Mattingly v Cosh - [2025] WASC 70

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MATTINGLY -v- COSH [2025] WASC 70
CORAM:   GETHING J
HEARD:   28 FEBRUARY 2025
DELIVERED          :   10 MARCH 2025
FILE NO/S:   CIV 1211 of 2022
BETWEEN:   WANDA MARGRIETE MATTINGLY as executor of the will of CALLUM CRAIG PAYNE
Plaintiff
AND
DAVID STANLEY COSH
First Defendant
TALEAH RACHELLE HAY COSH as executrix of the will of KYLA WINIFRED HAY COSH
Second Defendant
COLIN JEFFREY NICHOLL as executor of the will of RONALD HAY PAYNE
Third Defendant
ROSS GEORGE PAYNE as executor of the will of RONALD HAY PAYNE
Fourth Defendant
DAVID STANLEY COSH as executor of the will of KYLA WINIFRED HAY COSH
Fifth Defendant
COLIN JEFFREY NICHOLL as executor of the will of LINDA AMABEL PAYNE
Sixth Defendant
ROSS GEORGE PAYNE as executor of the will of LINDA AMABEL PAYNE
Seventh Defendant

Catchwords:

Practice and procedure - Summary judgment - Declaratory orders made without opposition - Claim for costs unnecessarily incurred by solicitors

Legislation:

Rules of the Supreme Court 1971 (WA) O 66 r 5
Transfer of Land Act 1893 (WA) s 68

Result:

Indemnity costs awarded against solicitors for the third, fourth, sixth and seventh defendants.

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	P G Donovan
Second Defendant	:	P G Donovan
Third Defendant	:	P R MacMillan
Fourth Defendant	:	P R MacMillan
Fifth Defendant	:	P G Donovan
Sixth Defendant	:	P R MacMillan
Seventh Defendant	:	P R MacMillan

Solicitors:

Plaintiff	:	Bruce Legal Consultants
First Defendant	:	MDS Legal
Second Defendant	:	MDS Legal
Third Defendant	:	Bailiwick Legal
Fourth Defendant	:	Bailiwick Legal
Fifth Defendant	:	MDS Legal
Sixth Defendant	:	Bailiwick Legal
Seventh Defendant	:	Bailiwick Legal

Case(s) referred to in decision(s):

Barnes v Addy (1874) 2 LR 9 Ch App 244
L H K Nominees Pty Ltd v Maureen Ada Kenworthy (as Administratrix of the Estate of Lionel Kenworthy) & Anor [2002] WASCA 291; (2002) 26 WAR 517
Patten v Burke Publishing Co Ltd [1991] 2 All ER 821
Permanent Mortgages Pty Ltd v Vandenbergh (2010) 41 WAR 353; [2010] WASC 10
Pier (WA) (as trustee for Isandi Trust) v Jean Maurice Pty Ltd (in liq) [No 7] [2018] WASC 355
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Westpac Banking Corporation v Dunn [2011] WASC 7

GETHING J:

The action concerns a farming property known as Carinya. It is convenient to begin by setting out the parties and their relationships. Consistent with the approach used in the pleadings and affidavits, and intending no disrespect, I will refer to the people involved by their first names.
The action involves three brothers, Ronald Hay Payne (Ron), Callum Craig Payne (Callum), and Ross George Payne (Ross).
Ron was married to Linda Annabel Payne (Linda). Ron and Linda had three daughters, Wanda Mattingly (Wanda), Kyla Winifred Hay Cosh (Kyla) and Sonia Tipton (Sonia). Kyla was married to David Cosh (David). David is the first defendant in his personal capacity.
Callum died on 18 November 2020. Wanda is the executor of Callum's estate and in that capacity is the plaintiff. She is the sole beneficiary of his estate.
Linda died on 27 January 2013. Ron was initially the executor of Linda's will. He died on 19 March 2021. The executors of Linda's will are now Ross and Colin Jeffrey Nicholl (Colin). Colin is Linda's brother. Ross and Colin in their capacities as executors of Linda's will are the sixth and seventh defendants.
The executors of Ron's will are also Ross and Colin. Ross and Colin are in their capacities as executors of Ron's will are the third and fourth defendants.
I will refer to the third, fourth, sixth and seventh defendants collectively as Ron and Linda's Executors.
Kyla died on 4 February 2020. The executors of Kyla's will are David and Taleah Rachelle Hay Cosh (Taleah). David and Taleah are the second and fifth defendants in their capacity as the executor/ executrix of Kyla's will. I will refer to the first, second and fifth defendants as the Cosh Parties.
In the statement of claim filed in the proceedings, Wanda (as Callum's executrix) claims that Callum, Ron, Ross, their mother Margaret Payne, and Linda carried on a farming business in partnership under the name 'R. & C. Payne' using, among other land, land owned by Ron and Callum known as 'Glen Elgin' (First Partnership). Wanda also asserts that Callum, Ron, Linda, David and Kyla entered into a second partnership to carry on business together in partnership as farmers using Glen Elgin and trading as 'Payne Co & Cosh'. This is said to be pursuant to an agreement between them to the effect that each would work the farm together and share profits and losses equally (Second Partnership). In the action, Wanda seeks an order that the First Partnership and the Second Partnership be wound up, together with ancillary orders.
For the purposes of determining the issue before me, it is sufficient that I refer to only one aspect of the dispute in the statement of claim. Wanda asserts that the First Partnership purchased a farm adjacent to Glen Elgin known as Carinya. Initially, Wanda sought a declaration that Carinya was the property of the First Partnership. This position persisted until a substituted statement of claim was filed on 19 December 2022 in which she sought a declaration that Carinya 'was purchased by the first partnership and was the property of the first partnership until [Ron] gifted his interest therein to his daughter Kyla and his son in law David as joint tenants'. The statement of claim contains an allegation that Ron held his interest in Carinya on trust and that his estate is liable to account for the value of Ron's interest which he gifted to David and Kyla.[1]
[1] Plaintiff's substituted statement of claim filed 19 December 2022, par 27.
In a further-reamended defence of the Cosh Parties, and counterclaim of David, filed 18 July 2024, the Cosh Parties do not admit that Carinya was the property of the First Partnership. They plead that on or about 10 May 2001, Ron, Callum and Linda were registered as proprietors of Carinya as tenants in common in equal shares. By a number of transactions, David became the registered proprietor of a two-thirds interest in Carinya. In the counterclaim, David assets a right to two‑thirds of the proceeds of the sale of Carinya plus any interest earned on those proceeds, net of tax on that interest.[2]
[2] First, second and fifth defendant's defence and counterclaim of first defendant filed 18 July 2024, counterclaim par B.
In the Reply to the Further Re-Amended Defence of the First, Second and Fifth Defendant, and Defence to the Counterclaim of the First Defendant, filed 28 June 2024, Wanda concedes that David obtained title by registration, confirms that fraud is not alleged, and consents to him being paid his two-thirds share of the proceeds of the sale of Carinya.[3]
[3] Plaintiff's Reply to Further Re-Amended Defence of the First, Second and Fifth Defendant and Defence to the Counterclaim of the First Defendant filed 28 June 2024, pars 9 and 10.
As to the position of Ron and Linda's Executors, in their defence and counterclaim filed 19 April 2024, they deny that Carinya was purchased with partnership assets.[4] In the counterclaim they seek a declaration that Carinya was not an asset of the First Partnership.[5] They also seek declarations that the First Partnership was dissolved in or about 1961 and the Second Partnership in or about 1978. Prior to this pleading, they had admitted that Carinya was an asset of the First Partnership, though in the context of seeking a declaration that the First Partnership was dissolved in or about 1961.
[4] Amended defence and counterclaim of the third, fourth, sixth and seventh defendants, filed 19 April 2024, defence par 17(a).
[5] Amended defence and counterclaim of the third, fourth, sixth and seventh defendants, filed 19 April 2024, counterclaim par 9.
On 25 March 2024, David's lawyers wrote in detail to the other parties seeking their consent to transfer to David two-thirds of the proceeds of Carinya.[6] That letter:
(a)referred to the fact that Ron and Linda's Executors deny that Carinya was ever an asset of the First Partnership;
(b)foreshadowed David commencing proceedings and applying for summary judgment with respect to the matter, including seeking costs against the other parties;
(c)stated that David would oppose the executors being indemnified by the estates for the costs of defending the action unless they obtained directions from the Supreme Court to do so; and
(d)required a response by 2 April 2024.
[6] David Stanley Cosh Affidavit filed 9 August 2024, annexure DSC-14, pages 56-59 (David Affidavit).
The response of the lawyers for Ron and Linda's Executors is set out in an email sent on 2 April 2024, in the following terms: [7]
Please see our clients' response:
1. The proceedings have been on foot for more than 2 years; your letter however is the first occasion on which the matters giving rise to the demand have been raised. Requiring a response within 4 working days is unreasonable.
2. Further, the parties have agreed, and provided consent orders, for amendments to their respective pleadings, such amendments likely to be comprehensive. These are to be finitised by 2 May 2024. A response to the new matters raised in your letter should not be required or provided until that process is complete.
3. The claimed funds have been put into a MDS Legal trust account with the firm as the trustee. No withdrawals are to be made without authority from MDS, MacDonald Rudder and our firm, or by Court Order. These were the terms agreed to by the parties. Our clients do not consent to the proposed withdrawal of funds from the trust.
ln all the circumstances, the demand for an immediate response is unreasonable. Any response should be by [no later] than 9 May 2024, 7 days after the last date for the amendment of pleadings. If your clients commence proceedings prior to that time, our clients will rely on this correspondence in relation to the substantive issues and costs.
[7] David Affidavit, annexure DSC-15, page 61.
In an email sent on 13 June 2024 to David's lawyers, copied to the lawyers for Ron and Linda's Executors, Wanda's lawyers advised that, given the amendments to the pleadings, their instructions were to not oppose an application for summary judgment in respect of the proceeds of the sale of Carinya.[8] This email does not go so far as to say that Wanda will consent to a summary judgment application.
[8] Affidavit of Ciara Mary Nalty, sworn 31 January 2025, annexure CMN-1.
David's lawyers followed up with the lawyers for Ron and Linda's Executors in an email sent on 18 July 2024, the substance of which was:[9]
Almost 4 months have now passed since we wrote seeking your clients' consent to the transfer of the proceeds of Carinya to David. You initially indicated that your clients would provide a response by May. That has not occurred. (As an aside, we do not accept that it was necessary for pleadings to close before your clients could reach a conclusion regarding the issue. However, that has now occurred in any event. The minor amendments made to our pleading filed today do not include any relevant changes to the counterclaim.).
To date, you have provided no reason why David is not entitled to receive the transfer of 2/3 of the proceeds of Carinya.
If your clients do not consent to that transfer occurring within 7 days will make an application for summary judgment in the counterclaim and seek costs against your clients without further notice. Please note that, given it is clearly not in the interests of the estates of Ron or Linda to be opposing such an application, our clients reserve the right to seek costs against your clients in their personal capacities without being indemnified by the estates.
[9] David Affidavit, annexure DSC-15, page 60.
In the affidavit evidence before the court, there is no response to this email by the lawyers for Ron and Linda's Executors.

