Macaulay v Macaulay (No 2)

[2025] NSWSC 421

Supreme Court

New South Wales

Medium Neutral Citation:

Macaulay v Macaulay (No 2) [2025] NSWSC 421

Hearing dates:

4 March 2025

Date of orders:

02 May 2025

Decision date:

02 May 2025

Jurisdiction:

Equity

Before:

Hmelnitsky J

Decision:

[52]

Catchwords:

COSTS – Party/Party – Exceptions to general rule that costs follow the event – Offers of compromise/Calderbank offers – Whether defendants’ rejection of plaintiff’s Calderbank offers was unreasonable

JUDGMENTS AND ORDERS — Amending, varying and setting aside — Correction 

Legislation Cited:

Succession Act 2006 (NSW) s 59

Uniform Civil Procedure Rules 2005 (NSW) rr 36.16(1), 36.16(3A) and 46.3

Cases Cited:

Archer v Archer (No 2) [2000] NSWCA 315

Calderbank v Calderbank [1976] Fam 93

Commissioner of State Revenue v Rojoda (2020) 268 CLR 281; [2020] HCA 7

Commonwealth v Gretton [2008] NSWCA 117

Cong v Shen (No 4) [2021] NSWSC 1206

Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602

E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296

Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322

Macaulay v Macaulay [2024] NSWSC 1547

Pirrottina v Pirrottina [2025] NSWCA 55

Sahade v Bischoff (No 2) [2016] NSWCA 45

Sze Tu v Jam Studios Pty Ltd; Jam Studios Pty Ltd v Sze Tu (No 2) [2018] NSWSC 1611

Torlonia v Wright (No 2) [2017] NSWSC 951

Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160

Vieira v O’Shea (No 2) [2012] NSWCA 121

Texts Cited:

Mark Friston, Friston on Costs, (4th ed, 2023, Oxford University Press)

Category:

Consequential orders

Parties:

Scott Alexander Macaulay (Plaintiff)
Craig Neil Macaulay (First Defendant)
Christina Jane Kronenberg (Second Defendant)
Tracey Maree Ford (Third Defendant)

Representation:

Counsel:
M Gunning (Plaintiff)
A Cheshire SC/N Kabilafkas (Second and Third Defendants)

Solicitors:
Gordon Garling Moffitt (Plaintiff)
Campbell Paton & Taylor (Second and Third Defendants)

File Number(s):

2021/00238598

Publication restriction:

Nil

JUDGMENT

1. I delivered judgment and made substantive orders in these proceedings on 3 December 2024: Macaulay v Macaulay [2024] NSWSC 1547 (my earlier reasons). At the time of making those orders, I reserved the question of costs. The parties have filed and served submissions on that issue. They have also identified some matters that require amendment in the substantive orders. Additionally, the second and third defendants have raised an issue that, although not argued at trial, is one they say is appropriate for me to deal with at this stage.

2. These are my reasons for making orders as to all of these matters. I will use the same definitions and naming conventions as in my earlier reasons.

Taking of partnership accounts

3. At paragraphs [491] and [492] of my earlier reasons, I found that it was appropriate for accounts to be taken of the Partnership. However, I overlooked making an order to that effect. I will therefore make an order under r 46.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) for accounts to be taken on the basis indicated in my earlier reasons.

4. The parties have assumed that such an order would require an associate justice of the Court to take the accounts. The Court’s usual practice in relation to the taking of accounts was described by Brereton J in Torlonia v Wright (No 2) [2017] NSWSC 951. His Honour said at [4]-[5]:

“[4] Traditionally, where a judge decreed the taking of accounts, they would be taken before a master, or as that office later became in this State, an associate judge. This was described by Young CJ in Eq in Cavasinni v Cavasinni:

‘As a result of the Chancery Commission of 1850, equity procedure was reformed and the tasks performed by the Masters in Chancery were transferred to Clerks within the Judges’ chambers. Accordingly, what happened after a decree in a partnership suit was that the Clerks would enquire sitting in the Judges’ chambers, hearing evidence if need be, but because they were acting completely as the Judges’ delegates, they were bound by what the Judge found. They did not make a decision, but presented a report to the Judge. The Judge could either adopt that report or send the matter back for further enquiry.

