FEDERAL COURT OF AUSTRALIA

Eggerth v EPI International Pty Ltd [2017] FCA 1547

ORDERS

THE COURT ORDERS THAT:

1.    The application filed 17 December 2017 is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

1    The application before the Court seeks relief in two main respects. First, that certain identified paragraphs of the Further Amended Statement of Claim (FASC) be struck out. Second, that pursuant to r 40.12 and r 40.13 of the Federal Court Rules 2011 (Cth) the order for costs made on 1 June 2018 and on 18 August 2017 (although the order on the Court file is dated 10 August 2017) be taxed immediately.

The application to strike out

2    The application to strike out various paragraphs of the FASC falls into five separate topics (incorporating a paragraph or paragraphs of the pleading) each of which will be dealt with separately. Before doing so, however, it is appropriate to note that the application is made pursuant to rr 16.21(1)(c), (d) and (e) of the Federal Court Rules and the topics raised by the respondents generally rely on one or more of those sub-paragraphs.

3    It is well established that the power in r 16.21 to strike out a pleading or portions of a pleading is discretionary and that is a power which ought to be used sparingly and only in a clear case (see Australian Competition and Consumer Commission v Pauls Ltd (2000) ATPR 41-747 at [10] cited in Radisch v McDonald (2010) 198 IR 244 at [20]). Ultimately, the question will turn on whether it is necessary to strike out a pleading in the interests of justice (see John Holland Pty Ltd v Maritime Union [2009] FCA 437 at [60]) and it is generally accepted that the power will only be used in a plain and obvious case (see Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325 at 337). All of the authorities which have been referenced above reflect the observations of Barwick CJ in General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 at 129 where the Chief Justice identified the various formulations of the test for striking out as being “so obviously untenable that it cannot possibly succeed”, “manifestly groundless”, “so manifestly faulty that it does not admit of argument”, “discloses a case which the court satisfied cannot succeed” and other like iterations of the same principle. There is little doubt that the moving party carries a not insignificant onus of establishing that the impugned pleading suffers from deficiencies that warrant it being struck out either in whole or in part.

4    A correlative of the above is that, so long as a pleading adequately informs the opposing party of the case which they have to meet, the court should allow the claim to proceed to trial. Whilst some of the rules of pleading contained in r 16.02 exist to provide clarity, strict adherence to all of them is not always required. Recently, in Rana v Google Inc (No 2) (2017) 347 ALR 663, Charlesworth J identified the essential requirement of a pleading as identifying the case which the other party has to meet. Her Honour said at 668-669:

THE SUFFICIENCY OF THE PLEADING

Principles

[27] The purpose of a statement of claim is to enable the respondent to know, with sufficient clarity, the case which it is required to meet: Dare v Pulham (1982) 148 CLR 658 at 664. That purpose accords with ordinary principles of procedural fairness: Banque Commerciale SA, En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286.

[28] The requirements for a pleading are prescribed in r 16.02 of the Rules. A pleading must (among other requirements) be as brief as the nature of the case permits and must not be likely to cause prejudice, embarrassment or delay in the proceeding: subr 16.02(1)(b) and (d) respectively. The Court may strike out a statement of claim that does not meet those requirements: r 16.21(1) (formerly O 11 r 16).

[29] In Australian Securities and Investments Commission v Cassimatis (No 2) [2013] FCA 1008 ; (2013) 96 ACSR 272 at [97]–[99], Reeves J approved of the following robust approach to the resolution of pleading disputes applied by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 ; (2006) 33 WAR 82 (Barclay) at [7]–[8]:

In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.

Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.

[30] Martin CJ went on to criticise the “pedantic and pettifogging” complaints that had been made about the adequacy of the pleading before him. His Honour concluded that any lawyer looking at the impugned pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, would have no difficulty in ascertaining those matters (at [10]).

[31] It is appropriate that the Court adopt the same robust approach adopted in Barclay when considering whether Mr Rana’s case has been pleaded with sufficient precision and clarity so as to fairly require Google to respond to it.

5    In cases of the type under consideration where the respondents have possession of the critical information and where the parties engaged in the disputed transactions to the exclusion of the applicant, it is not inappropriate to adopt a similar approach. Where the court can be satisfied that, in the circumstances, an opposing party has been adequately informed of the case which they have to meet, mere infelicitousness of expression does not warrant striking out the pleading or part of it. The rules relating to pleadings ought to be used to facilitate the hearing of a matter on its merits. In the light of ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth), they are not to be used in any pedantic or humbugging fashion by which the progress of an action is rendered more costly and less efficient. Given the extensive case management requirements now imposed upon parties (such as the provision of statements of evidence, statement of agreed facts and outlines prior to trial) ambiguity of expression in pleadings is now somewhat less important than it previously was (see Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], [15]; Barclay Mowlem Construction Limited v Dampier Port Authority [2006] 33 WAR 82; Bright v Femcare (2000) 175 ALR 50).

The Trade Practices Act claim

6    The misleading or deceptive conduct claim under the Trade Practices Act is alleged in paragraph 45 of the pleading. Its essence is that a corporate trustee of a trust of which Mr Eggerth was a beneficiary made entries in its financial statements over a number of years which purported to record the reduction in the amount of a loan of $356,000 which was apparently owed to Mr Eggerth. The entries gave the appearance that the loan to Mr Eggerth was completely repaid over time. The particulars provided refer to the earlier paragraph 18(a) in which the applicant asserts that the identified loan reduction payments are those set out in EPI’s financial statements. It is alleged that none of the alleged loan repayments were in fact made to Mr Eggerth. Consequently, it is alleged that the purported loan reduction payment entries in the trustee’s books and accounts were misleading or deceptive. It is further alleged that those entries were made “in trade or commerce” within the meaning of s 52 of the Trade Practices Act 1974 (Cth). The allegation as to causation is that by reason of the making of the entries, Mr Eggerth has suffered, or is likely to suffer, loss and damage because the corporate trustee no longer recognises the debt of $356,000 which is owed by it to Mr Eggerth.

