Bassett v Cameron (No 2)

1. [1]

   HER HONOUR: On 12 March 2021, I handed down judgment (Bassett v Cameron [2021] NSWSC 207) (the principal judgment) in proceedings arising out of disputes between the four adult children of the late Elaine Jill Bassett (Jill) and the late William Edward Bassett (Bill).

2. [2]

   In summary, I dismissed the plaintiff (Geoff Bassett)’s amended statement of claim, other than in relation to his claim for further provision out of Bill’s estate, and I dismissed the first cross-claim (brought by two of his siblings, Merilyn Ryan and Bruce Bassett, as representatives of Jill’s estate) which related to claims of maladministration in respect of Jill’s estate. The second cross-claim (brought by Geoff), which arose only if Bruce and Merilyn were successful on the first cross-claim, was dismissed with no order for costs. I reserved the question of the costs of both the amended statement of claim and first cross-claim, to be dealt with on the papers, if possible, and for that purpose I made directions for the filing of written submissions in relation thereto.

3. [3]

   Since then, I have received and considered submissions as to costs filed by each of Geoff, on the one hand, and Bruce and Merilyn, on the other; as well as submissions on costs filed by the first defendant, Sue Cameron (the remaining sibling, who, with Geoff, is the co-executor named in Bill’s Will). I then received reply submissions from each and further supplementary submissions from Sue. The ongoing cost (and time) expended in what is ultimately an unedifying sibling dispute as to their deceased parents’ estates is regrettable, to say the least.

4. [4]

   These are my reasons for the costs orders I now propose to make and which will dispose of the proceedings. I note that these reasons deal with an issue reserved by Pembroke J as to whether Sue should be indemnified out of Bill’s estate for costs of the conduct of the proceedings as representative of Bill’s estate until 27 May 2019.

Background

1. [5]

   The background to the proceedings is set out in my principal judgment and I do not propose here to repeat it. I adopt the same defined terms as used in those reasons and, again, I refer to the family members by their first names, without intending any disrespect.

Parties’ respective positions on costs

1. [6]

   In summary, the parties seek the following costs orders.

2. [7]

   Geoff seeks an order that the first and second cross-claimants to the first cross-claim (Bruce and Merilyn, respectively) pay his costs of the primary proceeding and the first cross-claim (as agreed or assessed), on the ordinary basis on or prior to 31 May 2019 and on the indemnity basis on or after 1 June 2019. Costs of the second cross-claim have already been dealt with, there being no order made as to those costs. The claim for part of Geoff’s costs to be awarded on an indemnity basis is by reference to the making by Geoff on 31 May 2019 of offers of compromise (Offers of Compromise) relied upon in the alternative as Calderbank offers (see Calderbank v Calderbank [1975] 3 All ER 333) to which I refer in due course.

3. [8]

   In the alternative, Geoff seeks orders that his costs of the primary proceeding be paid on a “standard basis” (by which I understand him to mean the ordinary party/party basis), either by Bruce and Merilyn or from the residue of Bill’s estate, and that Bruce and Merilyn pay his costs of the first cross-claim (on the ordinary basis or such other basis as the Court sees fit).

4. [9]

   Bruce and Merilyn (unsurprisingly, given the history of the disputes to date) contend for very different costs orders.

5. [10]

   As to the costs of the primary proceeding, Bruce and Merilyn submit that: Geoff should pay their costs of the primary proceeding (excluding his family provision claim), i.e., a costs order limited to Geoff’s proprietary estoppel claim, on the indemnity basis (or alternatively on the ordinary basis up to 11 July 2019, and on the indemnity basis as and from 11 July 2019 or alternatively from 23 July 2019); that there should be no order as to Geoff’s costs of his family provision claim, with the intent that he bear his own costs; and that their own costs of defending the family provision claim should be paid out of Bill’s estate on the indemnity basis. They rely on two Calderbank offers made in July 2019 in relation to their submission that Geoff should pay costs, or part of their costs, on an indemnity basis. Alternatively, they contend that Geoff’s conduct of the proceeding warrants such an order.

6. [11]

   As to the costs of the first cross-claim, Bruce and Merilyn submit that their costs of the first cross-claim should be paid out of Jill’s estate (which in practical terms they say means out of Bill’s estate, Bill being Jill’s co-executor and the recipient of her assets) and that there be no order as to Geoff’s costs; or, in the alternative, that Geoff’s costs of the first cross-claim be paid on the ordinary basis by Bill’s estate and that such an order exclude certain costs identified as costs thrown away (see below at [104]) (to which I will refer as the Excluded Costs).

7. [12]

   As to the costs incurred by Sue, as representative of Bill’s estate up to and including her removal as representative of the estate for the purpose of these proceedings on 27 May 2019, Bruce and Merilyn submit that those costs should be paid by Sue personally and should not be indemnified from Bill’s estate.

8. [13]

   Alternatively, if the above not be accepted, Bruce and Merilyn submit that: Geoff should pay their costs of the primary proceeding (excluding his family provision claim) on the ordinary basis; that Geoff’s costs of the first cross-claim be paid by Bruce and Merilyn (with an indemnity from Bill’s estate) on the ordinary basis (but, again, that any costs order exclude the Excluded Costs). Again on this alternative, as to the costs of Geoff’s family provision claim, Bruce and Merilyn say that: there should be no order as to the costs incurred by Sue, with no indemnity from Bill’s estate; Bruce and Merilyn’s costs should be paid out of Bill’s estate on the indemnity basis; and that there should be no order as to Geoff’s costs, with the intent that he bear his own costs, or, alternatively, that Geoff’s costs to be paid out of Bill’s estate should be capped in the amount of $50,000, pursuant to s 98 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act).

9. [14]

   Sue initially submitted that the following costs orders should be made insofar as they relate to her: that Geoff should pay her costs of his proprietary estoppel claim up to 27 May 2019 (i.e., the costs of the primary proceeding excluding his family provision claim); that Sue, in her capacity as executor of Bill’s estate, pay Geoff’s costs of his family provision claim up to 27 May 2019, in a sum to be capped; that Bruce and Merilyn pay Geoff’s costs of the family provision claim following 27 May 2019; and that Bruce and Merilyn pay Sue’s costs of the first cross-claim. Sue also sought an order that she be indemnified from Bill’s estate in respect of the costs (including adverse costs) of the notice of motion filed by Bruce and Merilyn on 14 March 2019 and determined by Pembroke J on 27 May 2019.

10. [15]

    In reply submissions, for reasons that I address in due course, Sue proposed the following revised costs orders (in lieu of the above proposed costs orders) on the basis that there were multiple issues requiring severable treatment:

Relevant Principles

1. [16]

   The relevant principles on costs applications are well known and were not in dispute. They may be summarised briefly as follows.

2. [17]

   There is a broad discretion as to costs (see s 98 of the Civil Procedure Act; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 (Oshlack)) but it must be exercised judicially and having regard to the overriding statutory purpose mandated by s 56 of the Civil Procedure Act.

3. [18]

   The usual order is that costs follow the event (r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR)); unless the Court considers that some other order ought to be made (see Purnell v Tindale (No. 2) [2020] NSWSC 1047 at [12] per Henry J; Commonwealth of Australia v Gretton [2008] NSWCA 117 (Gretton) at [38] per Beazley JA, as Her Excellency then was (with whom Mason P agreed)). Ordinarily, where there are multiple issues in proceedings, the Court does not seek to differentiate between the issues on which a party succeeded and those in which the party did not succeed, unless the two are clearly severable (see Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; [1994] NSWCA 338 at 330-331 per Mahoney JA; and Yazgi v Permanent Custodians Ltd (No. 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA). The apportionment of costs between different issues in proceedings may be appropriate, for example, where: there is a separate issue involving a disputed question of fact or law and the determination of that issue takes additional time in preparation and in argument (see Ryde Developments v Property Investors Alliance (No 2) [2018] NSWCA 40 at [7] referring to Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38]).

4. [19]

   As to costs in relation to family provision claims, again that there is a broad costs discretion in making orders under the Succession Act 2006 (NSW) (Succession Act) to achieve overall justice in the case. There are various alternatives which may be adopted in this regard, including the capping of costs, orders for provision inclusive of costs and, in appropriate cases, making no order as to costs. Parties to family provision claims are discouraged, during the case management process, from incurring substantial costs (and they are required to file affidavits deposing to their costs in advance of the hearing). Generally, the executor’s costs of defending such claims will be payable out of the deceased’s estate on an indemnity basis.

5. [20]

   As to the claims here made for special (indemnity) costs orders, the rationale for special costs orders is that which was explained in cases such as Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 per Kirby P, Mahoney JA and Samuels AJA, and Gretton. The public policy objectives of such orders include the encouragement of the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation (see also Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 (Miwa) at [6] per McColl, Basten and Campbell JJA).

6. [21]

   Pursuant to r 42.14 of the UCPR, where an offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer, the plaintiff is entitled (subject to any contrary order) to his or her costs on: (i) the ordinary basis up to the date of the offer; and (ii) the indemnity basis as from the beginning of the day following the date of the offer.

7. [22]

   As to the general principles concerning Calderbank offers, see Jones v Bradley (No 2) [2003] NSWCA 258, the Court of Appeal there approving (at [8]-[9]) what had been said by Giles JA in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37]. The factors relevant to take into consideration in this regard are well-known (see, as summarised in Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519 (Favotto) at [20]-[30]). Relevantly, while the rejection of a Calderbank offer, in circumstances where it transpires that the final result in the proceeding is less favourable to the offeree, enlivens the discretion to award indemnity costs, it does not create a prima facie right to such an order (see Favotto at [28]; Chief Commissioner of State Revenue v Platinum Investments Management Ltd (No 2) [2011] NSWCA 197 at [9] per Campbell, Macfarlan JJA and Handley AJA).

8. [23]

   To warrant the making of a special costs order, the offer must “[constitute] a genuine offer of compromise, which it was unreasonable for the [unsuccessful party] not to accept” (Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4] per Handley, Basten and Beazley JJA; see also Hancock v Arnold (No 2) [2009] NSWCA 19 at [23] per Ipp, McColl and Basten JJA; Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120 at [8] per Basten JA (with whom Santow JA and Young CJ in Eq, as his Honour then was, agreed); Leichhardt Municipal Council v Green [2004] NSWCA 341 at [23] per Santow JA (with whom Bryson JA and Stein AJA agreed)). Where the offer is a Calderbank offer, the onus to demonstrate that it was unreasonable to reject it is on the party seeking to rely on the making of the offer (see Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [26] per Giles, Ipp and Tobias JJA).

9. [24]

   The factors to be taken into regard when considering whether the rejection or non-acceptance of the offer was unreasonable include: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree’s prospects of success assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it (see Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 (Hazeldene’s Chicken Farm) at [25] per Warren CJ, Maxwell P and Harper AJA; Commissioner of State Revenue v Challenger Listed Investments Ltd (No 2) [2011] VSCA 398 at [8] per Buchanan and Tate JJA and Sifris AJA; Miwa at [12]).

10. [25]

    Where a Calderbank offer is unreasonably rejected, and the offeror succeeds in litigation, costs may be made on an indemnity basis at least from the date of the offer or thereabouts. Whether such an order will be made will be determined in the exercise of the Court’s discretion (see Becker v Queensland Investment Corp (No 2) [2009] ACTSC 147 at [12] per Refshauge J).

11. [26]

    As to special costs orders referable to the unreasonable conduct of litigation, the discretion to award indemnity costs may be exercised where there is some special or unusual feature or circumstances in the case (concerning the conduct of the party against whom the order is made and relating to the proceedings in question) to justify such an order (i.e., some “relevant delinquency” by the party as a litigant – see Oshlack at [44] per Gaudron and Gummow JJ). In that regard, “relevant delinquency” does not mean moral delinquency or some ethical shortcoming but delinquency bearing a relevant relation to the conduct of the case (see, for example, White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303 at [11] per McDougall J). Conduct in relation to the matter may be discreditable to an extent warranting a party being deprived of costs (see, for example, Jamal v Department of Health (1988) 14 NSWLR 252 at 271 per Mahoney JA).

12. [27]

    As to the payment of “forthwith” costs orders, costs may be ordered to be paid forthwith where the determination relates to a “separately identifiable matter or may be viewed as the completion of a discrete aspect” and where there has been unreasonable conduct on the part of the party against whom costs is to be ordered (Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 (Fiduciary v Morningstar) at [10]-[13]). However, the issue does not here arise since the costs now to be ordered will be assessable and payable in the ordinary course following a final judgment.

13. [28]

    Finally, insofar as reference was made in submissions to the possibility of a gross sum costs order, it should be noted that the power to make such an order “should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available” (Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 (Harrison v Schipp) at [22] per Giles JA). A gross sum costs order is appropriate where it is desirable to avoid the expense, delay and aggravation likely to be involved in a costs assessment or where a party’s conduct has unnecessarily contributed to the costs of the proceedings and “especially where the costs incurred have been disproportionate to the result of the proceedings” (Hamod v New South Wales [2011] NSWCA 375 at [817]-[818] per Beazley JA with whom Giles and Whealy JJA agreed).

14. [29]

    With the above principles in mind, I turn to the respective parties’ submissions in support of the orders they seek.

Geoff’s submissions

1. [30]

   As adverted to above, Geoff relies on offers that were made by him to Bruce and Merilyn in the course of the proceedings.

2. [31]

   On 31 May 2019 (i.e., within a week of the removal of Sue as representative of Bill’s estate for the purpose of the proceedings and after Merilyn and Bruce had been appointed to represent Bill’s estate in the proceedings), Geoff made separate offers, in substance in the same form, to each of Bruce and Merilyn. The Offers of Compromise were expressed to be offers of compromise under r 20.26 of the UCPR and open for acceptance for 28 days (see the affidavit sworn by Mr Martin (Geoff’s solicitor) on 9 April 2021, Annexure A).

3. [32]

   Each of the Offers of Compromise contained an offer by Geoff to compromise the whole of the claims made in the proceedings (expressly referring to: all the claims made in the amended statement of claim filed 26 February 2015; all the claims made in the first cross-claim filed 16 February 2017; and all the claims made in the second cross-claim filed 31 August 2018), on terms including, relevantly, that:

4. [33]

   The letter dated 31 May 2019 serving those Offers of Compromise, which was expressed to be Without Prejudice Save as to Costs, stated that if, for any reason, either Offer of Compromise was not effective as an offer of compromise under the UCPR, then the letter and the offers contained therein were intended to have effect as an offer of settlement according to the Calderbank principles.

5. [34]

   In a further letter of the same date, again expressed to be Without Prejudice Save as to Costs, Geoff’s solicitor explained that the costs Geoff had incurred in the proceeding at that point in time were approximately $900,000 (see Mr Martin’s affidavit, Annexure B) and set out reasons in support of acceptance of the offers. I note that, if both offers were to be accepted, the result would thus be that Geoff’s costs liability would effectively be discharged; an issue of no little relevance given that Bruce and Merilyn understood that Geoff’s solicitor had taken a charge over Geoff’s interest in the property in respect of his legal costs. (Pausing here, Bruce and Merilyn rely on this as rendering the Offers of Compromise non-compliant with the requirements of the UCPR – see below.)

6. [35]

   It does not appear that the Offers of Compromise were in terms conditional on acceptance by both offerees (it seemingly being assumed that Bruce and Merilyn would take a joint position in that regard – as in fact they did). Nor does it seem that the offers were conditional on Sue’s concurrence (that may have been assumed or it may have been considered unnecessary in that the offers could, on their face, be accepted by Bruce and Merilyn without Sue’s assent). Relevantly, for present purposes, on the face of the Offers of Compromise (and, if not valid as such, the Calderbank offers) it appears that Bruce or Merilyn could have accepted the offer made to him or her even if the other one did not accept the corresponding offer.

7. [36]

   Geoff says that he ultimately obtained a judgment which was no less favourable to him (indeed was more favourable) than the terms of the Offers of Compromise (which, as noted, are alternatively relied on as Calderbank offers). Therefore, he submits that he is entitled to an award of indemnity costs for his costs of the whole of the proceedings on and from 1 June 2019. In this regard, Geoff makes the following submissions.

8. [37]

   First, it is said that the offer that Geoff made to settle the proceeding was a “particularly desperate one” in that he was effectively asking only to have his legal costs paid (the costs to that time being in the order of $900,000), although accepting that he would then have been fully indemnified in respect of his costs rather than obtaining costs on the ordinary basis; but that he would otherwise obtain nothing and would give up his existing (legal and beneficial) 50% interest in The Springs. (The desperation, or otherwise, underlying the offers does not in my opinion have any relevance of itself to the costs consequences of their rejection. It simply suggests Geoff’s motivation to settle the proceedings.)

9. [38]

   The reasons that Geoff says that he obtained a judgment that was substantially more favourable than the terms of the Offers of Compromise (and Calderbank offers) is that the consequence of the principal judgment was that: Geoff retained his 50% interest in The Springs (which was the subject of the offers in question); Geoff was awarded a half share of Bill’s estate’s 50% interest in The Springs (the principal judgment at [1001]); the first cross-claim was dismissed; aside from the costs consequence of the offers, Bruce and Merilyn would be expected to have to pay Geoff’s costs of the first cross-claim on a standard (i.e., the ordinary) basis (see the principal judgment at [1000]); and Geoff would ordinarily be entitled to his costs of the family provision claim from the estate (as to which see his submissions below). (Geoff accepts, however, that there might be a contest – as indeed there presently is - as to whether the costs of the proprietary estoppel claim are severable from the costs of the family provision claim.)

10. [39]

    Bruce and Merilyn’s response to the offer, by letter dated 9 July 2019 from their solicitor (also expressed to be Without Prejudice Save as to Costs) rejected that offer “in its current form” (Mr Martin’s affidavit sworn 9 April 2021, Annexure C). The letter expressed the view that Geoff’s legal costs were excessive, and outside the normal range of what would be considered to be reasonable or proportional; and that Geoff had, in effect, already “lost” his half of The Springs (as a result of a charge he had given to his solicitors over the land in relation to his legal fees) and, therefore, that the real value of a settlement to Geoff was whether it avoided “the even greater losses that he faces if the proceedings continue”.

11. [40]

    The letter asserted an expectation that similar costs (to Geoff’s estimated costs exposure, if the matter went to trial, of $1.6 million) would be sought against Geoff if part or all of his claims were unsuccessful (which, somewhat surprisingly, seems to be suggesting that, despite their apparent indignation at the excessiveness of Geoff’s costs, the defendants’ costs would be of similar order). Further, the letter stated that Geoff also faced liability for the $2,256,750 claimed for the maladministration of Jill’s estate (i.e., assuming the success of the first cross-claim).