In due course the Clerks were renamed Masters.

The same procedure applied in New South Wales so that it was not possible for the Master on an enquiry to make any different determination on the facts than that made by the Judge.’

[5] With the demise of the office of Associate Judge, it has become necessary to engage alternative machinery for the taking of accounts. Sometimes, it is referred out to a referee; but in my view parties who seek public justice in the courts should not ordinarily be visited with the additional cost of private justice before a referee. Alternatively, the taking of accounts can now be referred to a registrar, as formerly they were referred to an associate judge; the delegation under (NSW) Civil Procedure Act 2005, s 13, dated 26 November 2012, confers on a registrar all the powers of the Court under UCPR Part 46 (Accounts and Inquiries), with an irrelevant exception. However, particularly where evidence relevant on the account has already been taken before the judge, it is often convenient and efficient for the account to be taken by the judge who heard the substantive proceeding, and that is the procedure that was adopted here.” (footnotes omitted)

5. The evidence does not allow me to reach a view as to how complex the process of the taking of accounts will be in this case. It may yet be appropriate for the task to be undertaken by a referee. I also note that the parties do not intend to progress this aspect of the dispute until such time as any appeal from the principal judgment has been determined.

6. In the circumstances, I propose to make orders for the taking of accounts before me. At such time as the parties propose to proceed with the taking of accounts following the outcome of any appeal, I will make further orders and directions as may be necessary.

7. The parties have also asked that I make a declaration that the Partnership was terminated on 1 September 2017. At [490] of my earlier reasons I said the following:

“I therefore conclude that the Partnership was carried on between 1 July 2015 until its termination on 1 September 2017 on the basis that Neil and Scott were equal partners.”

8. The parties have not explained why it is necessary for me to make a declaration in these terms. However, given my finding at paragraph [490] and given that the parties all seem to consider it useful for me to make a declaration to that effect, I will do so.

Miscellaneous matters

9. The parties have raised three miscellaneous matters.

Miltons as partnership property

10. The first miscellaneous matter concerns order 1(b) made on 3 December 2024. That order was a declaration that the defendants hold Miltons on trust for Scott, subject to the conditions identified in order 2 made on 3 December 2024. However, I concluded at paragraph [413] of my earlier reasons that Miltons was partnership property and that, on dissolution, the former partners therefore held their interest in that property on a trust for sale of the kind described in Commissioner of State Revenue v Rojoda (2020) 268 CLR 281; [2020] HCA 7 at [31]-[35]. As I explained at paragraph [414], the existence of such a trust is not inconsistent with Scott’s claims in these proceedings. However, as the parties have pointed out, order 1(b) should have been expressed to be subject to the trust described at paragraphs [413] to [414].

11. I will therefore make an order pursuant to UCPR rr 36.16(1) and (3A) varying order 1(b) of 3 December 2024 accordingly.

Conveyance of Fairfield to Craig

12. The second miscellaneous matter concerns order 2 made on 3 December 2024. That order contains the two conditions to order 1, being the declaration that the defendants (as executors of the estate) hold their interest in Miltons and most of their interest in Parkvale on trust for Scott. The two conditions are that he must (a) convey free and clear title of Fairfield to Craig, and (b) renounce the gift of the Endeavour Place property. I explained my reasons for making orders in that particular form at paragraphs [406] to [419] of my earlier reasons.

13. By their draft amended notice of motion, Christina and Tracey submit that the condition in order 2(a) should be amended so as to require Scott to convey Fairfield to the defendants as executors of Neil’s estate.

14. Craig submits that I should not make such an order. He made brief submissions on 4 March 2025 when the matter was first raised in the course of a directions hearing and then filed a short affidavit on 12 March 2025 setting out his position. He submits that I should instead make a further order requiring the estate to convey the top paddocks of Parkvale to him, on the footing that the promise which Neil made to Scott was, in substance, that Scott should receive Miltons plus most of Parkvale and that Craig should receive Fairfield plus the top paddocks of Parkvale.

