Bassett v Cameron (No 2)

[2021] NSWSC 419

Supreme Court

New South Wales

Medium Neutral Citation:

Bassett v Cameron (No 2) [2021] NSWSC 419

Hearing dates:

On the papers

Date of orders:

27 April 2021

Decision date:

27 April 2021

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

(1)   As to the costs of Geoff’s proprietary estoppel claim, order that:

(i)   Geoff pay Sue’s costs of defending the proprietary estoppel claim on behalf of Bill’s estate up to 27 May 2019, on the ordinary basis and that Sue otherwise be indemnified out of the estate for those costs;

(ii)   Geoff pay the costs of Bruce and Merilyn of defending the proprietary estoppel claim on behalf of Bill’s estate from 28 May 2019 to 31 May 2019 on the ordinary basis and that Bruce and Merilyn otherwise be indemnified out of the estate for those costs;

(iii)   Bruce and Merilyn pay Geoff’s costs of the proprietary estoppel claim from 1 July 2019 (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated costs) on the indemnity basis;

(iv)   Bruce and Merilyn be indemnified out of Bill’s estate for their costs of defending the proprietary estoppel claim after 1 June 2019 (and for the adverse costs ordered in (iii) above) but only as assessed on the ordinary basis (with the intent that they bear personally the difference between the indemnity costs ordered and costs on the ordinary basis).

(2)   As to the costs of the family provision claim, order that:

(i)   Geoff’s costs be paid out of Bill’s estate (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated costs) on the ordinary basis up to 31 May 2019 and on the indemnity basis thereafter;

(ii)   Sue be indemnified out of Bill’s estate for the costs of defending the family provision claim up to 27 May 2019 on the indemnity basis;

(iii)   Bruce and Merilyn be indemnified out of Bill’s estate for their costs of defending the family provision claim after 1 June 2019, assessed on the ordinary (not indemnity) basis and that they indemnify Bill’s estate for the difference between the indemnity costs ordered in favour of Geoff in respect of his family provision claim and those costs on the ordinary basis.

(3)   As to the first cross-claim, order that:

(i)   Bruce and Merilyn pay Geoff’s costs of the first cross-claim up to 31 May 2019 on the ordinary basis and from and including 1 June 2019 on the indemnity basis;

(ii)   Sue be indemnified out of the estate for the costs of the first cross-claim on an indemnity basis up to 27 May 2019 and there be no order as to her costs of the first cross-claim thereafter;

(iii)   for the avoidance of doubt, there be no indemnity out of Bill’s estate for Bruce and Merilyn’s costs of the first cross-claim.

(4)   As to the reserved costs, order that:

(i)   costs of the notice of motion determined by Stevenson J on 3 February 2017 follow the outcome of the first cross-claim, such that order 3 above apply to those costs;

(ii)   costs of the notice of motion before me on 26 November 2019 follow the event, such that orders 1 – 3 above, as applicable, govern those costs.

(5)   Order that Sue be authorised to retain, from the respective entitlements of Geoff and Merilyn and Bruce in Bill’s Estate, for her costs as ordered above, (after having recovered as much as possible of the costs from the persons liable to pay them) the difference between the costs paid or payable on the ordinary basis by these orders and costs on the indemnity basis where so ordered above.

(6)   Order that Sue not be indemnified out of Bill’s estate for her costs (including the adverse costs order) of Bruce and Merilyn’s notice of motion filed 14 March 2019 by Pembroke J on 27 May 2019.

Catchwords:

COSTS — Party/Party — General rule that costs follow the event — Bases of quantification — Indemnity basis — Offer of compromise — Trustee basis — Payable out of a fund — Deceased estate

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 60, 98, 99

Succession Act 2006 (NSW), ss60(2), 99

Trustee Act 1925 (NSW), s 93

Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.1, 42.7, 42.14, 42.25

Cases Cited:

Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100

Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120

Application of Scali [2010] NSWSC 1254

Bassett v Cameron [2021] NSWSC 207

Baychek v Baychek [2010] NSWSC 897

Becker v Queensland Investment Corp (No 2) [2009] ACTSC 147

Bird v Bird (2013) 11 ASTLR 225; [2013] NSWCA 262

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Bovaird v Frost [2009] NSWSC 917

Calderbank v Calderbank [1975] 3 All ER 333

Carey v Robson (No 2) [2009] NSWSC 1199

Chick v Grosfeld (2012) 10 ASTLR 66; [2012] NSWSC 1166

Chief Commissioner of State Revenue v Platinum Investments Management Ltd (No 2) [2011] NSWCA 197

Commissioner of State Revenue v Challenger Listed Investments Ltd (No 2) [2011] VSCA 398

Commonwealth of Australia v Gretton [2008] NSWCA 117

Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326

Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141

Degmam Pty Ltd (in liq) v Wright (No 2) (1983) 2 NSWLR 354

Detheridge v Detheridge [2019] NSWSC 183

Drummond v Drummond [1999] NSWSC 923

EDPI Pty Ltd v Rapdocs Pty Ltd [2007] NSWSC 195

Ellem v Webber [2020] NSWSC 910

Evans Shire Council v Richardson (No 2) [2006] NSWCA 61

Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519

Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432

Forsyth v Sinclair (No 2) (2010) 28 VR 635; [2010] VSCA 195

Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Dobrijevic (No 3) [2017] NSWCA 109

Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 85

GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263

Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843

Guardian Trust and Executive Company of New Zealand Ltd v The Public Trustee of the Dominion of New Zealand [1942] UKPC 1

Haertsch v Whiteway (No 2) [2020] NSWCA 287

Hamod v New South Wales [2011] NSWCA 375

Hancock v Arnold (No 2) [2009] NSWCA 19

Harkness v Harkness (No 2) [2012] NSWSC 35

Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213

Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298

Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375

Hughes v Sharp [2017] NSWSC 962

Jamal v Department of Health (1988) 14 NSWLR 252

Jojeni Investments Pty Ltd v Mosman Municipal Council (No 2) [2015] NSWCA 208

Jones v Bradley (No 2) [2003] NSWCA 258

Jones v Sutton (No 2) [2005] NSWCA 203

Juul v Northey [2010] NSWCA 211

Leichhardt Municipal Council v Green [2004] NSWCA 341

Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721

Maule v Liporoni (No 2) (2002) 122 LGERA 216; [2002] NSWLEC 140

McCusker v Rutter (2010) 7 ASTLR 137; [2010] NSWCA 318

Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133

Milillo v Konnecke (2009) 2 ASTLR 235; [2009] NSWCA 109

Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13

Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344

Nominal Defendant v Hawkins (2011) 58 MVR 362; [2011] NSWCA 93

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Plimsoll v Drake (No 2) (Supreme Court (Tas), Zeeman J, 8 August 1995, unrep)).

Ploder v Garcea (as executrix of the estate of the late Garcea) [2013] NSWSC 1360

Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14

Poche v Poche [2020] NSWSC 835

Purnell v Tindale (No. 2) [2020] NSWSC 1047

Rattigan v Hanly [2020] NSWSC 1722

Re Beddoe: Downes v Cottam [1893] 1 Ch 547

Re Estate Gowing; Application for Executor’s Commission (2014) 17 BPR 32,763; [2014] NSWSC 247

Re Jones; Christmas v Jones [1897] 2 Ch 190

Re Lanfear (1940) 57 WN (NSW) 181

Rinehart v Rinehart [2020] NSWSC 235

Ritter v Godfrey [1920] 2 KB 47

Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd (2001) 53 NSWLR 626; [2001] NSWCA 461

Ryde Developments v Property Investors Alliance (No 2) [2018] NSWCA 40

Salvo v New Tel (No 2) [2004] NSWSC 852

Sarant v Sarant [2020] NSWSC 1686

Sergi (by next friend Solowiej) v Sergi [2012] WASC 18

SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323

Statham v Shephard (No 2) (1974) 23 FLR 244

Stojanovski v Stojanovski (No 3) [2020] NSWSC 1540

Sze Tu v Lowe (No 2) [2015] NSWCA 91

Van Eeden v Henry (2005) 62 NSWLR 301; [2005] NSWCA 14

Warren v McKnight (1996) 40 NSWLR 390; [1996] NSWSC 419

Warton v Yeo (2015) 15 ASTLR 462; [2015] NSWCA 115

Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; [1994] NSWCA 338

White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303

Whitney v Dream Developments Pty Ltd (2013) NSWLR 311; [2013] NSWCA 188

Yazgi v Permanent Custodians Ltd (No. 2) [2007] NSWCA 306

Zupicic v La Camera Paino as Trustee for the Estate of the Late Mario Novick [2018] NSWSC 1117

Category:

Costs

Parties:

Geoffrey William Bassett (Plaintiff)
Sue Narelle Cameron (First Defendant)
Bruce Edward Bassett (Second Defendant)
Merilyn Jill Ryan (Third Defendant)

Representation:

Counsel:
M Hodge QC with JR Willis (Plaintiff)
J Needham SC (Defendants)

Solicitors:
Martin Legal (Plaintiff)
Keypoint Law (Defendants)

File Number(s):

2015/00019536

Publication restriction:

Nil

Judgment

1. HER HONOUR: On 12 March 2021, I handed down judgment (Bassett v Cameron [2021] NSWSC 207) (the principal judgment) in proceedings arising out of disputes between the four adult children of the late Elaine Jill Bassett (Jill) and the late William Edward Bassett (Bill).

2. In summary, I dismissed the plaintiff (Geoff Bassett)’s amended statement of claim, other than in relation to his claim for further provision out of Bill’s estate, and I dismissed the first cross-claim (brought by two of his siblings, Merilyn Ryan and Bruce Bassett, as representatives of Jill’s estate) which related to claims of maladministration in respect of Jill’s estate. The second cross-claim (brought by Geoff), which arose only if Bruce and Merilyn were successful on the first cross-claim, was dismissed with no order for costs. I reserved the question of the costs of both the amended statement of claim and first cross-claim, to be dealt with on the papers, if possible, and for that purpose I made directions for the filing of written submissions in relation thereto.

3. Since then, I have received and considered submissions as to costs filed by each of Geoff, on the one hand, and Bruce and Merilyn, on the other; as well as submissions on costs filed by the first defendant, Sue Cameron (the remaining sibling, who, with Geoff, is the co-executor named in Bill’s Will). I then received reply submissions from each and further supplementary submissions from Sue. The ongoing cost (and time) expended in what is ultimately an unedifying sibling dispute as to their deceased parents’ estates is regrettable, to say the least.

4. These are my reasons for the costs orders I now propose to make and which will dispose of the proceedings. I note that these reasons deal with an issue reserved by Pembroke J as to whether Sue should be indemnified out of Bill’s estate for costs of the conduct of the proceedings as representative of Bill’s estate until 27 May 2019.

