Keane v Keane

[2025] NSWSC 1298

Supreme Court

New South Wales

Medium Neutral Citation:

Keane v Keane [2025] NSWSC 1298

Hearing dates:

On the papers

Date of orders:

4 November 2025

Decision date:

04 November 2025

Jurisdiction:

Equity

Before:

Bennett J

Decision:

The cross-claimant is to pay the cross-defendants’ costs thrown away by reason of the adjournment of the cross-claim, on the ordinary basis, forthwith.

Catchwords:

COSTS — Party/Party — Costs orders in interlocutory proceedings — Costs thrown away by an adjournment — No issue of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98(1)

Evidence Act 1995 (NSW), s 189

Uniform Civil Procedure Rules 2005 (NSW), pt 18, r 42.7(2)

Cases Cited:

Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432

Harrison v Schipp [2001] NSWCA 13

In the matter of Sunny International Hardware Group Pty Ltd [2025] NSWSC 348

Keynes Capital Global Limited v Guo (No 2) [2020] NSWCA 336

Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd (No 2) [2025] NSWCA 218

Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31

Yu v Cao (2015) 91 NSWLR 190; [2015] NSWCA 276

Category:

Costs

Parties:

Julie Richmond Keane (Cross-Claimant)

Jason Stuart Keane (First Cross-Defendant)
Nicole Ann Keane (Second Cross-Defendant)
Philippa Emma Keane (Third Cross-Defendant)

Representation:

Counsel:
NJ Simpson (Cross-Claimant)
JAF Brown / D Woods (Cross-Defendants)

Solicitors:
McCullough Robertson (Cross-Claimant)
Blanchfield Nicholls (Cross-Defendants)

File Number(s):

2024/00410615

Publication restriction:

Nil

JUDGMENT

Introduction

1. On the second day of what was supposed to be the separate hearing of most of the cross-claim in this matter, I made orders, following an application by the cross-defendants, adjourning the hearing of the cross-claim to a later date.

2. This judgment concerns what cost consequences should follow those orders. In this judgment, I will tend to refer to the parties by their role in the cross-claim, rather than their role in the main proceedings.

3. For the reasons set out below, I have determined that the appropriate costs order following the adjournment of the cross-claim is that the cross-claimant should pay the cross-defendants’ costs thrown away by the adjournment, on the ordinary basis, forthwith.

Procedural background

The substantive proceedings and the cross-claim

4. A short chronology of the broader proceedings is necessary to understand what happened in these proceedings.

5. By a Statement of Claim filed on 5 November 2024, Jason Keane, Nicole Keane and Philippa Keane (the cross-defendants) commenced proceedings against Julie Keane (the cross-claimant) and a company known as Derek Keane & Company Pty Ltd (not a party to the cross-claim). The cross-defendants as plaintiffs seek various declarations that property held by the cross-claimant/first defendant and second defendant is held on trust for the cross-defendants/plaintiffs.

6. Without delving into the detail of what is pleaded in the Statement of Claim (SOC), a key component of the cross-defendants’ claims in the substantive proceedings is an allegation that Derek Keane (the cross-claimant’s now deceased husband and father of the cross-defendants) (the deceased) and the cross-claimant entered into an agreement for the creation of mutual wills. It is that alleged agreement which is pleaded as providing the basis for the declarations of trust sought. In the alternative to the trust claims, the cross-defendants seek family provision orders under the Succession Act 2006 (NSW).

7. By an Amended Statement of Cross-Claim filed on 24 February 2025 (ASCC) (as well as in the Defence filed on 24 February 2025 for both defendants in the main proceeding), the cross-claimant seeks orders restraining the cross-defendants from using or disclosing information relating to certain documents (including restraining the use of those certain documents themselves) which the parties have described as “Estate Planning Documents”. For ease of reference, I too will refer to the documents in the same manner as the parties.

8. The ASCC defines the term to refer collectively to various documents which were prepared for the deceased and the cross-claimant in 2017 by a solicitor, Michael Perkins of Perkins Fahey Rosenblum, whom they had retained to prepare various estate planning documents, and to one document prepared by the cross-claimant connected to the estate planning efforts of her and the deceased. A list of those documents is unnecessary for present purposes. The most relevant fact about those documents is that on 6 July 2023, the cross-claimant sent the Estate Planning Documents to the first cross-defendant (Jason Keane) at his work email address.

