Supreme Court
New South Wales
Medium Neutral Citation: Segal v Osborne (No 2) [2016] NSWSC 1328 Hearing dates: On the papers Date of orders: 19 September 2016 Decision date: 19 September 2016 Jurisdiction: Equity Before: Darke J Decision: See paragraph [55].
Catchwords: EQUITY – Trusts and trustees – Powers, duties, rights and liabilities of trustees – Whether trustees entitled to recover costs of proceedings on indemnity basis – Whether trustees entitled to recover costs from trust assets – Whether trustees should first seek to recover costs from unsuccessful plaintiff – Whether trustees should then have recourse to unsuccessful plaintiff’s notional share of trust assets
PROCEDURE – Costs – Third defendant applied for joinder to proceedings – No relief sought against third defendant – Limited participation in proceedings by third defendant – Whether unsuccessful plaintiff should pay third defendant’s costs
PROCEDURE – Costs – Whether unsuccessful plaintiff should indemnify other beneficiary for costs paid out of other beneficiary’s notional share of trust assetsLegislation Cited: Civil Procedure Act 2005 (NSW), ss 3, 98
Conveyancing Act 1919 (NSW), s 66G
Trustee Act 1925 (NSW), s 59(4)
Supreme Court Act 1970 (NSW), s 76
Uniform Civil Procedure Rules 2005 (NSW), r 42.25Cases Cited: Balkin v Peck (1998) 43 NSWLR 706
Bovaird v Frost [2009] NSWSC 917
Cochrane v Cochrane (1985) 3 NSWLR 403
Commonwealth Bank of Australia v Segal [2016] NSWSC 1016
Commonwealth Bank of Australia v Segal (No 2) [2015] NSWSC 656
Drummond v Drummond [1999] NSWSC 923
Fay v Moramba Services Pty Ltd [2010] NSWSC 725
Foord v Brock [2005] NSWCA 156
Frost v Bovaird [2012] FCAFC 60
Grizonic v Suttor [2011] NSWSC 471
In re Beddoe; Downes v Cottam [1893] 1 C
In re Jones; Christmas v Jones [1897] 2 Ch 190
Miller v Cameron (1936) 54 CLR 572
National Trustees Executors and Agency Company of Australasia Ltd and anor v Barnes (1941) 64 CLR 268
Nissen v Grunden (1912) 14 CLR 297
Northey v Juul [2014] NSWSC 464
Registrar-General v Gill [1994] NSWSC 261; (2015) 17 BPR 33, 709
Segal v Barel (No 2) [2013] NSWCA 148
Segal v Osborne [2016] NSWSC 941
Warton v Yeo [2015] NSWSC 115Texts Cited: J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, (5th ed 2015, LexisNexis Butterworths) Category: Costs Parties: Phillip Segal (Plaintiff)
Michael Osborne (First Defendant)
Margaret Colleen Hole (Second Defendant)
Elie Barel (Third Defendant)Representation: Counsel:
Solicitors:
A Cornish (Plaintiff)
S Chapple (First and Second Defendants)
C Gleeson (Third Defendant)
Low Doherty and Stratford (Plaintiff)
Osborne Lawyers (First and Second Defendants)
Leigh Johnson Lawyers (Third Defendant)
File Number(s): 2014/342038 Publication restriction: None
Judgment
Introduction
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I delivered my judgment in this matter on 7 July 2016: Segal v Osborne [2016] NSWSC 941. On that occasion, I ordered that the plaintiff’s Amended Statement of Claim be dismissed and that costs should follow the event. I directed that, if the parties could not reach agreement concerning the appropriate orders…
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- AGLC
- Segal v Osborne (No 2) [2016] NSWSC 1328
- Case
- [2016] NSWSC 1328
- Decision Date
CaseChat Overview and Summary
The primary legal issues the court had to address were whether the trustees were entitled to recover costs from the trust assets or from Osborne, and if the trustees should first seek to recover costs from Osborne before doing so from other beneficiaries' shares in the trust assets. The court also had to consider whether Osborne should be liable to pay the costs of a third defendant, who had applied to join the proceedings but had not sought any relief and had only participated minimally.
The court concluded that the trustees were entitled to recover costs from the trust assets where it was just and equitable to do so, but they must first seek to recover those costs from Osborne before doing so from other beneficiaries' shares in the trust assets. The court found that Osborne was liable to indemnify the other beneficiary for costs paid out of that beneficiary's notional share of the trust assets, and also liable to pay the costs of the third defendant. The court emphasised the importance of ensuring that trustees act fairly and equitably in seeking to recover costs, and that beneficiaries who have been unsuccessful in their claims should bear a fair share of the costs incurred.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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