ISHMAEL NOAH HARLOCK BY NEXT FRIEND JOHN NOAH HARLOCK -v- HANSEN [2026] WASC 287

[2026] WASC 287 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : ISHMAEL NOAH HARLOCK BY NEXT FRIEND JOHN NOAH HARLOCK -v- HANSEN [2026] WASC 287 CORAM : STRK J HEARD : ON THE PAPERS DELIVERED : 15 JULY 2026 FILE NO/S : CIV 1330 of 2021 BETWEEN : ISHMAEL NOAH HARLOCK BY NEXT FRIEND JOHN NOAH HARLOCK First Plaintiff DANIEL ZACHARY HARLOCK Second Plaintiff AND MICHELLE PIERRETTE SIMONE HANSEN First Defendant MARK ANDREW HANSEN Second Defendant GIBAUD NOMINEES PTY LTD Third Defendant MARSELISBORG PTY LTD Fourth Defendant SARAH DINA HARLOCK Fifth Defendant -- 1 of 26 -- [2026] WASC 287 Page 2 Catchwords: Practice and procedure - Costs - Interlocutory application for inspection of documents that had been discovered and were subject to a claim of legal professional privilege - Interlocutory application resolved by agreement after the application was heard but before it was determined on its merits - Documents produced so that the determination of the application for inspection was rendered nugatory - Whether the conduct amounted to a 'surrender' - What would do justice between the parties - Turns on own facts Legislation: Rules of the Supreme Court 1971 (WA) O 66 Supreme Court Act 1935 (WA) s 37 Result: No order as to costs Category: B Representation: Counsel: First Plaintiff : No appearance Second Plaintiff : No appearance First Defendant : No appearance Second Defendant : No appearance Third Defendant : No appearance Fourth Defendant : No appearance Fifth Defendant : No appearance Solicitors: First Plaintiff : Williams + Hughes Second Plaintiff : Williams + Hughes First Defendant : Lavan Second Defendant : Lavan -- 2 of 26 -- [2026] WASC 287 Page 3 Third Defendant : Lavan Fourth Defendant : Lavan Fifth Defendant : Solomon Hollett Lawyers Case(s) referred to in decision(s): Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 Grove v Grove [2022] WASCA 86 Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) ATPR 40-748 James v Surf Road Nominees Pty Ltd [No 2] [2005] NSWCA 296 Kelliher v Commissioner for Main Roads [2013] WASC 437 Lafferty v Waterton [2016] WASCA 183 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 Major v Woodside Energy Ltd [No 3] [2009] WASC 246 Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; (2018) 97 NSWLR 681 Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 Ohn v Walton (1995) 36 NSWLR 77 One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Peet Ltd v Richmond [2010] VSCA 71 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 Re Traditional Values Management Ltd; Handberg v Dantay Pty Ltd [2012] VSC 308 Re Western Australian Planning Commission; Ex parte Solomon [2010] WASCA 236 (S) Russell v Lee [2018] WASC 404 Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 Wentworth v Attorney-General (NSW) [1984] HCA 70; (1984) 154 CLR 518 -- 3 of 26 -- [2026] WASC 287 STRK J Page 4 STRK J: Introduction 1 Ishmael Harlock is subject to a plenary administration order made by the State Administrative Tribunal in favour of his father, John Harlock. Ishmael commenced a proceeding by a writ issued in April 2021 by John as his next friend. The proceeding was also brought by Ishmael's brother, Daniel Harlock. In these reasons, I refer to Ishmael (by his next friend) and Daniel together as the plaintiffs. 2 The plaintiffs commenced the proceeding against four defendants, Michelle Hansen, Mark Hansen, Gibaud Nominees Pty Ltd and Marselisborg Pty Ltd. The first to fourth defendants share common representation in the action. 3 Sarah Harlock was joined as the fifth defendant to the action in April 2025. She has indicated that she does not intend to take part in the action and will accept any order made by the court other than as to costs. 4 A number of parties to this proceeding, and the first plaintiff's next friend, share the same surname. For ease of reference and clarity, if I refer to any of them individually, I will refer to them by their respective given names. 5 When the action came to my attention, the trial of the action had been listed for eight days commencing 28 April 2026 before another judge, and there were two interlocutory applications to be determined before the trial of the action by a judge other than the trial judge. 6 The first concerned a controversy as to inspection of documents produced under subpoenas issued by the court on about 4 June 2025 to the Proper Officer of Elysian Wealth Services Pty Ltd and the Proper Officer of MD Legal Pty Ltd, which subpoenas were issued at the request of the plaintiffs. The second concerned a controversy as to the application made pursuant to the Rules of the Supreme Court 1971 (WA) O 26 r 9(2) and r 12 by the plaintiffs for production for inspection of certain discovered documents. 7 The interlocutory applications were listed for hearing on 9 February 2026. At that hearing, only the second controversy remained to be determined and the documents the subject of the inspection -- 4 of 26 -- [2026] WASC 287 STRK J Page 5 application had reduced.1 The decision with respect to the inspection application was reserved. 8 On 16 March 2026, before judgment was delivered, the first to fourth defendants produced a tranche of documents to the plaintiffs which included the documents the subject of the inspection application. The circumstances in which that production occurred are outlined below. The need for a decision with respect to the inspection application was rendered nugatory. 