Bassett v Bassett

1. [1]

   THE COURT: The appeal and application for leave to cross-appeal before the Court are in from a decision of the Chief Judge in Equity (the primary judge) in relation to the Estates of the late William Edward Bassett (Bill) who died on 22 January 2014, aged 85, and the late Elaine Jill Bassett (Jill) who predeceased Bill, having died on 21 March 2007: see Bassett v Cameron [2021] NSWSC 207 (the principal judgment or PJ); Bassett v Cameron (No 2) [2021] NSWSC 419 (the costs judgment or CJ). In these reasons, we refer to all family members by their first names, without intending any disrespect.

2. [2]

   Bill and Jill, who married in 1953, were farmers and conducted their farming business through a series of rural partnerships which will be considered in further detail later in these reasons. Bill and Jill had four children, Merilyn born in 1955, Susan (Sue) born in 1957, Geoffrey (Geoff) born in 1960 and Bruce born in 1965. Of the four children, Geoff was the only child to take up a career as a farmer and worked alongside his parents in varying ways over the years.

3. [3]

   At the time of his death, Bill had a 50% share in a rural property near Inverell, known as “The Springs”. Geoff owned the other 50% interest in that property.

4. [4]

   At the time of his death, Bill’s Estate for probate purposes had a gross value of $3,474,518.83. A 2018 desktop valuation of The Springs that was in evidence before the primary judge implied that by the time of that valuation at least, the overall value of Bill’s Estate had increased to $4,274,518.00, as was noted at CJ [291].

5. [5]

   Under Bill’s Will, Geoff received a bequest comprising Bill’s:

6. [6]

   Merilyn, Sue and Bruce were residuary beneficiaries under Bill’s Will. They had also been the residuary beneficiaries under Jill’s Will.

7. [7]

   Bill and Geoff were the executors of Jill’s Estate. Sue was and is the executrix of Bill’s Estate. Probate of Bill’s Estate was granted on 18 December 2014. It has been partly distributed to the residuary beneficiaries: PJ [265].

8. [8]

   Jill’s Estate had been fully administered prior to Bill’s death.

Procedural background

1. [9]

   On 21 January 2015, shortly after the grant of probate of Bill’s Estate, Geoff filed a Statement of Claim naming Sue as defendant in her capacity as executrix of Bill’s Estate. In this relatively simple Statement of Claim, Geoff articulated his claim to be entitled to Bill’s 50% interest in The Springs based upon principles of proprietary estoppel (the estoppel claim). As originally formulated and up until immediately before commencement of the trial, the estoppel claim was based upon a series of representations, the initial one of which was said to have been made by Bill to Geoff in 1984. At trial, the estoppel claim was principally founded upon a representation said to have been made in 2009.

2. [10]

   In his Statement of Claim, Geoff alternatively sought provision or further provision from Bill’s Will under the Succession Act 2006 (NSW) (the family provision claim) but the Statement of Claim did not particularise what provision was sought. Sue denied Geoff’s entitlement to the relief claimed in the Statement of Claim in an Amended Defence filed on 22 July 2015.

3. [11]

   In November 2016, Merilyn and Bruce filed a Notice of Motion which led to their appointment to represent Jill’s Estate in the proceedings, pursuant to consent orders made on 3 February 2017. The orders made on that occasion by Stevenson J were as follows:

4. [12]

   Merilyn and Bruce filed the First Cross-Claim on 16 February 2017, naming Geoff and Sue as first and second cross-defendants. The First Cross-Claim sought relief on behalf of Jill’s Estate by reference to some 10 discrete claims relating to its administration by Bill and Geoff. Sue was sued in her capacity as executrix of Bill’s Estate. Geoff filed a detailed Defence to the First Cross-Claim. Sue filed a far less detailed Defence which either denied or did not admit particular claims.

5. [13]

   On 31 August 2018, Geoff filed a further claim (the Second Cross-Claim) by which he sought contribution from Bill’s Estate for any liability (including any costs liability) he may be found to have under the First Cross-Claim relating to his administration of Jill’s Estate. Sue, as executrix of Bill’s Estate, was named as the defendant to the Second Cross-Claim.

6. [14]

   On 27 May 2019, Pembroke J made orders, pursuant to a Notice of Motion dated 14 March 2019 and filed on behalf of Merilyn and Bruce, joining Bruce and Merilyn as defendants to the amended Statement of Claim and as cross-defendants to the Second Cross-Claim, and appointing them to represent Bill’s Estate in defending Geoff’s amended Statement of Claim and the Second Cross-Claim. His Honour also ordered Sue to pay Merilyn and Bruce’s costs of the Notice of Motion. His Honour, however, reserved the question as to whether Sue was entitled to be indemnified from Bill’s Estate in respect of those costs (the reserved costs question).

7. [15]

   On 1 July 2019, Merilyn and Bruce, having been appointed by Pembroke J to represent Bill’s Estate in respect of Geoff’s estoppel and family provision claims, filed an Amended Defence to those claims.

8. [16]

   The proceedings at first instance were heard over seven days in August 2020 with the principal judgment of some 288 pages delivered on 12 March 2021. The costs judgment of some 106 pages was delivered on 27 April 2021 following the receipt of written submissions. The length of those judgments in part reflects some of the complexity of the claims, and the volume of evidence filed.

Outcomes at first instance and issues on appeal

1. [17]

   At first instance, Geoff was unsuccessful in the estoppel claim against Bill’s Estate for a 50% interest in The Springs, and Merilyn and Bruce were wholly unsuccessful in their various challenges to the administration of Jill’s Estate which were pursued in the First Cross-Claim. If successful in the estoppel claim, Geoff would have secured 100% ownership of The Springs which was valued for probate purposes at $1.9 million (extrapolating a 50% valuation of $950,000) but to which a 2018 desktop valuation, in evidence at first instance, assigned an estimated value of $3.5 million.

2. [18]

   Geoff was successful, however, in the family provision claim made under s 59 of the Succession Act. In this respect, the primary judge ordered that, in addition to the bequest referred to in [5] above, there be further provision out of Bill’s Estate in favour of Geoff:

3. [19]

   This order left Geoff with a 75% interest in The Springs and Merilyn, Sue and Bruce with a 25% interest between them (together with a one-third share each of the balance of Bill’s Estate other than the specific bequest to Geoff).

4. [20]

   There is no appeal by Geoff from the primary judge’s rejection of his estoppel claim. To the extent that it has continuing relevance to the proceedings before this Court, such relevance lies in the costs that were involved in its prosecution and the impact of those costs on the various parties and on Bill’s Estate.

5. [21]

   In the costs judgment, notwithstanding his failure on the estoppel claim, Merilyn and Bruce were ordered to pay Geoff’s costs of this claim from 1 July 2019 (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated) on the indemnity basis. This was accompanied by an order that they be indemnified out of Bill’s Estate after 1 June 2019 “but only as assessed on the ordinary basis (with the intent that they bear personally the difference between the indemnity costs ordered and costs on the ordinary basis)”. The reason for this order related to Merilyn and Bruce’s rejection of Offers of Compromise made on behalf of Geoff on 31 May 2019 (the Offers of Compromise). The primary judge’s finding that the Offers of Compromise complied with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) was challenged on appeal. That issue has significant financial consequences for Merilyn, Bruce and Geoff.

6. [22]

   The principal (but not sole) issue before this Court related to the correctness of the primary judge’s order for family provision in Geoff’s favour, pursuant to s 59 of the Succession Act. By ground 11 of their Notice of Appeal, Merilyn and Bruce have also appealed against the primary judge’s rejection of claim 6 in the First Cross-Claim, which they brought on behalf of Jill’s Estate, and which related to its administration by Bill and Geoff.

7. [23]

   In respect of the First Cross-Claim, which was dismissed in its entirety, the primary judge ordered that Merilyn and Bruce pay Geoff’s costs up to 31 May 2019 on the ordinary basis and from and including 1 June 2019 on the indemnity basis (with there to be no indemnity out of Bill’s Estate for those costs). Again, this order was made by reference to Merilyn and Bruce’s rejection of the Offers of Compromise.

8. [24]

   On the reserved costs question, relating to Sue’s prima facie entitlement to be indemnified out of Bill’s Estate for her costs of having opposed Merilyn and Bruce’s appointment to represent Bill’s Estate in defending Geoff’s estoppel and family provision claims, the primary judge held that Sue was not so entitled because her resistance to the Notice of Motion caused costs unnecessarily to have been incurred. That finding is sought to be challenged by Sue on appeal, pursuant to the leave of the Court if necessary: see [204]–[226] below.

9. [25]

   It follows that the issues raised on appeal in respect of the various claims may be identified as follows:

Costs of the proceedings and their significance

1. [26]

   Before turning to consider the background to the proceedings in more detail, it is necessary to note at the outset that one matter that loomed large over the hearings both at first instance and on appeal was the very significant costs which had been incurred by the parties, even prior to the commencement of the seven-day hearing before the primary judge.

2. [27]

   On 4 August 2020, approximately a fortnight prior to the commencement of the hearing, Geoff filed an updating Affidavit which deposed to the fact that his costs to date were in the sum of $1,201,658.28. The primary judge recorded that Merilyn and Bruce’s costs, whilst not as great, were still very substantial. It is to be emphasised that these estimates did not include the costs of the seven-day trial or of the immediate pre-trial preparation. In this context, senior counsel for Geoff observed in the opening paragraph of his opening submissions before the primary judge that “the costs are on any view extraordinary”.

3. [28]

   Following delivery of the principal judgment, the primary judge noted that the total costs of the respective parties were in the order of $2.5–3 million: CJ [291]. Her Honour rightly observed that that was to be deplored. She went on to observe, however, that “in the present case, it seems to me that the fault lies on all sides”. At CJ [294], the primary judge also made the sobering observation that:

4. [29]

   As will be seen, the impact or potential impact of these extraordinary costs on both the size of Bill’s Estate and the financial position and needs of the parties in their personal (as opposed to representative) capacities played a role in the primary judge’s assessment of the family provision claim and also featured in a number of the arguments advanced on appeal.

5. [30]

   The costs at first instance impacted Geoff’s claim for family provision in two ways. First, the likely adverse costs consequences of Geoff’s failure in his estoppel claim, assessed as the time of the making of the order for family provision, strongly influenced the primary judge’s assessment of whether adequate provision had been made in Bill’s Will for Geoff’s proper maintenance and advancement. Secondly, as the primary judge observed to senior counsel for Merilyn and Bruce in the course of closing submissions:

6. [31]

   Her Honour’s observation was undoubtedly correct. As will be seen, however, somewhat paradoxically, it meant that the basis upon which her Honour’s award of family provision to Geoff was predicated, namely that he not only intended but would continue to farm The Springs and needed the additional provision as ordered to be able to do so, was defeated. This is a matter to which we return in our consideration of the appeal against the primary judge’s family provision order.

