Supreme Court New South Wales Medium Neutral Citation: Cruden v Sae-Ung [2021] NSWSC 1070 Hearing dates: In Chambers Date of orders: 25 August 2021 Decision date: 25 August 2021 Jurisdiction: Equity Before: Hallen J Decision: Orders that: (a) The Plaintiffs' notice of motion filed 9 June 2021 be dismissed. (b) The Defendants' notice of motion filed 12 May 2021, to the extent that it seeks additional security for costs at this stage, be dismissed. (c) How the burden of the costs of each notice of motion will be dealt with be determined on the adjourned date being 3 September 2021. Catchwords: PRACTICE AND PROCEDURE – Separate determination – Uniform Civil Procedure Rules 2005 (NSW), r 28.2 – Application to consider whether, amongst other things, property falls into the estate of the deceased before other issues, including whether family provision order should be made – Where there are significant disputes of fact – Where credibility is likely to be in issue – Whether making the order would give effect to the just, quick and cheap resolution of issues – No basis on which to alter the general rule that all matters be determined in the one hearing – notice of motion dismissed COSTS — Security for costs — Partial security already provided – Second and third Defendants seek an order that requires the Plaintiffs to increase the amount of the indemnity for costs by an appropriate amount – Order for further security at this stage be dismissed Legislation Cited: Civil Procedure Act 2006 (NSW) ss 56-58 Succession Act 2006 (NSW) ss 60, 87 Uniform Civil Procedure Rules 2005 (NSW) r 6.3, 28.2, 42.21 Cases Cited: Brundza v Robbie and Co (No. 2) (1952) 88 CLR 17; [1952] HCA 49 Combis & Staatz as joint and several liquidators of RB Hospitality Holdings Pty Ltd (in Liquidation) v Lee [2020] NSWSC 960 Crawley v Vero Insurance Ltd & Ors [2012] NSWSC 593 Energy Drilling Inc v Petroz NL & Ors [1989] FCA 184; [1989] ATPR 40-954 Li v State of New South Wales [2013] NSWCA 165 Loretta Craig & Ors v Anthony Johnson & Ors [2020] NSWSC 430 Porter v Aalders Auctioneers and Valuers Pty Ltd and Anor [2011] NSWDC 96 Rogers v Baillieu Bullock Wilkinson Pty Ltd (1981) 28 SASR 594 Singer v Berghouse (1993) 114 ALR 521; [1993] HCA 35 Southwell v Bennett [2010] NSWSC 1372 Stephenson Blake & Co v Grant, Legros & Co (1917) 86 LJ Ch 439 Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274 Category: Procedural rulings Parties: Pirapon Cruden (first Plaintiff) Nattapon Wongpanich (second Plaintiff) Pornnapa Sae-Ung (first Defendant) Carolyn Elizabeth Cruden (second Defendant) Valerie Robyn Kirby (third Defendant) Representation: Counsel: B Burke (Plaintiffs) No appearance (first Defendant) L J Ellison (second and third Defendants) Solicitors: Turnbull Hill Lawyers (Plaintiffs) No appearance (first Defendant) Deutsch Miller (second and third Defendants) File Number(s): 2020/327240 Publication restriction: Nil Judgment 1. HIS HONOUR: The Plaintiffs, Pirapon Cruden and Nattapon Wongpanich, who are the adult sons of Alexander Cruden (the deceased), initially, brought proceedings, by Summons filed on 17 November 2020, seeking a family provision order under Chapter 3 of the Succession Act 2006 (NSW) (the Act) in respect of the estate and notional estate of the deceased. The only Defendant named in the Summons was Pornnapa Sae-Ung, the widow of the deceased, who was also the person named as executor in the deceased's last Will. She appeared, initially, with legal representation, but a notice of ceasing to act was filed and she has not played an active role since then. 2. The deceased died on 18 November 2019. The Defendant named in the Summons has made an application for Probate of the last Will of the deceased, but so far as is known, at the time the matter came before the Court, Probate of the Will has not yet been granted. 3. The Plaintiffs filed an amended Summons on 26 March 2021, in which they repeated the claim for family provision orders and added additional prayers for relief relating to a fund of money which they asserted was held in trust for the estate of the deceased. In this amended Summons, they added Carolyn Elizabeth Cruden and Valerie Robyn Kirby, the two daughters of the deceased by a prior marriage, as the second, and the third, Defendant respectively. 4. On 26 April 2021, the matter was in the Succession List for directions. On this occasion, Mr B Burke of counsel appeared for the Plaintiffs, there was no appearance by, or on behalf of, the first Defendant, and Mr L J Ellison SC appeared for the second and the third Defendants. 5. Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 6.3(e) requires that proceedings on a claim for relief in relation to a trust, other than an express trust wholly in writing, must be commenced by statement of claim. The Court directed that a form of the proposed Statement of Claim be provided to the Defendants who should then inform the Plaintiffs whether there was any opposition to it being filed. 6. It was noted, on 26 April 2021, that the second and third Defendants intended to file a notice of motion for security for costs. 7. On 12 May 2021, the second and third Defendants filed the notice of motion seeking security for costs, together with an affidavit of Mark Andrew Deutsch, solicitor, sworn on that date. In that notice of motion, they sought: "1. Pursuant to rule 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) or, alternatively, the inherent jurisdiction of the Court, the plaintiffs provide security for the second and third defendants' costs of and incidental to the proceedings in the amount of $75,000 (the Security Amount) or such sum as the Court orders, payable at such times as the Court sees fit. 2. The Security Amount be provided by way of payment into Court within 14 days of the date these orders are made. 3. In the event that the Security Amount is not provided in accordance with Orders 1 and 2, the proceedings are stayed until the Security Amount is provided. 