9 By a communication received from the parties on 17 March 2026, the court was informed that the remaining matters of controversy had been resolved between the parties. By the consent of the plaintiffs and the first, second, third and fourth defendants recorded in a memorandum of proposed consent orders filed on 22 May 2026, the following orders were made on 25 May 2026: 1. The plaintiffs' application for inspection of documents filed 15 September 2025 be dismissed (Application). 2. The parties are to file and serve written submissions, no longer than five pages in length, in relation to the costs of the Application by 29 June 2026, with the question of costs to be determined on the papers. 10 On 29 June 2026, a minute of proposed orders, written submissions and an affidavit sworn on 25 June 2026 by Yasmin Catherine McCann were filed on behalf of the plaintiffs with respect to the remaining issue of costs. On the same day written submissions as to costs were filed on behalf of the first to fourth defendants. 11 These reasons concern the appropriate costs disposition with respect to the now dismissed inspection application. Applicable principles 12 I adopted and applied the principles summarised below in determining the question of costs. 13 Where costs should fall is at the discretion of the court.2 The discretion to order costs under the Supreme Court Act 1935 (WA) s 37 1 ts 56 (9 February 2026). 2 Supreme Court Act 1935 (WA) s 37. -- 5 of 26 -- [2026] WASC 287 STRK J Page 6 and the Rules of the Supreme Court O 66 r 1 is very wide.3 The only restrictions are those provided elsewhere in the Supreme Court Act and the Rules of the Supreme Court, or in any other Act; and the fact that the discretion must be exercised judicially, in accordance with established principles and factors directly connected with the litigation.4 The discretion must be exercised so as to achieve what is fair and just between the parties according to the circumstances of the particular case.5 14 It is well established that an order for the payment of costs by one party is compensatory in nature; it is not for the purpose of punishment. Costs generally follow the event because such an order is intended, at least to the extent that the costs incurred were not unreasonable or unreasonably incurred, as compensation (and vindication) for the successful action or application.6 15 While a successful party will ordinarily receive his or her costs, where the successful party has succeeded only upon a portion of his or her claim, it may be reasonable in the circumstances to order that the successful party bear the expense of litigating that portion upon which he or she had failed.7 Where a party though generally successful has, by the introduction of some issue or issues on which that party has failed, increased the costs the court may order such party to pay the costs of such issue or issues.8 16 The exercise of the court's discretion to order costs is ordinarily exercised after a hearing on the merits of a matter.9 Where there has been no hearing on the merits, the court will be 'deprived of the factor that will usually determine how the discretion as to costs is to be exercised'.10 The general principles which inform when an order for 3 LexisNexis, Civil Procedure Western Australia (at 14 July 2026) [66.1.2], citing Wentworth v Attorney-General (NSW) [1984] HCA 70; (1984) 154 CLR 518, 528; Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 [39]. 4 LexisNexis, Civil Procedure Western Australia (at 14 July 2026) [66.1.2], citing Naidoo v Williamson [39], [42]; Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [48] - [50]; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [22], [65] - [66]; Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 [24]. 5 LexisNexis, Civil Procedure Western Australia (at 14 July 2026) [66.1.2], citing Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 558. 6 LexisNexis, Civil Procedure Western Australia (at 14 July 2026) [66.1.2], citing Latoudis v Casey (543), (567); Northern Territory v Sangare [30] - [31]; Ohn v Walton (1995) 36 NSWLR 77. 7 James v Surf Road Nominees Pty Ltd [No 2] [2005] NSWCA 296 [33], citing Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) ATPR 40-748. 8 Rules of the Supreme Court O 66 r 1(3). 9 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, 624. 10 Lafferty v Waterton [2016] WASCA 183 [17]; Grove v Grove [2022] WASCA 86 [41]. -- 6 of 26 -- [2026] WASC 287 STRK J Page 7 costs may be appropriate in a case where a matter has not been determined on its merits were affirmed by the Court of Appeal in Grove v Grove and are set out below. 17 The court cannot try a hypothetical action between the parties and burden the parties with the costs which by their settlement they had avoided.11 The court's caution about examining the merits of a case will be particularly pronounced where a consideration of the merits would involve complex factual matters where credit could be in issue.12 18 However, it has been recognised that there may be cases where, despite the lack of a final determination, the court can be satisfied that there was a high degree of certainty that if the proceedings had been determined on their merits, success would have been achieved by the plaintiff, and an order for costs may be appropriate.13 19 Where it appears that both parties have acted reasonably in commencing and defending the proceedings, and their conduct continued to be reasonable until the proceedings came to an end, the proper exercise of the costs discretion will usually mean that the court will make no order as to costs, as to do so would involve it in an examination of the merits of the action.14 20 There may also be cases where the court is able to conclude that one party has acted so unreasonably that the other party should be entitled to an order for costs.15 21 In Russell v Lee, Pritchard J considered whether costs could be awarded where a party would almost certainly have succeeded had the matter been determined on the merits. In circumstances where the proceeding was resolved by consent without the matter proceeding to trial, her Honour concluded that it would be appropriate to make orders as to costs, and referred to the principles applied in the decision of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (at 624 - 625), where his Honour said: 11 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (624). 