7    In the defence the respondents plead that the applicant’s factual substratum of the misleading or deceptive conduct claim is erroneous. They assert (in response to paragraph 18) that the entries pleaded were “purportedly, but incorrectly, made in the income tax returns of the first respondent”. It is then said that entries purporting to show that the amounts were, in fact, paid to the Piccardi family were also false and that they were made by the trust accountant “for taxation purposes”. It is also said that the relevant entries in the accounts were inconsistent with other entries in the taxation returns of the trust. Despite that, however, the first respondent trustee seems to refuse to acknowledge the debt owed to Mr Eggerth. It opposes any order for relief as sought by the applicant which includes an order for the payment of $356,000.

8    The substance of the respondents’ attack on paragraph 45 has changed over the course of the hearing. Initially in the written submissions it was alleged that the allegations were deficient because they did not allege that Mr Eggerth, the applicant, was aware of the misleading conduct, or that he relied upon that conduct and was led into error, or that he suffered loss by reason of his reliance on it, or that he is likely to suffer loss by reason of that reliance. In this respect the respondents identified that in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, at [37] the High Court held that the plaintiff (in an action under s 52 of the Trade Practices Act) must establish a causal link between the impugned conduct and the loss that is claimed and that depends on analysing the conduct of the defendant in relation to that plaintiff alone. That being so, the respondents assert that the absence of a pleading of a causal connection between the alleged misleading conduct, or any error on the part of the applicant caused by his reliance on that conduct and damage being suffered by him due to that reliance, has the consequence that the pleading is defective.

9    This submission by the respondents is misconceived as is the reliance on Butcher v Lachlan Elder Realty Pty Ltd. There is no requirement for a cause of action under s 52 of the Trade Practices Act (or its subsequent iteration being s 18 of sch 2 of the Australian Consumer Law) that the applicant relied upon the respondents’ misleading or deceptive conduct. Whilst that might be a common and, indeed, a frequent way in which a cause of action will arise, it is not the only way. This was made clear by Lockhart J in Janssen-Cilag Pty Ltd v Pfitzer Pty Ltd (1992) 37 FCR 526, 529-30. There his Honour identified that whilst the applicant’s loss and damage must be caused by the respondent’s misleading or deceptive conduct, there was no warrant for the suggestion that the applicant’s right to damages is confined to cases where he, himself, has been personally influenced by the conduct (see also Hampic Pty Ltd v Adams (1999) ASAL 55-035 at [35]). The accuracy of the observations of Lockhart J cannot be doubted. There have been many cases where s 52 actions have been successfully prosecuted by market competitors where the respondent has sought to mislead the public or the applicant’s customers thereby causing the applicant damage (see the decision in Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45, it is well recognised that such cases are within the scope of a s 52 cause of action).

10    In written submissions handed to the Court at the hearing the respondents mounted a second argument to the effect that the pleading does not identify how any person was led into error by the making of the alleged representation and it is bad for that reason. Mr Stumer for the applicant submitted that the causal link between the alleged representation and loss was adequately pleaded. He relied upon paragraph 45(e) of the FASC which reads:

(e)    by reason of the entry of the Purported Loan Reduction Payments into the books of accounts of EPI Investment Trust, Mr Eggerth has suffered or is likely to suffer loss and damage because EPI no longer recognises the debt of $356,000 owed by it to Mr Eggerth and has not repaid that debt despite demand made in the letter of 27 June 2017.

11    He submitted that if the applicant establishes that the false entries in EPI’s accounts have, in fact, had the consequence that a legitimate debt owing to him is no longer recognised and will not be paid to him by EPI, he will have established that he has suffered loss as a result of the misleading or deceptive accounts. There may be some force in that submission. On one view, however, it might be said that for that allegation to be made good, it must be because of the implicit premise that the entry of the Purported Loan Reduction Payments into the books of accounts of EPI Investment Trust has had the consequence that EPI no longer recognised the debt owing to the applicant. Importantly, there is no specific allegation that EPI “relied” upon its own accounts in refusing to recognise Mr Eggerth’s debt. In that respect, Mr Stumer submitted that reliance is not the only method by which causation can be established under the TPA / ACL (see Justice R S French, ‘The Action for Misleading and Deceptive Conduct: Future Directions’ in C Lockhart (ed), Misleading or Deceptive Conduct: Issues and Trends, Federation Press, Sydney, 1996, p 302. See also Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 2) (1989) 40 FCR 76). He relied specifically upon C. Lockhart, The Law of Misleading or Deceptive Conduct. In that work the learned author said (4th ed, online service [10:08])

Clearly, then, establishing reliance is a means of proof of causation in TPA or ACL claims, although some doubt remains as to whether reliance must be proved to establish causation in that setting. There seems to be no objection in principle to the proposition that reliance, although ‘plainly sufficient to support the necessary causal connexion between conduct and loss … is not … a necessary element’ of causation under the TPA or ACL. Nor is reliance a ‘substitute … for the essential question of causation’ in the statutory context. The circumstances in which a loss might, for TPA or ACL purposes, be caused by a breach in the absence of reliance remain uncertain, although it has been noted that ‘the notion of “reliance” is less useful’ for determining causation in misleading conduct claims ‘when the [breach] is constituted by a failure to speak or advise’. (Footnotes omitted).

12    Mr Stumer further submitted that, given the high hurdle which an applicant needs to overcome on a strike out application and given the continuing uncertainty surrounding questions of causation, it is inappropriate to strike out the cause of action at this stage. He further submitted that the damage which has been sustained arises from the fact that EPI has recorded the payment of the debt in its financial accounts and now refuses to repay his debt and that establishes the necessary connection which, if proven, will satisfy s 82 of the TPA (or s 236 of the ACL). Again, there is much substance in that submission.

13    Although not raised by the respondents, it is relevant that in Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222 French J held that “facts and circumstances should be set out leading to a reasonable inference that the conduct and the damage stood to each other in the relation of cause and effect.” Subsequently in Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2004] QSC 457, Chesterman J said at [15]:

In any cause of action in respect of which causation is an essential element it is necessary to plead the material facts which are said to give rise to the causal connection. In particular it is necessary to plead the facts which lead to a reasonable inference that the acts complained of (here the relevant non-disclosure) and the alleged later event (here the making of the dragline agreement) stand to each other in the relation of cause and effect. Douglas J put it this way in LBS Holdings Pty Ltd v The Body Corporate for Condor Community Title Scheme 13200 & Ors [2004] QSC 229 (at para [3]):

… The principle relied on is that facts must be set out which lead to a reasonable inference that the acts complained of and the loss claimed stand to each other in the relation of cause and effect and that the plaintiff must plead the necessary facts showing that causal link …

His Honour referred to Dow Hager Lawrance v Lord Norreys & Ors (1890) 15 App Cas 210at 221 and Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 221–222. In the first of those cases Lord Watson had said:

There must be a probable, if not necessary, connection between the fraud averred and the injurious consequences which the plaintiff attributes to it; and if that connection is not sufficiently apparent from the particulars stated, it cannot be supplied by general averments. Facts and circumstances must in that case be set forth, and in every genuine claim are capable of being stated, leading to a reasonable inference that the fraud and injuries complained of stood to each other in the relation of cause and effect.