4. The second and third defendants have liberty to apply for additional security for costs if and when the Security Amount is insufficient to cover the second and third defendants' costs of and incidental to the proceedings. 5. The plaintiffs to pay the second and third defendants' costs of and incidental to this Notice of Motion. 6. The Notice of Motion is stood over. 7. Such further or other order(s) as the Court deems fit." 1. The basis of the application for security for costs was that "the Plaintiffs in these proceedings are resident overseas and have no assets located in Australia". 2. There was no dispute that both Plaintiffs live in Thailand and that they have no assets in Australia. It seems to be accepted that the Defendants have satisfied the jurisdictional threshold for an order for security for costs in UCPR, r 42.21(1)(a) and that each of the Plaintiffs has no assets of any substance within, or outside, the jurisdiction. 3. On 28 May 2021, further directions were made for the Plaintiffs to file and serve any evidence in opposition to the claim for security for costs. 4. On 15 June 2021, the matter was again in the Succession List, and on that date, without opposition, the Court granted the Plaintiffs leave to file and serve the Statement of Claim by 28 June 2021. Shortly thereafter, the Plaintiffs complied with that order. 5. In the Statement of Claim, the Plaintiffs sought the following relief: "1. An order that the plaintiffs' claim for relief in prayers for relief 3 and 4 below be heard separately and prior to the hearing of the plaintiffs' claim for the relief in prayer for relief 6 below. 2. An order that the plaintiffs be appointed administrators ad litem in relation to the estate of the Alexander Cruden late of Chon Buri Provence for the purposes of seeking orders 3 and 4 below. As against the Second and Third Defendants 3. A declaration that the sum of $453,851.27 removed by the second and third defendants from Commonwealth Bank of Australia account identified as BSB XXXXXX account number XXXXXXXX is held on trust for the deceased or his personal representative and constitutes an asset of the estate of the deceased. 4. An order that the second and third defendants account to the personal representative of the deceased in relation to the sum of $453,851.27 referred to in order 2 above. As against the First Defendant 5. Orders [sic] that provision be made for the plaintiffs' maintenance, education and advancement in life pursuant to section 59 of the Succession Act 2006 (NSW) out of the estate and/or notional estate of Alexander Cruden late of Chon Buri Provence. As against the First, Second and Third Defendants 6. Costs." 1. On 9 June 2021, the Plaintiffs filed a notice of motion seeking, relevantly, the following relief: "1. An order that the plaintiffs' claim for the relief in prayers for relief 3 and 4 below be heard separately and prior to the hearing of the plaintiffs' claims for provision pursuant to section 59 of the Succession Act 2006 (NSW) out of the estate and/or notional estate of Alexander Cruden late of Chon Buri Provence ('the deceased'). …. 3. A declaration that the sum of $453,851.27 removed by the second and third defendants from Commonwealth Bank of Australia account identified as BSB XXXXXX account number XXXXXXXX is held on trust for the deceased or his personal representative and constitutes an asset of the estate of the deceased. 4. An order that the plaintiffs be appointed administrators pedente life or administrators ad colligenda bona in relation to the estate of the deceased for the purposes of receiving and holding the sum of $453,851.27 referred to in order 3. …" 1. Subsequently, the parties asked the Court to determine whether the order sought for a separate hearing could be determined because it was thought that it might resolve, at least partially, the question of security for costs. 2. The matter was again before the Court on 19 July 2021, when counsel, together, submitted that it would be in the interests of all parties for the Court to make an order for the separate determination of the questions referred to. Subsequently, they forwarded to the Court orders proposed by consent, which were in the following terms: "1. Pursuant to UCPR Part 28 Rule 28.2 the claims the subject of paragraphs 3 and 4 of the prayers for relief claimed in the Statement of Claim and the Notice of Motion filed 9 June 2021 (the 'separate issues') be determined as a separate question. 2. The separate question be heard prior to, and in advance of, the balance of the Statement of Claim. 3. The plaintiffs pay into Court within 7 days the sum of $25,000.00 as security for the Second and Third Defendants' costs of the hearing of the separate issues. 4. Reserve the right of the Second and Third Defendants to make application for further security for costs. 5. The Defendants file any Defence by 2 August 2021. 6. The Plaintiffs file and serve any further evidence they intend to rely upon in relation to the separate issues by 23 August 2021. 7. The Defendants file and serve the evidence in relation to the separate issues by 13 September 2021. 8. The Plaintiffs file and serve any evidence in reply in relation to the separate issues by 27 September 2021. 9. The Proceedings and the Second and Third Defendants' motion for security for costs and the Notice of Motion filed 9 June 2021 is listed for further directions on ___________." 