Lin v Lin (No 3)
[2024] VSC 17
•5 February 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S CI 2018 02053
| TSAI MEI CHUAN LIN and others (according to the schedule) | Plaintiffs |
| v | |
| SHIH-HSIEN LIN and others (according to the attached schedule) | Defendants |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 April 2023 |
DATE OF JUDGMENT: | 5 February 2024 |
CASE MAY BE CITED AS: | Lin v Lin (No 3) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 17 |
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COSTS – Trusts – Where controversy continued after proceeding was dismissed by consent – Dispute in relation to deed of variation of trust deed – Trustee appointed by consent – Defendants to pay the plaintiffs’ costs on a standard basis in respect of the period on and before 14 March 2023 – Plaintiffs to pay the defendants’ costs on an indemnity basis in respect of the period after 14 March – Supreme Court Act 1986, s 24 – Supreme Court (General Civil Procedure) Rules 2015 O 63 –Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201 – Bailey v Marinoff (1971) 125 CLR 529 – Banksia Securities Ltd v Insurance House Pty Ltd (Costs) [2020] VSC 234 – Eckert v Roberts (2021) 405 ALR 515 – Lin & Ors v Lin & Ors (No 2) [2022] VSC 542.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr N Kaskani | Aitken Partners |
| For the First Defendant and the Seventh Defendant | Mr J Barber KC with Mr M Cenacchi | AUM Lawyers |
HIS HONOUR:
This proceeding concerns an acrimonious dispute amongst members of a Taiwanese-Australian family about the control and administration of two family trusts: the Lin Family Trust and the Lin Family Trust No 2 (the trusts). In a judgment delivered on 16 September 2022, McMillan J described the proceeding, which commenced in 2018, as being characterised by a degree of ‘disorder’, with the parties filing multiple summonses seeking various types of relief resulting in significant delay and the utilisation of a great deal of the Court’s resources.[1] Regrettably, this state of affairs has continued, even after the proceeding was dismissed by consent.
[1]Lin & Ors v Lin & Ors (No 2) [2022] VSC 542, [6] (’Lin v Lin (No 2)’).
Fortunately, in order to determine the remaining controversy – liability for the costs of a summons filed by the plaintiffs – it is only necessary to examine in any detail the final phase of the history of this proceeding.
Relevant background and orders
After Mukhtar AsJ delivered judgment in relation to various procedural matters and applications in 2021,[2] the matter proceeded to trial over four days commencing on 17 February 2022. Judgment in respect of three of nine issues for determination was delivered on 16 September 2022.[3] The remaining six issues for determination were the subject of a further trial before McMillan J which commenced in January 2023. However, on the eighth day of the trial on 2 February 2023, the proceeding settled with the first defendant giving certain undertakings to the Court and the Court making various orders by consent, including an order that the proceeding be dismissed.
[2]Lin & Ors v Lin & Ors [2021] VSC 53.
[3]Lin v Lin (No 2) (n 1).
The orders made by the Court on 2 February 2023 with the consent of the parties were as follows:
1.The First and Second Plaintiffs and the First and Sixth Defendants shall by agreement choose an independent person to be the sole trustee of the Lin Family Trust and the Lin Family Trust No 2 (‘the Independent Trustee’).
2.Failing agreement under paragraph 1 of these orders within 21 days of the date of these orders, the First and Second Plaintiffs and the First and Sixth Defendants shall request the President of the Law Institute of Victoria to nominate a suitably qualified and experienced solicitor to be the Independent Trustee.
3.With effect upon the appointment of the Independent Trustee, pursuant to s 51(1) of the Trustee Act 1958 (Vic):
(a)the property of the Lin Family Trust shall vest in the Independent Trustee; and
(b)the property of the Lin Family Trust No 2 shall vest in the Independent Trustee.
4.Upon the appointment of the Independent Trustee, the First Defendant shall:
(a)cause the Third Defendant to remove the caveat lodged by it on or about 13 May 2019 over the title of the land described in certificate of title volume 8263 folio 465;
(b)do all such things and deliver all such records and things and execute all such documents as are reasonably necessary to give effect to paragraph 3 of these orders; and
(c)cause the Second and Third Defendants to do all such things and deliver all such records and things and execute all such documents as are reasonably necessary to give effect to paragraph 3 of these orders.
