Oates v Oates (No 2)

[2025] NSWSC 929

Supreme Court

New South Wales

Medium Neutral Citation:

Oates v Oates (No 2) [2025] NSWSC 929

Hearing dates:

On the papers

Date of orders:

15 August 2025

Decision date:

15 August 2025

Jurisdiction:

Equity

Before:

Brereton J

Decision:

The parties are to confer about the form of final orders that will dispose of the proceedings and give effect to these reasons and are to notify my Associate as to the outcome of that conferral by 5pm on 22 August 2025.

Catchwords:

COSTS – party/party – where plaintiff successful in obtaining family provision orders – general rule that costs follow the event pursuant to UCPR r 42.1 – where defendant made an offer of compromise and a Calderbank offer in the alternative – where plaintiff submitted terms of the offers were unclear and ambiguous – where plaintiff submitted it was uncertain whether he had “beaten” defendant’s offers – where defendant’s offer of compromise fails to comply with UCPR r 20.26 – where it was unreasonable for plaintiff to reject defendant’s Calderbank offer – where defendant is to pay plaintiff’s costs up to date of the Calderbank offer on the ordinary basis – parties to bear their own costs after this period – defendant’s application for indemnity costs unsuccessful – plaintiff’s application for all his costs unsuccessful

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Succession Act 2006 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

AAI Ltd v Josipovic (No 2) [2013] NSWSC 1577

Alexiou v Alexiou [2024] NSWSC 1340

Berry v Nicholls [2016] NSWCA 272

Brian John Harris v Mark Harris (No 2) [2013] NSWSC 1157

Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586

Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392

Coregas Pty Ltd v Penford Australia Pty Ltd (No 2) [2013] NSWCA 11

Estate of May Berry, deceased [2016] NSWSC 130

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

Knox v Peacock (No 2) [2024] NSWSC 1372

Le v Angius; Angius v Angius (No 2) [2024] NSWSC 1417

Leichhardt Municipal Council v Green [2004] NSWCA 341

Liosatos v Liosatos [2025] NSWSC 44

Oates v Oates [2025] NSWSC 548

Pethers v Pethers (No 2) [2025] NSWSC 561

Scott v Scott (No 2) [2022] NSWSC 914

Sherborne Estate (No 2): Vanvalen v Neaves; Gilroy v Neaves (2005) 65 NSWLR 268; [2005] NSWSC 1003

Singer v Berghouse [1993] HCA 35; 114 ALR 521

Wild v Meduri; Meduri v Neal; Meduri v Meduri No 2 [2023] NSWSC 669

Texts Cited:

Nil

Category:

Costs

Parties:

Aaron Tasman Oates (plaintiff)
Jan Maree Oates (defendant)

Representation:

Counsel:
AF Stevens (plaintiff)
R Bianchi (defendant)

Solicitors:
Aubrey Brown Lawyers (plaintiff)
Ryan & Ryan Lawyers (defendant)

File Number(s):

2023/285256

Publication restriction:

Nil

JUDGMENT

1. I delivered judgment in these proceedings on 29 May 2025: see Oates v Oates [2025] NSWSC 548. These reasons assume familiarity with my earlier reasons.

2. I have not made final orders. I indicated at [137] of my earlier reasons that I would provide an outline of the orders I proposed to make and give the parties the opportunity to formulate precise orders that would give effect to my reasons. The outline of the matters to be addressed in the orders is at [138] of the reasons. In broad terms, I indicated that Aaron should have a family provision order for a lump sum that equates to 10% of the net proceeds of sale of the Bateau Bay property. I further indicated that Jan should have an opportunity to consider whether she would prefer to pay a lump sum payment in the amount of $120,000 now (or in the near future) rather than the obligation to pay 10% of the net proceeds upon the eventual sale of the property, which could be many years from now. I anticipated that she would make that decision before I made final orders. I recognised that Jan’s election could depend on what happened in relation to costs (see [138(6)]) and made some preliminary observations about costs.

