Penhall (as executor of the estate of the late Paul Sukkar) v Abu.Tony Pty Ltd atf Abu.Tony Discretionary Trust (No 2)

In the matter of Penhall (as executor of the estate of the late Paul Sukkar) v Abu.Tony Pty Ltd atf Abu.Tony Discretionary Trust (No 2), the court was tasked with determining the costs associated with the litigation between the parties. The dispute involved a substituted plaintiff, a solicitor appointed as the executor of the deceased plaintiff's estate, who had no interest as a beneficiary in the estate but had a right to be paid professional fees for acting in the proceedings. The central legal issues included whether the solicitor was in substance acting for himself and therefore entitled to recover his professional fees under a costs order against the defendants, and whether costs could be ordered against non-parties who were not substantially involved in the proceedings.

The court considered the general principle that costs follow the event and applied the reasoning from Bell Lawyers Pty Ltd v Pentelow, which established that a solicitor acting as a substituted plaintiff is not in substance acting for himself if they have no interest in the outcome other than their professional fees. The court found that the solicitor was not in substance acting for himself and was entitled to recover his professional fees. Furthermore, the court considered the unreasonable and delinquent nature of the first defendant's defence and ordered the second and third defendants, who controlled the first defendant, to pay part of the costs ordered against the first defendant to the plaintiff. The court examined the circumstances in which a costs order should be made against third parties and the significance of the failure of the parties to accept Calderbank offers in quantifying the costs.

The court concluded that the second and third defendants should bear part of the costs as they controlled the first defendant and the primary part of the defence was unreasonable and delinquent. The court made an order that the second and third defendants should pay part of the costs ordered to be paid by the first defendant to the plaintiff. Additionally, the court emphasised the importance of considering Calderbank offers in the quantification of costs.