1. Because, in my view, the orders required consideration, initially, I referred the matter to Chambers. On 29 July 2021, having considered the documents in the Court file, as well as the proposed Consent Orders, my Associate, at my request, sent an email, in the following terms, to the legal representatives of each party: "This email is sent on behalf of his Honour Dear Practitioners, His Honour has now had the opportunity to consider the documents in the Court file as well as the Consent Orders. His Honour is not prepared to deal with the matter in Chambers and without the benefit of written submissions on the question of the separate question for determination. Please provide written submissions, by 4:00 p.m. on Thursday, 5 August 2021, including a joint statement of facts not in dispute upon which the Court can consider whether it is appropriate to deal with the matter in the way the legal representatives have suggested." 1. On 5 August 2021, the Court received written submissions from each of the legal representatives. Some brief background facts that are unlikely to be in dispute 1. The Plaintiffs are the children of the deceased and Rattanakom Wongpanich (called "Noi"). The first Plaintiff was born in October 1993 and the second Plaintiff was born in November 1997. As stated, they both currently reside in Thailand. 2. Noi died in March 2016. 3. The first Defendant is the spouse of the deceased. They were married on 29 July 2016. 4. The second and third Defendants are the children of the deceased and Edna Cruden. They were married to each other in January 1966 and were divorced in September 1996. 5. The second Defendant was born in November 1969 and the third Defendant was born in November 1971. 6. In 1987, the deceased and Edna purchased an apartment in Coogee, in the eastern suburbs of Sydney. Following their divorce and a property settlement, the deceased came to be the sole registered proprietor of the Coogee apartment. He moved into the apartment in about 1995. 7. In about 1997, the deceased moved, permanently, to Bangkok, Thailand. However, he returned to Australia regularly and would stay with his sister, former wife, or with one of the second, or the third, Defendant. 8. The deceased left a Will dated 7 June 2011 which provided in Clause 7.2.1: "I hereby give all my estate and interest in the property situated at and known as XX Dundas Street, Coogee in the State of New South Wales together with its contents [...] to my daughters VALERIE ROBYN KIRBY and CAROLYN CRUDEN as shall survive me and if more than one then in equal shares." 1. In July 2017, the Coogee apartment was sold for $1,050,000. Shortly thereafter, the deceased returned to Thailand. On about 30 August 2017, the net proceeds of sale were deposited into an account in the joint names of the deceased and the second and third Defendants pursuant to written instructions given by the deceased. 2. In September 2017, each of the second and third Defendants received amounts totalling $227,846 from the joint account. 3. Various events, which do not have to be repeated, then occurred involving the deceased and the second and third Defendants. 4. As at 29 January 2020, the amount held in the joint account was $453,851.27. (There was, apparently, another amount of $537,658 which was the proceeds of the recommendation following a complaint made by the deceased to the Australian Financial Complaints Authority. Not very much is known about this amount.) 5. On 29 January 2020, the whole of the balance of the account of $453,851.27 was transferred out of the joint account (excluding the AFCA funds) to a different bank account held in the names of the second and third Defendants. 6. The Plaintiffs submitted that if the claim against the second and third Defendants is successful, the family provision claim will be continued, and the first Defendant is expected to take an active role in the proceedings. However, should the claim against the second and third Defendants be unsuccessful, the Plaintiffs will not continue with any of their claims. The proceedings will then come to an end. 7. The Plaintiffs also submitted that the second and third Defendants' notice of motion for security of costs was brought upon the basis that the whole of the proceedings would be heard together. Should security for costs be ordered in the amount of $75,000 against them, the Plaintiffs would be unable to provide that security and their claims would be brought to an end. 8. The Plaintiffs stated that they have raised, and sent to Australia, $25,000 as security for the costs of the second and third Defendants for a hearing, of one day, on the issue of the separate question. They noted that a hearing of the separate issue against the second and third Defendants would be a short one, given that the claim is based almost entirely upon evidence in the affidavit of the second and third Defendants. The Plaintiffs' legal representatives estimated hearing of the separate issue would be of one day's duration. 9. The Plaintiffs also submitted that there is very little factual dispute between the parties and the real dispute is legal in nature. They also submitted that their claim against the second and third Defendants had very strong prospects of success. Counsel submitted in writing: "The statement of facts not in dispute provided to the Court with these submissions is in tabular form and refers to the facts relied upon by the plaintiffs and gives references to the Statement of Claim and the affidavit by the second and third defendants. The Statement of Claim was filed after the affidavit of the second and third defendants was filed in the majority of the material facts pleaded are based upon the material disclosed in the affidavit sworn by the second and third defendants. It is submitted by the plaintiffs that it is clear from the table of facts and the references therein that there is very little factual dispute between