Turner v O'Bryan-Turner

Principles

1. The principles applicable to costs applications are well-known. Briefly, the power to award costs is found in s 98 of the Civil Procedure Act 2005 (NSW); costs are in the general discretion of the Court; the discretion is a wide one but must be exercised judicially; and the general rule is that costs follow the event (r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW)) (although there may at times be multiple events and at times there may be dispute as to what is the relevant "event"). Where a special costs order is sought on the basis (as here) of the making of a Calderbank offer (see Calderbank v Calderbank [1975] 3 All ER 333), then it is necessary to address the matters set out below including, in particular, whether it was unreasonable for the offeree not to accept the offer.
2. As to a Sanderson Order, this is an order requiring an unsuccessful defendant to pay the costs of other successful defendants (so-called after the decision in Sanderson v Blyth Theatre Co [1903] 2 KB 533).
3. In Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 at [15], Beazley JA (as Her Excellency then was), together with Hodgson and McColl JJA, outlined the following considerations as to when a Sanderson Order is appropriate: In determining whether it is fair to make such an order, two matters are usually considered to be relevant. First, it must have been reasonable for the plaintiff to have brought the proceedings against the successful defendant: see Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215 per Gibbs CJ (at 230); Wilson J (Murphy J agreeing) (at 247); Brennan J (at 260); Lackersteen v Jones (No 2) (1988) 93 FLR 442 (at 449); Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179; (2000) NSWCCR 417 (at [128]) per Mason P (Stein and Heydon JJA agreeing). Secondly, there must be some conduct on the part of the unsuccessful defendant which would make it fair to impose liability on it for the costs of the successful defendant: Gould v Vaggelas (at 230; 247 and 260).

Single costs order

1. The David/Karl interests contend for a single costs order covering both sets of proceedings on the basis that the issues in dispute in the 2017 and 2019 Proceedings were so intertwined and intermingled as to make such an order appropriate in the present case. It is submitted that a single costs order would be more efficient and less expensive for the parties because it will be a time consuming and expensive exercise for the parties, and any costs consultants they retain, to attempt to differentiate the work done in the different proceedings. As noted above, the Nick interests resist the making of a single costs order.

Indemnity costs

1. As to the submission that such an order be on the indemnity basis, the David/Karl interests rely upon a letter dated 12 July 2018 from their solicitors (Palmers Solicitors) to the solicitors acting for the Nick interests (Cleary Hoare). That letter was marked "Without Prejudice save as to costs" and was expressed to be sent under the "Calderbank principle".
2. The letter was clearly sent in the context of correspondence between the solicitors in relation to settlement proposals (in that it referred to a letter of 10 July 2018 from Cleary Hoare that was described as "proposing settlement" and it repeated an offer that the David/Karl interests were said to have put on 14 June 2018). The earlier offer, repeated in the 12 July 2018 letter, was in the following terms: 1. Nick/Allawah Pastoral, Sarah, Wendy, David and Karl each enter into a Deed of Release, whereby each of them (on their own behalf and, where applicable, on behalf of John) will release the others from all actions, claims suits and demands whatsoever arising out of the issues pleaded in the litigation, claims for family provision out of John's estate and claims against the validity of John's last Will; 2. Within six months of execution of the Deed of Release, Wendy David and Karl will pay to Allawah Pastoral a sum of $500,000 in partial settlement of John's cross claim against Nick and Allawah Pastoral; 3. Within a further period of 3 years, Wendy David and Karl will pay to Allawah Pastoral an additional sum of $50,000 in final settlement of John's cross claim; 4. Nick will agree in the Deed to pay 50% of John's future costs of care; 5. The terms of settlement will remain confidential. Each party will refrain from publishing and/or otherwise making disparaging statements or comments about the others to non parties; 6. Upon execution of the Deed of Release, and upon approval by the Court of the tenns of settlement, Nick/Allawah Pastoral will consent to the dismissal of the Plaintiffs' claims and Wendy will consent to the dismissal of the Cross Cairns pleaded in the litigation, both in their own right and, where applicable, on behalf of John; 7. Wendy, David and Karl will charge the Trundle lands with the payment of: (a) 50% of John's future costs of his nursing home care; and with (b) the agreed settlement amount payable to Allawah Pastoral. 8. Each party will each pay their own costs; 9. The Motion to restrain Cleary & Hoare will be dismissed with o orders as to costs.
3. The footnote to [2] of the above terms of offer stated that: Wendy, David & Karl will need time to liquidate some of the land in order to pay Nick/Allawah. They have no further borrowing power, given the family dispute and the severe drought conditions in NSW,
4. The 12 July 2018 letter also referred to earlier discussions in which it is said that views were exchanged on the structure of a possible settlement and in which it is said that the solicitor for the Nick interests (Mr Paratore) indicated that the Nick interests would consider a trust for the sole benefit of John. In that regard, the 12 July 2018 letter stated: It remains our view that passing the lands into a trust will not serve John's interests. Our reasons were outlined on 7th inst. If you think our reasoning is wrong, we invite Nick/Allawah to put their own 'trust proposal' so long as is free from the adverse consequences identified? As the writer indicated in Sydney, we have an open mind as to a trust structure so long as any trust created [sic; presumably "is"] solely for John's welfare inter vivos, and so long as the settlement preserves John's testamentary intentions.
5. The letter stated that the proposals therein were conditional and dependent upon Court approval, and upon the discharge of the injunctions "which presently prohibit dealings with the Trundle lands" (a reference no doubt to the orders made by Sackar J). The letter further noted that the proposals remained open for 7 days, failing which they would lapse without further notice.
6. It is submitted by the David/Karl interests that the result of the 2019 Proceeding was clearly less favourable to the Nick interests than the offer (by the sum of $550,000); and that, treating the offer globally (for both proceedings), the result for the Nick interests was less favourable than what was offered. In those circumstances, it is submitted that the failure to accept the offer was unreasonable.
7. The David/Karl interests say that they were successful in the 2017 Proceeding on all but two issues (Wendy's lack of power and breach of fiduciary duty), and that those two issues were very minor in the scheme of the whole litigation; and that Angelena (the plaintiff in the 2019 Proceeding) was successful in that proceeding.
8. Alternatively, as adverted to above, if it is considered that there should be some account for the success obtained by the Nick interests in the 2017 Proceeding, it is submitted that a 5% reduction would be an appropriate allowance for the limited success achieved against Wendy.