14    In the present matter, in paragraph 45(e) of the pleading, the applicant alleges the connection between the trustee producing false accounts over many years and the subsequent sustaining of damage. Those false accounts record the gradual repayment of the loan to Mr Eggerth and, thereafter, the loan does not appear as a liability of the trustee. In these circumstances it may not be difficult for the applicant to establish that the production of the false accounts over time was, at least, “a cause” of EPI’s subsequent denial of liability to Mr Eggerth. The trustee’s creation of inaccurate statements of its financial affairs over many years might well be a cause of its subsequent refusal to repay a debt which it has wrongly recorded as having been discharged. On the other hand, a contrary argument might be mounted that the allegations in paragraph 45(e) are insufficient to establish a reasonable inference that the acts complained of and the alleged later event stand to each other in the relation of cause and effect because the precise manner in which EPI utilised its statement of accounts for the purposes of informing itself as to its extant liabilities is not specifically pleaded. In this respect it cannot be said that the arguments advanced on either side are clearly more convincing than those advanced on the other.

15    In the light of the uncertain boundaries of the concept of “causation” as used in s 82 (or s 236 of the ACL) and the high level of satisfaction required for the striking out of a pleading, it is inappropriate to strike out paragraph 45 in the present circumstances. It is arguable that sufficient facts are alleged to demonstrate that there exists the necessary connection between the cause (the making of the misleading entries) and the effect (EPI’s refusal to recognise the loan and repay it to the applicant). Despite what is now said in the defence, it would be surprising if EPI recorded the gradual repayment of a debt owed to Mr Eggerth over a period of 11 years (from 1997 to 2008) and thereafter recorded no liability to Mr Eggerth for a further number of years, but then did not subsequently act consistently with its own financial accounts as a basis for eschewing its liability to him. This is not necessarily a question of reliance which, as is said by C. Lockhart in the passage cited above, is not necessarily a useful analytical tool when considering all instances of causation. It follows that it cannot be said that the claim is, in this respect, “so obviously untenable that it cannot possibly succeed” or is “manifestly groundless” or is “so manifestly faulty that it does not admit of argument” or “discloses a case which the court is satisfied cannot succeed”.

16    Although there may be some doubt as to whether the claim under s 52 of the TPA will ultimately succeed at trial, it is not so obviously untenable that it ought to be struck out.

17    The applicants also submit that the Trade Practices Act claim contains no allegation of causation. At paragraph 9(c) of their written submissions, the respondents assert that the pleading is defective because there are no allegations that the applicant “suffered loss by reason of that reliance or that he is likely to suffer loss by reason of that reliance”. The reference to “reliance” is a reference to the alleged reliance of the applicant on the misleading conduct. This is reflective of the allegations made in paragraph 45(a) of the defence. As identified above, there is no requirement in s 52 or s 82 that damage occur by reason of the applicant’s reliance on the misleading or deceptive conduct. For that reason this submission must also fail.

18    In the written submissions in reply and in oral submissions, the respondents made a new argument to the effect that there was no allegation of any material facts sufficient to establish causation. Mr Cooper QC put the submission in the following terms during the course of addresses:

MR COOPER: There’s no evidence pleaded that that’s the case. It’s said there as a fact – sorry, as part of a rolled up fact, there is no allegation that the trustees have refused to pay this debt because they say it’s not due and owing. And there’s no evidence that they had been subject to a demand to repay it, because they haven’t been subject to a demand. The letter sought sale of the shopping centre, not the specific repayment of the debt. It wasn’t a demand.

HIS HONOUR: Well, putting aside the absence of a need to plead evidence, but the pleading is – the causal connection pleaded is EPI no longer recognises the debt. Well, I presume that means he says, “Well, my accounts are we don’t owe you anything, we did but we don’t and that’s it”.

MR COOPER: And that’s not pleaded.

…

MR COOPER: The allegation is this: Eggerth has suffered or is likely to suffer damage because EPI no longer acknowledges the debt owed to it by Eggerth. That’s why he will suffer damage. There is – that assumes as a fact that EPI has said it no longer recognises the debt. There is no pleading of that primary fact, as there is no pleading of the primary fact that EPI has not repaid that debt, despite demand. That’s simply an explanation of how he might suffer damage, but it doesn’t establish – but the primary facts for why he might suffer damage should be pleaded discretely, so they can be responded to.

19    Subsequently, the following exchange also took place:

MR COOPER: Could your Honour please direct me to where in the other paragraphs in this pleading there’s an allegation that EPI no longer recognises the debt of 356 being owed to it by Eggerth?

HIS HONOUR: I would have thought that the words “EPI no longer recognises [the debt] of $356,000” is an assertion – an allegation of that nature.

MR COOPER: We’ve already – no, that’s an explanation of why he is supposed to have suffered damage or will suffer damage. It’s not a pleading of a discrete fact that they don’t recognise the debt.

20    The difficulty with the respondents’ submissions in this respect is that by paragraph 45(e) of the FASC, which is set out above, the applicant specifically pleads that loss and damage will be suffered “because EPI no longer recognises the debt of $356,000”. It would appear that the argument which is advanced is that because EPI’s refusal is not stated as a separate fact but rather as part of a rolled up pleading it is not an allegation of a material fact. That submission cannot be accepted. Whilst it may be that the rules require that separate and distinct allegations should be stated in separate paragraphs or sub-paragraphs (r 16.02(1)(a)), the failure to do so does not mean that the allegations of fact are to be ignored. In paragraph 45(e) of the FASC the applicant has directly pleaded its causation case. There he pleads the following facts:

(a)    That he suffered loss and damage or is likely to suffer loss and damage by reason of the entry of the loan reduction payments in EPI’s books and accounts;

(b)    That the making of the entries caused the loss and damage “because” EPI no longer recognises the indebtedness to him and has not repaid the debt despite demand made in the letter of 27 June 2017.