Background

5. The background to the proceedings is set out in my principal judgment and I do not propose here to repeat it. I adopt the same defined terms as used in those reasons and, again, I refer to the family members by their first names, without intending any disrespect.

Parties’ respective positions on costs

6. In summary, the parties seek the following costs orders.

Geoff

7. Geoff seeks an order that the first and second cross-claimants to the first cross-claim (Bruce and Merilyn, respectively) pay his costs of the primary proceeding and the first cross-claim (as agreed or assessed), on the ordinary basis on or prior to 31 May 2019 and on the indemnity basis on or after 1 June 2019. Costs of the second cross-claim have already been dealt with, there being no order made as to those costs. The claim for part of Geoff’s costs to be awarded on an indemnity basis is by reference to the making by Geoff on 31 May 2019 of offers of compromise (Offers of Compromise) relied upon in the alternative as Calderbank offers (see Calderbank v Calderbank [1975] 3 All ER 333) to which I refer in due course.

8. In the alternative, Geoff seeks orders that his costs of the primary proceeding be paid on a “standard basis” (by which I understand him to mean the ordinary party/party basis), either by Bruce and Merilyn or from the residue of Bill’s estate, and that Bruce and Merilyn pay his costs of the first cross-claim (on the ordinary basis or such other basis as the Court sees fit).

Bruce and Merilyn

9. Bruce and Merilyn (unsurprisingly, given the history of the disputes to date) contend for very different costs orders.

10. As to the costs of the primary proceeding, Bruce and Merilyn submit that: Geoff should pay their costs of the primary proceeding (excluding his family provision claim), i.e., a costs order limited to Geoff’s proprietary estoppel claim, on the indemnity basis (or alternatively on the ordinary basis up to 11 July 2019, and on the indemnity basis as and from 11 July 2019 or alternatively from 23 July 2019); that there should be no order as to Geoff’s costs of his family provision claim, with the intent that he bear his own costs; and that their own costs of defending the family provision claim should be paid out of Bill’s estate on the indemnity basis. They rely on two Calderbank offers made in July 2019 in relation to their submission that Geoff should pay costs, or part of their costs, on an indemnity basis. Alternatively, they contend that Geoff’s conduct of the proceeding warrants such an order.

11. As to the costs of the first cross-claim, Bruce and Merilyn submit that their costs of the first cross-claim should be paid out of Jill’s estate (which in practical terms they say means out of Bill’s estate, Bill being Jill’s co-executor and the recipient of her assets) and that there be no order as to Geoff’s costs; or, in the alternative, that Geoff’s costs of the first cross-claim be paid on the ordinary basis by Bill’s estate and that such an order exclude certain costs identified as costs thrown away (see below at [104]) (to which I will refer as the Excluded Costs).

12. As to the costs incurred by Sue, as representative of Bill’s estate up to and including her removal as representative of the estate for the purpose of these proceedings on 27 May 2019, Bruce and Merilyn submit that those costs should be paid by Sue personally and should not be indemnified from Bill’s estate.

13. Alternatively, if the above not be accepted, Bruce and Merilyn submit that: Geoff should pay their costs of the primary proceeding (excluding his family provision claim) on the ordinary basis; that Geoff’s costs of the first cross-claim be paid by Bruce and Merilyn (with an indemnity from Bill’s estate) on the ordinary basis (but, again, that any costs order exclude the Excluded Costs). Again on this alternative, as to the costs of Geoff’s family provision claim, Bruce and Merilyn say that: there should be no order as to the costs incurred by Sue, with no indemnity from Bill’s estate; Bruce and Merilyn’s costs should be paid out of Bill’s estate on the indemnity basis; and that there should be no order as to Geoff’s costs, with the intent that he bear his own costs, or, alternatively, that Geoff’s costs to be paid out of Bill’s estate should be capped in the amount of $50,000, pursuant to s 98 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act).

Sue

14. Sue initially submitted that the following costs orders should be made insofar as they relate to her: that Geoff should pay her costs of his proprietary estoppel claim up to 27 May 2019 (i.e., the costs of the primary proceeding excluding his family provision claim); that Sue, in her capacity as executor of Bill’s estate, pay Geoff’s costs of his family provision claim up to 27 May 2019, in a sum to be capped; that Bruce and Merilyn pay Geoff’s costs of the family provision claim following 27 May 2019; and that Bruce and Merilyn pay Sue’s costs of the first cross-claim. Sue also sought an order that she be indemnified from Bill’s estate in respect of the costs (including adverse costs) of the notice of motion filed by Bruce and Merilyn on 14 March 2019 and determined by Pembroke J on 27 May 2019.

15. In reply submissions, for reasons that I address in due course, Sue proposed the following revised costs orders (in lieu of the above proposed costs orders) on the basis that there were multiple issues requiring severable treatment:

(a)   The Plaintiff [Geoff] pay the costs of the First Defendant [Sue] of her defence to the estoppel claim up to 27 May 2019 on the ordinary basis;

(b)   The Plaintiff pay the costs of the Second and Third Defendants [Merilyn and Bruce] of their defence to the estoppel claim from 28 May 2019 on the ordinary basis;

(c) The costs of the Plaintiff of his Succession Act claim be paid out of the Estate of the late William Bassett on the ordinary basis, in a sum to be capped;

(d) The costs of the First Defendant in defending the Succession Act claim up to 27 May 2019 and the balance of the unpaid costs of the Second and Third Defendants in defending the Succession Act claim from 28 May 2019, be paid out of the Estate of the late William Bassett on the indemnity basis;

(e)   The Cross Claimants (Bruce and Merilyn) pay the costs of the First Cross Defendant (Geoff) to the First Cross Claim on the ordinary basis;

(f)   The Cross Claimants (Bruce and Merilyn) pay the costs of the Second Cross Defendant (Susan) to the First Cross Claim up to 19 June 2019 on the ordinary basis;

(g)   The First Defendant be indemnified from the Estate of the late William Bassett in respect of the costs (including any adverse costs) of the Notice of Motion filed by the Second Defendant and the Third Defendant on 17 August 2016 dealt with by Stevenson J on 3 February 2017 and subsequently;

(h)   The First Defendant be indemnified from the Estate of the late William Bassett in respect of the costs (including any adverse costs) of the Notice of Motion filed by the Second Defendant and the Third Defendant on 14 March 2019, determined by Pembroke J in 27 May 2019;

(i)   Vacate Order 6 of the orders made by Pembroke J on 27 May 2019;

(u)   The First Defendant be authorised to retain from the respective entitlements of the Plaintiff and the Second and Third Defendants in the Estate of the late William Bassett for her costs arising from Orders (a), (b), (f) and (g), after having recovered as much as possible of the costs from the persons liable to pay them and in addition, the costs (if any) being the difference between the costs paid or payable on the ordinary basis by these orders and the indemnity basis [Shorter v Hodges (1988) 14 NSWLR 698 at 709].

Relevant Principles

16. The relevant principles on costs applications are well known and were not in dispute. They may be summarised briefly as follows.

17. There is a broad discretion as to costs (see s 98 of the Civil Procedure Act; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 (Oshlack)) but it must be exercised judicially and having regard to the overriding statutory purpose mandated by s 56 of the Civil Procedure Act.

18. The usual order is that costs follow the event (r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR)); unless the Court considers that some other order ought to be made (see Purnell v Tindale (No. 2) [2020] NSWSC 1047 at [12] per Henry J; Commonwealth of Australia v Gretton [2008] NSWCA 117 (Gretton) at [38] per Beazley JA, as Her Excellency then was (with whom Mason P agreed)). Ordinarily, where there are multiple issues in proceedings, the Court does not seek to differentiate between the issues on which a party succeeded and those in which the party did not succeed, unless the two are clearly severable (see Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; [1994] NSWCA 338 at 330-331 per Mahoney JA; and Yazgi v Permanent Custodians Ltd (No. 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA). The apportionment of costs between different issues in proceedings may be appropriate, for example, where: there is a separate issue involving a disputed question of fact or law and the determination of that issue takes additional time in preparation and in argument (see Ryde Developments v Property Investors Alliance (No 2) [2018] NSWCA 40 at [7] referring to Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38]).

16. As to costs in relation to family provision claims, again that there is a broad costs discretion in making orders under the Succession Act 2006 (NSW) (Succession Act) to achieve overall justice in the case. There are various alternatives which may be adopted in this regard, including the capping of costs, orders for provision inclusive of costs and, in appropriate cases, making no order as to costs. Parties to family provision claims are discouraged, during the case management process, from incurring substantial costs (and they are required to file affidavits deposing to their costs in advance of the hearing). Generally, the executor’s costs of defending such claims will be payable out of the deceased’s estate on an indemnity basis.

17. As to the claims here made for special (indemnity) costs orders, the rationale for special costs orders is that which was explained in cases such as Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 per Kirby P, Mahoney JA and Samuels AJA, and Gretton. The public policy objectives of such orders include the encouragement of the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation (see also Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 (Miwa) at [6] per McColl, Basten and Campbell JJA).

18. Pursuant to r 42.14 of the UCPR, where an offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer, the plaintiff is entitled (subject to any contrary order) to his or her costs on: (i) the ordinary basis up to the date of the offer; and (ii) the indemnity basis as from the beginning of the day following the date of the offer.

19. As to the general principles concerning Calderbank offers, see Jones v Bradley (No 2) [2003] NSWCA 258, the Court of Appeal there approving (at [8]-[9]) what had been said by Giles JA in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37]. The factors relevant to take into consideration in this regard are well-known (see, as summarised in Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519 (Favotto) at [20]-[30]). Relevantly, while the rejection of a Calderbank offer, in circumstances where it transpires that the final result in the proceeding is less favourable to the offeree, enlivens the discretion to award indemnity costs, it does not create a prima facie right to such an order (see Favotto at [28]; Chief Commissioner of State Revenue v Platinum Investments Management Ltd (No 2) [2011] NSWCA 197 at [9] per Campbell, Macfarlan JJA and Handley AJA).

20. To warrant the making of a special costs order, the offer must “[constitute] a genuine offer of compromise, which it was unreasonable for the [unsuccessful party] not to accept” (Herningv GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4] per Handley, Basten and Beazley JJA; see also Hancock v Arnold (No 2) [2009] NSWCA 19 at [23] per Ipp, McColl and Basten JJA; Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120 at [8] per Basten JA (with whom Santow JA and Young CJ in Eq, as his Honour then was, agreed); Leichhardt Municipal Council v Green [2004] NSWCA 341 at [23] per Santow JA (with whom Bryson JA and Stein AJA agreed)). Where the offer is a Calderbank offer, the onus to demonstrate that it was unreasonable to reject it is on the party seeking to rely on the making of the offer (see Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [26] per Giles, Ipp and Tobias JJA).