5.Upon the appointment of the Independent Trustee, the Second Plaintiff shall:
(a)do all such things and deliver all such records and things and execute all such documents as are reasonably necessary to give effect to paragraph 3 of these orders; and
(b)cause the Third and Fourth Plaintiffs to do all such things and deliver all such records and things and execute all such documents as are reasonably necessary to give effect to paragraph 3 of these orders.
6. There is liberty to apply in respect of these orders.
7. The proceeding is otherwise dismissed.
8. There is no order as to costs.
The undertakings given by the first defendant to the Court on 2 February 2023 were as follows:
(i)Within seven days of the identification of the Independent Trustee pursuant to para 1 or 2 of these orders, he shall exercise his power under cl 17 of the trust deed of the Lin Family Trust to remove the second defendant as trustee of the Lin Family Trust and appoint the Independent Trustee as the trustee of the Lin Family Trust.
(ii)Within seven days of the identification of the Independent Trustee pursuant to para 1 or 2 of these orders, he shall exercise his power under cl 17 of the trust deed of the Lin Family Trust No 2 to remove the third defendant as trustee of the Lin Family Trust No 2 and appoint the Independent Trustee as the trustee of the Lin Family Trust No 2.
(iii)He shall not exercise his power under cl 17 of the trust deed of the Lin Family Trust to remove the Independent Trustee as trustee of the Lin Family Trust or to appoint any additional trustee or trustees of the Lin Family Trust in addition to the Independent Trustee without leave of the Court.
(iv)He shall not exercise his power under cl 17 of the trust deed of the Lin Family Trust No 2 to remove the Independent Trustee as trustee of the Lin Family Trust No 2 or to appoint any additional trustee or trustees of the Lin Family Trust No 2 in addition to the Independent Trustee without leave of the Court.
(v)Until the Independent Trustee is appointed, he shall not without the written consent of the plaintiffs or leave of the Court cause or permit, or cause the Second or Third Defendants to cause or permit, the payment, distribution or disbursement of any funds of the Lin Family Trust or the Lin Family Trust No 2 other than by continuing to pay or discharge proper trust expenses where any such expense is less than $3,000 in amount.
As is apparent from the above, the orders made on 2 February 2023 required the parties to agree to an independent person to be the trustee of the trusts and, failing agreement, provided for the President of the Law Institute of Victoria to nominate a suitably qualified and experienced solicitor to be trustee. In the weeks after the orders were made, the parties had some communications to that end, but agreement remained elusive.
On 22 February 2023, in his capacity as appointor of the Lin Family Trust No 2 and as sole director of the corporate trustee of the trust, the first defendant drew and executed a deed of variation of the trust deed of the Lin Family Trust No 2 (the 22 February deed of variation). He did so without taking any advice from his lawyer (who did not become aware of it until 3 March 2023), without seeking any direction from the Court, and without consulting or notifying the plaintiffs, or any of the other beneficiaries of the Lin Family Trust No 2.
The effect of the 22 February deed of variation was to impose limitations on any decision by the trustee regarding the sale of property owned by the Lin Family Trust No 2.[4] In particular, it limited the trustee’s power to sell trust property by requiring the trustee to:
[4]The main asset of the Lin Family Trust No 2 is a unit property at 17 Carrington Road, Box Hill.
(a) inform all primary beneficiaries of the reasons why the trustee believed the sale of property was necessary;
(b) provide the primary beneficiaries with an opportunity to propose alternatives to the sale, and for those alternatives to be given due consideration; and
(c) obtain the written consent of all the primary beneficiaries to sell the property.
By about 28 February 2023 the parties had agreed on the identity of an independent trustee: a solicitor, Lachlan Vallance. Pursuant to the orders made on 2 February 2023 and the undertakings given by the first defendant, Mr Vallance was to be appointed as independent trustee on 7 March 2023.
The first defendant did not disclose the existence of the 22 February deed of variation to the plaintiffs, or the proposed independent trustee, Mr Vallance, until 6 March 2023. Upon becoming aware of it, the plaintiffs’ solicitors wrote to the first defendant’s solicitors and demanded that it be revoked prior to Mr Vallance’s appointment as trustee. On 7 March 2023, Mr Vallance emailed the parties’ solicitors stating that the 22 February deed of variation should be revoked prior to his appointment. In correspondence the following day, the solicitors for the first defendant did not agree to this request.
