//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2026] NSWSC 906
Supreme Court of NSW
2026-07-30
Kunc J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: The Royal Australasian College of Physicians v Chandran [2026] NSWSC 906
Hearing dates: 27 May 2026; final written submissions 6 July 2026
Date of orders: 30 July 2026
Decision date: 30 July 2026
Jurisdiction: Equity
Before: Kunc J
Decision: No order as to costs
Catchwords: COSTS — Party/Party — General rule that costs follow the event — Proceedings settled at commencement of urgent final hearing — No issue of principle
Cases Cited: Re Minister for Immigration and Ethnic affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Category: Costs
Parties: The Royal Australasian College of Physicians (Plaintiff)
Sharmila Ramessur Chandran (First Defendant)
Abbi Sharma (Second Defendant)
Antonio Tenaglio (Third Defendant)
John Wilson (Fourth Defendant)
Jennifer Helen Martin (Fifth Defendant)
Representation: Counsel: F T Roughley SC/R Jameson (Plaintiff)
N Kirby/T Ross (First - Fourth Defendants)
M Luitingh (Fifth Defendant)
Solicitors: Herbert Smith Freehills Kramer (Plaintiff)
Allegro Law (First – Fourth Defendants)
Toomey Pegg Lawyers (Fifth Defendant)
File Number(s): 2026/201549
These proceedings concerned the governance of the plaintiff, The Royal Australasian College of Physicians. They were commenced in urgent circumstances by originating process filed on 15 May 2026 in relation to meetings which had occurred on 22 April 2026 (an extraordinary general meeting of the College (EGM)) and 23 April 2026 (a purported board meeting), and against the background of an annual general meeting (AGM) that was to be held on 29 May 2026.
On 21 May 2026, the Chief Judge in Equity fixed the proceedings for final hearing before me on 27 May 2026. No contested hearing took place because after a brief colloquy between bench and bar at the commencement of the final hearing, the proceedings resolved by consent.
These reasons dispose of the one outstanding issue: costs. The parties agreed that this question should be determined on the papers and that is what has occurred, with written submissions from the parties.
The College submits that there should no order as to costs, relying on the oft cited decision of McHugh J in Re Minister for Immigration and Ethnic affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6. By the conclusion of the written submissions, the fifth defendant, Professor Jennifer Martin, agreed that there should be no order as to her costs.
The first to fourth defendants seek their costs against the College on the indemnity basis. The essential reason for that outcome is said to be the capitulation of the College in the proceedings. For the reasons which follow, the Court declines to make the costs order proposed by those defendants. There will be no order as to any party’s costs of the proceedings.
The plaintiff is the College. It was represented at the final hearing by Ms F T Roughley of Senior Counsel with Mr R Jameson of Counsel, who both also prepared the College’s costs submissions.
The fifth defendant is Professor Jennifer Martin. She had been the President of the College (and therefore chair of its board and of any meetings of the College), but was purportedly removed at the EGM. The validity of her removal was the first of what the College described in its opening written submissions as the two “central issues” in the case.
On 19 May 2026, Professor Martin filed a submitting appearance save as to costs. She was represented at the final hearing and as to costs by Mr M Luitingh of Counsel. At the final hearing, Mr Luitingh confirmed that Professor Martin had no intention of attempting to chair the forthcoming AGM (which she would otherwise have been entitled to do if the Court determined that her purported removal as President was invalid).
The first to fourth defendants were represented by Mr N Kirby of Counsel with Mr T Ross of Counsel. Mr Kirby and Mr Ross also prepared those defendants’ submissions as to costs.
The first defendant is Dr Sharmila Chandran. She was the President-Elect of the College and purported to chair the EGM. On the assumption that Professor Martin’s removal was valid, Dr Chandran would have been entitled to chair the AGM, subject to what I set out in [12] below.
Immediately after the EGM, Dr Chandran purported to call the purported board meeting for the next day, 23 April 2026. At that meeting, Dr Chandran unilaterally passed a resolution purporting to appoint the second, third and fourth defendants (the Appointees) as directors of the College. The validity of the purported board meeting and appointment of the Appointees was the second of the two “central issues” advanced by the College in its opening written submissions.
There was a further development in relation to Dr Chandran. The College is a charity subject to the oversight of the Australian Charities and Not–for–Profits Commission (ACNC). On 18 May 2026, the ACNC exercised its power to suspend Dr Chandran from her role as a director (or responsible person) of the College and appointed an independent person, Professor Susan Pascoe, in Dr Chandran’s place.