12. [41]

    The letter went on to state that Bruce and Merilyn’s enquiries indicated various costs and issues associated with the proposal that were said to make it “financially prohibitive in its current form”, including that the transfer of Geoff’s share of the farm to them “and its subsequent sale” would attract costly agent, marketing and transfer fees “and the possibility of significant capital gains tax in addition to any capital costs to invest in farm improvements to achieve a sale”.

13. [42]

    Pausing there, the reference to a subsequent sale makes clear (as evident from other statements in their solicitors’ letter and Merilyn’s affidavit sworn 9 April or 2021) that Bruce and Merilyn were not interested in retaining and operating The Springs as a farm. Thus, the costs of a sale would presumably have arisen in any event, albeit that the proportion of those costs that (as residuary beneficiaries) Bruce and Merilyn would effectively bear would differ on the two scenarios; i.e., as between a realisation by the estate (at the estate’s cost) of the estate’s one-half share of The Springs as part of the assets of deceased and then the distribution of net proceeds after estate liabilities between the three residuary beneficiaries (which would presumably mean the sale costs would be divided between the three residuary beneficiaries as to a half share and Geoff as to the other half share); as opposed to the costs that would be borne by Bruce and Merilyn (and Sue, for that matter) if there were to be a transfer to them by Geoff of a one-third interest each in his half share of The Springs and then a subsequent sale by the three of The Springs.

14. [43]

    The letter also referred to “logistical costs” and issues for Bruce and Merilyn in owning and operating the farm from interstate (they living in Queensland and Canberra, respectively); and said that the value of the farm had been depleted by the very low stock numbers recorded in the past four years, as well as drought conditions and the “unimproved condition of the farm” (something apparently relied on as going to the potential difficulty of selling The Springs or as reducing the amount that might be realised from the sale).

15. [44]

    The letter also conveyed Bruce and Merilyn’s instructions that it was not practical for them to own Geoff’s share of the farm with Sue “given the hostility she has shown towards [them]” (highlighting that, at least from Bruce and Merilyn’s perspective, there is no love lost between Bruce and Merilyn on the one hand and Sue on the other). I note this result is effectively the same as provided for under Bill’s Will, at least until The Springs was realised as an estate asset; namely that Sue was entitled to a one-third share of the residuary estate which included Bill’s half share of The Springs.

16. [45]

    In that letter, Bruce and Merilyn made an offer expressed to be pursuant to the Calderbank principles and to be relied upon in any application for a special costs order. The offer was expressed to be subject to and conditional on separate negotiations and agreement with Sue. The terms of the offer included that, in lieu of provision for Geoff out of Bill’s estate, the estate pay the sum of $400,000 simultaneously with the transfer (the costs of which were to be borne by Bill’s estate) of Geoff’s existing share of The Springs and Hurricane Hill to Bruce and Merilyn in equal shares as tenants in common and that Geoff pay his own costs of the proceedings and renounce his role as executor of Bill’s estate with no right or entitlement to any claim for provision.

17. [46]

    Geoff makes the following comments in relation to this response to his Offers of Compromise.

18. [47]

    First, as to the practical difficulties identified with the proposal that Geoff transfer 50% of The Springs to Bruce, Merilyn and Sue, Geoff submits that, while this might ordinarily raise a question as to whether the offer made by Geoff was capable of acceptance, any such question is here answered by the fact that in the same letter Bruce and Merilyn’s solicitor made the without prejudice offer referred to above, including in its terms a similar transfer, i.e., that:

19. [48]

    Geoff submits that the fact that Bruce and Merilyn’s proposal provided for a transfer of his interest in the land demonstrates that his own offer was readily capable of acceptance. It is noted that the effect of Bill’s Will (unless Geoff’s claim succeeded) was that Bruce and Merilyn already shared Bill’s residuary estate with Sue, including a 50% share of The Springs. Thus, it is submitted that also sharing Geoff’s 50% share of The Springs with Sue could not render Geoff’s offer incapable of acceptance.

20. [49]

    Further, it is submitted that, when compared with Geoff’s offer, the effect of Bruce and Merilyn’s counter proposal was that Sue would be “cut out of” a share of the transfer of Geoff’s 50% interest in The Springs; that Sue would bear one-third of the cost of the proposed payment to Geoff (as a residuary beneficiary of Bill’s estate); and that Geoff would receive $400,000 rather than $900,000.

21. [50]

    Second, it is noted by Geoff that Bruce and Merilyn were by that stage well-informed about the commercial calculations underlying the value of the offer. Geoff points to the fact that, on or about 28 May 2018, Bruce and Merilyn had obtained a “desktop land valuation” from Herron Todd White which valued The Springs (including Hurricane Hill) at $3.5 million (see Mr Martin’s affidavit sworn 9 April 2021, Annexure D). It is noted that Bruce and Merilyn relied on the desktop valuation in the proceedings insofar as it formed part of the report dated 26 March 2019 of their expert, Mr Loneragan; and that both Bruce and Merilyn were aware of the existence (and contents) of that desktop valuation, pointing to Bruce’s affidavit sworn 22 May 2019, in which he deposed (at [65]) that:

22. [51]

    Geoff says that his offer to each of Bruce and Merilyn, on the basis of their own estimate as to the value of The Springs, was to provide each of them with an interest in real property with a value of $583,334 (being 1/6 of $3.5 million) in exchange for a payment of $450,000 (with the net effect being the receipt of an asset worth $133,334 more than they would be required to pay for it). It is submitted that each of Bruce and Merilyn would have had the capacity to pay the $450,000 sought since each was entitled to a one-third share in the residue of Bill’s estate and, as at 6 August 2020 (and as at the date of the offer), the gross value of the residue in Bill’s estate was estimated at between $2,494,023 and $2,677,023 (referring to Bruce’s affidavit sworn 6 August 2020 at [11]).

23. [52]

    Accordingly, Geoff seeks his costs of the primary proceeding and the first cross-claim on an indemnity basis from 1 June 2019, the day after the offer (31 May 2019).

24. [53]

    In the event that an order for indemnity costs on the basis of the above Offers of Compromise (or Calderbank offers) is not made, then Geoff makes the following submissions as to the costs of each of the claims in the proceedings.

25. [54]

    Geoff accepts that his primary claim was a proprietary estoppel claim (the family provision claim being an alternative claim); and that he was ultimately unsuccessful in that proprietary estoppel claim. However, he submits that the two claims are not severable, given the commonality between the issues to be determined in both of the claims, and that, ordinarily, a successful plaintiff would have a costs order even if not successful on all claims unless those claims were severable.

26. [55]

    Geoff submits that in the present case there were no factual issues for the proprietary estoppel claim that were separate from the family provision claim; but, rather, that the factual issues in the proprietary estoppel claim were a subset of the factual issues in the family provision claim, noting that he relied upon the representations as to The Springs for both his proprietary estoppel and the family provision claim (see the principal judgment at [119]).

27. [56]

    Geoff says that the critical facts relied on for his proprietary estoppel claim (the representations and detrimental reliance) were relevant to the testamentary intentions of Bill (see s 60(2)(j) of the Succession Act; the principal judgment at [1001]) and to an assessment of any contribution (whether financial or otherwise) by Geoff to the acquisition, conservation and improvement of Bill’s estate (see s 60(2)(h) of the Succession Act). For those reasons, it is said that the two claims are not clearly severable.

28. [57]

    Geoff says that Bruce and Merilyn’s submission as to the proportion of the evidence concerned with the proprietary estoppel claim (see below), incorrectly characterises all or most of the lay evidence as relating to the proprietary estoppel claim.

29. [58]

    Geoff says that the majority of the lay evidence was concerned with matters which went directly to the family provision claim (some of which was relevant to the proprietary estoppel claim). It is noted that each of Geoff, Bruce and Merilyn adduced evidence across forty years of family relations as being relevant to the family provision application, referring to: Geoff’s evidence as to the contributions he had made to the conservation and improvement of Bill’s estate over the course of farming dealings (referring to the principal judgment at [967]-[972]); and Bruce and Merilyn’s evidence as to significant gifts given to Geoff by their parents over the course of their lives (referring, in particular, to the principal judgment at [973]-[977]).

30. [59]

    It is submitted that there was no meaningful dispute about the law in relation to the proprietary estoppel claim and that the factual issues dealt with as part of the proprietary estoppel claim necessarily had to be resolved in any event for the purposes of the family provision claim. Thus, it is submitted that the costs are not severable and Geoff should have his costs of the claim. It is further submitted that it would not be practical to sever the costs (and that it would simply lead to further dispute between the parties – as to which, I consider there is little, if any, doubt).

31. [60]

    Geoff points out that the usual rule in family provision claims is that he would be entitled to his costs on the ordinary basis from Bill’s estate (referring to Sarant v Sarant [2020] NSWSC 1686 at [57] per Hallen J). Geoff says that, in this case, there is a question as to whether Bruce and Merilyn, rather than the estate, should pay Geoff’s costs of the primary claim (or the family provision claim, if it is determined that the proprietary estoppel claim is severable). Geoff points out that, if his costs are ordered to be paid from Bill’s estate, then the practical consequence is that Sue would effectively bear one-third of those costs, as she is a residuary beneficiary of Bill’s estate.

32. [61]

    In that regard, Geoff says that Sue would ordinarily be entitled to an indemnity from Bill’s estate for her costs incurred up to 27 May 2019 and for any costs she was ordered to pay Geoff. Geoff says that Merilyn and Bruce’s entitlement to indemnification out of Bill’s estate, for representing the estate after 27 may 2009 is subject to the special costs orders here sought (arising from their rejection of the Offers of Compromise) and that any indemnity would, regardless, not include Bruce and Merilyn’s costs of the first cross-claim (see below).

33. [62]

    In any case, Geoff submits that he should have his costs of the primary claim (and that it is a matter for the Court whether that should be from Bruce and Merilyn or from Bill’s estate).

34. [63]

    As to the first cross-claim, Geoff says that Bruce and Merilyn were unsuccessful in all aspects of the first cross-claim and that he is entitled to his costs in relation to this claim. Further, he submits that these costs should be met by Bruce and Merilyn personally (and not from Bill’s estate) because the first cross-claim concerned the alleged maladministration of Jill’s estate (i.e., not Bill’s estate) and, as such, Bruce and Merilyn were not acting for Bill’s estate in relation to that claim.

35. [64]

    In his initial submissions, Geoff sought an opportunity to be heard in the event that either Bruce or Merilyn were to seek some special costs order (such as an order seeking to cap Geoff’s costs by way of a fixed-sum costs order under s 98 of the Civil Procedure Act), as they have indeed. I address relevant aspects of his reply submissions in due course. Suffice it here to note that any further oral hearing is opposed by Bruce and Merilyn and, in my opinion, would just lead to further wasted costs. Geoff has had ample opportunity to respond by way of his reply submissions.

Bruce and Merilyn’s submissions

1. [65]

   Bruce and Merilyn say that there are complexities in the present proceedings which should result in an order other than the usual order of costs being made. In this regard, they refer to the following matters, each of which is addressed in more detail in due course.

2. [66]

   First, the offers made between the parties which were expressed to be “Without Prejudice Save as to Costs”, referring to the affidavits sworn by each of Merilyn and by Bruce and Merilyn’s solicitor (Ms Monica Ross-Maranik) on 9 April 2021.

3. [67]

   Second, that Geoff’s costs are excessive and disproportionate to the success he has achieved. It is said that the Court’s interest in principled fairness should result in an order pursuant to s 98 of the Civil Procedure Act limiting any costs which Geoff might otherwise expect to have ordered in his favour.

4. [68]

   Third, as to Geoff’s costs generally, it is said that, to the extent that the proceedings were not conducted by Geoff in accordance with s 56 of the Civil Procedure Act (as to which, see their submissions below), neither Bruce and Merilyn nor the relevant estate should have to bear such costs.

5. [69]

   Fourth, that, in bringing the first cross-claim, Bruce and Merilyn were appointed by Stevenson J to represent Jill’s estate to recover any assets for the benefit of the residuary beneficiaries (which include Sue) and to ensure these assets were not improperly subjected to Geoff’s claim. It is said that, on the usual costs principles, Bruce and Merilyn should receive an indemnity from Jill’s estate and that, while they were not successful in restoring property to Jill’s estate, the issues arising from Geoff’s conflict of duty and the benefit derived by Bill from Jill’s estate (referring by way of example to the Claim 6 assets and [822] of the principal judgment) make it appropriate that Bill’s estate should bear the burden of Bruce and Merilyn’s costs; and that no orders should be made as to Geoff’s costs, with the intention that he should bear his own costs.

6. [70]

   Furthermore, it is submitted that Geoff’s conduct in “obstructing” the investigation of Jill’s estate and the “single expert process” (as to which, see below) supports the making of these orders.

7. [71]

   Bruce and Merilyn seek orders that Sue’s costs not be indemnified out of Bill’s estate pursuant to s 93 of the Trustee Act 1925 (NSW) and/or r 42.25 of the UCPR on the basis that she was a witness for Geoff in his claim against Bill’s estate, and that her conduct “necessitated” that Bruce and Merilyn seek separate representation and also seek to represent Bill’s estate against Geoff’s claims (referring to Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13 (Miller v Cameron) at 578-9 per Latham CJ; Re Jones; Christmas v Jones [1897] 2 Ch 190 (Re Jones) at 197-8 per Kekewich J; Plimsoll v Drake (No 2) (Plimsoll v Drake) (Supreme Court (Tas), Zeeman J, 8 August 1995, unrep)). It is said that Sue acted unreasonably in opposing her removal (given that she did not support Bill’s Will) and noting that she had agreed that Bruce and Merilyn should be joined to act as the “significant contractors” against Geoff’s claim. It is said that Sue also duplicated Geoff’s role as the contradictor against the first cross-claim, when her role was not necessary given that the issues were able fully to be ventilated with Bruce and Merilyn, on the one hand, and Geoff opposing the claim, on the other.

8. [72]

   It is noted that there are a number of outstanding costs orders against Geoff and some issues of reservation of costs (which are set out at Attachment A to Bruce and Merilyn’s submissions). It is said that the orders made in the primary judgment should not affect the orders already made and that, where costs were reserved, Geoff should pay those costs. In particular, it is submitted that Geoff should pay the costs reserved for the directions hearing before me on 26 November 2019 (item 6 of Attachment A). An affidavit sworn by Ms Ross-Maranik on 18 November 2019 is relied upon in this regard.

9. [73]

   It is submitted that, in respect to the outstanding costs and reserved costs (noted in Attachment A as totalling $18,600), there should be a “costs to be paid forthwith” order (see r 42.7 of the UCPR).

10. [74]

    I deal with the question of reserved costs in due course. As to any costs orders that have already been made, I see no basis to disturb those (otherwise than to consider whether Sue should be indemnified from the estate for any adverse costs orders). As to the submission that there should be “forthwith” costs orders, as adverted to above that is unnecessary as judgment has now been handed down and costs will be assessable and payable in the ordinary course after the making of final orders.

11. [75]

    Turning then to the respective claims, Bruce and Merilyn’s submissions are as follows.

12. [76]

    Bruce and Merilyn say that the bulk of the evidence and the hearing time was taken up by Geoff’s proprietary estoppel claim. It is said that around 80% of the hearing (17, 18, 19, 20 and 24 August 2020) was occupied almost exclusively with the proprietary estoppel claim; and that, by contrast, the first cross-claim was essentially dealt with in one day of the hearing. Bruce and Merilyn say that most of the affidavits for the proceedings related to Geoff’s proprietary estoppel claim (they have calculated that twenty-two affidavits were served and/or read for the proprietary estoppel claim, being twelve affidavits for Geoff’s claim, including Sue’s affidavits; as well as ten affidavits on behalf of Bill’s estate); and that only three of these affidavits covered Geoff’s 2015 amended statement of claim as well as the first and second cross-claims. It is also said that over half of the principal judgment was devoted to the proprietary estoppel claim. (As noted above, Geoff says this incorrectly assumes that all or most of the lay evidence relates only to the proprietary estoppel case.)

13. [77]

    As to the claim by Geoff for indemnity costs, Bruce and Merilyn say that their rejection of any offers made by Geoff was not unreasonable and should not ground any special costs orders (see the matters raised in the affidavit sworn by Merilyn Ryan on 9 April 2021).

14. [78]

    In respect of the offers that were made and rejected by them, Bruce and Merilyn start by noting that (at [150] of the principal judgment), I referred to the suggestion of a mediation. It is said that a mediation held in April 2016 was unsuccessful, at a time when the defendant and contradictor to the claim was Sue (not Bruce and Merilyn). Bruce and Merilyn go on to make various submissions as to attempts by them later to pursue the mediation of the dispute which it is said were “rebuffed in an abrupt and unilateral way”, and they accuse Geoff’s solicitor, Mr Martin, of “unprofessional remarks” referring to letters dated 17 November 2017 and 15 January 2020 from Geoff’s solicitor to Bruce and Merilyn’s former solicitor (Ms Kennedy).

15. [79]

    Pausing here, leaving aside the complaint as to the tone or tenor of the relevant correspondence (as to which I say more in due course), I cannot possibly draw any conclusions about the earlier unsuccessful mediation (as to the conduct of which there is, quite properly, no evidence) nor as to the fact that one or more of the parties chose not to take up my suggestion as to a later mediation of the dispute. Had Bruce and Merilyn sought to pursue such an avenue for settlement, an order to that effect could have been sought.

16. [80]

    As to the making of settlement offers, Bruce and Merilyn point to the two offers made by them (referring, in addition, to an unidentified offer said to have been made to Geoff at the mediation in April 2016, before Bruce and Merilyn were involved as parties). It is said that each of these offers gave Geoff the ability to finalise the litigation with certainty and to “stem the tide of costs” which later flowed. The relevant offers from Bruce and Merilyn are identified as: the letter dated 9 July 2019 from Keypoint Law to Martin Legal (to which I have referred above), which it is said was rejected in “disparaging” terms by a letter dated 11 July 2019 from Geoff’s solicitors; and a letter dated 21 July 2020 from Keypoint Law to Martin Legal, receipt of which was acknowledged but in respect of which it is said that the promised response (see the letter from Martin Legal on 23 July 2020) did not eventuate in writing (see Ms Ross-Maranik’s affidavit sworn 9 April 2021, Annexures E, F, G, H).

