Federal Court of Australia

Lindsay v Qld Childcare Centres Pty Ltd (No 2) [2026] FCA 1162

ORDERS

THE COURT ORDERS THAT:

1.    The plaintiff pay 50% of the costs of the second to fifth defendants of and incidental to the application seeking orders for the appointment of a statutory trustee for sale.

2.    The costs ordered to be paid by order 1, be taxed immediately.

3.    Otherwise, there be no order as to costs.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    These reasons concern the costs of an application for the appointment of a trustee for the sale of real property (the “Application”), made in the context of shareholder oppression proceedings. In general terms, the principal proceedings concern an allegation by Mr Matthew Lindsay (Mr Lindsay), a minority shareholder in Qld Childcare Centres Pty Ltd (QCC), that the second to fifth defendants, Mr Ray Hawkins, Mrs Patricia Hawkins, Mr Bryce Hawkins and Mrs Sandra Hawkins (the “Hawkins owners”), who collectively hold a majority shareholding in QCC, have engaged in oppressive conduct against him.

2    By the Application, the Hawkins owners sought orders pursuant to ss 33, 34, 37 and 39 of the Property Law Act 2023 (Qld) (Property Law Act), appointing Mr David Hambleton of Rodgers Reidy as trustee for the sale of certain real property located at 4 Heaton Street, Biloela (Property). The Hawkins owners, together with Mr Lindsay, were the joint owners of that Property, from which QCC carried on a child care business (the “Business”) as a licensee at will.

3    The Application was opposed by Mr Lindsay. His position was that the Property should be sold to him or a related entity, and that a sale of the Property, by a trustee appointed for that purpose, would undermine his entitlement to the remedies sought in the principal proceedings.

4    Ultimately, the Application was granted, and orders were made substantially in accordance with those sought by the Hawkins owners: Lindsay v Qld Childcare Centres Pty Ltd [2026] FCA 613 (Property Decision). The costs of the Application were reserved, and the parties were directed to file written submissions for the matter to be determined on the papers.

5    For the reasons which follow, the appropriate order is that Mr Lindsay pay half of the Hawkins owners’ costs of and incidental to the Application, and that those costs be taxed immediately.

The parties’ submissions

6    The Hawkins owners seek the following orders in relation to the costs of the Application:

a.     The Plaintiff pay the Statutory Trustee Applicants’ costs of the Application on the indemnity or alternatively the party and party basis;

b.     Pursuant to rule 1.32 of the Federal Court Rules 2011 (FCR), the costs in the above order are to be taxed immediately; and

c.     The Statutory Trustee Applicants’ costs, once taxed, are to be paid from the Plaintiff’s share of the proceeds of sale of the property at 4 Heaton Street, Biloela in the State of Queensland (Property), if not paid by the Plaintiff prior to the distribution of the Plaintiff’s share of those proceeds.

7    In general terms, the Hawkins owners seek their costs on an indemnity basis on the ground that there was no proper basis for Mr Lindsay to resist the Application. They also seek orders that the costs be taxed immediately, on the basis that the Application involved the resolution of a discrete issue and the grant of substantively final relief.

8    Conversely, Mr Lindsay seeks an order that the parties’ costs of the Application be paid out of the net proceeds of the sale of the Property, or, alternatively, that the Hawkins owners pay his costs. He seeks the latter order on the basis that the Hawkins owners were unsuccessful in obtaining orders that the trustee sell the Business together with the Property, which, it is said, formed the predominant basis on which he opposed the Application.

The Court’s power to make an order for costs

9    It is trite that s 43 of the Federal Court of Australia Act 1976 (Cth) bestows upon the Court a wide discretion to make orders in relation to costs, though it must be exercised judicially; that is, by reference to relevant considerations and having regard to the contextual features and facts of the litigation: Kazar (Liquidator) v Kargarian (2011) 197 FCR 113, 115 [4].

10    It is also trite that costs, ordinarily, should follow the event. The “event” is the outcome of the dispute, assessed by reference to the substance of the application, the issues on which the parties succeeded or failed, and the relief actually obtained. However, a party who succeeds overall may be deprived of all or part of their costs where they have not succeeded on all issues raised by them. For example, they may be required to pay the other party’s (or parties’) costs in relation to issues which they unnecessarily or inappropriately raised: Cretazzo v Lombardi (1975) 13 SASR 4.

The appropriate orders to be made

11    The parties’ submissions raise three questions:

(a)    whether the costs should be paid out of the proceeds of the sale of the Property;

(b)    the application of, and whether there is any reason to depart from, the ordinary rule that costs follow the event; and

(c)    whether any order for costs should be immediately taxable.

12    It is appropriate to consider each question in turn.

Should the costs be paid out of the proceeds of the sale?

13    It was submitted on behalf of Mr Lindsay that the “usual order” in applications for the appointment of a statutory trustee for sale under the Property Law Act is that the parties’ costs of the application be paid from the net proceeds of sale. The rationale for that general rule is that the costs of the application are an incident of joint ownership: Kardos v Sarbutt (No 2) [2006] NSWCA 206 [28]; and that they would be necessarily incurred by one party or another in obtaining an order for the appointment of a trustee for sale: Zhang v Metcalf; Metcalf v Zhang [2020] NSWCA 228 [133].