21. The factors to be taken into regard when considering whether the rejection or non-acceptance of the offer was unreasonable include: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree’s prospects of success assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it (see Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 (Hazeldene’s Chicken Farm) at [25] per Warren CJ, Maxwell P and Harper AJA; Commissioner of State Revenue v Challenger Listed Investments Ltd (No 2) [2011] VSCA 398 at [8] per Buchanan and Tate JJA and Sifris AJA; Miwa at [12]).

22. Where a Calderbank offer is unreasonably rejected, and the offeror succeeds in litigation, costs may be made on an indemnity basis at least from the date of the offer or thereabouts. Whether such an order will be made will be determined in the exercise of the Court’s discretion (see Becker v Queensland Investment Corp (No 2) [2009] ACTSC 147 at [12] per Refshauge J).

23. As to special costs orders referable to the unreasonable conduct of litigation, the discretion to award indemnity costs may be exercised where there is some special or unusual feature or circumstances in the case (concerning the conduct of the party against whom the order is made and relating to the proceedings in question) to justify such an order (i.e., some “relevant delinquency” by the party as a litigant – see Oshlack at [44] per Gaudron and Gummow JJ). In that regard, “relevant delinquency” does not mean moral delinquency or some ethical shortcoming but delinquency bearing a relevant relation to the conduct of the case (see, for example, White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303 at [11] per McDougall J). Conduct in relation to the matter may be discreditable to an extent warranting a party being deprived of costs (see, for example, Jamal v Department of Health (1988) 14 NSWLR 252 at 271 per Mahoney JA).

24. As to the payment of “forthwith” costs orders, costs may be ordered to be paid forthwith where the determination relates to a “separately identifiable matter or may be viewed as the completion of a discrete aspect” and where there has been unreasonable conduct on the part of the party against whom costs is to be ordered (Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 (Fiduciary v Morningstar) at [10]-[13]). However, the issue does not here arise since the costs now to be ordered will be assessable and payable in the ordinary course following a final judgment.

25. Finally, insofar as reference was made in submissions to the possibility of a gross sum costs order, it should be noted that the power to make such an order “should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available” (Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 (Harrison v Schipp) at [22] per Giles JA). A gross sum costs order is appropriate where it is desirable to avoid the expense, delay and aggravation likely to be involved in a costs assessment or where a party’s conduct has unnecessarily contributed to the costs of the proceedings and “especially where the costs incurred have been disproportionate to the result of the proceedings” (Hamod v New South Wales [2011] NSWCA 375 at [817]-[818] per Beazley JA with whom Giles and Whealy JJA agreed).

26. With the above principles in mind, I turn to the respective parties’ submissions in support of the orders they seek.

Geoff’s submissions

Indemnity costs

30. As adverted to above, Geoff relies on offers that were made by him to Bruce and Merilyn in the course of the proceedings.

31. On 31 May 2019 (i.e., within a week of the removal of Sue as representative of Bill’s estate for the purpose of the proceedings and after Merilyn and Bruce had been appointed to represent Bill’s estate in the proceedings), Geoff made separate offers, in substance in the same form, to each of Bruce and Merilyn. The Offers of Compromise were expressed to be offers of compromise under r 20.26 of the UCPR and open for acceptance for 28 days (see the affidavit sworn by Mr Martin (Geoff’s solicitor) on 9 April 2021, Annexure A).

32. Each of the Offers of Compromise contained an offer by Geoff to compromise the whole of the claims made in the proceedings (expressly referring to: all the claims made in the amended statement of claim filed 26 February 2015; all the claims made in the first cross-claim filed 16 February 2017; and all the claims made in the second cross-claim filed 31 August 2018), on terms including, relevantly, that:

1.   The Proceedings be dismissed.

2.   Each party pay its own costs of the Proceedings.

3.   Geoffrey William Bassett transfer one third of his share of the real property known as “The Springs” (including “Hurricane Hill”) on Nullamanna Road, lnverell (The Springs), to [Bruce Edward Bassett, in the offer addressed to Bruce; and Merilyn Jill Ryan, in the offer addressed to Merilyn] and one third of his share in The Springs to Susan Narelle Cameron, as tenants in common.

4.   [Bruce Edward Bassett, in the offer to Bruce; and Merilyn Jill Ryan, in the offer to Merilyn] pay to Geoffrey William Bassett $450,000 [i.e., meaning that, if both offers were accepted, Geoff would be paid $900,000 in total].

33. The letter dated 31 May 2019 serving those Offers of Compromise, which was expressed to be Without Prejudice Save as to Costs, stated that if, for any reason, either Offer of Compromise was not effective as an offer of compromise under the UCPR, then the letter and the offers contained therein were intended to have effect as an offer of settlement according to the Calderbank principles.

34. In a further letter of the same date, again expressed to be Without Prejudice Save as to Costs, Geoff’s solicitor explained that the costs Geoff had incurred in the proceeding at that point in time were approximately $900,000 (see Mr Martin’s affidavit, Annexure B) and set out reasons in support of acceptance of the offers. I note that, if both offers were to be accepted, the result would thus be that Geoff’s costs liability would effectively be discharged; an issue of no little relevance given that Bruce and Merilyn understood that Geoff’s solicitor had taken a charge over Geoff’s interest in the property in respect of his legal costs. (Pausing here, Bruce and Merilyn rely on this as rendering the Offers of Compromise non-compliant with the requirements of the UCPR – see below.)

35. It does not appear that the Offers of Compromise were in terms conditional on acceptance by both offerees (it seemingly being assumed that Bruce and Merilyn would take a joint position in that regard – as in fact they did). Nor does it seem that the offers were conditional on Sue’s concurrence (that may have been assumed or it may have been considered unnecessary in that the offers could, on their face, be accepted by Bruce and Merilyn without Sue’s assent). Relevantly, for present purposes, on the face of the Offers of Compromise (and, if not valid as such, the Calderbank offers) it appears that Bruce or Merilyn could have accepted the offer made to him or her even if the other one did not accept the corresponding offer.

36. Geoff says that he ultimately obtained a judgment which was no less favourable to him (indeed was more favourable) than the terms of the Offers of Compromise (which, as noted, are alternatively relied on as Calderbank offers). Therefore, he submits that he is entitled to an award of indemnity costs for his costs of the whole of the proceedings on and from 1 June 2019. In this regard, Geoff makes the following submissions.

37. First, it is said that the offer that Geoff made to settle the proceeding was a “particularly desperate one” in that he was effectively asking only to have his legal costs paid (the costs to that time being in the order of $900,000), although accepting that he would then have been fully indemnified in respect of his costs rather than obtaining costs on the ordinary basis; but that he would otherwise obtain nothing and would give up his existing (legal and beneficial) 50% interest in The Springs. (The desperation, or otherwise, underlying the offers does not in my opinion have any relevance of itself to the costs consequences of their rejection. It simply suggests Geoff’s motivation to settle the proceedings.)

38. The reasons that Geoff says that he obtained a judgment that was substantially more favourable than the terms of the Offers of Compromise (and Calderbank offers) is that the consequence of the principal judgment was that: Geoff retained his 50% interest in The Springs (which was the subject of the offers in question); Geoff was awarded a half share of Bill’s estate’s 50% interest in The Springs (the principal judgment at [1001]); the first cross-claim was dismissed; aside from the costs consequence of the offers, Bruce and Merilyn would be expected to have to pay Geoff’s costs of the first cross-claim on a standard (i.e., the ordinary) basis (see the principal judgment at [1000]); and Geoff would ordinarily be entitled to his costs of the family provision claim from the estate (as to which see his submissions below). (Geoff accepts, however, that there might be a contest – as indeed there presently is - as to whether the costs of the proprietary estoppel claim are severable from the costs of the family provision claim.)

39. Bruce and Merilyn’s response to the offer, by letter dated 9 July 2019 from their solicitor (also expressed to be Without Prejudice Save as to Costs) rejected that offer “in its current form” (Mr Martin’s affidavit sworn 9 April 2021, Annexure C). The letter expressed the view that Geoff’s legal costs were excessive, and outside the normal range of what would be considered to be reasonable or proportional; and that Geoff had, in effect, already “lost” his half of The Springs (as a result of a charge he had given to his solicitors over the land in relation to his legal fees) and, therefore, that the real value of a settlement to Geoff was whether it avoided “the even greater losses that he faces if the proceedings continue”.

40. The letter asserted an expectation that similar costs (to Geoff’s estimated costs exposure, if the matter went to trial, of $1.6 million) would be sought against Geoff if part or all of his claims were unsuccessful (which, somewhat surprisingly, seems to be suggesting that, despite their apparent indignation at the excessiveness of Geoff’s costs, the defendants’ costs would be of similar order). Further, the letter stated that Geoff also faced liability for the $2,256,750 claimed for the maladministration of Jill’s estate (i.e., assuming the success of the first cross-claim).

41. The letter went on to state that Bruce and Merilyn’s enquiries indicated various costs and issues associated with the proposal that were said to make it “financially prohibitive in its current form”, including that the transfer of Geoff’s share of the farm to them “and its subsequent sale” would attract costly agent, marketing and transfer fees “and the possibility of significant capital gains tax in addition to any capital costs to invest in farm improvements to achieve a sale”.

42. Pausing there, the reference to a subsequent sale makes clear (as evident from other statements in their solicitors’ letter and Merilyn’s affidavit sworn 9 April or 2021) that Bruce and Merilyn were not interested in retaining and operating The Springs as a farm. Thus, the costs of a sale would presumably have arisen in any event, albeit that the proportion of those costs that (as residuary beneficiaries) Bruce and Merilyn would effectively bear would differ on the two scenarios; i.e., as between a realisation by the estate (at the estate’s cost) of the estate’s one-half share of The Springs as part of the assets of deceased and then the distribution of net proceeds after estate liabilities between the three residuary beneficiaries (which would presumably mean the sale costs would be divided between the three residuary beneficiaries as to a half share and Geoff as to the other half share); as opposed to the costs that would be borne by Bruce and Merilyn (and Sue, for that matter) if there were to be a transfer to them by Geoff of a one-third interest each in his half share of The Springs and then a subsequent sale by the three of The Springs.

43. The letter also referred to “logistical costs” and issues for Bruce and Merilyn in owning and operating the farm from interstate (they living in Queensland and Canberra, respectively); and said that the value of the farm had been depleted by the very low stock numbers recorded in the past four years, as well as drought conditions and the “unimproved condition of the farm” (something apparently relied on as going to the potential difficulty of selling The Springs or as reducing the amount that might be realised from the sale).

44. The letter also conveyed Bruce and Merilyn’s instructions that it was not practical for them to own Geoff’s share of the farm with Sue “given the hostility she has shown towards [them]” (highlighting that, at least from Bruce and Merilyn’s perspective, there is no love lost between Bruce and Merilyn on the one hand and Sue on the other). I note this result is effectively the same as provided for under Bill’s Will, at least until The Springs was realised as an estate asset; namely that Sue was entitled to a one-third share of the residuary estate which included Bill’s half share of The Springs.

