O'Donnell v O'Donnell (No 2)

[2023] NSWSC 1196

Supreme Court

New South Wales

Medium Neutral Citation:

O’Donnell v O’Donnell (No 2) [2023] NSWSC 1196

Hearing dates:

28 April 2023

Decision date:

10 October 2023

Jurisdiction:

Equity

Before:

Robb J

Decision:

See proposed orders at [150]

Catchwords:

JUDGMENTS AND ORDERS – proposed orders – form of orders to give effect to principal judgment

COSTS – party/party – where multiple proceedings – where proceedings involve multiple parties – apportionment of costs between parties

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Domestic Relationships Act 1994 (ACT)

Family Law Act 1975 (Cth), s 117

Family Provision Act 1969 (ACT)

Income Tax Assessment Act 1936 (Cth), Div 7A

Succession Act 2006 (NSW), ss 62, 59

Uniform Civil Procedure Rules 2005 (NSW), Pt 20 Div 4, r 42.15

Cases Cited:

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

Calderbank v Calderbank [1976] Fam 93

Morris v Riverwild Management Pty Ltd [2009] VSC 439

O'Donnell v O'Donnell [2022] NSWSC 1742

Royal v El Ali (No 3) [2016] FCA 1573

Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306

Tomasetti v Brailey [2012] NSWSC 120

Texts Cited:

Practice Note SC Eq 7

Category:

Consequential orders

Parties:

Proceedings 2019/120911
Kalpana O’Donnell (Plaintiff)
Jaimie Francis John O’Donnell (First Defendant)
Vanessa Channon (Second Defendant)
Laura O’Donnell (Third Defendant)
Ashley O’Donnell (Fourth Defendant)
Evenlong Pty Ltd (Fifth Defendant)
Duboti Pty Ltd (Sixth Defendant)

Proceedings 2019/363217
Kalpana O’Donnell (Plaintiff)
Jaimie Francis John O’Donnell (First Defendant)
Vanessa Channon (Second Defendant)
Laura O’Donnell (Third Defendant)
Ashley O’Donnell (Fourth Defendant)
Evenlong Pty Ltd (Fifth Defendant)
Duboti Pty Ltd (Sixth Defendant)

Proceedings 2021/194343
Kalpana O’Donnell (Plaintiff)
Jaimie Francis John O’Donnell (First Defendant)
Vanessa Channon (Second Defendant)
Laura O’Donnell (Third Defendant)
Ashley O’Donnell (Fourth Defendant)

Proceedings 2020/112383
Anna Gray (Plaintiff)
Jaimie Francis John O’Donnell (First Defendant)
Ashley O’Donnell (Second Defendant)
Vanessa Channon (Third Defendant)
Laura O’Donnell (Fourth Defendant)
Executors of the Estate of Garry O’Donnell (Fifth Defendant)

Proceedings 2019/372281
Kristina Elena Gray (First Plaintiff)
Jurek Gray (Second Plaintiff)
Jaimie Francis (First Defendant)
Vanessa Channon (Second Defendant)
Laura O’Donnell (Third Defendant)
Ashley O’Donnell (Fourth Defendant)

Representation:

28 April 2023
Proceedings No 2019/120911; Proceedings No 2019/363217; Proceedings No 2021/194343
Counsel:
L Ellison SC/L Nurpuri (Plaintiff)
A Cheshire SC/M Pringle (Defendants)
Solicitors:
Vincent Butcher Lawyers (Plaintiff)
Glass Goodwin (Defendants)

Proceedings No 2019/372281
Counsel:
A Cheshire SC/M Pringle (Defendants)
Solicitors:
Glass Goodwin (Defendants)

Proceedings No 2020/112383
Counsel:
A Smyth (Plaintiff)
A Cheshire SC/M Pringle (Defendants)
Solicitors:
Mills Oakley (Plaintiff)
Glass Goodwin (Defendants)

File Number(s):

2019/120911; 2019/363217; 2021/194343; 2020/112383; 2019/372281

Publication restriction:

Nil

JUDGMENT

1. I published the principal judgment in these six proceedings on 16 December 2022: O'Donnell v O'Donnell [2022] NSWSC 1742 (the “principal judgment” or “J”).

2. These reasons deal with the final orders to give effect to the principal judgment, including orders as to costs in the proceedings.

Proceedings the subject of the principal judgment

3. The principal judgment dealt with six separate proceedings, all of which concerned the estate of the late Garry Francis O'Donnell (the deceased).

4. As was the case for the principal judgment, I will follow the course taken by the parties and will, with no disrespect intended, generally refer to the parties and persons related to them by their first names.

5. Because of the complexity of the proceedings and the interrelationship between them it will be necessary to assume that the reader is aware of the content of the principal judgment.

6. The principal defendants in each of the proceedings are four of the five children of the deceased (the “defendants” or “executors”), who were made the deceased's executors under his will dated 18 August 2015 (the “will”). Probate of the will was granted to the defendants by the Supreme Court of the Australian Capital Territory (ACT) on 22 March 2019.

7. The plaintiff in three of the proceedings is Kalpana, the deceased's fourth wife and widow. The primary cause for these three proceedings being commenced was that the deceased left nothing to Kalpana in his will. The deceased left his estate equally to his five children.

8. Two of the proceedings brought by Kalpana were for family provision orders, under the Succession Act 2006 (NSW) in one case and the Family Provision Act 1969 (ACT) in the other case. The former proceedings were commenced in this Court. The latter proceedings were commenced in the Supreme Court of the ACT and were transferred to this Court by the Supreme Court of the ACT.

9. The only significant difference between the legal principles to be applied in the two family provision proceedings was that Part 3.3 of the Succession Act vests jurisdiction in this Court to make family provision orders against what is called the notional estate of a deceased person. Relevantly, in this case, it was agreed between the parties that, at the time of the hearing, the actual estate of the deceased had a value of $2,058,460.11. During his lifetime, the deceased had established a group of companies that was called the “O'Donnell group” for the purposes of the principal judgment. The O'Donnell group had a value of between $28,170,236 and $32,720,859. I found at J [113] that by reason of the control that the deceased could have exercised over the activities of the O'Donnell group, by means of his ability ultimately to control the activities of the discretionary trust that was the ultimate beneficial owner of the companies in the group, the Court could have declared assets owned by the companies in the O'Donnell group to be notional estate of the deceased.

10. However, the issue of whether the Court had jurisdiction to make a family provision order in favour of Kalpana depended upon the determination of the place of domicile of the deceased at the date of his death. The possibilities were New South Wales or the ACT, and the Court would only have jurisdiction to make a family provision order in favour of Kalpana out of the notional estate of the deceased if it found that the place of his domicile was NSW.

11. As stated at J [313], I found after a detailed consideration of the evidence that the deceased was domiciled in the ACT at the date of his death. That meant that Kalpana's claim in her NSW family provision proceedings must be dismissed for want of jurisdiction in the Court.

12. The Court therefore only had jurisdiction to make a family provision order in Kalpana's favour in her ACT family provision proceedings that had been transferred to this Court. I found that Kalpana was entitled to succeed on that claim, and set out the following conclusions in the principal judgment:

[539] In response, the defendants submitted in the oral submissions of their senior counsel that any order for family provision that is made in favour of Kalpana, on the basis that the deceased is found to have been domiciled in the ACT such that the order can only be made in respect of his actual estate, should be limited to the transfer of Unit 14 to Kalpana for the purpose of her accommodation, plus a fund valued at between $700,000 and $1,000,000, "which would effectively consume the estate": [T 751.45]. Senior counsel added at [T 752.3] that the consequences would be: "One is that the executors would effectively have their costs dealt with outside of the estate; two, that the plaintiff's legal costs, if they were to be paid, would effectively consume the benefit."

[540] It is obvious that the Court cannot make the family provision orders sought by Kalpana, given its finding that the deceased was domiciled in the ACT at the time of his death. Given, on the findings that I have made, that the beneficiaries under the deceased's will have control over the O'Donnell group and the Mugga Way Family Trust, I am satisfied in principle that, as between Kalpana and the beneficiaries, a family provision order should be made in Kalpana's favour that gives her the whole of the remaining actual estate of the deceased, subject to the effect of the costs orders that may be made.

[541] Given the observations made by senior counsel for the defendants that I have recorded above concerning the defendants' costs, I consider that it would be a fair outcome, on the facts of this case, for the Court not to make an order that the defendants' costs be paid out of the estate of the deceased.

13. It is important for the purposes of the present reasons to note that the effect of this finding is that Kalpana will be entitled to the whole of the actual residual estate of the deceased, when that residue has been determined. That is something that will happen in the future, as it will be necessary for the executors to pay all of the debts of the estate and to complete its administration. Accordingly, the value of the family provision order in Kalpana's favour in the ACT proceedings is not presently known.

14. Briefly, I made the finding that I did in relation to the further family provision that should be awarded to Kalpana because I considered that, in all of the circumstances, the deceased, in leaving Kalpana nothing in his will, had not acted in conformity with community expectations concerning the distribution of his estate as between all persons who had a natural call on his testamentary bounty. Although that finding deprived all of the nominated beneficiaries, being the deceased's children, of the entirety of the assets in the deceased's actual estate, I held that that course was justified, because all five children were beneficiaries of the discretionary trust whose assets consisted of the property of the companies in the O’Donnell group, and the defendants, as executors and beneficiaries of the deceased's estate, were in a position to control the trustee of the discretionary trust. I was satisfied by the evidence that the nominated beneficiaries were in a position where they could legitimately share between themselves the benefits that accrued under the discretionary trust. Whether or not that ability was absolute, in the sense that it extended to all of the benefits of the discretionary trust, I was satisfied that the benefits that would enure to the deceased's children, when compared to the value of the actual estate, justified the family provision order that I found should be made.

15. The result is that Kalpana's NSW family provision proceedings will be dismissed and appropriate orders will be made in her favour for further family provision in the ACT family provision proceedings.

16. Kalpana's third proceedings involved a claim against the defendants in devastavit, on the basis that they transferred the deceased's shareholding in a particular company to the company that is the trustee of the primary discretionary trust, being Duboti Pty Ltd. I considered this claim at J [321]-[348], and found at J [340] that Kalpana's claim should be dismissed.