21    These matters appear clearly from the words used in that paragraph. The fact that the allegation that EPI refused to recognise the debt is given as an explanation as to why the applicant has suffered damage and contained in a composite paragraph does not alter its status as a pleading of a material fact.

22    Mr Cooper QC also submitted that there is no pleading that any demand had been made for the repayment of the amount of the loan and that the demand had been refused. However, that too misunderstands the pleading. At paragraph 40 the applicant expressly pleads that by a letter of 27 June 2017, Mr Eggerth wrote to EPI seeking that EPI confirm that it will recover the amounts paid to the Piccardi beneficiaries and pay the amount of the loan repayments to Mr Eggerth. That letter is alleged to demand that the shopping centre be sold and that the sum of $356,000 be paid to Mr Eggerth representing the amount of the loan repayments. It would be an obtuse reading of the pleading not to construe that as a demand for the repayment of the loan. Mr Cooper QC submitted that the letter was not sufficient to constitute a demand for the payment of a debt. That too cannot be accepted. The letter, as pleaded, expressly requires that EPI pay to Mr Eggerth the sum of “$356,000 representing the purported Loan Reduction Payments”. Therefore, to the extent to which the applicant seeks repayment of a debt, the plea is adequately made.

23    It is next alleged that the allegation that the conduct of the respondents was in “trade or commerce” is inadequate. Whilst the allegation to that effect in paragraph 45 is a bald assertion, it is made in the context of the transactions which are pleaded. Those transactions relate to what is apparently a commercial trading trust in which the applicant, on the one hand, and the respondents, on the other, participated. It appears that object of the business arrangement was to acquire commercial property and exploit it for profit and it is pleaded that the trustee acquired a commercial shopping centre to advance that purpose. It is uncontroversial that the arrangements between the parties were of a commercial nature and the entries in the accounts of the trust appear to be recordings of the transactions in that commercial enterprise between those parties. Whilst it is undoubtedly true that not all activities which are undertaken in the course of business are “in trade or commerce” (see Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594) and it is true that matters internal to a trading entity may not be “in trade and commerce”, it is not possible to conclude that the applicant will be unable to establish at trial that the conduct impugned was “in trade or commerce”. That is, he may be able to establish that the conduct was in trade or commerce as between him on the one hand and the respondents, including EPI on the other. In this context it should be kept in mind that it is apparent that the boundaries of the concept of “in trade or commerce” are not yet well defined (see for instance the “competing” decisions in Yates v Whitlam (1999) 32 ACSR 595 and NRMA v Yates (2000) 18 ACLC 45 and the attempt by Austin J to rationalise them on this point in Cleary v Australian Cooperative Foods (No 2) (1999) 32 ACSR 701. See also the discussion of Kourakis CJ in Viscariello v Macks (2014) 103 ACSR 542 at [72] – [84].

24    Mr Cooper QC for the respondents submitted that the plea in paragraph 45 that the alleged misleading conduct was “in trade or commerce” is the mere pleading of a legal conclusion and that alone justifies the striking out of the paragraph. In this respect he relied upon the observations of Yates J in Toben v Jones (2012) 298 ALR 203 at [35], [37] – [41]. However, there, his Honour was addressing the situation where the pleading had not identified any facts from which it might be discerned that the conduct had arisen in trade or commerce. His Honour said:

[35] In the present case it is clear, as the respondent contends, that all the applicant has done in relation to his claim based on contravention of s 18 of the ACL is to plead a bald legal conclusion. For this reason alone, the pleading of the s 18 claim is wholly deficient and should be struck out. The deficiency is illustrated by the respondent’s second objection, specifically that it cannot be discerned from the face of the statement of claim that the conduct complained of was “in trade or commerce”.

[36] It may be that, in many cases, this particular question would not arise because allegations of fact will have been pleaded from which this element of s 18, or at least the applicant’s case in relation to it, with reference to the impugned conduct, is apparent. In the present case, however, the impugned conduct is simply identified as the publication on the internet of the impugned article. On what basis can it be said that this single act was “in trade or commerce” beyond the applicant’s mere formulaic assertion of that fact?

…

[41] It is not sufficient for the applicant merely to plead that the impugned conduct was “in trade or commerce”. He must, by his pleading, identify the material facts that identify the trade or commerce in question and the connection between that trade or commerce and the publication of the impugned article so as to lay the foundation to allege that the impugned conduct was “in” trade or commerce.

25    In the matter before Yates J there was nothing else in the pleading which indicated that the activities in question were engaged in trade or commerce. As indicated above, the pleading in the present case raises allegations about the commercial activity between the applicant and the respondents such that the essential commercial nature of the impugned conduct is apparent. I do not doubt that the pleading might have been more felicitously expressed and although reasonable minds might differ on this issue, there appear to be sufficient facts pleaded from which it is arguable that the conduct in question was “in trade or commerce”. For that reason, and given the high degree of satisfaction which a court must reach in order to strike out a cause of action, it is not appropriate to strike out paragraph 45 on this basis.

26    It is not irrelevant to note that the respondents’ complaint in relation to this point loses some of its force when it is observed that their defence asserts that the arrangement between the applicant and the second respondent was a business arrangement in which those two would engage in the business activity of investing in commercial property in Australia. Details of the business agreement between Mr Eggerth and Mr Piccardi are set out at length in the defence and include the allegations that EPI was incorporated to be the trustee of the trading trust to pursue that business, that the shopping centre would be acquired and that funds would be disbursed from the trust on certain terms. In the light of this it is difficult to understand how the respondents might not understand the case which is alleged against them as to the manner in which the misrepresentation of the statement of accounts between the two commercial parties in relation to their commercial activities inter se was “in trade or commerce”.

27    The respondents assert that because the pleaded case against the corporate trustee (EPI) must be struck out, no accessorial liability will exist against the second and third respondents who are individuals. However, the basis for this submission has failed such that there is no legitimate ground advanced for striking out paragraph 46.