Nick interests' response on the indemnity costs application

1. As to the indemnity costs application, at the outset the Nick interests say that it is unclear whether the David/Karl interests are seeking indemnity costs in both the 2017 Proceeding and the 2019 Proceeding or only in the 2019 Proceeding. Pausing here, I would have thought that if a single costs order were to be made encompassing both proceedings, then to the extent that it was made on an indemnity costs basis, i.e., for part of the period, it would cover both proceedings (which for the reasons I set out in due course I consider would not be appropriate). In any event, the Nick interests say that indemnity costs should not be awarded at all.
2. The Nick interests note that neither David nor Karl was a party to the 2019 Proceeding and it is submitted that they therefore cannot seek indemnity costs for that proceeding and they do not get the benefit of the offer.
3. As to the offer itself, it is said that the offer made on 12 July 2018 raises issues which are well outside the scope of both proceedings. First, that the offer was made while there was only one proceeding on foot; and, in that proceeding, a cross-claim had been commenced by Wendy as John's tutor in circumstances where she had no authority to do so and the solicitors had no authority to put the offer on behalf of John. Consequently, it is said that it was not an offer made by (or on behalf of) John for the purposes of either proceeding. Second, that Sara was not a party to either proceeding yet the offer required her to be a party to a deed of settlement to resolve (not just the issues raised in the proceeding but also) future issues concerning John's estate and his Will. Third, that the offer required Nick to pay 50% of John's care costs; and, fourth, that the offer included releases and required the approval of the Court.
4. Further, it is submitted that, on the basis that the indemnity costs application is directed at the 2019 Proceeding only, the offer was put to resolve all issues in "both" proceedings and therefore cannot be apportioned or separated in the manner suggested by the David/Karl interests.
5. The Nick interests further say that the submission by the David/Karl interests that costs be paid by both Allawah and Nick is misconceived for the following reasons. First, that the only claim brought by Nick was the review of the power of attorney under s 36 of the Powers of Attorney Act 2003 (NSW). Second, that Allawah's claim was limited, as a creditor, to s 37A of the Conveyancing Act 1919 (NSW), which claim did not proceed at trial (and it is said that its liability for costs must be limited to this claim only).
6. It is said that the joint defence of the defendants in the 2017 Proceeding, while accepting that the enduring power of attorney did not authorise Wendy's conduct, contested her knowledge and the consequences of that conduct. In this regard, the Nick interests say that they were successful and that their success included the costs of taking Wendy's evidence on commission and the resultant taking of David and Karl's evidence at trial. It is said that the substance of the joint defence was that, despite concessions, the case against Wendy would not succeed because all elements could not be proved and therefore no relief would be granted; and that had the joint defence succeeded with respect to Wendy's position, there would have been no need to consider any case against David and Karl (and it is noted that this aspect of the joint defence failed).

Alternative submission by the David/Karl interests if separate costs orders are to be made for each proceeding

The 2017 Proceeding

1. As to the 2017 Proceeding, if considered separate from the 2019 Proceeding, the David/Karl interests address separately the case brought by the first plaintiff (John by his tutor, Nick) and that brought by the second and third plaintiffs (Allawah and Nick). Further, as to the first plaintiff's case, the David/Karl interests consider separately the outcome as against Wendy from the outcome as against themselves.
2. As to the case by John against Wendy, it is submitted that there should be no order as to costs between those parties for two reasons. First, that the overwhelming bulk of the 2017 Proceeding was concerned with issues other than the two issues on which John succeeded against Wendy (those two issues on which John succeeded being the absence of power under the Enduring Power of Attorney, which it is noted was accepted at the hearing and in the pleadings - see my reasons in Turner v O'Bryan-Turner [2021] NSWSC 5 at [455] and the defence at [25]; and breach of fiduciary duty, which it is said was in effect conceded - see [456] of my reasons). Second, that, although John had a measure of success against Wendy, he also had a measure of failure.
3. It is noted that John abandoned (at the hearing) the claims under the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, the claim for breach of s 37A of the Conveyancing Act 1919 (NSW) and the claim for breach of a common law duty of care by Wendy (as noted in my reasons at [410]); and that John failed in his claim for the taking of accounts (see at [489]). It is said that, although no specific finding was made, the fact that fraud was not put to Wendy in cross-examination (see at [455]) would inevitably have meant that such a claim would have been dismissed.
4. As to the case by John against David and Karl, it is submitted that the appropriate order is that John pay their costs. It is noted that David and Karl were wholly successful in relation to the claims brought against them; and, accordingly, it is submitted that costs should follow the event.
5. As to the case by Allawah and Nick, it is submitted that those plaintiffs were wholly unsuccessful in the proceedings against all defendants and should be ordered to pay the defendants' costs, again on the basis that costs follow the event.