3. The parties could not agree on the appropriate form of final orders. For reasons I do not need to set out, the parties agreed that I should rule on costs before I make final orders to otherwise give effect to my reasons. I have received written submissions and some evidence. The parties are content for me to rule on the papers.

4. For the reasons set out below, Jan should pay Aaron’s costs on the ordinary basis for the period up to and including 23 February 2024. For the period from 24 February 2024, there should be no orders as to costs. The consequence will be that Aaron and Jan will each bear their own costs for that period.

The starting point – Aaron should have his costs

5. The Court has a broad discretion as to the form of any costs order, under either or both s 98 of the Civil Procedure Act 2005 (NSW) or s 99 of the Succession Act 2006 (NSW).

6. As my earlier reasons reveal, Aaron will succeed in obtaining a family provision order. He will succeed in the litigation and the general rule is that he should have his costs: see Uniform Civil Procedure Rules 2005 (NSW) r 42.1.

7. In my earlier reasons, I recorded at [111] that Aaron seeks costs in the form of a specified gross sum in the amount of $120,000. My preliminary view (see [138(6)]) was that I would make an order to that effect. I made it clear that my view was preliminary because I had not heard argument and I was (as one would expect) unaware of any settlement offers made by Aaron or Jan that could inform the exercise of discretion in making orders as to costs.

8. There is evidence that up to 25 June 2025, Aaron’s total legal costs were $164,397.35 and that it was estimated that he would incur a further $12,000 to $16,000. It was again submitted on Aaron’s behalf that he should have his costs, capped at $120,000, to be paid out of the notional estate.

9. Jan opposes those costs orders. She proposes alternative costs orders arising from Aaron’s failures to accept her settlement offers. Jan does not contend, however, that if I concluded that Aaron should otherwise be entitled to costs, that it is inappropriate to order that he have those costs in the sum of $120,000, to be paid from the notional estate.

Jan’s offers to settle the proceedings

10. Jan made offers to settle the proceedings. Aaron also made offers, but on terms that were much more favourable to him than the orders that he will secure from the Court, and which are irrelevant for present purposes because they do not relevantly inform the exercise of discretion as to costs.

11. By letter dated 23 February 2024, Jan’s solicitors served what was said to be an offer of compromise made in accordance with UCPR r 20.26 and also made a separate offer expressed to be made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.

12. Jan’s (unsigned and undated) formal offer of compromise relevantly provided:

The plaintiff offers to compromise this claim on the following terms:

1.    Judgment for the plaintiff in the sum of $180,000.

2. This offer of compromise is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW).

3.    The offer of compromise expires 28 days from the date of this Offer of Compromise.

The statement that “the plaintiff offers” is an obvious mistake. The offer was made by the defendant. The offer was exclusive of costs (consistent with the requirements of UCPR r 20.26). If it was valid and accepted, Aaron would have been entitled to costs on the ordinary basis up to the time the offer was made: see UCPR r 42.13A(2).

13. The Calderbank offer made in the cover letter by which the offer of compromise was served, was said to be made “in the event your client does not accept the offer, and the offer of compromise is not a complying offer of compromise in accordance with” UCPR r 20.26. That offer was to settle the proceedings for $220,000 inclusive of costs. The letter stated that if the defendant achieves a better outcome in the proceedings than is reflected by the offer, she will seek indemnity costs. The offer was open for 28 days.

14. Jan relies on both the offer of compromise and the Calderbank letter to support a submission that the Court should order that she should pay Aaron’s costs for the period up to and including 22 February 2024, and that he should pay her costs on an indemnity basis thereafter. Aaron resists any order for indemnity costs.