Mr Vallance and the first defendant’s solicitor spoke by telephone late in the morning on 9 March 2023. Mr Vallance said that he wanted the 22 February deed of variation revoked before he accepted appointment as trustee and that his main concern was in relation to subclause 1(3). When they spoke again soon after that day, Mr Vallance said that he could ‘live with’ subclauses 1(1) and 1(2). Mr Vallance agreed to accept appointment as trustee if subclause 1(3) of the 22 February deed of variation was removed. Shortly thereafter, the first defendant executed a deed of variation which reversed the effect of clause 1(3) of the 22 February deed of variation and provided a copy of it to Mr Vallance at about 1pm on 9 March 2023, who then provided a copy of it to the parties’ solicitors later in the afternoon. At about 3pm on 9 March 2023, the plaintiffs made inquiries of the Court for a summons to be issued.
On 10 March 2023, the plaintiffs filed a summons seeking the following orders (the summons):
Breaches by First Defendant
1.The Deed of Variation dated 22 February 2023 executed by the First Defendant and Third Defendant (Impugned Deed of Variation) be set aside.
2.A declaration that the First Defendant engaged in and is continuing to engage in conduct which frustrates and/or otherwise interferes with the terms of the orders made by this Honourable Court on 2 February 2023.
3.A declaration that the First Defendant breached and is continuing to breach undertakings given by him to this Honourable Court on 2 February 2023.
Removal of First Defendant as Appointor of Lin Family Trust and Lin Family Trust No 2
4. The Trust Deed for Lin Family Trust No. 2 be varied as follows:
(a)The First Defendant be removed as appointor of the Lin Family Trust No. 2; and
(b)Mr Lachlan Vallance, or alternatively the Second Plaintiff, be appointed as appointor of the Lin Family Trust No. 2.
5. The Trust Deed for Lin Family Trust be varied as follows:
(a) The First Defendant be removed as appointor of the Lin Family Trust; and
(b) Mr Lachlan Vallance, or alternatively the Second Plaintiff, be appointed as appointor of the Lin Family Trust.
Conferral of Powers on Trustee of Lin Family Trust No 2
6.Pursuant to s 63(1) of the Trustee Act 1958 (Vic), or alternatively pursuant to the inherent jurisdiction of the Court, the Impugned Deed of Variation be set aside and/or rescinded and the powers of the trustee for Lin Family Trust No. 2 be reinstated to those powers contained in the Trust Deed Lin Family Trust No. 2 immediately prior to the execution of the Impugned Deed of Variation.
Costs
7.The First Defendant pay the Plaintiffs’ costs of and incidental to this Application on an indemnity basis (or alternatively on a standard basis) payable forthwith.
The summons was listed for hearing before McMillan J on 14 March 2023. In the afternoon of 10 March 2023, soon after the summons was filed, Mr Vallance notified the parties by email that, ‘given the matter has been listed before [McMillan J] on Tuesday morning 14th March 2023, I will not be signing any form of the deed today’.
When the summons came before McMillan J on the morning of 14 March 2023, the matter was stood down until the afternoon. During the adjournment the first defendant executed a further deed of variation that reversed the effect of the remaining effective clauses of the 22 February deed of variation, thereby completing a full reversal of its effect.
When the Court reconvened in the afternoon of 14 March 2023, the following orders were made by consent:
1. Lachlan James Vallance of Level 18, 461 Bourke Street, Victoria is appointed trustee of the Lin Family Trust.
2. Lachlan James Vallance of Level 18, 461 Bourke Street, Victoria is appointed trustee of the Lin Family Trust No 2.
3. Costs reserved.
The Court also made programming orders for the filing of affidavits and submissions in relation to the hearing of the remainder of the summons which was fixed for hearing on 31 March 2023.[5]
[5]The proceeding was later relisted for hearing on 6 April 2023 following referral to me on 27 March 2023.
Following McMillan J’s retirement, the summons came before me on 6 April 2023. The day before the hearing, the plaintiffs informed the Court that they would not be pressing for the remainder of the relief in the summons, save in respect of costs. Accordingly, at the further hearing of the summons, the parties’ submissions were confined to the issue of costs.
The primary orders the plaintiffs sought were that the parties bear their own costs of the summons, or alternatively, that there be no order as to costs, save that that the first and seventh defendants (who I will hereafter refer to as ‘the defendants’) pay the plaintiffs’ costs in relation to the hearing on 6 April 2023 on an indemnity basis.
The defendants sought orders that: (a) there be no order as to costs up to and including the hearing on 14 March 2023 and; (b) the plaintiffs pay their costs of the summons thereafter on an indemnity, or alternatively, a standard basis.