the parties. The real dispute is a legal dispute. The plaintiff's [sic] contend: (a) any joint tenancy which may have existed as to the beneficial ownership of the funds in the joint account as between the deceased and the second and third defendants was severed by the agreement reached on or before 4 September 2017 between the deceased and the second and third defendants that they would take unequal shares of the funds with the deceased taking 50% and the second and third defendants taking 25% each; or (b) any joint tenancy which may have existed as to the beneficial ownership of the funds in the joint account as between the deceased and the second and third defendants was severed by the conduct of the second and third defendants taking shares of 25% each and the conduct of the deceased causing his 50% share to be retained in the account so that the second and third defendants could transfer it to him overseas over a period of time; or (c) any joint tenancy which may have existed as to the beneficial ownership of the funds in the joint account as between the deceased and the second and third defendants was severed by the combination of (a) and (b) above. The second and third defendants contend that the severance of the joint tenancy contended for by the plaintiffs is not possible because the Commonwealth Bank of Australia terms and conditions relating to the joint account included a term, at clause 2.3, that: 'If a joint account owner passes away, the account belongs to the other account owner(s).' Based upon this contention, the second and third defendants contend that they were entitled to the funds in the account beneficially upon the deceased's death." 1. In support of this submission, counsel for the Plaintiffs provided the written statement of facts which they submitted was based on the evidence of the second and third Defendants. However, it is clear that, at the time of sending it to the Court, it was not an agreed Statement of Facts as had been required by the Court. 2. The second and the third Defendants submitted that their agreement to the hearing of the separate question was conditional upon the Plaintiffs' agreement to abandon any notional estate issue if unsuccessful in their claim. Should the Plaintiffs not give that assurance, or resile from any such assurance, (which they appear to have done), the second and third Defendants contended that the determination of fact, law, and credibility of witnesses which will be required for the determination of the separate question would also be relevant to the determination of the balance of the Statement of Claim. 3. The second and third Defendants also submitted that should the entirety of the Plaintiffs' claims be heard together, further security should be ordered (in addition to the $25,000 already provided by the Plaintiffs) for the following reasons: 1. The second and third Defendants have already been put to substantial expense preparing evidence in the proceedings; 2. An order was made on 15 June 2021 in favour of the second and third Defendants for costs thrown away in respect of the amendment of the Plaintiffs' pleadings; 3. There have been three lengthy appearances already held before the Court, largely caused by substantial delays in the Plaintiffs agreeing to provide security and insistence on hearing the issues as separate questions; and 4. The timetable for further evidence proposed by the Plaintiffs suggests they intend to put on substantive evidence that will likely require a response. 1. Senior counsel submitted (in writing): "The second and third defendants did not think it was appropriate or apt for the separate issues to be determined as a separate question. However, we had taken, and respectfully thought His Honour had taken, the view the plaintiffs had agreed to abandon any notional estate issue if the separate question was allowed. The second and third defendants only sought the orders in respect of the separate question on the basis of that understanding. We refer to page 5, line 45 of the transcript of the directions hearing on 15 June 2021 (Transcript) (annexed to these submissions): 'HIS HONOUR: In the event, Mr Ellison, that Mr Burke gives up a notional estate claim, on the basis that if he loses on the trust point, that's the end of the matter. And in the event that he succeeds on the trust claim, what portion of the $450,000 does he receive under the will or on intestacy.' On the last occasion before the Court (19 July 2021), the plaintiffs seemed to resile from their previous position the notional estate claim would not be pursued if the separate question was determined in favour of the second and third defendants. If they have resiled from abandoning any notional estate claim, then the second and third defendants are of the view all the issues canvassed in the pleadings must be heard together. The determination of the separate issues involves the determination of issues of fact and law and credibility of witnesses which are also relevant to the balance of the statement of claim. This accords with the views of the Court expressed on previous occasions, for example, at Transcript, page 5, line 20; page 13, line 14 and page 14, line 12." 