Uncertainty about beating the offers

15. It was submitted for Aaron that it is uncertain whether he has “beaten” the offers, meaning that it is uncertain whether the outcome of the proceedings will result in a more favourable outcome for Aaron than he would have obtained from accepting the offers. That submission is made on the basis that the orders I contemplate involve the payment to Aaron of 10% of the net proceeds of sale of the Bateau Bay property, which may not occur for many years, and it is possible that Aaron will ultimately be paid more than $220,000. However, the reasons contemplate Jan having the option to pay Aaron $120,000 as an alternative to paying 10% of the net proceeds. I consider that a fair and reasonable basis to assess whether Aaron has beaten the offers is to consider the offers against the $120,000. On that basis, Aaron has done worse by taking the matter to judgment than he would have done by accepting either of the offers.

Whether the offer of compromise is valid

16. It was submitted for Aaron that the offer of compromise does not comply with the requirements of UCPR r 20.26. That rule relevantly provides:

(1)    In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.

(2)    An offer under this rule—

(a)    must identify—

(i)    the claim or part of the claim to which it relates, and

(ii)    the proposed orders for disposal of the claim or part of the claim, including, if a monetary judgment is proposed, the amount of that monetary judgment, and…

17. The contention is that the offer does not set out the proposed orders for disposal of the claim. In one sense, the offer does that because the proposed order is: “Judgment for the plaintiff in the sum of $180,000”. The difficulty is that this is not an order that could be made in response to Aaron’s claim in these proceedings. It is not an offer that could be accepted and entered (see UCPR r 20.27(3)). An order that there be judgment for the plaintiff in a given sum of money is not an order that could properly be made in these proceedings.

18. Section 65 of the Succession Act relevantly states:

(1) A family provision order must specify—

(a)    the person or persons for whom provision is to be made, and

(b)    the amount and nature of the provision, and

(c)    the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and

(d)    any conditions, restrictions or limitations imposed by the Court…

Any orders disposing of the claim would have to comply with this section. Moreover, it was also necessary for Aaron to secure a notional estate order over designated property, because there were insufficient assets in the estate to accommodate any family provision order. The proposed order would have to identify that property with precision.

19. While there is no doubt that the UCPR provisions concerning formal offers of compromise can be utilised in the context of family provision orders, the “emphatic” language of r 20.26 and the character of family provision orders means that considerable care is often required in formulating a compliant offer of compromise in family provision proceedings: see AAI Ltd v Josipovic (No 2) [2013] NSWSC 1577 at [33]; Alexiou v Alexiou [2024] NSWSC 1340 at [152]; Pethers v Pethers (No 2) [2025] NSWSC 561 at [58]. The requirements of UCPR r 20.26 were considered in some detail in a case that has some similarity to the present one in Scott v Scott (No 2) [2022] NSWSC 914 at [59]-[97]. In that case, the failure to specify the fund from which further provision was to be made was fatal to the validity of the offer of compromise.

20. The offer of compromise in this case propounded an order that could not be made by the Court in the proceedings and failed to identify and provide for any orders as to notional estate (if they were to be made). That was a failure of substance and means that the offer of compromise did not meet the requirements of UCPR r 20.26. The cost consequences contemplated by UCPR r 42.15 are not engaged.

The Calderbank offer

21. The principles to be applied in response to a Calderbank offer have been stated on many occasions. The high level point is that a party who has achieved a more favourable outcome in a judgment than was offered by way of settlement does not have a prima facie entitlement to indemnity costs, but the offer is a circumstance that can be taken into account when exercising the discretion in making a costs order, and in deciding whether to make an order for indemnity costs in favour of the offeror. A useful collection of relevant authorities given in the context of a case that included an application for a family provision order is found in Wild v Meduri; Meduri v Neal; Meduri v Meduri No 2 [2023] NSWSC 669 at [57]-[62].

22. In a family provision case which has been unsuccessful, it has been said that the exercise of discretion in relation to costs will sometimes require “liberality and discrimination”: Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 at [138]-[139]. Liberality and discrimination may be required in the exercise of discretion in the context of an application for indemnity costs in a family provision case.