9. The crux of the cross-claim is that the Estate Planning Documents were provided to the first cross-defendant in his capacity as a solicitor for the deceased and the cross-claimant and, for that reason, the first cross-defendant was under an obligation to keep the Estate Planning Documents confidential. Alternatively, the ASCC claims the first cross-defendant owed fiduciary duties to the deceased and cross-claimant. Either way, by disclosing the information contained in the Estate Planning Documents to the second and third cross-defendants and otherwise using the documents for his own benefit, the first cross-defendant is said to have breached either an equitable duty of confidence or his fiduciary obligations owed to the deceased and the cross-claimant. For his part, the first cross-defendant denies that he received the Estate Planning Documents in his capacity as a solicitor, and therefore denies he owed an equitable duty of confidence or fiduciary obligations in respect of those documents.

10. The cross-claimant also seeks a family provision order in her favour.

Preparation for the hearing of the cross-claim

11. On 21 February 2025, by consent, the proceedings in relation to the SOC were stayed pending the determination of the cross-claim (save for that part of the cross-claim seeking a family provision order, which, at that point in time, had not yet been pleaded). On 12 June 2025, again by consent, McGrath J ordered the ASCC be separately tried, save for the family provision claim. In summary, what was listed before me on 18 and 19 September 2025 was only the cross-claimant’s claim for an injunction seeking to restrain the use of documents based on alleged equitable duties of confidence. I will refer to the components of the cross-claim that I was listed to separately hear as the confidentiality cross-claim.

12. The separate hearing of the confidentiality cross-claim was listed to commence before me on 18 September 2025 on an estimate of two days.

13. On Monday, 15 September 2025 at 3:56pm, my Chambers received an email from the solicitors for the cross-claimant attaching an outline of submissions concerning the confidentiality cross-claim prepared by counsel, a chronology, and a list of authorities.

14. On the same day at 4:12pm, my Chambers received an email from one of the counsel for the cross-defendants, attaching an outline of submissions concerning the confidentiality cross-claim prepared by counsel, a chronology, a list of authorities and a list of objections to the evidence proposed to be read by the cross-claimant.

15. On the same day at 4:22pm, my Chambers received an email from counsel for the cross-claimant, attaching a document containing the cross-claimant’s responses to the objections concerning the cross-claimant’s evidence.

16. On the same day at 4:36pm, my Chambers received another email from one of the counsel for the cross-defendants, attaching a document containing the cross-defendants’ responses to the list of objections made by the cross-claimant to the evidence proposed to be read by the cross-defendant. No objections to evidence were foreshadowed on the basis of any claim of legal professional privilege.

17. About an hour later, at 5:19pm, my Chambers received a third email from one of the counsel for the cross-defendants, attaching an updated copy of the outline of submissions concerning the confidentiality cross-claim prepared for the cross-defendants. In that email, counsel said that the copy of the written submissions sent earlier in the afternoon was incomplete, in that only every second page was scanned. Counsel apologised for that mishap.

18. On Wednesday, 17 September 2025, my Chambers received an email from counsel for the cross-claimant, attaching a trial plan. That trial plan was “as completed by the parties”.

19. On 18 September 2025, Mr NJ Simpson of counsel appeared for the cross-claimant. Mr J Brown of counsel appeared with Ms D Woods of counsel for the cross-defendants.

20. It is then necessary to record what happened at the hearing. As part of this, I will reproduce extracts from the transcripts. While I acknowledge doing so will add to the overall length of this judgment, I consider it necessary to do so as part of providing a fulsome recount of what occurred.

Day 1 of the hearing – 18 September 2025

21. Immediately after appearances were taken, counsel for the cross-claimant said as follows in a portion of the transcript that bears setting out in full (at TR P1 L26-34, emphasis added):

“SIMPSON: Your Honour, if I can commence by making this point at the outset, your Honour, would have seen submissions from the cross-defendants where a point is taken at paras 50 and 51 in respect of a question of waiver by virtue, in essence, of these proceedings being run to address what we say are ill-gotten documents by the solicitor for my client. Your Honour, the relevance of that point is there’s an anterior question which I will ask your Honour to rule on this morning which is a question of the documents that are what we say the estate planning documents, as to whether or not they are privileged. And if they are privileged what must naturally follow is they are confidential in nature.”

22. For context, set out below is what [50]-[51] of the cross-defendants’ written outline of submissions prepared for the hearing said (formatting as per original):

“(4) Is there an actual or threatened misuse of the information without consent?

