Horizon Capital Fund (Registration Number B218924) v BCC Trade Credit Pty Ltd

1. [1]

   BCC Trade Credit Pty Ltd, the first defendant, and Tokio Marine & Nichido Fire Insurance Co. Ltd, the second defendant (together, the insurers), sought a costs order that Horizon Capital Fund, the plaintiff, pay their costs of an abandoned portion of Horizon’s claim.

2. [2]

   The substantive dispute concerns a policy of trade credit insurance arranged by the insurers. Horizon commenced the proceedings against the insurers as an assignee of the interests of Longview Resources (HK) Limited (Longview), the insured under the policy.

3. [3]

   Longview had purchased copper cathodes from Compania Minera Zaldivar SPA, Chile and sold them to Welta General Trading LLC (Welta) for about USD5.8 million. Longivew also sold soybeans to Welta for about USD1.2 million. The trade credit insurance policy limited the amount recoverable in respect of purchases by Welta to USD5 million.

4. [4]

   Horizon sought relief from the insurers, alleging Longview was never paid by Welta.

5. [5]

   On 2 December 2025, Horizon informed the insurers that it would not press the soybean claim, and that claim was dismissed by consent.

6. [6]

   The insurers now seek an order that Horizon pay their costs of the soybean claim, but have not sought that costs be payable on a forthwith basis. Horizon submitted that there should be no order as to costs, or that the question of costs be reserved to final hearing. Both parties seek their costs of the motion.

7. [7]

   For the following reasons, Horizon must pay the insurers’ costs of the soybean claim, but not the insurers’ costs of the motion.

Costs following dismissal

1. [8]

   The Court has a broad discretion to order costs pursuant to s 98 of the Civil Procedure Act 2005 (NSW) (CPA) and its inherent jurisdiction, and must exercise this discretion in accordance with the overriding purpose encapsulated in ss 56-59 CPA.

2. [9]

   Rule 42.20(1) Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that:

3. [10]

   Rule 42.20 UCPR does not create a presumption that costs will be ordered against the plaintiff: see eg Fordyce v Fordham (2006) 67 NSWLR 497 at [84] (McColl JA, Beazley JA and Santow JA agreeing). It does create a “starting point” that unless displaced by a discretionary decision, the plaintiff must pay the defendant’s costs of the proceedings: McNamara v Bao San [2010] NSWSC 809 at [12(c)] (Hallen AsJ) (McNamara).

4. [11]

   As there has been no hearing on the merits of the soybean claim, considerations from Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625 (McHugh J) are also relevant to the discretion: see eg Freelancer International Pty Ltd v Matthew O’Kane [2019] NSWSC 159 at [70] (Ward CJ in Eq).

Ought the Court make an order for costs?

1. [12]

   Horizon submitted that a supervening event has removed or modified the subject of the dispute, which is a sufficiently “good reason” for the Court not to order costs pursuant to r 42.20(1) UCPR: McNamara at [12].

2. [13]

   On 17 May 2024, the insurers invited Horizon to withdraw the soybean claim, as the USD5 million limit was already exceeded by the copper claim.

3. [14]

   Horizon then sought confirmation that the insurers agreed that the copper transaction created an insured debt for the purposes of the trade credit policy, which the insurers refused to provide.

4. [15]

   By 5 September 2025, Horizon had received confirmation from Longview’s liquidator that the copper transaction was completed and that Longview had actually paid for the copper it received, before selling the copper to Welta.

5. [16]

   Following this, Horizon decided the copper claim was genuine and there was no point in pressing the soybean claim, given the USD5 million limit.

6. [17]

   I do not accept that this is a supervening event which warrants a departure from r 42.20(1) UCPR.

7. [18]

   Horizon had pleaded relief in relation to both the copper claim and soybean claim. It appeared to do so to increase its chance of success in the proceedings where the insurers did not admit the transactions were insured debts, even though there is a USD5 million limit on what Horizon could recover under the policy.

8. [19]

   Once Horizon had satisfied itself that Longview had paid for the copper and that the claim was an insured debt for the policy, Horizon chose to discontinue the soybean claim, knowing that it would not be able to recover this amount in addition to the copper claim.

9. [20]

   I do not consider that the insurers ought to bear the costs of strategic decisions made by Horizon as it gathered its evidence for its case.

10. [21]

    It is possible that reviewing the swathe of evidence in the proceeding could reveal that the insurers ‘should’ have admitted the debt, however, to do so would require investigation the kind inappropriate for this application and amount to something of a hypothetical trial: Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681 at [8] (Basten JA), and at [33] (Payne JA).

11. [22]

    I do not consider it appropriate to exercise any discretion to depart from r 42.20(1) UCPR.

Who should bear the cost of the insurers’ motion?

1. [23]

   Horizon sought an order that “whatever the result”, the insurers should pay its costs of this motion. Horizon submitted that determining the question of costs of the soybean claim now, rather than at final hearing, has caused duplication and wasted costs. It submitted that the insurance contract, relied on by the insurers in this application, is the document that will feature in the dispute at final hearing. It also contended that correspondence between Horizon and Longview’s liquidators, relied on in this application, will also be used by Horizon at final hearing to demonstrate the bona fides of the copper transaction.

2. [24]

   The insurers only sought an order that Horizon pay its costs “to the extent of the dismissal of that part of the proceedings referred to in Order 5 of the orders made on 26 February 2026, such sum to be agreed or assessed.” In circumstances where the insurers have not sought payment of their costs of the dismissal of the soybean claim on a forthwith basis, it is unclear why the question of those costs needed to be determined now.

3. [25]

   Pursuant to paragraph 60 of Practice Note SC EQ 03, the insurers “may proceed to assessment of such costs forthwith”. However, for r 42.7 UCPR to be displaced and for costs to be payable forthwith, the insurers would need to have sought such an order: see Twigg v Twigg (No 2) [2019] NSWSC 1356 (Stevenson J). As Stevenson J observed in G&S Engineering Services Pty Ltd v MACH Energy Australia Pty Ltd (No 2) [2019] NSWSC 463, “there would, in most if not all cases, be little point in ordering that the costs the subject of an interlocutory costs order be assessed forthwith unless those costs were also to be payable forthwith.” Nevertheless, a forthwith order was not sought, and therefore that is what will happen here.

4. [26]

   I consider there ought to be no order as to costs of the motion.

Orders

1. [27]

   I make the following orders:

   1. (1)

      The Plaintiff pay the First and Second Defendants’ costs to the extent of the dismissal of that part of the proceedings referred to in Order 5 of the order made on 26 February 2026, such sum to be agreed or assessed.

   2. (2)

      No order as to costs of the First and Second Defendants’ motion filed 24 March 2026.