14    Though that may be accepted, the general rule is not absolute. Relevantly, it may be departed from in circumstances where one party has engaged in unreasonable conduct or conduct that has unnecessarily increased the costs of the application. For example, that might occur where a co-owner unreasonably refuses to accept a proposal to sell the co-owned property and subsequently unsuccessfully opposes the application: see Lewin v Lewin (2019) 19 BPR 39,225, 39,232 [41] – [42] (Lewin). Or, similarly, where a co-owner strenuously opposes the application on bases lacking cogent or persuasive foundation: Spathis v Nanos (No 2) [2008] NSWSC 470 [13]; McPaul v Massignani (No 2) [2023] QSC 118 [13] – [19]. It has been said, however, that such conduct must be balanced against the fact that a co-owner is ordinarily under no obligation to seek to avoid the need to bring an application for the appointment of a statutory trustee: Lewin 39,232 [41]. Ultimately, whether a co-owner has acted unreasonably depends upon the particular circumstances of the case.

15    In this case, the evidence demonstrates that the issue of the sale of the Property had been agitated for some time prior to the Application and the commencement of the underlying proceedings. The timeline may be summarised as follows:

(1)    In mid-2024, the Hawkins owners’ solicitors sent a letter to Mr Lindsay’s solicitors advising that the Hawkins owners had been willing to sell the Property since 2009, and that their attempted sales had been frustrated by Mr Lindsay’s conduct. The letter further stated that the Hawkins owners were willing and able to negotiate an agreement to resolve the matter and sell the Property as well as the Business.

(2)    At some time in 2025, QCC received an offer from Wunderkids Early Learning Centres Pty Ltd (Wunderkids) to purchase the Property and the Business.

(3)    In July 2025, having not received any response to their correspondence from mid-2024, the Hawkins owners’ solicitors wrote directly to Mr Lindsay, advising that their clients were left with “no option other than to appoint statutory trustees for the sale”. The letter offered another opportunity for Mr Lindsay to consent to the sale of the Property.

(4)    In August 2025, by a further letter to Mr Lindsay’s solicitors, the Hawkins owners’ solicitors sought confirmation of Mr Lindsay’s consent to the sale of the Property, and warned that, if no response was received, an application would be filed to appoint a statutory trustee for sale. The letter also stated that the costs of any application would be sought against Mr Lindsay on an indemnity basis.

(5)    On 5 September 2025, Mr Lindsay’s solicitors responded seeking a one-week delay to the filing of any application to allow for advice to be obtained from Counsel.

(6)    On 12 September 2025, Mr Lindsay filed an originating process in this Court commencing the principal proceedings. The originating process sought, inter alia, an order that his shares be acquired by the remaining shareholders.

(7)    The Hawkins owners subsequently reiterated their offer to sell the Business and the Property together on certain conditions, but this was rejected.

(8)    The Application was filed on 27 February 2026.

(9)    In March 2026, Mr Lindsay offered that he or a related entity acquire the Business and the Property for the same price which was offered by Wunderkids. That was rejected by the Hawkins owners because they did not wish to protract their relationship with him and Mrs Clive (his ex-wife).

16    It is clear from the foregoing that, from at least August 2025, the Hawkins owners had made clear that they would seek an order that Mr Lindsay pay their costs of any application for the appointment of a statutory trustee for sale. Notwithstanding, Mr Lindsay failed to engage with the Hawkins owners’ repeated requests for his consent to sell the Property, and then mounted a strenuous opposition to the Application once filed. As it transpired, the grounds of his opposition to the Application were not clear, particularly in circumstances where he had apparently, for some time, also wished for the Property to be sold: Property Decision [40] – [52].

17    In these circumstances, while Mr Lindsay was not necessarily under any obligation to avoid the need for the Application, his opposition to it on grounds lacking any cogent or persuasive foundation constitutes conduct sufficiently unreasonable to justify a departure from the general rule.

18    Moreover, it is apparent that Mr Lindsay opposed the sale to Wunderkids and the Application in the hope of acquiring the Property and Business himself. In that sense, and in the context of the underlying oppression proceedings, his opposition might be perceived to have been directed towards preserving a commercial opportunity. Though commercially sensible as that may be, it was not a cogent basis on which the Application could reasonably have been opposed. As an incident of their co-ownership of the Property, the Hawkins owners were, prima facie, entitled to seek the appointment of a statutory trustee. In those circumstances, Mr Lindsay’s failure to advance any persuasive basis upon which the Court should decline to make the orders sought rendered his opposition to the Application unreasonable.

19    It is also relevant that the parties appear to have been in agreement as to the value of the Property. The evidence indicates that each was prepared to sell it (in the Hawkins owners’ case) or acquire it (in Mr Lindsay’s case) at the same price. This demonstrates that the dispute was confined to the terms of any sale and the identity of the purchaser. It was not a dispute concerning the value of the Property or the price at which it should be sold, which more commonly arises in applications of this kind.