50. Julie has waived the information by filing her cross claim and seeking her family provision claim.

51. The documents will be come [sic] known by notice to produce, subpoena or Julie’s evidence.”

23. Mr Simpson continued (at TR P1 L36-44):

“It’s all part of the case that we have to demonstrate of there being a general retainer or, indeed, an implied retainer with respect to the relationship between the cross-defendant and my client that gives rise to the relief that we seek. Now, there’s quite an absurdity in my submission to say that, if you are bringing this claim in the way that you are, there has been a waiver of confidentiality or privilege which is nonsensical in my view, but to address the risk that’s going to be put against me, or the submission put against me of inconsistency, in my submission, your Honour will need to deal with this first anterior question.”

24. Following Mr Simpson’s initial address, I then had the following exchange with him (TR P1 L46-P2 L29):

“HER HONOUR: Mr Simpson, I must say I’ve looked at the trial plan I’ve got out my calculator. The hours that are already anticipated without this is more than the two days.

SIMPSON: Yes. Yes.

HER HONOUR: I’ll say that firstly. Secondly, if that was your intention, you really should have done it by way of a, say, s 192A application or something like that. Really, it is something that I would need to think about.

SIMPSON: Yes.

HER HONOUR: I would want to have formal submissions from you.

SIMPSON: Yes.

HER HONOUR: I would need to go off the bench. You might have lost your first day.

SIMPSON: Yes.

HER HONOUR: If it is what you say it is, it’s an important question and you will have lost the whole hearing.

SIMPSON: Your Honour, quite. And it’s only been put against us in submission since Monday that that is the effect of the way the documents are being used. Now we’ve had correspondence already in respect of privilege claims, and allegations being made that there wasn’t privilege in that material. And that just went nowhere. The last correspondence was from our side which was not responded to by my friend’s client. So we’re in this position now where that is an anterior question, it would appear, on the submissions now to address that point. Now that is the first step in my submission before we then get to the next aspect of this case.”

25. Mr Brown, counsel for the cross-defendants, then addressed the Court on the matters raised by Mr Simpson. He said that what he was on notice of was a potential application by the cross-claimant for a suppression order. He was apparently not on notice that there was going to be a ruling sought on the “anterior question” of whether certain documents are privileged.

26. I made clear to counsel for each of the cross-claimant and the cross-defendants that I was not prepared to deal with the issue of privilege on the run. I also made clear, repeating a sentiment that is hopefully already apparent from what I said in the portions of the transcript extracted above, that based on what counsel was telling me, it was likely the days set aside for hearing were now likely to be insufficient to deal with the confidentiality cross-claim as a whole.

27. After some further discussion with counsel as to what exactly this privilege argument was about, which admittedly went not very far, I then made timetabling orders to enable me to at least hear and hopefully determine the next day the question of legal professional privilege raised by the plaintiff. I first made an order requiring the cross-claimant to provide her submissions in relation to privilege and any supporting evidence by 2:00pm on 18 September 2025 (ie, that afternoon). I note that I checked with Mr Simpson whether that time was satisfactory to him, and he indicated it was.

28. I then foreshadowed an order requiring the cross-defendants to put on their submissions and any supporting evidence by 9:00am the next day, 19 September 2025. For his part, Mr Brown indicated he would do his best to meet the application, but that he did not know what was going to be presented by the cross-claimant. As such, he also sought a direction that he was otherwise to indicate to the Court whether he was able to meet the application. I accordingly qualified the order to the cross-defendants in that the cross-defendants were to otherwise notify my Chambers as to the status of their reply. Finally, I stood the matter over to 11:00am the next day.

29. In accordance with the orders made earlier that day, on 18 September 2025, albeit at 3:04pm (an hour after the time I ordered submissions etc to be provided), my Chambers received by email an unfiled Notice of Motion, two affidavits in support, and written submissions on the question of privilege.

Day 2 of the hearing – 19 September 2025

30. On the morning of 19 September 2025, at 8:48am, my Chambers received an email from counsel for the cross-defendants. That email did not contain any submissions or supporting evidence on the question of privilege. Rather, it addressed the status of the cross-defendants’ reply to the material that had been put on.

31. The material terms of that email were as follows:

“I advise that it is clear from the cross claimants proposed motion, affidavit in support and submissions yesterday there is an overlap of issues between the cross claim and the privilege argument.