7. [32]

   But the topic of costs (which have necessarily continued to mount as a result of the appeal and application for leave to cross-appeal in which all parties were represented by senior counsel) cannot be left without noting that this case stands as yet another depressing although salutary example of the manner in which claims on the bounty of a deceased parent by adult siblings can be ruinous in a host of ways, as has frequently been commented upon by judges of the Equity Division and in this Court: see, for example, Neale v Neale [2015] NSWCA 206 at [36]; Harris v Harris [2018] NSWCA 334 at [8]; Sung v Malaxos (No 2) [2015] NSWSC 290 at [12]–[13]; Olsen v Olsen [2019] NSWSC 217 at [48]; Katramados v Hasapis (No 2) [2018] NSWSC 1604 at [42]; Clarke v Croucher [2015] NSWSC 230 at [38]; and Poche v Poche [2020] NSWSC 835.

8. [33]

   It is not merely the financial burden of the litigation. In the present case, family relations have become embittered, unlikely ever to be repaired, and at least two of the four siblings gave evidence as to the seriously adverse health consequences they had suffered as a result of the proceedings. One also attributed a relationship breakdown to the pressure of the proceedings.

9. [34]

   The powerful corollary of this is the desirability of early mediation and the need for parties to appreciate at the outset of such proceedings the importance of compromise and the potentially devastating consequences of attritional internecine warfare through the courts. This Court cannot ordinarily prevent parties seeking relief under the Succession Act but, as the primary judge observed at the end of the costs judgment (see [348]), parties in family provision cases should not proceed on the assumption that their costs will necessarily be indemnified out of the estate nor should parties assume, when representing an estate but ultimately in furtherance or defence of their own personal interests, that they will recover their costs even if the claim is unsuccessful.

10. [35]

    Practitioners in this area should ensure that their clients are fully cognisant of these hard realities when considering whether to embark upon family provision litigation, or the desirability of compromise.

Further Background

1. [36]

   It is necessary to provide some further background before considering the primary judge’s decision and dealing with the issues noted in [25] above.

2. [37]

   The Springs was purchased by Bill and Jill (as to two 25% shares) and by Geoff (as to a 50% share) on 29 November 1984. At the time of his death, Bill had a 50% interest in The Springs as well as in “Hurricane Hill”, which was farmland contiguous to The Springs. Geoff owned the other 50% interest in Hurricane Hill. Bill acquired his second 25% share in the Springs, taking his ownership up to 50%, following Jill’s death in circumstances explained more fully below.

3. [38]

   Another nearby property, “Pindaroi”, was acquired by Geoff and his ex-wife Kaye from Bill and Jill in or around 1998, with a contract for sale signed by the parties on 17 June 1998. The circumstances of this acquisition are relevant to arguments which were made in the proceedings and indeed which had been made amongst the siblings themselves prior to Bill and Jill’s deaths. In short, the evidence suggested that, but for a contribution of $200,000 paid over some 10 years from around 1998 (see PJ [82]), Pindaroi was effectively gifted to Geoff by his parents and was referred to by various family members as Geoff’s “early inheritance”. Geoff sold Pindaroi for $4,200,000 in 2009. Geoff and Kaye separated in or around 2008 and the sale of Pindaroi was bound up in that separation.

4. [39]

   Subsequent to his divorce from Kaye, Geoff commenced a relationship with Fiona and the couple moved to Dorrigo, approximately 200 kilometres from The Springs, in October 2015 (after Bill’s death), having jointly purchased “Fernbrook”, a farming property of approximately 114 hectares, for $1.5 million. Geoff and Fiona’s relationship apparently ended in mid-2020, shortly before the hearing of the proceedings at first instance.

5. [40]

   The notion that Pindaroi represented Geoff’s “early inheritance” was supported by Merilyn’s evidence, as referred to at PJ [85], to the effect that:

6. [41]

   It is also supported by the fact that on 17 June 1998, the same day as the transfer of Pindaroi to Geoff and Kaye, Bill and Jill executed mirror wills which no longer included a testamentary gift to Geoff of their interests in Pindaroi but replaced it with a gift of the plant, stock and equipment on that property.

7. [42]

   Jill executed her last Will on 17 June 1998, the same day that Pindaroi was transferred to Geoff and Kaye. Under that Will, Geoff was bequeathed Jill’s share or interest in all farming plant and equipment, machinery and implements situated on and used in connection with the running of Pindaroi and a “one quarter share of my share in the remaining part of the real estate purchased by me and my said husband from the Estate of the late James Lauder comprising 18.69 hectares or thereabouts and being Lots 1 to 32 inclusive (excluding Lot 8) in Deposited Plan 876448”. Further, in the event that Bill predeceased her, Jill released and forgave Geoff in respect of “any monies owing [by Geoff or Kaye] jointly or severally to [Jill] … at the date of [her] death”. This effectively entailed the forgiveness of Geoff’s indebtedness to his mother in relation to his “purchase” of Pindaroi. On 28 December 2007, Merilyn, Sue and Bruce, as residuary beneficiaries of Jill’s Estate, executed a Deed of Release in relation to Geoff’s debt to the Estate in the sum of $69,500.00.

8. [43]

   Most significantly for present purposes, by cl 7 of her Will, Jill gave, devised and bequeathed to Merilyn, Sue and Bruce (but not Geoff) the residue of her property in equal shares and as tenants-in-common. A significant component of that property was Jill’s 25% interest in The Springs. Following Jill’s death, Bill indicated to Merilyn, Sue and Bruce that he wished to buy them out of the shares in The Springs that they had inherited from Jill. This 25% interest was transferred to Bill for consideration of $250,000, although Merilyn and Bruce claimed in the proceedings that only $200,000 was paid to Jill’s Estate.

9. [44]

   Each of Merilyn, Sue and Bruce ultimately received a sum of $595,000 from Jill’s Estate, whilst Geoff received $214,554.68.

10. [45]

    In March 2009, Bill revised his Will as made on 17 June 1998, making the bequest to Geoff as set out in [5] above and nominating Merilyn, Sue and Bruce as residuary beneficiaries. The key difference for present purposes between the two wills is that, in the former (as with Jill’s mirror will), Geoff was bequeathed Bill’s “share or interest in all farming plant and equipment machinery and implements” specifically situated on and used in connection with “the running of the property ‘Pindaroi Station’”, in addition to a one-quarter share in “the remaining part of the real estate purchased by [Bill] and [Jill] from the Estate of the late James Lauder”. The 2009 Will, on the other hand, omitted reference to any real estate and expressly excluded from the bequest to Geoff “any real estate which I may own with [Geoff] as at the date of my death”.

11. [46]

    The structure of each of Bill’s 1998 and 2009 Wills was consistent with the notion that Geoff had received his early inheritance via Pindaroi. This was powerfully reinforced by the plain and express statement that the bequest to Geoff of any partnership assets excluded any real estate that Bill owned with Geoff.

12. [47]

    The primary judge referred to a number of discussions between family members, in the period following Jill’s death in 2007 and leading up to Bill’s (unexpected) death in January 2014, regarding Bill’s testamentary intentions. In particular, the primary judge referred to a family meeting at Sue’s home in Tamworth at Christmas in 2012, and, at PJ [154], her Honour set out the following conversation as deposed to by Bruce:

13. [48]

    The primary judge also set out the following passage from the cross-examination of Sue in relation to this discussion, at PJ [156], as follows:

14. [49]

    There was also evidence of a “heated discussion” between Bruce, Edwina (Bruce’s wife) and Bill in August 2013, overheard by Sue, concerning Bill’s assets, his business dealings with Geoff and his Will. Sue, whose evidence the primary judge accepted (her Honour having reservations in respect of Geoff and Bruce’s evidence because of their self-interest), made reference to a conversation with her father the following day in which she recalled him saying that “if I thought there would be fights over my will I might just leave it all to the grandchildren” and that Bruce and Edwina “don’t understand and won’t listen. I don’t see it the same way” (see PJ [159]).

15. [50]

    Bruce’s account of his conversation with Bill on the previous day included the following:

16. [51]

    The primary judge noted (at PJ [163]) that by at least October 2013, Bruce and Edwina were taking steps to ascertain what financial provision Geoff had received from his parents, including how much had been received from the sale of Pindaroi.

17. [52]

    A snapshot of the position was conveyed in an email sent by Bruce to Sue on 3 October 2013 which was as follows:

18. [53]

    Sue, who the primary judge accepted as a witness of truth (see [49] above), gave important evidence as to a number of conversations she had with Bill in Coffs Harbour between 6 and 13 December 2013. One conversation was in these terms:

19. [54]

    A slightly later conversation during the same week (the Coffs Harbour conversation), which assumed great significance in the primary judge’s reasoning in respect of the family provision claim, was in these terms:

20. [55]

    The primary judge noted (PJ [391]) that Sue held a genuine belief as a result of this conversation that “as at late 2013, Bill was considering changing his Will, in circumstances where he was concerned that Geoff might not be able to continue farming The Springs if he had to buy out his siblings’ share of the property” (emphasis added).

21. [56]

    Sue also gave evidence of a conversation with Bruce’s wife Edwina on 29 December 2013 at Inverell while she was visiting Bill. The conversation was as follows:

22. [57]

    Bill was unexpectedly hospitalised on 16 January 2014 and died six days later.

The primary judge’s reasoning on the family provision claim

1. [58]

   Much of the primary judge’s lengthy principal judgment was directed to Geoff’s unsuccessful estoppel claim, although the factual matters considered by her Honour in relation to that claim were not wholly divorced from matters relevant to the family provision claim. Having said that, her Honour estimated that, as between the estoppel and family provision claims, the costs relativity was approximately 60:40: CJ [300]. The parties did not take issue with this estimate.

2. [59]

   At PJ [932]–[934], the primary judge made reference to relevant case law and principles as follows:

3. [60]

   The primary judge referred to Geoff’s evidence which was to the effect that he had net assets at the time of the hearing at first instance with an estimated value of $2,124,240, although this estimate was based upon a 2015 probate valuation of a 50% interest in The Springs at $950,000, whereas a 2018 desktop valuation appraisal in evidence before the primary judge and used by her Honour to value Bill’s 50% interest in The Springs valued that interest at $1.75 million. On this basis, the value of Geoff’s net assets was $2,924,240.

4. [61]

   The primary judge noted that Geoff’s income varied from month to month depending on the revenue received by his consultancy business. Earlier in the principal judgment, her Honour had noted that in or around 2000, Geoff had started an agricultural consultancy business through which he “provided advice to clients located in New South Wales, Queensland, Victoria and South Australia in relation to grain cropping, pastures, livestock, cell grazing, horses, orchards and sugar cane”. Whilst he initially conducted this business with his former wife Kaye, from 2009 he had operated as a sole trader and, since 2016, through a company known as Farm Mojo Pty Ltd (Farm Mojo).

5. [62]

   Her Honour noted that the notice of assessment issued to Geoff by the Australian Taxation Office for the year ended 30 June 2018 disclosed the following income: in 2014, $52,740; in 2015, $101,249; in 2016, $39,130; in 2017, $91,688; and in 2018, nil. Earlier in the principal judgment (at [508]), but not in the section dealing with the family provision claim, the primary judge had recorded that the draft statements of account for Farm Mojo showed that it returned a gross profit of $92,000 for the financial year ending 30 June 2019 and that Geoff agreed that, for the 2020 financial year, he was likely to have received at least $53,000 from his soil consultancy business.

