compromise on the terms specified in the offer.

(2) An offer of compromise in respect of a claim may be on terms that take into account any other claim made in the proceeding between the parties.

(3) An offer of compromise must -

(a) be in writing and prepared in accordance with Rules 27.02 to 27.04; and

(b) contain a statement to the effect that it is served in accordance with this Order.

(4) An offer of compromise must state either -

(a) that the offer is inclusive of costs; or

(b) that costs are to be paid or received, as the case may be, in addition to the offer.

29 Rules 27.02 to 27.04 contain provisions as to the form of Court documents.

30 Rule 26.08 stipulates the costs consequences of the making of a compliant offer of compromise which has not been accepted. It provides, as relevant to the present case:

26.08 Costs consequences of failure to accept

(1) This Rule applies to an offer of compromise which has not been accepted at the time of verdict or judgment.

(4) Where an offer of compromise is made by a defendant and the plaintiff unreasonably fails to accept the offer and the claim to which the offer relates is dismissed or judgment on the claim is entered in favour of the defendant, then unless the Court otherwise orders -

(a) the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim until 11.00 a.m. on the second business day after the offer was made, taxed on the ordinarily applicable basis; and

(b) the defendant shall be entitled to an order against the plaintiff in respect of the defendant's costs after the time referred to in paragraph (a) taxed on an indemnity basis.

(7) Paragraphs (2), (3) and (4) shall not apply unless the Court is satisfied by the party serving the offer of compromise that that party was at all material times willing and able to carry out the party's part of what was proposed in the offer.

31 The Court's discretion is to order 'otherwise' than that the offer has the consequences in r 26.08. The party seeking to displace the prima facie outcome in r 26.08 has the onus of establishing that the Court should order otherwise.[28] In PCCEF Pty Ltd v Geelong Football Club Ltd (No 3), the Court of Appeal observed that this onus is not readily discharged. Their Honours referred to the decision of McMillan J in Saric, in which her Honour stated:

The Court must exercise caution in departing from the prima facie rule and only do so in cases that warrant such a departure, invariably expressed in terms such as 'compelling and exceptional circumstances', 'for proper reasons which, in general, only arise in an exceptional case' and 'special circumstances'.[29]

32 The Court considered that the rationale of Order 26 was an important consideration in exercising the discretion, and gave the following guidance:

Whether the Court will 'otherwise order' depends on whether doing so advances the purpose of O 26. That purpose, broadly speaking, is to encourage the compromise of litigation and the saving of the private and public costs associated with it. The reasonableness of the rejection or non-acceptance of an offer is one matter that may be taken into account, but is not of itself determinative.[30]

33 The question of reasonableness is also significant in the context of the Calderbank offers made in the proceeding. If the party making such an offer receives judgment no less favourable than the terms of the offer, and it was unreasonable for the other party to reject the offer, this is a factor relevant to whether the Court should award indemnity costs to the party making the offer.[31] The factors relevant to assessing whether rejection of an offer was unreasonable include the stage of the proceeding at which the offer was received and the time permitted to consider the offer, the extent of the compromise offered and the clarity of the terms in which it was expressed, and the offeree's prospects of success at the time of the offer.[32]

34 The Offer of Compromise served on the plaintiff by the defendants on 30 January 2025 was compliant with the requirements of the Supreme Court Rules. It was in writing, and stated that it was served in accordance with Order 26, as required by r 26.02(3). It stated that it was inclusive of costs as required by r 26.02(4), and complied with the requirements of form in rr 27.02 to 27.04.

35 None of the relief sought by the plaintiff in the Amended Originating Motion was granted. The plaintiff's claim was dismissed, within the meaning of r 26.08(4).

36 The terms of the Offer of Compromise were clear. It was proposed that the proceeding be dismissed, with no orders as to costs. That outcome was, in my view, unambiguous and I do not accept Barfuss' submission that it was 'unclear what claims would be settled by acceptance'.[33] It is clear that it was the plaintiff's claims in the Amended Originating Motion which would be settled by being dismissed, with no orders as to costs. That involved a compromise in that there would be no costs liability if Barfuss' claims failed. The outcome proposed in the Offer of Compromise was also reflected in the Calderbank offer served at the same time, which also referred to a release from all claims, liabilities or causes of action arising from the subject matter of the proceeding. That letter also contained reasons for the defendants' view that the claims were unlikely to succeed at trial.