Costs
Unless otherwise expressly provided by an Act or by any rules made pursuant to the Supreme Court Act 1986, the Court has a general discretion in respect of costs, including in relation to the administration of estates and trusts.[6] The discretion is to be exercised judicially and in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules).
[6]Supreme Court Act 1986, s 24.
The usual rule as to costs is that a successful party to litigation is entitled to an award of costs in its favour, with the unsuccessful party bearing the liability for the costs of the unsuccessful litigation. In Northern Territory v Sangare, the High Court stated that:[7]
A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. ...
[7](2019) 265 CLR 164, 173 [25], omitting citations.
In Banksia Securities Ltd v Insurance House Pty Ltd (Costs),[8] John Dixon J summarised some of the principles relating to indemnity costs as follows:[9]
(a)Costs are to be assessed on a standard basis unless the circumstances of the case justify a departure from the usual course.
(b)The making of an indemnity costs order is in the unlimited discretion of the court, with such discretion to be exercised judicially and not unreasonably.[10]
(c)The court may order indemnity costs where the circumstances warrant departing from the usual rule that costs be payable on a standard basis, including conduct that bears a ‘sufficient or unusual feature’ or some ‘relevant delinquency’.[11]
(d)The court may order indemnity costs in cases where a party, properly advised, knew or should have known that it had no chance of success and has persisted with its claim.[12]
[8][2020] VSC 234.
[9]Ibid [15].
[10]Bass Coast Shire Council v King [1997] 2 VR 5, 29.
[11]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233; Oshlack v Richmond River Council (1998) 193 CLR 72, 89 [44].
[12]Murdaca v Maisano [2004] VSCA 123, [40], citing Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397; Macedon Ranges Shire Council v Thompson [2009] VSCA 209, [15].
Further to the fourth of these principles, as stated by French J (as he then was) in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) & Anor (No 2),[13] indemnity costs may be awarded is where it appears that an action has been commenced in circumstances where the applicant, properly advised, should have known that he had no chance of success.[14] The discretion to award indemnity costs will be enlivened where ‘for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case’.[15]
[13](1993) 46 AR 301.
[14]Ibid 303.
[15]Ibid.
Given the events that have occurred, it is appropriate to exercise the discretion as to costs separately in relation to: (a) the period on and before 14 March 2023; and (b) the period after 14 March 2023. The full reversal of the effect of the deed of variation on 14 March 2023 and the appointment that day by consent of Mr Vallance as trustee of the trusts, together with the later abandonment by the plaintiffs of the remaining relief sought in the summons, self-evidently gives the prosecution of the summons after 14 March 2023 a markedly different character to its prosecution on and before that date.
The plaintiffs primary submission that there should be no order as to costs[16] proceeds from the following propositions: the plaintiffs could fairly establish an entitlement to costs in relation to the earlier of the above periods; the defendants would have some entitlement to costs in relation to the later period; and the quantum of the parties’ claims to costs in respect of the two periods broadly offset each other. The evidence does not satisfy me of this last assertion. In circumstances where that proposition is contested, it would be inappropriate for the Court to resolve this controversy by assuming an equivalence between the quantum of the parties’ costs in respect of the two periods.
[16]Save in relation to the hearing on 6 April 2023.
Given the rejection of their primary submission in respect of costs, the alternative submission advanced by the plaintiffs in respect of costs was as follows:
(a) the defendants pay the plaintiffs’ costs up to and including the hearing on 14 March 2023 on an indemnity basis;
(b) the plaintiffs pay the defendants’ costs on a standard basis in respect of the period in and between 15-30 March 2023 (except in relation to an affidavit of the first defendant filed on 30 March 2023 and an affidavit of Attila Mete filed on the same date); and
(c) the defendants pay the plaintiffs’ costs in respect of the hearing on 6 April 2023 on an indemnity basis.
Period on and before 14 March 2023
Senior counsel for the defendants acknowledged that the plaintiffs had ‘some’ success in the hearing on 14 March 2023: the first defendant executed a further deed of variation which reversed the effect of the remaining clauses of the 22 February deed of variation which then remained effective. On 6 March 2023 and then 8 March 2023, the plaintiffs had made written demands of the first defendant that he revoke the 22 February deed of variation. The first defendant did not accede to these requests, but ultimately did so after the summons came before the Court on 14 March 2023. The plaintiffs are accordingly entitled to their costs of the summons in respect of the period on and before 14 March 2023.