15. There is no doubt that the effect of the orders made on 3 December 2024 is that Scott will receive what his father promised him (ie, Miltons plus most of Parkvale on condition he transfer Fairfield), but that none of the defendants will receive what they say Neil promised them, either in his 2018 Will or otherwise. Specifically, (a) Craig will not receive the top paddocks of Parkvale, (b) the value of the estate in which the defendants are entitled to share equally under Neil’s 2018 Will is significantly diminished, and (c) Craig will receive Fairfield plus an entitlement to a share in the already diminished residue.

16. The orders made on 3 December 2024 were not made in ignorance of the impact they would have on the defendants, including the specific impacts they now seek to redress. However, a feature of this litigation is that none of Christina, Tracey or Craig ever brought a claim against the estate on the possibility that Scott might be successful in his claim. Such claims may have included claims under the Succession Act.

17. As I pointed out at paragraph [417] of my earlier reasons, in making final orders it was necessary to take account of the position of all affected parties. But I was not then and am not now at liberty to completely rewrite Neil’s 2018 Will so as to deliver a more favourable result to the defendants in their personal capacities. Nor was I at liberty to make orders that effectively gave concomitant relief to Craig in relation to the top paddocks of Parkvale, at least in the absence of a claim by him to that effect.

18. It is true that the effect of my orders means that Craig will likely receive Fairfield in addition to his entitlement to share in the residue of Neil’s estate, which is an outcome that Neil does not seem to have contemplated. At the same time, Craig is not entitled (by my orders, at least) to the top paddocks of Parkvale. This may represent a departure from what Craig says Neil promised him, but no claim about any such promise was ever brought forward.

19. If it were within my power to order that Craig renounce his entitlement under Neil’s 2018 Will in return for Fairfield and to order that the executors transfer the top paddocks of Parkvale to him, I would consider doing so. That result would probably make Craig as happy as he could be in the light of my earlier reasons. But no one has asked for orders of that kind. And, more to the point, those orders would go well beyond the scope of the dispute that was litigated. Rather, they are the kinds of orders that might be appropriate to resolve a dispute as between the defendants in their own right (that is, not in their capacity as executors) and the estate.

20. As I said at paragraph [418] of my earlier reasons:

“It will be up to Craig, Christina and Tracey to determine whether and, if so, how their interests are to be adjusted as among themselves to take account of the orders giving effect to Scott’s claim.”

21. I am not prepared to make the orders now sought by the second and third defendants in relation to order 2(a) made on 3 December 2024.

Dismissal of Statement of Claim

22. The third miscellaneous matter was raised by Scott. He submits that it is likely that the Court will again be called on to make further ancillary orders to implement the substantive orders. As such, he submits that the Court should not have ordered that his originating process be ‘otherwise dismissed’, at least at this point. It is doubtful whether my order otherwise dismissing the statement of claim would stand in the way of making any further orders that are appropriate to give effect to the substantive relief granted on 3 December 2024. Nonetheless, there was no opposition by any other party to Scott on this point, apart from an alternative suggestion for an order for liberty to apply by the second and third defendants which they admitted might be ‘a distinction without a difference’, and so I will make both an order setting aside order 6 of 3 December 2024 and grant liberty to apply.

Costs

23. Scott was generally successful in the litigation and he is entitled to his costs. The only question is whether the defendants should be ordered to pay his costs on the indemnity basis from one of two possible dates, based on two settlement offers.

24. Each offer was a ‘Calderbank’ offer. In respect of each, the relevant question is whether it was reasonable in the circumstances for the offerees to have rejected the offer. In E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296 at [59], Ward CJ in Eq (as her Honour then was) said:

“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’s rejecting it (see Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 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 Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 at [12] per Basten JA (with whom McColl and Campbell JJA agreed)).”