6. [63]

   The primary judge also recorded various submissions made on Geoff’s behalf by reference to the factors listed in s 60(2)(a)–(j) of the Succession Act. In respect of s 60(2)(d), concerning the present and future financial resources and needs of an applicant for a family provision order and/or any beneficiaries of the deceased person’s estate, her Honour noted (at PJ [949]–[950]) that:

7. [64]

   In a passage of some importance to the appeal, the primary judge recorded Geoff’s submission, in relation to s 60(2)(d) of the Succession Act, that “if Merilyn and Bruce were successful in whole or in part in relation to the claims made in the first cross-claim (which they have not been as it transpires), Geoff could have a significant financial need at the time of judgment (the quantum of which necessarily could not be determined until the date of judgment)”: PJ [951].

8. [65]

   A further consideration of particular significance to the primary judge’s ultimate disposition of the family provision claim (and to the appeal) was that which is referred to in s 60(2)(j) of the Succession Act, which relates to “any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person”. In this context, reliance was placed by Geoff on Sue’s evidence of what Bill said to her in the Coffs Harbour conversation in late 2013 (see [54] above), with Geoff submitting that it was apparent from this conversation that “Bill wanted to change his Will either to leave Geoff his interest in The Springs or 25% of his estate; and that Bill wanted Geoff to own the entirety of The Springs and had decided to leave it to him or leave him with sufficient funds to purchase it from his siblings”: see PJ [979].

9. [66]

   The primary judge summarised at PJ [981] that:

10. [67]

    The submissions recorded by the primary judge as having been made on behalf of Merilyn and Bruce were to the effect that Geoff had not demonstrated that he had been left without adequate provision for his proper maintenance and advancement in life, that his financial position both in terms of assets and income was strong (especially compared to his siblings) and that this was in part because of his early inheritance of Pindaroi and other benefits received during his lifetime. The primary judge also recorded Merilyn and Bruce’s submission that, if Geoff’s estoppel claim was dismissed with costs, then those costs should not be taken into account in determining his family provision claim: see PJ [991].

11. [68]

    The primary judge’s dispositive reasoning on the family provision claim was as follows:

12. [69]

    In view of these reasons, the primary judge made the following order in the family provision claim:

Grounds of appeal in relation to family provision order

1. [70]

   Merilyn and Bruce’s Notice of Appeal contained several grounds of appeal in relation to the family provision order made.

2. [71]

   Although the appeal is by way of rehearing pursuant to s 75A(5) of the Supreme Court Act, this Court is constrained by the applicable standard of appellate review. While the making of a determination that adequate provision has or has not been made for the proper maintenance, education or advancement in life of a claimant, under s 59(1)(c) of the Succession Act (the jurisdictional question), involves an evaluative as opposed to a truly discretionary decision (which is what is involved in an assessment of what provision should actually be ordered under s 59(2)), authority dictates and, in the present case, the parties accepted that the proper standard of review is by reference to the principles set out in House v The King (1936) 55 CLR 499; [1936] HCA 40.

3. [72]

   In Strang v Steiner [2019] NSWCA 143; 19 ASTLR 330 at [76] (Strang), Macfarlan JA observed that:

4. [73]

   Macfarlan JA went on to cite the statement by Gageler J in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [49] explaining the difference between the two standards and his Honour’s conclusion that “[t]he resultant line is not bright; but it is tolerably clear and workable.”

5. [74]

   Notwithstanding what he described as “the logic of Gageler J’s reasoning”, to the effect that the correctness standard would ordinarily apply to a finding such as that under s 59(1)(c), Macfarlan JA took the view in Strang (at [79]) that the course of authority, including the view of the majority in Singer v Berghouse (1994) 181 CLR 201 at 212; [1994] HCA 40 (Singer), was that the House v The King standard of appellate review continued to apply, citing in this regard Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6], [42] and [99]–[100]; DJ Singh v DH Singh [2018] NSWCA 30 at [277] (DJ Singh); and Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 at [14]. See also the judgments of White JA and McCallum JA in Strang.

6. [75]

   Whilst we, too, recognise the logic of Gageler J’s reasoning and the existence of strong arguments in favour of the application of the “correctness” standard to appellate review of the jurisdictional question in s 59(1)(c), no challenge was made to Strang nor the authorities referred to in the preceding paragraph, and senior counsel for Merilyn and Bruce accepted that House v The King error was required to be established. Accordingly, it was incumbent on Merilyn and Bruce as appellants to demonstrate “an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or [that] the result is so unreasonable or plainly unjust to bespeak error of such a kind”: see DJ Singh at [277].

7. [76]

   Given the accepted standard of appellate review, the manner in which a number of Merilyn and Bruce’s grounds of appeal were expressed, in terms of “insufficient weight” or “too much weight” being given to particular matters, was not likely to satisfy the standard of appellate review in this Court. As the arguments were refined in oral submissions, what were asserted to be material errors of fact and principle emerged more clearly.

8. [77]

   The grounds of appeal upon which principal reliance was placed in oral argument were as follows:

Consideration

1. [78]

   Before an order for provision can be made in favour of a child of the deceased (who is an “eligible person” within the meaning of s 59 of the Succession Act), the Court must be satisfied that “adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person”: Succession Act, s 59(1)(c).

2. [79]

   Satisfaction in this regard is “jurisdictional” insofar as it is a prerequisite to the Court exercising its discretionary power to make an order for provision pursuant to s 59(2): see, for example, as to the use of the description “jurisdictional”, White v Barron (1980) 144 CLR 431 at 456; [1980] HCA 14; Singer at 208–210; Hampson v Hampson [2010] NSWCA 359; (2010) 5 ASTLR 116 at [69]–[72]. Care must, however, be taken when answering this jurisdictional question not to confine the relevant consideration to an applicant’s financial or material needs; the language of “proper maintenance, education or advancement” involves more than simply a question of financial needs: see Sgro v Thompson [2017] NSWCA 326 at [68]–[74] (Sgro).

3. [80]

   Once the level of satisfaction referred to in [78] has been reached, the Court has a broad discretion, “having regard to the facts known to the Court at the time the order is made” (emphasis added), to make such order for provision out of the estate as ought to be made “for the maintenance, education or advancement in life of the eligible person”: Succession Act, s 59(2).

4. [81]

   In considering both whether to make a family provision order and the nature of any such order if the threshold required by s 59(1)(c) is satisfied, the Court is entitled to consider the broad range of matters specified in s 60(2) of the Succession Act. The breadth of the matters that may be considered under s 60(2) does not, however, authorise the making of an order which is for a purpose other than “the maintenance, education or advancement in life of the eligible person”. Nor does it relieve the Court of the need to make the order “having regard to the facts known to the Court at the time the order is made” (emphasis added).

5. [82]

   The primary judge’s summary of relevant principles, as noted at [59] above, was not challenged. It is convenient to add a reference to McCosker v McCosker (1957) 97 CLR 566 at 571–572; [1957] HCA 82 (McCosker), in which Dixon CJ and Williams J observed that:

6. [83]

   Kitto J’s observations in the same case at 579 are also of note:

7. [84]

   In Singer at 208–209, the majority held, in the context of broadly equivalent provisions under the predecessor Family Provision Act 1982 (NSW), that:

8. [85]

   More recently, in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [122] (Vigolo), Callinan and Heydon JJ observed, in relation to the corresponding Western Australian legislation, that the questions which the Court has to answer in assessing such a claim do not “necessarily always divide neatly into two” and that:

9. [86]

   Vigolo is also significant because three of the five justices (Gleeson CJ, Callinan and Heydon JJ) supported the continuing utility in this field of discourse of notions of moral obligation and duty. Thus, Gleeson CJ (at [25]) observed that:

10. [87]

    It is also relevant to note that in Sgro at [83], White JA (with whom McColl and Payne JJA agreed) repeated what he had earlier said in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] as follows:

11. [88]

    In relation to the approach to be taken to a claim for provision by an adult child, reliance was placed by Merilyn and Bruce upon the following summary of principles by Hallen AsJ (as his Honour then was) in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111] as follows:

12. [89]

    Reference was also made in the course of submissions to the recent observations of Hallen J in Starr v Miller [2021] NSWSC 426 at [625] in relation to family provision claims in the context of rural properties. His Honour there said that:

13. [90]

    Merilyn and Bruce contended that the primary judge exercised her power to make a family provision order contrary to s 59(2) by having regard to facts not known to her Honour, namely whether it was in fact Geoff’s intention to continue to farm The Springs and whether this depended upon his ability to buy out his siblings’ inherited 50% interest in that property as a result of their status as residuary beneficiaries under Bill’s Will. Whilst the facts “known to the Court” within the meaning of s 59(2) of the Succession Act no doubt may include the fact of an intention as to the future, Merilyn and Bruce’s point was that there was simply no evidence that it was ever Geoff’s intention to continue to farm The Springs.

14. [91]

    Indeed, Merilyn and Bruce went further and contended that the primary judge appreciated, as reflected in her Honour’s exchange with senior counsel then appearing for Merilyn and Bruce extracted at [30] above, that The Springs would in fact need to be sold in any event (and thus could not continue to be farmed by Geoff, even if he intended and was able to do so) because of the costs that had been incurred by all parties to the proceedings (including what her Honour considered would be Geoff’s costs liability in respect of his unsuccessful estoppel claim).

15. [92]

    In consequence of this appreciation, they contended that the primary judge’s conclusion at PJ [1001] that “adequate and proper provision was not left for Geoff (insofar as he may now be left unable to retain and continue to farm The Springs)” (emphasis added) was essentially based upon a number of false or unestablished predicates or assumptions, namely that:

16. [93]

    This led to the submission, as part of Ground 7, that what the primary judge had in substance done by making the family provision order in favour of Geoff was not fairly to be characterised as for the purposes of making adequate provision for his proper maintenance and advancement in life but, rather, to give effect to Bill’s “testamentary” wishes as expressed in the Coffs Harbour conversation, as detailed at [54] above, a matter upon which the primary judge placed “considerable weight”: PJ [995]. Although not precisely put in this way, this was akin to a submission that the power to make provision for Geoff was not exercised for the purpose authorised by s 59 of the Succession Act. If Geoff did not in fact intend to continue to farm The Springs (or if he had not established that), the order for further provision to facilitate his doing so cannot have been because of any need on his part for such provision. That pointed to the order being made for some other purpose, viz. the fulfilment of Bill’s testamentary intention expressed orally shortly before his death.

17. [94]

    Close attention is required to be paid to what the primary judge meant in PJ [1001] by the parenthetical expression “insofar as he [Geoff] may now be left unable to retain and continue to farm The Springs” in her key conclusion that adequate provision had not been made for Geoff’s proper maintenance or advancement in life.

18. [95]

    One curious aspect of the proceedings at first instance in relation to the family provision claim is that, although written submissions that provision ought to be made for Geoff were raised in the alternative to the estoppel claim, those submissions did not identify what provision should be made or what specific order was sought. Nor were any oral submissions made as to the quantum or value of the provision which it was said ought be made in Geoff’s favour and, consistent with this, the principal judgment does not record any submission as to what was in fact sought.