45. In that letter, Bruce and Merilyn made an offer expressed to be pursuant to the Calderbank principles and to be relied upon in any application for a special costs order. The offer was expressed to be subject to and conditional on separate negotiations and agreement with Sue. The terms of the offer included that, in lieu of provision for Geoff out of Bill’s estate, the estate pay the sum of $400,000 simultaneously with the transfer (the costs of which were to be borne by Bill’s estate) of Geoff’s existing share of The Springs and Hurricane Hill to Bruce and Merilyn in equal shares as tenants in common and that Geoff pay his own costs of the proceedings and renounce his role as executor of Bill’s estate with no right or entitlement to any claim for provision.

46. Geoff makes the following comments in relation to this response to his Offers of Compromise.

47. First, as to the practical difficulties identified with the proposal that Geoff transfer 50% of The Springs to Bruce, Merilyn and Sue, Geoff submits that, while this might ordinarily raise a question as to whether the offer made by Geoff was capable of acceptance, any such question is here answered by the fact that in the same letter Bruce and Merilyn’s solicitor made the without prejudice offer referred to above, including in its terms a similar transfer, i.e., that:

2.   The Plaintiff transfer all of his right, title and interest in the properties known as “The Springs” and “Hurricane Hill” … to Bruce Edward Bassett and Merilyn Jill Ryan in equal shares as tenants in common within 28 days of orders being made …

48. Geoff submits that the fact that Bruce and Merilyn’s proposal provided for a transfer of his interest in the land demonstrates that his own offer was readily capable of acceptance. It is noted that the effect of Bill’s Will (unless Geoff’s claim succeeded) was that Bruce and Merilyn already shared Bill’s residuary estate with Sue, including a 50% share of The Springs. Thus, it is submitted that also sharing Geoff’s 50% share of The Springs with Sue could not render Geoff’s offer incapable of acceptance.

49. Further, it is submitted that, when compared with Geoff’s offer, the effect of Bruce and Merilyn’s counter proposal was that Sue would be “cut out of” a share of the transfer of Geoff’s 50% interest in The Springs; that Sue would bear one-third of the cost of the proposed payment to Geoff (as a residuary beneficiary of Bill’s estate); and that Geoff would receive $400,000 rather than $900,000.

48. Second, it is noted by Geoff that Bruce and Merilyn were by that stage well-informed about the commercial calculations underlying the value of the offer. Geoff points to the fact that, on or about 28 May 2018, Bruce and Merilyn had obtained a “desktop land valuation” from Herron Todd White which valued The Springs (including Hurricane Hill) at $3.5 million (see Mr Martin’s affidavit sworn 9 April 2021, Annexure D). It is noted that Bruce and Merilyn relied on the desktop valuation in the proceedings insofar as it formed part of the report dated 26 March 2019 of their expert, Mr Loneragan; and that both Bruce and Merilyn were aware of the existence (and contents) of that desktop valuation, pointing to Bruce’s affidavit sworn 22 May 2019, in which he deposed (at [65]) that:

Merilyn and I obtained a desktop land valuation from a leading rural valuation firm, Herron Todd White, dated 1 May 2018, which estimates The Springs farm has a value of $3,500,000.00, based on the stock that were carried on The Springs farm at the date of my father’s death and the livestock records for the 5 years prior to my father’s death…. Annexed and marked “R” (at page 124) is a true copy of this valuation by Herron Todd White with the “Land Value Assessment” on page 6 of that report.

51. Geoff says that his offer to each of Bruce and Merilyn, on the basis of their own estimate as to the value of The Springs, was to provide each of them with an interest in real property with a value of $583,334 (being 1/6 of $3.5 million) in exchange for a payment of $450,000 (with the net effect being the receipt of an asset worth $133,334 more than they would be required to pay for it). It is submitted that each of Bruce and Merilyn would have had the capacity to pay the $450,000 sought since each was entitled to a one-third share in the residue of Bill’s estate and, as at 6 August 2020 (and as at the date of the offer), the gross value of the residue in Bill’s estate was estimated at between $2,494,023 and $2,677,023 (referring to Bruce’s affidavit sworn 6 August 2020 at [11]).

52. Accordingly, Geoff seeks his costs of the primary proceeding and the first cross-claim on an indemnity basis from 1 June 2019, the day after the offer (31 May 2019).

Alternative costs orders

53. In the event that an order for indemnity costs on the basis of the above Offers of Compromise (or Calderbank offers) is not made, then Geoff makes the following submissions as to the costs of each of the claims in the proceedings.

Primary Claim

54. Geoff accepts that his primary claim was a proprietary estoppel claim (the family provision claim being an alternative claim); and that he was ultimately unsuccessful in that proprietary estoppel claim. However, he submits that the two claims are not severable, given the commonality between the issues to be determined in both of the claims, and that, ordinarily, a successful plaintiff would have a costs order even if not successful on all claims unless those claims were severable.

55. Geoff submits that in the present case there were no factual issues for the proprietary estoppel claim that were separate from the family provision claim; but, rather, that the factual issues in the proprietary estoppel claim were a subset of the factual issues in the family provision claim, noting that he relied upon the representations as to The Springs for both his proprietary estoppel and the family provision claim (see the principal judgment at [119]).

56. Geoff says that the critical facts relied on for his proprietary estoppel claim (the representations and detrimental reliance) were relevant to the testamentary intentions of Bill (see s 60(2)(j) of the Succession Act; the principal judgment at [1001]) and to an assessment of any contribution (whether financial or otherwise) by Geoff to the acquisition, conservation and improvement of Bill’s estate (see s 60(2)(h) of the Succession Act). For those reasons, it is said that the two claims are not clearly severable.

57. Geoff says that Bruce and Merilyn’s submission as to the proportion of the evidence concerned with the proprietary estoppel claim (see below), incorrectly characterises all or most of the lay evidence as relating to the proprietary estoppel claim.

58. Geoff says that the majority of the lay evidence was concerned with matters which went directly to the family provision claim (some of which was relevant to the proprietary estoppel claim). It is noted that each of Geoff, Bruce and Merilyn adduced evidence across forty years of family relations as being relevant to the family provision application, referring to: Geoff’s evidence as to the contributions he had made to the conservation and improvement of Bill’s estate over the course of farming dealings (referring to the principal judgment at [967]-[972]); and Bruce and Merilyn’s evidence as to significant gifts given to Geoff by their parents over the course of their lives (referring, in particular, to the principal judgment at [973]-[977]).

59. It is submitted that there was no meaningful dispute about the law in relation to the proprietary estoppel claim and that the factual issues dealt with as part of the proprietary estoppel claim necessarily had to be resolved in any event for the purposes of the family provision claim. Thus, it is submitted that the costs are not severable and Geoff should have his costs of the claim. It is further submitted that it would not be practical to sever the costs (and that it would simply lead to further dispute between the parties – as to which, I consider there is little, if any, doubt).

60. Geoff points out that the usual rule in family provision claims is that he would be entitled to his costs on the ordinary basis from Bill’s estate (referring to Sarant v Sarant [2020] NSWSC 1686 at [57] per Hallen J). Geoff says that, in this case, there is a question as to whether Bruce and Merilyn, rather than the estate, should pay Geoff’s costs of the primary claim (or the family provision claim, if it is determined that the proprietary estoppel claim is severable). Geoff points out that, if his costs are ordered to be paid from Bill’s estate, then the practical consequence is that Sue would effectively bear one-third of those costs, as she is a residuary beneficiary of Bill’s estate.

61. In that regard, Geoff says that Sue would ordinarily be entitled to an indemnity from Bill’s estate for her costs incurred up to 27 May 2019 and for any costs she was ordered to pay Geoff. Geoff says that Merilyn and Bruce’s entitlement to indemnification out of Bill’s estate, for representing the estate after 27 may 2009 is subject to the special costs orders here sought (arising from their rejection of the Offers of Compromise) and that any indemnity would, regardless, not include Bruce and Merilyn’s costs of the first cross-claim (see below).

62. In any case, Geoff submits that he should have his costs of the primary claim (and that it is a matter for the Court whether that should be from Bruce and Merilyn or from Bill’s estate).

First cross-claim

63. As to the first cross-claim, Geoff says that Bruce and Merilyn were unsuccessful in all aspects of the first cross-claim and that he is entitled to his costs in relation to this claim. Further, he submits that these costs should be met by Bruce and Merilyn personally (and not from Bill’s estate) because the first cross-claim concerned the alleged maladministration of Jill’s estate (i.e., not Bill’s estate) and, as such, Bruce and Merilyn were not acting for Bill’s estate in relation to that claim.

Reply submissions

64. In his initial submissions, Geoff sought an opportunity to be heard in the event that either Bruce or Merilyn were to seek some special costs order (such as an order seeking to cap Geoff’s costs by way of a fixed-sum costs order under s 98 of the Civil Procedure Act), as they have indeed. I address relevant aspects of his reply submissions in due course. Suffice it here to note that any further oral hearing is opposed by Bruce and Merilyn and, in my opinion, would just lead to further wasted costs. Geoff has had ample opportunity to respond by way of his reply submissions.

Bruce and Merilyn’s submissions

65. Bruce and Merilyn say that there are complexities in the present proceedings which should result in an order other than the usual order of costs being made. In this regard, they refer to the following matters, each of which is addressed in more detail in due course.

66. First, the offers made between the parties which were expressed to be “Without Prejudice Save as to Costs”, referring to the affidavits sworn by each of Merilyn and by Bruce and Merilyn’s solicitor (Ms Monica Ross-Maranik) on 9 April 2021.

67. Second, that Geoff’s costs are excessive and disproportionate to the success he has achieved. It is said that the Court’s interest in principled fairness should result in an order pursuant to s 98 of the Civil Procedure Act limiting any costs which Geoff might otherwise expect to have ordered in his favour.

68. Third, as to Geoff’s costs generally, it is said that, to the extent that the proceedings were not conducted by Geoff in accordance with s 56 of the Civil Procedure Act (as to which, see their submissions below), neither Bruce and Merilyn nor the relevant estate should have to bear such costs.

69. Fourth, that, in bringing the first cross-claim, Bruce and Merilyn were appointed by Stevenson J to represent Jill’s estate to recover any assets for the benefit of the residuary beneficiaries (which include Sue) and to ensure these assets were not improperly subjected to Geoff’s claim. It is said that, on the usual costs principles, Bruce and Merilyn should receive an indemnity from Jill’s estate and that, while they were not successful in restoring property to Jill’s estate, the issues arising from Geoff’s conflict of duty and the benefit derived by Bill from Jill’s estate (referring by way of example to the Claim 6 assets and [822] of the principal judgment) make it appropriate that Bill’s estate should bear the burden of Bruce and Merilyn’s costs; and that no orders should be made as to Geoff’s costs, with the intention that he should bear his own costs.