17. It must be noted that two companies that form part of the O'Donnell group were joined as fifth and sixth defendants to Kalpana's family provision proceedings: see J [21]. Those companies are Duboti Pty Ltd and Evenlong Pty Ltd, which are trustee companies. The former is the trustee of the Mugga Way Family Trust, which is the trustee of the ultimate discretionary trust. Those defendants were joined before my involvement in the proceedings, but I understand that their joinder occurred in order to cause them to be bound by any finding made by the Court that the shares in the companies in the O'Donnell group or their assets should be declared to be notional estate of the deceased. As that declaration cannot be made, then Kalpana's claims against the companies, whatever they may precisely have been, must be dismissed. I have mentioned the joinder of the two companies because, as will be seen, Kalpana makes an alternative claim that the other defendants’ costs of her proceedings should be paid by the two companies.

18. Two of the remaining proceedings were commenced by Anna, who shared a lengthy relationship with the deceased before he met Kalpana. One of those proceedings was a claim for family provision under the Family Provision Act 1969 (ACT). Those proceedings were transferred to this Court by the Supreme Court of the ACT. The second proceedings commenced by Anna were proceedings in the Family Court of Australia at Canberra (as that Court was then known), the primary purpose of which was to obtain relief setting aside a deed of settlement between Anna and the deceased made on 12 October 2015 under the Domestic Relationships Act 1994 (ACT), under which Anna received a property settlement from the deceased. The purpose of Anna in commencing those proceedings was to avoid the bar against further claims contained in the deed of settlement, with the intent that Anna would prosecute further proceedings against the defendants, as the deceased's executors, for a better outcome than she had received under the deed of settlement. That claim would have been made on the basis that Anna and the deceased had been in a de facto relationship. These proceedings are complicated, as only part of Anna's claim was transferred to this Court and determined in the principal judgment. I will return to this issue below.

19. As I recorded at J [408], Anna did not finally prosecute her ACT family provision claim at the hearing. I found in any event that Anna had not established that a family provision order should be made in her favour: see J [441]. Anna also failed on that part of her Family Court proceedings that was transferred into this Court: see J [440]. As I will explain below, after the publication of the principal judgment, but before any final orders were made, Anna and the defendants agreed to consent orders that led to the dismissal of the balance of the Family Court proceedings, and an agreement as to the costs payable by Anna.

20. The last of the six proceedings that were determined by the principal judgment were proceedings commenced in this Court by Anna's children, Kristina and Jurek, for family provision under the Succession Act. As I found that the deceased was domiciled in the ACT at the date of his death, these proceedings necessarily failed. I found in any event, on the merits, that Kristina and Jurek had not justified orders for family provision in their favour under the Succession Act. An order must therefore be made for the dismissal of these proceedings.

21. I explained the practical relationship between all of the proceedings at J [23]-[35]. Had any of the various family provision proceedings succeeded, then the capacity of the Court to make family provision orders in favour of other claimants out of the estate or notional estate of the deceased would have been affected by the entitlements of the successful claimants. As all of the proceedings have failed, except for Kalpana's ACT family provision proceedings, that problem does not arise. However, in a residual way, the costs orders that the Court will make and the defendants' ability to recover costs from the plaintiffs against whom costs orders will be made will affect the value of the residuary estate of the deceased that Kalpana will receive.

Orders proposed by Kalpana and the defendants

22. For the purposes of the hearing that took place on 28 April 2023 concerning the orders that should be made to complete each of the proceedings, Kalpana proposed that orders be made in the following terms:

1. In [Kalpana’s ACT family provision proceedings] an order [that] the Plaintiff (Kalpana O’Donnell) receive provision out of the estate of the late Garry Francis O’Donnell pursuant to section 8 of the Family Provision Act 1969 (ACT) by way of an entitlement to the whole of the residuary estate of the deceased.

2.   In [Kalpana’s devastavit proceedings] Statement of Claim dismissed.

3. In [Kalpana’s NSW family provision proceedings] the claim so far as it relates to the Succession Act 2006 NSW is dismissed.

4.   The Plaintiff’s costs of the 3 proceedings on the indemnity basis to be paid out of the estate of the deceased.

5.   The requirement of the defendants to assess the costs of the Plaintiff is dispensed with.

6.   No order as to the costs of the Defendants to the intent [that] they bear their own costs of the 3 proceedings without recourse to the estate of the deceased.

7.    In the alternative to order [6], the Defendants’ costs are to be paid by the Fifth and Sixth Defendants.

8.   To the extent the Defendants have (or have been) paid any costs to date of the 3 proceedings (together with the costs in [Kristina and Jurek’s proceedings] and [Anna’s proceedings]) out of the estate of the deceased the amount of those costs is to be repaid to the estate of the deceased within 28 days.

9.   The plaintiffs in [Kristina and Jurek’s proceedings] are to pay the costs of the Defendants of those proceedings on the ordinary basis.

10.   The plaintiff in [Anna’s proceedings] is to pay the costs of the Defendants of those proceedings on the ordinary basis.

11.   In the alternative to orders [9] and [10] no order as to the plaintiffs’ costs in each of the proceedings to the intent they bear their own costs.

12.   The Court notes the agreement of the parties the benefits received to date by the plaintiff by way of interim provision are received by the plaintiff on account of the provision ordered herein, and no deduction is to be made in respect of benefits received to date.

13.    Payments made to Simon O’Donnell and Jamie O’Donnell pursuant to orders made and as agreed between the parties since 7 June 2019 out of the estate of the deceased are to be repaid to the estate of the deceased within 28 days.

23. As part of their written submissions, the defendants proposed that the Court make the following orders:

[The Court orders]:

a.   in respect of Kalpana:

i    Kalpana receive provision out of the estate of the late Garry Francis O’Donnell pursuant to the Family Provision Act (ACT) by way of an entitlement to the whole of the residuary estate of the deceased after payment of all liabilities, including to complete the administration of the estate;

ii.   Kalpana’s claims are otherwise dismissed;

iii.   there is no order as to Kalpana’s costs with the intent that she bear her own costs;

iv.   the Defendants’ costs be paid out of the estate on the indemnity basis;

b.   in respect of Kristina and Jurek;

i.   the proceedings are dismissed;

ii.   Kristina and Jurek pay 40% of the Defendants’ costs of all of the proceedings on the ordinary basis to 24 September 2020 and thereafter on the indemnity basis;

iii.   the Defendants’ costs be paid out of the estate on the indemnity basis;

c.   in respect of Anna:

i.   the proceedings are dismissed;

ii.   Anna pay 20% of the Defendants’ costs of all the proceedings on the ordinary basis to 15 September 2020 and thereafter on the indemnity basis;

iii.   the Defendants’ costs be paid out of the estate on the indemnity basis.   

24. It will be convenient to defer reference to the orders that Anna suggested should be made in the two proceedings commenced by her until I deal with those orders below.

25. Kristina and Jurek were not represented at the hearing on 28 April 2023 and did not provide submissions to the Court. I will deal with the orders that should be made in their proceedings below.

Substantive orders in proceedings commenced by Kalpana

26. There is no real issue about the orders that should be made by the Court for the purpose of dealing with the substantive claims made by the various plaintiffs.

27. The only positive order that will be made in favour of a plaintiff is the order in Kalpana's ACT family provision proceedings. As noted, the effect of the order will be that Kalpana will be entitled to the whole of the actual residuary estate of the deceased when that can be determined, as well as the total amount of interim distributions that have been made to her. As will be seen, that form of order will have consequences for the costs orders that should be made in those proceedings.

26. A consequence of the substantive order in the form proposed by the Court is that the defendants, as executors, will cease to have any interest in the administration of the deceased's actual estate, save for the completion of their duties to administer it. They will cease to be personal beneficiaries. The evidence establishes that a number of potential liabilities of the deceased’s estate remain to be resolved by the defendants. A claim has been notified to the defendants by Grady Strata & Facilities Pty Ltd to compensate the owners corporation for damage to the common property in the strata home unit block in which the deceased's property (known for the purposes of these proceedings as “Unit 27”) was located. The amount claimed is $61,608.36. The contents of Unit 27 continue to be held in storage, and storage costs of approximately $525 per month are paid from the estate. The defendants have estimated that the deceased’s estate is liable to pay capital gains tax of $84,812 as a result of the sale of the estate’s property known as Unit 14. The defendants will also need to deal with the issue of recovering costs from the parties other than Kalpana in response to the costs orders that the Court will make. The Court is not in a position to foresee reliably what will be involved in the completion of the administration of the deceased's estate or how long it will take to complete the administration.

27. There will therefore remain some scope for future dispute between Kalpana and the defendants concerning the completion of the administration of the deceased's estate. There has been no suggestion that the defendants should be replaced as the executors of the deceased's estate, and there has been no evidence that they have performed their duties as executors inadequately. The Court has no reason for concern that the defendants will not administer the deceased's estate properly, notwithstanding that they will not have a continuing personal interest in the assets of the estate.

28. In these circumstances, I consider that the prudent course for the Court to take is to make an order giving all parties interested in the administration of the estate of the deceased leave to relist Kalpana's ACT family provision proceedings to apply for any orders that may be necessary to facilitate the completion of the administration of the deceased's estate in a way that achieves, so far as may be reasonably possible, the Court's objective in respect of the order that will be made in favour of Kalpana for further family provision.

Costs orders in Kalpana’s proceedings

31. I will now turn to address the issue of the costs orders that should be made by the Court in respect of the three proceedings in which Kalpana is the plaintiff.

Order for the payment of Kalpana’s costs

32. By proposed orders 4 and 5 that are set out above, Kalpana seeks an order that her costs of the three proceedings on the indemnity basis be paid out of the estate of the deceased, and that the requirement for the defendants to assess her costs be dispensed with. I infer that the latter order has been sought because, in practical terms, Kalpana will have to recover her costs out of the residue of the deceased's estate, and accordingly, there will be no point in the Court leaving the defendants in the position where they may feel obliged to require Kalpana's costs to be assessed before paying them. That would leave the issue of the amount of the costs actually paid by Kalpana to be a matter between Kalpana and her legal representatives.