17. [81]

    It is said that Bruce and Merilyn’s offer of 9 July 2019 was made: during a severe drought (I interpose to note that so, for that matter, were Geoff’s offers); in the context of an appraisal from Landmark Harcourts which valued The Springs between $1,957,000 and $2,275,000 on a per acre basis (Merilyn’s affidavit sworn 9 April 2021, Annexure B); and on the basis that Geoff would receive $400,000 for Bruce and Merilyn (strictly speaking, from Bill’s estate) to purchase his share of The Springs. It is said that that offer was made in a spirit of compromise, and would have enabled Geoff to walk away from the proceedings with nearly half of his costs (at that time) being paid, rather than having a significant costs burden from his loss in the proprietary estoppel claim and the substantial costs he subsequently incurred for that claim.

18. [82]

    Bruce and Merilyn note in this context that Geoff no longer lives near The Springs, referring to the evidence at the hearing that, after Bill died, Geoff sold his home in Inverell, and that, in 2015, he and his then partner, Fiona Fielding, bought another farm (Fernbrook) some 230km away from The Springs in Dorrigo, for $1.5 million. It is also noted that, at the hearing, Geoff confirmed that he expected to retire from farming due to health reasons and that his Senior Counsel submitted in this regard that:

19. [83]

    It is said that the second offer on 21 July 2020 was conditional upon Sue’s agreement but that “negotiations did not get that far”, as it was “apparently unilaterally” rejected by Geoff’s solicitor. That offer was that Geoff pay a sum of $200,000 to each of Bruce and Marilyn, together with their entitlements from the estate of the deceased (then being calculated at $933,000) upon which basis Geoff and Sue (as executors of the estate) could thereafter arrange the estate exclusively between them, including the sale of The Springs at the value asserted by Geoff of $3.6 million.

20. [84]

    It is submitted that this offer, if accepted (and, significantly I would add, if it could be negotiated with Sue), would have left Geoff better off than he is following the findings ultimately made (although Bruce and Merilyn say that a specific arithmetical assessment in the absence of a final costs outcome is not possible). It is submitted that it was not reasonable for Geoff to reject Bruce and Merilyn’s offer, given the uncertainties and lack of corroboration for Geoff’s proprietary estoppel claim (as, they say, the hearing and principal judgment demonstrated). Bruce and Merilyn say that the 21 July 2020 offer effectively reflected an outcome where they sought no payment for any of the issues raised in the first cross-claim, and so this reflected the eventual order made in this regard.

21. [85]

    It is submitted that, given the findings made in dismissing the proprietary estoppel and the first cross-claim, and making a family provision order of half of the estate’s share of The Springs, the 21 July 2020 offer was a reasonable one, and would have saved Geoff significant costs (as outlined in the letter dated 31 May 2019 from his solicitors to Bruce and Merilyn’s solicitors). It is noted that the foreshadowed costs of $700,000, although already significant, were exceeded by the actual costs incurred by Geoff of approximately $820,000.

22. [86]

    Further, Bruce and Merilyn say that Geoff’s conduct of the proceedings was unreasonable. It is noted that Geoff was “entirely unsuccessful” in the substantial claim put by him (the proprietary estoppel claim). (Pausing there, the failure of Geoff’s proprietary estoppel claim does not of itself mean that it was unreasonably brought or conducted.)

23. [87]

    Bruce and Merilyn maintain that Geoff put them (as contradictors to that claim) to significant expense, in pleading representations over a period of 30 years since 1984 only to resile from those pleaded representations at the hearing. It is said that this in turn caused the defendants to incur costs “far beyond what they could reasonably have expected to incur in litigation of genuine issues” (referring to Maule v Liporoni (No 2) (2002) 122 LGERA 216; [2002] NSWLEC 140 (Maule v Liporoni) at [34] per Lloyd J; Degmam Pty Ltd (in liq) v Wright (No 2) (1983) 2 NSWLR 354 at 358 per Holland J) (though those costs are not here identified with any particularity). It is also noted that, despite the departure from the amended pleadings in his submissions, Geoff maintained in cross-examination his earlier claims as to the representations he alleged were made by his father since 1984.

24. [88]

    It is said that the change of Geoff’s case (to restrict the estoppel claim to the representations allegedly made in 2009 and not 1984) was made only in Geoff’s opening written submissions served immediately before the commencement of the hearing; and that, had this abandonment of the pleaded case occurred earlier, this would have had a significant effects on costs as follows. First, that it would have reduced the costs of Bruce and Merilyn in investigating and responding to Geoff’s claims in relation to the pleaded representations and alleged detriment over 30 years. Second, that it would have changed the basis on which Bruce and Merilyn were able to assess Geoff’s claim in the context of responding to settlement offers. (As to the first, it is not clear why this would have been the case when a representation or oral agreement in 1984 of the kind pleaded would also have been relevant to the family provision claim even if not relied upon to found a proprietary estoppel. As to the second, the basis on which Bruce and Merilyn rejected the Offers of Compromise does not suggest this was due to any uncertainty in assessing the prospects of Geoff’s proprietary estoppel claim. Indeed, there is no suggestion that had the claim solely been founded on the alleged 2009 representations this would have caused a different assessment of Geoff’s prospects of success.)

25. [89]

    Bruce and Merilyn submit that this approach was a “vexing” one (referring to the words used in Rinehart v Rinehart [2020] NSWSC 235 (Rinehart) at [145]), which they say should be taken into account were any application for costs (indemnity or otherwise) to be considered in relation to Geoff’s proprietary estoppel claim. Pausing here, I fail to see any analogy that can usefully be drawn between the present case and that considered in Rinehart where the issue was as to an abuse of process in the “vexing” of the defendants by the maintenance of inconsistent claims across different jurisdictions.

26. [90]

    Bruce and Merilyn further say that Geoff’s claim was marked by a significant duplication of evidence, including his 134 page affidavit of 8 June 2017, which contained a significant amount of replication, as well as changes to the evidence previously given and numerous additional matters of contention. While Geoff explained the duplication and modification of his earlier evidence (see Geoff’s affidavit sworn 8 June 2017 at [2]) on the basis that his 2017 affidavit was “a comprehensive compilation of all of [his] evidence to date”, together with all of the evidence he now sought to adduce “so that this information is contained in one convenient document”, Bruce and Merilyn maintain that careful consideration still needed to be given not only to the contents of this 2017 affidavit but also all the previous ones (and they note that all the previous affidavits which resulted in the “compilation” were still read and included in the Court Book).

27. [91]

    It is said that it is also significant that only about 20% of this 2017 evidence was identified by Geoff’s solicitor as relevant to the first cross-claim (as presumably calculated by Bruce and Merilyn by reference to relevant paragraphs identified in the letter - see Ms Ross-Maranik’s affidavit sworn 9 April 2021, Annexure J). Bruce and Merilyn say that it is apparent, from this, that Geoff continued to depose to a significant volume of fresh and duplicated evidence for his proprietary estoppel claim in the years after he filed his amended statement of claim in 2015, as well as after the first cross-claim was filed, which necessarily inter-mixed the costs for these claims, and caused Bruce and Merilyn significant additional expense in analysing and responding to his evidence for both the first cross-claim and Geoff’s proprietary estoppel claim (given Sue’s “support” for Geoff).

28. [92]

    Bruce and Merilyn say that Geoff’s costs also involved significant duplication of effort. It is said that, when Geoff changed solicitors in April 2017, he duplicated his costs for his proprietary estoppel claim as illustrated by his statement in his affidavit of 25 May 2017 (at [8]) that:

29. [93]

    It is said that five full days of conferencing (in proceedings which had been commenced and in which evidence had already been served) is manifestly excessive. (Pausing here, this, and other similar submissions as to unnecessary or duplicated costs, seems to treat the present application as a costs assessment exercise; which would only arise, if at all, for present purposes if a gross sum costs order were here to be considered.)

30. [94]

    Bruce and Merilyn further complain that serious allegations were made by both Geoff and Sue about the conduct of Bruce and Edwina (effectively, they say, alleging that they were guilty of theft), referring to the following affidavits: Geoff’s affidavit sworn 25 May 2017 at [13]; Geoff’s affidavit sworn 8 June 2017 at [498]; [495]; Geoff’s affidavit affirmed 18 October 2018 at [188]; Sue’s affidavit sworn 22 July 2015 at [40]; and Sue’s affidavit sworn 31 May 2018 at [25].

31. [95]

    It is submitted that these repeated and unfounded allegations should attract indemnity costs (referring to what was said in Maule v Liporoni at [39]). It is said that the consideration and response to these claims caused Bruce and Merilyn unnecessary expense; and that they were improper and baseless. Bruce and Merilyn say that there is no evidence of any request to Bruce for any records before these allegations were made in May 2017, and that all records obtained by Bruce and Merilyn on subpoena were the subject of general access orders. Bruce and Merilyn point out that Sue says that she gave Bill’s cheque book and other records to Geoff after Bill’s death and, at the hearing, Geoff admitted that he (not Bruce) had these documents, and that he (not Bruce) also had Bill’s partnership cashbooks. It is said that it was Sue (not Bruce) who took possession of Geoff’s “Discussion Note” and Bill’s “Shopping List” notes after Bill’s death, as noted in Merilyn’s evidence and Bruce’s email to Sue; and that Geoff says that Sue told him Bill’s records “[w]ere taken to the tip” (referring to Geoff’s affidavit affirmed 8 December 2015 at [5]).

32. [96]

    Further, it is said (by reference to the cost orders noted in Attachment A to their submissions) that Geoff repeatedly disregarded Court orders and failed to serve his witness evidence for his proprietary estoppel claim for some 18 months after filing his claim in 2015; and that Geoff was also the subject of a number of calls for production of documents, including those to establish his claim of detriment, but that he only produced the documents underlying his business income during the course of the hearing. Bruce and Merilyn say that a failure to conduct litigation “with a view to speed and thrift results in unjust outcomes”; and it is submitted that it would not be just to require Bruce and Merilyn, or Bill’s estate, to bear any cost for Geoff’s estoppel claim, and that his conduct should be answered by indemnity costs against him.

33. [97]

    Finally, I note that Bruce and Merilyn say that much of Geoff’s costs should not be recoverable. In this regard, it is noted that Geoff filed an affidavit from his former de facto partner, Fiona Fielding, in which it is said that she “purported to critique” the expert reports and “advocate for Geoff”. It is said that Ms Fielding was clearly not an expert (and the affidavit was rejected) but that, again, the affidavit caused cost and delay to Bruce and Merilyn in considering the issues raised and its admissibility.

34. [98]

    In summary, therefore, Bruce and Merilyn’s indemnity costs claim appears to be based on: Geoff’s rejection of their without prejudice settlement offers, their complaints as to excessive, unnecessary and disproportionate costs, duplicated affidavit evidence, evidence that was rejected and duplication of solicitors’ costs; their complaint that Geoff did not conduct the proceedings in a manner consistent with the obligations of a litigant under the Civil Procedure Act; and their complaint as to the making of allegations by Geoff (and Sue) against Bruce and Merilyn as to alleged failure to produce documents.

35. [99]

    It is said that Geoff had a duty, as the sole surviving executor of Jill’s estate, to explain the administration of her estate and to investigate and recover any assets that were maladministered or otherwise unaccounted for; and that he faced personal liability for his failure to meet his duties (citing Bird v Bird (2013) 11 ASTLR 225; [2013] NSWCA 262). It is also said that, Geoff placed himself in a position of conflict with his duties to Jill’s estate, by claiming he had been promised her property by Bill in 2008 and 2009, while they held these assets as executors (The Springs Partnership, Hurricane Hill and The Springs); and that Sue could not act for Jill’s estate (as she represented Bill’s estate) which it is said left Bruce and Merilyn as the only parties able to represent Jill’s estate, instead of Geoff. Pausing here, no claims in devastavit were pursued against Geoff; rather, (due to limitations issues) the claims against Geoff were as to receipt of trust property (hence the reason most of them failed).

36. [100]

    Bruce and Merilyn submit that Geoff’s conduct of the first cross-claim was such that no costs order should be made for his costs of the first cross-claim, with the intent he should bear his own costs of that claim. It is noted that, in Ritter v Godfrey [1920] 2 KB 47 at [60] Atkin LJ said that relevant considerations for the exercise of this discretion are evidence that the defendant “(1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains”.

37. [101]

    Bruce and Merilyn say that it is not necessary for them to establish misconduct nor that the case be exceptional, citing GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 at [20] where Bryson JA (with whom Hodgson and Santow JJA agreed) stated:

38. [102]

    Reference is also here made to what was said by Hallen J in Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326 at [283]:

39. [103]

    It is said that Bill was the other executor for Jill’s estate and was therefore responsible (with Geoff) for maintaining accurate estate records; and that Bill benefited from assets recorded in their joint partnerships. Bruce and Merilyn say that they sought to recover Jill’s assets (as representatives of Jill’s estate since no other party could act in that role) and they submit that their costs of so doing should be indemnified from Bill’s estate. (Pausing here, Bruce and Merilyn in effect made a claim against Bill’s estate in relation to matters relating to the administration of Jill’s estate, which claim was wholly unsuccessful. The suggestion that they should be indemnified out of Bill’s estate for their costs of pursuing an unsuccessful claim against Bill’s estate is paradoxical and, as I discuss below, conveniently ignores that they were two of the three residuary beneficiaries of Jill’s estate and hence had a very obvious interest in the recovery of the claimed assets.)

40. [104]

    Alternatively, it is submitted that, if Bruce and Merilyn were to be ordered to pay the costs of the first cross-claim (for which costs it is again submitted they should be indemnified from Bill’s estate), then the Excluded Costs should be excluded from such an order, namely, costs relating to the single expert evidence process and the costs of the “Samuel Report”; as well as costs thrown away arising out of Geoff’s failure to serve evidence on time.

41. [105]

    In this regard, it is submitted that it would be appropriate to exclude any recovery of costs by Geoff for litigation conducted by him in an unreasonable manner which resulted in both expense and delay. Bruce and Merilyn say that Geoff’s conduct added to the cost and the difficulty of the first cross-claim, occasioning unnecessary expense and delay, particularly in relation to three aspects (considered further below): failure to respond to correspondence or to disclose evidence; “sabotaging” of the “single expert” process; and a disregard for timely provision of evidence and court directions.

42. [106]

    It is said that the only affidavit from Geoff’s side which related solely to the first cross-claim was that dated 13 September 2019, which was served shortly before the hearing despite having been sworn nearly a year earlier, as well as the report of his expert and a four page letter served during the hearing. It is again said that Geoff’s affidavit of 8 June 2017 was predominantly concerned with Geoff’s proprietary estoppel claim, and that he intermixed evidence of his estoppel claim with the first cross-claim in subsequent years.

43. [107]

    It is submitted that Geoff caused the need to investigate Jill’s estate because he claimed, for his proprietary estoppel claim, that Bill promised he would inherit assets that included Jill’s share of assets in 2008 and 2009, which they both held as executors for her estate; but failed to provide accurate estate records, or to explain the administration of Jill’s estate (particularly relating to Jill’s share of The Springs Partnership, The Springs and Hurricane Hill, but also to other estate property).

44. [108]

    Bruce and Merilyn rely on the affidavit of their former solicitor, Ms Kennedy, sworn 23 November 2016 (filed in support of the notice of motion on 3 February 2017 in which they sought leave to being the first cross-claim on behalf of Jill’s estate) and Exhibit 11, which contained correspondence which it is said demonstrates that Geoff and Sue (as co-executors of Bill’s estate) failed to respond to letters about Jill’s estate sent on 23 September and 12 October 2016, and a detailed 14-page report dated 12 October 2016.

45. [109]

    In addition to this, it said that: Mr Carrigan (the estate’s accountant) admitted at the hearing he did not provide accurate information about the administration of Jill’s estate in his letter of 13 January 2015; Mr Carrigan agreed in cross-examination that no consideration was paid to Jill’s estate for her share of The Springs Partnership, and Bill also did not pay the agreed consideration for The Springs; the Inventory of Property for Jill’s estate did not identify Jill’s partnership assets (contrary to Mr Carrigan’s letter of 7 May 2017 to the estate solicitors) and property totalling $1,493,056.63 was not included in the Inventory at all; there are no records to show the winding up or final settlement of accounts for Jill’s interest in The Springs or Monowai Partnerships after her death; and that Sue refused to respond to letters from Bruce and Merilyn’s solicitor or to investigate Jill’s estate prior to probate, and did not disclose written statements from Geoff in October 2014 which Bruce and Merilyn rely on as showing that Geoff was aware that Jill’s interest in The Springs Partnership had not been administered according to her Will and had been “transferred” to Bill.

46. [110]

    It is said that, for three months after the first cross-claim was filed, Geoff again failed to comply with orders made on 3 February 2017, or to respond to letters from Bruce and Merilyn’s solicitor on 21 February 2017, 22 March 2017, 7 April 2017, 20 April 2017, 28 April 2017, 19 May 2017 (noting that a change of solicitor’s notice was filed on 18 April 2017 with the engagement of Geoff’s current solicitor, Mr Martin). Bruce and Merilyn say that, at the directions hearing on 26 May 2017, Geoff filed an affidavit sworn on 25 May 2017 in which he objected to orders to which he had consented on 3 February 2017, criticised his previous solicitors and Senior Counsel and made various (“baseless”) allegations about Bruce (see Bruce’s affidavit sworn 29 June 2017). It is noted that Geoff’s conduct was the subject of an affidavit from Ms Kennedy sworn 25 May 2017, which was filed for the directions hearing on 26 May 2017, and that Stevenson J ordered costs forthwith against Geoff on that occasion (see items 1 and 2 in the table in Attachment A to Bruce and Merilyn’s submissions).

47. [111]

    Bruce and Merilyn complain that, after the first cross-claim was filed, Geoff repeatedly gave assurances that he would adduce evidence to explain the administration of Jill’s estate, and then failed to do so. By way of example, reference is made to what was said by Geoff in his affidavit sworn 25 May 2017 at [36] and [38]:

48. [112]

    It is noted that in his affidavit sworn 8 June 2017, Geoff again gave his assurance that (at [19]):

49. [113]

    Bruce and Merilyn say that, despite these assurances, in his affidavit subsequently affirmed on 23 June 2017, Mr Carrigan referred to only three of the 12 deposits to the bank account for Jill’s estate; made no reference at all to Hurricane Hill (Claim 4); and indicated that Bill paid $250,000 as consideration for Jill’s share of The Springs land (Claim 5) (which he later admitted in cross-examination was inaccurate). It is said that Mr Carrigan repeatedly stated in his affidavit that he could not estimate the value of Jill’s estate as he was not a valuer and he could not express a view as to what amounts were payable or paid to the estate.

