Parkes-Linnegar v Watson (No 2)

The case involved a dispute between the plaintiffs, Parkes-Linnegar, and the defendant, Watson, concerning the indemnity for costs and liability. The matter was heard in the Supreme Court of Queensland. The plaintiffs, who were trustees, sought to be indemnified for costs and liability incurred in defending a proceeding against them in their capacity as trustees. The defendants opposed the indemnity, arguing that the plaintiffs' conduct was unreasonable and that there was no proper basis for seeking advice on the discrete issue of indemnity for costs.

The central legal issues were whether the plaintiffs had a right to indemnity for the costs and liability incurred in the proceeding, and whether the advice sought was on a discrete issue. The court had to determine if the plaintiffs' conduct was reasonable and if there was a proper basis for seeking advice on the issue of indemnity for costs. The court also needed to assess if the advice sought was on a discrete issue, as this would determine the extent of the indemnity to which the plaintiffs were entitled.

In delivering the judgment, the court found that the plaintiffs' conduct was unreasonable and that there was no proper basis for seeking advice on the discrete issue of indemnity for costs. The court held that the plaintiffs did not have a right to indemnity for the costs and liability incurred in the proceeding. The court concluded that the plaintiffs' request for indemnity was not justified and refused the application for indemnity for costs. The court's reasoning was based on the finding that the plaintiffs' conduct was unreasonable and that there was no proper basis for seeking advice on the discrete issue of indemnity for costs.

The court made no orders for indemnity for costs. The plaintiffs were required to bear their own costs in defending the proceeding against them in their capacity as trustees. The decision underscores the importance of trustees acting reasonably and seeking proper advice before incurring costs in proceedings against them in their capacity as trustees. The case also highlights the need for trustees to be cautious when seeking indemnity for costs, as the court may refuse such indemnity if the conduct was unreasonable or the advice sought was not on a discrete issue.