37 I do not accept Barfuss' submission that it enjoyed 'partial success in the adjudication of claims', by reason of the observations made in the Reasons that invitations from the defendants are not necessary for Barfuss to enter the Property to inspect it or do non-obtrusive work.[34] Barfuss' claims were at all relevant times not simply for inspection, but for access in order to undertake activities which were much more intrusive than inspection and surveying, and ultimately involved a very significant exploration programme of diamond core drilling and mineral sampling.

38 It is, therefore, necessary to consider the consequences of the offer under r 26.08. As the plaintiff rejected the offer, and the relief sought in the plaintiff's claim was dismissed, the consequences in r 26.08(4) will follow if:

(a) the remaining element of r 26.08 is present - that is, that the plaintiff unreasonably refused the offer; and

(b) the Court does not consider it appropriate to 'otherwise order'.

39 Given the existence of the compliant Offer of Compromise, r 26.08 is the appropriate starting point for the exercise of the discretion. It is unnecessary to analyse the Calderbank offer in the letter of 30 January 2025 in any detail, save for the fact that the letter explained the reasons why claims in the Amended Originating Motion were, in the defendants' view, misconceived which is relevant to the reasonableness or otherwise of the plaintiff's rejection of the Offer of Compromise. The terms of the subsequent offers which were subsequently exchanged by the parties also have only limited relevance, insofar as they also are relevant to an assessment of the reasonableness of Barfuss' refusal of the Offer of Compromise.

Was Barfuss unreasonable in failing to accept the offer?

40 Barfuss' failure to accept the offer was, in my view, unreasonable in all the circumstances. There were strong reasons, which should have been apparent to Barfuss at the time of the offer, why the relief it sought in the Amended Originating Motion would not be granted. These reasons include, but are not limited to, those put forward by the defendants in the Calderbank letter.

41 First, it should have been apparent to Barfuss that the first declaration sought, which was to the effect that Barfuss held the mining licence over the Property, would not be granted. This declaration was first sought in the Originating Motion filed in November 2023 and as noted in the reasons given on the interim injunction, it was clear from evidence and submissions at the original hearing in December 2023, that the subject of the declaration was undisputed. Barfuss did not press for that declaration at that hearing, and it was not made.[35] There was no reason why this position would change at the final hearing to make it appropriate to grant the first declaration.

42 It also should have been apparent that there was little, if any, prospect of obtaining the second declaration, to the effect that the diamond core drilling and mineral sampling work was to be completed 'in order to prepare a work plan' and constituted 'low impact exploration work'. The Reasons for the final determination identified why the diamond core drilling programme proposed by Barfuss and described in the evidence of Ricardo Barfuss and its expert:

(a) could not be regarded as necessary to prepare the requirements of a work plan having regard to the terms of the Act and the Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2019 (Vic),[36] and to the guidance provided by the Work Plan Guideline[37] as to what is required in a work plan;[38] and

(b) was not 'low impact exploration', given it involved activities of two kinds which were expressly excluded from the definition of low impact exploration under the Act.[39]

43 Barfuss ought reasonably to have been aware of the very significant weaknesses in its position that the drilling program would be necessary to prepare a work plan and that it should also be regarded as low impact exploration. This was primarily by reason of the observations which had been made by the Court (and by the defendants) during the interlocutory phases of the proceeding. There were three hearings on Barfuss' summons filed on 4 April 2024 in which it sought further interlocutory relief to restrain the defendants from restricting Barfuss access to buildings and equipment on the Property.[40] Barfuss' evidence in support of that application was to the effect that it sought to undertake very significant activities on the Property including mine refurbishment, water diversion, digging trenches for gold ore samples, and conducting exploratory drilling.[41]

