El-Bayeh v El-Bayeh (No 2)
[2025] NSWSC 1287
•31 October 2025
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New South Wales |
Case Name: | El-Bayeh v El-Bayeh (No 2) |
Medium Neutral Citation: | [2025] NSWSC 1287 |
Hearing Date(s): | On the papers |
Date of Orders: | 31 October 2025 |
Decision Date: | 31 October 2025 |
Jurisdiction: | Equity |
Before: | Hmelnitsky J |
Decision: | Pursuant to r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW), order 2 made on 8 October 2025 be varied to provide that the defendant is to pay the plaintiff’s costs calculated on the ordinary basis up to and including 8 August 2025 and on the indemnity basis from 9 August 2025 |
Catchwords: | COSTS — Party/Party — Exceptions to general rule that costs follow the event – Offers of compromise/Calderbank offers — Where plaintiff obtained judgment more favourable than two offers made to the defendant — Whether indemnity costs should be ordered from date of one of the Calderbank offers — Whether it was unreasonable for the defendant to reject the offers |
Legislation Cited: | Civil Procedure Act 2005 (NSW) s 98 |
Cases Cited: | Calderbank v Calderbank [1976] Fam 93 |
Texts Cited: | Nil |
Category: | Costs |
Parties: | Tony El-Bayeh (Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2024/150074 |
Publication Restriction: | Nil |
JUDGMENT
I delivered judgment in this matter on 8 October 2025: El-Bayeh v El-Bayeh [2025] NSWSC 1177. Pursuant to s 59 of the Succession Act 2006 (NSW), I ordered that the plaintiff is to receive provision by way of a lump sum of $1,450,000 from the estate of the late Tony Salim (also known by various other names including Youssef El-Bayeh). I also ordered the defendant to pay the plaintiff’s costs.
By a notice of motion filed on 10 October 2025, the plaintiff seeks an order pursuant to r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that the costs order made on 8 October be varied to provide for the defendant to pay the costs of the plaintiff, calculated on the ordinary basis up to and including 7 August 2025 and from 8 August 2025 on the indemnity basis, or such other order in relation to costs as the Court considers appropriate.
These reasons deal with the plaintiff’s notice of motion. I will use the same naming convention and defined terms as in my 8 October 2025 judgment.
Tony relies on two settlement offers in support of his claim for indemnity costs. The first offer was made on 8 August 2025. The 8 August offer was stated to be without prejudice save as to costs and referred to Calderbank v Calderbank [1976] Fam 93. The offer was in these terms:
“1. An order that provision be made out of the Estate for the plaintiff pursuant to s. 59 of the Succession Act 2006 (NSW) by way of a lump sum in the amount of $1,200,000.00.
2. An order that the lump sum referred to in paragraph 1 be paid within 28 days of the date of the order and, if not paid at the time, interest is to accrue from the 29th day on such unpaid amount at the rate for unpaid legacies specified in s. 84A of the Probate and Administration Act 1898 (NSW) until paid in full.
3. An order that the plaintiff’s costs be paid out of the Estate on the ordinary basis as agreed or assessed.
4. An order that the defendant’s costs be paid out of the Estate on the indemnity basis.”
The offer was open for acceptance until 5:00PM on 15 August 2025. It is relevant to note that the proceedings were listed for a three-day hearing to commence on 25 August 2025.
The second offer was made on 19 August 2025. It was also stated to be without prejudice save as to costs and referred to Calderbank v Calderbank. The offer was in similar terms to the 8 August offer save that the proposed first order was as follows:
“1. An order that provision be made out of the Estate for the plaintiff pursuant to s. 59 of the Succession Act 2006 (NSW) by way of a lump sum in the amount of $1,050,000.00.”
The 19 August offer was open for acceptance until 5:00PM on 22 August, being the Friday prior to the hearing.
Tony’s submissions
Both offers proposed a settlement of the proceedings on terms that were substantially less favourable to Tony than the orders made by me on 8 October. Tony submits that both offers provide a basis to depart from the usual order as to costs, including pursuant to r 42.14 of the UCPR and s 98 of the Civil Procedure Act 2005 (NSW).
Tony submits that although he did not file his updating affidavit until 15 August, Andrew was nevertheless in a position to know exactly what Tony’s case was by the time the 8 August offer was made. He had all of the substantive evidence on which Tony intended to rely at hearing. Tony’s case did not change in any material way from the way it had been articulated prior to 8 August. He submits that, by this stage, Andrew had briefed solicitors and counsel and would have been in a good position to obtain advice in relation to the offer. He submits that the period of seven days (in the case of the 8 August offer) was reasonable in circumstances where the parties were preparing for a final hearing on 25 August. He submits that the period of three days (in the case of the 19 August offer) was also reasonable given the imminent hearing.
