Background
Four related trustees in the Cottle family group filed proceedings in June 2025 against accounting and tax advisers associated with Nexia and PricewaterhouseCoopers. The plaintiffs allege professional negligence and misleading or deceptive conduct concerning advice about family trust and interposed entity elections lodged with the Australian Taxation Office. They claim that distributions and loans made over at least 20 years may expose them to family trust distribution tax, penalties and interest; when filing suit, they estimated that damages could exceed $280 million.
The defendants had not been served. After an initial extension, the plaintiffs sought to delay service until June 2027 so that continuing discussions with the ATO could clarify their liability and allow them to narrow a pleading covering 91 distributions. Registrar Hedge rejected that request but extended service to 31 July 2026. The plaintiffs then sought review under r 49.19(1) of the Uniform Civil Procedure Rules 2005 (NSW), requesting an extension until February 2027.
The Court’s Holding
Sirtes J held that the Registrar had made no error. On the evidence then available, the plaintiffs expected their ATO discussions to continue until at least the first quarter of 2027, and the requested extension would have postponed service until two years after commencement. The Court agreed that such a delay was inconsistent with the overriding purpose and applicable case-management principles.
Nevertheless, a registrar review did not require proof of error, and the Court could consider new evidence. Because the plaintiffs now expected the ATO negotiations to conclude by the end of 2026, the Court set aside the Registrar’s orders and extended the service deadline to 27 November 2026. It declined to grant the longer extension sought because the proceedings had already been pending for more than a year and the defendants were entitled to notice of the allegations. To limit unnecessary expense while the claim was refined, the Court extended the deadline for filing defences until further order and listed the matter for directions on 8 February 2027.
Key Takeaways
- A Supreme Court review of a registrar’s decision under UCPR r 49.19 is discretionary and does not require the applicant to establish error.
- Fresh evidence or changed circumstances can justify intervention even when the registrar’s original procedural decision was correct.
- A desire to refine a claim before service does not justify a prolonged delay where defendants can instead be served and relieved temporarily from filing defences.
Why It Matters
The ruling balances efficient pleading against defendants’ entitlement to timely notice of a major claim. Plaintiffs cannot ordinarily leave originating process unserved for an extended period merely because related dealings with a regulator may alter the scope of the case.
It also illustrates a practical case-management solution for an evolving, high-value dispute: require service within a reasonable period, but suspend the obligation to plead in response until the claim’s scope becomes clearer.