Nick interests' response regarding costs of the 2017 Proceeding

1. The Nick interests say that the effect of the orders I have proposed (that there be a charge imposed over the Woolharinga, Nellyvale and Sunrise properties to secure the necessary funds for John's needs during his lifetime; that David and Karl provide an undertaking to provide for John's needs during his lifetime and honour his bequest to Sara; and that the proceeding be otherwise dismissed) is that the plaintiffs in the 2017 Proceeding (i.e., the Nick interests) were successful as against Wendy but unsuccessful as against David and Karl.
2. In this regard, it is noted that the Nick interests contended at trial that: Wendy committed a fraud on the power when transferring properties from John to herself, David and Karl in various combinations; Wendy was a knowing participant and a knowing recipient in respect of such conduct; David and Karl were also knowing participants and knowing recipients in respect of such conduct; each of Wendy, David and Karl had sufficient knowledge under the principles of Barnes v Addy (1874) LR 9 Ch App 244; and that David and Karl had sufficient knowledge within the fourth category of Baden Delvaux & Lecuit v Societe Generale pour Favoriser le Development du Commerce et de l'Industrie en France SA [1993] 1 WLR 509.
3. It is noted that it was also contended that Wendy, David and Karl, when transferring properties from John to themselves in various combinations, engaged in fraudulent conduct within the exception to indefeasibility.
4. As to the determination of those issues, it is submitted that the Nick interests succeeded on the first two issues (namely, the fraud on the power issue and that Wendy was a knowing participant and recipient in respect of that conduct).
5. As to the contentions concerning Wendy, reference is made to what was determined at [515] of the reasons, namely, that Wendy's conduct in transferring John's properties was "in breach of the proscriptive fiduciary duties that she owed John" though it was done with an honest belief, rather than fraudulent intent. It is noted that I accepted that the ordinary relief for such conduct would be the re-transfer to John of property held by Wendy and equitable compensation for the property held by David and Karl; alternatively, equitable compensation for the value of all properties. It is submitted that the fact that I proposed to fashion relief in equity which did not give rise to a re-transfer of the properties does not detract from the determination in the Nick interests' favour as against Wendy.
6. As to the contentions concerning David and Karl, reference is made to what was said at [526] of my reasons, namely that "there is no doubt [David and Karl] received their respective interests in the Trundle Properties for no consideration as a result of Wendy's breach of fiduciary duty and they participated in that breach of fiduciary duty by signing the relevant documents". It is said that it follows that David and Karl's conduct was substantially connected with and dependent on Wendy's conduct; that is, David and Karl received John's properties as a result of Wendy's breach of fiduciary duty.
7. It is noted that, notwithstanding David and Karl's participation, I determined (see at [551]-[556] of my reasons) that neither had sufficient knowledge to make good the contention that they knowingly assisted and/or knowingly received John's property.
8. However, while the Nick interests accept that the general rule of costs is that they follow the event, they note the academic commentary by Professor Dal Pont that the "central and overriding principle is that of doing justice to the parties in each particular case, it being judicially remarked that there is 'no better test than the test of what is fair and just between the parties'" (see G.E. Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths) at [6.15]) and that an order contrary to the general rule may be made depending on the circumstances of the case (citing Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [8]).
9. The Nick interests submit that it is appropriate in the following circumstances for a Sanderson Order to be made, to the effect that Wendy ought to be liable for David and Karl's costs, noting that a Sanderson Order may only be made where it is fair to impose some liability on the unsuccessful defendant for the costs of the successful defendant (see Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55-842 (Sved) per Giles J at 56-605).
10. The particular circumstances of the case to which the Nick interests refer in support of their submission that a Sanderson Order should be made are that: Wendy was the mother of David and Karl; John is the father of David and Karl; Wendy committed, and David and Karl participated in, a breach of fiduciary duty in respect of property owned by John; Wendy deliberately transferred John's property into her name and David and Karl's names, and David and Karl "assisted in that exercise" (though without the requisite knowledge) (at [552]); David and Karl knew that the properties "were being transferred out of John's name for no consideration for the purpose of effecting his testamentary intentions in advance and so as to prevent interference by Nick" (at [554]); and Wendy, David and Karl filed a joint defence in the proceeding, represented by the same law firm and had a common position.
11. The Nick interests say that there are two other matters that are also relevant to consider in this context: first, whether it was reasonable for the Nick interests to have commenced proceedings against David and Karl; and, second, whether there was some conduct on the part of Wendy which would make it fair to impose liability on her for the costs of David and Karl (referring to Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 at [15] and the authorities cited therein).
12. It is noted that, at the commencement of the proceedings, Wendy, David and Karl were, in various combinations, the registered proprietors of the Trundle Properties. It is said that it was necessary, for the purpose of seeking a re-transfer back to John, that all three were made defendants. Further, it is said that, for the purpose of seeking a resulting or constructive trust for the properties, it was necessary that all three were made defendants. It is noted that, in their joint defence, Wendy, David and Karl denied the plaintiffs' contentions and denied the relief sought by the plaintiffs (including the relief that would ordinarily be granted in the circumstances alleged - see at [523] of my reasons).
13. Further, it is said that it was not in dispute that the purpose of the transfers was, in part, to prevent any claim or interference by Nick. It is said that, with or without knowing assistance or knowing receipt, David and Karl participated in and received the benefit of Wendy's breach.
14. Finally, it is said that the remedy fashioned to resolve the inherent difficulties in this case (which was fundamentally premised on the practical utility of John's situation vis-à-vis ongoing care needs, including government assistance, and the ultimate beneficiaries of his last Will being David and Karl, as well as Sara) was that a charge be imposed over certain of the properties to secure John's ongoing care needs and Sara's legacy.
15. It is submitted that in these circumstances, it is appropriate that a Sanderson Order be made.
16. In particular, it is said that if the general rule is followed: first, Wendy would be liable for the Nick interests' costs, yet John did not receive the benefit of what would ordinarily be the relief consequent on Wendy's breach; and, second, the Nick interests would be liable for David and Karl's costs, despite: David and Karl receiving the fruits of the breach of fiduciary duty; John not receiving compensation as a result of the breach of fiduciary duty (which thereby deprives John of any ability to meet a costs order); and David and Karl being the main beneficiaries of John's estate but having already received John's estate inter vivos.
17. It is thus submitted that the general rule would produce an unfair and unjust result in the circumstances and therefore that a Sanderson Order is the most appropriate order.
18. Alternatively, it is submitted that the respective parties ought to bear their own costs. It is submitted that, by filing a joint defence and by using the same legal representatives, and by reason of the fact that all defendants participated in the same conduct (leaving aside the issue as to breach of fiduciary duty), Wendy, David and Karl had inseparable interests in the proceeding. Reference is made in this regard to my observation that Wendy's interest in certain properties passed to Karl on her death and to the David/Karl interests' submissions that Wendy did not intend to benefit personally but, rather, that the properties would be shared equally between David and Karl with Wills made for that purpose.
19. As to the costs of the cross-claim in the 2017 Proceeding, the Nick interests say that the result of my decision of 12 September 2019 in Turner v O'Bryan-Turner [2019] NSWSC 1340 (2019 Turner decision) brings about two possibilities for costs of that cross-claim: that the costs either fall away or that they are awarded in the defendants' favour. It is submitted that Wendy, as John's tutor, was on notice of her lack of authority from the time a defence to the cross-claim was filed on 13 July 2017, which pleaded (at [1A]): 1A. The First Cross-Defendant ("Nicholas") and the Second Cross-Defendant ("Allawah Pastoral") (hereafter collectively "NAP") say that the Cross-Claim has not been validly commenced and cannot be carried on by Wendy as John's tutor, inter alia, for the following reasons: (a) Wendy has not filed the tutor's consent to act as John's tutor, as is required by Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") Rule 7.16(a); (b) Wendy has not filed a certificate, signed by her solicitor in the proceeding, to the effect that Wendy does not have any interest in the proceeding adverse to the interests of John, as is required by UCPR Rule 7.16(b); and (c) Wendy is ineligible to be John's tutor, pursuant to UCPR Rule 7.15(2)(c), because Wendy is a person who has an interest in the proceeding adverse to the interests of John, inter alia, by reason of: (i) the relief sought, and the causes of action pleaded, against Wendy in the Statement of Claim in the proceeding; (ii) the admission in paragraph 25 of Wendy's Defence to the Statement of Claim that John's Power of Attorney, in terms, did not authorise Wendy, as John's Attorney, to do the things alleged; (iii) the order made in the proceeding on 18 April 2017, that until further order, Wendy be restrained from exercising any power, or engaging in any act as the attorney of the First Plaintiff, under the instrument titled "ENDURING POWER OF ATTORNEY" made on 10 June 2015 by the First Plaintiff as the principal and the First Defendant as the attorney and registered at the LPI in Book 4689 No 83; (d) Wendy is terminally ill.
20. Further, it is noted that although Wendy, David and Karl sought to take up the cross-claim in place of John, leave to that effect was not granted.
21. The Nick interests say that the cross-defendants in the 2017 Proceeding (Allawah and Nick) incurred the unnecessary costs of unauthorised proceedings up until 12 September 2019, and that they ought not to be prejudiced and ought to be compensated for those unnecessary costs by the cross-claimant on the cross-claim. Alternatively, it is submitted that any costs awarded in favour of the David/Karl interests in the 2017 Proceeding ought to be discounted to reflect the unnecessary costs incurred by the cross-defendants to the cross-claim.