50. [114]

    Bruce and Merilyn further say that, in his evidence in 2017, Mr Carrigan did not suggest that Jill’s assets which he recorded in the partnership accounts were not partnership property (an assertion which did not emerge until Mr Carrigan’s affidavit served in early 2019).

51. [115]

    (Pausing here, criticism of Mr Carrigan’s conduct or evidence does not seem to me to be to the point. Mr Carrigan was the estate accountant. There is no basis to suggest that Geoff was responsible for any failures on Mr Carrigan’s part. The fact that Mr Carrigan gave evidence in Geoff’s case is not sufficient to establish such a contention; and, indeed, it seems from the evidence that was before me at the hearing that Bill was the person responsible for instructing Mr Carrigan at the time of the administration of Jill’s estate, not Geoff.)

52. [116]

    Bruce and Merilyn note that orders were made on 30 June 2017 by Stevenson J that Ms Delbridge of Delbridge Forensic Accounting would be appointed as the single expert to investigate Jill’s estate. Bruce and Merilyn rely on the affidavit sworn 21 November 2017 by their previous solicitor (Ms Kennedy) which they say sets out in detail what they say was the appropriate, sensible and cheaper “joint expert” process commenced by Bruce and Merilyn. They complain that this process was “consistently derided and obstructed” by Mr Martin “in most unprofessional terms”, referring to Mr Martin’s letters dated 6 October 2017 and 17 November 2017; and complaining also of a failure by Mr Martin to respond to Ms Kennedy’s letters of 19 October 2017 and 30 October 2017.

53. [117]

    It is said that the single expert also had a view that the tone of Geoff’s representatives was “of great concern” (referring to Ms Delbridge’s letter dated 6 November 2017 and the letter dated 17 October 2017 from Martin Legal). It is said that this arose out of Mr Martin (for Geoff) calling for the expert’s curriculum vitae after Ms Delbridge’s suitability as the single expert for the proceedings had already been considered and approved by Stevenson J by orders made on 30 June 2017. It is submitted that it can be inferred that the “personal reasons” cited by Ms Delbridge on 23 February 2018 (which I understand to be at the time she sought to withdraw from acting as the single expert) were difficulties she encountered in dealing with Mr Martin, on behalf of Geoff. (Pausing here, I cannot possibly here entertain an enquiry as to the cause of any personal difficulties Ms Delbridge may have experienced in relation to her appointment as joint expert, nor would it be appropriate to do so.)

54. [118]

    Bruce and Merilyn say that the failure of the single expert process led to an exponential increase in costs. It is noted that Mr Samuel’s fees were expressed to be $110,000 and it is said that those costs would not have been necessary had Geoff and Martin Legal “been more cognisant of their duties to avoid unnecessary costs, and to participate properly in the single expert process”. (Pausing here, I considered Mr Samuel’s evidence to be of considerable assistance in the determination of the first cross-claim; far more so than that of Mr Loneragan (with no disrespect to Mr Loneragan) for the reasons set out in the principal judgment. The cause of any additional cost referable to Mr Samuel’s report seems to me to flow from the problems identified in Mr Loneragan’s analysis.)

55. [119]

    Complaint is further made by Bruce and Merilyn that the “further explanatory report” of Mr Samuel referred to in [605] of the principal judgment was: served late, without leave, at 10.21pm on a Sunday night immediately before the commencement of the second week of the hearing; and dated 19 November 2019, some nine months before the hearing. It is said that, while the report was accepted into evidence, its late service demonstrates that Geoff and his solicitors, throughout the whole of the proceedings, gave no weight to the rules of litigation and the burden placed upon them by s 56 of the Civil Procedure Act. (It is not, however, suggested how the late service of this report had any adverse costs consequences referable to the present application.)

56. [120]

    Pausing here, the constant criticism throughout Bruce and Merilyn’s submissions of conduct by Geoff’s legal representative is not particularly helpful. This is not a personal costs application against a solicitor (say, pursuant to s 99 of the Civil Procedure Act for serious misconduct, serious incompetence or serious neglect causing wasted costs). Further, I see no basis to attribute to Geoff any intemperate or infelicitous language on his solicitor’s part (at least without evidence that Geoff expressly instructed his solicitor to take such a stance.)

57. [121]

    Further complaint is made as to non-compliance with Court orders for the filing of Geoff’s lay evidence in support of the defence to the first cross-claim (from May 2018 until October 2018); and that, in his letter of 30 May 2018, Mr Martin indicated that Geoff would not comply with those orders because he was considering “potentially joining some people to the proceedings, who are not currently defendants joining other parties to the Cross Claim” (but that no other parties were in fact joined).

58. [122]

    Reference is made to correspondence between the solicitors in relation to that delay (including a letter dated 20 June 2018 from Ms Kennedy about Geoff’s repeated failure to comply with orders; Mr Martin’s response, by letter dated 21 June 2018, as to Geoff’s intention to file a second cross-claim; and a further explanation given in an affidavit filed by Geoff’s solicitor of 28 August 2018 (but not included in the court book)). Bruce and Merilyn say that the explanation that Mr Martin needed to spend a considerable time reviewing the pleadings, following an incident in which his office computer system had been hacked, is “yet another illustration of how costs and delays were needlessly caused (and incurred) by Geoff and his solicitor” (though it is difficult to see why blame should be attributed to Geoff for the fact that his solicitor’s office computer system was “hacked”).

59. [123]

    It is noted that, on 31 August 2018, Geoff filed his second cross-claim against Bill’s estate; but that it was not until 18 October 2018 (more than one and a half years after the first cross-claim had been filed) that Geoff executed his lay affidavit for the first cross-claim. Bruce and Merilyn say that the late service of Geoff’s evidence, which they say continued up to and well into the hearing, made it impossible for them to take an overall view of the evidence and to be in a position properly to assess the strength of the defence to the first cross-claim. (Pausing here, a number of the matters relevant to the prospect of the first cross-claim should have been apparent well before Geoff’s lay evidence – not least, the limitations issue and the fact that one of the claims (claim 1) had already been the subject of a release to which Bruce and Merilyn were party.)

60. [124]

    Bruce and Merilyn emphasise their complaint as to the perceived unfairness of the burden of any costs imposed on them in relation to the costs of the proprietary estoppel claim, given what they allege to be the failure of Geoff to have regard to his obligations under s 56 of the Civil Procedure Act.

61. [125]

    Bruce and Merilyn say that Geoff’s costs of the family provision claim should be considered in the light of the actual evidence and time taken by that claim. It is noted that the result of this claim was that Geoff received 50% of Bill’s estate’s half share of The Springs, which on the basis of his affidavit of 4 August 2020 he estimated as being worth $600,000. It is said that, in order to receive that amount by way of family provision, Geoff expended costs of $1,619,975.67 (primarily on his unsuccessful proprietary estoppel claim, referring to Mr Martin’s affidavit of 17 August 2020).

62. [126]

    Complaint is made that Mr Martin’s costs affidavit (like, it is said, Geoff’s affidavit sworn 4 August 2020 at [58]) did not comply with the requirements as to costs affidavits of cll 17.1 and 17.2 of Practice Note SC Eq 7, in that it did not identify in a readily identifiable way the costs of the family provision proceedings calculated on both an indemnity and an ordinary basis, including costs already paid, disbursements, and the basis of any costs agreement if it were to divert from the usual arrangement.

63. [127]

    It is submitted (though this seems inconsistent with the above submissions that the costs were expended primarily on the unsuccessful proprietary estoppel claim) that, on the basis of the level of costs charged overall, the costs of Geoff’s family provision claim can be inferred to be significantly disproportionate to the amount by which he was successful; and that this warrants an order depriving the otherwise successful plaintiff (Geoff) of the usual costs order, including of a prima facie entitlement to indemnity costs arising from bettering an offer of compromise (citing Jones v Sutton (No 2) [2005] NSWCA 203 (Jones v Sutton)).

64. [128]

    Reference is made to Poche v Poche [2020] NSWSC 835 (Poche v Poche) where Henry J held that the plaintiff’s costs were “excessive” and capped them at $125,000. It is submitted that any costs order to which Geoff may be entitled from the estate for his family provision should be capped at much less than that in Poche v Poche. Reference is also made to Baychek v Baychek [2010] NSWSC 897 (Baychek v Baychek) at [41] per Ball J, where no order was made as to the plaintiff’s costs of a modestly successful action, on the basis that the estate should not bear the excessive or disproportionate costs of a claim, particularly where the plaintiff had assets to bear those costs so that the failure to order costs was not an “unduly adverse consequence”.

65. [129]

    In the alternative, Bruce and Merilyn submit that any costs order should be capped at a reasonable amount so as not disproportionately to burden the estate. It is noted that Practice Note SC Eq 7, which applies to claims for a family provision order, provides, in cl 24, that “[o]rders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the net distributable value of the estate is less than $500,000” (though I note that the estate here is worth considerably more than this). It is noted that this is only one basis upon which costs may be capped (referring to s 98 of the Civil Procedure Act; and to Baychek v Baychek; Sergi (by next friend Solowiej) v Sergi [2012] WASC 18 at [50]-[52] per EM Heenan J).

66. [130]

    It is submitted that appropriate costs of an “adult son” family provision proceeding should not exceed more than $50,000. It is also noted that the costs of the plaintiff in the decision in Ellem v Webber [2020] NSWSC 910 were $40,500 (that being the case relied on in Geoff’s submissions to argue that his costs should be considered a basis for further provision).

67. [131]

    Bruce and Merilyn submit that their costs of defending the family provision claim should be paid out of Bill’s estate on the indemnity basis. They say that the defence of the family provision claim was conducted regularly by them; and that no adverse findings as to their motives or credit in relation to this portion of the proceeding were made.

68. [132]

    As to Sue’s costs, Bruce and Merilyn emphasise that Sue had a duty as executor of Bill’s estate to uphold his Will, to act as the adversary against Geoff’s claims, and to support the interests of Bill’s beneficiaries (Bruce and Merilyn) under his Will. It is said that it was Sue’s duty to require Geoff to prove his challenge against the Will, and that it should have been expected that that claim would be closely scrutinised given that it depended on evidence against the deceased which could not be answered because of his death (referring to Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14 at 548-549 per Isaacs J).

69. [133]

    It is noted that, where an executor fulfils his or her duty to act as an adversary against a claimant, it is not generally necessary for beneficiaries to become involved in the proceedings on their own account, referring to what was said by Hodgson J, as his Honour then was, in Warren v McKnight (1996) 40 NSWLR 390; [1996] NSWSC 419 at 395 in relation to family provision applications:

70. [134]

    Bruce and Merilyn also note that, ordinarily, only one set of costs will be ordered in connection with the representation of an estate and that, in Re Lanfear (1940) 57 WN (NSW) 181 at 183, where Williams J ordered that the beneficiary’s costs be paid from the estate (except for the cost of two affidavits), his Honour noted that the intervention of beneficiaries of an estate may be necessary in “special cases where for instance the executors are themselves beneficiaries under the will, or where very substantial benefits are conferred upon beneficiaries ... but as a general rule such separate representation should not be necessary if the executors do their duty”. His Honour there said that:

71. [135]

    Bruce and Merilyn submit that Sue’s costs should not be indemnified out of Bill’s estate, including her costs for her removal as the representative of Bill’s estate because, in breach of her duty to act as an adversary against Geoff’s claim, Sue did not undertake the basic executorial duty of seeking to uphold the Will. It is said that, instead, she brought forward evidence supporting Geoff and that she took an attitude which required Bruce and Merilyn to seek separate representation to protect Bill’s Will and their entitlements under it.

72. [136]

    Bruce and Merilyn said that Sue also duplicated Geoff’s role as the contradictor against the first cross-claim, before she “finally” filed a submitting appearance on 18 June 2019; and that she failed accurately to disclose the estate finances, including where this conflicted with her own interests and/or was adverse to Geoff’s claim.

73. [137]

    It is noted that an executor will be denied his or her costs from an estate where the executor acts obstructively, unreasonably and in disregard of the executor’s duty, or where the costs incurred by an executor are in furtherance of a personal interest (Miller v Cameron at 578-9; Re Jones at 197-8; Plimsoll v Drake). In Miller v Cameron, Latham CJ took the view that a trustee who defended an action for his removal was therefore representing the trustee’s own interests and not those of the estate. In Plimsoll v Drake, Zeeman J reached a similar conclusion where a trustee unsuccessfully asserted the right to demand a release before distributing the trust estate to the beneficiaries. Reference is also made in this context to Drummond v Drummond [1999] NSWSC 923 (Drummond) per Austin J; Ploder v Garcea (as executrix of the estate of the late Garcea) [2013] NSWSC 1360 at [106]-[108] per Sackar J, where an executrix who incurred costs of some $400,000 was required to pay these personally.

74. [138]

    It is noted that Sue’s invoices, which are annexed to the affidavit of 5 August 2020 of Ms Ross-Maranik, indicate that, by the time Sue filed her submitting appearance, Sue had paid legal costs and disbursements totalling $475,029.77 from Bill’s estate, out of which $69,277.25 was paid by Bill’s estate for Sue’s opposition to her removal as the estate’s representative for Geoff’s claims. Bruce and Merilyn submit that none of those costs should be indemnified by Bill’s estate. In the alternative, it is submitted that, should Sue be indemnified for all of some or all of her costs, they should be capped so that any excessive costs can be repaid to the estate. Bruce and Merilyn say that, effectively, two-thirds of Sue’s legal costs and disbursements have been paid from Bruce and Merilyn’s share of Bill’s residuary estate (and it is noted that, in addition to this, Bruce and Merilyn have incurred costs personally in resisting the claim against Bill’s estate).

75. [139]

    Bruce and Merilyn note that Sue executed six affidavits, at a cost to Bill’s estate, none of which was read by Bruce and Merilyn at the final hearing. It is noted that, instead, Sue’s affidavits of 22 July 2015 and 31 May 2018 were read in support of Geoff’s claim; and Sue was called at the hearing by Geoff.

76. [140]

    Bruce and Merilyn point out that Sue’s affidavit of 10 May 2019 related to her unsuccessful opposition to the notice of motion for her removal as the representative of Bill’s estate. It is said that Sue paid all of her costs for her removal from Bill’s estate, in breach of Order 5 made by the Court on 27 May 2019 (see below), and in any event, that such a payment is not in accordance with proper practice by an executor whose conduct is the subject of the hearing (absent a Re Beddoe order – see Rattigan v Hanly [2020] NSWSC 1722 at [44], [71] per Hallen J).

77. [141]

    Bruce and Merylin point to the existence of a significant conflict and risk of prejudice where a defendant of an estate also acts as a witness for a plaintiff for their claim against that estate. It is said that Sue was Geoff’s witness for the final hearing; that Sue had access to privileged advice and information about the estate’s case; and that Sue admitted in cross-examination that she had discussed Geoff’s claim with him, but these discussions did not appear in her evidence (which they say is troubling).

78. [142]

    It is said that, had Bruce and Merilyn not intervened in the proceedings, it would not have been possible to test Sue’s evidence in cross-examination at the final hearing (a proposition with which Sue does not cavil). It is noted that Sue admitted in cross-examination that: she failed to disclose in her affidavits that, in “late 2012”, she tried to persuade Bill “not to change his will” because “Geoff had had enough” and he was “conning” him; she understood Geoff had received his “inheritance early” when their parents gave him Pindaroi, which she had not disclosed in her affidavits; she had no proper basis for her speculation that “...in 2009 when he made his last will he may have led Geoff to believe that he was leaving him his half of the farm”; and she believed her father would have thought it “grossly unfair” to leave Geoff more inheritance in 2009 as he had been given Pindaroi.

79. [143]

    It is also noted (seemingly to suggest bias on Sue’s part) that Sue provided Geoff’s legal representatives with an email that she received from Bruce on 3 October 2013 which noted Geoff’s complaints about having to buy Bill’s share of The Springs (revealing, it is said, that he was aware he would not inherit the land), yet Sue did not disclose this email in her affidavits.

80. [144]

    Bruce and Merilyn say that, in cross-examination, Sue did not deny her conflict with them, and she admitted that, in March 2016, she threatened to withhold all information from them except the “bare necessities” about Bill’s estate. It is said that this conduct was improper, as beneficiaries are entitled to information about the estate beyond “bare necessities”. Bruce and Merilyn say that Sue’s affidavit sworn 31 May 2018, paid for by Bill’s estate, demonstrates her strong sympathies for Geoff as the claimant against Bill’s estate, her antipathy towards Bruce and Merilyn, and her lack of support for Bill’s Will, (which she was duty bound to defend).

81. [145]

    Further, as with their similar complaint about Geoff, Bruce and Merilyn say that Sue improperly insinuated theft by Bruce and Edwina; but that at no time did Sue’s solicitors write to Bruce’s solicitors to allege any stolen records (and, as noted above, it later transpired that Geoff and Sue had possession of various missing records from Bill’s office).

82. [146]

    Complaint is also made as to Sue’s lack of financial disclosure, and her conflict between interest and duty, noting that executors are held to high standards of conduct and are prevented from placing their own interests above those of the estate. Reference is made to Chick v Grosfeld (2012) 10 ASTLR 66; [2012] NSWSC 1166, where White J (as his Honour then was) found (at [31]) that concealing the true nature of estate property by wrongly describing payments and transactions was grounds for the removal of an estate administrator.

83. [147]

    Bruce and Merilyn point out that executors are also prevented from profiting from their role, and must apply to the Court for any commission, which may be denied if the executor is guilty of a breach of trust, neglect or disregard of fiduciary obligations, including where they acted in good faith (Re Estate Gowing; Application for Executor’s Commission (2014) 17 BPR 32,763; [2014] NSWSC 247 at [67]-[69] per Lindsay J); and that executors are also at risk of personal liability for assets they distribute from an estate while on notice that property may be subject to a claim (referring also to what was said in Guardian Trust and Executive Company of New Zealand Ltd v The Public Trustee of the Dominion of New Zealand [1942] UKPC 1 per Romer LJ).

84. [148]

    It is noted that Sue executed three affidavits as to the estate’s finances (on 22 July 2015, 20 July 2018 and 15 May 2019). Complaint as to Sue’s lack of financial disclosure (and her alleged breaches of duty as executor) were the subject of correspondence annexed to the affidavit of 13 March 2019 sworn by Ms Ross-Maranik in support of the notice of motion to remove Sue. It is said that Sue was not willing to provide any substantive response to these issues, referring to a chain of correspondence from May 2016 through to 2019 (see Ms Ross-Maranik’s affidavit, Annexures F, H, I, J, L and P).