12 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, 201. 13 Russell v Lee [2018] WASC 404 [22]. 14 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (625); Australian Securities Commission v Aust-Home Investments Ltd (201); Re Western Australian Planning Commission; Ex parte Solomon [2010] WASCA 236 (S) [9]. 15 Lafferty v Waterton [18]; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (624 - 625); Re Western Australian Planning Commission; Ex parte Solomon [9]. -- 7 of 26 -- [2026] WASC 287 STRK J Page 8 In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extracurial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. 22 In Russell v Lee, proceedings were initially commenced for the appointment of an independent administrator, and the first defendant filed a defence and counterclaim. Once it became apparent that there would be a conflict of interest if the first defendant was to administer the estate, the first defendant consented to orders for the appointment of an independent interim administrator. On behalf of the plaintiffs, it was submitted that the plaintiffs had substantially succeeded in the action; and the conduct of the first defendant in the proceeding had been unreasonable. 23 Counsel for the first defendant submitted that it could not be regarded as certain that the first defendant's counterclaim would be dismissed in circumstances where the interim administrator had been appointed to deal with particular proceedings, but when a subsequent dispute arose in relation to the two impugned transactions, opposition to the appointment of an independent administrator was immediately withdrawn. 24 Pritchard J considered that although the first defendant eventually consented to the appointment of an interim administrator, her Honour was not persuaded that that was a viable long term solution to the administration of the estate - essentially, that bifurcation of the administration would not have been possible other than on an interim basis. The court would necessarily have had to resolve the question of the appropriate administrator, having regard to the first defendant's conflict of interest. In the end, her Honour was persuaded that this was -- 8 of 26 -- [2026] WASC 287 STRK J Page 9 an unusual case where, without any need to examine in great detail the merits of the arguments advanced by the parties in the present proceedings, it is nevertheless possible for the court to say with some degree of certainty that the plaintiffs would inevitably have succeeded in their application for relief. Her Honour noted that she reached this view without finding it necessary to reach a conclusion as to whether the first defendant's conduct was unreasonable.16 25 The decision of the New South Wales Court of Appeal in Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; (2018) 97 NSWLR 681 concerned a proceeding resolved by consent save as to costs and without admissions. The primary judge heard the parties on costs, and awarded costs in favour of the defendant. The plaintiff's appeal was upheld. Basten JA commented that a costs order should only be made against a party where the party has invited the litigation by unreasonable behaviour or has unreasonably pursued it. The order can only be made where that finding is manifest by reference to known circumstances that are not in dispute between the parties. If the finding cannot be made without reviewing large quantities of evidence and tentatively resolving disputed facts, the court should not embark on the task.17 26 In Kelliher v Commissioner for Main Roads [2013] WASC 437 Pritchard J observed that a circumstance which may justify a costs order, even when there has been no determination of the merits, is where it is apparent from the orders put before the court that one party has effectively 'surrendered'. In those circumstances, a cost order may be justified on the basis that success in an action usually controls the exercise of discretion in favour of a cost order, and the successful party is ordinarily entitled to a cost order.18 As was observed in Re Western Australian Planning Commission; Ex parte Solomon, this might be justified where it was clear that the strength of the other side's case led to the surrender thereby allowing the inference to be drawn that the abandoning party had acted unreasonably in suing or defending in the first place.19 16 Russell v Lee [21]. 17 Nichols v NFS Agribusiness Pty Ltd [8]. 18 Kelliher v Commissioner for Main Roads [28], citing Re Traditional Values Management Ltd; Handberg v Dantay Pty Ltd [2012] VSC 308 [3]; Peet Ltd v Richmond [2010] VSCA 71 [16] (Nettle JA), [42] (Neave JA agreeing). 