33. I should note at this point the strange circumstance that there appears to be a difference between Kalpana and the defendants concerning the nature of the costs agreement that Kalpana entered into with her legal representatives. I record that it was my understanding that the Court had been told that Kalpana had entered into a conditional costs agreement with her legal representatives, under which she would only be obliged to pay costs to her legal representatives if her claim succeeded. Because of the morass of material that the Court has received in these multiple proceedings, it has not been feasible for me to confirm the source of that understanding. The defendants stated in their 28 March 2023 written submissions at par 15 their understanding that Kalpana had entered into a conditional costs agreement with her legal representatives. Kalpana's submissions, on the other hand, contained a statement to the contrary, and that Kalpana was liable to pay her legal representatives' fees on an ordinary commercial basis: see par 10 of the submissions dated 20 April 2023.

34. I do not think that this is an issue that needs to be resolved by the Court. The outcome of the proceedings has been that Kalpana has succeeded, albeit only on one of her claims, being her ACT family provision proceedings. It is therefore likely that Kalpana will be liable to pay fees to her legal representatives, even if she did enter into a conditional costs agreement with them. The Court has been told that Kalpana's legal costs and disbursements in these multiple proceedings total $1,888,345.16 on the indemnity basis. If that is the case, then the commercial merit of pursuing the proceedings has turned out to be questionable. As Kalpana's capacity to pay her legal representatives' fees will depend upon the ultimate value of the residuary estate of the deceased, it will necessarily be a matter between Kalpana and her legal representatives as to how much of the fees that they have claimed they are paid and on what basis.

35. As appears from order a(iii) of the orders proposed by the defendants, they contest the costs orders proposed by Kalpana, and submit that, in the special circumstances of this case, the appropriate order is that there be no order as to Kalpana's costs, with the intent that she bear her own costs. An order in those terms would generally not be appropriate in a family provision claim in which the plaintiff has succeeded, but the proceedings in which Kalpana has succeeded are exceptional, in that an order will be made that she receive the whole of the residuary estate of the deceased. The defendants submit there is no benefit to Kalpana in the Court making a separate order that her costs be paid out of the estate, before the remaining residual estate can be identified. Further, there is no point in the Court making the usual order, which would limit Kalpana's costs entitlement to the ordinary basis. Kalpana will be required to meet the difference between her costs calculated on the indemnity and the ordinary bases out of the residue of the deceased's estate. Finally, and more importantly, the defendants submit that, given the nominal amount of the costs incurred by Kalpana at $1,888,345.16, and the uncertain value of the residue at about $2,058,460.11, the making of an order that the defendants pay Kalpana's costs out of the estate is likely to make the estate insolvent. That is because there may be insufficient liquid funds in the estate to make that payment after all prior debts of the estate are met.

36. The defendants' submissions highlight the significance of the absolute amount of the costs apparently incurred by Kalpana, which at $1,888,345.16 is, at the least, an unusually high proportion of the value of the benefit that Kalpana may receive as a result of her limited success in her various proceedings.

37. In the exceptional circumstances of these proceedings, I am satisfied that the preferable approach to the payment of Kalpana’s costs of her proceedings is the approach proposed by the defendants. That is, no order should be made for the payment of Kalpana’s costs out of the actual estate of the deceased, with the intent that she will bear her own costs. That is the outcome that will happen, as a practical matter, in any event. No good reason has been suggested on behalf of Kalpana as to why it will be beneficial if her costs are paid out of the actual estate of the deceased on the ordinary basis, before the value of the residuary estate is ascertained and given to Kalpana. The approach that I prefer will avoid the need to discriminate between the costs incurred by Kalpana in prosecuting her ACT family provision proceedings, for which Kalpana is in principle entitled to be paid her costs on the ordinary basis out of the estate, and Kalpana’s costs of prosecuting the proceedings in which she failed. The need for the assessment of Kalpana’s costs will be avoided. The risk that compliance with an order that part of Kalpana’s costs be paid out of the estate will impinge on the solvency of the estate will also be avoided.

Costs incurred by the defendants

38. As to the costs incurred by the defendants, by whom I mean the costs of the executors of the deceased's estate as the only active defendants, their solicitor, Ms Lauren Gidley, affirmed an affidavit on 5 October 2021 in which she said that the defendants' estimated costs on the basis of a 15 day hearing, inclusive of GST, were $1,062,945.08. As it happened, the hearing itself did take 15 days (plus an additional brief hearing on 25 March 2022). Ms Gidley said that the defendants had already paid a total of $565,575.83 towards their costs.

39. In her 27 March 2023 affidavit, Ms Gidley said that the current value of the estate assets was $2,102,908.99. As it has happened, that is more than the $2,058,460.11 than was originally agreed as the net value of the deceased’s actual estate. The Court has not been given an explanation for the change, although it appears that the value of the estate has increased notwithstanding that the defendants have paid an additional amount for their legal costs out of the estate. The $2,102,908.99 does not take into account outstanding legal costs, accountant’s fees and tax. The estate's liquid funds total $1,412,101.75. Two companies in the O'Donnell group, Stadso Pty Ltd and Enima Pty Ltd, owe the estate a total of $656,346.24. There has been no suggestion that the debts owed to the estate by the two companies are not recoverable in full. Ms Gidley also said that the estate owns shares in a number of companies, with an apparent current value of approximately $34,461.

40. In her affidavit dated 27 March 2023, Ms Gidley updated the amount that the deceased’s estate has paid for the defendants' legal costs to a total of $866,862.08. The total amount outstanding is $303,000.

41. In addition, Ms Gidley said that the defendants had incurred costs of $90,615.93 in the Family Court proceedings commenced by Anna in the ACT. The defendants and Anna have come to an agreement that Anna would pay the defendants $50,000 in settlement of her costs obligation to the defendants, in the context of the parties to the Family Court proceedings having agreed to consent orders being filed for the dismissal of those proceedings. I will deal with this costs issue separately below, when I consider the orders that should be made by the Court in the proceedings commenced by Anna against the defendants.

42. Paragraph 17.2 of Practice Note SC Eq 7, as it applied at the time of the hearing, required the defendants to file an affidavit of costs and disbursements for the defendants, estimated on the indemnity basis. Strictly, that should have been done separately for all four of the family provision proceedings that were to be determined by the Court at the hearing. In fact, Ms Gidley's affidavit and the later updating affidavit only state the defendants' costs of all six proceedings on a global basis, subject to what was said about the compromise of the defendants' costs claim in the Family Court proceedings. Although Ms Gidley cannot be expected to have apportioned the costs of the 15 day hearing between the six separate proceedings, it would have been helpful to know what the defendants' costs were for the individual proceedings up to the date of the commencement of the hearing. I assume that Ms Gidley has kept some records that would enable her to identify the costs of the individual proceedings where that is possible. That would have been a prudent course for Ms Gidley to have taken, against the possibility that the defendants would succeed in some of the proceedings but fail in others. As it has happened, the Court only has global evidence of the costs incurred by the defendants.

43. There is no basis in principle that would support order 6, as proposed by Kalpana, by which no order as to costs would be made in favour of the defendants, to the intent that they bear their own costs of the three proceedings prosecuted against them by Kalpana, without recourse to the estate of the deceased. Apart from the fact that the defendants will succeed in obtaining orders for the dismissal of two of the proceedings commenced by Kalpana, as executors of the estate of the deceased they are on ordinary principles prima facie entitled to an order that their costs of the proceedings be paid out of the estate on the indemnity basis.

44. I accept the submission made by the defendants that, as the defendants have succeeded in establishing that the deceased was domiciled in the ACT at the date of his death, the Court does not have jurisdiction in Kalpana's NSW family provision proceedings to make an order designating any assets as notional estate of the deceased, and, that being so, it would be wrong in principle for the Court to throw the burden of the whole of the defendants' costs of defending Kalpana's proceedings onto any assets that would have been available to be designated as notional estate of the deceased, if he had been found to have been domiciled in NSW at the date of his death. There is no principle that would justify the Court requiring the defendants to bear the whole of their costs of the proceedings, or to require them to use the power that the Court has found them to have to control the trustee of the discretionary trust that effectively owns the assets of the O'Donnell group to resolve to make discretionary distributions to the defendants to enable them to recoup the whole of their costs of the proceedings.

45. It logically follows that the Court must decline to make order 8, as proposed by Kalpana, which would require the defendants to replenish the deceased's estate by the amount of the defendants' costs that have to date been paid out of the assets of the estate.

46. There is, however, one unusual circumstance that I consider justifies the Court in making an exceptional order for costs in Kalpana's ACT family provision proceedings.

47. The genesis of this approach is to be found in the submissions made by senior counsel for the defendants at the end of the hearing, concerning the orders that it was appropriate for the Court to make in Kalpana's ACT family provision proceedings, on the assumption that the Court accepted the submissions made by senior counsel that the evidence established that the deceased was domiciled in the ACT at the date of his death. At T 751.45, senior counsel said:

MEEK: What we suggested, the estate - according to MFI 5 - is a little over 2 million. We suggested Unit 14 as being accommodation, which is valued at 1 million and a fund of between roughly about 700 to a million which would effectively consume the estate.

HIS HONOUR: Yes. What is the consequence of that if I accepted that? How are costs to be dealt with?

MEEK: The consequence of it is that your Honour - well, a number of things.

One is that the executors would effectively have their costs dealt with outside of the estate; two, that the plaintiff’s legal costs, if they were to be paid, would effectively consume the benefit…

…

In saying all of those things, I’m not arriving at a point where I tell your Honour it’s all going to end up nice and neat; it probably doesn’t but what we have attempted to do is to recognise there is some need for accommodation and some need for a fund…

…

48. Acting on senior counsel's submissions, the Court made the observations in the principal judgment that are extracted above at [12], which included J [541], which I will repeat for convenience:

[541] Given the observations made by senior counsel for the defendants that I have recorded above concerning the defendants' costs, I consider that it would be a fair outcome, on the facts of this case, for the Court not to make an order that the defendants' costs be paid out of the estate of the deceased.

49. In my general approach to the consideration of the issues raised by all of the proceedings, I acted upon the submissions made by senior counsel for the defendants. I did not directly accept the submissions, but I had regard to them, and they formed a real and inseparable part of my overall deliberations as to the proper conclusion to reach on the basis of all of the evidence that was before the Court.