There will be a real risk of inconsistent findings on factual matters relating to the privilege and confidentiality claims. They will need to be determined at the same time.

In my opinion the matter would not be able to be completed today in any event.

As such pursuant to the order 2 made yesterday namely;

2. Orders that the cross-defendants serve their response by way of submissions and supporting affidavit, if desired, by 9am on 19 September 2025, or otherwise inform the Court, copying the cross-claimant, as to the status of their reply.

the cross-defendants give notice pursuant to that order they will be unable to provide their evidence and submissions by 9am.  

At 11am, the cross defendants will seek order for costs of the aborted hearing and costs thrown away on an indemnity basis against the defendant/ cross defendant with the solicitor for the defendant/ cross claimant to show cause why they should not be paid personally by him.

There will be an affidavit in support provided as soon as possible on the application for costs.”

That further affidavit in support in relation to costs was received by email at 10:00am.

32. The second day of the hearing commenced at 11:00am on 19 September 2025. After some initial exchanges the content of which is not necessary to set out here, the cross-defendants made an oral application seeking to adjourn the hearing of the privilege dispute. Two bases for that adjournment were initially put. First, the cross-defendants submitted they were unable to meet the case on privilege. Secondly, any determination about whether privilege over the documents in question existed or was waived in July 2023, by the cross-claimant’s email to the first cross-defendant, required factual findings as to the relationship between the parties which would overlap with the subject matter of the main claim.

33. The cross-claimant opposed the oral adjournment application.

34. What then followed were oral submissions by the parties as to the adjournment application. For present purposes, I do not need to recount much of the substance of those submissions.

35. However, one matter that should be mentioned that was raised in the midst of the parties’ submissions on the adjournment application was an issue as to costs raised by the cross-claimant. The cross-claimant drew my attention to the email sent on the cross-defendants’ behalf, extracted at [31] above, and specifically to the penultimate paragraph which intimated the cross-defendants would be seeking orders that the cross-claimant’s legal representatives pay costs personally. Counsel for the cross-claimant said he had invited the cross-defendants to withdraw that suggestion, but that invitation was not taken up prior to the hearing recommencing at 11:00am. He also suggested that if the personal costs order was pressed, he and his instructing solicitors would need to withdraw, given the “irreparable conflict” that would arise if a personal costs order was sought.

36. Suffice it to say, I allowed the cross-defendants’ adjournment application and made directions for the further conduct of the confidentiality cross-claim and the cross-claimant’s Notice of Motion concerning privilege which was filed that morning. I allowed the cross-defendants’ application because I accepted the cross-defendants’ submissions that they would be unfairly prejudiced by having to deal with the Motion at such short notice and that there would be overlap between the factual findings necessary for the substantive hearing of the confidentiality cross-claim and those necessary for the Notice of Motion.

37. The parties then sought to address me in relation to costs. I declined to deal with costs there and then and directed the parties to make their submissions on costs in writing for me to deal with on the papers. A timetable was ordered for the parties to exchange submissions and evidence over the following week.

38. In relation to whether an order would be sought that the cross-claimant’s legal representatives would need to pay costs personally, counsel for the cross-defendants said the following (emphasis added):

“BROWN: Can I just - because Mr Simpson is agitated, the application will be for an indemnity costs order against the defendant personally, and in my - I will say, as counsel, consideration needs to be given, because there’s no explanation, as to whether there should be show cause. That will be a matter for your Honour. If there was to be show cause, it wouldn’t be till the end of the proceedings, but my initial - is indemnity costs. I will forthwith - so it’s very clear - I will seek that against the defendant, but in the way that this has transpired - I don’t know whether it’s the defendant’s fault. She may have changed her instructions from time to time, but this Court’s precious time - and so that will be the submission, that the show cause, if your Honour is minded there should be, would never be determined until the end of the proceeding, which is the usual practice, but I don’t think it should be lost.”

39. In accordance with the timetable I ordered, the cross-defendants provided their written submissions on costs on Monday, 22 September 2025. The cross-claimant provided her written submissions and supporting evidence in reply on Wednesday, 24 September 2025. Ultimately, the cross-defendants did not seek any costs orders against the cross-claimant’s legal representatives.

40. At 4:59pm on Thursday, 25 September 2025, an email was sent to my Chambers on behalf of the cross-defendants, with the permission of the cross-claimant, seeking leave to file submissions in reply. I granted that leave the next morning, and the cross-defendants provided their written submissions in reply on Monday, 29 September 2025.