19 Re Western Australian Planning Commission; Ex parte Solomon [9], citing One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548, 552 - 553 (Burchett J); Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302. -- 9 of 26 -- [2026] WASC 287 STRK J Page 10 Overview of the inspection application - privilege claim 27 At the hearing of the inspection application the plaintiffs applied for an order for inspection of documents 98, 99, 100, 101, 102 and 103 in the first to fourth defendants' list of documents dated 14 May 2024, attached to the affidavit made by Mark. 28 In support of that application, counsel for the plaintiffs read the affidavit of Ms McCann sworn on 15 September 2025, the supplementary (correcting) affidavits of Ms McCann sworn on 5 November 2025 and on 5 February 2026, and an outline of submissions filed on 15 September 2025. Ms McCann is a legal practitioner employed by Williams + Hughes, the plaintiffs' legal representatives. 29 Opposing inspection, counsel for the first to fourth defendants read the affidavit of Amelia Richmond-Scott sworn on 14 October 2025, and an outline of submissions made in opposition to the application filed on 14 October 2025. Ms Richmond-Scott is a legal practitioner and is a partner of Lavan, the first to fourth defendants' legal representatives. The pleading 30 For the purpose of the inspection application, counsel for the plaintiffs identified what were described as the relevant pleaded facts. Counsel noted that on the pleadings it was not disputed that:20 (a) the plaintiffs are the children of Danielle Harlock (nee Gibaud) and John, and that Danielle and Michelle were the daughters of Georges Gibaud; (b) the Georges Albert Gibaud Family Trust was established by deed of settlement on 12 December 1974; (c) Gibaud Nominees is and was at all material times the trustee of the Georges Albert Gibaud Family Trust, and had, as its directors Michelle and her husband Mark; (d) the Georges Albert Gibaud Family Trust was varied by a deed of variation dated 16 December 2011, and as varied, the Georges Albert Gibaud Family Trust provided that the Primary Beneficiaries of the trust were Danielle and Michelle, and the 20 Plaintiffs' outline of submissions filed on 15 September 2025, par 4 (with pleading cross-references omitted). -- 10 of 26 -- [2026] WASC 287 STRK J Page 11 'Beneficiary Class' included the children of the Primary Beneficiaries; (e) accordingly, until 30 November 2016, Ishmael and Daniel were within the Beneficiary Class of the Georges Albert Gibaud Family Trust. Specifically, they were: (i) discretionary objects of the trustee's power to distribute the income of the trust before the Vesting Date and to distribute the trust fund on the Vesting Date; and (ii) as takers in default of appointment of the trust after the Vesting Date, contingent beneficiaries of the trust; (f) on 30 November 2016 (among other things) a further deed of variation was executed, which purported to vary the Vesting Date of the Georges Albert Gibaud Family Trust to permit the trustee, with the consent of the appointor, to determine the Vesting Date, and the plaintiffs contend that the Further Deed of Variation is liable to be impugned; and (g) on the same date, a document described as a resolution of the trustee and the appointor of the Georges Albert Gibaud Family Trust was executed. The resolution purported to exclude (inter alia) the plaintiffs from the Beneficiary Class of the Georges Albert Gibaud Family Trust, and the plaintiffs contend that the resolution was ineffective or is otherwise liable to be impugned. The documents 31 On 14 May 2024 Mark made an affidavit verifying a list of documents. It was not the first such affidavit made by him in the proceeding. Attached to his 14 May 2024 affidavit was a document marked 'Attachment A2', which Mark deposed was a list of the documents which fell within the categories of documents contained in the 'Further Amended Schedule 1' to the orders of the court made on 9 April 2024 that are or have been in the possession, custody or power of the first to fourth defendants that had not yet been discovered. The categories as particularised in 'Further Amended Schedule 1' are reproduced at sch A to these reasons. 32 As is noted above, at the hearing of the inspection application the plaintiffs moved for an order for inspection of six documents. They -- 11 of 26 -- [2026] WASC 287 STRK J Page 12 were described in the 'Attachment A2' list (by reference to document number, category and description of document) as follows: 33 In his 14 May 2024 affidavit Mark deposed that: (a) he was authorised on behalf of Michelle to make the affidavit on her behalf; and (b) as a director of Gibaud Nominees and Marselisborg, he was also authorised to make the affidavit on behalf of the companies. The plaintiffs' position with respect to inspection 34 In summary, it was the plaintiffs' position that for the purpose of the application, the documents could be assumed to be subject to legal professional privilege, specifically litigation privilege, having been created for the dominant purpose of advising Gibaud Nominees, the trustee of the Georges Gibaud Family Trust. However, it was the contention of the plaintiffs that the privilege was jointly held by Gibaud Nominees as trustee of the Georges Gibaud Family Trust and the plaintiffs as beneficiaries of that trust (among others).21 35 Counsel for the plaintiffs made submissions as to the principles applicable to joint privilege, which were submitted to be uncontroversial between the parties. The most important, and was 21 Plaintiffs' outline of submissions filed on 15 September 2025, par 3; ts 64 (9 February 2026). -- 12 of 26 -- [2026] WASC 287 STRK J Page 13 submitted to be key to the resolution of the dispute, was the distinction between whether the documents related to legal services provided in connection with the management and administration of the trust where advice is sought and obtained by the trustee for the purpose of assisting it to discharge