44 In the 15 April 2024 hearing, I made observations questioning Barfuss' position that major works, such as repairs or refurbishment to mines, were works that needed to be completed in order to obtain information for a work plan, and did not require a work plan themselves; and the need for more specific evidence as to what activity was necessary to prepare a work plan, being the preliminary requirement before mining work could be conducted.[42] Barfuss prepared further evidence which included the Work Plan Guideline and described works which were claimed, by reference to the Guideline, to be necessary in order to prepare a work plan. It was asserted in the further evidence that works, such as mine stabilisation and the diamond core drilling program, were necessary in order to obtain the geological information required for the work plan, notwithstanding that the requirement for geological information is only a 'general description of geological information pertaining to the work'.[43] At the hearing on 9 May 2024, I observed that it was unclear how activities, such as drilling and stabilising mines, related to the preparation of a work plan.[44] I also raised the issue that the description in Ricardo Barfuss' affidavit of diamond core drilling being necessary to prepare a JORC Code statement in compliance with condition 3 of the licence, demonstrated a misconception of what could be done to facilitate a work plan, which was the subject of condition 2 of the licence. This continued to be asserted in Barfuss' evidence at trial, in both Ricardo Barfuss' evidence and that of Dr Tunks, the mining expert. I rejected their evidence that the diamond core drilling programme was necessary to prepare the work plan, for reasons that included their a mistaken reliance on a perceived need to provide information required by the JORC Code in the work plan.[45]

45 I also observed that clear evidence would be required to show why any activity Barfuss wished to conduct could be done prior to obtaining a work plan and without complying with the compensation or consent requirements.[46]

46 The defendants, in an affidavit filed in response to Barfuss' April summons identified ways in which it argued Barfuss was non-compliant with requirements of the Act, including by failing to provide the statement of economic significance required by s 26A(4) of the Act.[47] That too was an issue relevant in the final hearing. The non-compliance with s 26A and other non-compliances with the regulatory scheme was relevant to my refusal of relief on discretionary grounds.[48]

47 The hearing on 9 May 2024 was adjourned to permit Barfuss to put on more evidence in support of the April summons. It did not file further supporting evidence. At the further hearing on 7 June 2024, Ms King for the defendants made submissions as to why Barfuss had no legal right to access the buildings and equipment, and that it was not clear why the activities Barfuss proposed to conduct were required for preparation of the work plan.[49] I delivered a ruling dismissing the application for any further injunction and made observations as to why the proposed activities were not required to prepare a work plan.

48 The fact that the diamond core drilling programme did not satisfy the other element of the description in the second declaration - i.e. that it was 'low impact exploration' - should have been apparent from a proper consideration of the relevant activity by reference to the definition of the activities excluded from the scope of low impact exploration.[50]

49 The other reasons for refusing the relief sought by the plaintiff included that the activity proposed by Barfuss was 'work' to which the requirements of s 42(1) of the Act applied, including the consent or compensation requirements of s 42(1)(h), and those requirements had not been satisfied. This conclusion could also have been anticipated by Barfuss. The offers exchanged between the parties after the Offer of Compromise referred to compensation and appeared to be based on an acceptance by Barfuss that compensation would be payable before the exploratory programme was commenced.[51]

50 Finally, it should also have been evident at the time of the Offer of Compromise that there was little prospect of obtaining the injunction in the terms proposed, that is to restrain the defendants 'from restricting or denying the plaintiff's right to access the Property in accordance with the plaintiff's access rights under the Licence and the Act'. It would never have been appropriate to grant an injunction in such general terms, when the scope of Barfuss' 'access rights' was unclear and had been the subject of misunderstanding by Barfuss and disagreement between the parties before the proceeding was issued and throughout the interlocutory phase of the proceedings.[52]

51 Although that was the only injunction sought, it should also have been apparent that no other, more specific injunction, would be granted at trial. To establish any entitlement to an injunction to undertake activity on the Property, Barfuss would have had to establish a legal right to undertake that activity. Barfuss failed to establish that it could undertake a diamond core drilling programme and mineral sampling without having a work plan approved and complying with the consent or compensation requirements. Further, it was not compliant with other regulatory requirements imposed by the Act and the licence, a matter also relevant to whether the injunction could be granted based on any entitlements under the licence. Barfuss had been put on notice of this non-compliance before the Offer of Compromise was made.[53] Ultimately, Barfuss should have been aware that it had little prospect in these circumstances of obtaining any injunction.