19. [96]

    In Vigolo at [124], in dismissing an appeal by an unsuccessful claimant for provision, Callinan and Heydon JJ observed that “[n]o evidence was adduced at trial of the amount of money required (or desired) by the appellant for his ‘proper maintenance, support, education or advancement in life’”.

20. [97]

    In a recent decision, Hallen J has emphasised the importance of counsel for the claimant in a family provision case being in a position to assist the Court with an identification of what provision is being sought: Limberger v Limberger [2021] NSWSC 474 at [66] (Limberger). This is a matter to which legal practitioners conducting family provision claims should have given consideration even before proceedings have commenced, and a meaningful response (even if expressed approximately or within a range) is important not only to assist the Court in its determination but also as a matter of fairness to other parties whose own interests could be affected by the making of an order in a particular amount, or an order structured in a particular way. As Hallen J explained in Limberger at [66(d)–(e)]:

21. [98]

    Turning then to the primary judge’s “jurisdictional” conclusion that “adequate and proper provision was not left for Geoff (insofar as he may now be left unable to retain and continue to farm The Springs)” (emphasis added), on one reading, the italicised words carried the implication that Geoff was adequately provided for unless he planned and wished to retain and continue to farm The Springs.

22. [99]

    In support of this implication, Merilyn and Bruce emphasised that, especially compared to their respective financial positions, Geoff was in a very strong financial position. They pointed to the value of Geoff’s net assets (as found by the primary judge: see [60]–[62] above), the success of his ongoing consultancy business and large financial gifts he had made to his then partner and children in recent years. They also drew attention to the following passage of Ms Needham’s cross-examination of Geoff which was not referred to in the principal judgment:

23. [100]

    This candid evidence in relation to Geoff’s financial needs was reinforced by the submission made on his behalf at first instance, as reproduced above at [64], to the effect that Merilyn and Bruce’s success on the First Cross-Claim could have resulted in a significant financial need on the part of Geoff. Of course, there was no such success for Merilyn and Bruce.

24. [101]

    The implication of this submission is that Geoff did not have any significant financial need and such a need might only arise (i.e. “could have”) in the event that Merilyn and Bruce succeeded in whole or in part on the First Cross-Claim, or if Geoff chose to remain farming The Springs.

25. [102]

    The primary judge’s statement at PJ [994] that Geoff “will, as a practical matter, presumably need to buy out his siblings’ half share in The Springs if he wishes to remain farming on that land; and if unable to procure finance for that purpose would presumably need to sell The Springs” (emphasis added) highlights the lack of any evidence that Geoff in fact had that wish and intention. If he did not, the primary judge’s concern that adequate provision had not been made for his proper maintenance and advancement in life does not appear to have been supported.

26. [103]

    On the reading of the critical jurisdictional finding of the primary judge set out at [98] above, it was a finding that was qualified by a circumstance or matter, namely Geoff’s wish or intention to remain on and continue to farm The Springs, that Merilyn and Bruce contended was not only not established but indeed was contradicted by the evidence in the case. Thus, whilst it is correct that Geoff gave evidence as to it being his long-term intention to continue to farm The Springs, stating at [370] of his Affidavit of 8 June 2017 that:

27. [104]

    It should be borne in mind that this Affidavit was sworn more than three years prior to the hearing of the proceedings at first instance and before Geoff incurred very significant subsequent expense: see [27] above. Geoff was to swear three more Affidavits, including an incredibly detailed Affidavit in reply of over 50 pages on 18 October 2018, subsequent to making the statements referred to above as to his ability to continue to farm The Springs. The only way he could have received Bill’s entire 50% share of The Springs was if he had succeeded in his estoppel claim (which he did not).

28. [105]

    When pressed on appeal as to whether there was evidence of Geoff’s intention to continue to farm The Springs following his father’s death, all that senior counsel for Geoff could point to were the passages set out at [103] above.

29. [106]

    The submission that Geoff’s intention was to continue to retain and to farm The Springs was further undermined by the following additional matters:

30. [107]

    When viewed in light of these matters, which bespoke an absence of intention or ability for Geoff to retain and farm The Springs, the effect of her Honour’s conclusion that adequate provision had not been made for Geoff’s proper maintenance and advancement in life “insofar as he may now be left unable to retain and continue to farm The Springs” was that Geoff was otherwise adequately provided for and that further provision did not need to be made for him because there was no basis in the evidence for concluding that the contingency about which her Honour was evidently concerned would arise. From this it would follow that Geoff in fact had failed to establish that he had not been adequately provided for, having regard to all of the considerations set out in s 60(2) of the Succession Act, such that the jurisdictional threshold in s 59(1)(c) should not have been crossed and no order for provision should have been made.

31. [108]

    Another possible reading of her Honour’s critical jurisdictional observation in PJ [1001] is that, because Geoff “may now be left unable to retain and continue to farm The Springs”, inadequate provision was made for him in Bill’s Will. This would presumably be on the basis that Geoff would no longer be able to earn income from The Springs. But if this is what the primary judge meant, then making provision for Geoff by reference to a secured share of Bill’s interest in The Springs as opposed to a capital sum was a curious way of making provision.

32. [109]

    Moreover, with the exception of the cost of a particular medication which Geoff said he could not afford, the amount of any additional financial need on the part of Geoff was not identified, estimated or quantified in evidence or submissions before her Honour. In these circumstances, it would be an extremely unlikely coincidence that adequate provision for Geoff’s proper maintenance and advancement would approximate to the value of half of Bill’s 50% interest in The Springs. No assessment was made of what Geoff’s financial needs otherwise were, and whilst accepting that the s 59(1)(c) exercise involves more than simply an assessment of financial needs, that will generally be an essential part of the determination of whether adequate provision has been made for the proper maintenance and advancement in life of an “eligible person”.

33. [110]

    For these reasons, of the two readings of her Honour’s critical jurisdictional conclusion identified respectively at [107] and [108] above, we consider that the first reading most likely accords with what was intended by her Honour. On that footing, Ground 6 should succeed, the order for family provision should be set aside and this Court should proceed to make the orders that ought to be made in accordance with s 75A of the Supreme Court Act.

34. [111]

    If, on the other hand, our reading of her Honour’s critical jurisdictional conclusion is in error and the learned primary judge intended to conclude that because Geoff would not be (or would be unlikely to be) in a position to continue to farm The Springs (and thus to derive an income from it), adequate provision had not been made for his proper maintenance or advancement, this conclusion would not, with great respect, have been justified.

35. [112]

    As Geoff candidly conceded in cross-examination (see [99] above), his material needs are currently met. In addition, he had a substantial asset pool and, in circumstances where he was unable to retain and continue to farm The Springs, he would nevertheless have been able to realise his valuable investment in it (valued by reference to the 2018 desktop valuation at $1.75 million) and invest the proceeds elsewhere. Furthermore, an important consequence of not being able to farm The Springs would have been that he could devote more time to engagement in his consultancy business.

36. [113]

    As to the last matter, the following aspects of Geoff’s evidence are relevant:

37. [114]

    It is of course the fact, as pointed out at [79] and [86] above, that the Court is required to consider not only material or financial needs, and that the word “proper” in s 59(1)(c) is heavily value-laden. In further considering the primary judge’s assessment of the jurisdictional question, it may be noted that two of the matters taken into account in support of her Honour’s conclusion that further provision should be made in favour of Geoff were:

38. [115]

    The primary judge’s reasoning in respect of these two matters was also the subject of criticism on behalf of Merilyn and Bruce which fed into various grounds of appeal.

39. [116]

    As to the first matter noted in [114] above, whilst it is correct that s 59(2) of the Succession Act makes it clear that orders for provision are to be made “having regard to the facts known to the Court at the time the order is made” and the primary judge knew that Geoff had failed in his estoppel claim, all that her Honour could have known as to his liability for his own and Merilyn and Bruce’s costs in that regard was a matter of speculation based on what might be expected “in the ordinary course”, namely that costs would follow the event. But the ordinary course could have been (and in the event was) radically altered by the effect of the Offers of Compromise, and the powerful costs consequences dictated by the UCPR when a rejected offer of compromise is bettered by the offeror in the final judgment following a contested hearing.

40. [117]

    Mr Wilson SC, who appeared for Merilyn and Bruce on the appeal, drew the Court’s attention to the decision of Hodgson J (as his Honour then was) in Lewis v Lewis [2001] NSWSC 321 (Lewis). In that case, his Honour dismissed a proprietary estoppel claim to a piece of land but found that the plaintiff's son was entitled to relief under the Family Provision Act. At [89] of his reasons, Hodgson J observed:

41. [118]

    This is the course that it was submitted should have been followed in the present case. The passage quoted above recognised that the determination of a costs outcome could impact on the appropriate amount of provision under the equivalent regime in the Family Provision Act. The primary judge in the present case was also plainly alive to that possibility (and was also acutely aware of the huge expenses that had been incurred in the proceedings, as reflected in the opening remarks of Geoff’s senior counsel at the trial: see [27] above).

42. [119]

    A consequence, however, of her Honour’s making of an order as to the amount of provision prior to hearing submissions on and determining questions of costs was that her Honour was taking account of something that was not in fact known at the time of the final order, cf Succession Act s 59(2), namely Geoff’s potential (and potentially heavy) costs liability to Merilyn and Bruce in respect of his unsuccessful estoppel claim. So much was reflected in her Honour’s language that “the potential for such an outcome is a relevant (though I do not suggest determinative) factor to be taken into account” (emphasis added): PJ [1000].

43. [120]

    One obvious difficulty with the approach evidently taken in Lewis, namely determining questions of costs and assessing the impact of such costs orders on a claim for family provision, is that, absent the consent of the parties, offers of compromise cannot be tendered other than on the question of costs: see Evidence Act 1995 (NSW) s 131. There is a “chicken and egg” problem: the consequences of the offer may affect the amount of the order for provision, but the amount of the order for provision may in turn affect whether an offer of compromise or a Calderbank offer has been bettered in the final judgment.

44. [121]

    The Lewis approach may be taken where there are no such offers or where the parties consent to offers of compromise (or Calderbank offers) being tendered to facilitate the making of appropriate family provision orders. But where that does not occur, it seems erroneous to take into account the potential impact of an adverse costs order to a party such as Geoff in circumstances where it is common experience that offers of compromise, which the UCPR positively encourages, are made and can have significant financial consequences, even for successful parties as was so in the present case.

45. [122]

    In a case such as the present where the costs are very significant and the impact of an offer of compromise may also be very significant, it is difficult to see how the taking into account of a potential costs order on the assumption that no offers of compromise had been made cannot but involve impermissible speculation. On any view, the potential costs consequences for Geoff of his loss of the estoppel claim were not facts which could be meaningfully “known to the Court at the time the [family provision] order” was made.

46. [123]

    Taking this potential liability into account as a relevant factor in the circumstances of this case, when its impact was not known or knowable, also vitiated the making of the order for family provision in Geoff’s favour.