The 2019 Proceeding

1. The David/Karl interests say that in this proceeding, John, by his tutor Angelena, was wholly successful against both defendants (referring by way of example to [405] of my reasons) and it is submitted that therefore costs should follow the event (on the ordinary basis up to 12 July 2018 and thereafter on the indemnity basis relying upon the offer of 12 July 2018 referred to above).
2. The David/Karl interests further submit that those costs should include the costs of and incidental to the cross-claim filed by John (though, in effect, by Wendy who did so as tutor for John) on 31 May 2017 in the 2017 Proceeding against Allawah and Nick. That cross-claim became the statement of claim in the 2019 Proceeding as a result of the 2019 Turner decision.
3. It is noted that the orders made on that occasion included the following: 6. The cross-claim is discontinued by leave. 7. Reserve the question of costs of the cross-claim. 8. The issues pleaded in the discontinued cross-claim may be litigated by separate proceedings in accordance with the undertakings referred to in Order 13.
4. It is submitted that the reserved question of costs of that cross-claim should now be answered in favour of the then cross-claimant (now plaintiff in the 2019 Proceeding).

Nick interests' submissions regarding costs of the 2019 Proceeding

1. The Nick interests say that while the 2019 Proceeding was able to stand on its own, both it and the 2017 Proceeding progressed in-step from 12 September 2019, including that evidence in one be evidence in the other, on account of the inherent commonality among parties and issues. It is noted that, even though there were distinct transactions involved, both proceedings concerned family members' interests in John's properties.
2. The Nick interests say that it was accepted by them that if they failed in the 2017 Proceeding, then the 2019 Proceeding would be pointless as there would be nothing in John's estate to which a liability might attach; and, conversely, that if they succeeded in the 2017 Proceeding, then the issues raised in the 2019 Proceeding would be critical. It is noted that the Nick interests had argued (and which was opposed by the David/Karl interests), in the context of the tutorship of John in both proceedings, that the proceedings be bifurcated and then the 2019 Proceeding be deferred until after the primary issues in the 2017 Proceedings were resolved.
3. The Nick interests say that the consequence of the decision in respect of the 2017 Proceeding is that John's only asset is a charge over properties to secure his ongoing care needs and his legacy to Sara, both of which will be further secured by undertakings from David and Karl. It is said that even though the orders made in the 2019 Proceeding unwind transactions, those transactions are inconsequential as a result of the orders made that I propose to make in the 2017 Proceeding.
4. The Nick interests note that the outcome of the 2019 Turner decision was that the cross-claim filed by Wendy in the 2017 Proceeding was discontinued, a separate proceeding was to be commenced in respect of those issues and that costs were reserved. Hence, they say that any costs order in the 2019 Proceeding starts from the date that the 2019 Proceeding was commenced, with costs of the previous cross-claim in the 2017 Proceeding to be dealt with in respect of the 2017 Proceeding.
5. It is said that this outcome arose due to the fact that the cross-claim was commenced by Wendy without authority to act as tutor for John. The Nick interests say that there ought to be no entitlement to costs of the 2017 cross-claim (purportedly filed in the 2017 Proceeding) as costs of Angelena for John's tutor in the 2019 Proceeding because the cross-claim was commenced without authority; and that only those costs which are properly and ordinarily attributable to the 2019 Proceeding should be awarded on a standard basis.