It was unreasonable to refuse to accept the Offer of Compromise

52 The claim made by Barfuss had very limited, if any, prospects of success. Barfuss should have been aware of this from the interlocutory history of the proceeding, during which observations were made by the Court as to the statutory scheme and its application to the activity proposed by Barfuss. Those reasons were reiterated in the Calderbank offer letter served by the defendants at the same time as the Offer of Compromise.

Should the Court order otherwise than in accordance with r 26.08(4)?

53 Barfuss submits that it should have its costs of the application for an injunction, which it succeeded in obtaining on 12 December 2023.

54 Barfuss' application which was heard in December 2023 was for a permanent injunction, and a declaration that the Property was subject to the mining licence. I did not consider it appropriate to make the declaration, as the validity of the mining licence over the Property was not contested by the defendants. I also did not consider it appropriate to order a permanent injunction, as there were conditions in the mining licence which would have to be complied with by Barfuss in order to work on the land, including the requirement of a work plan under condition 2 of the licence. At the time the application was heard and determined, that work plan was required to be submitted by 5 September 2024. For that reason, I granted an interim injunction only until that date, on the basis that any further activity should not be authorised unless the condition requiring the work plan had been satisfied by Barfuss.

55 Nevertheless, Barfuss did succeed in obtaining an interim injunction, and it was an appropriate step to take to seek that injunction given the lack of co-operation by the defendants at that time in permitting access to the Property. The defendants should pay Barfuss' costs of issuing the proceeding up to and including the hearing on 12 December 2023.

56 I do not accept Barfuss' submission that it should have the costs after the date of the interim injunction. Barfuss' conduct following the grant of the injunction was to pursue its misconceived claim to be entitled to enter the buildings on the Property and to use mining machinery which had been abandoned on the Property, while failing to constructively progress activity under the licence in a way consistent with the Act and regulatory scheme.[54] Barfuss' conduct did not involve any reasonable action in furtherance of the claims in the proceeding. However, the defendants also did not always act entirely consistently with the terms of the injunction while it was in force.[55] In considering the costs of the proceeding after the grant of the injunction, I consider that it is appropriate that the parties bear their own costs until Barfuss sought and was granted leave to file the Amended Originating Motion on 18 October 2024. From that date, Barfuss' final claim which the defendants were required to meet (and which I determined was misconceived) was clear.

57 There is otherwise no good reason, in my view, to depart from the costs consequences set out in r 26.08(4).

58 Barfuss refers to the fact that the defendants did not have legal representation between 10 January 2024 and 15 January 2025. That is not, in my view, a matter relevant to whether it is appropriate to make the costs orders identified in r 26.08(4), or to otherwise order. It will, however, be directly relevant to the costs that the defendants can recover for the period while they were unrepresented.[56]

59 It is appropriate that in accordance with the terms of r 26.08(4), the plaintiff pay the defendants' costs on a standard basis up until 11am on 3 February 2025, which is the second business day after the Offer of Compromise was served, and on an indemnity basis thereafter.

(a) The defendants pay the plaintiff's costs of the proceeding on a standard basis up to and including the hearing on 12 December 2023.

(b) Each party bear their own costs of the proceeding in the period from 13 December 2023 to 18 October 2024.

(c) The plaintiff pay the defendants' costs of the proceeding from 19 October 2024 up to 11am on 3 February 2025 on a standard basis.

(d) The plaintiff pay the defendants' costs of the proceeding from 11am on 3 February 2025 on an indemnity basis.

---

[1] Orders of Justice Harris made on 12 December 2023, [1]-[2]. The date of 5 September 2024 was identified as this was the date on which, pursuant to condition 2 of the licence, a mining work plan and rehabilitation plan was required to be submitted to the Earth Resources Regulator.

[2] Amended Originating Motion dated 25 October 2024 and filed 28 October 2024.

[3] Barfuss Corporation Pty Ltd v King & Anor [2025] VSC 487 (Reasons).

[4] Affidavit of Jessica Ho sworn on 14 August 2025, (Ho Affidavit), [4]-[12].

[5] Plaintiff's Submission on Costs dated 22 August 2025; Defendants' Submissions on Costs dated 22 August 2025.

[7] Orders of Justice Harris made on 11 June 2024 dismissed the summons filed on 4 April 2024 which sought further injunctions.

[8] Transcript 07/06/24, T67.31-68.05, T68.14-27; Reasons [55]-[59].