50. In those circumstances, I consider that it is proper for the Court to adjust the costs orders that it will make to reflect the Court's acceptance of the submissions made by senior counsel for the defendants, concerning the defendants remaining liable to meet part of their costs personally.

51. Although it is not necessary for me to decide the issue on this basis, I consider that it will be fair for the defendants to be responsible for part of the costs that they have incurred in defending Kalpana's ACT family provision proceedings. Although, as executors, they had a duty to uphold the deceased's will, and would generally be entitled to recover their costs of defending the proceedings out of the estate on the indemnity basis, irrespective of the outcome, the fact is that the defendants were acting in their own interests (as well as in the interests of their brother, Simon, who was not nominated as an executor). Although, at the end of the hearing, senior counsel for the defendants conceded that the Court could properly make a family provision order in favour of Kalpana out of the actual estate of the deceased, the defendants led a considerable body of evidence directed at defeating Kalpana's family provision claim, on the assumption that only the actual estate of the deceased was available to meet that claim. The defendants substantially failed in relation to most of those issues.

52. At the recent hearing that took place on 28 April 2023, it emerged that there was inherent ambiguity in what senior counsel for the defendants at the original hearing meant when he used the words “the executors would effectively have their costs dealt with outside of the estate”, in the submission that I have extracted above at [47]. The new senior counsel who appeared for the defendants submitted that the original senior counsel must not have meant that the defendants would accept an order that they pay all of their costs of all proceedings to the date the submission was made, which would involve the defendants being required to replenish the deceased's estate to the extent that part of their costs had already been paid to the defendants' legal representatives before the hearing. The defendants submitted that, having regard to the fact that senior counsel for the defendants referred to the estate then being expected to have a value of “a little over 2 million”, he could only have been referring to the defendants bearing their then unpaid legal costs. That is because the amount of $2,058,460.11 had been calculated on the basis that that was the value of the estate after the defendants had paid so much of their legal costs as had already been paid. It thus appears that, when senior counsel for the defendants at the hearing made this submission as to the family provision order that could be made in favour of Kalpana on the basis that the value of the actual estate of the deceased was slightly more than $2 million, which would have the practical result that the defendants would have to pay their costs from outside the estate, he could only have been referring to the outstanding costs of the defendants. The value of the estate upon which the submission was based had been determined after a substantial part of the defendants’ costs had already been paid out of the estate.

49. I accept the logic of this argument on behalf of the defendants. Although the outcome was only implied, its logic is clear. It is immaterial that the Court did not draw the conclusion at the time that was necessary for it to have a proper understanding of the submission being made on behalf of the defendants.

50. Consequently, if the Court makes an order that has the practical effect that the defendants will have to bear part of their legal costs, at most that result should only apply to the amount of those costs that had not been paid by the defendants out of the estate of the deceased at the time when the submission was made.

51. Senior counsel for the defendants went further, at the 28 April 2023 hearing, by making a submission that an order by the Court that permitted the defendants to pay all of their legal fees out of the estate of the deceased was consistent in substance with the submission made on their behalf at the hearing on 29 October 2022. This additional submission focused on the fact that senior counsel at the principal hearing suggested that the family provision order that might be made in favour of Kalpana could give her Unit 14 (valued at $1 million) “and a fund of between roughly 700 to a million”. As I understand this submission, it focused on the lower value of $700,000. If the family provision order had a value of $1.7 million and the estate had a value of about $2 million, that would accommodate the payment of the outstanding $303,000 of legal costs incurred by the defendants.

52. Although it is true that the submission made on behalf of the defendants at the hearing suggested a range of $1.7 million to $2 million as being justifiable, it would not be proper for the Court to ignore the higher end of that range in considering the effect that should be given to the submission. I am satisfied that the principal judgment was decided by the Court on the basis that the costs orders could have the effect that the defendants would be required to bear their own costs of Kalpana's ACT family provision proceedings, to the extent that those costs remained outstanding at the date the submission was made.

53. That leaves the question of what should be done in relation to the additional legal costs of the defendants that appear to have been paid since the end of the principal hearing. In my judgment, as the value of the actual estate of the deceased is currently more than the agreed value upon which the Court acted when it formulated the principal judgment, notwithstanding that some additional legal costs of the defendants have been paid, the just approach will remain that the only legal costs that the defendants should be required to bear is the currently outstanding $303,000.

Payment of defendants’ costs by fifth and sixth defendants

58. I will now address Kalpana's alternative claim in par 7 of her proposed short minutes of order, that the defendants' costs should be ordered to be paid by the fifth and sixth defendants. I have noted above that those defendants are two companies in the O'Donnell group who acted as trustees. As I explained at J [22], Kalpana did not seek any specific relief against either company. Their affairs could only have been affected by Kalpana's claims if the Court had made a notional estate order in relation to the direct or indirect capacity of the defendants to control the rights attached to the shares in the companies. I noted that the companies did not have any independent role in the proceedings.

59. There is no principled basis upon which the two companies could be made liable for any of the costs of the proceedings, and in particular, they could not be ordered to pay the defendants' costs of the proceedings. In any event, the companies could not properly be ordered to pay the costs of those aspects of the proceedings for which the defendants succeeded.

Offers of compromise served on Kalpana

60. The defendants served two offers of compromise on Kalpana under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) Pt 20 Div 4, and also relied on Calderbank v Calderbank [1976] Fam 93. Under the first offer dated 24 September 2020, the defendants offered to compromise Kalpana's claims against them on the basis that she would retain all of the interim provision made in her favour out of the estate to that date, plus receive a legacy of $4.5 million from the estate and/or the notional estate of the deceased. As it has happened, if this offer had been accepted by Kalpana, it would have required the defendants to make up the total amount offered out of the notional estate of the deceased, as well as his actual estate. The offer was made on the basis that Kalpana would bear her own costs, and the defendants' costs would be paid out of the estate on the indemnity basis. Kalpana's claim for provision would have otherwise been dismissed.

61. The second offer made by the defendants, dated 3 November 2021, was made generally on the same terms as the earlier offer. The defendants offered that, in addition to retaining the interim provision that she had received to date, Kalpana would receive a legacy of $4.8 million, paid as to $2.4 million within 30 days of the date of the orders, and the balance would be paid within 14 days after the settlement of the sale of Unit 14. As the second offer was made after Kalpana filed her statement of claim in the devastavit proceedings on 7 July 2021, the second offer also contained a provision for the dismissal of that statement of claim.

62. Kalpana did not accept either of the offers of compromise.

63. Kalpana does not appear to have contested the validity of the offers of compromise, either for the purposes of UCPR r 42.15 or as Calderbank offers.

64. A number of factors diminish the significance of Kalpana having failed to accept either of the offers of compromise in this case. The first is that the defendants, as the executors of the deceased’s estate, are entitled to the payment of their costs out of the actual estate of the deceased in accordance with the ordinary rule that governs the entitlement of executors to be indemnified for their costs. The second is that the effect of the family provision order that will be made in Kalpana’s favour is that she will become entitled to the whole of the actual residuary estate of the deceased, whatever that may contain. Consequently, there will be no other beneficiaries whose interests will be advanced by Kalpana being ordered to pay the defendants’ costs, notwithstanding her success in the ACT family provision proceedings, because of her failure to accept the offers of compromise.

65. In par 10 of their written submissions dated 28 March 2023, the defendants referred to the fact that Kalpana has received a judgment which is significantly less favourable than the offers of compromise, and that the result would usually be that, at least from the date of those offers, Kalpana would be required to bear her own costs and to pay the defendants’ costs. However, the only noticeable effect of that submission in the orders proposed by the defendants, which are set out at [23] above, is that the defendants’ costs be paid out of the estate on the indemnity basis. That position may reflect the general rule that the defendants’ costs should be paid out of the estate in any event.

66. As the devastavit claim that Kalpana prosecuted against the defendants was a claim against them personally, on the basis that they had breached their duties as executors, it may have been arguable that, following their success in defeating that claim, the defendants were only entitled to payment of their costs by Kalpana personally on the ordinary basis. However, subject to the consideration in the following paragraph, I consider that the defendants are correct in seeking an order that the whole of their costs be paid out of the estate on the indemnity basis. Kalpana’s failure to accept the second offer of compromise would ordinarily have the effect that she would be ordered to pay the defendants’ costs of those proceedings on the indemnity basis. As the effect of the family provision order will be that Kalpana will be entitled to the whole of the residual actual estate of the deceased, it will be appropriate that Kalpana satisfy the costs order that would otherwise have been made in the devastavit proceedings, by means of an order that the whole of the defendants’ costs on the indemnity basis be paid out of the estate.

67. The qualification that I suggested in the preceding paragraph concerns the possible effect on Kalpana’s failure to accept the offers of compromise on the conclusion that I have expressed above, that by reason of the submissions made on behalf of the defendants at the hearing, the costs orders to be made as between Kalpana and the defendants should have the effect that the defendants will bear the part of their costs of the proceedings that currently remains outstanding. Although then senior counsel for the defendants adverted in his submissions to the possibility that Kalpana’s response to offers of compromise might ultimately affect the costs orders that should be made in these proceedings, I consider that Kalpana’s failure to accept the offers of compromise in this case should not alter the position concerning the payment of the currently outstanding costs of the defendants. That is because the Court took into account the submission made on behalf of the defendants, in the light of the evidence that was then before the Court, concerning the costs incurred by the parties in determining the substantive family provision order that should be made in the ACT family provision proceedings.

Accountancy fees of PricewaterhouseCoopers

68. Kalpana made a submission that fees charged by PricewaterhouseCoopers (“PwC”) for accountancy services provided to the defendants as executors of the deceased’s estate and to the companies in the O’Donnell group should not in their entirety be treated as liabilities of the estate.

69. The services provided by PwC were relevant to a number of different issues in the proceedings commenced by Kalpana and were also required for the purposes of the administration of the deceased’s estate that were not directly connected to the proceedings. That included the ascertainment of the assets in the actual estate of the deceased, and the identification of assets that may form part of the deceased’s notional estate, as well as the determination of the values of both classes of asset. In brief, the deceased did not cause proper accounts to be prepared of his own financial affairs or the affairs of the companies in the O’Donnell group. Furthermore, the deceased caused companies in the O’Donnell group to make payments for his benefit without attending to the correct legal procedures that applied to the deceased’s entitlement to receive those payments. At the time of his death, the deceased was subject to an audit by the Australian Taxation Office (the “ATO”) and an investigation in relation to his possible liability under Div 7A of the Income Tax Assessment Act 1936 (Cth).