25. As this passage makes clear, the assessment of whether the rejection of an offer was unreasonable does not solely depend on whether the final judgment is more favourable than the settlement offered: see also Commonwealth v Gretton [2008] NSWCA 117 at [43].

26. In Pirrottina v Pirrottina [2025] NSWCA 55, Gleeson JA (with Payne and Adamson JJA agreeing) said at [220]:

“Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs: Commonwealth Bank of Australia v Gretton [2008] NSWCA 117 at [121] (Hodgson JA, Mason P and Beazley JA agreeing).”

The first offer

27. The first offer was made on 28 June 2024. It stated that it was ‘[w]ithout prejudice save as to costs’ and that it was made in accordance with the principles set out in Calderbank v Calderbank [1976] Fam 93. The offer was as follows:

“1. An order, pursuant to section 59 of the Succession Act 2006, that in addition to the bequest to the Plaintiff under clause 3 of the will of the late Neil John Macaulay dated 10 August 2018 (‘the will’), further provision be made out of the Estate for the Plaintiff by way of a lump sum in the amount of $3,183,507.34 (‘the Lump Sum’).

2. An order that no interest is to be paid on the lump sum if it is paid within 90 days of the date of these orders; and, if not so paid, interest is to be paid on any unpaid part thereof, calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), from the 91^st day from [the] date of these orders until the date of payment in full.

3. There be no order as to costs, to the intent that each party is the bear their own costs of the proceedings.

4. The Defendants release the Plaintiff from, and forever quit all past, current and future claims, including:

a. those claims pleaded in the Amended Defence;

b. any claims, debts, losses or entitlements claimed by or on behalf of the Estate in relation to the Parkvale Pastoral Partnership (‘the Partnership’) and the accounts of the Partnership;

c. any liability owed to the Plaintiff to the Partnership;

d. any other claims of the Estate arising out of or in relation to the Proceedings; and

e. any claims that any of the Defendants have or may have against the Plaintiff.

5. The Defendants indemnify and covenant forever to indemnify the Plaintiff in relation to:

a. any liability of the Partnership, the partners and former partners;

b. any liability owed by the Plaintiff to the Partnership;

c. any taxation liabilities that may arise in relation to the Partnership and the Estate have or may have against the Plaintiff; and

d. any and all such claims that they, the Partnership and the Estate have or may have against the Plaintiff; and

e. any claims made on or against the Estate by any persons or entities, including but not limited to any eligible persons, creditors or other claimants.

6. The Offer is subject to a mutually acceptable Deed of Release executed by the parties to the proceedings.”

28. The offer was open for acceptance for 21 days from the date of the offer. The letter in which the offer was conveyed set out the evidentiary basis upon which the plaintiff said he was entitled to succeed, which largely aligned with the conclusions I reached in my earlier reasons. The letter also pointed out that the offer represented a genuine compromise given the value of the properties in dispute.

29. The parties all seem to accept that Scott has achieved a better outcome from the litigation than he was willing to accept on the basis of his 28 June 2024 offer. On the basis of my findings, he is entitled to most of Parkvale plus Miltons. Even taking into account that he must first renounce the gift of Endeavour Place, transfer Fairfield to Craig, and that he must repay the Fairfield Debt, he will be in a better financial position than he would have been if the estate had accepted his June 2024 offer.

30. However, as already mentioned, unreasonableness does not turn only on the question of whether the final judgment is more favourable to the offeror.

31. One particular matter raised by the defendants can be dealt with briefly. They submitted that it could not have been unreasonable to reject the offer given that it contemplated entry into a ‘mutually acceptable’ deed of settlement. They submitted that this condition meant that the offer was not capable of acceptance and thus outside the principles of Calderbank v Calderbank: Vieira v O’Shea (No 2) [2012] NSWCA 121 at [10]. However, there is no evidence that the defendants asked to see a draft of such a deed. In those circumstances, I am not prepared to place any weight on this consideration in determining whether it was unreasonable of the defendants to reject the offer: Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160 at [29]; Cong v Shen (No 4) [2021] NSWSC 1206 at [200] – [201].