85. [149]

    Finally, complaint is made (as adverted to above) that, although Geoff was the active contradictor for the first cross-claim, Sue duplicated that role and that she involved herself unnecessarily as an active party for the first cross-claim, at the cost of Bill’s estate until she was removed as the representative for his estate for Geoff’s claims, referring to correspondence annexed to Ms Ross-Maranik’s affidavit sworn on 13 March 2019.

86. [150]

    Bruce and Merilyn point out that Sue was put on notice on a number of occasions that her costs would be in issue in these proceedings and that Sue refused to consent to resigning as executor; pointing to correspondence from Bruce and Merilyn’s former and current solicitors in this regard, including a demand on 27 July 2020 that she repay legal costs that she had paid from Bill’s estate for her removal (contrary to orders made on 27 May 2019).

87. [151]

    It is said that Sue’s opposition to the motion for her removal was unreasonable because she agreed that Bruce and Merilyn should be joined to the proceedings to act as the significant contradictors against Geoff’s claims, but that she nevertheless insisted this should be at their own costs, while Sue would continue as an active party in the proceedings. Bruce and Merilyn say that this proposal was unreasonable and that it would have duplicated the costs of the parties (and they note that Pembroke J rejected Sue’s proposal and appointed Bruce and Merilyn to replace Sue as representatives of Bill’s estate for Geoff’s claims, and that, by Order 6 made on 27 May 2019, Sue was ordered to pay the costs of the application).

88. [152]

    Bruce and Merilyn say that their costs of the application to replace Sue amounted to $66,424.73 (referring to the affidavit sworn 9 April 2021 of Ms Ross-Maranik) and they submit that the primary judgment in the proceedings should not affect the order made on 27 May 2019 (and that Sue should be directed to pay these costs forthwith).

89. [153]

    As to Order 5 made by Pembroke J on 27 May 2019, whereby his Honour directed that he would reserve for the trial judge the question whether Sue should be indemnified by the estate for her costs of this application, Bruce and Merilyn say that, in contravention of this order, Sue paid from Bill’s estate her costs of the application for her removal as the estate’s representative. It is noted that, following the demand on 27 July 2020 that Sue return these funds to Bill’s estate, on 3 August 2020 Sue’s solicitor responded that she had agreed to place $69,277.25 into his solicitor’s trust account for these costs (although Sue did not reimburse Bill’s estate for these costs). (Pausing there, I do not see any order made by Pembroke J in terms restraining Sue from making reimbursement out of the estate for those costs, as opposed to his Honour’s Order 5, leaving open the question of any indemnity from the estate for those costs.) It is submitted by Bruce and Merilyn that Sue should be ordered to repay these costs to Bill’s estate, and that Sue should not be indemnified by Bill’s estate for any costs in the proceedings that are not recovered from Geoff.

Sue’s submissions

1. [154]

   As to the costs of the principal proceeding, Sue submits that Geoff’s proprietary estoppel claim (which failed) and his family provision claim (which succeeded) were true alternatives (referring to the principal judgment at [6]). Sue submits (and I agree) that, while there was substantial overlap in the evidence, it is unlikely that a family provision claim alone would have attracted the same time and attention as the proprietary estoppel claim. Sue notes that a proprietary estoppel claim can attract a separate costs liability to a family provision claim (referring by way of example to Stojanovski v Stojanovski (No 3) [2020] NSWSC 1540 at [63] per Robb J; McCusker v Rutter (2010) 7 ASTLR 137; [2010] NSWCA 318 (McCusker v Rutter) at [28]-[34]). Sue submits that preparation and argument in the defence of the proprietary estoppel claim in the present proceeding involved considerable additional time and costs.

2. [155]

   Sue says that there is no reason or other conduct to displace the usual rule that “costs follow the event” and hence that Geoff should be ordered to pay Bill’s estate’s costs of the proprietary estoppel claim up to 27 May 2019.

3. [156]

   As to the costs of Geoff’s successful family provision claim, Sue submits, again, that costs should follow the event, and that Bill’s estate should be liable to pay Geoff’s costs up to 27 May 2019 but that, thereafter, any costs liability should rest with Bruce and Merilyn.

4. [157]

   Sue also submits that Geoff’s costs should be capped to reflect his relative success and to be proportionate to the importance and complexity of the subject matter in dispute (pointing to s 60 of the Civil Procedure Act; and referring to Detheridge v Detheridge [2019] NSWSC 183 at [172]-[175] per Slattery J).

5. [158]

   As to the first cross-claim, which was dismissed, Sue submits that there is no reason or other conduct to displace the usual rule that costs follow the event (r 42.1 of the UCPR) and she submits that Bruce and Merilyn should be ordered to pay the costs of Bill’s estate up to and including 27 May 2019.

6. [159]

   As to the question reserved by Order 5 on 27 May 2019 to the trial judge, Sue points to the ex tempore reasons given by Pembroke J on that application and to the observations made by me in the principal judgment to the effect that his Honour’s observations were based upon a preliminary view of the evidence without making any actual findings against Sue. Sue submits that, since no such findings were made in the final judgment, the reserved costs issue should be determined in her favour; namely, that she should be entitled to be indemnified by Bill’s estate for the costs of the notice of motion filed 14 March 2019, by Bruce and Merilyn.

7. [160]

   Insofar as Bruce and Merilyn have foreshadowed an application under s 93 of the Trustee Act and under r 42.25(2) of the UCPR (see the principal judgment at [12]), Sue points out that no such application has been made.

Geoff’s reply submissions

1. [161]

   Geoff responds to two matters raised in Sue’s submissions on costs: first, the submission that he should pay her costs of the proprietary estoppel claim up to 27 May 2019; second, the submission that Sue should pay Geoff’s costs of the family provision claim up to 27 May 2019 in a sum to be capped.

2. [162]

   As to the costs of the proprietary estoppel claim, Geoff repeats his primary submission that this claim is not severable from the family provision claim.

3. [163]

   As to the costs of the family provision claim (if considered separately), Geoff makes two submissions.

4. [164]

   First, that there should not be an arbitrary capping of Geoff’s costs. It is submitted that it is not possible for the Court to be satisfied that Geoff has unreasonably incurred costs but, in any event, that if costs have not been reasonably incurred then they will not be recoverable (whether on an ordinary or indemnity basis). It is accepted that Geoff’s costs are substantial in amount, but it is said that there are two particular complexities in this case, namely that this is not a case concerning an estate worth less than $500,000; and that the first cross-claim was complicated and involved substantial expert evidence and detailed consideration of the historical conduct of the partnerships and the manner in which Bill and Jill dealt with and recorded their assets. It is submitted that the “historical sweep” of the evidence relevant to the family provision application was not something for which Geoff was solely responsible (pointing to the evidence of Bruce and Merilyn – as to the history of gift giving during his parents’ lifetime). Further, it is said that some of the findings in the principal judgment reflect unfavourably on the manner in which Bruce and Edwina (and, it is said, by association Merilyn), conducted the litigation. It is said that the assessment of costs can occur in the usual way.

5. [165]

   Second, it is noted that, if Geoff’s primary submission (that costs should be ordered in his favour for the whole of the proceedings on an indemnity basis having regard to the Offers of Compromise) is not accepted, then he has alternative submission is that his costs of the family provision application should be paid either by Bruce and Merilyn or from Bill’s estate. It is said that the effect of the order proposed by Sue (that she pay Geoff’s costs of the family provision application up to 27 May 2019) is the same as if his costs were ordered to be paid from Bill’s estate up to that date. (That, however, seems to assume that Sue is entitled to an indemnity from Bill’s estate.)

6. [166]

   Geoff says that Bruce and Merilyn’s lengthy costs submissions fail to reckon with their own conduct. Geoff submits that, in practical terms, Bruce and Merilyn lost, both on Geoff’s claim and on the first cross-claim; and he emphasises that this was after they had rejected an offer from him that he says was, on any calculation, more favourable to them than the outcome of the trial. (Geoff criticises Bruce and Merilyn’s submissions, based on his own rejection of their offers, as untenable insofar as the premise of those submissions is, in effect, that he should have capitulated so as to avoid further costs being incurred.)

7. [167]

   As to the submissions that Bruce and Merilyn have made, Geoff’s response can be summarised as follows.

8. [168]

   Concerning the submission as to his rejection of their offers, Geoff says that the outcome of the primary judgment was more favourable to Geoff, and less favourable to Bruce and Merilyn, than both of those offers (and, hence, his rejection of them could not give rise to an indemnity costs order in their favour – I agree). As to the complaint by Bruce and Merilyn that Geoff’s solicitor said that a further mediation would be pointless, Geoff says that, with hindsight, that view was unarguably correct (given the approach taken by Bruce and Merilyn to the offers and throughout the proceeding). (As adverted to already, I do not propose to engage in debate as to who might be at fault for the failure to reach agreement at the earlier mediation or to progress any subsequent mediation proposal.)

9. [169]

   As to the second offer, made on 21 July 2020 (less than a month before the trial started), Geoff says that the effect of the offer was that Geoff would pay $800,000 to each of Bruce and Merilyn and obtain their 1/6 entitlement to The Springs out of Bill’s estate (and also that Bruce and Merilyn would each receive $333,000 from Bill’s estate within 14 days). The offer put a total value on The Springs of $3.6 million so that each 1/6 interest held by Bruce and Merilyn (and also Sue) was worth $600,000.

10. [170]

    Geoff says that the reasoning behind the suggestion that Geoff would have done better under this offer seems to be that, had he accepted Bruce and Merilyn’s offer, he would have resolved the proceeding earlier but that because he did not do that he should pay their costs and, therefore, if he has to pay their costs, then their 21 July 2020 offer for him to pay them $200,000 and to buy out their 1/6 entitlement to The Springs ($600,000) was actually better than the outcome of the trial. Geoff contends that the logic of that argument is flawed.

11. [171]

    Geoff says that the outcome of the trial, before costs, is that: Geoff has received a further 25% interest in The Springs, which has a value of $900,000 based on Bruce and Merilyn’s offer; and Bruce and Merilyn, rather than each having effectively a 1/6 interest worth $600,000 have a 1/12 interest worth $300,000.

12. [172]

    It is noted that Bruce and Merilyn’s solicitor deposed at the trial that the total costs for Bruce and Merilyn were estimated to be $813,153.50 (see Ms Ross-Maranik’s affidavit sworn 5 August 2020 at [14]-[17]). It is submitted that unless it is seriously contended that Bruce and Merilyn ought to obtain a full indemnity from Geoff for all costs incurred in the proceeding, and that their costs are at least 50% greater than that to which their solicitor deposed, the above submission by Bruce and Merilyn could not be arithmetically correct.

13. [173]

    In addition, Geoff says the following about the offers made by Bruce and Merilyn.

14. [174]

    First, that in the offer of 21 July 2020, Bruce and Merilyn put a value on The Springs of $3.6 million, which, it is said, supports Geoff’s primary costs submission to the effect that the offer he made in 2019 was substantially better for Bruce and Merilyn, and substantially worse for him, than the trial outcome.

15. [175]

    Second that, even if The Springs was only worth $1,975,000 (the lowest figure suggested at [18] of Merilyn’s affidavit sworn 9 April 2021), the offer made by Geoff was still better for Bruce and Merilyn, and worse for him, than the outcome achieved at the end of the contested hearing.

16. [176]

    Third, that Merilyn’s affidavit suggests that a problem with Geoff’s offer was that Sue remained a part owner of The Springs (see [20]). However, as adverted to above, Sue was effectively entitled to a share of The Springs under both Geoff’s offer and Bruce and Merilyn’s counter-offer (and hence it was only a question of what that share was).

17. [177]

    As to the submissions by Bruce and Merilyn that Geoff unreasonably conducted the litigation, referring to the change in Geoff’s case (i.e., not relying on the alleged 1984 representations at trial) and that some of Geoff’s evidence was duplicative or irrelevant, Geoff submits as follows.

18. [178]

    Geoff contends that the first submission suffers from the fact that all parties put on evidence about the dealings between Geoff and Bill dating back to the 1980s and relied upon that evidence for the purposes of the family provision application. It is said that no additional cost was incurred (or is described) as a consequence of those alleged representations not being pressed at trial as a basis for the estoppel. Further, Geoff points to adverse findings made against Bruce and Edwina concerning their unsatisfactory and unpersuasive evidence in relation to the withheld letter (see [350] of the principal judgment), the making of irrelevant criticisms (see [296] of the principal judgment) and other adverse findings about their evidence generally (see [371] of the principal judgment).

19. [179]

    As to the second submission, Geoff says that if the costs were not reasonably incurred they will not be allowed (and ought not be claimed) on a costs assessment.

20. [180]

    As to Bruce and Merilyn’s submissions about the costs of the first cross-claim, Geoff responds as follows.

21. [181]

    To the criticism that adequate information was not supplied, which necessitated investigation of the subject matter of the first cross-claim, Geoff says: that the cost of investigation is not the bringing of (and persisting with) a claim; that Bruce and Merilyn refused to accept Mr Carrigan’s explanations, challenged them at trial and failed; and that Bruce and Merilyn persisted with the first cross-claim after all investigation had been exhausted and Geoff had put on substantial expert evidence, which was accepted.

22. [182]

    To the allegation that Geoff “sabotaged” the single expert process, Geoff says that factual findings should not be made about this but in any event: that there was an issue between the parties about the instructions given to the single expert and whether the questions being asked by Bruce and Merilyn were in fact accounting questions; that, given the outcome when the parties instructed separate expert witnesses, it could hardly be said that Bruce and Merilyn were obviously in the right; and that the reaction by the single expert to a request for her curriculum vitae could not support the allegation that Geoff “sabotaged” the single expert process.

23. [183]

    As to the complaint about delay by Geoff in serving his evidence, Geoff says that there is no evidence that this caused additional cost to anyone. It is said that Bruce and Merilyn made many allegations in the first cross-claim, all of which failed; and that the complaint that it took Geoff and his solicitor a lot of time to consider and respond to them “demonstrates a lack of insight”.

24. [184]

    As to the submissions by Bruce and Merilyn that there should be a capping order, Geoff submits that this is not an appropriate case for a capping order not only for the reasons adverted to above but also having regard to the fact that Bruce and Merilyn rejected the offer from Geoff (by which the proceeding could have been resolved earlier and much more favourably to them).

25. [185]

    As to Bruce and Merilyn’s submissions about costs orders already made, Geoff says that there is one reserved costs order for a directions hearing (before me), that no submission is made as to why Geoff should bear the costs of that directions hearing, and that the costs of that directions hearing should follow the outcome of the costs of the proceeding (see r 42.7(1)(a) of the UCPR). Geoff says that costs orders already made should be dealt with in accordance with r 42.7(2) of the UCPR.

Bruce and Merilyn’s reply submissions

1. [186]

   In answer to the submissions on costs from each of Geoff and Sue, Bruce and Merilyn point to s 99(1) of the Succession Act, which provides that the costs of proceedings under Ch 3 of the Act, in relation to the estate or notional estate of a deceased person (including costs in connection with mediation), may be ordered to be paid out of the estate, or notional estate, or both, in such manner as the Court thinks fit.

2. [187]

   They say that, as they were the persons appointed by the Court to represent Bill’s estate and defend his Will (which included the interests of Sue as a residuary beneficiary), it is appropriate that they be entitled to orders that their costs, calculated on the indemnity basis, be paid out of Bill’s estate. It is said that, in doing so, they were acting on behalf of Bill’s estate in defending the proprietary estoppel and family provision claims on behalf of the residuary beneficiaries (including Sue) who stood to benefit equally from the defence of the proceedings.

3. [188]

   Bruce and Merilyn say that Geoff should not have costs for his family provision claim (as his proprietary estoppel claim was the predominant matter); or alternatively, they agree with Sue that Geoff’s costs of the family provision claim should be capped.

4. [189]

   Bruce and Merilyn repeat in this context the evidence as to their financial position. It is said that Bruce’s evidence of his financial circumstances was not disputed by Geoff (i.e., that Bruce does not have any capital assets against which he can raise a loan to pay a costs order and that any costs order against Bruce would necessarily require him to sell his home) noting that any distribution from Bill’s estate is “some time away”, being dependent in part on the sale of the remaining portion of The Springs, and that the quantum is not yet ascertained.

5. [190]

   Similarly, reference is made to Merilyn’s affidavit of 9 April 2021 in which she deposed that she does not have cash or redeemable assets outside of her home, and that any moneys that she draws from her superannuation will be permanently lost from her retirement income to meet her current and future needs. It is noted that Bruce and Merilyn have personally paid the legal costs to defend the estate against Geoff’s claims and for the proceedings, and it is submitted that their financial needs should be considered in the orders made for costs.

6. [191]

   As to Sue, reference is again made to the fact that Bill’s estate has paid Sue’s costs during the proceedings, which has had the practical effect that Bruce and Merilyn have borne two-thirds of those costs by reason of their interest in the residuary estate.

7. [192]

   As to the special costs order sought by Geoff against Bruce and Merilyn personally, Bruce and Merilyn reply as follows.

8. [193]

   First, they say that the Offers do not have the effect of triggering the costs consequences of r 42.14 of the UCPR, because: the offers are not compliant with the rules, in that they incorporated an offer for costs; Geoff’s costs are disproportionate; and that the offer contained in the Offers of Compromise was not a genuine compromise by Geoff.

9. [194]

   Further, they say that, in light of all the circumstances of the case, there should be an “otherwise order” i.e., that Geoff should not have his costs of the proceedings on the basis of the offer of compromise regime.

10. [195]

    It is said that both the covering letter serving the Offer of Compromise and the plaintiff’s submissions make it clear that the payment of $450,000 from each of Bruce and Merilyn was for Geoff’s indemnity costs. It is noted that r 20.26(2)(c) of the UPCR provides that an offer must not include an amount for costs and must not be expressed to be inclusive of costs.

11. [196]

    Reference is made to Whitney v Dream Developments Pty Ltd (2013) NSWLR 311; [2013] NSWCA 188 where Bathurst CJ (speaking of an earlier version of the rules) said at [24];

12. [197]

    Reference is also made to what was said by the Court of Appeal (Giles JA, Handley AJA, Whealy J) in Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141, at [26], (also in relation to an earlier version of the rules) namely that:

13. [198]

    Bruce and Merilyn say that an offer of compromise which seeks to provide indemnity costs to a plaintiff “while paying lip-service” to the UCPR in providing that the “parties pay their own costs” is not an offer in accordance with the UCPR, and thus no costs consequences pursuant to r 42.14 of the UCPR should be triggered by the service of that offer and its subsequent non- acceptance.