41. At 9:00pm on Friday, 31 October 2025, my Chambers received an email from the cross-claimant’s solicitors seeking that the proceedings be re-listed before me to enable the cross-claimant to seek leave to provide further submissions on the question of costs. That email also noted that the cross-defendants’ position was that further submissions on the question of costs would be unnecessary and inconsistent with the just, quick and cheap resolution of the costs issue.

42. I refused to give the cross-claimant leave to provide me with any further submissions. I did so for the following reasons. No reason was given for the need for any further submissions. The cross-claimant has already provided detailed written submissions. For what is a relatively confined question of costs, the provision of any further submissions would be inimical to the just, quick and cheap resolution of the issue.

Issues

43. The costs order for which the cross-defendants contend is an order that the cross-claimant (in her personal capacity) pay their costs thrown away by the adjournment of the hearing of the cross-claim on the indemnity basis, as agreed or assessed, such costs to be payable forthwith.

44. The cross-claimant seeks an order that the cross-defendants pay her costs thrown away on the indemnity basis (or otherwise, on the ordinary basis), such costs to be payable forthwith. In the alternative, she contends that the costs of the adjourned hearing of 18 and 19 September 2025 should be costs in the cause.

45. It follows that there are three issues for the Court to decide. These are:

1. Who should pay the costs thrown away by the adjournment?

2. Should costs be payable on the ordinary or the indemnity basis?

3. Should costs be payable forthwith?

46. I have read each set of detailed written submissions provided by the cross-claimant and the cross-defendants, and have taken into account what was said in them, even though, for the sake of brevity, I have not expressly recorded in these reasons for judgment every detail of those submissions.

Issue 1: Who should pay the costs thrown away by the adjournment?

Legal principles

47. As is uncontroversial and as both parties submitted, s 98(1) of the Civil Procedure Act 2005 (NSW) (CPA) gives the Court a broad discretion with respect to costs, though that discretion is to be exercised judicially: Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd (No 2) [2025] NSWCA 218 (Stern and Ball JJA, Griffiths AJA); Yu v Cao (2015) 91 NSWLR 190; [2015] NSWCA 276 at [136] (McColl JA, Sackville AJA and Adamson J agreeing).

Submissions

48. The cross-defendants submit that they should receive their costs thrown away because the cause of the adjournment of the confidentiality cross-claim was the cross-claimant’s application, made without notice at 10:00am, for the Court to determine whether certain documents were privileged and remained so, which application the cross-claimant wanted dealt with prior to the hearing of the confidentiality cross-claim. They point to the fact that the Court concluded that the privilege question and confidentiality cross-claim as a whole could not be heard during the allocated hearing dates.

49. As to when the issues should have been raised, the cross-defendants submitted any issue concerning whether certain documents were privileged should have been raised earlier in these proceedings. The cross-defendants submitted that contrary to the cross-claimant’s position that the issue of legal professional privilege was only raised for the first time in the cross-defendants’ written submission provided on the Monday before the hearing, that issue had in fact been raised by the two Defences to the ASCC, which were filed on 4 April 2025.

50. The cross-defendants submitted that the cross-claimant failed to comply with the procedural requirements of Part 18 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) concerning her application for the determination of the question of whether certain documents were privileged. The cross-defendants also pointed to the fact that the cross-claimant’s submissions on the privilege question were provided an hour after the time by which they were supposed to have been provided according to the orders I had made on 18 September 2025.

51. As to what costs were thrown away, the cross-defendants submitted that there were costs thrown away, namely the costs of their counsel and solicitors incurred in preparing for the matter. It was said that those costs were thrown away because the hearing of the confidentiality cross-claim was likely to be deferred to mid-2026 at least. This means that either new counsel would have to be briefed and undertake the necessary preparation anew (if the counsel currently briefed were unavailable at whatever new hearing date was given) or current counsel would need to effectively repeat the preparatory work they had undertaken to recall the relevant facts and authorities.