32. Christina and Tracey next submitted that the dispute had a quite different complexion in June 2024 as compared to the conclusion of the hearing. In particular, Scott does not at that point seem to have accepted (in pleadings or in the evidence that had been filed) that he would not be entitled to the relief he sought in relation to Parkvale and Miltons unless he were willing to transfer Fairfield to Craig. This was something that only became clear during the course of the hearing. Further, as at June 2024 there seems to have been no acknowledgement that Miltons was partnership property.

28. Christina and Tracey also pointed out that the offer required the defendants to release Scott from all claims related to the Partnership and to indemnify him from any other claims that might arise from the business of that Partnership in circumstances where the winding up of the Partnership had not yet commenced. They submit that in those circumstances it was impossible to make a ‘carefully considered comparison between the offer made and the ultimate relief [they were] seeking in all its aspects’: Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [24]; Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [114]. Those partnership claims were not the subject of the litigation.

29. I accept that it is appropriate to take these matters into account in assessing the reasonableness of the defendants’ decision to reject the June 2024 offer. However, none of them seem to me to carry significant weight in circumstances where the extent of the compromise offered was, in financial terms, quite generous and where its acceptance would have brought a long and expensive litigation among siblings to an end without the need for a hearing.

30. The evidence about the value of the farming properties was not really the subject of dispute by the time of the final hearing. There was no direct evidence of the value of the properties in June 2024, nor at the time of the hearing. Nonetheless, there was evidence to show that as at 16 March 2023, Parkvale had a market value of about $6.74 million, Fairfield had a market value of about $1.99 million and Miltons had a market value of about $1.21 million.

31. So far as the Partnership was concerned, the evidence shows total assets as at 30 June 2017 of $986,890 which includes the Fairfield Debt of $453,288. Total liabilities were $396,180, leaving net assets of $590,710. I appreciate that there may yet be some dispute about partnership entitlements and that the asset values appearing in the accounts are likely to reflect historical cost. I also appreciate that the 30 June 2017 accounts are the last of the finalised Partnership accounts prepared by Mr Twomey, there being only draft 2018 accounts by Mr Twomey and accounts for 2018 and following years prepared by Mr Weston Ryan on various assumptions.

32. Under the June 2024 offer, Scott was offering to retain Fairfield, Endeavour Place and his one-third share of Miltons but to release the estate from all claims over Parkvale and its two-thirds share of Miltons in return for a cash payment of $3,183,507.34. Given the relative values of those properties, that represents a better result for the estate than what I have ultimately ordered, being Endeavour Place and some top paddocks of Parkvale. The fact that I have found that Scott is not entitled to Miltons and his majority interest in Parkvale unless he first transfers Fairfield to Craig does not detract from this conclusion.

33. Scott also made the June 2024 offer conditional on securing releases and indemnities in relation to the Partnership. Even allowing for the fact that only very limited aspects of the Partnership dispute were before me and even allowing for the fact that the picture is still somewhat opaque in relation to the final value of the partnership assets, it seems clear enough that the estate would have been better off accepting the June 2024 offer on terms that the Partnership gives up any claims against Scott. The only claim against Scott of any significance (at least, of which I am aware) was the Fairfield Debt, which I have found to be repayable. The estate would have been far better off if it had released Scott from that liability in June 2024 if it meant retaining Parkvale in its entirety and two-thirds of Miltons, which it could have done. The cost of recognising Scott’s interest in most of Parkvale and the whole of Miltons represents a detriment to the estate that far outweighs its success in demonstrating that the Fairfield Debt is repayable.

34. The June 2024 offer was made about six weeks prior to the start of the hearing. At the time it was made, almost all evidence had been served. It represented a serious, genuine and favourable compromise. In my view, it was unreasonable of the defendants not to accept it. It is appropriate in these circumstances that the estate should pay Scott’s costs on an indemnity basis from 20 July 2024 onwards, being from the date on which the first offer lapsed.