1. Ultimately, senior counsel submitted that any statement of agreed facts would not reflect the full range of factual matters the Court will need to take into account at a separate or final hearing. In his written submissions, he wrote: "Nevertheless, the nature of these proceedings limits the ability of the parties to agree as to facts. Accordingly, any agreed statement of facts would be largely limited to the circumstances surrounding the opening of, deposits in and withdrawals from the Commonwealth Bank of Australia joint account. These matters have already addressed in the affidavit of the first and second defendant. Similarly, any statement of agreed facts would not resolve any significant issues in the dispute. As touched on above, there is going to be significant further affidavit evidence of a presently unknown scope. The evidence of the second and third defendants is expected to canvas the nature of relationship with their father, the intentions in relation to relevant funds and matters discussed or not discussed with their father in relation to these issues. Given the plaintiffs' case turns on allegations there was conduct on the part of the second and third defendants and/or an agreement between the second and third defendants and the deceased, which they rely upon to establish that severance occurred, and which is disputed by the second and third defendants, it seems inevitable key facts will not be agreed. In short, any statement of agreed facts would not reflect the full range of factual matters the court will need to take into account at a separate or final hearing." The separate question 1. UCPR r 28.2 provides that the Court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. 2. The discretion which is conferred on the Court to make the order sought is obviously a wide one. There have been many authorities on the legal principles that apply in exercising the discretion of whether to make the order for separate determination. I dealt with the principles in Southwell v Bennett [2010] NSWSC 1372, at [15]: "I take the principles that apply in determining whether to make an order for the separate determination of a question under the rule to be: (a) The rule speaks of 'questions' and not 'issues' and does not differentiate between questions of fact, or law, or partly of fact and partly of law. (b) The judicial determination of a 'question' must involve a conclusive, or final, decision based on concrete and established, or agreed, facts, for the purpose of quelling a controversy between the parties: Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334, at [45] and [51]. (c) The rule permits the Court to hear and determine the separate question at any point before, at, or after, any trial or further trial in the proceedings, rather than only as a preliminary question. (d) Whether such an order should be made is a matter for the court's discretion, which discretion must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 669, at 670; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7]. (e) As a general rule, the discretionary power to order separate determination of a question should be approached with caution: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at [436], per Callinan J; Tepko Pty Limited v The Water Board [2001] HCA 19; (2001) 206 CLR 1, at [168]–[170] per Kirby and Callinan JJ: Commonwealth Bank v Clune [2008] NSWSC 1125 at [6], per Johnson J; Bailey and Bailey v Director-General Department of Energy Climate Change and Water and Ors [2010] NSWSC 979 at [4] per Studdert AJ. (f) In exercising its discretion, the overriding purpose of the Civil Procedure Act 2005, namely the just, quick and cheap resolution of the real issues in the proceedings (s 56) must be given effect. (g) Generally, all questions of fact and law should be determined at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-42; SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd [2006] FCA 14. If the Court is to depart from that position, the party seeking the separate determination of a question must satisfy the Court that it would be 'just and convenient' for that order to be made: Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718 at [8]-[9], see also Energy Australia v Australian Energy Limited [2001] FCA 1049. (h) While it may appear attractive, superficially, to order the trial of a separate question, experience often shows that it will not be so, for example, because of the complications that can arise in relation to appeals, or to overlapping factual issues, or to questions of credit, if the same witnesses have to give evidence in relation to a question that is separated and those questions that are not: Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(6)] per Einstein J.; Owners Corporation Sp 70672 v Trustees of Roman Catholic Church [2010] NSWSC 946 at [16] per Ball J. (i) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings, but often has the reverse effect. It sometimes happens that it turns out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which it is intended to avoid: Idoport Pty Ltd v National Australia Bank Ltd; Tepko Pty Limited v The Water Board at [168]. (j) Before a question is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd at 142, per Giles CJ in Comm D; Parramatta Stadium Trust v Civil and Civic Pty Ltd; Century Medical v THLD (NSWSC, 27 August 1996, unreported). (k) Where findings as to the credit of a witness is, or of witnesses are, or may be, involved in the consideration of the evidence relevant to the question, it is inappropriate to order a separate trial: ABB v Freight Rail [1999] NSWSC 1037. (l) Often, a separate question is heard on the basis of: (i) agreed statements of fact; (ii) a narrow point to be determined; and (iii) a hearing that is able to be conducted within a short time (or a short time relative to the total length if the hearing of the separate question were not to be dealt with). (m) Factors that tend to support the making of an order, include that the separate determination of the question may: (i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the proceedings: Tallglen v Pay TV Holdings; (ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 602 per Kirby P at 607). (n) It may be appropriate to determine a separate question, even if it will not resolve all the issues, provided