Loan repayments

28    In paragraph 18 of the Statement of Claim the applicant pleads that between 1997 and 2008 the loan account balance of the applicant was reduced by the recording of payments allegedly made by the trustee to the applicant. It is asserted that such payments were not made to the applicant but payments in equal amounts were made to the Piccardi beneficiaries. It is also alleged that the payments were made in breach of trust because they were contrary to the terms of cl 5(2)(a) of the trust deed. That clause is pleaded and set out in full in paragraph 11(e) of the Statement of Claim.

29    The respondents’ complaint in relation to this appears to be that there is no explanation as to why the payments made in the 11 year period were contrary to the terms of cl 5(2)(a). However, when cl 5(2)(a) is considered ,it is immediately apparent that the breach alleged is that the clause requires the capital of the trust be held equally between the Eggerth beneficiaries and the Piccardi beneficiaries and that it follows, if part of the capital is paid out to the Piccardi beneficiaries, the trustee has put itself in a position whereby it has not and cannot comply with the terms of the trust. That appears to be axiomatic and seems to be founded upon a natural reading of the pleading. That is how the applicant puts the position in his written submissions. There is no substance in the respondents’ submission in this regard.

30    The respondents also complain that the pleading does not expressly state that the payments made were capital distributions. In this respect the pleading might have been more felicitously expressed, however, given that cl 5(2)(a) deals only with the distribution of capital it must be necessarily implicit in the allegation that the trustee was engaged in a distribution of capital amounts rather than income. The pleading is adequately expressed to enable the respondents to know the case which they have to meet. The complaint in this regard is an exercise in pedantry. There is no basis for striking out this paragraph.

31    The respondents further complain about the allegation of law that the trust deed provided no authority for the making of the payments to the Piccardi beneficiaries. That is contained in paragraph 18(d) which reads:

the payments by EPI pleaded in sub-paragraph (c) were in breach of trust because they were contrary to the terms of clause 5(2)(a) of the Deed of Trust and the Deed of Trust provided no authority for the making of those payments to the Piccardi Beneficiaries;

32    It is apparent that what is being alleged is that by the making of the payments EPI engaged in a breach of trust. That breach is alleged to arise for two reasons. First, the payments were contrary to the requirement of equality in cl 5(2)(a) of the Trust Deed. Second, the Trust Deed provided no authority for the making of the payment. This second ground is an independent and cumulative ground to the breach of cl 5(2)(a) in that it is a breach of trust for a trustee to make distributions without authority. It is difficult to comprehend how an allegation of breach of trust arising from the misappropriation of trust money might be validly made without alleging an absence of authority to make the payment. In this respect there is no defect in the pleading.

33    The respondents further complain that the nature of the distribution of the payments to the Piccardi beneficiaries has not been particularised. To some extent this matter has been dealt with by the earlier judgment in this matter in relation to the particularisation of the claim (see Eggerth v Piccardi [2017] FCA 939). Here the applicant is a beneficiary of a trust which he alleges has been mismanaged. The management of the trust is peculiarly in the knowledge of the respondents or some of them who had control of it. The applicant has alleged his case from documents which have been provided on discovery although, it is apparent, that they are not of a sufficiently high standard to allow the applicant to plead with any greater particularity. The admission by the respondents that those documents include financial statements and tax returns of the trust which are false in material respects demonstrate that the respondents have limited the ability of the applicant to plead too particularly in some respects.

34    It is also a matter that weighs heavily in the exercise of the discretion that by a letter dated 28 September 2017 the applicant, by his solicitors, sought an explanation from EPI, of the transactions which are the subject of this action. In particular, the requests were directed to the manner in which payments were made to the other beneficiaries of the trust and details of these payments. There has been no response to that letter and no explanation as to why the trustee has failed to respond. The information sought has not been provided and no reason has been given to the applicant as to why that is so.

35    It is well established that a trustee has a “core” duty to render accounts when demanded. That obligation means that a trustee is obliged to maintain the trust accounts up to date and have them ready for inspection (Ford & Lee, The Law of Trusts, online version, [9:4410]). A trustee is obliged to allow a beneficiary or their solicitor to inspect the accounts, vouchers, receipts and other such documents as are reasonable to allow the beneficiary to protect their interests. These duties of the trustee are not discretionary. They are obligatory and must be performed when required. The obligation of the trustee is to faithfully discharge their obligations to the beneficiaries is not suspended when they are engaged in hostile litigation with them. If a trustee finds that they cannot carry out their trust duties, then they have no choice but to resign.

36    On the material before the Court the first respondent, EPI (which is controlled by the other respondents), appears to have breached its obligation to render accounts to Mr Eggerth who is undoubtedly a beneficiary. If one assumes that the trustee is not deliberately withholding information, it can be inferred that the trustee is unable to provide the information because it has failed to keep proper accounts. That being so, the respondents, who are jointly represented, have very little to complain about if the applicant cannot more fully particularise the alleged inappropriate transaction. The applicant has pleaded as best he can in the circumstances and the respondents clearly know the case that they have to meet. This complaint in relation to the loan repayments also fails.

Capital distributions

37    In paragraphs 21 to 24 of the FASC the respondents complain that there have been capital distributions made by EPI to the Piccardi beneficiaries in excess of the amount required to repay loans from them. It is alleged that no equal distributions were made from the capital to Mr Eggerth and, that being so, this is also identified as a breach of cl 5(2)(a) of the trust deed. It is alleged that as a result, the trustee is obliged to recover half of the capital distributions and restore them to the trust with interest for the benefit of Mr Eggerth. Alternatively, it is alleged Mr Kurt Piccardi and Ms Gerlinde Piccardi are obliged to repay those amounts to the trust.

38    The respondents’ complaints in relation to this issue appear to be minor. The respondents say that although the amount of excess payments is identified in the particulars, the claim against Mr and Mrs Piccardi for return of the amount does not have a foundation in an allegation of a material fact. There appears to be little substance in that submission. The nature of the claim for the return of funds is pellucidly clear from the allegations made in paragraph 21. It is identified that amounts were paid in excess of any amount to which Mr and Mrs Piccardi were entitled. The amount of that excess is identified in the particulars as being the “Capital Distributions”. The fact that in a subsequent paragraph it is alleged that the excess should be repaid and identified in that sum is neither ambiguous nor unclear.