47. [124]

    As to the second matter noted in [114] above, if the primary judge’s purpose in testing the proportionality of the siblings’ shares from their parents’ respective estates was intended as a cross-check, as it seems to have been, then as a matter of substance, her Honour should have taken into account Geoff’s “early inheritance” of Pindaroi. If she had done so, the cross-check would have indicated a grossly disproportionate outcome in Geoff’s favour as a result of the family provision order. The disproportionality of that outcome was even more skewed when it is appreciated that Geoff had enjoyed the benefit of the proceeds of the sale of Pindaroi since 2009.

48. [125]

    Mr Wilson, for Merilyn and Bruce, made the point that it is not the purpose of the Succession Act to provide for equality of provision between siblings (see, for example, Cooper v Dungan (1976) 50 ALJR 539 at 542 per Stephen J; and Davis v Davis [2012] NSWSC 201 at [50]). He also submitted by reference to s 59(1)(c) of the Succession Act that the discretion to make an order for family provision is based on an assessment of whether adequate provision was made "by the will of the deceased person" and that there was no basis for that assessment to be undertaken by reference to the adequacy of the provision made by the wills of both parents, i.e. Jill’s Will as well as Bill’s Will.

49. [126]

    Both of these matters may be accepted but the more important point to be made is that, to the extent that her Honour engaged in a cross-checking exercise as a component of her reasoning process, that exercise entailed, in our respectful opinion, a material error which, when corrected, demonstrated the opposite of what apparently had reinforced her Honour’s conclusion that what she proposed to award Geoff was “proper” and “ought to be made” within the meaning of s 59 of the Succession Act. That error was her Honour’s failure, in her rough cross-check, to take into account Geoff’s “early inheritance”, namely the substantial gift of Pindaroi, which was an asset sold by him and Kaye for $4.2 million after Jill’s death. As such, it was submitted that there had been a failure in substance to give effect to the competing “moral claims” of the residuary beneficiaries of Bill’s Estate, even taking into account that they had received more than Geoff from Jill’s Estate.

50. [127]

    Although the primary judge said at PJ [997] that she had taken into account the residuary beneficiaries’ competing claims on “Bill’s testamentary bounty (noting that they received a greater inheritance from Jill than did Geoff, no doubt because of his acquisition of Pindaroi but also that they received some, albeit less, financial assistance in their parents’ lifetime in terms of gifts)”, even on a rough basis and taking into account what they had received under Jill’s Will and the relatively small financial assistance each had received in their own lifetimes ($60,000 in respect of Sue; $10,000 in respect of Merilyn; and $81,000 in respect of Bruce), the effect of her Honour’s orders generated a “marked disproportion in the respective siblings’ inheritances from their parents’ estates” (cf. PJ [1001]) when the value of Pindaroi (even as at 2009 as opposed to the value of money in 2020/2021) was taken into account. On a gross basis, the impact of the primary judge’s order in favour of Geoff is reflected in the following table:

51. [128]

    By way of contrast, on the basis that Geoff contributed $200,000 equity to the acquisition of Pindaroi and noting that it was sold in 2009 for $4.2 million, on a gross basis, the sum of what Geoff received from his parents, by their wills and during their lifetimes, and the value of the provision ordered by the primary judge was as follows:

52. [129]

    The purpose of this exercise is not to suggest that rough equivalence between siblings is or should always be a relevant consideration in making a family provision order, even as a cross-check, but it is to illustrate that, taking into account the gift of Pindaroi to Geoff as a form of “pre-inheritance”, her Honour’s conclusion that there was no marked disproportion between the siblings’ inheritances was not accurate. This is so even allowing for the undoubtedly correct fact that Geoff, through his farming of and improvements to Pindaroi over the years prior to its sale, no doubt contributed to its ultimate value.

53. [130]

    Further, her Honour’s calculation did not allow for any impact on Merilyn and Bruce’s financial positions as a result of their lack of success in the First Cross-Claim, and the adverse costs orders that they were likely to bear personally in this respect (which orders were subsequently made). That was in marked contrast to her Honour’s consideration of this as a relevant factor in the context of Geoff’s family provision claim.

54. [131]

    These were in our view material errors which resulted in excessive provision being made in favour of Geoff and supplied additional reasons for upholding Merilyn and Bruce’s appeal.

55. [132]

    Before turning to the s 75A exercise, it should be noted that Grounds 8, 9 and 10 all related to the primary judge’s order that the burden of the additional provision made for Geoff should fall equally on the residuary beneficiaries (Sue, Merilyn and Bruce). It was said, in particular, that Sue did not raise her financial circumstances “in competition” to the family provision claim and that the primary judge, in making a family provision order in Geoff’s favour, should have differentiated between the residuary beneficiaries by reference to their individual positions.

56. [133]

    Given the conclusions reached as to error in the ordering of further provision for Geoff, it is not necessary to consider these grounds although it may be noted that they directly affected Sue, who incurred some costs in meeting them and advanced submissions that Merilyn and Bruce ought not to be permitted to seek orders against her given that they were appointed to resist the family provision claim in the interests of all beneficiaries. Sue also contended that these grounds would have failed in any event because, contrary to Merilyn and Bruce’s submission that Sue “chose” not to lead evidence as to her financial circumstances, such evidence was read and referred to by the primary judge (see PJ [953]).

57. [134]

    As we have indicated, however, it is not necessary to deal with these grounds and they did not occupy any significant time in the hearing of the appeal.

58. [135]

    There were also grounds of appeal relating to aspects of the primary judge’s costs orders. As explained above at [21], these orders depended in part upon her Honour’s conclusion, contrary to the submissions of Merilyn and Bruce, that the Offers of Compromise contained genuine elements of compromise and were reasonably capable of acceptance.

59. [136]

    The effect of the primary judge’s family provision order in favour of Geoff, coupled with his success in defeating the First Cross-Claim, led to the primary judge’s conclusion that Geoff had bettered the Offers of Compromise with the costs consequences set out in r 42.14 of the UCPR following from these twin conclusions.

60. [137]

    Merilyn and Bruce submitted that the primary judge erred in treating the Offers of Compromise as having properly been made under the UCPR and noted that, to the extent that they were relied upon as Calderbank offers, Merilyn and Bruce had not acted unreasonably in not accepting them: see CJ [317].

61. [138]

    Before considering this aspect of Merilyn and Bruce’s appeal, it is first necessary to determine:

Appeal in relation to Jill’s Estate (First Cross-Claim)

1. [139]

   By Ground 11, Merilyn and Bruce challenge the primary judge’s rejection of claim 6 in the First Cross-Claim by her Honour’s failure to find that what were described in the trial as the “Monowai Investment assets” were assets of the Monowai Partnership (see PJ [825]), in addition to a conclusion that the claim was otherwise statute-barred (PJ [579] and [823]).

2. [140]

   Some further background is necessary to consider this aspect of the primary judge’s reasoning and the basis for the challenge sought to be advanced on appeal.

3. [141]

   The starting point is that, from the time of Bill and Jill's wedding in 1953 until Jill's death, Bill and Jill each held a 50% interest in the partnership known as “W E Bassett & E J Bassett trading as Monowai Pastoral Co” (the Monowai Partnership): PJ [16].

4. [142]

   The essence of claim 6 was that certain discrete assets were, following Jill’s death, treated by Bill and Geoff (as executors of Jill’s Estate) as passing by way of survivorship to Bill when it was claimed that Jill held those assets as tenant-in-common with Bill, with the consequence that they should have passed to the residuary beneficiaries of Jill’s Estate, namely Merilyn and Bruce as well as Sue.

5. [143]

   As noted above, Bruce and Merilyn were representing Jill’s deceased estate pursuant to orders made by Stevenson J on 3 February 2017. The claim giving rise to ground 11 related to the ownership of shares and investments which had been treated as assets of the Monowai Partnership. The assets and the parties’ claims were described at length in the principal judgment at [801]-[821]. They included three accounts held with Colonial First State, three parcels of shares held in special purpose vehicles which were capital guaranteed by Westpac, various parcels of shares including some listed public companies and interests in two time-share schemes. Some of the assets were, at the time of the trial, worthless (for example, one of the companies in which shares were held had been deregistered). There was conflicting valuation evidence which need not be summarised.

6. [144]

   The basis of the claim advanced by Bruce and Merilyn was that the assets had been held by Bill and Jill as tenants-in-common, and after Jill’s death they had wrongly been treated as owned by Bill, rather than one half being distributed as part of Jill’s deceased estate. Because of the time that had passed since Jill’s death, the claim was confined to one for the recovery of trust property against a trustee falling within s 47(1)(c) of the Limitation Act 1969 (NSW). That section is applicable to an action on a “cause of action ... to recover trust property, or property into which trust property can be traced, against a trustee or against any other person”.

7. [145]

   The primary judge noted at [794] that:

8. [146]

   The primary judge concluded that Bruce and Merilyn had not discharged the onus of establishing that the assets were partnership assets: at PJ [825]. That reflected concerns that her Honour had regarding the accuracy of the descriptions of these assets as partnership assets in the accounts: at PJ [824]. It will not be necessary for present purposes to summarise the reasoning leading to that conclusion, which was challenged by Bruce and Merilyn by ground 11 of their appeal. It is preferable instead to resolve this ground by a distinct point which was at the forefront of the parties’ submissions in this Court.

9. [147]

   A peculiarity about this claim is the absence of primary evidence of the ownership of the assets. The claim advanced by Bruce and Merilyn concerning these assets must fail at the threshold unless it be established that they had been owned by Bill and Jill as tenants-in-common, rather than as joint tenants. It is unnecessary for present purposes to consider whether the legal title to the shares could be held as tenants-in-common, a matter considered but not decided in De Lorenzo v De Lorenzo (2020) 104 NSWLR 155; [2020] NSWCA 351 at [15]-[35] and [60]-[70]. It would suffice if the property were held jointly by Bill and Jill but on trust for themselves as tenants-in-common in equal shares. This Court was told, and it seems to be the case, that none of the primary documents recording the co-ownership of Bill and Jill of those assets was in evidence.

10. [148]

    However, the inventory annexed to the grants of probate for Jill’s Will described all of those assets as jointly held. Consistently with this, after Jill’s death, the same firm of solicitors, Borthwick and Butler, which had prepared her and Bill’s Wills, acting for the Estate, lodged a series of transmission applications with Computershare, Link Market Services Ltd and various banks and agents for the various investment schemes seeking the update of ownership details to the name of the “surviving joint holder” Bill.

11. [149]

    The same inventory of assets distinguished between Jill’s interest in The Springs from her interest in Hurricane Hill. The former was a share of parcels of land in her own name; the latter was described as a joint interest with Bill.

12. [150]

    The solicitors involved in administering Jill’s Estate thus appear to have applied some care in identifying which of the co-owned assets were held by Jill as tenant-in-common, and which were held jointly.

13. [151]

    That constitutes powerful contemporaneous evidence that the assets giving rise to this ground were held by Jill jointly with Bill, and passed to him by right of survivorship.

