Wright v Lemon [No 4] - [2025] WASC 430

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WRIGHT -v- LEMON [No 4] [2025] WASC 430
CORAM:   WHITBY J
HEARD:   ON THE PAPERS
DELIVERED          :   7 OCTOBER 2025
FILE NO/S:   CIV 1319 of 2017
BETWEEN:   JULIAN DAVID MAYNARD WRIGHT
Plaintiff

AND

DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT
First Defendant

ANGELA MARY MAYNARD WRIGHT BENNETT
Second Defendant

LEONIE BALDOCK
Third Defendant

ALEXANDRA BURT
Fourth Defendant

VOC GROUP LTD
Fifth Defendant

AMB HOLDINGS PTY LTD
Sixth Defendant

WRIGHT PROSPECTING PTY LTD
Seventh Defendant

TERALANI PTY LTD
Eighth Defendant

LAREMONT PTY LTD
Ninth Defendant

IAN McGREGOR THOM & BARBIROLLI INVESTMENTS PTY LTD
Non-Parties

Catchwords:

Practice and procedure - Costs of application for and compliance with orders for pre-action discovery - Turns on own facts

Legislation:

Australian Consumer Law
Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Costs of the application for and compliance with orders for pre-action discovery reserved for six months

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance
Eighth Defendant	:	No appearance
Ninth Defendant	:	No appearance
Non-Parties	:	No appearance

Solicitors:

Plaintiff	:	In person
First Defendant	:	Clayton Utz
Second Defendant	:	Clayton Utz
Third Defendant	:	Clayton Utz
Fourth Defendant	:	Clayton Utz
Fifth Defendant	:	Clayton Utz
Sixth Defendant	:	Clayton Utz
Seventh Defendant	:	Clayton Utz
Eighth Defendant	:	Clayton Utz
Ninth Defendant	:	Clayton Utz
Non-Parties	:	Hotchkin Hanly Lawyers

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

Kelbush Pty Ltd v Australia and New Zealand Banking Group [2016] WASCA 14 (S)
Wright v Lemon [No 3] [2025] WASC 41

WHITBY J:

These reasons concern the costs orders in relation to an application for pre‑action discovery.
On 20 June 2025, the defendants filed a chamber summons seeking pre‑action discovery from non‑parties to action, Ian McGregor Thom and Barbirolli Investments Pty Ltd (respondents). The application was made pursuant to O 26A of the Rules of the Supreme Court 1971 (WA) (RSC). The purpose of the application was to enable the defendants to determine whether to seek third party costs orders against the respondents as funders of the plaintiff's litigation.
The respondents gave discovery by consent without conceding the merits of the application. On 4 September 2025, I made orders providing for the respondents to give specified discovery on affidavit by 5 September 2025. In relation to the costs of the application, I made orders providing for the filing of submissions by the defendants and the respondents and that the issue of costs of the application be determined on the papers.
The respondents filed submissions on 11 September 2025 and the defendants filed submissions on 18 September 2025.
The respondents submit that the appropriate costs orders are:
(1)the defendants pay the respondents' reasonable costs of the application and of giving the discovery; and
(2)in the event the defendants commence an action against the respondents for recovery of the defendants' costs in CIV 1319 of 2017 and are successful in that action and awarded costs, the defendants may apply to recover the costs paid to the respondents in accordance with the preceding costs order.
The defendants submit that the appropriate costs order is that the costs of the application be reserved for a fixed period of (say) six months. The defendants say that this will allow the defendants time to commence any action against the respondents, at which point the issue of costs can be revisited.
The respondents rely upon the decision of the Court of Appeal in Kelbush Pty Ltd v Australia and New Zealand Banking Group[1] (Kelbush) in support of their contention that they ought be awarded the costs of the application and of giving discovery, with the ability for the defendants to recover those costs if they commence proceedings against the respondents.
[1] Kelbush Pty Ltd v Australia and New Zealand Banking Group [2016] WASCA 14 (S).
Kelbush concerned an application for pre‑action discovery pursuant to O 26A r 4 of the RSC made by the appellant in order to assess whether it had an action against the respondent for misleading and deceptive conduct contrary to s 18 of the Australian Consumer Law and s 104H of the Corporations Act 2001 (Cth). In awarding that the costs of the application for pre‑action discovery be paid by the appellant, Martin CJ said:[2]
… the proper course in proceedings of this nature is to order, in the absence of any reason to the contrary, that the applicant for the indulgence of pre-trial discovery pay both the respondent's costs of the application and the respondent's reasonable costs of complying with any order for discovery made. Further, it is my view that the obligation to pay costs should not be deferred indefinitely merely because proceedings are subsequently commenced by the applicant against the respondent.
However, as a matter of principle, there should be a mechanism by which such an applicant can recoup not only the costs that it is ordered to pay to such a respondent, but also its own costs of the pre-trial discovery application if it commences proceedings against the respondent and it appears to the court responsible for those proceedings that such costs should be ordered to be paid to the applicant. In the present case, the best way of achieving this is to order that, subject to an order enabling recoupment of those costs, the current appellant pay the respondent's reasonable costs of compliance with the order for discovery and also the respondent's costs of the application before the master.
[2] Kelbush [2] ‑ [3].
However, in my view, the application for pre‑action discovery I am considering is distinguishable from the application the court was considering in Kelbush. That is for several reasons.
First, the costs in the application would not be reserved indefinitely. The defendants' application for pre‑action discovery arises in the context of the defendants already having succeeded in defending the substantive proceedings commenced by the plaintiff and obtaining a costs order in their favour. This pre‑action discovery application relates to potential recovery of the defendants' costs from third parties who funded the plaintiff's prosecution of the proceedings. I have already found that the defendants have strong prospects of successfully obtaining a costs order against a third‑party funder.[3]
[3] Wright v Lemon [No 3] [2025] WASC 41 [44], [56].
Second, the defendants have established, by documents annexed to the affidavits of Gareth John Jenkins sworn on 12 June 2025 (Jenkins Affidavit 2) and on 20 June 2025 (Jenkins Affidavit 3) filed in support of the application, that the respondents had a significant commercial interest in the outcome of the proceedings and provided assistance in funding the plaintiff's litigation.[4] On this basis, the respondents cannot be characterised as strangers to these proceedings.
[4] Jenkins Affidavit 3; Annexures GJJ-47, GJJ-22 and GJJ-47.
Third, Mr Thom has applied to have Barbirolli Investments Pty Ltd (Barbirolli) deregistered. The Australian Securities and Investments Commission has advised the solicitors for the defendants that Barbirolli is expected to be deregistered on 31 December 2025.[5] Therefore, there is some uncertainty as to whether Barbirolli will exist after 31 December 2025 which in turn creates uncertainty as to whether the defendants could later apply to recover the costs of this application paid to Barbirolli.
[5] Jenkins Affidavit 3; Annexure GJJ-77.
These three reasons combined constitute 'reasons to the contrary' which justify the departure from the flexible rule identified in Kelbush that the applicant pays the costs of an application for, and compliance with, pre‑action discovery.
I am satisfied that the appropriate order is that the costs of the application, and of the respondents giving pre‑action discovery, be reserved for six months. This does not preclude the respondents from ultimately being awarded those costs in the event that the defendants determine not to seek third party costs orders against the respondents.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CS
Associate to the Hon Justice Whitby
7 OCTOBER 2025