39    A complaint was made that the expression “Capital Distributions” is used in the pleading and it is a term of art under the trust deed. It is then complained that no material facts are pleaded which establish why the alleged payments were capital distributions. However, it is not apparent that the expression used in the pleading is used in the same sense as it is used in the trust deed. Indeed, the contrary is true. Again, the nature of the case which the Piccardi’s have to meet in this respect is clear. The compliant in this respect has all the appearance of one founded upon a deliberate misreading of the pleading. Even if there was any ambiguity in the pleading, it would be well within the ability of the respondents to work out what is being alleged given that they possess the knowledge of how the trust was operated and EPI has refused to provide an account. Any further explanation of the matter would be tantamount to giving evidence of the matters alleged.

40    It is further complained that the allegations are ambiguous or embarrassing because the primary allegation in paragraph 21 is that the trust made payments “in excess of the amount required to repay” the loan. That being so, it is said only that the excess is recoverable. It is alleged that the particulars claim the totality of the Capital Distributions. However, this allegation also appears to be misconceived because it is the amounts in excess of the amounts required to repay the loans which are identified as the “Capital Distributions”. It may be that the respondents are aware of the exact nature of the accounts, but that is irrelevant as the case alleged against them is clear.

41    There is nothing ambiguous about this pleading and, indeed, the case to be met is clear. The complaints in relation to paragraphs 21 to 24 of the FASC also fail.

Income payments

42    The next complaint concerns paragraphs 35 and 36 of the Statement of Claim. There it is alleged that EPI has paid income of the trust to or for the benefit of one or more of the Piccardi beneficiaries. Certain particulars are provided as to years and as to amounts. It is alleged that the funds were “paid” in the manner provided for in clause 4(4)(a) of the trust deed. The complaint is that it is not particularised as to whether the money was paid directly to the beneficiaries or credited to their loan account. Pursuant to cl 4(4)(a) sums might be paid either way. The alleged breach is that there was a contravention of cl 4(1) of the trust deed because of the failure to make equal payments to the Eggerth beneficiaries. Whether the various payments were made by paying funds to the respondents or by crediting the amounts to their loan accounts is irrelevant to the breach which is alleged.

43    The complaints of the respondents in this respect are trivial. They do not need to know the particulars sought for the purposes of preparing a defence. To say, as they do, that they need to know whether the income was paid to the beneficiaries directly or was credited to a loan account before they may plead is disingenuous. The complaint is that an equal amount was not paid to the applicant and that can be easily answered. Additionally, the respondents are more than likely to know themselves how those particular payments were made. Indeed, in relation to these allegations the respondents rely on the fact that the trust’s financial accounts and tax returns on which the applicant relied to make the allegations are false and untrue. Again the respondents blame the accountants for creating the false documents for “tax purposes”. If the respondents are correct in this assertion about the veracity of the financial accounts, it would seem to follow that they are aware of the true state of the accounts of the trust and how the trust assets were dealt with. It is also somewhat unusual that the respondents might complain about the applicant’s inability to provide proper particulars when they admit that the trust records and accounts (which appear to have been provided by them) are false. The complaints here made are not supported by the observations of French J in Charlie Carter Pty Ltd v SDAEA (WA) (1987) 13 FCR 413 which were relied upon by the respondents. The case as alleged by Mr Eggerth in this respect affords the respondents sufficient information to have the issues defined and inform them of the case which they have to meet so as to put them into a position to take steps to deal with it. The particulars which have been provided are more than sufficient to allege with particularity the case the respondents have to meet. That is apparent by the detailed defence which has been provided in answer to this allegation. This ground must also be dismissed.

Equitable compensation

44    Paragraph 48 of the FASC pleads that EPI is required to pay the applicant “equitable compensation for all losses suffered…in consequence of [the trustee’s] breaches of trust”. The complaint appears to be that equitable compensation is only available to restore persons who have suffered loss to the position which they would be if there had been no breach of obligation and no loss. It is submitted by the respondents that paragraphs 47 to 53 (which are under the heading Equitable Compensation) do not allege the suffering of any loss by Mr Eggerth. They submit that the applicant has not pleaded that the other forms of relief which it has sought (being the restoration of the trust by the Piccardi beneficiaries or by the trustee) will not occur.

45    The answer to this submission is that the claim for equitable compensation is a claim in the alternative to the claims for the restoration of the trust. Breaches of the trust have been alleged which rely upon the unauthorised disposition of trust property. That necessarily diminishes the corpus of the trust which is a loss to the trust and the beneficiaries. In particular, a loss has been caused to Mr Eggerth who is a beneficiary with a right to 50% of the corpus of the trust. The applicant seeks relief in the first instance by way of the restoration of the corpus of the trust either directly by those who have received property in breach of trust or by the trustee who caused that to happen. However, if that relief is not available the alternative claim is for equitable compensation. It is in the alternative because it assumes that the primary relief sought, being that of restoration, has not and will not occur. This is not a case where the respondents have admitted the overpayments and have agreed to repay them. It is also patently not a case where alleged breaches of trust are not redolent of loss being suffered by the trust by diminution of the corpus. Were there to be no loss by reason of the wrongful distribution of the trust property there would be no obligation on the trustees or the third parties who wrongly received it to restore the trust funds. Orders for the restoration of the trust fund or, in the alternative, the payment of equitable compensation are legitimate avenues of relief for the applicant. Again, the complaint in this respect appears to be attempting to read the pleading with an eye to ambiguity rather than reading the pleading as a whole.

46    The respondents also seem to rely upon the fact that the trustee’s failure to seek to recover unauthorised distributions from the trust cannot cause loss. That seems to misunderstand the duty of the trustee to recover trust property and to restore the trust.

47    This attack on the pleading must also fail.

Conclusion on application to strike out

48    In the result, none of the attacks on the pleading can be sustained and to the extent to which the application seeks to strike out paragraphs of the pleading, the application should be dismissed.

Taxation of costs forthwith

49    On 18 August 2017 the Court ordered that the applicant have leave to amend his Originating Application and Statement of Claim. Orders were made in relation to costs in the following form:

5.    The applicant pay the respondents’ costs thrown away by reason of the making of the amendments referred to in orders 1 and 2 hereof.