70. As I understand the evidence, the defendants engaged the services of PwC to reconstruct the financial accounts of the deceased and the companies in the O’Donnell group, at least to a standard that would enable the defendants on behalf of the deceased’s estate and the companies in the O’Donnell group to make an arrangement that was satisfactory to the ATO, and to minimise the burden of the ATO’s investigation both to the estate and the O’Donnell group companies. I infer that it was also necessary for the defendants to put the financial accounts of the O’Donnell group companies on as sound a footing as possible to facilitate the future efficient management of the affairs of those companies.

71. It need only be said that the evidence demonstrated that the financial relationship between the deceased and the O’Donnell group companies was so murky that it was necessary for PwC to make somewhat arbitrary assumptions concerning an appropriate starting balance, so that the necessary financial accounts could be prepared on a basis that was reasonably cost effective.

72. I accept Kalpana’s submission that it would not be justifiable for all of the fees rendered by PwC to be treated as costs of the deceased’s estate. I note that the evidence does not strictly show how the defendants have apportioned PwC’s fees between the estate and the companies in the O’Donnell group.

73. As each of the companies in the O’Donnell group should have incurred the accountancy costs of preparing proper financial accounts in the ordinary course of their business, I am satisfied that fees rendered by PwC in recreating the financial accounts of the companies should be treated as costs of those companies and not as liabilities of the deceased’s estate. However, the fees that PwC have rendered for providing expert evidence in the proceedings, for preparing financial accounts for the deceased, and for dealing with the ATO in response to the audit and the Div 7A investigation should be treated as liabilities of the estate. To avoid unnecessary cost and disputes, I consider that the defendants will be justified in treating all of the fees rendered by PwC that were not incurred in the preparation of financial accounts for the companies in the O’Donnell group as being liabilities of the estate, unless in their discretion they decide otherwise.

Interim distributions from the deceased’s estate

74. The final question that must be considered as between Kalpana and the defendants arises in respect of orders 12 and 13 proposed by Kalpana. Proposed order 12 would note an agreement between the parties that the benefits received to date by Kalpana by way of interim provision were received by Kalpana on account of the provision that will be ordered, and no deduction is to be made in respect of the benefits received to date.

75. As I will explain below, whether by order of the Court or agreement between the parties, the interim distributions that the defendants have made to Kalpana out of the actual estate of the deceased must be taken to have been authorised by s 62 of the Succession Act. That section provides:

62 Interim family provision orders and orders restraining distribution of the estate

(1)    The Court may make an interim family provision order before it has fully considered an application for a family provision order if it is of the opinion that no less provision than that proposed in the interim order would be made in favour of the eligible person concerned in the final order.

(2)    After making an interim family provision order, the Court must proceed to finally determine the application for a family provision order by confirming, revoking or varying the interim order.

(3)    The Court may make an order restraining the final or partial distribution of an estate (other than a distribution under section 94 (1) of this Act or section 92A of the Probate and Administration Act 1898) pending its determination of an application for a family provision order.

76. Order 12, as proposed by Kalpana, is in substance consistent with the requirement in s 62(2) that the Court must proceed to finally determine the application for a family provision order by confirming, revoking, or varying the interim order. Although this statutory requirement may not apply in precise terms, the order proposed by Kalpana will be in accordance with the spirit of the statutory requirement, even if most of the interim distributions have been made in accordance with agreements between the parties.

77. Proposed order 12 will also be in accordance with the substantive decision made in the principal judgment, to the effect that a family provision order should be made in Kalpana's favour that will give her all of what ultimately remains in the residual estate of the deceased, which was intended to be in addition to the interim distributions that have been made to her.

78. As I will explain more fully below, interim distributions were also made by the defendants out of the actual estate of the deceased in favour of the deceased's sons, Jamie and Simon, each of which were shown to have reasonable needs for the supplementation of their income.

79. Order 13, as proposed by Kalpana, would oblige both Simon and Jamie to repay to the defendants on behalf of the deceased's estate all payments made to them since 7 June 2019.

80. As to the amount of all of the interim payments made, Kalpana received a total of $741,000 between 7 June 2019 and 23 March 2023. The aide memoire provided to the Court at the hearing on 28 April 2023 of the amounts of the individual payments advised that, after 23 March 2023, Kalpana would continue to receive payments of $6,000 per week. Kalpana received five lump sum payments between 7 June 2019 and 17 November 2022 in the total amount of $148,000. Between 6 May 2020 and 1 December 2021, Kalpana was paid $3,000 per week. She was paid $5,000 per week between 8 December 2021 and 16 November 2022. Between 23 November 2022 and 23 March 2023, Kalpana was paid interim distributions of $6,000 per week.

81. On the other hand, Jamie has been paid a total of $253,950 between 7 June 2019 and 23 March 2023. He was paid three lump sum amounts between 7 June 2019 and 17 November 2023 in the total amount of $76,200. Over the same periods that Kalpana received different amounts of weekly payments, Jamie received $1,050 per week, $1,350 per week and $1,500 per week.

82. Simon was paid two lump sum amounts on 7 June 2019 and 17 June 2022 in the total amount of $76,500. Simon was paid $1,050 per week between 6 May 2020 and 16 November 2022. He was paid $1,800 per week from 23 November 2022 to 23 March. 2023. The total amount of the interim distributions to Simon was $245,700 to 23 March 2023.

83. The aide memoire to which I have referred above advises that the final weekly payments to Jamie and Simon have continued to be made after the Court delivered the principal judgment on 16 December 2022. That gives rise to an issue of whether the defendants should have ceased making the payments to Jamie and Simon, once they became aware that the Court had decided in principle that the whole of the remaining residual of the estate of the deceased should be paid to Kalpana. That raises a question as to whether the distributions after 16 December 2022 should be refunded to the deceased's estate, even if the distributions made before that time are not required to be refunded.

84. It is to be noticed that, where lump sum payments were made to Kalpana, Jamie and Simon, each lump sum was paid on the same date as lump sum payments were made to the other two recipients. Further, the weekly distributions started on the same date, and the increases commenced on the same dates. This reflected the fact that, largely, the payments were made following agreements between Kalpana and the defendants, whereby the defendants only agreed to make payments to Kalpana if she agreed that they could also make payments to Jamie and Simon.

85. I have only found one order of the Court whereby an order was made under s 62 of the Succession Act that the defendants pay interim provision to Kalpana. That was order 1 made by Kunc J on 19 June 2019, whereby the sum of $50,000 was ordered to be paid to Kalpana.

86. The position may not be entirely clear, but it is my understanding that all other payments were made by agreement between the parties. I am satisfied that it was implicit in these agreements that the interim distributions were to be made to Kalpana as if ordered to be made under s 62 of the Succession Act.

87. The payments made by Jamie and Simon are in a different position. Prima facie, Jamie and Simon, as nominated beneficiaries under the deceased's will, were entitled to share in the deceased's actual estate equally with their siblings. Section 62(3) of the Succession Act authorises the Court to make an order restraining the final or partial distribution of an estate, pending its determination of an application for a family provision order. Although the Court was not required to make any orders under s 62(3), the effect of the agreements between Kalpana and the defendants, under which distributions were made to Jamie and Simon, was the same as if the Court had made orders under s 62(3) limiting the distributions permitted to be made to Jamie and Simon, pending the determination of Kalpana's family provision claims.

76. Ms Gidley exhibited to her 27 March 2023 affidavit correspondence between the parties' solicitors that led to the payments of interim distributions that commenced on 6 May 2020, 8 December 2021 and 23 November 2022. The correspondence included a number of communications that took place in respect of the negotiations between the parties, and it may be that the correspondence in Ms Gidley's exhibit is not entirely complete.

77. Ms Gidley's 1 May 2020 letter to Kalpana's solicitor, Mr Vincent Butcher, included:

We refer to your letter of 28 April 2020 and are instructed to reply as follows:

1. The amount of $3,000 per week is agreed to. However, payments are to commence from the date an agreement on interim provision is reached.

…

As stated in previous correspondence, all interim provision of any kind made for your client will be brought into account at the settlement or conclusion of the proceedings.

This offer is conditional on the plaintiff providing consent to the executors making a weekly payment of $1,050.00 to each of Jamie O'Donnell and Simon O'Donnell on the same ongoing basis.

90. In relation to the agreement that led to the increase in the payments made to Kalpana of $5,000 from 8 December 2021, Mr Butcher made an observation in an initial letter to Ms Gidley dated 26 April 2021:

…

My client is fully aware that any such interim provision shall be considered by the Court in a final sum awarded by the Courts pursuant to my client claim.

…

91. In a letter dated 29 October 2021 to Mr Butcher, Ms Gidley said:

…

Our clients have instructed us that they will agree to continue the payment of $3,000 per week until such time as an agreement is reached to resolve Mrs O'Donnell's claim, or a decision is handed down by Robb J.

The agreement above is conditional on the weekly payment to Simon O'Donnell of $1,050 per week continuing. It is also contingent on Mrs O'Donnell agreeing to weekly payments of $1,350 per week to Jamie O'Donnell…

92. Shortly afterwards, on 9 and 10 November 2021, Ms Gidley in an email to Mr Butcher stated, and he replied in the response that he included in his return email (which I have set out in italics), as follows:

My clients will agree to increase the weekly payments to your client to $5,000 per week for a period of 12 months, or until such time as her claim is resolved by agreement, or by order of the Court, whichever occurs first. The increased weekly payments will commence on 17 November 2021. Noted.

The increased payments are agreed to by my clients on the basis that the total amount of all weekly payments made to your client on and after 17 November 2021 are deducted from the amount of provision ultimately made for her either by way of agreement, or by order of the court. My client is content to have the matter noted as a consideration for His Honour pursuant to s 60(2) of the Succession Act. The agreement is also conditional on the weekly payments of $1,050 to Simon continuing, and the weekly payments of $1,350 being made to Jamie. Agreed.