23. Various arguments were raised on behalf of Aaron to support the submission that I should not accede to Jan’s application for indemnity costs.

Terms of the offer

24. There is authority that if a party wishes to rely on a Calderbank offer, the terms of the offer should be clear and unambiguous: Coregas Pty Ltd v Penford Australia Pty Ltd (No 2) [2013] NSWCA 11 at [12]; Knox v Peacock (No 2) [2024] NSWSC 1372 at [11]. Aaron contends that the offer made to him was ambiguous and unclear.

25. While the offer of compromise did not comply with the formal requirements of UCPR r 20.26, the terms of the Calderbank offer were not unclear or difficult to understand. The offer clearly contemplated that Jan would pay Aaron $220,000 to settle the whole of the matter and this was inclusive of costs. It is true that the offer did not specify the orders to be made. If the offer was accepted, the mechanics could easily be achieved by Jan paying $220,000 to Aaron and the proceedings being dismissed with no order as to costs. There was no necessity to mention provision or state where it was to come from, or to mention notional estate.

26. Aaron also relies on the fact that the Calderbank offer is said to be “equivalent or similar” to the offer of compromise. This does not create uncertainty. The offer of compromise was for $180,000 exclusive of costs. The Calderbank offer was for $220,000 inclusive of costs. The plaintiff’s costs to the mediation (held on 8 February 2024) were estimated to be $35,000. Under the offer of compromise, Aaron would be entitled to recover his costs up to the time of the offer. The Calderbank offer was equivalent or similar to the offer of compromise because the two offers would result in Aaron receiving an equivalent or similar amount.

27. The offer was sufficiently clear and unambiguous such that it was not reasonable to reject it on account of lack of clarity or ambiguity.

Other reasons to reject the offer

28. It was submitted for Aaron that there were various other reasons why it was reasonable to reject the offer.

29. At the date the offer was made, the evidence had not closed, although the parties had served their principal affidavits in chief. Aaron’s submissions focus on the fact that the evidence served on behalf of Jan did not address what I described at [73] of my reasons as Steven’s “imprecisely formulated testamentary intention”, which included that if he predeceased Jan, the Bateau Bay property would go to Jan by way of survivorship but she would provide for Aaron in some way by her will. Some evidence of this intention came from what was said at a meeting held on 12 October 2022 between Jan, Ashleigh and Mr McGrath, which is addressed in my reasons at [68]-[69]. Aaron’s submissions effectively allege that Jan was in breach of “a general duty” to assist the Court by failing to disclose this conversation, or the substance of Steven’s intention, in her evidence. At trial, Jan’s evidence was that she hardly recalled the meeting with Mr McGrath, which took place just over a week after Steven’s death. I do not accept that there was any disentitling conduct on Jan’s part for failing to address this meeting in her evidence in chief. The evidence about the meeting emerged from documents produced by Mr McGrath. I do not consider that criticism can be levelled at Jan for failing to include this matter in her affidavit evidence (or in Ashleigh’s affidavit).

30. Jan’s evidence in chief (filed on 2 February 2024) was that Steven wanted his share of the estate to go to Aaron’s children. She maintained that evidence under cross-examination. I concluded at [71] that Steven had not formed a firm view to that effect. I did not reject Jan’s evidence about Steven speaking in terms of his “share” going to Aaron’s children in due course, but concluded that it was Steven’s imprecisely formulated intention that his “share” would go to Aaron in due course. Again, I reject any suggestion that there was any kind of breach of duty or disentitling conduct on Jan’s part for failing to disclose something to the Court.