6.    The costs of the application to amend be each party’s costs in the proceedings.

50    The respondents sought an order that the costs ordered to be paid under orders 5 or 6 be immediately taxed. Presumably they wish those amounts to be paid upon the completion of the taxation.

51    The orders sought in relation to paragraph 6 appear to be misconceived. The respondents will only be entitled to recover those costs if they succeed in the action. There is simply no point in having those costs taxed now as they may never be payable by the applicant to the respondents. It seems that for this reason the respondents filed an amended interlocutory application at the hearing in which it amended the relief sought. The respondents now seek orders that they be entitled to tax immediately:

(a)    The order made on 1 June 2017 that the applicant pay their costs thrown away by the adjournment of the trial; and

(b)    The order made on 18 August 2017 that the applicant pay their costs thrown away by reason of the making of the amendments to the Claim and Statement of Claim.

52    At the time of making the order on 1 June 2017, Mr Cooper QC for the respondents, reserved his position as to whether additional orders would be sought in relation to costs. No such reservation was made in relation to the orders made on 18 August 2017, and Mr Stumer for the applicants submitted that the respondents should not be allowed to re-open issues about those costs orders. That submission should not be accepted. Whilst the cost order itself should not be altered, there seems to be no difficulty in a court making an order that a previous order for costs be taxed forthwith. That said, an application for an order that a costs order be taxed prior to the completion of the matter ought, usually, be made within a relatively short period of time after its making.

Scope of the costs

53    The application to amend the Claim and Statement of Claim occurred in the period leading up to the dates on which the trial of this action was originally set. The trial had to be adjourned as a result of the making of the amendments. The amendments made by the applicant are identified in the earlier judgment of the Court in relation to this matter. In brief, the applicant abandoned the claim based upon being misled into the trust arrangement which had stood between him and the Piccardi’s for some 20 plus years. He recalibrated his claim by seeking to enforce his entitlements under the trust as it was established. There is no doubt that some of the costs which were incurred in the conduct of a matter prior to the amendment will have been wasted. However, the true nature and extent of that wastage will not be apparent until, at the earliest, this matter is ready for trial. Indeed it will best be able to be ascertained after the hearing of the trial. This is perhaps emphasised by the applicant continuing to rely on the witness statements which were filed in relation to the action as formerly pleaded.

The general rule

54    Under the Federal Court Rules the general principle is identified in r 40.13 which provides:

If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceedings in which the order is made is finished.

55    Over time, decisions of this Court have identified a variety of reasons as to why interlocutory orders for costs should not be taxed until the proceeding concludes. Such reasons include the avoidance of multiple taxations, interlocutory applications being used as a means to exhaust the funds of an opposing party and the creation of unfairness in an inability to set off the amount of costs by a successful party.

56    However, it cannot be doubted that, pursuant to s 43(2) of the Federal Court of Australia Act 1976 (Cth), the court has a discretion in relation to orders for costs and they are not bound by the prescriptions in r 40.13. That said, there are many authorities which identify that r 40.13 should only be departed from where the interests of justice require it (see Kenny J in QS Holdings Sarl v Pauls Retail Pty Ltd (No 2) [2011] FCA 1038 at [37]-[38]; Higginbotham v Kerr [2017] FCA 686 at [14]). At that latter identified passage, Burley J identified that the categories of cases where an order will be made that costs be paid forthwith is open but the parties seeking the same must establish some good grounds for departing from the law (see Thunderdome Race Timing and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297, 312).

57    It should be observed that there is a danger that applications of this nature may become, themselves, expensive distractions unless the ground on which they might be made appears reasonably clearly. That is to say, applications of this nature should only be made in circumstances where the entitlement of the party to the order for the immediate payment of costs appears relatively easily. Such applications should not be a forum for a detailed analysis of the pleadings or a prolonged and detailed critique of each party’s role in the proceedings to date. Such processes would defeat the overriding objective to resolve the dispute as quickly and as efficiently as possible.

58    In support of their application in this respect the respondents first rely upon the fact that the claim previously advanced was self-contained and detached from the remaining claim in the Further Amended Statement of Claim. Whilst that is true to some extent, it is not wholly the case. The present case exists and is founded upon much of the background facts which were originally pleaded. It should be observed that the respondents made no attempt in their written or oral submissions to provide any comparison between the original Statement of Claim and the existing one, although the departure from the original is overly difficult to ascertain. In any event I do not regard this as a weighty factor in this matter where the dispute has always been as to the entitlement to the shopping centre purchased with the applicant’s money.

59    The respondents rely upon the proposition that the proceedings are not likely to be advanced or finalised for some time. That is not necessarily the case. Indeed, they are now likely to be finalised relatively quickly. The relevant issues have now crystallised and appear to be relatively confined. This tells against the making of the order sought by the respondent.

60    It is alleged that the costs thrown away by reason of the amendments are substantial and in the order of $160,000. There is no substantial evidence of that before the Court on this application. At the hearing of this matter the respondents filed an affidavit of Mr Robert Aitken deposing that a bill of costs in accordance with the order of 1 June 2017 and 18 August 2017 had been prepared in amount of $168,000. The bill itself was not attached to the affidavit. Although that affidavit was delivered late, it was allowed in as evidence only of the fact of the preparation of the bill of costs. Were the affidavit to be relied upon for any other purpose it would be difficult to give any real weight to the quantum given that the bill itself was not annexed. Any such bill would have to be carefully scrutinised in order for this submission to be fairly agitated. However, it is appropriate to take into account that a bill has been prepared for the purposes of a taxation although that is a relatively minor matter in the scheme of the considerations.

61    It might also be observed that the preparation of the matter prior to the amendment of the Claim and Statement of Claim was relatively minimal. Although witness statements were filed it is apparent that not a lot of time or money had been spent in preparing them. It is difficult to see how costs might have reached the amount suggested by the respondents. That, however, is a matter for another day.

62    One also might observe that whether the costs are substantial or not may require a detailed analysis of what money was expended and what work remains useful for the further conduct of the trial. As I mentioned earlier this is probably a matter best decided after the final hearing. In this respect it is worth observing that when it falls to a court to determine whether an order for costs might be taxed immediately, the nature of the order in question is important. When, for instance, the order relates to the costs of a discrete interlocutory application, the scope of the costs can be fairly well defined. Importantly, there is likely to be little dispute as to what costs fall within the bounds of the order. However, where the order in question relates to costs thrown away (by reason of an adjournment or of an amendment) the exact scope of the costs which are picked up by the order are far less clear. That is especially so in relation to an order for costs “thrown away” by reason of adjournment where there will be much room for debate as to whether particular items are rendered otiose. The resolution of those issues will be much easier to determine once the trial has occurred.