The Injunction

1. The orders made on 11 April 2017 by Sackar J included orders 3-5 as follows: 3. Until further order of the Court each of the First, Second, Third and Fourth Defendants, by himself or herself or any agent or servant on his or her behalf, be restrained from dealing in any way (including but not limited to assigning, selling, transferring, further leasing, licensing, encumbering or further encumbering, lodging or recording any dealing on the register at Land and Property Information ("LPI") save for a dealing which records this order) with: (a) The real property known as Garden Vale, which is near the rural town of Trundle, having title particulars Lot 15 in Deposited Plan 665275, Lot 1 in Deposited Plan 171930, Lot 16 in Deposited Plan 752121 and Lot 169 in Deposited Plan 752121; (b) The real property known as Allawah, which is near the rural town of Trundle, having title particulars Lot 168 in Deposited Plan 752121 and Lot 170 in Deposited Plan 752121; (c) The real property known as Woolharinga, which is near the rural town of Trundle, having title particulars Lot 3 in Deposited Plan 752121; (d) The real property known as Nellyvale, which is near the rural town of Trundle, having title particulars Lot 83 in Deposited Plan 752075, Lot 84 in Deposited Plan 752075 and Lot 85 in Deposited Plan 752075; (e) The real property known as Sunrise, which is near the rural town of Trundle, having title particulars Lot 2 in Deposited Plan 828545; (f) The real property known as Sunnycroft, which is near the rural town of Trundle, having title particulars Lot 167 in Deposited Plan 752121, ("the Properties"). 4. Until further order of the Court each of the First, Second and Third Defendants, by himself or herself or any agent or servant on his or her behalf, be restrained from dealing in any way (including but not limited to assigning, selling, transferring, leasing, licensing, encumbering or further encumbering) with any farm machinery, farm equipment, plant and equipment or other personalty located on any of the Properties or any motor vehicle usually garaged on any of the Properties or owned by or registered in the name of the First Plaintiff. In this order dealing does not encompass using in the ordinary course of the farming business and farming operations carried on or conducted upon any of the Properties. 5. Until further order of the Court each of the First, Second, Third Defendants, by himself or herself or any agent or servant on his or her behalf, be restrained from: (a) carrying on or conducting any farming business and farming operations upon any of the Properties (including but not limited to the sowing, growing and harvesting of crops, the raising or shearing of stock, including cattle and sheep, and the shearing of wool) other than in the ordinary and usual course of such farming business and farming operations, unless in accordance with the advice of an agronomist; (b) assigning, selling, transferring or encumbering or further encumbering any crops, produce, wool and stock (including cattle and sheep) sewn, grown, harvested, grazed, raised or shorn on any of the Properties ("Properties' Produce") other than by a sale to an arm's length purchaser at the market prices prevailing at the time of such sale of any Properties' Produce; (c) applying the proceeds of sale of any Properties Produce other than in paying any agency, broker or sales commission and then depositing the net proceeds into a bank account(s) at the National Australia Bank ("NAB") in the names of one or more of the First, Second and Third Defendants or into the Farm Working Account in the names of and/or operated by the Second and Third Defendants held at the Commonwealth Bank of Australia ("CBA") and thereafter applying such moneys in any such NAB account or CBA account in paying interest and other fees and charges to NAB or the CBA, paying the care, medical and living expenses, including aged care facility fees and expenses, of the First Plaintiff, paying the reasonable living expenses and legal costs of the First, Second and Third Defendants, paying the care and medical expenses of the First Defendant and paying the expenses incurred in the ordinary course of the First Defendant's business, and the farming business and farming operations carried on or conducted upon any of the Properties.
2. The David/Karl interests seek the discharge of orders 3- 5(b) inclusive. They submit that if order 5(c) remains, with the variation they have suggested, this would protect John's interests pending registration of the proposed charge or further order.
3. It is noted that the effect of order 3 made by Sackar J was to restrain the David/Karl interests (and the fourth defendant, the Registrar-General) from dealing in any way with the Trundle Properties. The David/Karl interests submit that this injunction has prevented the leasing out of some of the land in the past to other farmers, and has thus fettered the ability of David and Karl to generate income from the property and to service the debt to NAB and John's care costs. It is said that this has also prevented David and Karl from exploring the option of selling one of the parcels of land in order to service both the NAB debt and John's care costs. The David/Karl interests say that, having de-stocked during the drought, they have no financial resources to re-stock the land in order to generate income.
4. It is submitted that, as the proposed charge will not include the Garden Vale, Allawah and Sunnycroft properties (the proposed charge I have indicated as being limited to the Woolharinga, Nellyvale and Sunrise properties), it is appropriate to discharge Sackar J's orders in relation to the first-mentioned properties (i.e., orders 3(a), (b) and (f)).
5. It is submitted that John's interests would be protected by order 5(c) with the addition of the words: or the land identified in Order 3(c), (d) and (e) [i.e. Woolharinga, Nellyvale and Sunrise] immediately after the words "Properties Produce" in the first line of order 5(c).
6. The David/Karl interests say that the discharge of orders 3-5(b) would also allow for the transfer of Wendy's interest in Woolharinga, Nellyvale and Sunrise to Karl in accordance with her Will dated 9 March 2017, which would simplify the dealings with NAB and the drafting of the charge. Again, it is said that John would still be protected by order 5(c) (as proposed to be varied) if that were to occur.
7. It is submitted that if these orders were to be discharged, David and Karl would have the time prior to the Farm Debt mediation to explore options to deal with the land in such a way as to satisfy NAB's concerns and to provide for John's care costs without NAB exercising its powers of sale.
8. The Nick interests seek additional time to respond to the additional submissions raised by the David/Karl interests. However, the Nick interests make clear that they oppose any variation to Sackar J's orders until costs issues are determined. It is said that, to the extent there are costs against Wendy's estate, Wendy's estate may be required to satisfy that order before property is gifted under the terms of her Will. Additionally, they submit that the charge to be imposed ought to include John's liability for costs (and note that there has been raised a concern as to David and Karl's ability to satisfy the charge and undertaking). It is said that the submissions of the David/Karl interests indicate that they may not have the capacity to support John from the Trundle Properties.

The Charge

1. As to the request for further time in relation to the charge, as at the time of the submissions, a draft charge was shortly to be sent to the Nick interests' solicitors for review. It is noted that when the terms of the charge are settled, NAB will need to be approached for its consent.
2. As noted already, there is no objection to that extension of time and my associate has already communicated to the parties that such an extension will be granted.

The Opteon Valuation Report

1. As adverted to above, in light of the commencement by NAB of the process for a Farm Debt mediation, application is made by the David/Karl interests pursuant to s 23 of the Supreme Court Act 1970 (NSW) (the David/Karl interests citing Hammond v Scheinberg (2001) 52 NSWLR 49 (Hammond) in this context) to authorise the first to third defendants in the 2017 Proceeding and the plaintiff in the 2019 Proceeding to disclose to NAB the contents, and provide a copy of the Opteon Valuation Report (which was referred to in my reasons at [188]-[202]).
2. Senior Counsel for the David/Karl interests has been instructed that NAB is currently disinclined to obtain its own valuation report; and it is considered that the valuation may be useful in any negotiations with NAB.

Costs

1. I address the various issues put in relation to costs as follows (the issues as to the discharge and variation of the existing injunctive regime and as to the terms of the charge to be imposed in respect of three of the Trundle Properties are to be the subject of further submissions in due course).
2. As to the submissions put forward by the David/Karl interests that there be a single costs order encompassing both proceedings, while I consider that there is much force in the proposition that this would simplify the ultimate process of cost assessment (assuming, as seems not unlikely, that quantum cannot be agreed) and would no doubt assist in minimising the ongoing costs to be incurred in this matter, I consider that the complicated, and in at least one respect novel, manner in which the issues in the respective proceedings arose (not simply by the filing by Wendy of her cross-claim in the 2017 Proceeding but also by the competing positions of the parties as to who should be appointed to represent John's interests and whether the two sets of proceedings could or should properly be heard together) makes it more appropriate to consider separately the costs of the two proceedings (though that does not mean that an amalgamated costs order might not ultimately be able to be considered). I therefore do not propose at this stage to make a single costs order encompassing both proceedings.