31. It was also submitted that the evidence about Steven’s testamentary intentions that emerged after the offer was made (principally the evidence about the 12 October 2022 meeting) changed the reasonable assessment by Aaron of his prospects in the proceedings for the worse. The submission was that at the time of the offer, Aaron thought he was “facing a claim of a complete failure of moral duty by the deceased”. This, it was submitted, was a stronger claim than one where “the deceased actually held a considered position of wanting to provide some provision to the plaintiff”. There are several problems with this submission. First, Aaron was not facing a claim, he was the one making a claim. Second, it is an overstatement to say that Steven had “a considered position”. I concluded that he had an imprecisely formulated testamentary intention. Third, Steven’s moral duty was scarcely accommodated by his imprecisely formulated testamentary intention which he did nothing to formalise. Fourth, if anything, the evidence about Steven’s testamentary intention made Aaron’s case stronger, not weaker. Aaron could not reasonably have considered that his prospects in the proceedings worsened when evidence emerged that Steven had some kind of notion that Aaron would one day see some share of the estate. The evidence did not bring about a change in the case such that it cannot properly be asked whether rejection of the offer was unreasonable: see Brian John Harris v Mark Harris (No 2) [2013] NSWSC 1157 at [30].

32. Aaron also relies on authority that when assessing whether it was reasonable to reject a Calderbank offer, the Court may take into account, in favour of the offeree, that the outcome of family provision cases is unpredictable because the assessment of a claim will require a subjective assessment and different judges could reasonably come to different views: Sherborne Estate (No 2): Vanvalen v Neaves; Gilroy v Neaves (2005) 65 NSWLR 268; [2005] NSWSC 1003 at [56]-[58]; Haertsch v Whiteway (No 2) [2020] NSWCA 287 at [11].

33. Aaron relied on the observations by Meek J in Pethers v Pethers (No 2) at [56] that it is notorious in succession law that predictability of the outcomes of family provision claims cannot be quantified by a party’s legal advisors with anything like the degree of certainty that applies in other areas of law. The discretionary considerations that arise in a family provision case will often make predictions difficult, but in my view the degree of certainty that can be achieved in other areas of civil law can vary considerably. I would not proceed on the basis that outside family provision cases, the outcomes in civil cases can usually be predicted with a high degree of certainty. Most civil litigation is risky and outcomes are often highly uncertain.

28. It seems to me that the uncertainty of outcomes in family provision cases can cut both ways. The uncertainty of the outcome of any proceedings may be a reason why an offeree should be more, not less, inclined to accept a settlement offer. The greater the risk of an outcome, the more that a sum certain should be attractive. The uncertainty of the outcome of family provision proceedings may make it more unreasonable for an offeree to have rejected an offer. Moreover, many family provision cases involve relatively modest amounts and settlement is strongly to be encouraged. The making of settlement offers should be encouraged, because they promote settlement: see Leichhardt Municipal Council v Green [2004] NSWCA 341 at [14]. Litigants will be encouraged to make offers if they perceive that there is a real prospect that an offer, if rejected, will improve their position as to costs. Litigants will be encouraged to accept offers if they perceive that rejection may place them in a worse position when it comes to costs. Risk seeking litigants who reject a settlement offer and choose to pursue a claim over a modest estate should expect that the decision will be highly relevant to the exercise of discretion about costs.

29. The actual estate in this case was nominal. I concluded at [27] of my reasons that the potential notional estate was worth about $843,000. This case did not concern a large notional estate. At the time of the offer in February 2024, Aaron had incurred about $35,000 in legal costs. His costs to 25 June 2025 were about $165,000. Jan’s costs to the time of the offer were about $41,000 and are now at about $153,000. The parties incurred legal expense of nearly $250,000 since the offer was made. That is a significant sum having regard to what was at stake.

30. The Calderbank offer did not include an explanation or reasons why the plaintiff should accept the offer, which can be a factor taken into account in determining whether rejection was unreasonable: Le v Angius; Angius v Angius (No 2) [2024] NSWSC 1417 at [59]. I do not see this as a matter of much significance in this case. The offer was made shortly after a mediation. Aaron had the benefit of legal advice and cannot be described as unsophisticated. He made an offer of his own on 16 February 2024. I would infer that for the purposes of the mediation and the making of an offer, Aaron took advice about his prospects. I do not think a statement of reasons explaining why Aaron should accept the offer would have rendered it more compelling to him.