70. Furthermore, it is submitted that Geoff’s conduct in “obstructing” the investigation of Jill’s estate and the “single expert process” (as to which, see below) supports the making of these orders.

71. Bruce and Merilyn seek orders that Sue’s costs not be indemnified out of Bill’s estate pursuant to s 93 of the Trustee Act 1925 (NSW) and/or r 42.25 of the UCPR on the basis that she was a witness for Geoff in his claim against Bill’s estate, and that her conduct “necessitated” that Bruce and Merilyn seek separate representation and also seek to represent Bill’s estate against Geoff’s claims (referring to Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13 (Miller v Cameron) at 578-9 per Latham CJ; Re Jones; Christmas v Jones [1897] 2 Ch 190 (Re Jones) at 197-8 per Kekewich J; Plimsoll v Drake (No 2) (Plimsoll v Drake) (Supreme Court (Tas), Zeeman J, 8 August 1995, unrep)). It is said that Sue acted unreasonably in opposing her removal (given that she did not support Bill’s Will) and noting that she had agreed that Bruce and Merilyn should be joined to act as the “significant contractors” against Geoff’s claim. It is said that Sue also duplicated Geoff’s role as the contradictor against the first cross-claim, when her role was not necessary given that the issues were able fully to be ventilated with Bruce and Merilyn, on the one hand, and Geoff opposing the claim, on the other.

72. It is noted that there are a number of outstanding costs orders against Geoff and some issues of reservation of costs (which are set out at Attachment A to Bruce and Merilyn’s submissions). It is said that the orders made in the primary judgment should not affect the orders already made and that, where costs were reserved, Geoff should pay those costs. In particular, it is submitted that Geoff should pay the costs reserved for the directions hearing before me on 26 November 2019 (item 6 of Attachment A). An affidavit sworn by Ms Ross-Maranik on 18 November 2019 is relied upon in this regard.

73. It is submitted that, in respect to the outstanding costs and reserved costs (noted in Attachment A as totalling $18,600), there should be a “costs to be paid forthwith” order (see r 42.7 of the UCPR).

74. I deal with the question of reserved costs in due course. As to any costs orders that have already been made, I see no basis to disturb those (otherwise than to consider whether Sue should be indemnified from the estate for any adverse costs orders). As to the submission that there should be “forthwith” costs orders, as adverted to above that is unnecessary as judgment has now been handed down and costs will be assessable and payable in the ordinary course after the making of final orders.

75. Turning then to the respective claims, Bruce and Merilyn’s submissions are as follows.

Costs of the proprietary estoppel claim

76. Bruce and Merilyn say that the bulk of the evidence and the hearing time was taken up by Geoff’s proprietary estoppel claim. It is said that around 80% of the hearing (17, 18, 19, 20 and 24 August 2020) was occupied almost exclusively with the proprietary estoppel claim; and that, by contrast, the first cross-claim was essentially dealt with in one day of the hearing. Bruce and Merilyn say that most of the affidavits for the proceedings related to Geoff’s proprietary estoppel claim (they have calculated that twenty-two affidavits were served and/or read for the proprietary estoppel claim, being twelve affidavits for Geoff’s claim, including Sue’s affidavits; as well as ten affidavits on behalf of Bill’s estate); and that only three of these affidavits covered Geoff’s 2015 amended statement of claim as well as the first and second cross-claims. It is also said that over half of the principal judgment was devoted to the proprietary estoppel claim. (As noted above, Geoff says this incorrectly assumes that all or most of the lay evidence relates only to the proprietary estoppel case.)

Claims for indemnity costs

77. As to the claim by Geoff for indemnity costs, Bruce and Merilyn say that their rejection of any offers made by Geoff was not unreasonable and should not ground any special costs orders (see the matters raised in the affidavit sworn by Merilyn Ryan on 9 April 2021).

78. In respect of the offers that were made and rejected by them, Bruce and Merilyn start by noting that (at [150] of the principal judgment), I referred to the suggestion of a mediation. It is said that a mediation held in April 2016 was unsuccessful, at a time when the defendant and contradictor to the claim was Sue (not Bruce and Merilyn). Bruce and Merilyn go on to make various submissions as to attempts by them later to pursue the mediation of the dispute which it is said were “rebuffed in an abrupt and unilateral way”, and they accuse Geoff’s solicitor, Mr Martin, of “unprofessional remarks” referring to letters dated 17 November 2017 and 15 January 2020 from Geoff’s solicitor to Bruce and Merilyn’s former solicitor (Ms Kennedy).

79. Pausing here, leaving aside the complaint as to the tone or tenor of the relevant correspondence (as to which I say more in due course), I cannot possibly draw any conclusions about the earlier unsuccessful mediation (as to the conduct of which there is, quite properly, no evidence) nor as to the fact that one or more of the parties chose not to take up my suggestion as to a later mediation of the dispute. Had Bruce and Merilyn sought to pursue such an avenue for settlement, an order to that effect could have been sought.

80. As to the making of settlement offers, Bruce and Merilyn point to the two offers made by them (referring, in addition, to an unidentified offer said to have been made to Geoff at the mediation in April 2016, before Bruce and Merilyn were involved as parties). It is said that each of these offers gave Geoff the ability to finalise the litigation with certainty and to “stem the tide of costs” which later flowed. The relevant offers from Bruce and Merilyn are identified as: the letter dated 9 July 2019 from Keypoint Law to Martin Legal (to which I have referred above), which it is said was rejected in “disparaging” terms by a letter dated 11 July 2019 from Geoff’s solicitors; and a letter dated 21 July 2020 from Keypoint Law to Martin Legal, receipt of which was acknowledged but in respect of which it is said that the promised response (see the letter from Martin Legal on 23 July 2020) did not eventuate in writing (see Ms Ross-Maranik’s affidavit sworn 9 April 2021, Annexures E, F, G, H).

81. It is said that Bruce and Merilyn’s offer of 9 July 2019 was made: during a severe drought (I interpose to note that so, for that matter, were Geoff’s offers); in the context of an appraisal from Landmark Harcourts which valued The Springs between $1,957,000 and $2,275,000 on a per acre basis (Merilyn’s affidavit sworn 9 April 2021, Annexure B); and on the basis that Geoff would receive $400,000 for Bruce and Merilyn (strictly speaking, from Bill’s estate) to purchase his share of The Springs. It is said that that offer was made in a spirit of compromise, and would have enabled Geoff to walk away from the proceedings with nearly half of his costs (at that time) being paid, rather than having a significant costs burden from his loss in the proprietary estoppel claim and the substantial costs he subsequently incurred for that claim.

82. Bruce and Merilyn note in this context that Geoff no longer lives near The Springs, referring to the evidence at the hearing that, after Bill died, Geoff sold his home in Inverell, and that, in 2015, he and his then partner, Fiona Fielding, bought another farm (Fernbrook) some 230km away from The Springs in Dorrigo, for $1.5 million. It is also noted that, at the hearing, Geoff confirmed that he expected to retire from farming due to health reasons and that his Senior Counsel submitted in this regard that:

165.    As a result of no longer having a pituitary gland, Geoff is starting to suffer from the effects from long term cortisone use being a deterioration of his teeth and bone density: [Geoff’s affidavit sworn 4 August 2020 at [43]]. This is of particular concern to Geoff as he earns his living through tough physical work associated with farming and consulting. As Geoff’s condition continues to deteriorate, there is a significant risk that he will no longer be able to earn an income as a farmer and consultant, being the only area in which Geoff has vocational skills.

83. It is said that the second offer on 21 July 2020 was conditional upon Sue’s agreement but that “negotiations did not get that far”, as it was “apparently unilaterally” rejected by Geoff’s solicitor. That offer was that Geoff pay a sum of $200,000 to each of Bruce and Marilyn, together with their entitlements from the estate of the deceased (then being calculated at $933,000) upon which basis Geoff and Sue (as executors of the estate) could thereafter arrange the estate exclusively between them, including the sale of The Springs at the value asserted by Geoff of $3.6 million.

84. It is submitted that this offer, if accepted (and, significantly I would add, if it could be negotiated with Sue), would have left Geoff better off than he is following the findings ultimately made (although Bruce and Merilyn say that a specific arithmetical assessment in the absence of a final costs outcome is not possible). It is submitted that it was not reasonable for Geoff to reject Bruce and Merilyn’s offer, given the uncertainties and lack of corroboration for Geoff’s proprietary estoppel claim (as, they say, the hearing and principal judgment demonstrated). Bruce and Merilyn say that the 21 July 2020 offer effectively reflected an outcome where they sought no payment for any of the issues raised in the first cross-claim, and so this reflected the eventual order made in this regard.

83. It is submitted that, given the findings made in dismissing the proprietary estoppel and the first cross-claim, and making a family provision order of half of the estate’s share of The Springs, the 21 July 2020 offer was a reasonable one, and would have saved Geoff significant costs (as outlined in the letter dated 31 May 2019 from his solicitors to Bruce and Merilyn’s solicitors). It is noted that the foreshadowed costs of $700,000, although already significant, were exceeded by the actual costs incurred by Geoff of approximately $820,000.

Alleged unreasonable conduct of litigation – proprietary estoppel claim and cross-claim

86. Further, Bruce and Merilyn say that Geoff’s conduct of the proceedings was unreasonable. It is noted that Geoff was “entirely unsuccessful” in the substantial claim put by him (the proprietary estoppel claim). (Pausing there, the failure of Geoff’s proprietary estoppel claim does not of itself mean that it was unreasonably brought or conducted.)

87. Bruce and Merilyn maintain that Geoff put them (as contradictors to that claim) to significant expense, in pleading representations over a period of 30 years since 1984 only to resile from those pleaded representations at the hearing. It is said that this in turn caused the defendants to incur costs “far beyond what they could reasonably have expected to incur in litigation of genuine issues” (referring to Maule v Liporoni (No 2) (2002) 122 LGERA 216; [2002] NSWLEC 140 (Maule v Liporoni) at [34] per Lloyd J; Degmam Pty Ltd (in liq) v Wright (No 2) (1983) 2 NSWLR 354 at 358 per Holland J) (though those costs are not here identified with any particularity). It is also noted that, despite the departure from the amended pleadings in his submissions, Geoff maintained in cross-examination his earlier claims as to the representations he alleged were made by his father since 1984.