14. [199]

    I do not accept that submission. The cases referred to above dealt with a previous version of the rule. The Offers of Compromise in the present case do not infringe the requirements. They do not include an amount for costs; nor are they expressed to be inclusive of costs. I note in this regard the Court of Appeal’s decision in Jojeni Investments Pty Ltd v Mosman Municipal Council (No 2) [2015] NSWCA 208 at [10]-[11] where offers involving each party bearing its own costs were not considered to be offers expressed (impermissibly) to be inclusive of costs. The fact that the outcome of acceptance of the offers would (or may) have the effect that Geoff’s cost exposure could be wholly (or partially) discharged is not to the point. He might equally have used such payment for other purposes.

15. [200]

    Bruce and Merilyn reiterate their submissions to the effect that Geoff’s costs (totalling $1,694,989.97) are disproportionate and excessive; and that it would be unreasonable in all the circumstances to visit upon them such a significant amount (referring to Jones v Sutton). It is noted that, on Geoff’s evidence, the 25% of The Springs he was provided with by way of further provision was worth around $600,000, while Geoff’s costs are about a million dollars more than that. It is submitted that regard should be had to the costs overall and that it would not be consistent with the overriding purpose of the Civil Procedure Act of the “just, quick and cheap” resolution of proceedings to give effect to the costs consequences of r 42.14 of the UCPR.

16. [201]

    Further, it is submitted that, even if the offers were compliant with the UCPR, Geoff should not have his costs due to his conduct of the proceedings (see the submissions above). In summary, it is said that, by the time the matter came to a contested hearing, there had been about 43 directions hearings, delays by Geoff of 18 months before serving his witness evidence for his estoppel claim (in August 2016); another 18 month delay for him to serve his lay evidence for the first cross-claim (in December 2018); duplication of his evidence; delays serving his expert evidence; late service of evidence at the hearing; inadmissible and irrelevant evidence; unprofessional conduct by Geoff’s solicitor; and vexatious claims against Bruce.

17. [202]

    Reference is made to EDPI Pty Ltd v Rapdocs Pty Ltd [2007] NSWSC 195 where Brereton J, as his Honour then was, (at [76]-[85]) did not order indemnity costs notwithstanding that an Offer of Compromise had been bettered at trial because of the plaintiff’s conduct of the trial, which significantly expanded the time taken, and as a result of which costs were unnecessarily incurred.

18. [203]

    It is noted that “exceptional” circumstances are not always required to ground the “otherwise order” exception to the rules as to an Offer of Compromise (see above) and that a disproportionate costs bill or unreasonably contesting an issue (upon which the plaintiff did not succeed) could ground such an order.

19. [204]

    In the present proceedings, reference is made to the finding that Geoff’s evidence could only be accepted with caution where it was not corroborated, in circumstances where he had a clear personal interest in the outcome of the proceedings (primary judgment at [380]). It is said that, although there was not an adverse finding as to credit, Geoff’s evidence (and his being a “poor historian” and giving evidence in his own interests) significantly extended the duration of the case and made it more difficult for Bruce and Merilyn to consider Geoff’s evidence.

20. [205]

    Pausing here, I do not accept that this was a case where the proprietary estoppel claim was one that was unreasonably pursued. Nor do I consider that the caution I expressed in accepting Geoff’s evidence is any different from any other case where such evidence (of conversations with deceased persons) falls to be scrutinised. The fact that Geoff was a relatively poor historian does not alter that conclusion.

21. [206]

    Bruce and Merilyn also say that the effective change in Geoff’s case between the date of the Offers of Compromise and the hearing is a further reason why there should be an “otherwise order”.

22. [207]

    However, while Bruce and Merilyn point to authority that, if a case has changed significantly after the dates of an offer, the Court is not bound to order costs – in accordance with r 42.14, (citing Nominal Defendant v Hawkins (2011) 58 MVR 362; [2011] NSWCA 93); in the present case, the change in Geoff’s case did not to my mind significantly change the view that would reasonably have been taken of the prospects of success of the proprietary estoppel claim at the time the offer was made. It was always subject to the difficulty that it largely rested on evidence of conversations with the deceased.

23. [208]

    As to the alternative submissions by Geoff (based on Bruce and Merilyn’s non-acceptance of Geoff’s Offers of Compromise), Bruce and Merilyn again say that the Offers of Compromise were not offers that could be accepted by Bruce and Merilyn, and that it was not unreasonable for them to reject the offers (noting that Geoff bears the onus of establishing that it was unreasonable for them to refuse the Calderbank offers). Again, it is noted that indemnity to an offeror may be refused if the offeror’s case is changed after the date of the offer so that the rejection of a Calderbank offer was not unreasonable (see Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd (2001) 53 NSWLR 626; [2001] NSWCA 461).

24. [209]

    It is submitted that the terms of the 31 May 2019 letter are unusual and “strident”, and did not assist in Bruce and Merilyn being able properly to assess central issues such as the proper basis of Geoff’s claim, a realistic value for the farm, the real costs of the proposal, how to mitigate and meet those costs, and the inequitable burden of those costs.

25. [210]

    It is noted that the affidavit of Mr Martin indicates that, before his engagement in April 2017, Geoff had incurred total legal costs of $79,538.35 with his previous solicitors, Watson McNamara & Watt (during the first three years after giving notice of his claim in 2014) and that these costs were paid by Geoff when they ceased acting for him in 2017. Therefore, it is said that Geoff’s legal fees of $900,000 owed to Mr Martin at the time of the offer were incurred in the two years from April 2017 to May 2019, and that Mr Martin noted in his letter that these costs were secured against a charge Geoff had granted over his half of The Springs farm. Bruce and Merilyn say that there is no evidence that Mr Martin in fact registered any interest over The Springs (the significance of which is not clear to me). They note that Mr Martin’s fee retainer dated 21 November 2017 (obtained by notice to produce) includes the notation that Geoff agreed a caveat may be lodged over the land if “any amount ... remains unpaid” for Martin Legal’s tax invoices; and that Mr Martin estimated his costs as $132,000 to $264,000, at a time when he had been engaged for 7 months and had extensively reviewed Geoff’s case (including in a five day conference in April 2017).

26. [211]

    Bruce and Merilyn say that Mr Martin’s costs of $900,000, two years after his engagement, were grossly excessive and in breach of his costs estimate. They say that this reinforces their submissions that Geoff’s costs should not be imposed on Bruce and Merilyn or Bill’s estate.

27. [212]

    It is noted also that Mr Martin’s costs affidavit of 17 August 2020 shows that Geoff had paid $370,907.39 into trust by then and that Geoff’s Senior Counsel indicated that $666,000 of Geoff’s costs were unpaid at that time. They say that this could not be tested or clarified by them, because neither Geoff nor his solicitor disclosed in his evidence for the hearing what costs Geoff had actually paid, so as to arrive at the net resources he claimed to have. (Pausing here, if there is in fact an issue as to whether costs have been paid or are in fact required to be paid, that can be dealt with in a subsequent costs assessment.)

28. [213]

    As to the terms of the Offers of Compromise, complaint is made that Geoff’s settlement offer required a preferential settlement to Sue, in breach (it is said), of her duties as executor of Bill’s estate.

29. [214]

    Merilyn deposes in her affidavit sworn 9 April 2021 that the offer was discussed at a meeting between the parties on 27 May 2019. It is said that, by this time, Geoff had received his “early inheritance” in 2015, and the remaining assets in Bill’s estate were the inheritance of the three residuary beneficiaries, Sue, Bruce and Merilyn (being about $900,000 in cash and shares, plus 50% of The Springs farm held by Bill’s estate). Accordingly, it is said that the three residuary beneficiaries (Sue, Bruce and Merilyn) were entitled to around $300,000 each in cash and shares in Bill’s estate, and the letter from Martin Legal suggested that this could be used to pay Geoff’s legal costs of $900,000, secured against a charge that Mr Martin noted in his letter that Geoff had granted him over his half of The Springs.

30. [215]

    Bruce and Merilyn say that they did not have authority to transfer moneys from Bill’s estate to Geoff; rather, that Sue, as executrix, had the authority to release estate funds. (This submission does not sit comfortably with their own Calderbank offer, even though at one point in the 9 July 2019 letter they refer to the need to obtain Sue’s concurrence thereto.)

31. [216]

    Bruce and Merilyn say that Geoff’s offer required them to pay Sue’s share of the settlement ($450,000 each) for which Geoff would transfer a one-third share of his half of The Springs to each of Bruce, Merilyn and Sue. Thus, they say that Sue would have received an equal one-third interest in Geoff’s half of the land, without making any contribution to the settlement payment.

32. [217]

    It is said that Sue had indicated that she did not want to own Geoff’s half of the farm with Bruce and Merilyn, and that Bruce and Merilyn also considered co-ownership unworkable; such that they understood they needed to buy Sue’s share of that land for $600,000 based on the desktop appraisal in 2018. Consequently, it is said that Bruce and Merilyn would have been required to pay $1,500,000 to acquire Geoff’s half of the farm ($900,000 to Geoff plus $600,000 to Sue).

33. [218]

    Emphasis is placed on the fact that Sue was prohibited from preferring her own interests in any settlement for Bill’s estate, and it is said that there was no basis for her to be personally compensated in the settlement for costs she had paid from Bill’s estate, and that the offer did not provide Bill’s estate any compensation for costs it had paid during the proceedings, totalling $475,029.76 (which included Sue’s costs for her removal as the representative of Bill’s estate against Geoff’s claim). (Pausing here, there cannot seriously be an issue that, if all beneficiaries (fully informed and appropriately advised) consented thereto, a benefit obtained by Sue as a result of acceptance of a settlement offer in these proceedings would be in breach of her duties as executor.)

34. [219]

    Complaint is also made that Geoff’s 31 May 2019 offer did not address the costs Bruce and Merilyn had paid personally from their own resources for the proceedings. Again, however, this goes to the acceptability of the offer from their perspective (not whether the rejection of the Offers of Compromise should result in an “otherwise order” and not an order for indemnity costs).

35. [220]

    Bruce and Merilyn say that Geoff’s offer had the effect of providing personal financial advantage to Sue, without providing for the costs paid by Bill’s estate or Bruce and Merilyn. They say that the offer involved significant uncertainty as to the additional costs and liabilities associated with the offer (including commissions, stamp duty, investment in improvements and unquantifiable CGT). Further, they submit that it required Bill’s estate (as well as Bruce and Merilyn, personally) to carry the following costs: $900,000 payment by Bruce and Merilyn for Geoff’s half of The Springs, which would be transferred to Bruce, Merilyn and Sue; $600,000 payment to Sue for her one-third of Geoff’s half of The Springs (conveyed to her in exchange for Bruce and Merilyn’s settlement payment) (not a term of offer, as such); at least $400,000 costs paid personally by Bruce and Merilyn for the proceedings; $475,029.76 costs incurred by Sue for Bill’s estate, two-thirds of which was paid from Bruce and Merilyn’s inheritance in the estate; several hundred thousands of dollars in transaction costs and taxes, and unquantified CGT liabilities, primarily incurred by Bruce and Merilyn.

36. [221]

    It is noted that, in accepting these costs, Bruce and Merilyn would receive Geoff’s half of The Springs. The other half of The Springs belonged to Bill’s estate, for which Bruce, Merilyn and Sue were the residuary beneficiaries in equal one third shares. Reference is made to the different estimates for the value of The Springs is noted that the severe drought and low stock numbers had a significant effect on the farm’s value at this time (which was estimated on 14 June 2019 by Landmark Harcourts as being between $1,975,000 and $2,275,000 with a half share being between $987,500 and $1,137,500) and that in the 31 May 2019 letter, Mr Martin noted in this regard (Ms Ross-Maranik’s affidavit sworn 9 April 2021, Annexure I):

37. [222]

    Geoff’s offer is said to have been further complicated by the likelihood that Bruce and Merilyn would need to act as trustees for sale so they could manage the sale of the whole farm, including the estate’s share, given that they and Sue did not wish to own the land together.

38. [223]

    It is submitted that Geoff’s offer placed a “manifestly unjust” burden on Bruce and Merilyn; that Geoff was to receive $900,000 (his indemnity costs); Mr Martin was to be paid his legal fees; and Sue was to receive $600,000 plus the sale proceeds for her other 1/6 share of the farm. By contrast, it is said that, in selling the farm in drought conditions, Bruce and Merilyn would bear the losses for the payment for the land and other costs and liabilities above.

39. [224]

    It is noted that in the 31 May 2019 letter Mr Martin indicated that he required his legal fees to be paid, prior to the transfer of Geoff’s half of The Springs, and it is said that this precluded Bruce and Merilyn from paying Geoff from any proceeds they would receive from the future sale of The Springs. (I note that there was no term to this effect in the Offers of Compromise.)

40. [225]

    Complaint is again made that Geoff’s offer was “cost prohibitive”. It is said that, to make any counter-offer to Geoff, Bruce and Merilyn were dependent on accessing their remaining cash entitlements in Bill’s estate, being a gross amount of $300,000 each but that moneys needed to be held in reserve for the estate’s liabilities and costs associated with the sale of the farm. It is also said that, in practical terms, distributions from the estate also depended on agreement with Sue in her capacity as executor.

41. [226]

    As to their offer of 9 July 2019, Bruce and Merilyn say that it did not require Sue to pay one-third of the payment of $400,000 to Geoff; rather, that Bruce and Merilyn’s offer was intended to utilise their remaining cash entitlements in Bill’s estate and that the letter expressly stated the offer was “…subject to and conditional upon separate negotiations and agreement with the other executor, Susan Cameron”. It is said that, being expressly conditional upon Sue’s agreement, gave Sue the freedom to negotiate the distribution of her cash entitlements in Bill’s estate, without being bound by the proposal to transfer Geoff’s share of The Springs (given that the residuary beneficiaries did not wish to co-own the land). It is submitted that, in rejecting this offer out-of-hand “the sensible two-stage negotiation process commenced by Bruce and Merilyn, where a settlement could first be negotiated with Geoff, and then with Sue, was disrupted and put to an end”.

42. [227]

    Merilyn’s evidence is that, at the time of the offer, the value of The Springs was not clear. It is said that Bruce and Merilyn were not given access to The Springs by the executors before June 2019 (at the time of Geoff’s offer).

43. [228]

    In the Inventory of Property for Bill’s estate in 2014, Sue and Geoff noted the value of The Springs was $1.8 to $1.9 million (based on an appraisal Geoff obtained from Rex Daley on 13 June 2014). In 2018, Bruce and Merilyn obtained a desktop appraisal from Todd Herron & White which estimated the farm had a value of $3.5 million (based on the average number of cattle that had been grazed on the farm in the 5 years before Bill’s death (2009-2014), as recorded in the partnership records). It is noted that Geoff has paid the estate to agist significantly less cattle on the farm since Bill’s death (an average of only 191 cattle), and in an affidavit in May 2019 (at the time of his offer to Bruce and Merilyn) Geoff deposed (at [30]-[31]) that “Since August 2015, I have stocked an appropriate number of cattle on The Springs” being the maximum stock possible since Bill’s death, and that “there are currently only 158 cattle on The Springs due to the severity of the current drought.”

44. [229]

    Bruce and Merilyn say that a difficulty with Geoff’s evidence is that, being both a debtor to Bill’s estate for the agistment and an executor for the estate, he has a conflict in this issue. It is said that, in response to enquiries from Bruce and Merilyn, the co-executor, Sue, did not indicate that she had taken any steps to verify Geoff’s agistment numbers, other than communicating with Geoff. Bruce and Merilyn say that, in obtaining an appraisal of the farm in June 2019 for Geoff’s offer, Bruce provided the agent both historical stock numbers (prior to Bill’s death) as well as Geoff’s agistment numbers (after Bill’s death in 2014). It is said that, on this basis, and because of the unimproved condition of the farm, the agent noted the stock capacity to be 200 to 250 cattle and estimated the farm with a value of $1,975,000 to $2,275,000 (with a half share being $987,500 to $1,137,500).

45. [230]

    Bruce and Merilyn say this was the basis for their consideration of Geoff’s offer, particularly given that Merilyn has deposed that, at the meeting on 27 May 2019, Geoff said he thought the farm was worth about $2.4 million (and maybe less because of the drought).

46. [231]

    Complaint seems to be made that, at the hearing, Geoff’s Senior Counsel did not refer to Geoff’s 2019 evidence about the lower stock numbers he agisted on the farm after Bill’s death, or other land appraisals obtained by Geoff showing a lower value for the farm; rather he proceeded on the basis of the desktop valuation (for the purposes of Geoff’s family provision claim) which was based on the higher stock numbers before Bill’s death, with a resulting higher land value.

47. [232]

    Bruce and Merilyn cavil with the submissions by Geoff that the representations relied upon to support the estoppel were relevant to Bill’s testamentary intentions, on the basis that (at [534] of the principal judgment), I indicated that I would not have accepted that the evidence established, on the balance of probabilities, the making of such representations in 1984 or 2005; and (at [536]) found that the representations Geoff alleged in 2008/2009 were not consistent with the “considered way” that Bill carried out the making of that Will (with at least two drafts and attendance on his solicitors for that purpose) (referring also to the findings at [540]). (This submission seems to me to conflate the ultimate evidentiary findings with the question of which issue that evidence addressed.)

48. [233]

    Bruce and Merilyn say that it is not enough to say that there was some “commonality” in the thread of issues to be considered. It is said that the two claims, while linked by the individuals involved, remain separate causes of action (one equitable, one statutory) with separate elements of proof and pleading and it is asserted that they can be distinguished without much difficulty (referring to Poche v Poche).

49. [234]

    Bruce and Merilyn maintain that, in the written submissions for Geoff for the hearing, the only topic common to both Geoff’s alleged detrimental reliance (for estoppel purposes) and his alleged contribution (for family provision purposes) related to labour on The Springs (not Pindaroi). Bruce and Merilyn then entertain an analysis of the evidence in this regard disputing the claimed contribution (which I do not propose here to set out).

50. [235]

    Suffice it to note that Bruce and Merilyn reiterate their view of the respective contributions to Bill’s estate.

51. [236]

    Finally, insofar as Geoff sought a further hearing for the determination of any cost capping order, it is submitted that this is unnecessary as the Court is able of its own motion to set a cost capping figure; and “[i]t cannot be too strongly stressed that a further hearing for cost capping would be an unnecessary waste of the already depleted funds of all the parties in these proceedings”.

52. [237]

    Again reference is made to the fact that Sue has paid all of her costs (totalling $475,029.77) from Bill’s estate. Bruce and Merilyn say that Sue does not identify any reasons why they should not be indemnified from Bill’s estate; and did not provide notice of her intention to oppose their indemnity from the estate. It is submitted that Sue’s submissions should be rejected.

