Alexander & Ors T-as Minter Ellison v Perpetual Trustees WA & Anor

The parties to this proceeding were Alexander & Ors trading as Minter Ellison (the appellants) and Perpetual Trustees WA and another (the respondents). The dispute concerned the appellants' entitlement to recover costs incurred in acting for the respondents in litigation concerning a trust. The matter came before the High Court of Australia on appeal from the Supreme Court of Western Australia.

The central legal issue before the High Court was whether the appellants, as solicitors, were entitled to recover their costs from the respondents, who were trustees, in circumstances where the litigation was unsuccessful and the trust fund was insufficient to meet the costs. Specifically, the court had to determine the scope of the trustees' right of indemnity and the extent to which that indemnity extended to the solicitors' costs in defending litigation brought against the trustees.

The High Court held that a trustee's right of indemnity extends to costs properly incurred in defending litigation concerning the trust, even if that litigation is unsuccessful. This principle is rooted in the trustee's duty to administer the trust prudently and protect trust assets. The court reasoned that if trustees were personally liable for all costs incurred in defending their administration, they would be deterred from undertaking such roles. Therefore, the costs properly incurred by the trustees in defending the litigation were recoverable from the trust fund, and by extension, the solicitors acting for the trustees were entitled to be paid from that fund.

The appeal was allowed, and the appellants were entitled to recover their costs from the respondents in their capacity as trustees, to the extent of the trust fund's assets.