88. It is said that the change of Geoff’s case (to restrict the estoppel claim to the representations allegedly made in 2009 and not 1984) was made only in Geoff’s opening written submissions served immediately before the commencement of the hearing; and that, had this abandonment of the pleaded case occurred earlier, this would have had a significant effects on costs as follows. First, that it would have reduced the costs of Bruce and Merilyn in investigating and responding to Geoff’s claims in relation to the pleaded representations and alleged detriment over 30 years. Second, that it would have changed the basis on which Bruce and Merilyn were able to assess Geoff’s claim in the context of responding to settlement offers. (As to the first, it is not clear why this would have been the case when a representation or oral agreement in 1984 of the kind pleaded would also have been relevant to the family provision claim even if not relied upon to found a proprietary estoppel. As to the second, the basis on which Bruce and Merilyn rejected the Offers of Compromise does not suggest this was due to any uncertainty in assessing the prospects of Geoff’s proprietary estoppel claim. Indeed, there is no suggestion that had the claim solely been founded on the alleged 2009 representations this would have caused a different assessment of Geoff’s prospects of success.)

89. Bruce and Merilyn submit that this approach was a “vexing” one (referring to the words used in Rinehart v Rinehart [2020] NSWSC 235 (Rinehart) at [145]), which they say should be taken into account were any application for costs (indemnity or otherwise) to be considered in relation to Geoff’s proprietary estoppel claim. Pausing here, I fail to see any analogy that can usefully be drawn between the present case and that considered in Rinehart where the issue was as to an abuse of process in the “vexing” of the defendants by the maintenance of inconsistent claims across different jurisdictions.

90. Bruce and Merilyn further say that Geoff’s claim was marked by a significant duplication of evidence, including his 134 page affidavit of 8 June 2017, which contained a significant amount of replication, as well as changes to the evidence previously given and numerous additional matters of contention. While Geoff explained the duplication and modification of his earlier evidence (see Geoff’s affidavit sworn 8 June 2017 at [2]) on the basis that his 2017 affidavit was “a comprehensive compilation of all of [his] evidence to date”, together with all of the evidence he now sought to adduce “so that this information is contained in one convenient document”, Bruce and Merilyn maintain that careful consideration still needed to be given not only to the contents of this 2017 affidavit but also all the previous ones (and they note that all the previous affidavits which resulted in the “compilation” were still read and included in the Court Book).

91. It is said that it is also significant that only about 20% of this 2017 evidence was identified by Geoff’s solicitor as relevant to the first cross-claim (as presumably calculated by Bruce and Merilyn by reference to relevant paragraphs identified in the letter - see Ms Ross-Maranik’s affidavit sworn 9 April 2021, Annexure J). Bruce and Merilyn say that it is apparent, from this, that Geoff continued to depose to a significant volume of fresh and duplicated evidence for his proprietary estoppel claim in the years after he filed his amended statement of claim in 2015, as well as after the first cross-claim was filed, which necessarily inter-mixed the costs for these claims, and caused Bruce and Merilyn significant additional expense in analysing and responding to his evidence for both the first cross-claim and Geoff’s proprietary estoppel claim (given Sue’s “support” for Geoff).

92. Bruce and Merilyn say that Geoff’s costs also involved significant duplication of effort. It is said that, when Geoff changed solicitors in April 2017, he duplicated his costs for his proprietary estoppel claim as illustrated by his statement in his affidavit of 25 May 2017 (at [8]) that:

I have had 5 x full day conferences with Mr Martin on 27 & 28 April 2017, 9, 10 & 25 May 2017, to enable him to be fully apprised of the matter.

93. It is said that five full days of conferencing (in proceedings which had been commenced and in which evidence had already been served) is manifestly excessive. (Pausing here, this, and other similar submissions as to unnecessary or duplicated costs, seems to treat the present application as a costs assessment exercise; which would only arise, if at all, for present purposes if a gross sum costs order were here to be considered.)

94. Bruce and Merilyn further complain that serious allegations were made by both Geoff and Sue about the conduct of Bruce and Edwina (effectively, they say, alleging that they were guilty of theft), referring to the following affidavits: Geoff’s affidavit sworn 25 May 2017 at [13]; Geoff’s affidavit sworn 8 June 2017 at [498]; [495]; Geoff’s affidavit affirmed 18 October 2018 at [188]; Sue’s affidavit sworn 22 July 2015 at [40]; and Sue’s affidavit sworn 31 May 2018 at [25].

95. It is submitted that these repeated and unfounded allegations should attract indemnity costs (referring to what was said in Maule v Liporoni at [39]). It is said that the consideration and response to these claims caused Bruce and Merilyn unnecessary expense; and that they were improper and baseless. Bruce and Merilyn say that there is no evidence of any request to Bruce for any records before these allegations were made in May 2017, and that all records obtained by Bruce and Merilyn on subpoena were the subject of general access orders. Bruce and Merilyn point out that Sue says that she gave Bill’s cheque book and other records to Geoff after Bill’s death and, at the hearing, Geoff admitted that he (not Bruce) had these documents, and that he (not Bruce) also had Bill’s partnership cashbooks. It is said that it was Sue (not Bruce) who took possession of Geoff’s “Discussion Note” and Bill’s “Shopping List” notes after Bill’s death, as noted in Merilyn’s evidence and Bruce’s email to Sue; and that Geoff says that Sue told him Bill’s records “[w]ere taken to the tip” (referring to Geoff’s affidavit affirmed 8 December 2015 at [5]).

96. Further, it is said (by reference to the cost orders noted in Attachment A to their submissions) that Geoff repeatedly disregarded Court orders and failed to serve his witness evidence for his proprietary estoppel claim for some 18 months after filing his claim in 2015; and that Geoff was also the subject of a number of calls for production of documents, including those to establish his claim of detriment, but that he only produced the documents underlying his business income during the course of the hearing. Bruce and Merilyn say that a failure to conduct litigation “with a view to speed and thrift results in unjust outcomes”; and it is submitted that it would not be just to require Bruce and Merilyn, or Bill’s estate, to bear any cost for Geoff’s estoppel claim, and that his conduct should be answered by indemnity costs against him.

97. Finally, I note that Bruce and Merilyn say that much of Geoff’s costs should not be recoverable. In this regard, it is noted that Geoff filed an affidavit from his former de facto partner, Fiona Fielding, in which it is said that she “purported to critique” the expert reports and “advocate for Geoff”. It is said that Ms Fielding was clearly not an expert (and the affidavit was rejected) but that, again, the affidavit caused cost and delay to Bruce and Merilyn in considering the issues raised and its admissibility.

98. In summary, therefore, Bruce and Merilyn’s indemnity costs claim appears to be based on: Geoff’s rejection of their without prejudice settlement offers, their complaints as to excessive, unnecessary and disproportionate costs, duplicated affidavit evidence, evidence that was rejected and duplication of solicitors’ costs; their complaint that Geoff did not conduct the proceedings in a manner consistent with the obligations of a litigant under the Civil Procedure Act; and their complaint as to the making of allegations by Geoff (and Sue) against Bruce and Merilyn as to alleged failure to produce documents.

Costs of the first cross-claim

99. It is said that Geoff had a duty, as the sole surviving executor of Jill’s estate, to explain the administration of her estate and to investigate and recover any assets that were maladministered or otherwise unaccounted for; and that he faced personal liability for his failure to meet his duties (citing Bird v Bird (2013) 11 ASTLR 225; [2013] NSWCA 262). It is also said that, Geoff placed himself in a position of conflict with his duties to Jill’s estate, by claiming he had been promised her property by Bill in 2008 and 2009, while they held these assets as executors (The Springs Partnership, Hurricane Hill and The Springs); and that Sue could not act for Jill’s estate (as she represented Bill’s estate) which it is said left Bruce and Merilyn as the only parties able to represent Jill’s estate, instead of Geoff. Pausing here, no claims in devastavit were pursued against Geoff; rather, (due to limitations issues) the claims against Geoff were as to receipt of trust property (hence the reason most of them failed).

100. Bruce and Merilyn submit that Geoff’s conduct of the first cross-claim was such that no costs order should be made for his costs of the first cross-claim, with the intent he should bear his own costs of that claim. It is noted that, in Ritter v Godfrey [1920] 2 KB 47 at [60] Atkin LJ said that relevant considerations for the exercise of this discretion are evidence that the defendant “(1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains”.

101. Bruce and Merilyn say that it is not necessary for them to establish misconduct nor that the case be exceptional, citing GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 at [20] where Bryson JA (with whom Hodgson and Santow JJA agreed) stated:

It would be an error to think that it has been established, as a matter of law, that an order that a successful party to pay costs of an unsuccessful party cannot be made unless it has first been found in terms or to the effect that it is a most exceptional case, or a strong or exceptional case. Judicial references to general rules for the award of costs should not be understood as endeavours to alter the discretionary character of such decisions.

102. Reference is also here made to what was said by Hallen J in Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326 at [283]:

The ability of the court to limit the amount of recoverable costs of its own motion reveals that the purpose of such a costs order is not merely restricted to protecting a party from the consequences of an adverse costs order. The purpose also extends to the court implementing the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in the proceedings, acting in accordance with the dictates of justice and ensuring that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute: Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd and Minister for Mineral Resources [2009] NSWLEC 165 at [10].

103. It is said that Bill was the other executor for Jill’s estate and was therefore responsible (with Geoff) for maintaining accurate estate records; and that Bill benefited from assets recorded in their joint partnerships. Bruce and Merilyn say that they sought to recover Jill’s assets (as representatives of Jill’s estate since no other party could act in that role) and they submit that their costs of so doing should be indemnified from Bill’s estate. (Pausing here, Bruce and Merilyn in effect made a claim against Bill’s estate in relation to matters relating to the administration of Jill’s estate, which claim was wholly unsuccessful. The suggestion that they should be indemnified out of Bill’s estate for their costs of pursuing an unsuccessful claim against Bill’s estate is paradoxical and, as I discuss below, conveniently ignores that they were two of the three residuary beneficiaries of Jill’s estate and hence had a very obvious interest in the recovery of the claimed assets.)

104. Alternatively, it is submitted that, if Bruce and Merilyn were to be ordered to pay the costs of the first cross-claim (for which costs it is again submitted they should be indemnified from Bill’s estate), then the Excluded Costs should be excluded from such an order, namely, costs relating to the single expert evidence process and the costs of the “Samuel Report”; as well as costs thrown away arising out of Geoff’s failure to serve evidence on time.

105. In this regard, it is submitted that it would be appropriate to exclude any recovery of costs by Geoff for litigation conducted by him in an unreasonable manner which resulted in both expense and delay. Bruce and Merilyn say that Geoff’s conduct added to the cost and the difficulty of the first cross-claim, occasioning unnecessary expense and delay, particularly in relation to three aspects (considered further below): failure to respond to correspondence or to disclose evidence; “sabotaging” of the “single expert” process; and a disregard for timely provision of evidence and court directions.