that there is a strong prospect that the parties will agree upon the result when the core of the dispute has been decided, or if the decision will obviate unnecessary and expensive hearings of other questions: City of Swan v Lehman Brothers Australia Ltd [2009] FCA 784; (2009) 73 ACSR 86 at [27] per Rares J. The determination of the one question should enable a sensible reassessment of litigation risks, which is generally likely to encourage some form of settlement discussions. (o) Relevantly, one factor that may tell against the making of an order would be where there is likely to be a significant overlap between the evidence adduced on the hearing of the separate question and at trial — possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: Reading Australia Pty Ltd v Australian Mutual Provident Society at [8]. There is always a risk of inconsistent findings arising from determination of separate questions. (p) Whilst the decision is ultimately one for the court to determine, it will have regard to the attitude of the parties: TVW Enterprises Limited v Duffy (Federal Court of Australia, 28 March 1985, unreported) Toohey J. (q) It is a relevant consideration to weigh the time likely to be taken in the hearing of a separate question and the availability of hearing dates for that purpose, against the time and expense of a substantive hearing and the length of time likely to elapse before such a hearing will take place: TVW Enterprises Limited v Duffy at pp 4-5. (r) Each case will have its own dynamics that dictate the relative importance of various factors to be considered in exercising the discretion conferred. (s) It is necessary that there be precision, both in formulating the question, and in specifying the facts upon which it is to be decided: Jacobson v Ross [1995] 1 VR 337 at 341." 1. In Crawley v Vero Insurance Ltd & Ors [2012] NSWSC 593, Beech-Jones J adopted these principles and made five further points as follows at [16] – [20]: "First it is trite to observe that the power conferred by rule 28.2 is to be exercised by reference to the overriding purpose of the Civil Procedure Act 2005 'to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings' (s 56). One aspect of that command which my analysis below seeks to emphasise is the desirability of the proceedings being 'cheap'. I am under no illusion that these proceedings will be anything other than expensive for the parties, but that is not an excuse to let considerations of cost fall away. The system of litigation in this State expects that counsel appearing will be across all issues in the case and that the legal representatives will marshall all relevant evidence concerning those issues. Experience demonstrates that those steps in turn require a much larger body of material to be considered. All of this effort involves cost. Sometimes it is rendered futile because the focus of all this attention is rendered otiose by the courts' determination of some other issue. Second, an interlocutory order for the separate determination of issues is an exceptional measure, distinct from the ordinary course taken of determining the issues in their totality: Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697 at [5]. Consequently, the applicant bears the burden of demonstrating the appropriateness of the order, but it may be appropriate for the judge to take a more 'interventionist role' in crafting the precise scope of the question: Intergral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 per Brereton J at [6]; Commonwealth Bank of Australia v Clune [2008] NSWSC 1125. The counter to the observations in [16] is that sometimes issues are separated in the expectation that their resolution will determine the balance of the proceedings but that proves illusory. On other occasions a matter determinative of, and fatal to, the proceedings is decided but then appealed and overturned with the outcome that the parties find themselves back in the same position they were prior to a trial but with years having passed. Kirby and Callinan JJ noted in Tepko Pty Ltd v The Water Board [2001] HCA 19; (2001) 206 CLR 1 at [168] that the benefits of a separate question order 'are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory...'. Third, one real problem with ordering separate hearings is the potential for credibility findings to be made in one hearing in respect of a witness who may have to give evidence at the second hearing. This can create significant difficulties including, but not restricted to, the potential for the trial judge to disqualify themselves (see Warragamba Winery Pty Ltd v New South Wales [2010] NSWSC 66 at [10] to [14] per Harrison J). Fourth, the power conferred by rule 28.2 is not one that enables the severing of 'issues' but instead the isolation of 'questions'. The question needs to be identified with precision. One advantage of doing that in advance of hearing a motion such as this one is that the various considerations for and against exercising the power can be considered against the precise question that is proposed to be determined separately. Many of the cases involving applications of this kind involve attempts to undertake a Solomon style severing of all issues of liability and quantum without any precise identification of what the 'question' to be determined separately is. For the reasons discussed below I reject that approach here although I consider it appropriate to sever a relatively narrow question of quantum which might occupy a disproportionately large portion of the litigation battlefield. Fifth, one aspect of rule 28.2 that is not discussed in many of the cases is that it includes the power to order a question be decided after all other issues in the proceedings. Many of the cases where severance is sought