53. [238]

    In relation the first cross-claim, Bruce and Merilyn say that, while they were appointed to represent Bill’s estate against Geoff’s claim on 27 May 2019, they were not appointed to represent Bill’s estate against the first cross-claim (for which they were the plaintiffs) and that Sue continued in that role after 27 May 2019.

54. [239]

    It is said that it was not necessary for Sue to act in a substantive contradictor role at all in relation to the defence of the first cross-claim but that each of Sue and Geoff have sought costs against Bruce and Merilyn for the first cross-claim. It is said that it is not appropriate (and would be unjust) to order that two sets of costs be ordered against Bruce and Merilyn, especially where Sue’s active involvement and separate representation was “unnecessary or inappropriate” (citing Van Eeden v Henry (2005) 62 NSWLR 301; [2005] NSWCA 14 at [40] per Spigelman CJ (with whom Sheller JA and McColl JA agreed)). Reference is also made to Statham v Shephard (No 2) (1974) 23 FLR 244 at [6] per Woodward J and Milillo v Konnecke (2009) 2 ASTLR 235; [2009] NSWCA 109 at [109] per Ipp JA (with whom Macfarlan JA and Sackville AJA agreed). In this regard, Bruce and Merilyn say that the (belated) filing of Sue’s submitting appearance in June 2017 (even though she continued as the only representative for Bill’s estate against the first cross-claim) confirms that Sue’s involvement on behalf of Bill’s estate was not necessary, and thus, there should be no order as to Sue’s costs of the first cross-claim and she should not be indemnified by Bill’s estate.

55. [240]

    Additionally, it is submitted that the costs of Bruce and Merilyn in relation to the first cross-claim were increased by Sue’s conduct in refusing to respond to any correspondence from Bruce and Merilyn’s solicitors about Jill’s estate prior to the cross-claim. Reference is made to their earlier submissions as to Sue’s conduct causing unnecessary waste and duplication.

56. [241]

    Thus, it is submitted that Sue should not be indemnified from Bill’s estate for her involvement in the first cross-claim and she should not receive her costs from Bruce and Merilyn.

57. [242]

    As to the family provision claim, much weight is placed on Pembroke J’s observation (see below) that Sue did not support Bill’s Will:

58. [243]

    Bruce and Merilyn say that Sue’s conduct in opposing the notice of motion was unreasonable, noting that costs were awarded against Sue, Pembroke J there stating that:

59. [244]

    Insofar as Sue submits that her own costs should be indemnified from Bill’s estate (because no findings were made against her at the final hearing), Bruce and Merilyn say that Sue was not pressed on these issues in cross-examination at the hearing (because she was not represented) and, instead, it was considered this matter should be dealt with by way of written submissions on costs (see T 191).

60. [245]

    Bruce and Merilyn say that they should be fully indemnified from Bill’s estate for their costs in defending Geoff’s proprietary estoppel and family provision claim, and that Sue should be ordered to repay her costs to Bill’s estate and receive no indemnity for those. In the alternative, because Sue did not support Bill’s Will and her evidence was used for Geoff’s claims against the estate, it is submitted that it may be just, in the circumstances, for Geoff to pay the costs incurred by Sue, so that these are restored to Bill’s estate.

61. [246]

    Bruce and Merilyn say that the costs order made in Order 6 on 27 May 2019 was against Sue personally, and that her indemnity from Bill’s estate was not a matter for later determination (in contrast to Order 5 regarding the costs that Sue incurred for Bill’s estate). It is again submitted that Sue should be directed to pay Bruce and Merilyn’s costs forthwith.

62. [247]

    It is further submitted that Sue’s conduct increased Bruce and Merilyn’s costs. Reference is again made to Pembroke J’s observations that:

63. [248]

    Bruce and Merilyn reiterate their concerns about the conduct of Geoff and Sue in these proceedings and the risk of prejudice arising when a defendant and executor for an estate supports a plaintiff’s claim against that estate.

Sue’s reply submissions

1. [249]

   In her reply to the costs submissions of the other parties (settled by Senior Counsel who was retained for the purposes of the reply submissions), Sue sought leave to read the affidavit sworn 20 April 2021 of her solicitor, Wayne Chaffey; and raised various evidentiary objections to Merilyn’s affidavit sworn 9 April 2021 (i.e., to part or all of [2]-[11], [17], [20], [21], [22] and [24]). Sue also attached a statement of the remaining cash in Bill’s estate (to which she says should be added Bill’s one-half share of The Springs) and a statement of distributions and moneys paid out of Bill’s estate for costs.

2. [250]

   Reference was made to additional authorities dealing with costs (Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [37]-[42] per Gleeson JA (with whom Meagher and Barrett JJA agreed); Salvo v New Tel (No 2) [2004] NSWSC 852 at [7]-[12]; and Harrison v Schipp at [22] per Giles JA (to which I have already referred above)). As to whether costs capping is appropriate, reference was made to my decision in Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843 at [9], [172] and [173], where substantial legal costs had been incurred in an estate with limited assets. As to whether there should be an order that Sue pay the costs of Bruce and Merilyn (in the nature of a Bullock order) reference was made to Bostik at [12]-[17] quoting Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 85. Also, with specific reference to family provision claims, reference was made to Haertsch v Whiteway (No 2) [2020] NSWCA 287 at [5]-[7] per Macfarlan, Meagher and Leeming JJA; McCusker v Rutter at [57]-[67]; and Hughes v Sharp [2017] NSWSC 962 at [27]-[28] per Hallen J.

3. [251]

   In that regard, I note, in particular, Hallen J’s observation in Hughes v Sharp at [28] that parties should not assume that family provision litigation “can be pursued, safe in the belief that costs will be paid out of the estate” (his Honour there citing Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) (2010) 28 VR 635; [2010] VSCA 195; Harkness v Harkness (No 2) [2012] NSWSC 35). Sue submits that this observation applies equally to each of the claims and counter claims in the current proceedings.

4. [252]

   As to Geoff’s costs, Sue submits that, although there was some overlap in the evidence, the Succession Act claim alone did not attract the same time and attention as the proprietary estoppel claim. Sue maintains that the proprietary estoppel and family provision claims were severable (noting that the only reference to Bill’s testamentary intentions as forming part of the determination of the family provision claim was at [995] and [1001]). It is noted that the representations were not made out so far as the proprietary estoppel case was concerned and so it is said that they were also not made out for the purposes of the family provision claim. Therefore, it is said, the arguments concerning detrimental reliance also fall away as a possible support in aid of the family provision claim. (Pausing here, this seems to me to conflate success on particular factual issues with whether those factual issues were relevant to a particular claim or legal issue.)

5. [253]

   Sue submits that the Offers of Compromise and Calderbank letters between Geoff and Bruce and Merilyn should be disregarded.

6. [254]

   As to Geoff’s offers, Sue says they were incapable of acceptance, for some (but not all) of the reasons set out in the letter dated 9 July 2019 from Keypoint Law to Alex Martin (taking umbrage to the reference in that letter to her hostility to their clients), particularly given the uncertain value to be attributed to The Springs.

7. [255]

   As to Bruce and Merilyn’s Calderbank offer of 9 July 2019, Sue says that this was incapable of acceptance for the following reasons: (i) it purported to be conditional on “separate negotiations and agreement” with Sue; (ii) Sue was not made aware of the offer at any time; (iii) it contemplated a payment of $400,000 out of Bill’s estate, of which Sue would have been required to pay a one-third share as a residuary beneficiary; (iv) only Bruce and Merilyn were to obtain the benefit of Geoff’s one half interest in The Springs; (v) it contemplated terms that Bill’s estate would be responsible for the costs of transfer including stamp duty; (vi) and it was a term of the offer that Bruce and Merilyn’s costs of the whole proceedings be paid out of Bill’s estate on the indemnity basis (to the obvious detriment of Sue as a residuary beneficiary).

8. [256]

   Sue says that Bruce and Merilyn’s Calderbank offer in the letter of 21 July 2019, was similarly incapable of acceptance for the following reasons: (i) it purported to be conditional on them reaching a separate agreement with Sue; (ii) Sue was not made aware of the offer at any time; (iii) it contemplated a payment of $300,000 to each of Bruce and Merilyn out of Bill’s estate, leaving in question whether sufficient funds remained for Sue’s costs or further entitlement as a one-third residuary beneficiary; (iv) it contemplated a payment of $1.2 million by Geoff to Bruce and Merilyn (and not to Bill’s estate) for two-thirds of Bill’s estate’s interest in The Springs, thereby leaving a one-third (of one-half) interest in Bill’s estate; (v) it disregarded the interests of Sue as a residuary beneficiary; (vi) it was silent as to who would be responsible for the costs of transfer including stamp duty, if any and whether or not there would be other transactional costs and CGT; (vii) and it is said that it appeared to be implicit in the offer that Bruce and Merilyn’s costs of the whole proceedings would be paid out of Bill’s estate on the indemnity basis (again, it is said, to the obvious detriment of Sue as a residuary beneficiary).

9. [257]

   Sue says that, in making these offers, Bruce and Merilyn were negotiating in direct conflict with the interests of Bill’s estate; not acting on behalf of the estate but in their own interests. It is submitted that this renders hollow Bruce and Merilyn’s “oft repeated” claim that the basis of their intervention was to defend Geoff’s claim on behalf of Bill’s estate. Further, it is said that, by prosecuting their cross-claim, they were acting in their own interests, in direct conflict with the interests of Bill’s estate.

10. [258]

    Therefore, Sue says that Geoff should have his costs of his family provision claim out of Bill’s estate on the ordinary basis; and that Geoff should have his costs of the first cross-claim, payable by Bruce and Merilyn personally (and not indemnified out of Bill’s estate, noting that the first cross-claim related to the administration of Jill’s estate).

11. [259]

    Sue maintains her position that, since Geoff’s primary proprietary estoppel claim failed, he should pay Sue’s costs up to 27 May 2019 and the costs of Bruce and Merilyn from that date forward, each on the ordinary basis (noting that Bill’s estate paid out $46,746.85 on 15 April 2017 and 12 May 2017, for costs incurred in the preparation of affidavits which would otherwise have been prepared by the solicitor for Bill’s estate, Wayne Chaffey).

12. [260]

    As to the submission by Bruce and Merilyn that Sue is not entitled to her costs in defending the amended statement of claim (on the basis that Sue was in breach of her duties as executor and in breach of her duty to uphold the Will; and that she maintained a partisan role in Geoff’s favour, contrary to the interests of Bill’s estate and, relevantly, of Bruce and Merilyn), Sue submits as follows.

13. [261]

    Sue says that what motivated Bruce and Edwina (as Bruce’s advocate), and perforce Merilyn, was a perception of Sue’s bias and sympathy towards Geoff, without this being grounded in fact. Sue says that at all times she acted appropriately to defend the claims against Bill’s estate but that she refused to be a party to what turned out to be misconceived and unsubstantiated allegations against her father (Bill) and her brother (Geoff) in relation to Jill’s estate; and she “refused to accede to Bruce’s insistence that she act as his mouthpiece and adopt, as her own, his and Edwina’s views as to the appropriate evidence to be adduced” (including, it is said, evidence which, if accepted, would have resulted in Bill’s estate being reduced substantially because of the “maladministration” of Jill’s estate by Bill and Geoff). It is said that Sue indicated her position clearly, namely that if Bruce and Merilyn wished to agitate those issues, and to take a role in the proceedings, then she would consent to their joinder (but only at risk as to their own costs and not as the representative of Bill’s estate) and that Sue would continue to defend the claims (including the claims being made by Bruce and Merilyn), as she believed Geoff had received enough from their parents and in doing so, would continue to uphold the Will. It is submitted that the finding that Sue had a genuine belief (see at [390]-[391] of the principal judgment) that Bill was contemplating changing his Will, does not detract from her entitlement to costs (at least up to 27 May 2019).

14. [262]

    It is submitted that Bruce’s and Merilyn’s insistence on Sue “acting in accordance with their dictates” was relentless. Reference is made to their affidavit evidence, which it is said was “replete with vituperative correspondence, allegations of partisanship, of not putting forward a vigorous defence, making threats and recriminations” and finally their insistence on taking over the representation of Bill’s estate in the proceedings. It is said that this was made clear in correspondence and written submissions prior to the application brought by Bruce and Merilyn before Pembroke J. Reference is made to the observations made at [387]-[388] of the principal judgment, namely that I considered it quite plausible that Sue did not wish to engage in confrontation with Bruce and my ready acceptance that Sue found it intimidating to deal with Bruce and Edwina. Reference is also made to what was said at [390] of the principal judgment; namely that I did not consider that Sue’s stance in the litigation (so far as it involved matters of which I was aware) suggested that Sue had adopted a partisan role “rather than a role consistent with what she genuinely believed to be Bill’s wishes”.

15. [263]

    Further, Sue says that she consented to the joinder in the terms sought in Bruce and Merilyn’s notice of motion, dealt with by Stevenson J by consent on 3 February 2017, but at risk as to their own costs; and that the manner in which the administration of Jill’s estate was carried out by Bill and Geoff, as was understood by her, was disclosed in Sue’s affidavit sworn 22 July 2015 (at [44] and Ex A at pages 32, 33 and 70). It is noted that in Bruce and Merilyn’s reply submissions served on 30 January 2017 in relation to that notice of motion, the purpose of the application for the joinder of Bruce and Merilyn to the proceedings at that time was identified as being to permit them to agitate claims in respect of Jill’s estate only (Mr Chaffey’s affidavit sworn 20 April 2021, Annexure J at [3],[4],[10]-[16]). It is noted that Senior Counsel for Bruce and Merilyn there expressly disavowed that any claim was made against Sue on the basis of a breach of duty as executor of Bill’s estate and that the claims against Sure were simply brought against her as the representative of Bill’s estate; it being expressly stated that neither Geoff nor Sue had any personal interest in the defence of the claims so far as they are claims against Bill’s estate but that if the cross-claim were successful, it “would result in a very substantial subtraction of assets from the Estate of William in favour of the Estate of Jill” (at [20]). Sue points out that it was not stated, as now put forward by Bruce and Merilyn that a defence on behalf of Bill’s estate was not called for (when, Sue says, quite clearly it was).

16. [264]

    It is noted that Order 2 of the orders made on 3 February 2017 stated specifically that Bruce and Merilyn represented Jill’s estate on the cross-claim and the proceedings generally “but their standing shall be only as representative of Jill Bassett’s Estate”; that Order 3 directed Bruce and Merilyn not to file any defence to the existing statement of claim; and that other orders and directions were made on 30 June 2017, including that costs of the amended motion be reserved. Sue says that these costs also fall to be dealt with now.

17. [265]

    As to the findings and reasoning of Pembroke J concerning Sue, in his Honour’s ex tempore decision made on 27 May 2019, it is said that they can have no evidentiary value in the proceedings; noting that his Honour stated that these were not on a final basis (as noted at [11] of the principal judgment). Sue says that what fell from his Honour appears to have encouraged an expectation in the minds of Bruce and Merilyn, that their costs should fall in large measure on Sue, notwithstanding that their allegations remain unproven and notwithstanding the final result in the proceedings. Sue says that it has now been found (see the principal judgment at [389]) that what motivated Bruce and Edwina (and, by association it is said, Merilyn) was their perception of Sue’s bias or sympathy towards Geoff. Further, it is said that the basis on which Pembroke J expressed the view (albeit not final) that Sue had displayed antipathy towards Bruce and Merilyn is not apparent (referring to my observations in the principal judgment at [389]).

18. [266]

    It is submitted that the mere perception of bias and sympathy to Geoff should not support a costs penalty being imposed on Sue. Sue says that Pembroke J varied what had previously been agreed between the parties two years earlier (by ordering that Bruce and Merilyn be joined as defendants to the principal proceedings and the second cross-claim to represent Bill’s estate in place of Sue) but, paradoxically, Sue remained as the representative of Bill’s estate in respect of the first cross-claim (it being said that this incongruity remains unexplained). In circumstances where it is said that, in terrorem, his Honour ordered that Sue be at risk as to her own costs as executor from 27 May 2019, it is unsurprising that Sue then filed submitting appearances save as to costs in relation to the primary proceedings and both cross-claims and took no further active role in the proceedings.

19. [267]

    Sue says that she swore six affidavits in the proceedings, all pre-dating the orders of Pembroke J, including three affidavits as executor. It is said that the documents in the Court Book do not establish, nor can it be asserted, that those affidavits were prepared in support of Geoff’s case, as asserted by Bruce and Merilyn; and that it was not in Sue’s power to dictate whether or not her affidavits would be read in his case, nor that she would (or would not) be a witness called in his case. Sue says that to say (or imply) otherwise, as has been asserted by Bruce and Merilyn, is to misdescribe Sue’s role in the proceedings.

20. [268]

    Sue maintains that she was genuine in her desire to minimise the costs being incurred by all parties, to the detriment of all the beneficiaries.

21. [269]

    Sue says, as to the reserved costs of the motion before Stevenson J in February 2017, that she is entitled to a costs order out of Bill’s estate on the indemnity basis and that, in the events which have transpired, Bruce and Merilyn are not entitled to costs of that motion as they were relevantly in support of their first cross-claim, which failed.

22. [270]

    As to whether Sue should be indemnified by Bill’s estate for her costs of the application before Pembroke J, which was a question reserved by his Honour for the trial judge, it is said that Pembroke J’s reasons disclose that they were based upon a preliminary view of the evidence without making any actual findings against Sue; and again it is said that no such findings were made at final hearing. Accordingly, it is submitted that Sue should be entitled to be indemnified out of Bill’s estate on the indemnity basis for the costs of the notice of motion filed on 14 March 2019 by Bruce and Merilyn.

23. [271]

    It is further submitted that Order 6 of the orders of 27 May 2019 (the costs order against Sue in relation to Bruce and Merilyn’s motion) should be vacated. It is submitted that the allegations of bias and sympathy for Geoff, and hostility towards Bruce and Merilyn, sounding in costs, have not been made out; and that Sue is entitled to her costs of the motion, to be paid out of Bill’s estate on the indemnity basis. (Pausing here, I do not accept that it is appropriate for me to vacate the order made by Pembroke J for Sue to bear the costs of Bruce and Merilyn’s motion. That is an order that was made by his Honour in determining that motion. All that was reserved to the trial judge was whether Sue should be indemnified for those costs out of Bill’s estate.)

24. [272]

    In reply to the submissions made by Bruce and Merilyn as to alleged breach of duty and failure to uphold the Will, Sue makes the following submissions.