106. It is said that the only affidavit from Geoff’s side which related solely to the first cross-claim was that dated 13 September 2019, which was served shortly before the hearing despite having been sworn nearly a year earlier, as well as the report of his expert and a four page letter served during the hearing. It is again said that Geoff’s affidavit of 8 June 2017 was predominantly concerned with Geoff’s proprietary estoppel claim, and that he intermixed evidence of his estoppel claim with the first cross-claim in subsequent years.

(i)   Failure to provide accurate information about Jill’s estate

107. It is submitted that Geoff caused the need to investigate Jill’s estate because he claimed, for his proprietary estoppel claim, that Bill promised he would inherit assets that included Jill’s share of assets in 2008 and 2009, which they both held as executors for her estate; but failed to provide accurate estate records, or to explain the administration of Jill’s estate (particularly relating to Jill’s share of The Springs Partnership, The Springs and Hurricane Hill, but also to other estate property).

108. Bruce and Merilyn rely on the affidavit of their former solicitor, Ms Kennedy, sworn 23 November 2016 (filed in support of the notice of motion on 3 February 2017 in which they sought leave to being the first cross-claim on behalf of Jill’s estate) and Exhibit 11, which contained correspondence which it is said demonstrates that Geoff and Sue (as co-executors of Bill’s estate) failed to respond to letters about Jill’s estate sent on 23 September and 12 October 2016, and a detailed 14-page report dated 12 October 2016.

109. In addition to this, it said that: Mr Carrigan (the estate’s accountant) admitted at the hearing he did not provide accurate information about the administration of Jill’s estate in his letter of 13 January 2015; Mr Carrigan agreed in cross-examination that no consideration was paid to Jill’s estate for her share of The Springs Partnership, and Bill also did not pay the agreed consideration for The Springs; the Inventory of Property for Jill’s estate did not identify Jill’s partnership assets (contrary to Mr Carrigan’s letter of 7 May 2017 to the estate solicitors) and property totalling $1,493,056.63 was not included in the Inventory at all; there are no records to show the winding up or final settlement of accounts for Jill’s interest in The Springs or Monowai Partnerships after her death; and that Sue refused to respond to letters from Bruce and Merilyn’s solicitor or to investigate Jill’s estate prior to probate, and did not disclose written statements from Geoff in October 2014 which Bruce and Merilyn rely on as showing that Geoff was aware that Jill’s interest in The Springs Partnership had not been administered according to her Will and had been “transferred” to Bill.

110. It is said that, for three months after the first cross-claim was filed, Geoff again failed to comply with orders made on 3 February 2017, or to respond to letters from Bruce and Merilyn’s solicitor on 21 February 2017, 22 March 2017, 7 April 2017, 20 April 2017, 28 April 2017, 19 May 2017 (noting that a change of solicitor’s notice was filed on 18 April 2017 with the engagement of Geoff’s current solicitor, Mr Martin). Bruce and Merilyn say that, at the directions hearing on 26 May 2017, Geoff filed an affidavit sworn on 25 May 2017 in which he objected to orders to which he had consented on 3 February 2017, criticised his previous solicitors and Senior Counsel and made various (“baseless”) allegations about Bruce (see Bruce’s affidavit sworn 29 June 2017). It is noted that Geoff’s conduct was the subject of an affidavit from Ms Kennedy sworn 25 May 2017, which was filed for the directions hearing on 26 May 2017, and that Stevenson J ordered costs forthwith against Geoff on that occasion (see items 1 and 2 in the table in Attachment A to Bruce and Merilyn’s submissions).

111. Bruce and Merilyn complain that, after the first cross-claim was filed, Geoff repeatedly gave assurances that he would adduce evidence to explain the administration of Jill’s estate, and then failed to do so. By way of example, reference is made to what was said by Geoff in his affidavit sworn 25 May 2017 at [36] and [38]:

...in my capacity as the sole surviving executor of my mother’s estate, I have instructed Mr Alf Carrigan to provide a report about the financial affairs of my mother’s estate and Mr Carrigan has recently indicated to me that he also expects to have his report ready in the next 28 days.

287. As to those matters, I accept that there was a change in the way Geoff’s proprietary estoppel case was put in opening submissions from that in which it was pleaded. However, it is difficult to see how the need to address the pleaded claim as it was up to that point would have sounded in extensive or additional costs. The making of the alleged promises or representations back in 1984 and 1985 was adhered to by Geoff in his cross-examination at the hearing and would have formed part of the factual substratum for the family provision claim in any event.

288. As to the duplication of costs as a result of the change in solicitors (and the complaint that five days of conferencing was excessive) or the complaint as to the time spent by Geoff’s new solicitor in reviewing the pleadings after a computer difficulty in his office, those are matters that would be relevant in considering an amount to be allowed on a costs assessment (since even on an indemnity basis not all costs might be recoverable). Similarly, as to the costs of preparation of affidavits (such as Ms Fielding’s affidavit to which reference was made in the submissions) which were either not read or rejected outright, those would go to the assessment of recoverable costs not the basis on which costs would be ordered.

289. As to the complaint about the failure to comply with Court timetables or to provide documents in answer to notices to produce or the like, while that is unsatisfactory and not to be condoned, I am not persuaded that it rises in the present case to the level of unreasonableness that would warrant a special costs order. Nor is it clear, other than in relation to some costs incurred in chasing up such matters, that this has led to any significant cost or prejudice to Bruce and Merilyn.

290. As to the complaint that Geoff made serious allegations in relation to non-production of documents, it is not clear to me that an allegation rising to the level of fraud was made. Certainly none seems to have been pleaded. If the complaint includes the allegations made as to the fact that there was no production of the letter that Bill was said to have sent to Bruce (a copy of which was requested by Sue and not produced at the time apparently on the basis that it would make her more sympathetic to Geoff), I have referred in my principal reasons to the problematic aspects of Bruce and Edwina’s evidence in that regard and I do not here propose to repeat that. Suffice it to say that I do not consider that this is a case where the assertions that have been made in relation to non-production of documents warrant the making of an indemnity costs order.

291. Finally, as to the complaint that the single joint expert process was “sabotaged”, the complaint appears to be that Geoff’s solicitor (Mr Martin) sought a copy of the curriculum vitae for the already court-appointed expert and that he (or Geoff) did not co-operate with the single expert accountant in terms of the provision of instructions or responses to the single appointed expert, culminating in that expert seeking permission to withdraw from her referral, and as to the non-payment of or delay in payment in relation to Geoff’s share of the fees of that expert (see Ms Kennedy’s affidavit sworn 21 November 2017). I am not in a position to test the various assertions made in relation to the ultimate outcome of the single expert process. I accept that the evidence suggests that Geoff’s lawyers may have been dissatisfied with the expert’s expertise and/or work. Without a full review of the circumstances it is not appropriate for me to make findings in relation to that issue. Suffice it to say that if there were duplicated costs referable to the aborted attempt for an accounting report to be prepared by the single appointed expert, then this can be raised in a costs assessment process.

292. Therefore, I have concluded that Bruce and Merilyn should pay Geoff’s costs of the first cross-claim and (subject to an exclusion for costs that the costs assessor considers were inappropriately or unreasonably incurred) that those costs should be on the indemnity basis from 1 June 2019, having regard to the Offers of Compromise that were made (and not accepted).

293. I have taken into account the financial submissions as to the circumstances of the siblings and I accept that the litigation has come to an unfortunate impasse. However, I did make clear when reserving judgment that parties might wish to consider their position as to settlement on the basis that no one might be happy with the final outcome (T 612.25) and this is the unfortunate consequence of parties choosing to fight litigation to the bitter end.

294. As to whether Bruce and Merilyn should be reimbursed out of Bill’s estate, I note what was said in Warton v Yeo (2015) 15 ASTLR 462; [2015] NSWCA 115 (Warton v Yeo) at [72] as to the situation (not there the case) where the costs were incurred by the executor in the furtherance of a personal interest or where there was impropriety (referring to Miller v Cameron at 578; Re Jones at 197), as well as situations of unreasonableness on the part of the executor in taking a partisan stance. At [78], I noted that:

78.   There are circumstances in which the costs of litigation concerning the administration of estates should be borne by the parties personally (Inre Buckton; Buckton v Buckton [1907] 2 Ch 406). Three classes of case can be identified (see Buckton at 414-415). In the first, the applicants are trustees of a will who ask the court to construe the will for their guidance, in order to ascertain the interests of the beneficiaries. In the second class, the application is made not by the trustees (who are respondents) but by some of the beneficiaries because, for whatever reason, that course has been deemed more convenient. In the third class of case, the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and as such, the proceedings are properly characterised as adversary litigation. In the first two classes of case, the costs of all parties are borne by the estate; in the third class, the costs are borne by the parties themselves. (Emphasis added)

332. I consider that Merilyn and Bruce should be indemnified for the costs of the primary proceeding (in respect of the party/party costs component of the costs they are ordered to pay to Geoff) but not the costs of the first cross-claim. As to the former, I see nothing irregular in the defence of that claim on behalf of Bill’s estate. It is unfortunate, however, that their rejections of the Offers of Compromise have led to indemnity costs orders. I consider that they should not be indemnified for the additional component of those costs in circumstances where their rejection of the Offers of Compromise was largely predicated on the practical and logistical difficulty it would pose to their personal interests.

333. As to the latter, the first cross-claim was a claim to recover moneys or assets said to have been the subject of maladministration of Jill’s estate. It was not a devastavit claim per se. Moreover, and relevantly for present purposes, though brought (with leave) by Bruce and Merilyn as representatives of Jill’s estate, it was a claim the benefit of which would to a very large extent have enured to Bruce and Merilyn as residuary beneficiaries of her estate (although Sue would also have shared in that benefit, she did not seek to join in any such claim). This seems to be an attempt to trawl through accounting documents (many years after Jill’s death) in order to see what could be recovered for their ultimate benefit.

334. As to the family provision claim, on the ordinary basis, Bruce and Merilyn should be indemnified for their costs out of Bill’s estate but, having regard to the rejection of the Offers of Compromise (and having regard to the fact that their own offers of compromise make very clear that it was for their benefit that the proceedings were being conducted by them), I would limit that to an indemnity for the difference between the costs assessed on the ordinary basis (for which they should be indemnified) and the costs on an indemnity basis (for which additional amount they should only be indemnified out of their share of the residuary estate).

335. As to Geoff’s costs of the family provision claim, they should be paid on an indemnity basis (having regard to the rejection of the Offers of Compromise). I was inclined to cap these costs (approaching the matter on a broad brush basis) at, say, $100,000 to reflect the disproportionality of the costs incurred in relation to the family provision claim. I would not have considered that a further oral hearing was warranted on that issue given that all the parties have had ample opportunity to make submissions (at the very least in the various sets of reply submissions) on this question.