Indemnity Costs

1. As to the claim for indemnity costs based on the 12 July 2018 letter, the rationale underlying special costs orders is that which was explained in cases such as Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724, and Commonwealth of Australia v Gretton [2008] NSWCA 117. The public policy objectives include the encouragement of the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation (see also Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 (Miwa); and my recent considerations in Rinehart v Rinehart (No 2) [2020] NSWSC 235 at [141]).
2. The factors relevant to take into consideration are well-known (see, as summarised in Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519 at [20]-[30]). Relevantly, while the rejection of a Calderbank offer, in circumstances where it transpires that the final result in the proceeding is less favourable to the offeree, enlivens the discretion to award indemnity costs, it does not create a prima facie right to such an order (see Chief Commissioner of State Revenue v Platinum Investments Management Ltd (No 2) [2011] NSWCA 197 at [9]).
3. To warrant the making of a special (indemnity) costs order, the offer must "[constitute] a genuine offer of compromise, which it was unreasonable for the [unsuccessful party] not to accept" (Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4] per Handley, Basten and Beazley JJA (as Her Excellency then was); see also Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120 at [8] per Santow and Basten JJA and Young CJ in Eq (as his Honour then was); Leichhardt Municipal Council v Green [2004] NSWCA 341 (Leichhardt Municipal Council) at [23] per Santow JA with whom Bryson JA and Stein AJA agreed). Where the offer is a Calderbank offer, the onus to demonstrate that it was unreasonable to reject it is on the party seeking to rely on the making of the offer (here, the David/Karl interests) (see Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [26] per Giles, Ipp and Tobias JJA).
4. In summary, the factors to which regard will be taken when considering whether the rejection or non-acceptance of the offer was unreasonable include: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree's prospects of success assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it (see Commissioner of State Revenue v Challenger Listed Investments Ltd (No 2) [2011] VSCA 398 at [8]; Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 (Hazeldene's Chicken Farm) at [25]; Miwa at [12]).
5. Here, it is relevant to note that at the time of the Calderbank offer in question, there was only one proceeding on foot (the 2017 Proceeding). There was also around that time a dispute as to the authority of Wendy in relation to her filing of the cross-claim purportedly as John's tutor in that proceeding.
6. As to the time available for acceptance of the offer, it was short (seven days) but no complaint is here made that the Nick interests were not in a position to give the offer proper consideration in the time available. Moreover, it is clear that it was made in the course of ongoing settlement negotiations (since it referred to, and repeated, an earlier proposal, a subsequent counter-offer and discussions as to a "trust structure" proposal). Therefore, I would infer that the Nick interests were well capable of considering and responding to the offer within the time frame specified.
7. There is no suggestion that the offer did not contain a genuine element of compromise. Nor is there any suggestion that the terms of the offer were expressed with insufficient clarity. It clearly foreshadowed reliance on it on any future costs application in the event that it was not accepted.
8. Rather, the issues raised by the Nick interests in this regard are, in effect, twofold: first, whether the offer can be regarded as a more favourable result than the outcome of the litigation (on this hypothesis, the 2017 Proceeding), having regard to the fact that it encompassed terms going beyond the issues in the proceeding and was conditional on certain approvals; and, second, as to the reasonableness or otherwise of its non-acceptance.
9. As to the first of those matters, it certainly appears (at least on its face) that the offer would have been more favourable to Nick personally, as it encompassed a not insubstantial payment to him. However, as Nick has been at pains to emphasise throughout the litigation Nick's personal interest in the 2017 Proceeding is not a direct interest (although he accepts that he has indirectly an interest in the restoration of assets to John's estate insofar as he has foreshadowed a potential challenge to John's Will or a family provision claim under the Succession Act 2006 (NSW)).
10. More relevant, to my mind, is a comparison of the offer with the outcome of the proceeding from John's perspective. At least on a practical level, the offer was no less favourable than the outcome of the 2017 Proceeding in that it similarly made provision for John's ongoing care during the rest of his lifetime secured as to 50% over the Trundle Properties.
11. Therefore, the real issue here seems to me to be whether the terms of the offer (requiring, for example, Sara's consent to a deed of settlement, the Court's approval and Nick's agreement to bear 50% of the liability for John's ongoing care costs) render it unable properly to be compared with the outcome of the judgment or make it not unreasonable for the Nick interests not to have accepted the offer.
12. While I readily accept that the making of offers subject to conditions (whether the need for third party consent or Court approval or the like) may present a difficulty when considering how the offers compare to the ultimate judgment, it does not seem to me that the policy underlying the special costs order regime is met by treating such offers as necessarily incomparable to the outcome of the proceedings. That requires an assessment of the conditions themselves. In that regard, the requirement for Court approval is a condition that on one view could be tested by reference to the ultimate outcome of the proceedings, in that it could be expected that an offer which was reflected in the ultimate judgment is one that would have been met with the approval of the Court had that been a term of the offer. Conditions for third party consent are, however, another matter. Certainly, Sara was not a party to the proceeding and hence she could not have been compelled by the terms of any judgment following the contested proceedings to release any claim she might have had against John's estate. Therefore, although the fact of acceptance of a conditional offer would not preclude a binding agreement from coming into existence (albeit one that was subject to the requisite approvals), in the present case I consider that the settlement proposal in question cannot comfortably be compared with the outcome of the proceeding. Further, it is not clear how the alternative invitation for a trust structure proposal would factor into the settlement offer in the 12 July 2018 letter (as to which, I comment further below).
13. In any event, and leaving aside the issue of comparability, to my mind what is here determinative against the application for indemnity costs is that I consider that it was not unreasonable for the Nick interests to reject the Calderbank offer, in circumstances where it seems clear that the parties were (as adverted to above) alternatively considering a different "trust" proposal and where the offer was couched with conditions requiring both third party consent and Court approval.
14. That conclusion is not without some hesitation, since it encompassed a proposal which was similar to the ultimate relief granted in the proceeding and which, in my opinion, would adequately have accommodated John's interests. Moreover, it is somewhat ironic to note Nick's rejection of an offer that required him to assume half his father's care costs in circumstances where he was adamant that the proceeding was brought in his father's interests and on his father's behalf (and that he had no conflict in so doing). It also reinforces the complaint made in submissions for the David/Karl interests that (as Nick accepted in cross-examination) Nick had not paid one cent towards his father's care.
15. That said, I am not persuaded that the rejection of the Calderbank offer was unreasonable in all the circumstances and therefore I am not persuaded that costs should be ordered on the indemnity basis.
16. That makes it unnecessary to address the question whether, if so ordered, any indemnity costs order should extend to the costs of the 2019 Proceeding. Had that issue arisen, I would have concluded that the indemnity costs order should not so extend. As already noted, the 12 July 2018 Calderbank offer had expired in accordance with its terms by the start of the 2019 Proceeding. The fact that the offer had lapsed before the commencement of the 2019 Proceeding makes it difficult to suggest it has any operation in relation to the costs of that subsequent proceeding - it not being here suggested that the offer was in any way reinstated at that later time.) I see no basis to extend the consequences of non-acceptance of the 12 July 2018 offer to the costs of the 2019 Proceeding.
17. Turning then to the costs of each of the proceedings, I have concluded as follows.