its duty to undertake the due and proper administration of the trust, as distinct to documents relating to legal services obtained for the benefit of the trustee personally where advice was sought and obtained by the trustee for its own personal benefit of assistance.22 36 It was the plaintiffs' position that at the time of the creation of the documents, no litigation by the plaintiffs was reasonably contemplated against Gibaud Nominees, and therefore the privilege over the documents was jointly held.23 37 Counsel for the plaintiffs accepted (subject to the following) that the proper approach to be applied in determining the dispute was that which was proffered by the defendants, being:24 (a) whether the plaintiffs had discharged their evidential onus to show that the defendants' claim of privilege was unfounded or mistaken; and (b) if so, whether the defendants had satisfied their ultimate onus of proving that litigation privilege applied, such that there was no joint privilege. 38 It was submitted the evidential burden borne by the plaintiffs was to demonstrate that the defendants' claim for litigation privilege over the documents was unfounded or mistaken because any claim to litigation privilege was jointly held; and central to this was whether litigation was contemplated between these parties at the time of creation of the documents.25 The plaintiffs said that at the time the documents were created there were no actual proceedings against Gibaud Nominees by the plaintiffs, and none at that time could have been reasonably contemplated. It was submitted that this contention was borne out by the contemporaneous correspondence between the parties which was annexed to the affidavits of Ms McCann (to which counsel took the court to and dealt with comprehensively).26 It was the 22 Plaintiffs' outline of submissions filed on 15 September 2025, pars 16 - 17; ts 59 - 60 (9 February 2026). 23 ts 60 (9 February 2026). 24 ts 60 (9 February 2026). 25 ts 61 - 62 (9 February 2026). 26 Plaintiffs' outline of submissions filed on 15 September 2025, par 26. -- 13 of 26 -- [2026] WASC 287 STRK J Page 14 plaintiffs' position that the privilege attaching to the documents was jointly held. The defendants' position 39 The defendants' position was that the documents were subject to legal professional privilege, specifically litigation privilege, as the documents were created for the dominant purpose of advising Gibaud Nominees, the trustee of the Georges Albert Gibaud Family Trust, in connection with anticipated litigation to be brought by the plaintiffs through their father John.27 40 Counsel for the defendants acknowledged that there was no dispute as to the applicable legal principles as to legal professional privilege. However, it was submitted that there was no need for consideration of whether joint privilege arose, because if litigation privilege arose as the defendants created these communications for the dominant purpose of contemplated litigation, then there could be no joint privilege. Therefore, the question for determination was whether litigation was reasonably contemplated at the time that the documents were made?28 Therefore, counsel for the defendants' said that the proper approach was:29 (a) whether the plaintiffs had discharged their evidential onus to show that the defendants' claim of privilege was unfounded or mistaken; and (b) if so, whether the defendants had satisfied their ultimate onus of proving that litigation privilege applied, such that there was no joint privilege. 41 In summary, it was the position of the first to fourth defendants that by no later than September 2016, as far as the defendants were concerned, there was a real prospect of litigation being commenced against Gibaud Nominees, as trustee, by John acting on behalf of his children, as beneficiaries; and the documents were created for the dominant purpose of contemplated litigation.30 27 First to fourth defendants' outline of submissions filed on 14 October 2025, par 5. 28 ts 82 (9 February 2026). 29 ts 82 - 83 (9 February 2026). 30 First to fourth defendants' outline of submissions filed on 14 October 2025, pars 38 - 39. -- 14 of 26 -- [2026] WASC 287 STRK J Page 15 The circumstances in which the application came to be dismissed by consent 42 In the outline of submissions as to costs filed on behalf of the first to fourth defendants, the series of events that transpired which ultimately resulted in the production on 16 March 2026 of documents which included the six documents that had been the subject of the inspection application was described. It is convenient to reproduce the defendants' account here in full:31 13 On 19 December 2025, the plaintiffs filed the Report of Professor Peter Panegyres dated 10 October 2025 and the Report of Dr Roger Clarnette dated 23 November 2025 (Expert Evidence), and on 23 December 2025, the plaintiffs filed supplementary witness outlines of John Harlock and Daniel Harlock (Plaintiffs' Witness Outlines). 14 The Plaintiffs' Witness Outlines gave the first to fourth defendants notice for the first time that the plaintiffs would adduce evidence as to Danielle Gibaud's behaviour and mental capacity in 2014. In conjunction with further Expert Evidence that Danielle Gibaud did not have mental capacity to execute the enduring power of attorney dated 2 December 2014, what the first to fourth defendants believed would be a key issue at trial, the first and second defendants made a forensic decision to begin preparing themselves to adduce evidence as to Danielle Gibaud's behaviour and mental capacity in 2014. 