[9] Orders of Justice Harris made on 16 September 2024.

[10] A Notice of Solicitor Ceasing to Act on behalf of the Defendants was filed by Webb Legal on 10 January 2024.

[11] Notices of Appearance filed on behalf of the Defendants by PCL Lawyers on 16 January 2025.

[12] Further more comprehensive trial directions were made on the papers by consent by Orders of Justice Harris made on 31 January 2025.

[13] Amended Originating Motion, prayers of relief [1]-[3].

[16] Ho Affidavit, [6], Exhibit JH-1, 8-9.

[17] Ho Affidavit, [7], Exhibit JH-1, 10-12.

[18] As described in Barfuss' evidence for the trial, including the Updated Drill Collar Plan exhibited to the Affidavit of Ricardo Barfuss sworn 29 November 2024.

[19] Ho Affidavit, [8], Exhibit JH-1, 13-16.

[20] Ho Affidavit, [9], Exhibit JH-1, 17-19.

[21] Ho Affidavit, [10], Exhibit JH-1, 22.

[22] Ho Affidavit, [11], Exhibit JH-1, 20-21.

[23] Ho Affidavit, [12], Exhibit JH-1, 23-25.

[24] Plaintiff's Submissions on Costs, [17].

[25] Plaintiff's Submissions on Costs, [2], referring to Reasons, [31].

[26] Plaintiff's Submissions on Costs, [3].

[27] Plaintiff Submissions on Costs, [5].

[28] PCCEF Pty Ltd v Geelong Football Club Ltd (No 3) [2019] VSCA 191, [23]-[24] (McLeish and Emerton JJA, with whose reasons Whelan JA agreed); Cargill Australia Ltd v Viterra Malt Pty Ltd (No 32) [2022] VSC 299, [43] (Elliot J).

[29] PCCEF, [24] (McLeish and Emerton JJA, with whose reasons Whelan JA agreed, at [1]), citing Re Saric; Saric v Vukasovic (No 2) [2018] VSC 254, [16].

[30] PCCEF, [25] (McLeish and Merton JJA, with whose reasons Whelan JA agreed, at [1]).

[31] Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, 440-441 [18]-[20] (Warren CJ, Maxwell P and Harper AJA).

[32] Hazeldene's, 442 [25]; Cargill, [44] (Elliot J).

[33] Plaintiff's Submission on Costs, [5]. Barfuss also made submissions that to rely on the terms of r 26.08(3), the defendants must show that the offer was 'more favourable' than the judgment. Rule 26.08(3) relates to circumstances in which the plaintiff 'obtains a judgment on the claim' not more favourable than the offer. The relevant rule is r 26.08(4), dealing with circumstances in which the plaintiff's claim is dismissed or judgment is entered in favour of the defendant. Plaintiff's Submission on Costs, [10]-[12].

[34] Plaintiff's Submissions on Costs, [2.2], referring to Reasons, [31].

[35] Barfuss Corporation Pty Ltd v King & Anor [2023] VSC 763, [4]; [51]-[52].

[37] Preparation of Work Plans and Work Plan Variations, Guideline for Mining Projects, December 2020 (version 1.3) published by Resources Victoria and referred to at Reasons, [52].

[40] 15 April 2024, 9 May 2024, and 7 June 2024; see Reasons, [47]-[59].

[42] Transcript 15/04/24, T28.23-T29.12; T94.20-96.13; T104.18-27.

[43] Third Affidavit of Ricardo Barfuss sworn 24 April 2024, 7-8 (Annexure A).

[44] Transcript 09/05/24, T 114.23-116.24.

[45] Reasons, [139], [157]-[163].

[47] Affidavit of Shelley King sworn 8 April 2024, [42].

[49] Transcript 07/06/24, T45.02-49.14.

[51] See the offers referred to at [17]-[18] and [21] above.

[53] Reasons, [219]-[228]; Transcript 07/06/24, T33.08-13, T43.14-21.

[56] See Cachia v Hanes (1994) 179 CLR 403, 409, where the majority of the Court (Mason CJ, Brennan, Deane, Dawson and McHugh JJ) held that 'costs' under court rules does not include time spent by an unrepresented litigant in preparing and conducting their case, but is confined to monies paid for professional legal services.