Johnston v Johnston

The appeal concerned the costs of contested probate proceedings that had been settled by an offer of compromise. The respondents, who were the defendants at first instance, accepted an offer made by the plaintiffs. This offer proposed both a consent to the grant of probate in solemn form and a monetary payment to the respondents. The central issue before the Court of Appeal of New South Wales was the application of rule 42.13A of the *Uniform Civil Procedure Rules 2005* (NSW) to the costs of the proceedings following this settlement.

The primary legal question was whether rule 42.13A, which governs costs where an offer of compromise is not accepted, applied to the circumstances of this case. Specifically, the court had to determine if the offer of compromise, which included both a consent to the grant of probate and a monetary payment, could be characterised as a "mixed offer" that proposed judgment in favour of both the plaintiffs and the defendants. If the offer was a mixed offer, then rule 42.13A would be inapplicable. The court also considered whether the general costs discretion under section 98 of the *Civil Procedure Act 2005* (NSW) had been exercised appropriately by the primary judge, and if not, whether the matter should be remitted.

The Court of Appeal held that the offer of compromise was indeed a "mixed offer" because it contemplated outcomes favourable to both parties – the grant of probate in solemn form (favourable to the plaintiffs) and a monetary payment (favourable to the defendants). Consequently, rule 42.13A was not applicable. The court found no error in the exercise of the general costs discretion under section 98 of the *Civil Procedure Act 2005* (NSW) and therefore did not remit the matter.

Leave to appeal was granted, but the appeal itself was dismissed. The respondents were awarded their costs of the appeal.