93. On 18 October 2022, Ms Gidley wrote a letter to Mr Butcher in which she said: "Our clients are minded to agree to increase the weekly interim provision payments for your client to $6,000 per week as requested in your above mentioned letter, subject to the following…” Condition 2 consisted of an agreement by Kalpana to increase the weekly payments to Simon to $1,800 per week and to Jamie to $1,500 per week.

94. Mr Butcher agreed to that offer in a letter to Ms Gidley dated 20 October 2022.

95. I consider that it is clear from this evidence that Kalpana agreed that the interim distributions that were made to her were made subject to the possibility that, when the Court finally determined her family provision claims, the case would be subject to an order under s 62(2) of the Succession Act that she give credit for the interim distributions made to her, whether or not the amount of the family provision that she was awarded by the Court was greater than the total of the interim distributions that were made to her. As it has happened, from Kalpana's perspective, the risk that she would have to give credit for the interim distributions that she has received has not materialised, because the Court has found that she should be entitled to keep the interim distributions, and also receive whatever is ultimately contained in the residuary estate of the deceased.

96. The position is arguably different in principle in respect of Jamie and Simon, as between them they have received a total amount to 23 March 2023 of $499,650, by which the residuary estate of the deceased has been depleted.

97. The question is whether, in these circumstances, an order can, and should, be made by the Court that has the effect that the residuary estate of the deceased is restored by this amount.

98. I am satisfied, in principle, that the separate agreements made between Kalpana and the defendants for the making of interim distributions was intended to take effect on the basis that all payments were contingent on the effect of the orders ultimately made by the Court in Kalpana's family provision proceedings. That was expressly so in the case of interim distributions made to Kalpana, but I am satisfied, by implication, that the same was intended in relation to the interim distributions made to Jamie and Simon. It is possible that the defendants thought that the actual estate of the deceased would ultimately be found to be sufficiently large to accommodate the additional family provision made by the Court in favour of Kalpana, leaving Jamie and Simon with entitlements to shares in the estate that would be greater than the total of the interim distributions that were made to them. As it has happened, if this was the expectation of the defendants, it has not been realised.

99. However, a number of factors relevant to the manner in which these proceedings have been conducted must be taken into account in determining whether it would be proper for the Court to make orders that would have the effect that Jamie and Simon would be required to account to the defendants for the interim distributions they have received.

100. The first factor is that this was not an issue that was specifically raised by Kalpana or contested at the hearing. Secondly, though Jamie is a party to the proceedings as the first defendant, Simon has never been a party. There is, therefore, the issue of whether the Court is entitled to make an order that will affect the interests of Simon in his absence as a party. Thirdly, although the issue was not dealt with explicitly at the hearing, I am satisfied that it is more probable than not that, when the then senior counsel for the defendants made the concession that I have recorded above concerning the defendants bearing part of their legal costs, that concession was made on the understanding that Kalpana did not propose to make an application that would require Jamie and Simon to repay the amount of the interim distributions that they had received. I make that inference on the basis that, when senior counsel referred to the value of the actual estate of the deceased being a little more than $2 million, that was the amount that was left after all actual payments out of the estate, including payments for the defendants' legal costs, interim distributions to Kalpana, and also interim distributions to Jamie and Simon. In that circumstance, it would be unfair for the Court to make orders as to costs that held the defendants to the concession that was made on their behalf by senior counsel, and then make an order that had the effect of requiring Jamie and Simon to repay the amount of the interim distributions that they received from the estate.

101. I would add, as a substantive matter, that of the five children of the deceased, Jaimie and Simon were the least financially comfortable. Had Kalpana, at the original hearing, raised a real issue about whether Jamie and Simon should be required to repay their interim distributions, that would have raised a serious question concerning the relative strength of the claims of Kalpana on the one hand, and Jamie and Simon on the other hand, to receive provision out of the actual estate of the deceased. Given their financial circumstances, it would have been an exceedingly onerous order for the Court to make against Jamie and Simon that they be required to repay approximately $250,000 each to the defendants on behalf of the estate of the deceased within 28 days, as sought by Kalpana.

102. Consequently, apart from the difficulty of Simon not being a party to the proceedings, I consider that it is now too late for Kalpana to prosecute a claim that Jamie and Simon be required to repay the total of the interim distributions to the estate. That is a substantive and not simply a nominal question and ought to have been contested at the principal hearing.

103. I am satisfied, however, that the defendants ought to have understood, when the principal judgment was published on 16 December 2022, that they were no longer justified in paying the weekly interim payments to Jamie and Simon. Those continuing payments were made out of the residue of the actual estate of the deceased that the Court found should be the subject of a family provision order in favour of Kalpana. The defendants should be ordered to restore to the estate the amount of the interim payments made to Jamie and Simon after 16 December 2022.

Proceedings commenced by Anna

104. It is now necessary to consider the orders that should be made in the proceedings commenced by Anna.

105. It will be necessary for the Court to make an order dismissing Anna's ACT family provision proceedings that were transferred into this Court.

106. The position in relation to the Family Court proceedings commenced by Anna that were partly transferred to this Court is more complex.

107. Ms Gidley exhibited to her 27 March 2023 affidavit evidence that the defendants' costs of those proceedings were $90,615.93. Ms Gidley's exhibit also included an order of the Federal Circuit and Family Court of Australia (Division 1) (the “Division 1 Court”) made by a Judicial Registrar on 10 March 2023, which recorded:

BY CONSENT THE COURT ORDERS ON A FINAL BASIS THAT:

1.    That within forty-two (42) days, Anna Gray pay to the Estate of Garry [Francis] O'Donnell ("the Estate") the costs of and incidental to the proceedings filed by Anna Gray on 2 July 2020 [being her Family Court proceedings] and discontinued on the 7 February 2023 on the ordinary basis the fixed sum of $50,000.

2.    That the Amended Response filed on the 15 April 2021 is otherwise dismissed.

3.    That save for as specified in these Orders the parties otherwise meet their own costs of the Family Law proceedings.

…

108. The circumstances in which these orders were made by consent are in my view extraordinary. In par 10 of Anna's written submissions she said: "Pursuant to orders made by Justice Robb on 16 December 2022, the Plaintiff's claim in the family law proceedings was dismissed and, in these circumstances, that was the end of her claim in the Family Court and also in the Supreme Court…".

109. 16 December 2022 was the date on which the Court handed down the principal judgment. The Court has not yet made any orders to give effect to that judgment, and, in particular, it has not yet dismissed any of Anna's proceedings. It will do so, but that has not yet happened.

110. Anna's original claim in the Family Court raised complex issues that were considered in detail at J [349]-[443], in conjunction with her ACT family provision proceedings.

111. Only part of the Family Court proceedings was transferred to this Court. At J [395]-[398]. I said:

[395] Anna's proceedings came before Gill J again on 8 September 2021, his Honour then sitting as a judge of the Federal Circuit and Family Court of Australia Division 1 (which, for convenience, I will continue to call the Family Court). The first matter noted by his Honour in his orders was that the proceedings before his Honour were related to the proceedings that were pending before me in this Court regarding Anna’s family provision claim, and that it was more appropriate that the proceedings under the Domestic Relationships Act be determined by this Court.

[396] The substantive order made by Gill J was as follows:

1. That pursuant to Section 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act (Cth) 1987, the elements of the Applicant's Amended Initiating Application seeking relief under the Domestic Relationships Act (ACT) 1994, be transferred to the concurrent NSW Proceedings involving the parties.

[397] The effect of order 1 is clarified by notation c, in which his Honour recorded:

c. The relief referred to in Order 1 hereinbelow incorporates the following Orders sought by Applicant under the Domestic Relationships Act (ACT) 1994 in her Amended Initiating Application:

a. Order 1 (as amended by Justice Gill in Order 1 dated 24 August 2021); and

b.   Order 2; and

c.   Order 7 (in the alternative to orders 1 and 2)…

[397] This appears to mean that, by order 1, Gill J cross-vested to this Court Anna's application for orders setting aside the deed of settlement and Order 3, as well, in the alternative, as her application for an order under s 28 of the Domestic Relationships Act varying Order 3.

112. I further observed at J [409]:

[409] The result is that this Court is only required to decide whether Anna has established a right to the making of orders 1 and 2 of her amended originating application. If it decides that she has not proved that entitlement, that will be the end of the proceedings instituted by Anna in this Court and the Family Court. If the Court decides that orders 1 and 2 should be made, then the Court will not be required to proceed to determine Anna's cross-vested family provision application. It would then be a matter for Anna to pursue her claims for relief in orders 3 to 6 of her amended initiating application in the Family Court. That would have the collateral effect that this Court would not be able to determine with adequate certainty what the ultimate value of the actual estate of the deceased would be.

113. I concluded at J [440]:

[440] Consequently, I find that Anna has not proved her case for the Court to make an order setting aside the orders made by the Family Court on 12 October 2015. It follows that the Court will not make an order setting aside the deed of settlement, whether or not the entitlement to that order would follow an order setting aside the Family Court orders.

114. As a result of this finding, as was conceded by Anna at par 10 of her written submissions, the fate of her Family Court proceedings had to be that they be dismissed, as the finding on the issues transferred to this Court had the effect that they could no longer be pursued by Anna.

115. It is not clear on what basis the Family Court proceedings were dealt with and finally dismissed by the Division 1 Court, before this Court was given the opportunity to make orders to give effect to the relevant findings in the principal judgment.

116. I am satisfied, however, that the orders made by the Division 1 Court by consent of the parties does not deprive this Court of the right to exercise whatever jurisdiction it may have to make orders for costs consequent upon its findings in the principal judgment.

117. As I have noted above at [23], the defendants have submitted that the Court should make an order dismissing each of the proceedings commenced by Anna and a costs order that requires Anna to pay 20% of the defendants’ costs of all of the proceedings on the ordinary basis to 15 September 2020 and thereafter on the indemnity basis. They also submit that the Court should make an order that their costs of Anna’s proceedings be paid out of the estate on the indemnity basis.

118. As to the defendants’ costs, they are entitled to be paid their costs out of the estate on the indemnity basis. There should be one order for the payment of the defendants’ costs out of the estate in respect of all of the proceedings, so that there will be no possibility of the need to apportion the defendants’ costs as between the separate proceedings.