On 21 May 2026, Dr Chandran filed an unconditional appearance in these proceedings. She was the active defendant. On the same day, the Appointees filed submitting appearances save as to costs.
“Final relief
- A declaration as to whether or not the following persons remain, or have been validly appointed as, a director of the Plaintiff:
a. the Second Defendant, Professor Abbi Sharma
b. the Third Defendant, Mr Antonio Tenaglia
c. the Fourth Defendant, Professor John Wilson
d. the Fifth Defendant, Professor Jennifer Martin
- A declaration as to whether or not the extraordinary general meeting of the Plaintiff held on 22 April 2026, and the resolution purportedly passed at it to remove the Fifth Defendant, Professor Martin, as the President and Director of the Plaintiff, was valid.
- A declaration as to whether or not the resolutions purportedly passed on or after 22 April 2026 by the Board of the Plaintiff, as purportedly constituted by the First to Fourth Defendants being respectively Dr Sharmila Chandran, Professor Sharma, Mr Tenaglia and/or Professor Wilson) or any one or more of them, were valid.
…
Interlocutory injunctive relief
- The Defendants be restrained from convening, taking steps to convene, or otherwise holding the Annual General Meeting of the Plaintiff, currently scheduled for 29 May 2026, with the intent that the Annual General Meeting will not proceed on 29 May 2026, until further order of the Court.
- The Second to Fourth Defendants be restrained from acting or purporting to act, and from holding themselves out, as directors of the Plaintiff, until further order of the Court
- The First Defendant be restrained from acting or purporting to act, and from holding herself out, as the President and/or Chair of the Plaintiff, until further order of the Court.”
The interlocutory injunctive relief was never determined because the matter was promptly fixed for a final hearing before the date of the AGM.
Turning to that final hearing, at its outset and in the course of exchanges between the bench and bar:
Mr Kirby confirmed on behalf of Dr Chandran that she accepted that as a result of her suspension she could have no part in conducting the business of the College (including chairing the AGM) during the period of her suspension, including that she could not act as, or represent herself to be, President-Elect of the College;
Mr Luitingh confirmed on behalf of Professor Martin that she had no intention of attempting to chair the AGM;
No party disagreed with the proposition that Professor Pascoe was the appropriate person to chair the AGM;
On the instructions of Dr Chandran, Mr Kirby conceded that the Appointees had not been validly appointed and that each of the things they had purported to do as a board was not valid.
As a result of those developments and after a short adjournment, these declarations and orders were made by consent:
Short minutes of order
- Note the undertaking of the First Defendant, through her counsel to the Court, that she will not act as the President-Elect, and will not hold herself out as the President-Elect, of the Plaintiff for the period of her suspension as a Responsible Person, by the Australian Charities and Not-for-Profits Commission.
THE COURT DECLARES THAT:
- The Board meeting that was purportedly called by the First Defendant at 2:24pm on 22 April 2026 for 2:30pm on 23 April 2026 was invalid for reasons that are not a procedural irregularity for the purposes of s 1322(2) of the Corporations Act 2001 (Cth) and, accordingly, that section does not operate to validate the meeting at which the First Defendant purported to appoint the Second to Fourth Defendants as directors of the Plaintiff.
- The following persons were not validly appointed directors of the Plaintiff as a result of the purported Board meeting the subject of order 2, and are not directors of the Plaintiff:
a. the Second Defendant, Professor Abbi Sharma
b. the Third Defendant, Mr Antonio Tenaglia
c. the Fourth Defendant, Professor John Wilson
- All resolutions purportedly passed on or after 22 April 2026 and up to and including 27 May 2026 by the Board of the Plaintiff, as purportedly constituted by the First to Fourth Defendants or any one or more of them are invalid.
THE COURT ORDERS THAT:
- The Originating Process filed 15 May 2026 and the Interlocutory Process filed 19 May 2026 are otherwise dismissed with costs reserved...
There was no dispute as a matter of principle that a party which had in effect capitulated could be made liable for costs notwithstanding that the matter had not been finally determined.
In my respectful opinion, the principles applicable to the present application (including Lai Qin) may be summarised as:
Costs remain in the discretion of the Court, with that discretion being confined only by the need to be exercised judicially, that is to say rationally and for the purpose for which it was conferred.