David's summary judgment application

On 9 August 2024, David filed an application for summary judgment on his counterclaim (Application). Specifically he claimed:
(a)a declaration that from 4 February 2020 until on or around 27 June 2022, he was legally and beneficially entitled to his registered two-thirds estate and interest in Carinya free of any estate, interest or claim by any other party;
(b)a declaration that at all times since 27 June 2022, he has been legally and beneficially entitled to two-thirds of the proceeds of the sale of Carinya plus two-thirds of the interest earned on those proceeds, net of the tax earned on that interest;
(c)an order that the sum of $1,961,561 from the proceeds of Carinya (Proceeds of Sale Sought on Summary Judgment Application), presently held in NAB Term Deposit account number 77-597-3019 (NAB Account), be transferred to him;
(d)an order that two-thirds of the interest earned on the Proceeds of Sale Sought on Summary Judgment Application, presently held in the NAB Account, net of the tax earned on that Interest, be transferred to him;
(e)an order that Ron and Linda's Executors pay his costs of the summary judgment application on the basis that he is paid all the costs incurred by him in the application except in so far as they are of an unreasonable amount or have been unreasonably incurred, so that subject to those exceptions, he is completely indemnified for his costs incurred in the application.
David sets out the factual basis for the Application in his affidavit sworn by 9 August 2024. He deposes that when Carinya was acquired in 2001, Ron, Linda and Callum were its registered proprietors as tenants in common in equal shares.
Following Linda's death, Ron acquired legal title to her interest in Carinya and was registered as the proprietor of two thirds of Carinya pursuant to a transfer dated 8 October 2014. Callum remained the registered proprietor of the remaining one third as a tenant in common.
On 19 May 2016, Ron, Kyla and David executed a deed of agreement and a transfer pursuant to which Ron transferred his interest in certain farmland, including Carinya, to Kyla and David as joint tenants.
Following Kyla's death in 2020, David arranged to transfer her share of the real property that the two of them owned as joint tenants to himself. After that transfer was registered on 2 July 2020, David became the registered proprietor of two-thirds of Carinya. Until his death, Callum was the registered proprietor of the remaining third.
On or around 9 May 2022, Wanda (as executor of the estate of Callum) and David entered a contract for the sale of Carinya with a third party for a sale price of $3 million. That sale settled on 27 June 2022.
The balance received by the sellers at settlement, after taking into account taxes and costs of sale, was $2,942,341.15. Of this amount, David claims two thirds ($1,961,561) as well as his share of interest, net of tax.
David and Wanda agreed that the proceeds of the sale would be held in the trust account of David's lawyers pending determination of this dispute.

