Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd (Costs)

In the case of Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd, the trustee of a trading trust sought judicial advice on whether it was justified in terminating the trust. The application for judicial advice was opposed by some of the unitholders of the trust. The primary legal issue the court had to decide was whether the trustee's costs of seeking judicial advice were costs in the cause, and if so, up to what point they could be recovered from the trust fund. The court was also required to determine the appropriate allocation of costs between the trustee and the unitholders.

The court found that the trustee's application for judicial advice was valid up until the opposition by the unitholders became clear. The trustee had acted reasonably in seeking the advice, relying on counsel's opinion, and the opposition by the unitholders only became apparent shortly before the hearing of the application. The court held that the trustee's costs were costs in the cause for the period up to the point when the unitholders' opposition to the application became clear. After this point, each party was to bear their own costs. The court further determined that it was appropriate to order that the trustee not recover the costs up to the point when the unitholders' opposition became clear from the trust fund unless and until the trustee succeeded in the principal proceedings.

The final orders of the court were that the trustee's costs up to the point when the unitholders' opposition to the application became clear were to be costs in the cause. Each party was to bear their own costs from that point forward. Additionally, the trustee was not to recover the costs from the trust fund unless and until the trustee succeeded in the principal proceedings. This decision highlighted the importance of considering the timing and circumstances of when opposition to a trustee's actions becomes apparent in determining the appropriate allocation of costs in trust litigation.