Segal v Osborne (No 2) [2016] NSWSC 1328

Segal v Osborne (No 2) [2016] NSWSC 1328

The trustees' established shortcomings were limited errors that caused no loss to the trust estate and did not amount to impropriety, dishonesty, unreasonable conduct, or acting for their own benefit. They were therefore entitled to indemnity costs. Consistently with Barnes, UCPR r 42.25 and Northey v Juul, the trustees should first demand payment from the unsuccessful plaintiff and, if unpaid after a reasonable period, may recover from the trust assets, first from the plaintiff's notional share and then from the third defendant's notional share. Because equivalent indemnity orders had previously been made between Dr Segal and Mr Barel, Dr Segal should indemnify Mr Barel for any trustees'...

Jurisdiction
Australia
Judgment Date
19 September 2016
Procedural Posture
Equity; Trusts and Trustees; Costs / On the Papers Determination of Costs Following Dismissal of the Plaintiff's Amended Statement of Claim
Outcome
The trustees obtained indemnity costs against the plaintiff with conditional recourse to trust assets; the plaintiff must indemnify the third defendant for any trustees' costs paid from the third defendant's notional share; the third defendant bears his own costs.
Legal Topics
['trustee Indemnity for Costs' 'indemnity Costs' 'recovery of Costs From Trust Assets' 'costs Against Unsuccessful Plaintiff' 'joinder and Costs of Third Defendant' 'indemnification Between Beneficiaries']
['equity' 'trusts' 'civil Procedure' 'costs'] ['trustee Indemnity for Costs' 'indemnity Costs' 'recovery of Costs From Trust Assets' 'costs Against Unsuccessful Plaintiff' 'joinder and Costs of Third Defendant' 'indemnification Between Beneficiaries']

Case Brief

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Procedural Posture

Equity; Trusts and Trustees; Costs / On the Papers Determination of Costs Following Dismissal of the Plaintiff's Amended Statement of Claim

Legal Issues

  1. 1 ['Whether the first and second defendants, as trustees for sale, were entitled to recover their costs of the proceedings on an indemnity basis.' 'Whether the trustees were entitled to recover their costs from the trust assets if the plaintiff did not pay them.' "Whether the trustees should first seek to recover costs from the unsuccessful plaintiff and then have recourse first to the plaintiff's notional share of the trust assets." "Whether costs said to arise from late completion of the contract should be included in the trustees' costs of the proceedings." "Whether the unsuccessful plaintiff should pay the third defendant's costs of joinder, appearance, representation and costs submissions." "Whether the plaintiff should indemnify the third defendant for any trustees' costs paid out of the third defendant's notional share of the trust assets."]

Ratio Decidendi

The trustees' established shortcomings were limited errors that caused no loss to the trust estate and did not amount to impropriety, dishonesty, unreasonable conduct, or acting for their own benefit. They were therefore entitled to indemnity costs. Consistently with Barnes, UCPR r 42.25 and Northey v Juul, the trustees should first demand payment from the unsuccessful plaintiff and, if unpaid after a reasonable period, may recover from the trust assets, first from the plaintiff's notional share and then from the third defendant's notional share. Because equivalent indemnity orders had previously been made between Dr Segal and Mr Barel, Dr Segal should indemnify Mr Barel for any trustees'...

Court Disposition

The trustees obtained indemnity costs against the plaintiff with conditional recourse to trust assets; the plaintiff must indemnify the third defendant for any trustees' costs paid from the third defendant's notional share; the third defendant bears his own costs.

Orders

  • ['Order that the costs of the first and second defendants be paid by the plaintiff on the indemnity basis.' 'Order that, if the costs of the first and second defendants are not paid by the plaintiff within two months after the submission of a bill of costs and the making of demand for payment, the costs of the first...