Procedural history of the Application

The Application came before Whitby J on 29 August 2024 for mention. Counsel for Ron and Linda's Executors informed the court that they agreed that Carinya was not the property of the First Partnership, but did not go as far as to say that the transfer from Ron to David and Kyla was a simple indefeasibility of title claim. Rather, if Wanda's claim that Carinya was First Partnership property is successful, 'there is an arguable claim against the indefeasibility of title based upon the in personam exception'.[10] He informed the court that his clients would abide by the decision of the court.[11] Counsel for Wanda took the view that a breach of trust did not defeat indefeasibility of title, only fraud. He informed the court that his client would not oppose the orders sought.[12] Counsel for Ron and Linda's Executors then informed the court that he had concerns given what was pleaded in the statement of claim and that, in his view, Wanda has an arguable defence.[13] Accordingly, her Honour made orders programming it through to a special appointment.
[10] Transcript 29 August 24, page 4.
[11] Transcript 29 August 24, pages 5 and 6.
[12] Transcript 29 August 24, pages 6 - 7.
[13] Transcript 29 August 2024, pages 7 - 8.
On 5 September 2024, the lawyers for Ron and Linda's Executors filed submissions. These submissions are expressed in somewhat odd terms. They commence with this paragraph:
The third, fourth, sixth and seventh defendants do not oppose but do not consent to the first defendant's application for summary judgment with respect to the sum of $1,961,561 from the proceeds of Carinya, presently held in a NAB Term Deposit account number 77-597-3019 with interest on that sum and costs.
One would have thought that this only left the issue of costs to be the subject of submissions. However, these submissions, after noting the pleadings which I have summarised at [9] to [13], go on to set out in detail what is referred to as the in personam exception to indefeasibility to title. After referring to the rule in Barnes v Addy,[14] they submit:
14.The plaintiff is seeking that the third and fourth defendants (executors of Ron's estate) account to the partners of the continuing first partnership for the value of Ron's interest in Carinya that he gifted to the first defendant and Kyla Winifred Cosh, or alternatively pay to that partnership equitable compensation for the loss of that interest, on the basis of in personam.
15. Neither the plaintiff nor the defendants have pleaded that the first defendant and Kyla assisted Ron with the transfer of his share in Carinya in a dishonest or fraudulent manner.
16. However, at paragraphs 17 through to 19 of the SOC, the plaintiff claims that from in or about 2001 Ron, Linda, Callum, Kyla and the first defendant, carried on business together in a second partnership, trading as Payne Co & Cosh, using assets of the first partnership.
17. The pleadings at paragraph 17 to 19 of the SOC suggest that the first defendant and Kyla would or ought to have had knowledge of whether Carinya was held as an asset of the first partnership, prior to Ron transferring his share of Carinya to the first defendant and Kyla in 2016.
18. The first limb of the rule of in personam requires that the person who takes property becomes bound by a constructive trust provided there is notice of the trust affecting the property. As such, there appears to be a claim that is arguable to the plaintiff that the first limb of the rule of in personam may be relied upon in support of a claim against the indefeasibility of title.
[14] Barnes v Addy (1874) 2 LR 9 Ch App 244, 251 - 252 (Lord Selborne).
The submissions then refer to the principles applicable to summary judgment applications, before concluding:
22. The plaintiff currently pleads that Carinya was purchased using funds of the first partnership, forms part of the assets of the first partnership, and that Ron held his interest in Carinya in trust for the first partnership.
23. If the plaintiff were to continue to advance their pleaded case that Ron held his interest in Carinya in trust for the first partnership, then there is arguably an in personam exception to the infeasibility of title that could be argued by the plaintiff.
24. However, this is a defence for the plaintiff to argue based on their pleadings as it currently stands, as the third, fourth, sixth and seventh defendants join the first, second and fifth defendant in arguing that Carinya was not an asset of the first partnership.
25. Alternatively, the plaintiff should amend its pleading to reflect the position it appears to now be taking by consenting to the first defendant's summary judgment application.