35. In reaching this conclusion I have not placed any weight on the fact that the offer was made to the defendants jointly at a time when they were not jointly represented. Ordinarily, executors may be expected to bring and defend proceedings jointly. There may be exceptions to that rule where, for example, an executor has their own claim against the estate: Mark Friston, Friston on Costs, (4th ed, 2023, Oxford University Press) at [66.48].

36. The evidence does not explain why Mr Billing ceased to act for Craig. However that may be, there does not seem to have been any issue on which their interests as executors diverged. So far as the June 2024 offer was concerned, their interests as executors were the same.

37. The fact that Craig was unrepresented at the time this offer was made is not a reason to decline to make an order for indemnity costs: cf Sze Tu v Jam Studios Pty Ltd; Jam Studios Pty Ltd v Sze Tu (No 2) [2018] NSWSC 1611 at [31] and the authorities there cited. The offer was open for a period of 21 days and clearly stated what the consequences of failing to accept the offer might be.

The second offer

43. It is strictly unnecessary to consider the reasonableness of the defendants’ response to the second offer in the light of my conclusions about the first. Nonetheless, because it was argued, I will deal with it.

44. The second offer was made during the course of the hearing, which ran between 13 and 27 August 2024. It was made in a letter emailed to the defendants at 9:52AM on Monday, 19 August. It was open for acceptance until 5:00PM that same day. I note that Scott’s cross-examination concluded in the middle of the afternoon on that day. The offer was made in the form of proposed consent orders for further provision pursuant to s 59 of the Succession Act 2006 (NSW) in the sum of $2,700,000, and was again expressed to be ‘without prejudice save as to costs’. The proposed orders were as follows:

“1. ORDERS, pursuant to s 59 of the Succession Act 2006 (NSW), that in lieu of the provision that the Plaintiff receives in the will of the late Neil John Macaulay (the ‘Deceased’) dated 10 August 2018 (the ‘Will’), the Plaintiff receive, by way of provision out of the estate of the Deceased (the ‘Estate’), a lump sum of $2,700,000.00.

2. ORDERS that the Lump Sum be paid within 120 days of the date of these orders.

3. ORDERS that no interest is to be paid on the Lump Sum if it is paid within 120 days of the date of these orders; and, if not so paid, interest is to be paid on any unpaid part thereof, calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), from the date of these orders until the date of the payment in full.

4. ORDERS pursuant to s. 66 of the Succession Act 2006 that the residue of the Estate is to bear the burden of the provision for the Plaintiff.

5. ORDERS that there be no order as to the Plaintiff’s costs, with the intent that the Plaintiff shall bear his own costs.

6. ORDERS that the Defendants’ costs, calculated on the indemnity basis, be paid or retained, as the case may be, out of the Estate.

7. ORDERS that the Statement of Claim is otherwise dismissed.

8. NOTES the agreement of the parties that:

a. The application was made within time;

b. The Plaintiff is an eligible person;

c. There are no eligible persons other than the Plaintiff and the Defendants;

d. The Second and Third Defendants have filed the administrator’s affidavit; and

e. The Defendants, as administrators of the Estate, have filed an Amended Defence in these proceedings.

9. [NOTES] the further agreement of the parties that:

a. Miltons Block is not an asset of the Partnership;

b. The Defendants, as executors of the Estate, release the Plaintiff from and abandon any claims that the Estate may have against the Plaintiff, including:

i. any liability or debts alleged or found to be owing by the Plaintiff to the Estate or the Partnership, and

ii. any claim in respect of the alleged Fairfield Debt of $453,288.11;

c. The Partnership was dissolved on 1 September 2017 by Notice of Termination dated 1 September 2017;

d. That the Plaintiff is entitled to and shall retain ownership and possession of the Hyundai Sante Fe Registration SM1804; and

e. The Estate is otherwise entitled to and shall receive the assets of the Parkvale Pastoral Company Partnership (the ‘Partnership’), together with the profits post-dissolution of the Partnership, in full satisfaction of all claims that the Estate has or may have against the Plaintiff, including any debts said to be owing by the Plaintiff to the Estate or the Partnership.”