119. The defendants’ application that Anna should be ordered to pay their costs on the indemnity basis from 15 September 2020 is based upon the fact that Anna failed to accept offers of compromise made under UCPR Pt 20 Div 4 on 15 September 2020 and 9 October 2021, that also served as Calderbank offers. In each case, the principal component of the offer was that Anna receives a legacy of $100,000 from the deceased’s estate.

120. Anna’s submissions in response relied upon s 117 of the Family Law Act 1975 (Cth), which relevantly provides:

117  Costs

(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

(2)   If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

…

(2A)   In considering what order (if any) should be made under subsection (2), the court shall have regard to:

(a)   the financial circumstances of each of the parties to the proceedings;

(b)   whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

(c)   the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

(d)   whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

(e)   whether any party to the proceedings has been wholly unsuccessful in the proceedings;

(f)   whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g)   such other matters as the court considers relevant.

…

121. As I understand her position, Anna accepted that the Court must make an order dismissing Anna’s ACT family provision proceedings, and that, whatever order that the Court may see fit to make in that part of the Family Court proceedings that were transferred to this Court, those proceedings have effectively been dismissed by the order made by the Division 1 Court on 10 March 2023.

122. On the issue of costs, Anna submitted that the costs of her Family Court proceedings had been dealt with by the orders of the Division 1 Court, and were limited to the agreed payment of $50,000 by Anna. Accordingly, Anna submitted that any liability on her part to pay the defendants’ costs should relate only to the costs of part of the hearing in this Court. She submitted that the effect of the orders of the Division 1 Court was that, by agreement, the $50,000 covered the whole of the defendants’ costs of the Family Court proceedings, including so much of those costs as related to the hearing in this Court. Anna further submitted that the Court should not give any effect to her failure to accept the offers of compromise, because it was not “imprudent” for Anna to have rejected those offers, given the likelihood that s 117 of the Family Law Act would have the effect that the defendants would have to bear their own costs, even if Anna’s claim against them failed. Anna relied upon decisions of courts exercising jurisdiction under the Family Law Act, to the effect that, in the absence of a finding of justifying circumstances under s 117(2), the Court should make a costs order that accorded with s 117(1), and that there were no such exceptional circumstances established in the present case.

121. Anna submitted in the alternative that, if the Court was minded to order her to pay any part of the costs of the defendants in addition to the $50,000 that she has already agreed to pay, the 20% of the defendants’ total costs suggested by their submissions was excessive, and, on the basis that the hearing of Anna’s claim took two days or less, then Anna should be responsible for no more than 10% to 12.5% of the defendants’ costs, on the basis that the length of the hearing, including an additional day on 25 March 2023, was 16 days.

122. Anna’s ACT family provision proceedings were transferred to this Court following a hearing on 16 October 2019. The order transferring part of the Family Court proceedings to this Court was made on 8 September 2021. At the time of service of the 15 September 2020 offer of compromise, the whole of Anna’s Family Court proceedings remained before that Court. The order transferring part of those proceedings to this Court was made only about a month before the commencement of the hearing in this Court. The second of the offers of compromise was only made two days before the commencement of the hearing.

123. I accept Anna’s submission that, at the time she received the first of the offers of compromise on 15 September 2020, she was entitled to assume that her Family Court proceedings would be dealt with by that Court, and that the Family Court would apply s 117 of the Family Law Act. The first offer of compromise could not operate under UCPR Pt 20 Div 4 insofar as one of the terms was that Anna withdraw her Family Court proceedings forthwith. An offer that involved the compromise of two separate proceedings, one in this Court to which the UCPR applies, and another in the Family Court where the UCPR does not apply, will be ineffective as a formal offer of compromise under Pt 20 Div 4. For the purpose of determining whether the 15 September 2020 offer of compromise was effective as a Calderbank offer, the relevant issue is whether it was unreasonable in the circumstances for Anna to have rejected that offer. I accept Anna’s submission that the rejection of the offer was not unreasonable, because I am satisfied that, at the time, Anna was entitled to believe that the costs of her Family Court proceedings would be dealt with by applying s 117, and that the Family Court would not in the circumstances apply the Calderbank principle.

124. I do not think that the position materially changed by the 9 October 2021 date of the second offer of compromise. That offer of compromise may have been capable of being effective under both Pt 20 Div 4 and the Calderbank principle, if its subject matter had been limited to the compromise of Anna’s ACT family provision proceedings and that part of the Family Court proceedings that had been transferred to this Court, which was limited to the relief sought by Anna under the Domestic Relationships Act 1994 (ACT) and in respect of an order setting aside the deed of settlement: see J [396]-[399]. The part of the Family Court proceedings that was transferred to this Court involved jurisdiction under the law of the ACT and not the Commonwealth. Those claims were brought in the Family Court in its accrued or associated jurisdiction. Once they were transferred to this Court, they could be dealt with by this Court by applying the law of the ACT (whether or not as a technical matter the claims involved the exercise by this Court of federal jurisdiction under Ch III of the Constitution). As the 9 October 2021 offer of compromise in fact required Anna to accept a compromise of the whole of her Family Court proceedings, and not just the part that arose under ACT law, the offer encompassed that part of the Family Court proceedings that would attract the application of s 117 of the Family Law Act. It is, in my view, immaterial that, as a practical matter, Anna’s Family Court proceedings would not finally be determined by that Court unless Anna first succeeded on that part of those proceedings that had been transferred to this Court.

125. In these circumstances, this Court should not give any effect to the offers of compromise that were made to Anna, on the issue of whether Anna should be ordered to pay any part of the defendants’ costs of her proceedings on the indemnity basis.

126. I consider, however, that there is no reason why the Court should not make the usual order that Anna pay the defendants' cost of Anna’s ACT family provision proceedings on the ordinary basis.

127. Anna does not have any right to have her costs of those proceedings paid out of the estate of the deceased.

128. The final issue is whether Anna should be ordered to pay any of the defendants’ costs of her Family Court proceedings, in addition to the $50,000 recorded in the orders made by the Division 1 Court on 10 March 2023.

129. I am satisfied that the agreement made between the defendants and Anna and the order made by the Division 1 Court do not deprive this Court of its power under s 98 of the Civil Procedure Act 2005 (NSW) to make orders, at its discretion, as to the costs of that part of the Family Court proceedings that was transferred to this Court. The orders that the Division 1 Court was invited to make are probably anomalous, as this Court had not finally made orders to give effect to the relevant conclusions in the principal judgment. Be that as it may, the defendants and Anna had no right to agree to a costs order in relation to proceedings before this Court that bound Kalpana and was made in proceedings to which she was not a party. Whether or not this Court was exercising federal jurisdiction, it was in practice applying the law of the ACT. In the circumstances, this Court was not confined by s 117 of the Family Law Act in the determination of the costs order that was appropriate in relation to the issues transferred to this Court.

130. In any event, I consider that it would be a matter relevant to the application of s 117 of the Family Law Act that the purpose of Anna’s Family Court proceedings was to obtain orders from the Family Court by which Anna would receive a greater proportion of the assets controlled by the deceased than she received under the deed of settlement that she sought to have set aside by this Court. Anna’s objective was to secure for herself a better outcome, and, if she had been successful, the result would most likely have been to reduce the assets in the deceased’s actual estate that were available to be made the subject of a family provision order in favour of Kalpana. In those circumstances, I consider that the just course is for the Court to order Anna to pay the defendants’ costs of that part of her Family Court proceedings that were transferred to and determined by this Court from the time when the transfer order was made. I consider further that the order for costs made by the Division 1 Court on 10 March 2023 should only be given effect insofar as it applies to the costs of the parties in that Court.

131. I will deal with the issue of the apportionment of the responsibility to pay the defendants’ costs as between the different plaintiffs separately below.

Proceedings commenced by Kristina and Jurek

134. I will now turn to a consideration of the orders that should be made by the Court to deal with the family provision proceedings commenced by Kristina and Jurek.

135. As already noted, neither plaintiff was represented at the hearing that took place on 28 April 2023, and the Court has not received any submissions from those plaintiffs in relation to the outstanding issues.

136. The defendants submitted that Kristina and Jurek should be ordered to pay their costs (save in respect of Kalpana’s devastavit claim and the two claims made by Anna) on the ordinary basis initially and then on the indemnity basis from 24 September 2020. They submitted that there was sufficient commonality of evidence and issues between the family provision proceedings commenced by Kristina and Jurek and Kalpana’s family provision proceedings that Kristina and Jurek should be jointly and severally liable with Kalpana to the full extent that their respective claims overlapped. The defendants submitted that the ordinary principle is that where there are several unsuccessful parties, their liability for costs should be joint and several, unless there are “some special circumstances” or “sufficient reason” has been shown.

137. The defendants relied upon the decision of RA Hulme J in Tomasetti v Brailey [2012] NSWSC 120, and of Davies J in Royal v El Ali (No 3) [2016] FCA 1573. In the latter case, Davies J said:

[53] The applicants seek orders that costs be ordered against the respondents on a joint and several basis by reason of the general principle that unsuccessful parties bear the costs liability jointly and severally: ASIC v ActiveSuper Pty Ltd (in liq) (No 2) [2015] FCA 527; (2015) 106 ACSR 302 at [111] citing City of Swan v Lehman Bros Australia Ltd (No 3) [2009] FCA 1190; GE Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths Australia, 2013) at [11.2]. The general principle that multiple respondents are to be made jointly and severally liable for the costs of the successful party flows from the rationale that, because the successful party’s prima facie entitled to its costs of the action, that party should not lose that entitlement if one of the parties against whom costs orders are made cannot, or will not, meet its share of the costs burden: Perigo v Workers Compensation Nominal Insurer (No 3) [2013] NSWSC 6 at [4]–[5], citing Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3)(1979) 42 FLR 213 and Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670 at [16]; GE Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths Australia, 2013) at [11.2]. The general principle is that each unsuccessful party will be jointly and severally liable for the costs of the successful party, without differentiation between them, unless there are “special circumstances” warranting a departure from that principle: Tomasetti v Brailey [2012] NSWSC 120 at [30] and the authorities cited.