On 12 September 2024 the lawyers for David filed submissions in response. The submissions observed that the objection was not on the basis that Ron and Linda's Executors 'themselves have a defence to the relief sought by David in his counterclaim, but that Wanda could potentially have a defence to the claim on the basis of the in personam exception, should she amend her pleadings'. They make the point that when the stated position of the Ron and Linda's Executors is that they do not oppose the Application, it is 'inherently contradictory to adopt such a position and then file submissions as to why the Application should not be granted'. They then make the point that pursuant to Transfer of Land Act 1893 (WA) s 68(1) (TLA) it is only fraud which defeats indefeasibility of title. The submissions recite the well established principles in relation to the fraud exception,[15] before concluding with a reference to the decision of the Court of Appeal in L H K Nominees Pty Ltd v Maureen Ada Kenworthy (as Administratrix of the Estate of Lionel Kenworthy) & Anor to the effect that the mere knowing receipt of trust property does not defeat the principle of indefeasibility of Torrens title.[16] The submissions quote the following passage from the decision of Anderson and Steytler JJ:[17]
we are unaware of any other authority, binding or persuasive, for the proposition that the registered interest of a purchaser of Torrens system land is defeasible simply because he became registered with knowledge that the transfer was in breach of trust by the vendor.
[15] Referring to the summary by Murphy J in Permanent Mortgages Pty Ltd v Vandenbergh (2010) 41 WAR 353; [2010] WASC 10 [369] to [375] (Permanent Mortgages).
[16] L H K Nominees Pty Ltd v Maureen Ada Kenworthy (as Administratrix of the Estate of Lionel Kenworthy) & Anor [2002] WASCA 291; (2002) 26 WAR 517 (L H K Nominees).
[17] L H K Nominees [213] (Anderson and Steytler JJ).
They then address the in personam exception concluding:[18]
Accordingly, in the case of Torrens land, the in personam exemption does not apply to all cases where a registered proprietor has knowledge of a prior unregistered interest. Rather, the exemption recognises that a registered proprietor remains subject to obligations enforceable against them personally, even if those obligations require that the property in respect of which registration has been obtained must be dealt with in a particular manner.
[18] First Defendant's Submissions, filed 12 September 2024, par 26 citing Westpac Banking Corporation v Dunn [2011] WASC 7 [11] (Le Miere J).
On the facts, the submissions conclude: [19]
There is no allegation that David knew that Carinya was a partnership asset (if indeed it was), let alone that David accepted the transfer on terms that he would be bound by the First Partnership's unregistered interest. Without David having accepted the transfer on such terms, the in personam exception cannot even conceivably apply.
[19] First Defendant's Submissions, filed 12 September 2024, par 38.
The Application was listed for hearing on 12 November 2024 before Archer J. At the commencement of the hearing, counsel for Ron and Linda's Executors advised her Honour that his clients neither consented to, nor opposed, paragraphs (a), (b) and (c) of the orders which I have set out in [19], and only opposed the costs order in (d).[20] He appeared to accept that an order for indemnity costs should be made.[21] Counsel for David then raised the issue of whether those costs should be paid by Ron and Linda's Executors personally, and not out of the estates for which they were responsible.[22] Counsel for Wanda only sought an order for his client's costs to be paid assessed on a party and party basis and fixed in a relatively modest amount.[23] In the end, Archer J made orders in terms of paragraphs (a), (b) and (c) and the question of costs was adjourned to a hearing on 21 November 2024.
[20] Transcript 21 November 2024, pages 3 and 4.
[21] Transcript 21 November 2024, page 5.
[22] Transcript 21 November 2024, page 6.
[23] Transcript 21 November 2024, pages 7 and 8.
On 19 November 2024, the lawyers for the first, second and fifth defendants filed a minute of proposed orders in the following terms:
1.The first defendant's costs of his summary judgment application filed on 9 August 2024 (Application) be paid by the solicitors for the third, fourth, sixth and seventh defendants, Bailiwick Legal, personally on that basis that the first defendant be paid all the costs incurred by him in the Application except in so far as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions, he is completely indemnified for his costs (Indemnity Basis).
2.In the alternative to paragraph 1 above, the first defendant's costs of his summary judgment application filed on 9 August 2024 (Application) be paid by Mr Colin Jeffrey Nicholl and Mr Ross George Payne:
(a)on an Indemnity Basis; and:
(b)such that Mr Colin Jeffrey Nicholl and Mr Ross George Payne be jointly and severally liable to pay those costs in their personal capacities and that they not be indemnified with respect to payment of the first defendant's costs from the property of the estates of the late Mr Ronald Hay Payne or Mrs Linda Amabel Payne (Estates).
3.To the extent that Mr Colin Jeffrey Nicholl and Mr Ross George Payne are unable to pay the first defendant's costs of the Application pursuant to order 2 above, the first defendant's costs of the Application be paid out of the property of the Estates on an Indemnity Basis.
The same day, Wanda's lawyers filed a minute of proposed orders to the effect that Ron and Linda's Executors pay her costs of the Application, including the costs of the hearings on 29 August 2024 and 12 November 2024, fixed in the sum of $1,500. On 21 November 2024, Archer J made orders in these terms by consent, and excused Wanda's lawyers from attending the special appointment on the costs issue. The same day, Her Honour made programming orders for the other parties for this special appointment.
On 28 November 2024, David's lawyers filed in support of the costs order sought:
(a)submissions; and
(b)an affidavit sworn by Helen Burnside (a solicitor in their employ) sworn 28 November 2024.
On 5 December 2024, Archer J made orders by consent extending the timelines in the programming orders.
On 6 December 2024, the lawyers for Ron and Linda's Executors filed a minute in which they notified the court that the costs orders that should be made on the Application were:
1.The first defendant, and the third, fourth, sixth and seventh defendants each bear their own costs in relation to the first defendant's summary judgment application filed on 9 August 2024.
2.In the alternative, the third, fourth, sixth and seventh defendants pay the first defendant's costs of the first defendant's summary judgment application filed on 9 August 2024 on a party/party basis, to be taxed if not agreed.
At the same time, they filed submissions in support of these orders being made. On the substantive point, they submit:
4.As to the plaintiff's reply to the further re-amended defence of the first, second and fifth defendants and defence to counterclaim of the first defendant dated 28 June 2024 (Reply), at paragraph 9 the plaintiff concedes that the first defendant obtained title by registration and fraud is not alleged. This is already consistent with the plaintiff's pleaded case in the plaintiff's re-amended substituted statement of claim (SOC) dated 5 April 2024.
5.The Reply does not affect the in personam defence the plaintiff may be able to make. At paragraph 10 of the Reply the plaintiff consents to the first defendant being paid his two-thirds share of the proceeds of Carinya and his share of the interest thereon. The concession is in relation to the proceeds of sale and does not materially affect the plaintiff's pleaded case in their SOC.
The balance of the submissions dealt with costs.
On 6 December 2024 David's lawyers filed an amended minute of proposed orders adding three more orders to dispose of the balance of counterclaim:
4.The first defendant have leave to refer at the hearing on 10 December 2024 to the conferral communications annexed to the affidavit of Helen Burnside sworn on 6 December 2024.
5.The balance of the first defendant's counterclaim be dismissed.
6.The third, fourth, sixth and seventh defendants pay the costs of the first defendant's counterclaim, aside from costs associated with the Application, on a party/party basis with those costs to be taxed if not agreed.
The same day, they also filed:
(a)responsive submissions; and
(b)an affidavit of Ms Burnside sworn 6 December 2024.
The hearing of the Application listed for 18 December 2024 was adjourned due to health issues being experienced by both Ross and Colin. The costs of this hearing were reserved.
On 31 January 2025 the lawyers for Ron and Linda's Executors filed:
(a)substituted submissions; and
(b)an affidavit sworn that by Ciara Nalty, a solicitor employed by them.
The Application was ultimately listed for hearing before me on 28 February 2025 to determine the issue of costs.