I do not, however, consider that there are circumstances which warrant a departure from the usual rule that costs are payable on a standard basis. The orders made by the Court on 14 March 2023 providing for the appointment of Mr Vallance as trustee were not sought by the plaintiffs in the summons and were in fact proposed by the defendants. Furthermore, correspondence from the plaintiffs’ solicitor to the defendants’ solicitor on 10 March 2023 indicates that the principal relief sought by the plaintiffs from the summons was in fact the first defendant’s removal as appointor of the trusts, a matter which was not dealt with at the hearing on 14 March 2023 and which claim the plaintiffs ultimately abandoned.
It also cannot be overlooked, as the defendants submitted, that the actual impediment to the appointment of Mr Vallance as trustee of the trusts was in fact that the summons filed by the plaintiffs. As referred to in [11] above, ultimately Mr Vallance indicated that he would agree to be appointed if only subclause 1(3) of the 22 February deed of variation was reversed. The first defendant then executed a deed of variation which had this effect. At that point in time, given Mr Vallance’s position, it was unnecessary to seek a hearing in the Court for relief relating to the appointment of an independent trustee as provided by the orders made and undertakings given on 2 February 2023.
Period after 14 March 2023
The orders made by the Court on 2 February 2023 established a process for the appointment of new trustees to the trusts. The Court granted liberty to apply and the proceeding was otherwise dismissed.
As stated by Barwick CJ in Bailey v Marinoff, ‘[o]nce an order disposing of a proceeding has been perfected … that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court’. [17] Upon authentication of the Court’s orders made on 2 February 2023, the Court therefore became functus officio and those orders could not be altered or modified, save under the grant of liberty to apply, the slip rule or by reason of a specific statutory provision.[18]
[17](1971) 125 CLR 529, 530.
[18]Carroll v Price [1960] VR 651, 657-8; CMG v R [2013] VSCA 243, [126].
There was no suggestion that the slip rule, or any statutory provision, had application in the circumstances of this case. Central to the determination of the consequences in costs for the parties associated with the summons, and in particular its prosecution by the plaintiffs after 14 March 2023, is an understanding of the nature of the grant of liberty to apply and whether the relief sought by the plaintiffs in the summons was within the scope and ambit of the grant in the circumstances of this proceeding.
As explained by Campbell JA in Australian Hardboards Ltd v Hudson Investment Group Ltd,[19] the grant of liberty to apply ’enables further orders to be made which are necessary for the purpose of implementing and giving effect to the principal relief already pronounced or, as it is sometimes called, “working out the order”’.[20] ‘[W]hat can be done under a reservation of liberty to apply depends on what needs to be done, in the particular case, to work out the particular orders that have been made’,[21] although liberty to apply cannot be used to obtain an order outside the scope of those sought in the initiating process.[22]
[19](2007) 70 NSWLR 201.
[20]Ibid [50].
[21]Ibid [56].
[22]Ibid [74].
In Abigroup Ltd v Abignano, the Full Court of the Federal Court of Australia described the purpose of liberty to apply as being:[23]
… directed essentially to questions of machinery which may arise from the implementation of a court’s orders. They include cases where a court may need to supervise the enforcement of orders after they have been made.
[23](1992) 39 FCR 74, 88.
More recently in Eckert v Roberts, Bleby JA (with whom Kelly P and Doyle JA agreed) stated that:[24]
… liberty to apply cannot be deployed to obtain an order that alters the substance of a final order. Even more starkly, it cannot be used to devise what is properly characterised as a separate claim from that which engaged the jurisdiction of the court.
… the essence of the power … is to make any orders necessary to address any issues arising on account of the final orders determining the claim and which therefore remain within the court’s jurisdiction so engaged.
[24](2021) 405 ALR 515, [49]-[50] (citations omitted).
In applying these principles, the scope of the power retained by the Court after the making of the orders on 2 February 2023 is determined by focusing upon the orders made on that date against the background of the relief sought by the plaintiffs in the originating motion.
The orders made by the Court on 14 March 2023 appointing Mr Vallance as trustee of the trusts can clearly be seen to be within the scope of the Court’s power to ‘work out’ the orders made on 2 February 2023 as those orders established a process for the appointment of independent trustees to the trusts.