138. While I accept these observations in the context to which they were addressed, I do not think that his Honour intended to state a rule of general application. His Honour was concerned with the case where different parties in the one proceedings had substantially overlapping interests, although each party’s case raised issues that were peculiar to that case. Where parties to a proceeding have propounded a collective case, or mounted a collective defence, in circumstances where common issues arise, the courts resist disparate costs orders that limit the costs imposed on the individual defendants to the costs of the particular issues relevant to their cases. That is largely on the basis that, where there is a collective case or a collective defence, the ability of the successful party to recover its costs should not depend upon the willingness or ability of the individual unsuccessful parties to satisfy the costs orders made against them.

139. In the present case, all of the family provision claims were prosecuted by separate proceedings that were listed to be heard together, because there were limited common issues, and because all of the claims were made against the one deceased’s estate, so that the family provision orders that could be made if one claim was successful would be influenced by the successful outcome of other claims. Save for one matter, Kristina and Jurek’s family provision claim was conducted to the fullest extent possible as if it was being heard separately, and arrangements were made to set aside hearing time for the separate conduct of the hearing of their claim.

140. The one exception is that the success of Kristina and Jurek’s family provision claim depended entirely on Kalpana being successful in her NSW family provision proceedings in establishing that the deceased was domiciled in NSW at the date of his death. Kristina and Jurek always acknowledged that their family provision claim was only viable if it could be pursued in NSW, because the deceased was domiciled in this State at the date of his death. In that sense, Kristina and Jurek pursued a claim that had a substantial forensic issue in common with Kalpana’s family provision claim. However, Kristina and Jurek conducted their case on the basis that they would take advantage of any finding by the Court in Kalpana’s proceedings that the deceased was domiciled in NSW, without in any way increasing the forensic effort of prosecuting or resisting the case for a finding that the deceased was domiciled in NSW.

141. The forensic approach that was followed by Kristina and Jurek reflected their very limited means, which had the practical effect that they did not conduct their claims in a way that could materially have increased the defendants’ costs of resisting Kalpana’s case that the deceased was domiciled in NSW.

142. I am satisfied, in these circumstances, that the Court’s discretion under s 98 of the Civil Procedure Act should be exercised on the basis that Kristina and Jurek should only be ordered to pay the defendants’ costs of the forensic effort in dealing directly with their claim. So far as the defendants’ costs of the hearing is concerned, that will mean that Kristina and Jurek should only be ordered to pay the part of the defendants’ costs that was incurred for that part of the hearing that dealt with the claim by Kristina and Jurek.

143. The defendants served offers of compromise on Kristina and Jurek on 24 September 2020, 8 October 2021 and 28 October 2021, all of which were expressed to take effect under UCPR Pt 20 Div 4 and as Calderbank offers. Each offer was contingent on the offer being accepted by both plaintiffs. The defendants offered each plaintiff a legacy of $100,000 from the estate in the case of the first two offers and $110,000 in the case of the last offer.

144. Although neither Kristina nor Jurek has made submissions against the effectiveness of the offers of compromise, I consider in any event that there is no apparent reason why the Court should not give effect to them. The result must be that Kristina and Jurek will be ordered to pay the defendants’ costs of resisting their claims on the ordinary basis up to 24 September 2020 and on the indemnity basis thereafter.

Apportionment of costs

145. As stated above, I assume that the defendants have records of the costs that they have incurred in dealing separately with the claims made by Anna on the one hand and Kristina and Jurek on the other hand. There will be occasions when the defendants incurred the one set of costs in dealing with the proceedings prosecuted by the three sets of plaintiffs. It will be in the interests of the parties if the Court specifies the proportions in which costs incurred by the defendants jointly in relation to the claims by all plaintiffs should be apportioned as between the different plaintiffs.

146. That is an exercise that can only be undertaken on a broad brush basis (see Morris v Riverwild Management Pty Ltd [2009] VSC 439 at [13] per Pagone J). The length of the hearing proper was 15 days. I have not attempted to determine the time during the hearing that was devoted to particular plaintiffs’ claims by reference to an analysis of the transcript. The transcription of the oral conduct of the hearing is not an accurate measure of the time devoted to particular cases. Furthermore, it is proper to weigh cases according to the complexity of the issues raised, as the complexity is likely to be reflected in the overall forensic effort required, including in allowing for preparation out of court (see Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] per Beazley, Ipp and Basten JJA, citing Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA).

147. On this basis, having regard to the complexity of the issues raised by Anna’s claim, and the relative simplicity of the claims made by Kristina and Jurek, I consider that the proper course is to treat Anna’s claim as if it had been conducted over three days, and to treat the claim made by Kristina and Jurek on the basis that it probably would have been a one-day claim if it had been conducted separately. That means that Anna will be responsible for 1/5 of the defendants’ costs incurred jointly in respect of all of the plaintiffs’ claims and Kristina and Jurek will be responsible for 1/15 of those costs.

Orders

148. Given the complexity of the interrelationship between the six proceedings that are the subject of these reasons, I will set out the orders that the Court proposes to make. The parties may submit to my Associate within seven days of the publication of these reasons suggested amendments to the proposed orders, limited to matters necessary to give proper effect to the principal judgment and these reasons.

149. Given the number and complexity of the issues that remained for determination, I will give the parties leave to identify any issue that they consider remains outstanding that has not been dealt with in these reasons.

150. The proposed orders of the Court are:

Proceedings No 2019/120911 (Kalpana’s NSW family provision proceedings)

1. Order that the proceedings be dismissed.

Proceedings No 2019/363217 (Kalpana’s ACT family provision proceedings)

1. Order pursuant to s 59 of the Succession Act 2006 (NSW) (the Succession Act) that the plaintiff receive, by way of provision, a legacy equal to all of the residue of the actual estate of the deceased after the completion of its due administration.

2. Order pursuant to s 62 of the Succession Act confirming any order made by the Court for interim provision in favour of the plaintiff.

3. Note that order 2 is made on the basis that the plaintiff is entitled to retain all interim provision made in her favour by agreement between the plaintiff and the defendants.

4. Note that order 2 is made on the basis that the beneficiaries named in the will of the deceased, being Jaimie O’Donnell and Simon O’Donnell, to whom interim distributions of the estate of the deceased were made before 16 December 2022 by agreement between the plaintiff and the defendants, are entitled to retain the interim distributions, such that the residue of the actual estate of the deceased is to be determined on the basis that it does not include those interim distributions.

5. Order the defendants to restore to the estate of the deceased all interim distributions of the estate that were made to Jaimie O’Donnell and Simon O’Donnell by agreement between the plaintiff and the defendants after 16 December 2022.

6. Note that, for the purposes of the administration of the deceased’s estate, the defendants will be justified in treating the fees rendered by PricewaterhouseCoopers for providing accountancy services to the defendants and the companies in the O’Donnell group as being liabilities of the deceased’s estate, except for the fees rendered by PricewaterhouseCoopers for the professional services involved in preparing or recreating financial accounts for the companies in the O’Donnell group.

7. Grant leave to all parties to the proceedings to apply to the Court on seven days’ notice for the purpose of seeking all such relief as may be necessary or desirable for the purpose of giving efficient effect to these orders.

Proceedings No 2021/194343 (Kalpana’s devastavit proceedings)

1. Order that the proceedings be dismissed.

Plaintiff’s Costs Orders in Proceedings No 2019/120911, No 2019/363217 and No 2021/194343

1. Make no order for the costs of the plaintiff in Proceedings No 2019/120911, No 2019/363217 and No 2021/194343 to the intent that the plaintiff will be responsible for her own costs.

Proceedings No 2020/112383 (Anna’s ACT family provision proceedings)

1. Order that the proceedings be dismissed.

Partially transferred Federal Circuit and Family Court of Australia Division 1 No CAC 1389/2020 proceedings

1. Order that the claims made by the plaintiff in her points of claim filed in this Court on 14 September 2021 be dismissed.

1. Consequently, order that the claims made by the plaintiff in that part of these proceedings that were transferred to this Court by order 1 made by Gill J of the Federal Circuit and Family Court of Australia Division 1 on 8 September 2021 be dismissed.

Costs orders in Proceedings No 2020/112383 and partially transferred Federal Circuit and Family Court of Australia Division 1 No CAC 1389/2020 proceedings

1. Order the plaintiff to pay the defendants’ costs of proceedings No 2020/112383 and of so much of the proceedings that were transferred to this Court by order 1 made by Gill J of the Federal Circuit and Family Court of Australia Division 1 on 8 September 2021 as was heard in this Court.

2. In respect of all costs in all proceedings incurred by the defendants in which their costs have been incurred in defending more than one of the proceedings such that the costs are not conveniently apportionable between the separate proceedings, order that the plaintiff be responsible for 1/5 of each such item of the defendants’ costs.

Proceedings No 2019/372281 (Kristina and Jurek’s proceedings)

1. Order that the proceedings be dismissed.

2. Order the plaintiffs to pay the defendants’ costs of the proceedings on the ordinary basis up to 24 September 2020 and on the indemnity basis thereafter.

3. In respect of all costs in all proceedings incurred by the defendants in which their costs have been incurred in defending more than one of the proceedings such that the costs are not conveniently apportionable between the separate proceedings, order that the plaintiffs be responsible for 1/15 of each such item of the defendants’ costs.

Defendants’ costs orders in Proceedings No 2019/120911, No 2019/363217, No 2021/194343, 2020/112383, No 2019/372281 and Federal Circuit and Family Court of Australia Division 1 No CAC 1389/2020

1. Order that the defendants be entitled to be paid or recover their costs of Proceedings No 2019/120911, No 2019/363217, No 2021/194343, No 2020/112383, No 2019/372281 and that part of the Federal Circuit and Family Court of Australia Division 1 No CAC 1389/2020 proceedings that was transferred to this Court on the indemnity basis, save for so much of the defendants’ costs as had been incurred but remained unpaid as at 27 March 2023 (being the date of an affidavit sworn by the defendants’ solicitor containing evidence of their costs) with the intent that the defendants will be responsible only for those costs that had been incurred but remained unpaid, the defendants being entitled to be paid their proper costs of the administration of the estate of the deceased incurred after 27 March 2023.

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Decision last updated: 10 October 2023