David's position on costs

David asserts that the arguments raised by the lawyers for Ron and Linda's Executors were 'entirely hopeless and without merit'. In particular:
(a)the arguments raised in the 5 September Submissions based on the in personam exception to indefeasibility of title, was entirely inconsistent with their pleaded case;
(b)even if pleaded, the defence would only exist to benefit Wanda, who was not opposing the relief sought in the Application and did not plead any material facts necessary to establish an in personam defence; and
(c)the 5 September submissions misstate the nature of the in personam exception as mere knowledge of a trust relationship involving the transferor does not fall within the exception and certainly does not amount of a defence to a claim of indefeasibility of title.[24]
[24] First defendant's submissions filed 28 November 2024, par 10.
In this context, the position taken by Ron and Linda's Executors in relation to summary judgment warrants the imposition of indemnity costs, consistent with the principles set out by the Court of Appeal in Swansdale Pty Ltd v Whitcrest Pty Ltd.[25] In particular:
(a)to obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose or establish some species of fraud against the unsuccessful party;
(b)rather, it is sufficient to enliven the discretion to award such costs that, if for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case;
(c)where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost;
(d)persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full; and
(e)an indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers.
[25] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S). The Court summarised the relevant principles at [10] (reasons of the court) (Swansdale).
The lawyers for David then submit that the present case is one in which the court should exercise the power in Rules of the Supreme Court 1971 (WA) (RSC) O 66 r 5 to order that the costs be paid by Bailiwick Legal. That power is in the following terms:
(1)Where in any proceedings costs are incurred by a party -
(a)as a result of any improper, unreasonable, or negligent act or omission; or
(b)which, in the light of any such act or omission occurring after they were incurred, the Court considers it is unreasonable to expect that party to pay,
the Court may order any legal practitioner whom it considers to be responsible (whether personally or through a servant or agent) -
(c)to pay those costs personally or to indemnify any party who has been ordered to pay those costs; or
(d)not to claim any relevant costs or fees; or
(e) to refund any relevant costs or fees which may have been paid already.
The submissions note that in Pier (WA) (as trustee for Isandi Trust) v Jean Maurice Pty Ltd (in liq) [No 7] Kenneth Martin J sets out 15 principles applicable to the making of costs orders against an opposition legal representative.[26]
[26] Pier (WA) (as trustee for Isandi Trust) v Jean Maurice Pty Ltd (in liq) [No 7] [2018] WASC 355 [8] ‑ [23] (Kenneth Martin J) (Pier (WA)).
As to the application of these principles, in summary:
(a)the conduct of Ron and Linda's Executors and their lawyers in the period leading up to the filing of the Application was objectionable, as they refused to explain their position regarding the proceeds of Carinya;
(b)the issue of whether David was entitled to two thirds of the proceeds of the sale of Carinya was not one that concerned Ron and Linda's Executors - they made no claim to this sum;
(c)the position taken at the hearing on 29 August 2024 and in the submissions filed on 5 September 2024, on the one hand neither consenting nor opposing the application, and on the other filing submissions in substance opposing the grant of summary judgment was inappropriate;
(d)moreover, the position in (c) was inconsistent with the pleaded position of Ron and Linda's Executors;
(e)in any event, the substantive point in opposition was hopeless there was no rational basis on which it might succeed; and
(f)the end result is that David was put to unnecessary expense, for which the lawyers for Ron and Linda's Executors should be personally responsible.
These submissions also address the entitlement of an executor to recover costs from an estate. Given the conclusion I have reached, I do not need to address these submissions.