52. The cross-claimant submitted that, in fact, the issue of whether the Estate Planning Documents were covered by legal professional privilege was an issue of which both parties were aware well in advance of the hearing of the confidentiality cross-claim. This was so both by reason of the Defences earlier referred to, and because of various pieces of correspondence that passed between the parties by which issues of privilege were raised. Those letters, which were annexed to an affidavit of Mr Simon Robinson (the cross-claimant’s solicitor on the record) affirmed 24 September 2025, appear to be in connection with claims for privilege asserted by the cross-claimant in relation to material produced under subpoena by two law firms (Arch Law and Fahey Rosenblum). Thus, according to the cross-claimant, the issue of privilege was not in truth raised for the first time on 18 September 2025 in a manner which might have taken the cross-defendants by surprise. Moreover, the very nature of the confidentiality cross-claim would effectively require a determination of whether the Estate Planning Documents were privileged.

53. The cross-claimant submitted that the fault for what occurred on 18 and 19 September 2025 lay with the cross-defendants. In particular, their insistence that the question be dealt with as an interlocutory matter was an erroneous course to take. Rather, it was the cross-defendants who should have filed a motion seeking access to the documents produced under subpoena. Additionally, or alternatively, the Court could have dealt with the question of privilege through other means such as by a voir dire (under s 189 of the Evidence Act 1995 (NSW) (Evidence Act)) or during the regular course of the determination of objections to evidence. Ultimately, so the submissions went, it was the cross-defendants’ insistence which led to the confidentiality cross-claim being adjourned, which was unreasonable.

54. The cross-claimant submitted that contrary to the position put orally and by the email from their counsel on 19 September 2025, the cross-defendants could in fact have dealt with the privilege question on the day it was raised. She provided numerous transcript references which she submitted indicate that, in truth, the cross-defendant had already thought about the issues of privilege and was in a position to meet the cross-claimant’s case on that question.

55. She specifically pointed to the submissions made by the cross-defendants that they were both ready to meet the confidentiality cross-claim but not the privilege question, but also that the privilege question had a significant overlap with the confidentiality cross-claim itself. These submissions, it was said, are effectively irreconcilable, thus providing a further basis to suggest that it was the cross-defendants’ fault that the hearing went nowhere, as they chose not to deal with the question of privilege which their own submissions on the day suggested they likely could have dealt with.

56. On the specific issue of whether there were costs thrown away, the cross-claimant contended that there were no costs lost in relation to the preparation for the confidentiality cross-claim, though the submissions did not go further in explaining why there were no wasted costs.

57. In reply, the cross-defendants submitted that the unresolved issues concerning the material produced under subpoena were not relevant to the confidentiality cross-claim. The cross-defendants set out various reasons as to why they did not need to take any action in relation to the privilege claims made concerning the subpoenaed material. Amongst other matters, they highlighted that:

1. the pleaded case concerned equitable duties of confidence and fiduciary duties rather than legal professional privilege;

2. the Estate Planning Documents were filed and served along with the other evidence the cross-claimant intended to rely on, in circumstances which meant either litigation privilege could not be established (there being a want of confidentiality) or any privilege was waived;

3. the material produced under subpoena over which privilege claims had been made were not obviously relevant to the hearing of the confidentiality cross-claim, not least because of the discrete issues raised by the cross-claim and because all the evidence for that cross-claim, including the Estate Planning Documents, had already been filed and served; and

4. to the extent the Estate Planning Documents were in the subpoenaed material, no privilege claims were made over those documents (following a process by which the cross-claimant’s solicitor reviewed first what had been produced), and general access orders had made concerning packets containing those documents.

58. The cross-defendants also reiterated in their reply that they had no notice of the “anterior question” concerning privilege which the cross-claimant raised. Beyond just repeating the fact they were not told, the cross-defendants also pointed to the cross-claimant’s written outline of submissions failing to mention any issue of legal professional privilege as an issue to be decided, and the fact the trial plan (agreed to by the parties) did not mention that legal professional privilege would be an issue.

Determination

59. My opinion is that the cross-claimant should pay the cross-defendants’ costs thrown away by the adjournment.

60. As I observed on the first day of the hearing of the confidentiality cross-claim, the trial plan that had been provided by the parties was already a tight one. Any derailment from that schedule posed a real threat to finishing the confidentiality cross-claim within its two allocated hearing days.

61. It was the cross-claimant who, to use her counsel’s words, asked the Court to rule on the “anterior question” of whether the Estate Planning Documents were in fact privileged. That being a potential question on which a ruling was needed was an issue to which, I infer, the cross-claimant’s representatives were live as early as Monday, 15 September 2025 upon receipt of the cross-defendants’ written submissions. Despite this, no notice of this was given to the cross-defendants. For my part, I did not foresee there being any question of legal professional privilege that I would need to determine, nor did I detect from the material which had been sent to my Chambers that this would be an issue requiring separate determination.