In general, costs follow the event, being the outcome of a contested hearing.
Where there is no contested hearing and therefore no event because of a settlement or the proceedings otherwise becoming futile, the proper exercise of the costs discretion will generally be that there should be no order as to costs if the parties have acted reasonably in the commencement and conduct of the proceedings.
It is not appropriate for the Court to be drawn into a hypothetical hearing to predict what the final contested outcome would have been.
Notwithstanding the preceding two sub-paragraphs, a party may be ordered to pay the other party’s costs where there has not been a final hearing if the first-mentioned party can be shown to have capitulated or to have conducted itself unreasonably (for example, by having persisted in what that party should have understood was a clearly hopeless case).
Mr Kirby’s argument was founded upon three propositions:
The College’s case was focussed on the validity of the EGM and stopping the AGM and it had capitulated on those points;
By the time of the final hearing, the issues concerning the role of the Appointees and Dr Chandran had been resolved by undertakings and did not have to be determined at the final hearing in any event; and
Costs should be on the indemnity basis to reflect the indemnity afforded to directors of the College under its Constitution (in the case of Dr Chandran) and the failure to communicate with the Appointees before the proceedings were commenced.
I will deal with each of these in turn.
There was a difference in how the respective parties characterised the proceedings. The Court does not accept Mr Kirby’s characterisation and accepts the College’s argument that the focus of the proceedings, in particular at the final hearing, was the determination of the identity of the lawful directors of the College and the validity of the purported board’s conduct to determine who was to run the AGM and conduct the College’s business. These were precisely the issues resolved without a final hearing, and which necessarily then led to the conclusion that the AGM could proceed such that the relief in relation to it did not have to be pressed. There was no capitulation in relation to that relief: it became otiose because of what the parties eventually agreed.
The reasons for this conclusion are:
That is what was sought in the originating process as final relief (see [14] above) at the final hearing. While there was also an interlocutory process seeking, in effect, the postponement of the AGM, restraining the AGM was interlocutory relief that did not have to be pursued in the light of what occurred at the final hearing;
The College’s opening written submissions consistently identified those matters as the two “central issues” (see [7] and [11] above);
Ms Roughley SC’s responses to my questions about what the utility of the case was consistent with that approach.
It was clear from how the College put its case that whether the AGM could proceed would be determined by the Court answering who the lawful directors of the College were. The College’s case was concerned with who was lawfully entitled to run the affairs of the College, which would necessarily answer who was to preside over the AGM.
I am satisfied that the first to fourth defendants’ solicitors understood what the focus of the final hearing would be because on 24 May 2026 they had written to the College’s solicitors asking whether relief in relation to the AGM would still be sought “In light of the hearing on Wednesday, 27 May 2026 and the clarity that will be forthcoming on the questions concerning the validity of the events on 22 and 23 April*…*” (my emphasis). Those “events” were the EGM and the purported board meeting. The fact that the College’s solicitors replied by confirming that relief would still be pressed in relation to the AGM does not detract from the Court’s conclusion because that relief was dependent on the resolution of the “central issues” which related to those “events”.
The Court’s answer to the first proposition is sufficient to determine the present issue, because there was no “capitulation” that would justify a costs order against the College. I will nevertheless express my conclusions about the next two propositions.
As to the second proposition, the Court is not satisfied that any undertakings were communicated with sufficient clarity or comprehensiveness to support the conclusion that the College did not need to have pressed on to the final hearing.
The solicitor for the first to fourth defendants, Ms Caroline Parker, filed an affidavit on the costs application. This referred to a 21 May 2026 letter from the College’s solicitors requesting undertakings to the effect that the first to fourth defendants would not hold themselves out as directors of the College pending determination of the final relief sought by the College (and in the case of Dr Chandran for the duration of her suspension by the ACNC). The affidavit then records:
“12. On Thursday 21 May 2026, in conference with the first to fourth defendants, I obtained instructions:
a. from the Second to Fourth Defendants that they would give an undertaking on the terms set out in the 21 May 2026 letter; and
b. from the First Defendant, that she would comply with the ACNC suspension notice which prohibited her from acting as, and representing herself as, a Responsible Person of the Plaintiff.”
There is no evidence that there was ever a written response to the 21 May 2026 letter formally conveying the instructions to which Ms Parker refers in her affidavit. That is perhaps understandable in the flurry of the litigious activity in which the parties were engaged, including later that day.