The final position of Ron and Linda's Executors

In the submissions filed on behalf of Ron and Linda's Executors on 31 January 2025, their lawyers submit that:
(a)the arrangement by which the proceeds of the sale of Carinya were to be held on trust was not set up by Ron and Linda's Executors, though they were informed of it;
(b)the arrangement was structured on the basis that, in the absence of consent, a court order was required to release the funds;
(c)that is, in the absence of consent, an application was required; and
(d)therefore the position of Ron and Linda's Executors to not consent to the orders should not attract either the court's disapproval or an adverse costs order.
As to the costs of the remainder of the proceedings:
27. The First Defendant's submission that by not consenting to the application, the Defendant's opposed the application, is misconceived. Not consenting to the making of a Court order is not equivalent to opposing the making of the order.
28. The Defendants did not oppose the application. The Further Submissions were not argued; orders were made without a special appointment. In other words, orders were made on the basis that the Defendants did not oppose the application. If the Defendants' not consenting to the orders does not make them liable to an adverse costs order, inclusion of the Further Submissions should not do so.
29.If a costs order is to be made against the Defendants with respect to the First Defendant's costs, the order should be limited to the costs incurred by the First Defendant in responding to the Further Submissions. To make a costs order any more inclusive than that would be make such order against the Defendants on the basis that they did not consent to the application. That would not be an appropriate or judicial exercise of the Court's discretion. If such order is made, the Defendants make no submission as to whether the costs should be ordered on an indemnity basis. Solicitors pay costs
30. If the above submissions are not accepted, and there is a costs order made against the Defendants, the Defendants' solicitors accept that that order should be made against them.

Determination

In determining the issue of costs, it is instructive to examine what should have happened.
The lawyers for Ron and Linda's Executors should have responded to the conferral initiated by David's lawyers prior to the Application being filed. Having said that, a position of neither consenting to nor opposing the Application was not unreasonable given that this issue did not concern them. There is nothing in the correspondence before the court in which Wanda's lawyers inform David's lawyers that she will consent to the orders sought as to the distribution of the proceeds of the sale of Carinya. So an application was required. Moreover, given that a declaration was sought, an application for summary judgment was required to be made setting out the factual basis for the declaration. The courts will not usually make a declaration by consent. Rather the court must be satisfied as to the evidential basis for the declaration.[27] I for one would have been reluctant to have made the declaration sought by consent in the absence of evidence confirming the factual basis justifying it. It follows that Ron and Linda's Executors should not be liable for the costs of the Application up to the hearing on 29 August 2024. David's lawyers have not sought the costs of the Application from Wanda. The appropriate order is that there should be no orders as to the costs of the Application up to this point.
[27] Patten v Burke Publishing Co Ltd [1991] 2 All ER 821, 822 - 823; [1991] 1 WLR 541, 543 - 544 (Millett J).
What should have happened at the hearing on 29 August 2024 is that counsel for Ron and Linda's Executors should have advised the court that his clients neither consented to nor opposed the order, and said no more. It is true that counsel said this, but what else he said quite properly gave Whitby J cause for sufficient concern to not make the order and adjourn the Application. Having said that, one return of the Application would have been necessary in any event, so there should be no order as to the costs of this hearing.
The position of Ron and Linda's Executors is then set out in the submissions filed on 5 September 2024, which I have summarised out at [28] and [29]. If it was the position of Ron and Linda's Executors to neither consent nor oppose the Application, the submissions should not have then gone on to set out a detailed argument as to why summary judgment should not be granted. Moreover, the substantive argument made should not have been. This is for three reasons.
The first is that the entitlement of David to two thirds of the proceeds of the sale of Carinya was not one that concerned Ron and Linda's Executors - they made no claim to this sum. To the contrary, they positively advanced a case that Carinya was not an asset of the First Partnership (see [13]). Their submissions were inconsistent with their pleaded position.
The second is that there is no basis in law for the point made 'that there is arguably an in personam exception to the infeasibility of title that could be argued by' Wanda.[28] There is not. By TLA s 68(1) the only exception is 'fraud'. Fraud means actual fraud, personal dishonesty or moral turpitude.[29] Moreover, it must have been fraud by David against Callum.[30] There is neither a pleaded nor factual basis for a claim of this kind. As mentioned, 'a registered proprietor who merely acquires title with notice of an existing unregistered interest, or takes a transfer with knowledge that its registration will defeat such an interest, is not guilty of fraud'.[31] However, not even that knowledge is pleaded against David.
[28] Third, fourth, sixth and seventh defendant; submissions filed 5 September 2023, par 23.
[29] Permanent Mortgages [369].
[30] Permanent Mortgages [372].
[31] Permanent Mortgages [371].