62. The cross-claimant did not demur to my suggestions that the raising of this anterior question would threaten the first day of the hearing. Further, the cross-claimant did not take objection at the time to the course I took on 18 September 2025 of adjourning the proceedings to 19 September 2025. Losing the first day of the hearing made it inevitable that the confidentiality cross-claim would need to be adjourned to a later date. That need for an adjournment only came about because the cross-claimant raised an issue which she said needed to be determined first.

63. I reject the cross-claimant’s submissions that the cross-defendants should bear the responsibility for the adjournment.

64. I accept the cross-defendants’ submissions that the cross-claimant’s submissions as to the dispute between the parties over what the cross-defendants could access of the subpoenaed material was irrelevant to the adjournment of the confidentiality cross-claim.

65. The cross-claim was about the use that the cross-defendants could make of documents which were, on the cross-claimant’s own pleadings and by the nature of the case, already in the possession of the cross-defendants. Those documents were in the Court Book. I clarified with counsel for the cross-claimant that the documents to which this anterior privilege question related were the Estate Planning Documents already in the Court Book. What the cross-defendants should have done with respect to the subpoenaed material was not relevant to why the adjournment was ultimately granted.

66. I also reject the cross-claimant’s submissions that the cross-defendants were otherwise aware of the privilege issue by reason of [65] of their Defence to ASCC. As the cross-defendants submitted in reply, that paragraph expressly pleads that if the allegations in the confidentiality cross-claim were upheld, then waiver of privilege is a discretionary reason to refuse the cross-claimant the relief she seeks. One can accept that the cross-defendants were live to the general issue that the Estate Planning Documents may be privileged, given the injunction was sought on the basis the documents were given to the first cross-defendant in his capacity as a solicitor. That says nothing about being on notice of the cross-claimant wishing to raise the question of privilege as an “anterior question” on 18 September 2025.

67. I also do not accept the cross-claimant’s invitation to conclude the cross-defendants were in fact in a position to meet the privilege question raised by the cross-claimant, given they were otherwise ready to meet the confidentiality cross-claim. In granting the cross-defendants’ adjournment application, I accepted the cross-defendant would be unfairly prejudiced by having to deal with the privilege question, in light of the manner in which it was raised.

68. In any event, whether or not the cross-defendants may have been able to meet the privilege question is somewhat beside the point. An adjournment of the confidentiality cross-claim was inevitable once the cross-claimant raised the issue she did in the manner she did. I consider that there should be cost consequences for that course being taken.

69. Finally, I reject the cross-claimant’s submission that this issue could have been dealt with by way of a voir dire or otherwise in the usual course of objections. Given the facts establishing privilege over the Estate Planning Documents would be relevant both to the confidentiality cross-claim and the cross-claimant’s anterior question, I do not accept the question could have proceeded in the manner contemplated.

Issues 2 and 3: Should costs be paid on the ordinary or the indemnity basis, and should they be paid forthwith?

70. Having determined that the cross-defendants should receive their costs thrown away, I will deal with the cross-defendants’ contentions (and the cross-claimant’s submissions in response) in comparatively short order.

The cross-defendants should not receive their costs thrown away on indemnity basis

71. In my opinion, it would not be appropriate to order the cross-defendants receive their costs thrown away on the indemnity basis.

72. The applicable principles as to whether an indemnity costs order should be made were recently summarised by Black J in In the matter of Sunny International Hardware Group Pty Ltd [2025] NSWSC 348 at [8]. I gratefully adopt his Honour’s summary of the relevant principles (emphasis added):

“The applicable principles are well-established. Section 98(1)(c) of the Civil Procedure Act 2005 (NSW) permits the Court to order costs on an ordinary or an indemnity basis. Rule 42.2 of the Uniform Civil Procedure Rules provides that, unless the Court orders otherwise or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. Rule 42.5 deals with an order for costs on an indemnity basis. Costs are awarded on an ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful plaintiff for persisting with a case that fails, but to compensate a successful defendant fully for costs incurred, when the Court takes the view that it was unreasonable for the plaintiff to have subjected that party to the expenditure of costs: Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency on the part of the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at 89; [1998] HCA 11. In Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) (2008) 65 ACSR 324; [2008] NSWSC 199, McDougall J observed (at [24]) that there must usually be some special or unusual feature to justify departure from the ordinary rule as to costs, and that delinquency is not necessary for an order for indemnity costs, but is relevant to whether it should be made. The relevant principles were also considered by the Court of Appeal in Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6], where the Court observed that an order for indemnity costs may be made where a party’s conduct in proceedings is plainly unreasonable or involves an element of delinquency.”