45. Having already found that the first offer involved a genuine offer of compromise, I find that this second offer did as well. The amount Scott was willing to accept by the conclusion of many days in cross-examination was less than he had previously offered and less than what I have found he is entitled to.

46. I have already referenced the multifactorial approach that is taken when assessing whether the rejection of an offer save as to costs was unreasonable at [23] above. I note that the stage of the proceedings at which the offer was received, and the time allowed to the defendants to consider the offer, are both relevant considerations in making this determination.

47. The offer was made just as court began sitting on the fourth day of the hearing and was open for acceptance only until 5:00PM that same day. Given the number of issues in dispute, the offer was simply not on the table for long enough to allow the defendants to confer and to weigh up the consequences of agreeing to settle the proceedings on the basis of the plaintiff’s Succession Act claim alone. Of course, they would have been wise to do so in retrospect. But the question is whether the defendants’ failure to accept the offer was unreasonable. Even allowing for the fact that the defendants and the lawyers acting for Christina and Tracey must have been intimately familiar with all aspects of the litigation by 19 August 2024, I do not consider the offer was open long enough to make its non-acceptance by all three defendants unreasonable. This is especially so in circumstances where all parties were aware that the first defendant was self-represented.

48. I would not therefore have found that it was unreasonable of the defendants to reject this offer.

Costs out of the estate

49. The second and third defendants additionally ask that their costs be paid out of the estate on an indemnity basis. They submit that the first defendant, although separately represented, relied on the same defence as the second and third defendants and relied on counsel for the second and third defendants to prosecute the defence to the claim. The second and third defendants additionally submitted that the first defendant ‘made no submissions in writing, no oral submissions in opening and only brief submissions in closing’, did not put on any cross-claim, and that he bore a significant share of the responsibility for the parties’ inability to find a solution while Neil was alive.

50. I agree that it is appropriate for the defendants’ costs to be paid out of the estate on an indemnity basis. As executors, they were justified in defending the proceedings. However, I am not prepared to limit that order to Christina and Tracey’s costs. Craig was also represented by the same lawyers in the proceedings for a considerable period, including at the time the pleadings were settled and the evidence was prepared. He too is entitled to an indemnity out of the estate to meet those costs.

51. Had Craig been separately represented, I would have disallowed costs for his separate representation. However, he appeared for himself at the hearing and did little more than adopt the submissions of Christina and Tracey. I do not consider that there was any material duplication of effort so far as the conduct of the proceedings was concerned. Nor do I consider that his contribution to the ongoing disputation among the Macaulay family about what Neil should do with his estate is relevant to the exercise of my discretion on costs. I will therefore order that all defendants are entitled to an indemnity from the estate.

ORDERS

52. The orders of the Court will therefore be:

1. Declare that the Parkvale Pastoral Co Partnership (the Partnership) was terminated on 1 September 2017.

2. Pursuant to r 46.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), account be taken of the Partnership by Hmelnitsky J.

3. The orders made on 3 December 2024 in these proceedings be varied pursuant to UCPR rr 36.16(1) and (3A) by the insertion of order 1A:

“Declare that the rights of the Plaintiff pursuant to order 1(b) above are subject to the rights of the former partners of the Partnership to have recourse to that property insofar as may be necessary to meet partnership liabilities.”

4. Order 6 made on 3 December 2024 in these proceedings be set aside pursuant to UCPR rr 36.16(1) and (3A).

5. Grant liberty to apply.

6. The costs of the Plaintiff to be paid out of the estate of the late Neil Macaulay (Estate) on the ordinary basis up until 19 July 2024.

7. The costs of the Plaintiff to be paid out of the Estate on an indemnity basis on and from 20 July 2024.

8. The costs of the Defendants to be paid out of the Estate on an indemnity basis.

Notations

1. All parties are agreed that the process of the taking of accounts pursuant to Order 1 should be deferred until the conclusion of any appeal from the orders of 3 December 2024.

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Decision last updated: 02 May 2025