involve an attempt to isolate some preliminary question which one of the parties hopes will give them a Hail Mary pass to the end zone of success. This approach runs the risk of promoting delay because of the potential for appeals from any adverse preliminary determination and the difficulties in isolating some discrete facts that enable the preliminary question to be resolved without overlapping with the balance of the proceedings. These adverse consequences are less likely where the separate question is relatively narrow and will be decided after all other issues in the proceedings. In addition it is always to be borne in mind that an order under rule 28.2 can be revoked if appropriate (see Warragamba). Thus if it appears to a trial judge who is completely cognisant of all the issues and the material that a hearing of the separate question is not warranted they may revoke it or, if appropriate, hear and determine it immediately. There is far less scope to change course for a trial judge who embarks upon a hearing of a question posed prior to the hearing of all other issues in the proceedings." 1. The principles were re-stated, more recently, by Lonergan J in Loretta Craig & Ors v Anthony Johnson & Ors [2020] NSWSC 430 at [26]–[28] and by Davies J in Combis & Staatz as joint and several liquidators of RB Hospitality Holdings Pty Ltd (in Liquidation) v Lee [2020] NSWSC 960 at [27]. 2. In Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274, the Court (Bell P; Gleeson and Payne JJA) wrote at [187]: "…experienced commercial litigators are aware of the high hurdle that needs to be overcome to secure an order for a separate question: see, for example, Perre v Apand Pty Limited (1999) 198 CLR 180; [1999] HCA 36 at [436]; Tepko Pty Limited v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [168]–[170]; Commonwealth Bank of Australia v Clune [2008] NSWSC 1125 at [6]; Bailey & Bailey v Director-General Department of Energy Climate Change and Water [2010] NSWSC 979 at [4]; and Southwell v Bennett [2010] NSWSC 1372 at [15]." 1. Whilst the Plaintiffs argued that the separate question was purely a legal, rather than a factual, one, authorities have shown that what may first appear to be solely a question of law, may often involve findings of fact which are more properly dealt with together with the whole proceedings: Rogers v Baillieu Bullock Wilkinson Pty Ltd (1981) 28 SASR 594; Stephenson Blake & Co v Grant, Legros & Co (1917) 86 LJ Ch 439 at 440 (Warrington LJ). Determination 1. In this case, the questions for determination include whether amounts held in the deceased's bank account removed by the second and third Defendants are held on trust for the deceased or his personal representative, and would, therefore, fall into the deceased's estate. 2. The Plaintiffs contend that any joint tenancy which may have existed as to the funds in the joint account of the deceased and the second and third Defendants was severed by either, agreement reached on or before 4 September 2017, or, by the conduct of the second and third Defendants taking an unequal share of the funds, or, some combination of both. The second and third Defendants dispute that any agreement was reached and that the joint tenancy was severed. Clearly, these assertions involve disputed issues of fact. In addition, if the joint tenancy were not severed, a question may arise as to whether a notional estate order could be made in order to satisfy any order for provision made in favour of one, or both, of the Plaintiffs. 3. In view of the events that have occurred since the question of a separate hearing was first raised, it is clear that the notice of motion for a separate hearing must be dismissed for at least the following reasons: 1. The relevant facts are not agreed between the parties. To the contrary, some are likely to be in dispute. 2. At least the credit of one, or more, of the parties, may be in dispute. In that regard, I note: 1. The nature and value of the deceased's estate and notional estate is not entirely clear on the evidence that I have read. 2. I do not know, whether the matters to which the Court may have regard, identified in s 60(2) of the Act, for the purpose of determining whether to make a family provision order and the nature of any such order, are likely to be in dispute. 3. The determination of the question, should it arise, whether there is any relevant property transaction and whether the Court may make an order designating property as notional estate will depend on facts not agreed. 4. In view of the Plaintiffs not being prepared to state that, if unsuccessful, the claim for family provision orders would not be sought out of property that may be designated as notional estate of the deceased, the proceedings will not, necessarily, be concluded if the separate question is determined in favour of the second and third Defendants. The matter would have to proceed in order to determine whether a notional estate order may be made. 5. The matters referred to in s 87 of the Act, namely the importance of not interfering with reasonable expectations in relation to property, the substantial justice and merits involved in making or refusing to make the order, involve issues of fact. Whether there are any other matters the Court considers relevant in the circumstances cannot be determined at this stage. 6. There would be factual issues in determining, under s 89, what property should be designated as notional estate of the deceased. 1. A second hearing, if for example, the Plaintiffs are successful, or if they are not and they continue to proceed for a notional estate order, is likely to be an inefficient use of the Court's, and the parties', time and resources since the entirety of the dispute would not be resolved 2. The witnesses should be cross-examined on all issues at the same time, because the evidence given on one issue may impact on the acceptability of the evidence given on another. 