20    It follows that the circumstances of this case warrant a departure from the general rule that the costs of an application for the appointment of a statutory trustee for sale be paid from the net proceeds of sale. Mr Lindsay’s unwillingness to engage constructively with the Hawkins owners’ proposals, coupled with his strenuous yet unmeritorious opposition to the Application, unnecessarily and unreasonably increased the costs incurred by the Hawkins owners in exercising their rights as co-owners to seek the appointment of a statutory trustee.

The “event” which costs are to follow

21    It was submitted on behalf of Mr Lindsay, by way of alternative, that even if costs were to follow the event in this case, he would be entitled to recover his costs of the Application. That submission was advanced on the basis that the Hawkins owners unsuccessfully sought orders providing for a valuation mechanism and a combined sale of the Property and the Business to Wunderkids, which, in Mr Lindsay’s view, materially increased the evidence and submissions filed and relied upon in the Application.

22    Though it is true that the orders sought by the Hawkins owners in the Application were more extensive than the orders ultimately made, that is not a rational basis on which to suggest that they were not substantially successful. The fundamental relief sought was the appointment of a trustee for sale of the Property co-owned by several of them, and they succeeded in obtaining an order to that effect. Moreover, and in any event, Mr Lindsay’s opposition to the Application was not confined to the sale of the Business together with the Property, and he instead opposed it entirely.

23    Though it is not necessary to decide, there are some reasons for thinking that a sale of the Property together with the Business was an eminently sensible objective for all concerned. For instance, it would have assisted all parties in relieving themselves of the burdens of operating or attempting to operate the Business, whilst the oppression proceedings are determined.

24    Leaving that last point to one side, in the result, costs should be awarded in favour of the Hawkins owners. Ordinarily, this would result in an order that Mr Lindsay pay all of the Hawkins owners’ costs of the Application. However, it is necessary to take into account that the costs of applications of this nature are often paid from the net proceeds of sale. Giving some weight to that feature, the appropriate order is that Mr Lindsay pay 50% of the Hawkins owners’ costs of the Application on the standard basis and that, otherwise, there be no order as to costs.

25    For similar reasons, the circumstances do not warrant an award of costs on an indemnity basis. Though Mr Lindsay’s conduct was not helpful, it did not rise to the threshold at which an order for indemnity costs is warranted.

Should the costs be taxed immediately?

26    The Hawkins owners also sought an order that the costs of the Application be taxed immediately. Relevantly, r 40.13 of the Federal Court Rules 2011 (Cth) provides that:

40.13     Taxation of costs awarded on an interlocutory application

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 proceeding in which the order is made is finished.

27    It is not in doubt that this general rule “can be departed from where the proceeding involves the resolution of a discrete issue”: Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2013] FCA 567 [31]. Further, it has been accepted that “[t]he Court may order that costs of an interlocutory application be taxed immediately if it is in the interests of justice to do so”: Tour Squad Pty Ltd v Fifth Amendment Entertainment Inc [2020] FCA 1649 [10].

28    A curiosity of this case is that the Application was brought as an interlocutory application, notwithstanding that it sought, in substance, final relief. In that sense, the more orthodox course would have been to commence a separate proceeding by filing an originating application. It appears that the Hawkins owners proceeded as they did because all the relevant parties were already before the Court in Mr Lindsay’s oppression proceedings, and because the dispute concerning the sale of the Property formed part of the broader controversy between them. The interlocutory form of the Application also made it easier to identify that the Court had jurisdiction to make the orders sought: Property Decision [29] – [36].

29    Though the approach of the Hawkins owners was, perhaps, unorthodox, it was not necessarily inappropriate. They might equally have filed a cross-claim seeking the appointment of a statutory trustee for sale of the Property, and sought to have that claim determined separately from, and in advance of, any trial of the oppression claim. For present purposes, there is no material difference between either approach.

30    That aside, the Court’s decision in respect of the Application constituted a final determination of the parties’ rights in relation to the question of whether a trustee for sale should be appointed. That was a discrete issue, notwithstanding that it formed part of the broader controversy. It also did not concern a matter of practice or procedure in terms of the management of the oppression proceedings. In this sense, the Application was not interlocutory.

31    It follows that the costs of this discrete issue are able to be immediately taxed. Regardless of the outcome of the oppression proceedings, the Hawkins owners’ entitlement to 50% of their costs of the Application will not alter. Although it is possible that any costs order made in the oppression proceedings might ultimately be set off against the costs ordered in respect of the Application, that possibility is not a sufficient reason to defer taxation of those costs.

Conclusion

32    In the result, the Hawkins owners are entitled to an order that Mr Lindsay pay 50% of their costs of and incidental to the Application, taxed immediately. There will otherwise be no order as to costs.

33    A further order was sought that the trustee retain Mr Lindsay’s share of the proceeds of the sale of the Property and apply those proceeds in satisfaction of the costs order made against him. There does not appear to be any basis for making such an order or otherwise providing the Hawkins owners with security for their costs. The Hawkins owners will have their ordinary remedies against Mr Lindsay in the event of non-payment, together with the practical benefit that he is prosecuting proceedings against them in this Court.

Associate:    

Dated:    20 August 2026

SCHEDULE OF PARTIES