The effect of an adverse costs order on Aaron

37. It is relevant to consider whether the order will derogate from the purpose of making a family provision order in the first place: Estate of May Berry, deceased [2016] NSWSC 130 at [70]. In that case, Lindsay J concluded that the plaintiffs should have their costs paid out of the estate on the ordinary basis notwithstanding that they did not do better than what was offered by 2 settlement offers made by the defendants. The Court of Appeal discerned no error of principle in his Honour’s reasons: Berry v Nicholls [2016] NSWCA 272 at [8] and [12]. It was submitted for Aaron that the costs order sought by Jan would derogate from the purpose of making a family provision order in his favour.

38. In my earlier reasons, I concluded that there should be a family provision order in Aaron’s favour and contemplated that one way to make provision was for an order that he be paid $120,000 out of the notional estate. I also provisionally anticipated that he would obtain a costs order in the amount of $120,000. The effect of Jan’s proposed orders would be:

1. Aaron would obtain a costs order for his costs up to 22 February 2024, calculated on the ordinary basis. At that time, Aaron’s costs on an indemnity basis were likely to be in the order of $35,000. His costs on the ordinary basis would probably be less than $30,000.

2. Aaron would pay Jan’s costs from 23 February 2024 on an indemnity basis, which are $112,603.26 (and counting).

39. The net effect is that while Aaron would enjoy a family provision order worth $120,000 in value, he would likely be left considerably worse off overall because of his obligations to pay his own fees and Jan’s fees. I concluded that Aaron is deserving of a family provision order in this case, including because of his medical needs. Yet the outcome sought by Jan would probably leave him much worse off.

Evaluation

40. Having regard to all these matters and the “overall justice of the case” (see Singer v Berghouse [1993] HCA 35; 114 ALR 521 at 522 per Gaudron J), I have concluded that I should order that Jan pay Aaron’s costs on the ordinary basis up to and including 23 February 2024 (being the date of the Calderbank offer) and that there be no order as to costs from 24 February 2024. That would mean that Aaron would bear his costs from that date and Jan would bear her costs of the proceedings.

41. I conclude that the Calderbank offer was clear and contained no material ambiguity. I conclude that it was unreasonable for Aaron not to accept it. While it may have been difficult for Aaron and his advisors to predict the outcome of the litigation, I do not consider that to be a particularly compelling reason to reject the offer. The uncertainty was a reason to accept the offer. The relatively modest amount that was in contest when set against the likely expense of litigating was another reason to accept the offer. I do not think that there was material evidence served after the offer was made that reduced Aaron’s prospects in the litigation. In my view, if Jan cannot secure some significant costs advantage from her settlement offer in this case, a litigant in her position might reasonably ask whether there is any point in making an offer at all.

42. However, an order that Aaron pay Jan’s costs on an indemnity basis would derogate from the purpose of the family provision order that he has shown should be made in this case. His father died intestate and did not take steps to make proper provision for Aaron. His father had some kind of intention to do so, but failed. While there was real compromise in Jan’s offer, her case at trial was that Aaron should receive no family provision order. She maintained a position at trial that failed. Her compromise would have been much greater and her claim for indemnity costs would have been stronger if Aaron’s claim failed.

43. The consequence of this order is that Aaron’s ultimate financial success in these proceedings will be diminished compared with the outcome had there been no Calderbank offer. The outcome for Jan, flowing from her Calderbank offer, will be enhanced. That is the reasonable outcome.

Orders

44. The parties are to confer about the form of final orders that will dispose of the proceedings and give effect to these reasons and are to notify my Associate as to the outcome of that conferral by 5pm on 22 August 2025.

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Decision last updated: 15 August 2025