3. A bifurcated hearing is likely to be impractical and unworkable. There would also be a significant delay in having any subsequent hearing heard and determined. To make an order for a separate hearing would not give effect to the provisions of ss 56, 57 and 58 of the Civil Procedure Act 2006 (NSW) which provides (inter alia) that the overriding purpose of the Act and the Rules is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 4. The possibility exists that if the separate issue were determined, an appeal may be lodged, thereby giving rise to more proceedings, and further interruption to the Court's processes. 1. It follows that the Plaintiffs' application for determination of a separate question cannot justly be granted and the Plaintiffs' notice of motion filed on 9 June 2021 must be dismissed. Security for Costs 1. An order for security for costs against a plaintiff who is ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction against which it can enforce a judgement for costs, so that the defendant is not forced to seek recovery in a foreign jurisdiction: Energy Drilling Inc v Petroz NL & Ors [1989] FCA 184 at 11; [1989] ATPR 40-954 at 50-422. Such an order protects the efficacy of the exercise of the power to award costs: Li v State of New South Wales [2013] NSWCA 165 at [20]. 2. The principles applicable on an application for security for costs are well known. The residence of the Plaintiffs outside Australia is a powerful factor in favour of ordering security. The application was brought promptly. Presumably, because of these matters, amongst others, without a real contest, the Plaintiffs agreed to provide security of $25,000, which they have done. 3. The Court's discretion to make an order for security for costs, after the threshold question of jurisdiction is established, is necessarily a wide one which must be exercised having regard to all of the relevant circumstances of the particular case. There is no fixed principle which warrants the making of an order simply because one or more of the grounds specified in r 42.21(1) are established. All of the circumstances of the case must be considered. 4. The Court must also bear in mind that these are proceedings for a family provision order in favour of each Plaintiff. As Gaudron J pointed out in Singer v Berghouse (1993) 114 ALR 521 at 522; [1993] HCA 35, an order for security for costs involves a discretionary judgment of a very broad kind made by reference to the circumstances of the particular case and not by reference to a rule or rules which direct a decision one way or the other. 5. The evidence does not establish whether there are reciprocal arrangements in place between Australia and Thailand that enable an Australian judgment for costs to be registered and enforced in a Thai court. Neither counsel made any submissions on the question whether there exists, in Thai courts, provision for the recognition and enforcement of judgments of an Australian court. 6. In Porter v Aalders Auctioneers and Valuers Pty Ltd and Anor [2011] NSWDC 96, Murrell SC DCJ (as her Honour then was) at [20], wrote: "Australia and Thailand have no agreement for the reciprocal enforcement of judgments: Foreign Judgements Act 1991 and Schedule 2 to the Foreign Judgments Regulations 1992. As Mr Porter lacks substantial assets in Australia, the absence of such an agreement means that the only way in which Aalders could reasonably hope to recover any costs awarded in its favour is if the Court orders security for its costs." 1. Both the Act and the Regulations are still in force. 2. I shall assume that the Defendants may have difficulty, and will, inevitably, incur additional costs, in attempting to recover the amount of any costs judgment they might obtain against the Plaintiffs. 3. When providing security for costs, the Court does not set out to provide a complete indemnity to Defendants in respect of costs: Brundza v Robbie and Co (No. 2) (1952) 88 CLR 171 at 175; [1952] HCA 49. The Court has been informed that $25,000 has been provided by way of security. 4. It is not possible to conclude, on the evidence, whether the second and third Defendants' costs, calculated on the ordinary basis, to date, exceeds the amount already provided. I would not assume that it does even though senior counsel has been retained by them. 5. In view of the nature and value of the amount in dispute, engaging senior counsel may be a luxury that those Defendants will have to personally bear rather than imposing it upon the Plaintiffs. Furthermore, the conduct of the determination of the Plaintiffs' notice of motion has been achieved without a formal hearing of the notice of motion and has been determined, in Chambers, on the papers and without the need for a hearing. I also have regard to the effect of any order made at this time on the Plaintiffs' ability to continue the litigation. 6. Therefore, I shall not deal with the second and third Defendants' application for further security for costs at this time. To the extent that the second and third Defendants' notice of motion seeks additional security for costs at this time, it is dismissed. In taking that course, it will remain open to them to make further application if it is appropriate to do so at a later stage. 7. I shall allow the parties to consider how the matter should now proceed. I stand the matter over to Friday 3 September 2021 for further directions. I shall deal with the directions for how any question of the costs of the two notices of motion is to be determined on the adjourned date. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2021