Costs of the 2017 Proceeding

1. As to the 2017 Proceeding, I consider that costs should follow the respective "events". Wendy's estate should be ordered to pay the costs of the Nick interests so far as they relate to the claims ultimately pressed against her and which succeeded. However, I consider that a broad brush discount should be applied to reflect the abandonment of various claims that were made against Wendy and to reflect the fact that, by the time of the final hearing, the claims against Wendy which did succeed had to all intents and purposes been conceded so that, in practical terms, the final hearing so far as the 2017 Proceeding was concerned was largely focussed on the position of the David/Karl interests. Accordingly, and accepting that this is an impressionistic exercise, I consider that Wendy's estate should pay 20% of the Nick interests' costs of the 2017 Proceeding.
2. On the other hand, Nick, in his capacity as tutor for John, should be ordered to pay David and Karl's costs of the 2017 Proceeding. I do not accept that a Sanderson Order is here appropriate. I accept that the first of the conditions for such an order is satisfied, i.e., that it was reasonable for the Nick interests to have brought the 2017 Proceeding against the successful defendants (i.e., David and Karl). As to whether there has been conduct on the part of the unsuccessful defendant (i.e., Wendy), which would make it fair to impose liability on Wendy's estate for the costs of David and Karl, it is relevant to note that, in Sved, to which reference was made by the Nick interests in their submissions, the unsuccessful defendant had urged the plaintiff to seek recovery from the successful defendant. That is not the situation in the present case. Certainly, the conduct of Wendy is what led to the 2017 Proceeding (and the relief sought required David and Karl to be joined as necessary parties). However, it could hardly be suggested that Wendy had urged the plaintiff to look to David and Karl for relief.
3. I have set out above (see at [45]) the particular circumstances on which the Nick interests rely in support of their application for such an order (in addition to the matters. However, those circumstances (and particularly the family context of the disputes and the ramification of such a costs order, as to which I say more below) lead me to the conclusion that such an order is not appropriate.
4. True it is that Wendy and John are the parents of David and Karl; and that findings to the effect referred to by the Nick interests were made. However, what was apparent during the course of the hearing was that the thrust of the underlying dispute was one that was between Wendy and Nick (there having been a history of animosity between the two). In broad terms (and this is set out in more detail in my principal reasons), Wendy wished to preclude interference by Nick in the Trundle Properties and with John's testamentary intentions. On the other hand, Nick (as evident from his conduct at the time of the transactions in 2010 and 2015) wished to prevent Wendy from obtaining an interest in the Trundle Properties (at least, if the relationship between Wendy and John did not endure) and wished to secure the ownership of the Trundle Properties (or most of them) for himself and his sister, Sara (to ensure the ongoing Turner family ownership of the land, albeit on a basis which largely excluded John's later sons - David and Karl). Both Wendy and Nick took steps contrary to the interests of the other in order to try to secure their respective positions. However, what was also apparent was that David and Karl (though acting in accordance with their mother's directions) were not the driving force behind what happened (and I accepted that they acted in circumstances where they understood that their mother had obtained or had the benefit of legal advice as to the transactions in question). To a large extent, they may be seen as having been pawns in the strategy put in place by Wendy (albeit that they recognised they were obtaining the benefit of John's Trundle Properties for no consideration). By the same token, however, they willingly have undertaken responsibility for their father's ongoing care and, as I understand it, have continued to do so notwithstanding the constraints placed on their ability to obtain income from the farms by reference to the injunctive regime presently in place.
5. A Sanderson Order would indirectly visit upon David and Karl the costs of the Nick interests' unsuccessful prosecution of the 2017 Proceeding against them, by further depleting Wendy's estate over and above the costs to be borne as a result of Wendy's unsuccessful defence of the proceeding. In these circumstances, the exercise of the discretion requires careful attention to the application of general costs principles (in particular, that costs usually follow the event). I consider that the responsibility for David and Karl's costs of the proceeding should be borne by Nick (in whose indirect interest the proceeding was clearly brought) as John's tutor. To order otherwise would also be likely to have the effect of further diminishing the ability of David and Karl to care for John's ongoing care needs (responsibility for any part of which it appears that Nick was not prepared to assume at least at the time of the 12 July 2018 offer).
6. I accept that Allawah played little separate role in the 2017 Proceeding and hence would limit the costs order to an order against Nick, as tutor for John, other than in relation to Allawah's abandoned s 37A Conveyancing Act claim.
7. As for the 2017 cross-claim that was filed by Wendy, I accept that Wendy instituted that claim without leave and that in so doing nominated herself as John's tutor; and that the defence to that cross-claim made clear the issues raised as to her need for leave to be appointed as John's tutor. (It appears that when Nick commenced the 2017 Proceeding naming himself as John's tutor he also did so before any formal appointment as tutor was made; albeit that his summons and then statement of claim made clear that declaratory relief was sought as to John's capacity and orders were sought as to the appointment of the New South Wales Trustee and Guardian for the care and management of John's estate; a process that was unable to be carried into effect given the lack of assets in John's estate at that time.)
8. The complications introduced by Wendy's cross-claim (not least from a procedural perspective but also raising what were described by the Nick interests as novel issues as to the administration of John's estate) were what led to the 2019 Turner Decision. I reserved the costs on that occasion.
9. My view is that those reserved costs should be treated, in effect, as costs in the cause and that, given that the 2019 Proceeding was ultimately successful, the costs of the 2017 cross-claim should be treated as part of the costs of the 2017 Proceeding for which the Nick interests should be liable vis a vis David and Karl but that, as between Wendy and the Nick interests, each should bear her, his or its own costs of that cross-claim. I say that because the claims made in the 2019 Proceeding mirrored those in the 2017 cross-claim (so it is difficult to see how any prejudice would have been suffered by dealing with them in the 2019 Proceeding after they had first been raised in the 2017 cross-claim) but I accept that there were costs thrown away by the agitation of the issue as to how and in which proceeding such claims would appropriately be brought.

Costs - 2019 Proceeding

1. Finally, as to the costs of the 2019 Proceeding, I consider that they should follow the event and that the Nick interests should be ordered to pay the costs of the plaintiff (Angelena), as tutor for John, on the ordinary basis.
2. I note that the Nick interests have submitted, in effect, that the 2019 Proceeding might have been deferred (and ultimately may not have been necessary) pending the determination of the 2017 Proceeding. However, that was an issue dealt with in the 2019 Turner decision as part of the case management of the respective proceedings. For the reasons there set out, I considered that the just, quick and cheap resolution of the real issues in dispute would best be achieved by the parallel preparation and consecutive hearing of both sets of proceedings rather than deferring one to some later time (in circumstances where, had that later hearing proved to be necessary, then there would inevitably have been further costs and delay occasioned by a second hearing). The ultimate outcome of the 2017 Proceeding does not change the fact that, at the time (and without the benefit of hindsight) that was my view as to the appropriate case management of what by then had been protracted proceedings bedevilled by interlocutory applications.
3. As to the application now made (albeit that a similar application was foreshadowed at earlier times in the course of the proceedings) for discharge or variation of the interlocutory regime put in place by Sackar J, I would have thought that there was some force to the proposition that there be a relaxation of the regime insofar as it extends to properties over which no charge is to be imposed (particularly if this is likely to assist in the making of final orders in relation to the charge to be imposed over the remaining properties). However, in circumstances where the Nick interests resist this and wish to make further submissions, when I publish these reasons I will make directions to enable this issue speedily to be determined (that being necessary given that it may impact on the position of David and Karl vis a vis the Farm Debt mediation).
4. As to the requested extension of time for submissions in relation to the terms of the charge, which was not opposed by the Nick interests, my associate has already advised the parties that this will be extended until after the Farm Debt mediation but with liberty to apply if it is necessary or desirable to deal with that matter at an earlier time.

