Vella v Vella; Vella v Vella (No 2)

The proceedings in the case of Vella v Vella; Vella v Vella (No 2) involved two related family provision claims, one against the estate of the deceased and the other against the deceased's will. The unsuccessful parties were required to pay costs to the successful parties, who relied on several offers of compromise and Calderbank offers to support their costs application. The unsuccessful parties argued that the offers were invalid, either because they did not comply with the requirements of Uniform Civil Procedure Rules 2005 (NSW) r 20.26 or because they were treated as Calderbank offers, which are conditional on the recipient's acceptance. The court was required to determine whether it was unreasonable for the unsuccessful parties not to accept the offers and whether the unsuccessful parties were liable for the costs incurred by the successful parties.

The court considered the nature and purpose of offers of compromise and Calderbank offers, and the principles governing the assessment of costs in family provision proceedings. The court found that the unsuccessful parties were not unreasonable in not accepting the offers, as they were either invalid or conditional on acceptance. The court also found that the unsuccessful parties were liable for the costs incurred by the successful parties, as they had not demonstrated any special circumstances that would excuse them from paying costs. The court rejected the argument that the unsuccessful parties should only be liable for the costs that were reasonably incurred in pursuing the offers of compromise.

The court held that the unsuccessful parties were liable for the costs incurred by the successful parties, but the quantum of those costs was to be assessed on an indemnity basis rather than a party/party basis. The court found that the successful parties' costs were excessive, and reduced the costs by 20%. The court also held that the unsuccessful parties were not liable for the costs of the Calderbank offers, as they were conditional on acceptance and therefore not properly before the court. The final orders of the court were that the unsuccessful parties were liable for the costs of the proceedings, but the quantum of those costs was to be assessed on an indemnity basis and reduced by 20%.