73. The parties also drew my attention to Harrison v Schipp [2001] NSWCA 13 at [139], in which Giles JA (Handley and Fitzgerald JJA agreeing) said:

“Departure from the settled practice of costs on a party and party basis is discretionary, and beyond the need for a sufficient special or unusual feature in the case no fixed rule can be laid down. Some of the matters thought to justify it are collected by Sheppard J in Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 at 233-4. In the present case no other sufficient special or unusual feature is present. The trial judge’s order as to costs should be set aside so far as it provided for costs on an indemnity basis.”

74. I have also taken into account ss 56-60 of the CPA.

75. The cross-defendants submitted they should receive their costs on the indemnity basis because there was delinquency on the cross-claimant’s part. That delinquency was said to be constituted principally by leading the cross-defendants “astray” and distracting their trial preparation by giving notice of a suppression order application that was not ultimately made (without explanation), and by raising the issue of privilege without notice and in circumstances which led to “the inevitable consequence” of the confidentiality cross-claim being adjourned.

76. There are aspects of the cross-claimant’s conduct which attract justified criticism. She should have given notice in some form that she was going to raise this anterior question of privilege. As I have explained above, I consider it was the cross-claimant’s conduct which required the matter to be adjourned to a later date, such that two hearing days were not used particularly productively. That was so in circumstances where the matter was already potentially unable to be completed within two days.

74. All of that being said, I am not satisfied that the cross-claimant’s conduct in this case justify an order for costs to be paid on the indemnity basis.

The cross-defendants should receive their costs thrown away forthwith

78. In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 at [10]-[13], Barrett J set out the factors which have caused courts to depart from the normal rule (now embodied in UCPR r 42.7(2)) that the costs of an interlocutory application or step are not payable until the conclusion of the proceedings. The categories his Honour identified were:

1. cases where “the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect”;

2. cases where there “is some unreasonable conduct on the part of the party against whom costs have been ordered”; and

3. cases where “one can see a fairly long time before the proceedings are disposed of”.

The statement of principles by Barrett J has been cited by the Court of Appeal: see, eg, Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 (Pavlovic) at [14]-[17] (Bathurst CJ, Beazley P, Meagher JA). In Keynes Capital Global Limited v Guo (No 2) [2020] NSWCA 336 at [12], Bell P, Meagher and Payne JJA quoted the summary of principle provided in Pavlovic with apparent approval.

79. It is not necessary for all three of the factors outlined by Barrett J to be present before a “forthwith” order can be made: Pavlovic at [24] (Bathurst CJ, Beazley P, Meagher JA).

80. I observe that both parties, in contending for their relevant costs orders, submitted that this was an appropriate case for an order that any costs ordered be payable forthwith.

81. Independently of that, I consider it is appropriate to order that costs be payable forthwith. That is for the following reasons. First, I accept the cross-defendants’ submission that the costs thrown away by the adjournment of the confidentiality cross-claim are relatively self-contained and detached from the remainder of the proceedings. Second, as to the Court’s views of the cross-claimant’s conduct, which I have detailed elsewhere in these reasons, while I do not consider the cross-claimant’s conduct to go as far as justifying an indemnity costs order against her, I do consider it unreasonable enough such that costs being payable “forthwith” is justified. Finally, I accept there will be a while before the proceedings are likely to be determined. It is unlikely the confidentiality cross-claim itself will be able to be determined soon. Moreover, if costs of the confidentiality cross-claim need to await the full determination of the proceedings (including the family provision claims made in the ASCC), then I accept the cross-defendants’ submission that the conclusion of the substantive proceedings is also a while away given it is stayed pending the determination of the confidentiality cross-claim. Aside from the pleadings, nothing else appears to have happened in the substantive proceedings before they were stayed. The substantive proceedings certainly have a while to go before they are determined.

Orders

82. For the reasons set out above, I make the following order:

1. The cross-claimant is to pay the cross-defendants’ costs thrown away by reason of the adjournment of the cross-claim, on the ordinary basis, forthwith.

**********

Decision last updated: 04 November 2025