Andrew’s submissions
Andrew resists an order for indemnity costs on various bases.
Andrew contends that the plaintiff ran the case in such a way that costs were wasted. There are two aspects to this contention. First, he points out that Tony limited his tender of the 2010 transcript (being the proceedings commenced in 2006 and heard by McCallum J in 2010) to those particular parts on which he relied but that he did so only on the first day of the trial. Secondly, he points out that some of the evidence on which Tony relied was suggestive of Youssef having committed fraud but that no such submission was made at the final hearing. Andrew submits that he was put to the wasted expense of dealing with the possibility of a fraud case and of having to ‘respond’ to the whole of the transcript of the 2010 trial. In this respect, he refers me to Karwala v Skrzypczak; Re Estate of Ratajczak [2007] NSWSC 931.
Next, Andrew contends that the offers were not reasonable because they required payment of provision within 28 days in circumstances where the estate was said to be illiquid. He contends that any reasonable offer would have given him three months to raise funds to pay the provision.
Next, Andrew submits that the offers were not open for a reasonable period of time. The first was open for seven days. The second was open for three days.
Finally, Andrew submits that an order for indemnity costs would be punitive, because the ultimate decision turned on matters that were outside his control. In this respect, he says that what Youssef had said in the 2010 transcript was out of his control and that it was understandable that an executor in his position would have refused to settle the proceedings in these circumstances.
Conclusions
I consider that it was unreasonable of Andrew not to accept the 8 August offer and that it is appropriate for Andrew to pay indemnity costs from the day following that date. By the time that offer was made, Andrew well and truly knew the substance of the case that was being run against the estate and the evidence on which Tony relied. He was well represented and had an appropriate opportunity to take advice about the merit of the offer.
The ‘time allowed to the offeree to consider the offer’ is an important factor to be taken into account when considering whether the rejection of an offer was unreasonable: see Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 at [12] per Basten JA citing Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25] (Warren CJ, Maxwell P and Harper AJA). However, this is a matter that must be assessed in the light of other factors, including but not limited to the stage of the proceeding at which the offer was received and the history of dealings between the parties in relation to settlement.
I consider that seven days was an appropriate period for the 8 August offer to remain open in the particular circumstances of this case. By that date, the parties were fully prepared for trial and had also been in discussions about settlement for many months. Evidence relied on by Andrew discloses that they had been trading ‘without prejudice’ offers to settle the proceedings since May 2025. During that period, Andrew had made three separate offers to settle the proceedings. The first was made on 23 May and was open for 28 days. The second was made on 28 July and was open for 14 days. The third was made on 4 August and was open for seven days.
Tony also made two offers prior to the 8 August offer.
If Andrew was in a position to make three offers and reject two in the period prior to 8 August, he must have been in a position to assess the reasonableness of the 8 August offer and to do so quickly. The only real respect in which Tony’s offers had changed was in the amount of provision. Given this history and in circumstances where Andrew’s own final offer (made on 4 August) had been open only for seven days, it was reasonable for Tony’s 8 August offer to be open for a similar period.
I do not accept the submission that the 8 August offer was unreasonable because it did not allow three months to pay the provision. The relevant question is whether Tony achieved a result after final hearing that was better than the terms of the 8 August offer. Order 1 of the 8 October orders was simply for provision in the sum of $1,450,000. That order takes effect as a codicil to the will (see s 72(1)(a) of the Succession Act) and the amount is therefore presently due and payable. Andrew would clearly have been better off accepting the offer, which allowed 28 days for payment of a sum of $1,200,000.
I do not accept that Tony put Andrew to the expense of defending a fraud case that was ultimately not pressed at trial. This is not a case where affidavits or other material served prior to trial contained evidence of fraud but where that evidence was not read or tendered. In fact, the plaintiff’s affidavits were overwhelmingly read into evidence, including those parts detailing matters such as Youssef changing his name to Tony Salim and selling the Lanhams Road property. All that happened, so far as I can tell, is that Tony did not press the Court to make findings of fraud in relation to those matters.
Nor do I accept that it would be punitive to require Andrew to pay indemnity costs. The fact that Tony’s case involved allegations concerning things said and done by the deceased is no reason at all for Andrew to have pressed on despite the 8 August offer.
Orders
The order of the Court will be as follows:
(1)Pursuant to r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW), order 2 made on 8 October 2025 be varied to provide that the defendant is to pay the plaintiff’s costs calculated on the ordinary basis up to and including 8 August 2025 and on the indemnity basis from 9 August 2025.
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