The same cannot be said for the remainder of the relief sought in the summons. Putting aside the relief sought in relation to the 22 February deed of variation the effect of which was revoked in full by the first defendant on 14 March 2023, by the summons the plaintiffs otherwise sought:
(a) declaratory relief that the first defendant’s alleged conduct was in breach of the orders made, and undertakings given, on 2 February 2023; and
(b) orders varying the trusts to provide for the first defendant’s removal as appointor and his replacement with Mr Vallance.
As to the first head of relief, although the Rules provide a mechanism for a party to bring charges of contempt against an opposing party,[25] which necessarily includes conduct in breach of orders and undertakings, the plaintiffs expressly disavowed any intention to bring charges of contempt against the first defendant. This relief cannot therefore be said to have been brought by the plaintiffs pursuant to any statutory right.
[25]See Order 75.06 of the Rules.
The making of a declaration by the Court that the first defendant’s conduct was in breach of an order of the Court or an undertaking given by him could not be said to be relief directed at a question of machinery arising from the implementation of the Court’s orders made on 2 February 2023. Any such relief would not implement or give effect to the relief then pronounced by the Court, namely, the establishment of a process for the appointment of independent trustees of the trusts. Rather than giving effect to the orders of the Court, declaratory relief of the type sought would be limited to formally recording conduct in breach of orders of the Court. As noted, the Rules provide a specific procedure for a party to a proceeding to bring charges of contempt of court against another party. It would be anomalous and unjust if a party could in effect subvert that procedure, and its associated procedural safeguards, by seeking relief under liberty to apply which, if granted, would be tantamount to a finding of contempt of court.
The Court accordingly does not have jurisdiction to make the declaratory relief sought by the plaintiffs because such relief is not within the grant of liberty to apply and the proceeding has otherwise been dismissed.
The same conclusion emerges when considering the orders sought by the plaintiffs for the first defendant’s removal as appointor of the trusts. Any such orders would alter the relief granted by the Court on 2 February 2023 because orders made on that occasion did not touch upon the identity or powers of the appointor of the trusts and were limited to the process for the appointment of new trustees. Furthermore, the orders sought by the plaintiffs would amount to a separate claim to that which has engaged the jurisdiction of the Court. Relief in the nature of the first defendant’s removal as appointor of the trusts was not sought in the plaintiffs’ Originating Motion (in original or amended form), the final form of the pleading filed by the plaintiffs,[26] and was not referred to in any of the nine issues for determination identified by McMillan J in Lin v Lin (No 2).
[26]The Fourth Amended Statement of Claim filed 25 January 2023.
None of the submissions advanced by the plaintiffs raised any doubt about the legal principles outlined above, or their application to the circumstances of the case. It follows that, in persisting with the summons after 14 March 2023, the plaintiffs, properly advised, should have known that they had no chance of success in pressing for the remaining heads of relief because, having dismissed the proceeding, the Court lacked jurisdiction to grant that relief. Accordingly, subject to the following matters, in relation to the period after 14 March 2023, the defendants have established special circumstances which warrant a departure from the usual course that costs are awarded on a standard basis. A corollary of the defendants’ entitlement to payment of their costs on an indemnity basis after 14 March 2023 is that the plaintiffs’ submission that the defendants should pay their costs in respect of the hearing on 6 April 2023 on an indemnity basis – because the defendants did not accept the plaintiffs’ offer that they consent to orders for the remainder of the summons to be dismissed with no order as to costs – is rejected.
It remains to consider the plaintiffs’ submissions that the costs of the first defendant’s affidavit filed on 30 March 2023 and the affidavit of Attila Mete filed on the same date on which the defendants also relied should be excised from the defendant’s entitlement to costs in the period after 14 March 2023. The bases of the plaintiffs’ claim was that these affidavits were filed without the leave of the Court or the plaintiffs’ consent and, because they were filed after the plaintiffs filed their submissions, the plaintiffs did not have an opportunity to reply to or amend their submissions in order to deal with the material. The filing of these affidavits outside of the timetable established by the orders of the Court would have resulted, the plaintiffs submitted, in additional costs in having to respond to that material which referred to a large amount of affidavit material filed earlier in the proceeding. This would have substantially expanded the scope and length of the hearing of the summons because of the likely need for cross-examination and additional submissions. It was as a result of these concerns that the plaintiffs proposed to the defendants that they would not press the balance of their summons on the basis that there be no order as to costs.