14. [152]

    However, despite these matters being raised during the hearing of the appeal, this ground should not be decided on that basis. Mr Wilson said that:

15. [153]

    Mr Hodge QC, who appeared for Geoff, accepted this. Responding to the Court’s concern about what appeared on the face of the inventory prepared by Jill’s Estate’s solicitors, he said:

16. [154]

    This Court should respect the way the parties have chosen to fight on this issue. Indeed, it may explain the absence of evidence bearing more directly upon the title to the investments.

17. [155]

    At the forefront of the parties’ forensic decisions was Geoff’s concern to confine the claim to one arising under s 47(1)(c) of the Limitation Act. This was reflected in the way the case was opened at trial, and in observations made by the primary judge at PJ [576]-[579]. Given Jill had died more than six years before the First Cross-Claim was filed, there were limitation defences to certain other causes of action. Accordingly, it was necessary in order to fall within s 47(1)(c) for Bruce and Merilyn to establish that the assets had been held by Geoff.

18. [156]

    The primary judge addressed this at PJ [579]:

19. [157]

    Bruce and Merilyn submitted that “the vesting of Jill’s estate in Geoff and Bill upon the Grant of Probate on 22 August 2007 amounted to possession for the purposes of the question asked by the primary judge under s 47(1)(c) of the Limitation Act 1969.”

20. [158]

    Jill died on 21 March 2007. Real and personal property owned by her thereupon vested in the NSW Trustee, by reason of s 66 of the Probate and Administration Act 1898 (NSW). Upon the grant of probate on 22 August 2007, Jill’s real and personal property vested in Bill and Geoff as co-executors, this occurring retrospectively from the date of her death. Thereafter, by the transmission applications lodged by the estate solicitors mentioned above, the interests formerly held by Bill and Jill as co-owners were transferred into Bill’s sole name.

21. [159]

    There is no suggestion that Geoff ever became the registered owner of any of the property claimed under this ground of appeal. As noted above, because it was treated as property to which Bill succeeded by survivorship, the investments were fairly promptly transferred into his sole name. If favourably to Bruce and Merilyn this was wrong, and the investments were held on a basis such that Jill enjoyed at least a beneficial interest as a tenant-in-common, then her equitable interest vested in Bill and Geoff upon the grant of probate. But it is to be recalled that s 47(1)(c) confers an extended period of time for the recovery of claims to recover trust property or property unto which trust property can be traced.

22. [160]

    Geoff never became the registered owner of any of the investments. After the transmission applications were processed, Bill became their sole legal owner. But Bruce and Merilyn’s claim under s 47(1)(c) is not against Bill. Their claim turns upon Geoff being a trustee and holding trust property or property into which trust property can be traced. Making the assumption that Jill had an equitable interest in the investments as a tenant-in-common, it is true that in 2007 Geoff was, by dint of the vesting effected by s 44, a co-executor with an interest in the investments. He was not then a trustee; the Estate had not been administered. Title to the investments was thereafter transferred to Bill in his own right. No later than then, Geoff ceased to hold trust property. Geoff never held property into which trust property could be traced. It follows that s 47(1)(c) of the Limitation Act is not satisfied.

23. [161]

    That conclusion turns on the particular way in which this trial was argued. In particular, there was no claim for devastavit, which was eschewed when the case was opened at trial (as her Honour recorded at PJ [41]). Nor was there a pleading of breach of trust (as her Honour also noted at PJ [41]).

24. [162]

    This ground must be dismissed.

25. [163]

    Relevant to Merilyn and Bruce’s appeal in relation to claim 6 of the First Cross-Claim is Ground 14 of the appeal, which asserted that “[t]he primary judge erred in declining to order that Bruce and Merilyn's costs of the First Cross-Claim be paid out of [Bill’s] estate on the indemnity basis.”

26. [164]

    It is to be recalled that the First Cross-Claim was brought by Merilyn and Bruce, as representatives of Jill’s Estate, against Bill’s Estate and Geoff as executors of Jill’s Estate. Jill’s Estate had been fully administered well before the commencement of these proceedings and it was from Bill’s Estate that Merilyn and Bruce sought indemnity.

27. [165]

    The primary judge’s reasoning in this respect (at CJ [333]) was as follows:

28. [166]

    We see no reason to interfere with the primary judge’s reasoning on this question and consider it to be correct. The correctness was reflected in the exiguous nature of Merilyn and Bruce’s written submissions on appeal in relation to this ground.

29. [167]

    We note, for completeness, that the primary judge ordered not only that Merilyn and Bruce were not entitled to indemnity out of Bill’s Estate in respect of Geoff’s (or their own) costs of the First Cross-Claim, but that her Honour went on to order that they pay Geoff’s costs on an indemnity basis from 1 June 2019. These orders followed from and were dictated by the effect of the Offers of Compromise and Geoff’s success at first instance in bettering those offers by the results he achieved in the final orders, notwithstanding his failure in the estoppel claim. This aspect of her Honour’s orders is the subject of separate grounds of appeal dealt with at [227]–[254] below.

30. [168]

    It is convenient at this point also to note Ground 15 of the appeal, which complained about the primary judge’s order that Sue be indemnified out of Bill’s Estate on the indemnity basis for her costs of defending the First Cross-Claim up until 27 May 2019. We see no error in this regard. Sue was, up to that point in time, the representative of Bill’s Estate for the purposes of the proceedings, including as a cross-defendant to the First Cross-Claim. There is no reason why she should not be entitled to have her costs of defending that claim paid on an indemnity basis out of Bill’s Estate. In any event, as Merilyn and Bruce’s submissions point out, Sue did not play an active role in the defence of the First Cross-Claim, so any duplication by reason of the primary judge’s costs order in this respect is likely to be more illusory than real. The primary judge’s decision was a discretionary one which was plainly open to her Honour.

Re-exercise of power under s 59 of Succession Act

1. [169]

   Section 75A(10) of the Supreme Court Act provides that this Court “may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires”. In exercising this power, the Court may receive further evidence and “special grounds” are not required to be shown for the receipt of such evidence concerning matters occurring after the trial or hearing: s 75A(7)–(9).

2. [170]

   In approaching the re-assessment of Geoff’s family provision claim, we note the principles referred to at [78]–[89] above, to which may be added reference to Blendell v Blendell [2020] NSWCA 154 at [7]–[8], where Meagher JA (with whom Gleeson and Leeming JJA agreed) observed that the “proper” level of maintenance and “adequate” provision, as referred to in s 59 of the Succession Act, are “relative concepts” requiring regard to the matters in s 60(2) of that Act.

3. [171]

   We also note the following useful summary of approach articulated by Lindsay J in his extra-judicial paper “The Family Provision Jurisdiction in Historical Perspective” (Lecture, Macquarie Law School, 3 June 2020) at [94]:

4. [172]

   An Affidavit sworn by Bruce on 12 October 2021 was read on the appeal and noted that The Springs had been listed for sale on 10 November 2021 with a price estimate of $6–6.5 million.

5. [173]

   The parties accepted that, as The Springs was set to be sold at auction shortly following the hearing of the appeal, the Court should be informed of any sale price net of selling costs. This is because the sale price would affect the overall value of Bill’s Estate and also impact upon Geoff’s financial position and needs, given his 50% interest in The Springs.

6. [174]

   Subsequent to the hearing of the appeal, the Court was informed that The Springs was sold at auction for $5.9 million with agreed selling expenses of approximately $178,000. This significantly increases the size of Bill’s Estate by 50% of the sale price net of selling expenses.

7. [175]

   It also has the effect that Geoff’s adjusted net asset position, again based on the evidence before the primary judge and without taking into account any costs liabilities he may have as a result of the proceedings, is $3,124,901. To that amount should be added the bequest to him under Bill’s Will of various farming plant and equipment and a 50% share in the Monowai Partnership assets, which were attributed a value of $233,835, resulting in an adjusted total net asset position of $3,358,736.

8. [176]

   Apart from the evidence received in relation to the sale of The Springs, and the net proceeds derived from that sale, the parties did not otherwise seek to update any evidence or make any submissions in addition to those made at first instance in relation to Geoff’s family provision claim.

9. [177]

   Accordingly, we have proceeded on the basis of and by reference to the evidence and submissions before the primary judge in relation to Geoff’s family provision claim, updated only by the evidence of the sale of The Springs and its impact upon both the size of Bill’s Estate and Geoff’s financial position. We have also proceeded upon the basis of the primary judge’s findings in relation to aspects of the evidence relied upon for the purposes of the family provision claim.

10. [178]

    The Inventory of Property annexed to the Grant of Probate of Bill’s Will valued his assets at $3,474,518, with that amount attributing a value of his 50% interest in The Springs at $950,000. Adjusting that value to take into account the net value of a 50% interest in The Springs following its sale, the size of Bill’s Estate becomes $5,474,429.

11. [179]

    The net value of each of Sue, Merilyn and Bruce’s shares as residuary beneficiaries under Bill’s Will, following the sale of The Springs, having regard to the bequest to Geoff valued at $233,835 and without taking into account any depletion of the Estate by costs, becomes $1,824,810 each, subject to Geoff’s claim for provision.

12. [180]

    The financial positions and needs of Merilyn, Bruce and Sue, based upon the evidence before the primary judge and without taking into account any costs liabilities each may have personally as a result of the proceedings, were set out by the primary judge as follows (PJ [952]–[963]):

13. [181]

    Based on this evidence, the respective net assets of the siblings and their spouses (other than Geoff whose net assets including the specific bequest under Bill’s Will amount to $3,358,736) are as follows:

14. [182]

    Both Geoff and Bruce have health-related needs, Bruce’s being described in the extract from the primary judgment set out at [180] above and Geoff’s referred to in [63] above.

15. [183]

    Geoff is in a far superior financial position than Bruce and has an established source of income from his consulting business: see [61]-[62] and [113] above. He was also candid in his evidence as to his financial needs: see [99] above.

16. [184]

    One of the most significant matters relied upon by Geoff (and the primary judge) in considering Geoff’s family provision claim was Bill’s testamentary intention, as reflected in his discussion with Sue in Coffs Harbour in December 2013 but on which Bill had not acted by mid-January 2014 when he died: see [54] above where the Coffs Harbour conversation is set out.

17. [185]

    Section 60(2)(j) of the Succession Act permits “any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person” to be considered by the Court. Where a deceased person has made a will, that will be the obvious place where his or her testamentary intention is to be found. Section 60(2)(j) recognises, however, that a person’s “testamentary intentions” may also be evidenced in statements made by that person outside of his or her will. Such statements will most often assume significance in cases where an application for family provision is made in respect of an intestate estate. But there may be other cases, of which the present is an example, where the deceased person has made a will but subsequently expressed or contemplated a different testamentary intention. That is evidently what the primary judge considered had occurred in the course of the Coffs Harbour conversation between Sue and Bill in December 2013.

18. [186]

    A number of points may be made about that conversation.

19. [187]

    First, on one view, Bill’s language was not definitive, including a statement to Sue that “I’m still thinking about it” and “I’m still thinking about the best way to do it”.