On the afternoon of 21 May 2026, the proceedings came before Hammerschlag CJ in Eq for directions. It was at this hearing that his Honour fixed the matter for final hearing before me on 27 May 2026. In the course of that directions hearing Mr Kirby said:
“...as concerns the second to the fourth defendants who have already indicated are making submitting appearances, they have also offered [I interpose, without any criticism of Mr Kirby, that it is unclear on the evidence how that offer was made], and I just put it on the record now, undertakings not to purport to or take any act directorially on behalf of the College until the determination of these proceedings first. Secondly, that they will not hold themselves out as officeholders until the determination of the proceedings.” (Tcpt 21 May 2026, p 5(35)).
“As for the first defendant, I make no offer. An undertaking has been sought to get rid of this injunctive relief sought against her. I make no offer on her behalf but say that given the recent events happening on Monday, that the charities regulator, the ACNC, suspended her as a so-called responsible person…She will not be reporting to or taking any act in respect to the office that she holds.” (Tcpt 21 May 2026, p 5(45)).
In my respectful opinion, the significant matters arising from the foregoing are that by the end of the directions hearing before the Chief Judge:
No undertakings had been formalised in respect of the Appointees;
No undertaking or offer had been made on behalf of Dr Chandran;
Nothing had been said about the position of Professor Martin;
The undertakings under discussion were interlocutory undertakings pending the final determination of the proceedings and were overtaken by the fact that by the end of the directions hearing the matter had been fixed for a final hearing to take place the following week and before the AGM.
Unlike what had occurred (or not occurred) before Hammerschlag CJ in Eq, what took place before me (see [16] above) became cumulatively dispositive of the case when Mr Kirby made the concession (“in order to narrow issues”: Tcpt 27 May 2026, p9(31)) concerning the invalidity of the appointment of the Appointees and the invalidity of anything they had purported to do as directors. That was a new and significant development which, taken with the other developments, led Ms Roughley SC, properly in my respectful view, to seek the instructions which led to the resolution of the proceedings by consent.
Mr Kirby’s third submission - indemnity costs - was based, in the case of Dr Chandran, upon Clause 21 of the Constitution that current and past officers “must be indemnified by the College to the fullest extent permitted by law against a liability incurred by that person as an officer of the College…including legal costs and expenses incurred in participating in, being involved in or defending any legal proceedings”. It is uncontroversial that in exercising its discretion as to costs, the Court may take into account a party’s contractual right to a complete indemnity from the other party for costs and order that those costs be paid on the indemnity basis.
There are three reasons why the Court will not order indemnity costs in favour of the first to fourth defendants.
First, as to all of them, I accept the College’s submission that the party seeking the order must be a “successful” party in the sense that the Court has first determined that it is entitled to its costs from the other party. That is not this case in relation to any of the first to fourth defendants, because the Court has concluded there should be no order as to costs.
Second, in relation to Dr Chandran, that conclusion does not mean that she is disentitled from claiming indemnity for her costs if she is otherwise entitled to it on the proper construction of the Constitution. Whether she is so entitled is not a matter in dispute before the Court in these proceedings and the Court expresses no view on it. It has not been the subject of argument and the Court does not accept Mr Kirby’s submission that the Court should express a view on it “to avoid further disputation concerning indemnification and costs recovery from the College”. It is not appropriate for the Court to give, in effect, an advisory opinion on a hypothetical question. Insofar as the prospect of “further disputation” is concerned, the College’s affidavit evidence on the present application was that as at the date of its final written submissions (29 June 2026) none of the first to fourth defendants had “made a request pursuant to the College’s policies for the College to consider payment of their legal costs in respect of” these proceedings.
Third, as to the Appointees, they did not rely on the indemnity under the Constitution but on the outcome of the proceedings and the proposition the undertakings they gave upon service would have been given had they been approached before the proceedings were commenced. The Court is satisfied the proceedings had to be commenced urgently, so the failure to seek pre-action undertakings does not have the significance as to costs that it can have in other cases. Furthermore, the Appointees would still have had to file submitting appearances because it is inevitable, in my respectful opinion, that they would have been necessary parties to be bound by any final determination even if they had given pre-action interlocutory undertakings of the kind referred to in [28] above.
Note that the Court makes no order as to the costs of any party to these proceedings.
**********
The Royal Australasian College of Physicians
Chandran
(1997) 186 CLR 622