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Why wouldn't they just pay it? Would there be any negative consequences?

Not really for this one incident, but you don't really want to set a precedent if anything bigger ever happens. A spacefaring nation doesn't want to establish the idea it could owe financial liability for it to someone else.

> don't really want to set a precedent

Or sensibly they want to set the precedent that AU$400 is the appropriate amount!

Well Russia did eventually pay Canada the cleanup bill for the nuclear pollution of Kosmos-954. Precedent is already there.

https://en.m.wikipedia.org/wiki/Kosmos_954

And as the article says, states are already obligated to do so under the outer space treaty.

admission of guilt, liability

Indeed, and perhaps fear of precedent?

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