20. [188]

    Secondly, although he said in this conversation “I have to leave Geoff more”, this was on the basis of Bill’s expectation that Geoff would continue to farm The Springs but could not afford to do so. As has already been observed, there was no evidence that this was in fact Geoff’s intention and there was some evidence to the contrary. Bill’s perception of the need to leave Geoff “more” was based on Bill’s assumption in that regard. On the other hand, Bill told Sue, in this conversation, that “I want to be fair and there should be enough for everyone”.

21. [189]

    Thirdly, although the conversation was said to have occurred in the first half of December and Bill had said to Sue that “I will get on to it in the New Year”, he did not in fact do so although, as was correctly pointed out, he was hospitalised in mid-January 2014.

22. [190]

    Fourthly, the evidence was (and the primary judge held) that Bill was being “lobbied” by both Geoff and Bruce (and Edwina) in relation to what he was going to do with his Will. Indeed, Sue herself accepted in evidence that at an earlier point in time, she had expressed the view to Bill that Geoff was trying to “con” him as to his need for greater provision from the Will (see PJ [152]–[156]). Sue also gave evidence of another conversation with Bill in early December 2013 in which he was critical of Geoff, describing him as having a short and selective memory about some of the loans he had been given: see [53] above.

23. [191]

    We are not satisfied that, to the extent that Bill had intimated an intention to Sue with regard to increasing his bequest to Geoff in early December 2013, this remained his intention following conversations with other of his children. Thus, in her Affidavit sworn 22 July 2015, Sue gave evidence of a conversation with Edwina on 29 December 2013 in Inverell (where Bruce and Edwina were staying with Bill), in which Sue recalled Edwina saying to her “[e]verything is alright. Bill has said he won’t change his Will”.

24. [192]

    The Court is not bound to have regard to each and all of the matters listed in s 60(2) of the Succession Act and, for the reasons set out above, we do not attach any particular weight to Sue’s Coffs Harbour conversation with Bill in December 2013. It is to be contrasted with the long established family position, reflected in the final Wills of both Jill and Bill, that Geoff’s inheritance had been expedited by his receipt of the effective gift of Pindaroi, an asset with a very significant value at the time of its sale, far in excess of any benefit that any of the other siblings had received from their parents.

25. [193]

    Further, to the extent that Bill may have expressed to Sue an intention to increase his legacy to Geoff in order for him to continue to farm The Springs, it has not been established that this was Bill’s settled intention and, in any event, giving effect to it is not feasible in view of the primary judge’s observations as to the reality that The Springs will need to be sold. This reality has now, of course, come to pass and is a fact known to the Court to which it must have regard by reason of s 59(2) of the Succession Act.

26. [194]

    On the other hand, it is clear that, for a very long period of time, it had been the continuing intention on the part of both Bill and Jill that, broadly speaking, Geoff would not benefit in any significant way from their respective Estates. This was reflected in the making of Jill and Bill’s mirror wills in 1998 (see [41] above), and the notion, reflected in those wills, that Geoff received an early inheritance in the form of Pindaroi.

27. [195]

    Adjusting the figures referred to in [127] and [128] above to take into account the augmented value of Bill’s Estate, it is clear that Geoff will still have benefitted to a significantly greater extent from the combined effect of Pindaroi and specific legacies under his parents’ wills than the other three siblings.

28. [196]

    A further matter to be considered is whether regard should be had to the adverse costs consequences that will be visited upon the siblings including Geoff as a result of the various stances each has taken in these proceedings, together with the expenditure each has incurred on legal representation to date, and whether there will be any entitlement to indemnity out of the Estate.

29. [197]

    It is accepted that such considerations may be relevant depending upon the circumstances of a particular case: see [116]–[123] above. That having been said, how costs considerations might play out (even approximately) may not always be capable of being known at the time a decision in respect of provision comes to be made. As we have pointed out above at [119]–[122], that is likely to be the case where settlement offers have been made, the terms and effect of which will not be known to a trial judge if the parties have not consented to such offers being tendered in advance of the determination of adequate provision.

30. [198]

    Whether the adverse impact of legal costs or potential costs liabilities should be taken into account in assessing the needs and financial circumstances of particular beneficiaries and/or any applicant for orders under s 59 of the Succession Act is ultimately a discretionary matter; the factors specified in s 60(2) are all matters which the Court may consider. It may be doubted whether a “wise and just testator” (Re Allen [1922] NZLR 218 at 220–221; [1921] GLR 613; Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478–479; The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19–20; [1962] HCA 19; Goodman v Windeyer (1980) 144 CLR 490 at 499–502; [1980] HCA 31; see [171] above), in whose shoes the Court notionally stands in considering questions of adequate provision for proper maintenance of an eligible applicant, would self-evidently look favourably upon an adult child whose own financial position has been diminished by the unsuccessful pursuit of his or her siblings in expensive legal proceedings in relation to the estate.

31. [199]

    In the present case, we do not consider it appropriate to place significant weight on the impact of legal costs in re-assessing Geoff’s family provision claim. This is for three reasons.

32. [200]

    First, his election to pursue the proprietary estoppel claim was a deliberate choice and he must have been aware of the likely costs consequences of pursuing and losing that claim. Geoff is a man who has, on his own evidence, run a very successful consulting business and there was no suggestion in the evidence that he laboured under any mistaken belief that his pursuit of the estoppel claim was free of risk, including potentially adverse costs consequences.

33. [201]

    Secondly, Geoff will recover a significant measure of his costs of the proceedings from Merilyn and Bruce in respect of their unsuccessful pursuit of the First Cross-Claim against him and against Bill’s Estate, which Geoff assumed the burden (and cost) of resisting.

34. [202]

    Thirdly, if Geoff’s costs were to be taken into account, it would be necessary also to have regard to the impact of costs liabilities on Merilyn and Bruce, in respect of the First Cross-Claim, and Sue (subject to her costs appeal dealt with at [204]–[226] below), in respect of her resistance of Merilyn and Bruce’s application before Pembroke J: see [14]–[15] above. The result would be that the financial position of all four siblings has been diminished by their participation in the proceedings. In all cases other than Sue’s, that would be because they were pursuing (unsuccessfully) their own interests against each other.

35. [203]

    In our view, based upon our review of the evidence and in light of the authorities referred to earlier in this judgment, we are not satisfied that provision should be made out of Bill’s Estate in favour of Geoff.

Sue’s costs appeal in relation to her opposition to the Notice of Motion of 14 March 2019 (the Cross-Appeal)

1. [204]

   As noted at [24] above, Sue, who was the Second Respondent to the appeal brought by Merilyn and Bruce, and who filed a submitting appearance in the primary proceedings brought by Geoff, brings a cross-appeal against order 6 made by the primary judge in the costs judgment (the Cross-Appeal). As will appear, leave was required to bring the Cross-Appeal.

2. [205]

   By Order made by the primary judge, Sue was refused indemnity from Bill’s Estate for costs she had incurred in defending a Notice of Motion in the primary proceedings which was brought by Merilyn and Bruce on 14 March 2019 and determined in their favour by Pembroke J on 27 May 2019: see [14]–[15] above. By that Notice of Motion, Merilyn and Bruce sought to be joined as defendants to Geoff’s estoppel and family provision claims for the purposes of representing Bill’s Estate, in lieu of Sue.

3. [206]

   The crux of Merilyn and Bruce’s argument in support of the Notice of Motion was that “[Sue] has acted in her own interests … and has made admissions or otherwise failed to plead matters against the interests of the estate”. This argument was advanced in view of the principles stated in Plunkett v Bull (1915) 19 CLR 544 at 548–549; [1915] HCA 14 and in Warren v McKnight (1996) 40 NSWLR 390 at 395, where it was held that “it is the executor who takes an adversary role against the plaintiff, so as to uphold the will and support the interests of the beneficiaries”, such that Sue was said to be under a positive duty to put Geoff to proof on his challenge to Bill’s Will of 14 May 2009.

4. [207]

   In their submissions on the Notice of Motion, Merilyn and Bruce raised the following “serious concerns about Su[e]’s conduct as the representative of Bill’s estate against Geoff[’s] estoppel and family provision claim”, relying on correspondence annexed to affidavit evidence they had filed and served:

5. [208]

   Sue actively opposed the relief sought by Merilyn and Bruce in the Notice of Motion. She swore an Affidavit in response to the motion on 10 May 2019, filed written submissions and participated in the hearing of 27 May 2019 before Pembroke J.

6. [209]

   On 27 May 2019, Pembroke J made orders reflecting the relief sought by Merilyn and Bruce in the Notice of Motion. On the material before him, his Honour formed the view that “the best way forward is that Bruce and Merilyn be appointed to represent the estate of their father in defence of the amended statement of claim and in defence of the second cross claim.”

7. [210]

   As to Sue’s position subsequent to the view formed by his Honour, it was noted that although she “need not play any active role at all” in the proceedings, she “may continue as a defendant, but she should be at her own risk as to costs in her capacity as an executor on and from today”.

8. [211]

   Pembroke J ordered that Sue pay Merilyn and Bruce’s costs of the application but reserved to the primary judge the question whether she should be indemnified out of Bill’s Estate for her costs of the application.

9. [212]

   The amount of costs for which Sue was held liable has since been quantified in the sum of $66,424.73 incurred by Bruce and Merilyn, and $69,277.25 incurred by Sue herself. This amounts to a total sum of $135,701.98.

10. [213]

    At CJ [339], the primary judge held that:

11. [214]

    The primary judge went on to identify the relevant principles in terms that were not the subject of any attack by Sue in the Cross-Appeal:

12. [215]

    These principles are reflected in r 42.25 of the UCPR, which provides that:

13. [216]

    The primary judge applied these principles in reaching the following conclusion at CJ [345] (which is to be read with CJ [339]):

14. [217]

    The primary judge’s conclusion was essentially that Sue had acted unreasonably by resisting the application of Merilyn and Bruce with the consequence that costs were unnecessarily incurred. This involved an exercise in the characterisation of Sue’s conduct at a particular time in this litigation’s long history.

15. [218]

    The nature of the primary judge’s decision which is sought to be challenged by Sue attracts the question of whether leave to appeal is required.

16. [219]

    It was submitted on behalf of Sue that leave was not required because “Order (6) of the orders made below on 27 April 2021 is not an order which relates only to costs for the purposes of section 101(2)(c) of the Supreme Court Act, nor a matter captured by section 101(2)(r)”. It may be accepted that the order sought to be challenged was not an order “as to costs only” nor one that involved a matter amounting to the value of less than $100,000: Supreme Court Act, sub-ss 101(2)(c) and (r); see Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 at [20]–[28]; cf, Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106 at [82].

17. [220]

    The nature of the primary judge’s decision was, however, interlocutory, relating as it did to a Notice of Motion in the proceedings which was itself of an interlocutory nature: see, for example, Eatts v Dawson (1990) 21 FCR 166. The order was not one which “finally determine[d] the rights of the parties in a principal cause pending between them”: Re Luck (2003) 78 ALJR 177; [2003] HCA 70 at [4]; see also Bienstein v Bienstein (2003) 195 ALR 225; [2003] HCA 7 at [25]; Waller v Waller [2009] WASCA 61 at [8].