As to the third, it is the case that the 'principle of indefeasibility does not, however, deny the right of a plaintiff to bring a claim in personam, against a registered proprietor, arising out of the acts of the registered proprietor itself'.[32] However, Wanda does not plead the facts from which it could be asserted that Callum had an in personam claim against David. Her in personam claim is against Ron (and therefore his estate).[33]
[32] Permanent Mortgages [374].
[33] Substituted statement of claim, filed 5 April 2024, par 27.
The lawyers for Ron and Linda's Executors should not have filed the 5 September 2024 submissions. They should not have doubled down on their errors by filing the 6 December 2024 submissions ([39]). David's lawyers should be paid their costs of the Application after the hearing on 29 August 2024. The question then becomes on what basis and from whom.
The position I have reached means that I in essence agree with the position in the final submissions filed on behalf of Ron and Linda's Executors that costs should be limited to responding to the submissions filed on 5 September 2024. This was the next thing that happened in the litigation after the hearing on 29 August 2024. Having reached this point, the lawyers for Ron and Linda's Executors make no submission as to whether the costs should be ordered on an indemnity basis.
In my view, costs should be awarded on an indemnity basis. The lawyers for Ron and Linda's Executors put forward and persisted in arguing a position which was both legally and factually hopeless. Moreover, it was an argument which was inconsistent with their pleaded position on an issue which did not directly concern them. Doing so was unreasonable to the point of being inappropriate. Their actions unnecessarily increased the cost of this litigation. An indemnity costs order in this case will constitute an appropriate sanction to mark the court's disapproval of unreasonable and inappropriate conduct.[34]
[34] Swansdale [10].
As to whom the costs should be paid by, the lawyers for Ron and Linda's Executors accept that if there is a costs order made against their clients, it should be made against them personally. This is an appropriate concession. For the reasons set out at [61], the fault for the unreasonable and inappropriate conduct lies squarely with the lawyers. The costs incurred by David were as a result of acts by the lawyers for Ron and Linda's Executors which were at least unreasonable, enlivening the jurisdiction, and discretion, in RSC O 66 r 5(1)(a).[35] Their conduct caused David to incur unnecessary costs.[36] I accept that the exercise of this jurisdiction is not to be lightly invoked and calls for an exercise of great care in its application.[37] However, on the basis of what I have summarised at [61], David has readily satisfied the evidentiary onus on him to provide a proper basis for making an adverse costs order of this character.[38] In all the circumstances it is just to order the lawyers for Ron and Linda's Executors to compensate David for the costs incurred after the hearing 29 August 2024.[39]
[35] Pier (WA) [19].
[36] Pier (WA) [19].
[37] Pier (WA) [10].
[38] Pier (WA) [12].
[39] Pier (WA) [19].
The costs David is entitled to include the argument as to costs. David has been successful in this argument, and costs should follow the event. Moreover, these costs are part of the costs which have been unnecessarily incurred.
In the minute filed on 6 December 2024 David's lawyers also sought an order that the counterclaim be dismissed and that Ron and Linda's Executors pay the costs of his counterclaim aside from the costs of the Application. There is no basis for an order in these terms. David had to lodge a counterclaim in order to obtain the declarations which were made in the orders of 12 November 2024. David does not seek the costs of the counterclaim from Wanda. Accordingly, the balance of the counterclaim should be dismissed with no orders as to costs.
The appropriate costs order is:
1.There be no order as to the costs of the First Defendant's application for summary judgment filed 9 August 2024 (Application) up to and including the hearing on 29 August 2024.
2.Bailiwick Legal personally pay the costs of the Application from 29 August 2024, including in respect of the argument as to costs, on that basis that the First Defendant be paid all the costs incurred by him in the Application except in so far as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions, he is completely indemnified for his costs.
3.The counterclaim otherwise be dismissed with no orders as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OS
Associate to the Honourable Justice Gething
10 MARCH 2025