63    In the present case, the orders in respect of which taxations are sought are of a kind which is likely to render the taxation process somewhat more complicated than it will be at the end of the matter. This is a strong discretionary reason for refusing the order.

64    The respondents also assert that the expense of the litigation is oppressing them. However, they chose not to adduce any evidence of that on this application. There is no evidence of their financial capacities or what funds of their own they have actually spent. The applicant identifies that on 17 July 2017 the solicitors for the applicant wrote to the respondents concerning the extent to which trust assets were being used for the purposes of funding the defence in this action. The respondents have not replied to that letter. This is hostile litigation between the trustee and a beneficiary. There are clear rules which restrict a trustee, without the order of a court, from utilising trust funds in defence of such proceedings (see Miller v Cameron (1936) 54 CLR 572 at 578-579). If such an application had been made, the applicant would no doubt have been served and as it appears that has not occurred, it might be assumed that no such application has been made. In these circumstances, it cannot be known whether or not the trust funds are being used for the purposes of the litigation. That said, it can be inferred that the respondents’ failure to answer a legitimate request by the applicant’s solicitors means that the answer could not advance their case in relation to this issue.

65    Put simply, there is no evidence that the respondents are, in fact, being oppressed by the costs of this litigation. They have had plenty of time in which to put forward evidence of this and its absence is telling.

66    There is no doubt that the change in direction of this litigation brought about by the amendment of the Claim and Statement of Claim was significant. As I have indicated in my previous judgment that appeared to arise as a result of new counsel being briefed for the conduct of the trial and a view taken as to the difficulty which would be experienced in overturning a transaction which had stood for many years. Whilst this factor weighs in favour of the respondents there is no element of “unreasonableness” which might be attributed to the applicant.

67    The respondents assert that there is no risk of a series of taxations, as the costs thrown away relate to a discrete part of the proceedings. Whilst that may be so, some significant difficulty arises once a court starts making orders for the immediate taxation of costs as impetus is necessarily given in any subsequent interlocutory hearing for a similar order to be made. The concern about a series of taxations really relates to the propensity for that to occur. That is best avoided if possible.

68    The respondents also rely upon the delay in the pursuit of an ill-considered and perhaps unnecessary claim. I do not apprehend that the claim as originally formulated was necessarily ill-considered nor unnecessary. Given the circumstances of the matter and the apparently improvident agreement entered into by Mr Eggerth (on the assumption that the agreement was as that alleged by the respondents) the claim was not without its prospects. The real difficulty arose because of the fact that it had stood for so many years and had not been questioned by the applicant in that time. Whilst that might have been explained away, it was certainly not an easy case to run. That was particularly so as the applicant does not fluently speak English. It appears that the engagement of new counsels exposed the case to a fresh analysis with the conclusion being that the acceptance of the transaction as it has stood nevertheless generated causes of action against the respondents.

69    The applicant asserts additional reasons as to why it would be inappropriate to order the taxation of costs immediately.

70    First, he asserts that the respondents have left it too late to ask for the costs orders which were previously made to be altered. However, the respondents always sought to preserve their position in relation to the costs concerning the adjournment of the trial on this and that was accepted by the Court. Mr Stumer for the applicant submitted that the same reservation was not made in relation to the order for costs thrown away by reason of the amendment to the Statement of Claim. Whilst it is true that orders of the type now sought should be sought at or near the time of the making of the cost orders in question, the delay in this case is not a reason for refusing the order.

71    Secondly, Mr Stumer submits that, on the basis of the existing pleadings, he has substantial prospects of success. There is no need to go into that in any detail. However, the present apparent inability or refusal of the respondents to deal with some serious allegations made in the FASC does suggest that there may be no answer to some of them. That is particularly so in relation to the fact that Mr Eggerth had advanced the substantial part of the corpus of the trust. The accounts of the trust inaccurately identify that loan as being repaid over many years. That seems to be admitted. However at present no apparent substantive defence to the obligation to repay the loan is identified. A point such as this can, however, only carry limited weight. The merits of each side’s case can only be adequately considered in the fullness of time.

72    Mr Eggerth also points out that he is presently entitled to approximately $723,000 of the capital of the trust. There is some force in this and it does not seem to be presently disputed that he will succeed in the action, at least to the extent to which he seeks declarations as to his entitlement in the trust. The respondents’ position in relation to this is somewhat opaque. However, at best it appears that the respondents do not admit Mr Eggerth’s entitlements under the trust.

73    It is also relevant that to some extent EPI has security for its costs in the sense that, once the cost orders are enforceable, they may be set off by EPI against Mr Eggerth’s beneficial entitlement under the trust. That remains so whilst EPI remains the trustee of the EPI Trust. At this point in time no application has been made to the Court to remove EPI as trustee and to appoint an independent trustee.

74    As is apparent from what I have said, the weight of considerations favour the ordinary rule under r 40.13 of the Federal Court Rules applying in this case. There is nothing in the conduct of the applicant which warrants the conclusion that he has acted unreasonably. A not insignificant factor must also be that the nature of the orders sought to be taxed are orders which are more conveniently taxed at the conclusion of the litigation. Further, as the issues have now crystallised it is likely that the litigation can be disposed of relatively quickly such that the respondents will have the benefit of their costs orders without too much delay. This is also not a case where the there is any real risk of the respondents, by EPI, not being able to enforce the costs orders to a significant extent. As trustee EPI has the benefit of the entitlement, at the appropriate time, the ability to set off the amount owed by Mr Eggerth against his beneficial interest. It is also not irrelevant that, as the evidence has emerged, there is a possibility or risk that the applicant is having difficulty advancing his case because EPI has failed to comply with its obligation as trustee for some time. The respondents have not established that it is in the interests of justice to depart from the usual rule that costs orders should be taxed at the end of the matter.

75    In the result, the application should be dismissed.

Associate:

Dated:    22 December 2017

SCHEDULE OF PARTIES