18. [221]

    The consequence of this is that leave to appeal was required: Supreme Court Act, s 101(2)(e). This conclusion is not answered by the contention made on behalf of Sue that the order challenged “should not be characterised as the exercise of a discretion but a substantive order refusing indemnity to an executor for costs relating to her conduct in the proceedings.”

19. [222]

    Leave applications in this Court impose a general obligation on the applicant for leave to establish that there is an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]–[38]; The Age Co Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28].

20. [223]

    Sue’s sole ground of appeal was as follows:

21. [224]

    So expressed, that is essentially a challenge to the primary judge’s evaluative characterisation of Sue’s conduct in resisting the application of Merilyn and Bruce as unreasonable. No error of principle is identified in the ground of appeal and indeed it was accepted on the hearing of the appeal that the primary judge’s identification of the applicable principles was correct.

22. [225]

    To the extent that, in written submissions, Sue has contended that there was no evidence or finding against her of impropriety or dishonesty; the pursuit of a purely personal benefit or interest; an improper purpose; or maintaining a claim “of a monstrous character” (see Drummond v Drummond [1999] NSWSC 923 at [45]), that submission missed the point. The learned primary judge did not so characterise Sue’s conduct; indeed, she made it plain that she was not making any finding of impropriety in CJ [339].

23. [226]

    The fact remains, however, that acting “unreasonably” in causing costs unnecessarily to be incurred is a basis upon which a trustee or executor may be deprived of his, her or its right of indemnity. That was quintessentially a matter for the primary judge and no suggested error of principle was identified. Nor does Sue’s appeal raise a question of public importance or suggest a reasonably clear injustice going beyond something that is merely arguable. In short, Sue required leave to appeal but has not satisfied any of the criteria for the grant of leave. Her application must be dismissed.

Further costs issues in relation to Merilyn and Bruce’s appeal

1. [227]

   Two aspects of Merilyn and Bruce’s appeal in relation to costs have already been dealt with: see [163]–[168] above.

2. [228]

   It remains to consider Grounds 12 and 13 which were as follows:

3. [229]

   The reason why the primary judge did not order that Merilyn and Bruce's costs of defending the estoppel and family provision claims be paid out of Bill’s Estate on the indemnity basis was because of their failure to accept the Offers of Compromise, which have been referred to at [21] above, and her Honour’s assessment that, notwithstanding his failure in the estoppel claim, Geoff ultimately secured a superior result in the proceedings overall than he would have received had the Offers of Compromise been accepted.

4. [230]

   The primary judge’s assessment that Geoff had bettered the Offers of Compromise was plainly informed by his success in the family provision claim. In view of the conclusion to which we have come, namely that the claim should have been rejected, the significance of the Offers of Compromise including whether they were capable of acceptance in accordance with the UCPR (the matter put in issue by Ground 12), fall to be considered.

5. [231]

   It is first necessary to set out the terms in which the Offers of Compromise were made.

6. [232]

   On 31 May 2019, Mr Martin, who acted as Geoff’s solicitor in the proceedings, sent the following letter to Ms Ross-Maranik, the solicitor representing Merilyn and Bruce:

7. [233]

   The Offers of Compromise enclosed in Mr Martin’s letter were relevantly identical, substituting Merilyn for Bruce mutatis mutandis, and read as follows:

8. [234]

   It may be noted that these offers were made very shortly after Pembroke J had appointed Merilyn and Bruce to represent Bill’s Estate in the litigation.

9. [235]

   On the same date as the Offers of Compromise were made, Mr Martin sent a further letter of some nine pages in length to Ms Ross-Maranik (the Calderbank letter), setting out and explaining the reasons why the offers of compromise and/or settlement were “desirable to accept”, so as to ensure that they were effective “on Calderbank terms”.

10. [236]

    This letter contained a detailed summary of Bill’s Estate, the respective positions and objectives of the parties, their costs exposures, including the fact that Geoff had charged his interest in The Springs and Hurricane Hill in favour of Mr Martin as security for his costs, and the various permutations by which the proceedings could be conducted and resolved.

11. [237]

    Geoff’s costs exposure was estimated to be in the sum of $900,000 as at the time the Calderbank letter was sent, and was projected to increase to $1.6 million in the event that the proceedings were determined following a contested hearing.

12. [238]

    The summary in the Calderbank letter was in turn narrowed down to the following salient points for the purposes of explaining the Offers of Compromise:

13. [239]

    The terms of settlement were further explained by Mr Martin, who described the “genuine compromise” disclosed therein, on the part of Geoff, as follows:

14. [240]

    Importantly for present purposes, the expanded terms of settlement put forward in the Calderbank letter were said not to represent a “different offer to the one contained in the Offers of Compromise”. Rather their purpose was summarised as simply:

15. [241]

    At CJ [306], the primary judge described the effect of these offers as involving Geoff:

16. [242]

    On 9 July 2019, Ms Ross-Maranik sent a letter to Mr Martin responding to the Offers of Compromise and the Calderbank letter, stating that her “clients are unable to accept this offer in its current form” for several reasons:

17. [243]

    By way of counter-offer, formulated in view of the reasons summarised above and the financial resources available to them, Merilyn and Bruce were willing to transfer a lump sum of $400,000.00 to Geoff, out of Bill’s Estate, in return for receipt of a transfer of Geoff’s 50% share in The Springs. This counter-offer was stated to be “subject to and conditional upon separate negotiations and agreement with [Sue]”. This counter-offer was described by Ms Ross-Maranik as providing “a practical means by which [Geoff] may mitigate some of his losses and avoid his extensive exposure to future costs, while concluding the current proceedings”.

18. [244]

    The full terms of the counter-offer were as follows:

19. [245]

    The primary judge rejected Merilyn and Bruce’s argument that the Offers of Compromise were not able to be accepted in the form in which they were made, expressing the conclusion that they complied with the formal requirements for a valid offer under r 20.26 of the UCPR. The Offers of Compromise made clear that they were issued under that rule and were expressed to be open for acceptance for the requisite time: CJ [304].

20. [246]

    At CJ [305], which is referred to expressly in Ground 12, the primary judge observed:

21. [247]

    Her Honour noted that the terms of the counter-offer which have been set out above at [244] above strongly undermined the practical and logistical objections that had been made to the Offers of Compromise on behalf of Merilyn and Bruce. The primary judge was surely correct in her observation at CJ [307] that:

22. [248]

    The primary judge also rejected the submission that the Offers of Compromise did not contain a genuine element of compromise of the issues in dispute. Indeed her Honour went so far as to describe them as representing a “capitulation” by Geoff in respect of his claims: CJ [314].

23. [249]

    We agree with the primary judge’s analysis that the Offers of Compromise were capable of acceptance. We are also of the view that they did represent a genuine element of compromise albeit that they were formulated in a complex way. This is not said necessarily by way of criticism; rather, it reflected the undoubted complexity of the proceedings as they had evolved. Those complexities existed by reason not only of the existence of the Cross-Claims and the myriad aspects of the First Cross-Claim, but also by reason of the fact that Bruce and Merilyn appeared in different capacities: as representatives of Bill’s Estate in defending Geoff’s claim and as representatives of Jill’s Estate in bringing the First Cross-Claim against the executors of Jill’s Estate. In the middle of this was Sue who at all times remained as executor of Bill’s Estate, albeit not representing it in the proceedings as a result of the orders of Pembroke J.

24. [250]

    Although we have expressed our agreement with the primary judge that the Offers of Compromise formally complied with the Rules and were capable of acceptance, we consider that this is a case where it is appropriate that, even though Geoff could be said to have obtained a judgment no less favourable than the terms of his offer within the meaning of UCPR r 42.14(1), the consequences of that result should not be as provided for in UCPR r 42.14(2) but, rather, the Court should “otherwise order” within the meaning of that sub-rule.

25. [251]

    The Offers of Compromise were, as we have explained, complicated and involved, in substance, the “buy out” of Geoff’s interest in The Springs at a time where, on the evidence, it had been badly affected by drought and where neither Merilyn nor Bruce were graziers or lived in close proximity to the property and did not necessarily have the cash to make the acquisition (although this would largely have been a question of timing given their expectation from Bill’s Estate). This analysis is consistent with the primary judge’s assessment at CJ [317] that, viewed as Calderbank letters, it was not unreasonable for Merilyn and Bruce not to have accepted the offers contained in them. The Offers were further complicated by the fact that they involved Sue in effect gaining a carried one-third interest of Geoff’s 50% interest in The Springs without making any financial contribution.

26. [252]

    On the other hand, both Merilyn and Bruce were fighting to protect the interest they would receive in The Springs or the proceeds of its sale as residuary beneficiaries under Bill’s Estate. There also was, in our view, a very significant element of compromise in the Offers of Compromise. The notional value of The Springs on the desktop evidence at the time the Offers were made meant that Bruce and Merilyn would be acquiring a one-third interest in Geoff’s 50% interest at something of a discount and, together with Sue, would come to own one-third of the property, with Geoff being entirely removed from the picture. Moreover, as the primary judge observed in the passage we have quoted at [247] above, the practical and logistical obstacles presented by Bruce and Merilyn in response to the Offers masked the reality that they were seeking to acquire Geoff’s 50% interest in The Springs at an even deeper discount than he had offered.

27. [253]

    When considering in what terms an “otherwise order” should be made, we must bear in mind, amongst other considerations, ss 56, 58 and 60 of the Civil Procedure Act 2005 (NSW): compare Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 at [16]-[18], quoted with approval in Keynes Capital Global Limited v Guo (No 2) [2020] NSWCA 336 at [12]. There is no doubt that, had the proceedings been resolved at the time the Offers of Compromise were made, very significant costs would have been saved, as had been explained by Mr Martin in his correspondence in support of the Offers of Compromise. The litigious result represented by those Offers, namely the failure both of Geoff’s claims and Merilyn and Bruce’s First Cross-Claim, has come to pass. At least to the extent of the costs of defending Geoff’s claims, that has been at the expense of the Estate. That was the risk which Merilyn and Bruce took in seeking to drive a harder bargain than was presented by the Offers of Compromise. The main party to have lost out as a result of the rejection of the Offers was Sue.

28. [254]

    In our view, in light of the outcome we have reached in respect of both Geoff’s claim for family provision and the appeal brought by Merilyn and Bruce in relation to the First Cross-Claim, and in view of the genuine element of compromise reflected in the Offers of Compromise and the fact that Geoff has bettered those offers, we would make the following orders with respect to the costs of the proceedings at first instance:

Orders

1. [255]

   It follows from the above that the following orders should be made:

   1. (1)

      Appeal allowed with costs other than with respect to Ground 11.

   2. (2)

      Merilyn and Bruce to pay Geoff's costs in relation to Ground 11.

   3. (3)

      Set aside order 3 made on 12 March 2021 and orders 1(ii), (iii) and (iv), 2(i) and (iii) and 3(i) and (iii) made on 27 April 2021 and, in lieu thereof, order that:

   4. (4)

      Application for leave to cross-appeal be dismissed with costs.