15 On 19 February 2026, the first to fourth defendants filed the witness outlines of Mark Hansen and Michelle Hansen (Defendants' Witness Outlines), which addressed Danielle Gibaud's behaviour and mental capacity in 2014, but also a variety of other relevant matters in respect of which the plaintiffs would be entitled to cross-examine the first and second defendants. 16 The Defendants' Witness Outlines ultimately resulted in the first to fourth defendants filing the Fifth Further Amended Defence on 9 March 2026 (Fifth Defence), which for the first time, and as a direct result of the Plaintiffs' Witness Outlines, pleaded a positive defence to the plaintiffs' claims. 17 The first to fourth defendants could not have reasonably known whether there would be a waiver of privilege over the Documents until, at the earliest, the Defendants' Witness Outlines were prepared and the consequential impact of that evidence was understood. 31 First to fourth defendants' outline of submissions as to costs filed on 29 June 2026. -- 15 of 26 -- [2026] WASC 287 STRK J Page 16 18 That is to say, in the circumstances, it was reasonable for the first to fourth defendants to defend the Application to final hearing in circumstances where it was not until after that hearing on 9 February 2026 that they could have known whether the first and second defendants would adduce evidence that would effect, or require, a waiver of privilege over the Documents. 19 As it transpired, neither the Defendants' Witness Outlines nor the Fifth Defence effected a waiver of privilege over the Documents. But the first to fourth defendants voluntarily produced the Documents on 16 March 2026 to avoid any further disputation about the issue, noting that a waiver of privilege over the Documents may eventually be effected when the first and second defendants gave evidence at trial. 43 Ms McCann annexed to her affidavit sworn on 25 June 2026 correspondence that was sent by the representatives of the plaintiffs to the representatives of the first to fourth defendants, and the correspondence sent in reply. That correspondence reveals the circumstances in which the documents the subject of the inspection application came to be voluntarily provided to the plaintiffs. 44 In correspondence sent on 11 March 2026 by Williams + Hughes to Lavan, among other things, it was noted that at par 70 of Mark's witness outline it was recorded, with respect to the decision to exclude the grandchildren (including the plaintiffs) from the Georges Albert Gibaud Family Trust and the Gibaud Sisters Fund, that it was considered over a long period of time and that he (Mark) 'acted on' legal advice. In that correspondence, on behalf of the plaintiffs it was asserted that par 70 of Mark's outline disclosed, at least impliedly, the gist, substance or effect of the alleged legal advice (since it is asserted that Mark's decision to exclude the grandchildren was consistent with that alleged advice); and that the first to fourth defendants had plainly waived legal professional privilege in all legal advice obtained by any of the first to fourth defendants with respect to the decision to exclude the grandchildren from both the Gibaud Sisters Fund and the Georges Albert Gibaud Family Trust.32 45 On 16 March 2026 Lavan responded and, among other things, communicated why the first to fourth defendants maintained that matters recorded in Mark's witness outline could not equate to a waiver of legal professional privilege (in short, it was asserted that by the outline, Mark had not expressly or impliedly asserted the 'gist, 32 Affidavit of YC McCann sworn on 25 June 2026, YCM-1 (pages 4 - 5). -- 16 of 26 -- [2026] WASC 287 STRK J Page 17 substance or effect' of legal advice). However, the following was also noted:33 We accept that the issue of waiver may arise when [Mark] gives evidence at trial, depending on whether or not he expressly or impliedly asserts the content of that advice and therefore acts in a manner inconsistent with maintaining privilege. In any event, properly understood, the 'effect' of [70] of [Mark's] outline was to put your clients on notice of the fact of obtaining advice (not the content of that advice) and [Mark's] consultation of Michelle Hansen and Jalna Gibaud, which may be a relevant factor to determining the propriety of our clients' conduct. Having said the above, to save any further disputation, our clients will voluntarily waive privilege over legal advice obtained with respect to the decision to exclude the grandchildren from the Gibaud Sisters Fund and [Georges Albert Gibaud Family Trust] and we provide with this letter, a secure link to those materials. The materials include those the subject of the interlocutory application before Strk J, and so we propose that your clients abandon this application and the costs associated be reserved for determination by the trial judge following trial. The plaintiffs' position with respect to costs 46 The plaintiffs moved for an order that the first to fourth defendants pay the plaintiffs' costs of and incidental to the plaintiffs' application for inspection of documents filed on 15 September 2025, to be taxed if not agreed, and to be payable forthwith. In summary, they maintained that the 'effective surrender' exception to the usual costs position where a matter is resolved without a determination on the merits applies here. 47 It was submitted that the defendants' waiver of any legal professional privilege over the 64 documents produced on 16 March 2026, including the six documents that had been the subject of the inspection application, was, in effect, a surrender, or capitulation, in relation to the inspection application; and by the waiver, the defendants effectively consented to the orders sought by the inspection application. Whenever the defendants' decision to waive privilege was made (whether before or after the hearing of the application on 9 February 2026) and for whatever reason, by implication, the decision constituted a recognition by the defendants that, for the proper conduct of the trial in this proceeding, the plaintiffs were entitled to inspect the documents. 