Although it is correct that the affidavits were filed out of sequence and without the leave of the Court or the consent of the plaintiffs, no real prejudice arises in relation to the defendants’ reliance on the affidavit of Attila Mete filed on 30 March 2023 (and no specific matters in relation to it were raised in submissions). The affidavit principally deals with the discrete matter of the content and timing of communications between the parties and Mr Vallance on 9-10 March 2023.
The following points may be made in relation to the defendants’ reliance upon the affidavit of the first defendant filed on 30 March 2023. First, the content of the affidavit is limited to responses to a limited number of paragraphs of a previous affidavit filed on behalf of the first plaintiff, as well as certain paragraphs of the plaintiffs’ outline of submissions. Secondly, my strong impression is that, if the hearing had proceeded, the defendants would likely have obtained leave to rely upon this further affidavit material, even if at the cost of an adjournment or an award of costs thrown away. Thirdly, the defendants’ decision to prepare and rely on this affidavit was, at least to some extent, understandable insofar as it replied to paragraphs of the plaintiffs’ outline of submissions some of which were not expressed with the level of professional detachment and objectivity the Court expects from submissions prepared by solicitors or counsel. This no doubt reflects the highly antagonistic history of this proceeding and its ‘disordered’ course, but it is nevertheless unsurprising that the first defendant sought to respond to particular paragraphs of the materials relied upon by the plaintiffs.
I therefore do not consider that there is a proper basis to excise the affidavits of the first defendant and Attila Mete both filed on 30 March 2023 from the defendants’ entitlement to costs in the period after 14 March 2023. However, in exercising my discretion in respect of costs, I consider it would be unjust for the plaintiffs to be liable for the costs of these affidavits on an indemnity basis. Notwithstanding my criticisms of aspects of the plaintiffs’ outline of submissions, the preparation of these affidavits was not the consequence of any delinquent behaviour by the plaintiffs or other special circumstances which would warrant a departure from the usual position that costs are awarded on a standard basis. It also cannot be overlooked that they were filed outside of the timetable ordered by the Court and without the leave of the Court or the consent of the parties. The appropriate course is for the plaintiffs to pay the defendants’ costs after 14 March 2023 on an indemnity basis, save for the costs associated with the affidavit of the first defendant filed on 30 March 2023 and the affidavit of Attila Mete filed on 30 March 2023 in relation to which the costs are to be determined on a standard basis.
Disposition
The Court will accordingly make the following orders:
1.The defendants pay the plaintiffs’ costs of the summons filed on 10 March 2023 in respect of the period on and before 14 March 2023 on a standard basis.
2.The plaintiffs pay the defendants’ costs of the summons filed on 10 March 2023 in respect of the period after 14 March 2023 on an indemnity basis, except for the costs in relation to the affidavits of the first defendant filed on 30 March 2023 and the affidavit of Attila Mete filed on 30 March 2023 which the plaintiffs shall pay on a standard basis.
3. There otherwise be no order as to costs.
4. The plaintiffs’ summons filed on 10 March 2023 otherwise be dismissed.
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SCHEDULE OF PARTIES
S CI 2018 02053
BETWEEN:
| TSAI MEI CHUAN LIN (in her own capacity and as administrator of the estate of WEN CHIH LIN, deceased) | First Plaintiff |
| SHIH-KAI LIN | Second Plaintiff |
| JAVELIN TOWNS PTY LTD (ACN 007 274 259) (in its own capacity and as trustee for THE LIN FAMILY TRUST) | Third Plaintiff |
| W C LIN NOMINEES PTY LTD (ACN 007 455 987) (in its own capacity and as trustee for THE LIN FAMILY TRUST NO 2) | Fourth Plaintiff |
| -and- | |
| SHIH-HSIEN LIN | First Defendant |
| WEN CHIH LIN MEMORIAL PTY LTD (ACN 622 246 575) (in its own capacity and as trustee for THE LIN FAMILY TRUST) | Second Defendant |
| WEN CHIH LIN MEMORIAL PTY LTD NO 2 (ACN 622 246 619) (in its own capacity and as trustee for THE LIN FAMILY TRUST NO 2) | Third Defendant |
| LUXTRON PTY LTD (ACN 007 442 819) | Fourth Defendant |
| REGISTRAR OF TITLES | Fifth Defendant |
| SHU-CHEN LIN | Sixth Defendant |
| EAST OCEAN INVESTMENTS PTY LTD (ACN 122 892 095) | Seventh Defendant |
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