Disclosure of Opteon Valuation Report

1. Finally, as to the request for leave to disclose the Opteon Valuation Report to NAB, which also was not opposed by the Nick interests, it was not immediately apparent to me that such leave was necessary but to the extent that the implied Harman undertaking does apply then I was satisfied that such leave should be given.
2. The so-called implied Harman undertaking (see Harman v Secretary of State for the Home Department [1983] 1 AC 280 (Harman)) has been characterised variously as an obligation; a duty; a formula; a rule; or a principle (see, for example, Alterskye v Scott [1948] 1 All ER 469 at 470-471 per Jenkins J; Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764; [1991] 3 All ER 878 at 885; and Harman at 308). It applies, as noted in Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 (Hearne v Street), per Hayne, Heydon and Crennan JJ at [96], where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information. In those circumstances: … the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits … [footnotes omitted] [my emphasis]
3. In Harman, Lord Keith described the implied undertaking (at 308) as being: … independent of any obligation existing under the general law relating to confidentiality. It affords a particular protection accorded in the interests of the proper administration of justice. It is owed not to the owner of the documents but to the court, and the function of the court in seeing that the obligation is observed is directed to the maintenance of those interests, and not to the enforcement of the law relating to confidentiality.
4. As I have noted elsewhere, the purpose of the undertaking is to protect the privacy of the person disclosing (under compulsion) the relevant document(s) and thereby to encourage full and frank disclosure during litigation (see British American Tobacco Australia Services Ltd v Cowell (No 2) (2003) 8 VR 571; [2003] VSCA 43 at [20]; Riddick v Thames Board Mills Ltd [1977] QB 881). The implied undertaking applies not only to the documents as utilised in legal proceedings, but also to the information contained in or derived from those documents "whether it be embodied in a copy or stored in the mind" (Crest Homes Plc v Marks [1987] AC 829 at 854).
5. Relevantly, for present purposes, it no longer applies once the document(s) in question is (or are) in the public domain (such as, for example, when a document is read in open court in the course of proceedings). I note that, although the Opteon Valuation Report was only provisionally admitted at the time, in my final reasons I expressly removed the provisional qualification for the reasons there set out (see at [202]). Therefore, this is a document that is in evidence without any provisional qualification (and hence the case is not on all fours with the observations in Hammond to which the David/Karl interests have referred and the document is one to which an implied Harman undertaking would no longer attach). I note that such a document is one to which access would normally be granted to non-parties (see Practice Note SC Gen 2 at [7]).
6. For completeness, I note that the factors to be taken into account where the Harman undertaking applies and leave is sought to permit use of the relevant document(s) obtained in proceedings for another purpose were considered in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 (Springfield Nominees) by Wilcox J at 225: For "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court's discretion, many factors being relevant.... But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.
7. In Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283; [2005] FCAFC 3 (Liberty Funding), the Full Court of the Federal Court (Branson, Sundberg and Allsop JJ, as his Honour then was) made reference, with approval, to the above passage at [31], endorsing both the factors identified as relevant to the exercise of the Court's discretion and that the notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised.
8. In the present case, if the Harman undertaking were to have applied, I would have considered that there were good reasons for the David/Karl interests to be released from the implied Harman undertaking - the document was one that came into existence for the purposes of an appraisal of the relevant properties and it must have been expected that it might enter the public domain; and there does not seem to have been any personal data or commercially sensitive information in it. I consider that it would be in the interests of justice, and the just, quick and cheap resolution of all outstanding issues between the parties, that such a release be granted, were it to have been necessary.

Orders

1. While there may be scope for the costs orders to be in effect amalgamated into one (so as to minimise unnecessary costs), I consider that the parties will have a better understanding of the arithmetical working out of the orders that I have indicated should be made and I leave that to them to consider (with liberty to apply if a variation of the costs orders to encompass this can be agreed). The orders that I now make, for the above reasons, are as follows. 1. As to the costs of the 2017 Proceeding: 1. save as to the costs of the cross-claim filed 31 May 2017 by Wendy purportedly as tutor for John, which are the subject of (iii) below, order that Wendy's estate pay 20% of the Nick interests' costs of the 2017 Proceeding so far as those costs were identifiably referable to the claims brought against Wendy; 2. again, save as to the costs of the cross-claim filed 31 May 2017 by Wendy purportedly as tutor for John, which are the subject of (iii) below, order that Nick, as tutor for John, pay David and Karl's costs of the 2017 Proceeding and that Allawah pay the costs of the abandoned s 37A Conveyancing Act claim brought by it; 3. order that the costs of the cross-claim filed on 31 May 2017 by Wendy in the 2017 Proceeding be costs for which the Nick interests should be liable vis a vis David and Karl but that, as between Wendy and the Nick interests, each should bear her, his or its own costs of that cross-claim. 1. As to the costs of the 2019 Proceeding, order that the Nick interests pay the plaintiff (Angelena)'s costs, as tutor for John, on the ordinary basis. 2. List the matter for directions at 8.30am on 3 March 2021 as to the application by the David/Karl interests for discharge or variation of the interlocutory regime put in place by Sackar J in these proceedings and direct the Nick interests to file any brief written submissions on that issue by 4pm on 24 February 2021. 3. Confirm that the time for written submissions in relation to the terms of the charge to be imposed in accordance with my principal reasons was extended to 30 April 2021, with liberty to apply to restore the matter for directions at an earlier time on 48 hours' notice. 4. Note that leave was given, to the extent that such leave be necessary, for the David/Karl interests to disclose to NAB for the purposes of the forthcoming Farm Debt mediation the Opteon Valuation Report that was tendered in evidence in these proceedings. 5. Otherwise, stand the matter over for final directions on 4 May 2021.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 February 2021