48 It was further submitted that the result of the defendants' waiver was that the plaintiffs achieved the same outcome as if the inspection 33 Affidavit of YC McCann sworn on 25 June 2026, YCM-2 (pages 7 - 8). -- 17 of 26 -- [2026] WASC 287 STRK J Page 18 application had been determined in their favour, that is, as if the plaintiffs were the successful party in the application. The plaintiffs maintained that for costs purposes, therefore, the plaintiffs should be treated as the successful party and, in accordance with the usual rule that costs follow the event, the defendants should pay the plaintiffs' costs of and incidental to the inspection application.34 49 The plaintiffs maintained that it is not to the point whether the defendants' reason(s) for waiving privilege may have been (or included) some reason other than an acceptance of the correctness of the plaintiffs' position on the application that any privilege in the documents was jointly held by the plaintiffs, as beneficiaries, and the trustees of the trusts.35 Further, the plaintiffs maintained that the reason for producing the 64 documents, including the six documents the subject of the inspection application, which was stated in the letter from Lavan on 16 March 2026 - namely, to 'save any further disputation' about privilege over legal advice in relation to the decision to exclude the grandchildren from the trusts - was not sufficient to deny the plaintiffs their costs of the inspection application.36 50 The defendants' forensic decisions in relation to the further witness outlines filed on 19 February 2026, including Mark's, and the fifth further amended defence, had the result that (provided Mark gave evidence in accordance with his witness outline) the plaintiffs would be entitled to inspect the documents, at the latest, at trial, and therefore that the application had been unnecessary. The defendants' position with respect to costs 51 In summary, the first to fourth defendants maintained they acted reasonably in defending the inspection application up to the time the parties agreed to dismiss the application, and it would be unreasonable to expect the first to fourth defendants to have produced the documents at such a time as to avoid some or all of the costs of litigating the inspection application to final hearing. They maintained that the timeline of events (as outlined in the submissions filed and reproduced at [42] above) did not allow the parties to avoid litigating the application to a final hearing on 9 February 2026. On that basis, it was submitted that their failure to agree to produce the documents earlier 34 Plaintiffs' outline of submissions as to costs filed on 29 June 2026, pars 9 - 11. 35 Plaintiffs' outline of submissions as to costs filed on 29 June 2026, par 12, citing Kelliher v Commissioner for Main Roads [47]. 36 Plaintiffs' outline of submissions as to costs filed on 29 June 2026, par 13, seeking to distinguish Major v Woodside Energy Ltd [No 3] [2009] WASC 246 [20]. -- 18 of 26 -- [2026] WASC 287 STRK J Page 19 did not warrant an adverse cost order and the proper exercise of the court's discretion in relation to the question of costs is that there be no order as to costs.37 Disposition 52 For the reasons outlined below, I was not persuaded that in the exercise of discretion the costs order promoted by the plaintiffs ought be made. 53 Cognisant that the discretion to award costs must be exercised having regard to the circumstances of the particular case, I have described in some detail in these reasons the inspection application in the context of the pleadings (as they then stood), the position adopted by the parties in relation to the prosecution of the inspection application, and the circumstances which resulted in the decision with respect to the inspection application being rendered nugatory. 54 As is recorded above, the authorities establish that where it appears that both parties have acted reasonably in commencing and defending the proceedings, and their conduct continued to be reasonable until the proceedings came to an end, the proper exercise of the costs discretion will usually mean that the court will make no order as to costs, as to do so would involve it in an examination of the merits of the action. A case may however be made for a cost order in favour of a party where it is apparent from the orders put before the court that the other party has effectively surrendered. In such circumstances, a cost order may be justified on the basis that success in an action usually controls the exercise of discretion in favour of a cost order and the successful party is ordinarily entitled to a cost order. This might be justified where it was clear that the strength of the other side's case led to the surrender thereby allowing the inference to be drawn that the abandoning party had acted unreasonably in suing or defending in the first place.38 55 As was recorded by Pritchard J in Kelliher v Commissioner for Main Roads at [46]: In order to make an assessment of whether the plaintiffs' conduct, in truth, amounted to a 'surrender', it would be necessary to reach the conclusion that an assessment of the merits of the parties' respective positions could properly be made. 37 First to fourth defendants' outline of submissions as to costs filed on 29 June 2026, pars 4, 20. 