336. However, I have concluded that it is not appropriate here to do so in circumstances where there is a difficulty, on the material before me, in separating out the costs referable to the family provision claim (which is what I would have capped) and those referable to the other claims, in particular the costs of the first cross-claim. In this regard, it seems not coincidental that Geoff’s costs up to the point at which he instructed new solicitors (in April 2017, which was around the time that the first cross-claim was filed; and after the earlier unsuccessful mediation in 2016) were around $80,000 (and not therefore “out of the ball park” for a contested family provision claim – albeit that this was obviously before any costs were incurred in the contested hearing). The bulk of Geoff’s costs were incurred thereafter (by which time, of course, there had been a new level of complexity arising from the need to investigate the issues referable to the first cross-claim). Sue’s costs of representation in relation to the estate up to the time that she was removed as representative (in May 2019), which obviously included costs incurred after the filing of the first cross-claim, were in the order of some $400,000. (This suggests that at least one cause of the very considerable costs incurred on both sides was referable to the first cross-claim, not the family provision claim.) Moreover, insofar as much complaint was made by Bruce and Merilyn as to unnecessary or wasted or duplicated costs, that will most efficiently be dealt with during the costs assessment process. Further, there is the overlay of the special costs orders to consider.

337. Accordingly. I have concluded that the costs of none of the parties should be capped and the reasonableness or otherwise of the respective costs dealt with during the cost assessment process (if they cannot be agreed in the interim).

338. As to a gross sum cost order, as adverted to in the above discussion, I have concluded that this is not an appropriate case for a gross sum costs order, since I am not persuaded that I am in the position appropriately to make such a determination, and that the quantum of costs should be for a costs assessor to determine.

339. As to Sue’s costs, Sue has already been ordered (by Pembroke J) to pay Bruce and Merilyn’s costs of opposing the application for her removal as representative of Bill’s estate for the purpose of the proceedings. The question reserved by his Honour was whether she should be indemnified out of the estate for her costs (that issue being raised having regard to his Honour’s tentative or preliminary view as to the animosity between the parties). I consider that Sue should not be indemnified out of Bill’s estate for the costs (including the adverse costs order) of Bruce and Merilyn’s notice of motion filed on 14 March 2019 and determined by his Honour on 27 May 2019. I accept that Sue was not bound to accede to demands from the other residuary beneficiaries as to the conduct of the case. However, by the time of their motion it should have been apparent that there was a difficulty in Sue continuing to represent Bill’s estate and, but for the initial opposition to her removal (or the terms on which she would agree to that removal) the costs of the motion would not have been incurred. I do not suggest that there was impropriety in the sense of dishonesty in that context. Rather, I think that this is a case where Bill’s estate should not bear those costs. However, I do not propose otherwise to limit Sue’s indemnity out of Bill’s estate for costs incurred by Sue in representing the estate up to 27 May 2019. While there is some force to the argument that Bruce and Merilyn should not have to pay double costs for the first cross-claim (they say, that since Sue was not an active contradictor, they should not have to pay Sue’s costs of the first cross-claim), it was necessary in my opinion for Sue as representative of Bill’s estate to address the issues in relation to that claim; and any question of unreasonableness should be dealt with on a costs assessment.

340. In that regard, I note that it is a well-established rule that a trustee who has acted properly in the exercise of their duties, whether by commencing or defending proceedings, is entitled to be indemnified out of the estate. As noted by Lord Justice Lindley in Re Beddoe: Downes v Cottam [1893] 1 Ch 547 (Re Beddoe) at 558:

…a trustee is entitled as of right to full indemnity out of his trust estate against all his costs, charges, and expenses properly incurred…and in all cases of doubt, costs incurred by a trustee ought to be borne by the trust estate and not by him personally.

341. This rule extends to circumstances where the litigation is unsuccessful, the executor acted mistakenly and the other party to the litigation is found to be entitled to a costs order (see Drummond at [43] per Austin J; Bovaird v Frost [2009] NSWSC 917 (Bovaird) at [28] per Brereton J as his Honour then was).

342. There are two exceptions to this rule (as adverted to above). First, an executor will be deprived of indemnity costs out of the estate in cases of impropriety. In Re Beddoe (at 562), it was noted that “mere errors in judgment which fall short of negligence or unreasonableness” do not meet the threshold of impropriety. Rather, it is necessary that the executor incurred the costs unreasonably, negligently or unnecessarily (Drummond at [45]; Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133 (Mead) at [12]-[13] per Sheller, Ipp and Tobias JJA; Warton v Yeo [12], [72]). In Mead (at [14]), the Court of Appeal stated that a degree of personal misconduct or wilful recklessness is not required (see also Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100 at 111 per Northrop, Wilcox and Cooper JJ).

343. The second basis precluding an executor from indemnification out of the estate is where the executor has incurred costs in furtherance of a personal interest (Miller v Cameron at 578-579; Bovaird at [28]).

344. See in this regard Zupicic v La Camera Paino as Trustee for the Estate of the Late Mario Novick [2018] NSWSC 1117 at [24] per Sackar J; Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Dobrijevic(No 3) [2017] NSWCA 109 (Free Serbian Church) at [14] per Payne JA (with whom Gleeson JA and I agreed).

345. Neither exception is established in my opinion, at least up until the point at which Sue did not accede to the request for her removal as representative to the estate in these proceedings. At that stage, while I am not persuaded that there was such impropriety on the part of Sue in not immediately acceding to the demands by Bruce and Merilyn for her removal as representative of Bill’s estate, it does seem to me that there were costs unnecessarily incurred in relation to that application so as to warrant a refusal of indemnity for the costs of that application (but not otherwise in relation to the proceedings at that point).

346. As to the amount held in the solicitors’ trust account, there was no order of which Sue was directly in contravention; his Honour simply reserved for consideration in due course the question whether Sue should be indemnified out of the estate.

347. As to the observations made by Pembroke J (on an avowedly preliminary basis), my impression of Sue at the hearing was that she had found herself very much in the middle of an acrimonious dispute between her siblings; and, while that may not excuse delay in addressing the appropriateness of her continued representation of Bill’s estate, in all the circumstances, it seems to me that she should not bear sole responsibility for that acrimony (which I consider would be the case if the orders sought by Bruce and Merilyn were to be made). In his regard, to the extent that Bruce and Merilyn may have drawn comfort from the observations that fell from Pembroke J, it is clear that those were only preliminary views and not based on the whole of the evidence (that being the basis on which his Honour expressly left the matter for the trial judge to determine). No doubt those observations had a cautionary effect (in submissions they were described as in terrorem) on Sue; however, if they encouraged Bruce and Merilyn in their assessment of the matter, then this is unfortunate (and illustrates the caution to be observed in making preliminary or tentative observations without the benefit of all of the evidence or that evidence being tested).

348. Finally, by way of observation, as to the financial circumstances of the respective parties, to which my attention has been drawn in the submissions, I note (as Hallen J has observed – see above) that parties should not proceed in family provision cases on the assumption that their costs will necessarily be indemnified out of the estate. Nor should parties such as Bruce and Merilyn assume that, where they are representing an estate (here, Jill’s estate) ultimately in their own personal interests (as residuary beneficiaries of that estate) that they will recover their costs even if the claim is unsuccessful (particularly where, as here, Jill’s estate has already been administered and they are looking to be indemnified out of the estate of her executor).

349. In assessing the difficulty now faced by Bruce and Merilyn as to costs, the rationale and public policy objectives for special costs orders must be kept firmly in mind. It is clear from the reasons expressed in their solicitor’s correspondence when rejecting the Offers of Compromise that they did so having regard to their own personal interests. If litigants choose, in effect, to pursue litigation to the bitter end in the face of such Offers of Compromise, then they do so at their own risk.

Orders

350. For the above reasons, I make the following orders:

1. As to the costs of Geoff’s proprietary estoppel claim, order that:

1. Geoff pay Sue’s costs of defending the proprietary estoppel claim on behalf of Bill’s estate up to 27 May 2019, on the ordinary basis and that Sue otherwise be indemnified out of the estate for those costs;

2. Geoff pay the costs of Bruce and Merilyn of defending the proprietary estoppel claim on behalf of Bill’s estate from 28 May 2019 to 31 May 2019 on the ordinary basis and that Bruce and Merilyn otherwise be indemnified out of the estate for those costs;

3. Bruce and Merilyn pay Geoff’s costs of the proprietary estoppel claim from 1 July 2019 (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated costs) on the indemnity basis;

4. Bruce and Merilyn be indemnified out of Bill’s estate for their costs of defending the proprietary estoppel claim after 1 June 2019 (and for the adverse costs ordered in (iii) above) but only as assessed on the ordinary basis (with the intent that they bear personally the difference between the indemnity costs ordered and costs on the ordinary basis).

2. As to the costs of the family provision claim, order that:

1. Geoff’s costs be paid out of Bill’s estate (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated costs) on the ordinary basis up to 31 May 2019 and on the indemnity basis thereafter;

1. Sue be indemnified out of Bill’s estate for the costs of defending the family provision claim up to 27 May 2019 on the indemnity basis;

2. Bruce and Merilyn be indemnified out of Bill’s estate for their costs of defending the family provision claim after 1 June 2019, assessed on the ordinary (not indemnity) basis and that they indemnify Bill’s estate for the difference between the indemnity costs ordered in favour of Geoff in respect of his family provision claim and those costs on the ordinary basis.

3. As to the first cross-claim, order that:

1. Bruce and Merilyn pay Geoff’s costs of the first cross-claim up to 31 May 2019 on the ordinary basis and from and including 1 June 2019 on the indemnity basis;

2. Sue be indemnified out of the estate for the costs of the first cross-claim on an indemnity basis up to 27 May 2019 and there be no order as to her costs of the first cross-claim thereafter;

3. for the avoidance of doubt, there be no indemnity out of Bill’s estate for Bruce and Merilyn’s costs of the first cross-claim.

4. As to the reserved costs, order that:

1. costs of the notice of motion determined by Stevenson J on 3 February 2017 follow the outcome of the first cross-claim, such that order 3 above apply to those costs;

2. costs of the notice of motion before me on 26 November 2019 follow the event, such that orders 1 – 3 above, as applicable, govern those costs.

5. Order that Sue be authorised to retain, from the respective entitlements of Geoff and Merilyn and Bruce in Bill’s Estate, for her costs as ordered above, (after having recovered as much as possible of the costs from the persons liable to pay them) the difference between the costs paid or payable on the ordinary basis by these orders and costs on the indemnity basis where so ordered above.

6. Order that Sue not be indemnified out of Bill’s estate for her costs (including the adverse costs order) of Bruce and Merilyn’s notice of motion filed 14 March 2019 by Pembroke J on 27 May 2019.

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Decision last updated: 27 April 2021