38 See [26] above and the authorities referenced at footnotes 18 and 19. -- 19 of 26 -- [2026] WASC 287 STRK J Page 20 56 In the circumstances of the case before her Honour, Pritchard J concluded that it was neither possible to make, nor appropriate to attempt, that assessment for the purposes of determining the appropriate costs outcome.39 57 As to the submissions that had been made to explain the basis for the change in the plaintiffs' position in that case, Pritchard J recorded as follows:40 For completeness, I note that the plaintiffs sought to explain the basis for their decision not to pursue the date of assessment issue. It is not entirely clear whether, or why, the reasons for the plaintiffs' change of position could be relevant to the surrender issue. Even if those reasons are relevant, I am not persuaded that they support the defendant's claim of surrender. Counsel for the plaintiffs submitted the plaintiffs' change of position came about because they were faced with the prospect of increased costs, and a lengthy delay in the resolution of their claim, if the date of assessment issue was dealt with as a preliminary question. In that circumstance the plaintiffs made a pragmatic decision designed to avoid those costs and that delay. In those circumstances, I do not think that it can be inferred that the plaintiffs' decision not to pursue the date of assessment at the date of trial reflected a conclusion on their part that the point lacked merit. 58 In considering the appropriate cost outcome in this case I gave careful consideration as to whether the first to fourth defendants' conduct, in truth, amounted to a 'surrender'. I did so cognisant that (as was observed by Pritchard J) in order to make an assessment of whether the conduct of the first to fourth defendants, in truth, amounted to a 'surrender', it would be necessary to reach the conclusion that an assessment of the merits of the parties' respective positions could properly be made. 59 In this case, the inspection application was fully argued and the affidavits made in support and opposition to the application were read. While I have not dealt with (and do not propose to deal with) the merits of the inspection application, having had the benefit of evidence and detailed written and oral submissions, I was satisfied that the position that had been adopted in defending the application had been arguable. Further, I was satisfied that the first to fourth defendants had acted reasonably in defending the inspection application up to and at the hearing of the application. 39 Kelliher v Commissioner for Main Roads [46]. 40 Kelliher v Commissioner for Main Roads [47]. -- 20 of 26 -- [2026] WASC 287 STRK J Page 21 60 This was not a case where upon reflection, it might be inferred that the first to fourth defendants agreed to production of documents that had been subject to a claim of legal professional privilege, having belatedly accepted that the claim of privilege could not be sustained, and then 'surrendered'. 61 Nor was it suggested that this was a case where the first to fourth defendants had acted so unreasonably in relation to the application that the plaintiffs should obtain the costs of the application. 62 In this case, the first to fourth defendants provided a cogent explanation for the basis of their decision to provide inspection of the documents the subject of the contested application. There had been developments in the manner in which the plaintiffs' case was to be prosecuted and defended at trial. 63 To the extent the explanation of the first to fourth defendants was relevant, it did not support the drawing of the inference that the decision reflected a conclusion on their part that the claim for privilege lacked merit and could not be sustained. The question of whether the witness outlines of Mark and Michelle, or the fifth further amended defence filed on 9 March 2026, effected a waiver of privilege over the six documents was not fully ventilated and did not call to be determined. 64 I did not accept the submission made on behalf of the plaintiffs that by implication, the decision to provide inspection constituted a recognition by the defendants that, for the proper conduct of the trial in this proceeding, the plaintiffs were entitled to inspect the documents. Indeed, the first to fourth defendants maintained that neither the witness outlines of Mark and Michelle, nor the amended defence effected a waiver of privilege over the six documents, and a cogent explanation was proffered - that is, that the documents were produced to avoid any further disputation about the issue, noting that a waiver of privilege over the documents may eventually be effected when Mark and Michelle gave evidence at trial. 65 In all of the circumstances, I considered the conduct of the first to fourth defendants to be reasonable, and I could not be satisfied that their conduct, in truth, amounted to a 'surrender'. 66 The overriding consideration in any given case is that any costs order should do justice between the parties. In all of the circumstances -- 21 of 26 -- [2026] WASC 287 STRK J Page 22 of this case, justice between the parties is served by there being no order as to costs. -- 22 of 26 -- [2026] WASC 287 STRK J Page 23 Sch A - Further Amended Schedule 1 -- 23 of 26 -- [2026] WASC 287 STRK J Page 24 -- 24 of 26 -- [2026] WASC 287 STRK J Page 25 -- 25 of 26 -- [2026] WASC 287 STRK J Page 26 I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. CR Associate to the Honourable Justice Strk 15 JULY 2026 -- 26 of 26 --