25. [273]

    First, Sue cavils with the proposition that Bruce and Merilyn were forced to intervene on behalf of Bill’s estate. It is said that their claims in respect of Jill’s estate, and their argument that those claims (when “inevitably substantiated”) would result in a diminution of Bill’s estate assets, demonstrates that Bruce and Merilyn were not intervening for the benefit of Bill’s estate or their interests in it.

26. [274]

    Second, Sue says that it has now been established that she did not display bias towards nor was she sympathetic to Geoff’s claim. It is said that perceptions of bias are an insufficient basis for displacing the executor and justifying intervention in the role to which Sue had consented.

27. [275]

    Third, reference is made to the statement by Handley JA in McCusker v Rutter at [57]-[62] to the effect that an executor, faced with a statutory family provision claim, is bound “within reason” to uphold the terms of the Will but that, in appropriate cases, the legal personal representative will be justified in compromising the claim or even consenting to the orders sought. It is noted that even encouraging a family member to make a claim is no ground for depriving an executor of costs. Reference is made to what his Honour said at [62], namely, that:

28. [276]

    It is said that even assuming (which is “strongly denied and is unsupported by the evidence”) that Sue encouraged Geoff (to whom she owed no parental or familial duty) in making and prosecuting his claim, there is no obligation of an executor to stand aside and permit a beneficiary to stand in the executor’s shoes and to conduct the defence to a family provision or any other claim on behalf of the estate, particularly where the executor consents to the beneficiary’s joinder (but at risk as to the beneficiary’s own costs).

29. [277]

    Reference is made to Application of Scali [2010] NSWSC 1254 where Brereton J said:

30. [278]

    It is said that in weighing the duty to uphold the Will, an executor must exercise a due sense of proportionality involved in defending the proceedings (pointing also to s 60 of the Civil Procedure Act in this regard).

31. [279]

    Fourth, it is said that there is no evidence to support Bruce and Merilyn’s contention that Sue failed to act as adversary against Geoff’s claim, or that she brought forward evidence supporting Geoff’s claim and “took up an attitude which required Bruce and Merilyn to seek separate representation to protect Bill’s Will and their entitlements under it”. It is said that, on the contrary, there is ample evidence that Bruce and Merilyn pursued their own interests “relentlessly and remorselessly, to the ultimate detriment of the Estate”.

32. [280]

    Fifth, it is said that the intervention of Bruce and Merilyn, at least from the time they filed their motion to intervene, and as determined by Pembroke J, resulted in the proceedings becoming a dispute inter partes, if not earlier.

33. [281]

    As to the complaint made in respect of the sum of $69,277.77 (initially paid out of Bill’s estate), it is said that this was refunded promptly to Wordsworth Lawyers’ Trust Account after complaint was (properly) made.

34. [282]

    As to the submission that Sue’s costs should be capped (and for any “excessive costs” to be repaid), it is said that there is no proper basis for such an order.

35. [283]

    Sue accepts that, absent the intervention of Bruce and Merilyn, Sue’s evidence would not have been tested in cross-examination; but says that, as she consented to the joinder of Bruce and Merilyn as parties (albeit at the risk as to their costs), this difficulty “evaporated” and that it was not necessary (nor was it appropriate in view of their cross-claim), for Bruce and Merilyn to represent the interests of Bill’s estate in addition to their standing as representing the interests of Jill’s estate, by which they became conflicted.

36. [284]

    As to the submissions made by Bruce and Merilyn at [104]-[107] concerning Sue’s alleged lack of financial disclosure, it is said that none of the matters alleged was put to Sue in cross-examination, and consequently it cannot be suggested that there had been a lack of financial disclosure and that she was conflicted; and thus the submissions now made should be rejected.

37. [285]

    It is said that Sue was a named defendant to the first cross-claim in her representative capacity; that whatever role she may have played in the hearing was rendered otiose by the decision of Pembroke J on 27 May 2019 and her submitting appearances; that by that time she had already incurred costs and filed and served a defence (as she was bound at that time to); and that to do otherwise in the circumstances would have been a dereliction of Sue’s obligations as executor.

38. [286]

    Finally, as to Sue’s refusal to resign as executor, it is said that there was no reason for her to do so (“except perhaps to avoid being embroiled in her siblings’ disputes”). It is said that Sue addressed the issue by consenting to the joinder of Bruce and Merilyn to the proceedings and that no executor is required to stand aside merely because a beneficiary does not like what he or she is doing. It is noted that a robust approach is expected of executors and it is said that there is no evidence that Sue has displayed any moral turpitude, or conscious impropriety. Reference is made to what was said by McColl JA (with whom Basten and Campbell JJA agreed) in Juul v Northey [2010] NSWCA 211 at [238]-[239] in that regard.

Determination

1. [287]

   This is yet another unfortunate example of disputes between siblings over perceived entitlements to an inheritance out of their parents’ estates (whether by reference to an alleged testamentary promise or otherwise for further provision out of the estate, as in Geoff’s case, or by reference to a family “understanding” as a result of family discussions, as in Bruce and Merilyn’s case). There was an evident sense of grievance on both sides – or, at the very least, between Geoff (on the one hand) and Bruce (and his wife, Edwina) on the other hand. Merilyn and Sue each seems to have stood, to some extent, out of the fray, albeit that Sue’s apparently changing position as to her sympathy for Geoff’s claims appears to have led to further acrimony between the siblings and Merilyn’s opposition to Geoff can presumably be inferred from the giving of instructions in relation to the conduct of the litigation.

2. [288]

   The siblings’ dispute (which, at least in part, on Bruce’s side seems to have stemmed from a long-standing perception that Geoff had been treated more favourably than him during his parents’ lifetimes) was litigated to the bitter end, with the consequence that (whatever happens with the costs orders now to be made) the estate will inevitably have been diminished by the costs of the litigation. Furthermore, the family relationship between at least some of the siblings has been (perhaps irreparably) damaged.

3. [289]

   The conduct of the litigation of the siblings’ dispute appears, unfortunately, to have been marred by the tone of some of the correspondence emanating from Geoff’s solicitor (as to which I will say further in due course). Suffice it here to note that it is unfortunate when officers of the Court, with their own obligations of professional and ethical conduct, and having regard to the overriding statutory purpose of civil proceedings in this Court, descend into the fray, so to speak, with intemperate communications that cannot possibly advance the just, quick and cheap resolution of the real issues in dispute (as seems, to some extent, to have been the case here, though I make no adverse findings against any of the legal representatives involved in the matter).

4. [290]

   This is also another unfortunate example of litigation pursued, at what was fairly described in submissions at the hearing itself, at an outrageous and extraordinary cost.

5. [291]

   Principles of proportionality undoubtedly here arise. Bill’s estate was valued for probate purposes as being in the order of $3.5 million (see the inventory of property annexed to the probate for Bill’s estate valuing Bill’s assets at $3,474,518.83 – [943] of the principal judgment). Adopting for present purposes the desktop valuation for The Springs (assuming its validity), the overall value of Bill’s estate increases to $4,274,518. By adopting this value and excluding the specific bequest to Geoff of Bill’s interest in various farming plant and equipment and Bill’s interest in The Bassett Grazing Co Partnership (valued at approximately $233,835), the remaining estate would be valued at $4,040,683 (see principal judgment at [944]). Jill’s estate was wholly distributed long ago. The total costs of the respective parties are in the order of $2.5 to 3 million. This is to be deplored. However, in the present case, it seems to me that the fault lies on all sides.

6. [292]

   As to the principal protagonists, criticism has been made of Geoff (among other things) for incurring unnecessary and duplicated costs, and for abandoning reliance at the final hearing of claims based on an alleged oral agreement in 1984 and 1985. There is also a complaint as to Geoff’s alleged “sabotage” of the single joint expert process that was put in place in June 2017 to enquire into and report on the accounting issues raised by the first cross-claim). Criticism can equally be made of Bruce and Merilyn as to the manner in which the first cross-claim seems, in effect, to have become an exercise for the taking of accounts as to the administration of their mother’s estate many years after her death and after the death of the person most likely to have been able to explain what had occurred (their father, Bill) and out of whose estate (and also from Geoff) recovery of assets or compensation was sought (which can only be said to have been mainly for the benefit of Bruce and Merilyn – since, although Sue was a residuary beneficiary of Jill’s estate, she was not seeking to maintain any such claim).

7. [293]

   As to Sue, leaving aside the complaints levelled against her by Bruce and Merilyn as to partisanship or the like, it would seem that her costs as executor of the litigation, up to the time she ceased to take an active role in the proceedings, were also well in excess of the costs one would expect in a straightforward family provision claim (which indicates to me that the umbrage now taken by Bruce and Merilyn at Geoff’s costs needs to be put in context).

8. [294]

   The unfortunate position seems to be that now the dust of the litigation has settled, so to speak, the parties must reckon with the reality that the costs of that dispute will impact adversely on all of them.

9. [295]

   Not surprisingly, having regard to the way in which the parties appear to have approached the litigation, there is (as noted above) a vast difference in the costs orders they have proposed; and the first round of submissions as to costs was followed by another round of submissions in reply by each of the siblings. As is apparent from the thrust of the communications (and submissions) relating to the respective without prejudice offers, from at least May 2019 costs appear to have become a (or perhaps the) driving factor in the litigation. That is unfortunate, to say the least.

10. [296]

    Turning then to the questions now for determination in relation to costs, I have concluded as follows.

11. [297]

    As to any costs already the subject of costs orders, in my opinion, there is no basis on which those costs should be disturbed (those costs orders being identified in Attachment A to Bruce and Merilyn’s submissions at items 1, 2, 3, 4 and 5). I do not here need further to address those costs.

12. [298]

    There are three questions concerning reserved costs which I deal with in due course. First, the question reserved by Pembroke J as to whether Sue should be indemnified out of Bill’s estate for the costs of the successful application by Bruce and Merilyn. Second, the costs reserved by Stevenson J in 2017 in relation to Bruce and Merilyn’s joinder to represent Jill’s estate. Third, the costs reserved by me on 26 November 2019 in relation to discovery (item 6 of Attachment A).

13. [299]

    As to the primary proceeding (Geoff’s proprietary estoppel claim, on which he failed, and his family provision claim, on which he succeeded), while I accept that there was a degree of commonality in the factual substratum of the two alternative claims, I do not consider the overlap to be so extensive as to make it appropriate to treat the claims as, in effect, one “event” for the purposes of the ordinary rule that costs follow the event (see r 42.1 of the UCPR). That is because it seems to me that the evidence required (and time occupied) for consideration of the proprietary estoppel claim was likely to have been more extensive than would have been required had Geoff’s claim been limited to the family provision claim. I also bear in mind the strictures applied in relation to costs of family provision claims in general (which would be well understood by practitioners in the Family Provision List, which now forms part of the Succession List). Therefore, subject to the effect of the respective Offers of Compromise and Calderbank offers (which I consider below), I consider that the costs of the proprietary estoppel claim (on which Geoff failed) should be considered separately from those of the family provision claim (on which Geoff succeeded).

14. [300]

    That said, I am not persuaded that an 80%/20% split as to the time and cost of the primary proceeding as between the respective alternative claims is a necessarily reliable guide. That is because, as indicated above, a large portion of the evidence referable to the proprietary estoppel claim (both as to representations allegedly made and as to contribution to the farming properties) was also relevant to the family provision claim. An analysis of the principal judgment to suggest that most of the reasoning was devoted to the proprietary estoppel claim seems to me to overlook that much (albeit not all) of the factual analysis by reference to which the proprietary estoppel claim was determined would have been relevant had the claim been limited to a family provision claim alone; and the comparative brevity with which I was able to deal with the latter claim was in large measure because that factual exercise had already been undertaken with respect to the former. On a broad brush basis, were that to be the appropriate way of dealing with costs at this stage as opposed to proceeding to a formal costs assessment, I would apportion the overall costs of the primary proceeding at 60%/40% as between the proprietary estoppel claim and the family provision claim.

15. [301]

    As to the proprietary estoppel claim, considered on its own, on the usual basis Geoff would be liable for the costs of the defendants (up to 27 May 2019, the relevant defendant being Sue; thereafter, the relevant defendants being Bruce and Merilyn) and there should be no duplication of costs in that regard because Bruce and Merilyn were not parties to the proceedings prior to 27 May 2019 and Sue filed a submitting appearance save as to costs (and took no active part in the proceedings) shortly after she was removed as the representative for Bill’s estate for the purpose of the proceedings on 27 May 2019. I leave aside at this stage the question reserved by Pembroke J.

16. [302]

    This brings me to the effect of the respective Offers of Compromise and Calderbank offers. The rationale for special costs orders in those circumstances has been set out earlier.

17. [303]

    First, as to the Offers of Compromise issued on Geoff’s behalf on 31 May 2019 to each of Bruce and Merilyn, I note as follows.

18. [304]

    Although Bruce and Merilyn have made submissions to the effect that these offers were not able to be accepted in the form in which they were made (Sue echoing those submissions) and have suggested that they were non-compliant by reference to the term that “each party pay its own costs” (read in the context of the letter indicating that the sum sought by the offer would discharge Geoff’s costs liability), I consider that the Offers of Compromise complied with the formal requirements for a valid offer under r 20.26 of the UCPR. They made clear that they were issued under r 20.26 of the UCPR and they were expressed to be open for acceptance for the requisite time. As noted above, an offer with the term that “each party pay its own costs” is not an offer “expressed to be inclusive of costs” (see r 20.26(c)), and so Geoff’s Offers of Compromise were compliant with r 20.26 of the UCPR.

19. [305]

    I do not accept that the Offers of Compromise did not contain a genuine element of compromise. To my mind, they did indeed offer a genuine compromise of the disputes. They were not expressed to be conditional on acceptance by the other offeree (i.e., in their terms either one of the offerees, say, Merilyn, could have accepted the offer and the other, on this hypothesis, Bruce, not done so). Conceivably, that might be said to have led to the frustration of the agreement constituted by acceptance of the offer (if Geoff was not then in a position to fulfil the requirement to transfer a one-third share of his half share of The Springs to the offeree who had not accepted the offer); but in their terms they were offers capable of acceptance. Nor were the offers expressed to be conditional on Sue’s acceptance of the one-third share contemplated by the offers to be transferred to her.

20. [306]

    Clearly, the ultimate outcome of the proceedings was no less favourable to Geoff than the outcomes in the Offers of Compromise, since he was thereby in effect giving up all his claims in the proceedings (to his father’s 50% interest in The Springs or, in the alternative, to a greater provision out of his father’s estate) and his 50% interest in The Springs for sums equal in total to what his costs then were ($900,000); whereas, in the end result he has retained his 50% interest in The Springs and has obtained an order for provision that in effect gives him a further 25% interest in The Springs. As to the first cross-claim, the Offers of Compromise encompassed a dismissal of those claims, which is what Geoff achieved at the hearing.

21. [307]

    As I have indicated above, the Offers of Compromise were, in my opinion, capable of acceptance by each of Bruce and Merilyn (and, importantly, would have been capable of acceptance by either one of them alone). The practical and “logistical” difficulties expressed by Bruce and Merilyn, through their without prejudice response to the offers, had nothing to do with whether the offers could have been accepted. Rather, those perceived difficulties were clearly concerned with whether Bruce and Merilyn considered the offers to be sufficiently attractive in their “current form” to be accepted. The fact that Bruce and Merilyn would have incurred costs in relation to a subsequent sale of The Springs and their apparent concern that they be left as joint owners with their sibling, Sue, goes in essence to the difference between The Springs being realised as an asset of Bill’s estate (at the cost of the estate) and then their interest as residuary beneficiaries being distributed to them as a share of the proceeds of The Springs; compared with the position where there was a transfer in specie to them of a much greater share of The Springs than that to which they had any entitlement under Bill’s Will.

22. [308]

    Therefore, the jurisdiction to make a special costs order in favour of Geoff is in my view clearly enlivened (and it is not strictly necessary to consider their efficacy as Calderbank offers). The question then is whether there is a reason to order otherwise (or, whether, as the rationale for special costs orders contemplates, they should notionally be regarded as the cause of the litigation thereafter proceeding to a contested hearing).

23. [309]

    The reasons put forward by Bruce and Merilyn in support of the conclusion that there should not be a special costs order in favour of Geoff (framed as to why their rejection of the offer was not unreasonable – the test applicable when considering the consequences which flow from rejection of a Calderbank offer), are those set out in Merilyn’s affidavit sworn 9 April 2021, and as summarised in their submissions on costs (see above).

24. [310]

    To the extent that those reasons go to the alleged unreasonableness of the conduct of the litigation by Geoff (and the level of costs incurred by him), to my mind that goes to whether there should be a cap placed in some fashion on the costs the subject of any indemnity order or the costs assessment process itself, rather than as to whether there should be a special costs order per se, flowing from the rejection of the Offers of Compromise (and I say more about this in due course).

25. [311]

    Were (contrary to the conclusion I have reached) the Offers of Compromise not to be valid as offers of compromise under the UCPR, then they were clearly intended to be relied on as Calderbank offers, and it would fall for consideration as to whether the rejection of the offers was unreasonable by Bruce and Merilyn (the onus of establishing which would lie on Geoff). The factors to be taken into consideration in this context are those set out in Hazeldene’s Chicken Farm (as set out above).

26. [312]

    As to the stage of the proceeding at which Bruce and Merilyn received the 31 May 2019 offers, by this time the pleadings were well and truly closed, Bruce and Merilyn had been appointed to represent Bill’s estate in the proceedings (and had for some time been prosecuting the first cross-claim on behalf of Jill’s estate) and all parties should have been well appraised of the issues in the proceedings. Bruce and Merilyn not only had had the benefit of legal advice but also Bruce (and Edwina) had been investigating the factual substratum for the respective claims (such as the contribution made by Geoff to Bill’s estate) for quite some time. (Indeed, they were investigating such matters even before Bill’s death.)

27. [313]

    As to the time allowed to the offerees to consider the offer, this was a reasonable time (being the time required for offers of compromise under the rules) and it would have been open to Bruce and Merilyn to seek more time had that been required.

28. [314]

    As to the extent of the compromise offered, as noted above, it involved the giving up by Geoff not only of his claims in respect of The Springs but also of the interest he already held in The Springs for payment of an amount by each offeree that would have discharged Geoff’s costs liabilities to his own solicitors. It was, in a very real sense, a capitulation of his claims in respect of the proceedings.

29. [315]

    As to the offerees’ prospects of success assessed as at the date of the offer, while it should have been apparent by that stage that there were difficulties with at least some of the claims in the first cross-claim (for reasons such as the fact that the debt the subject of Claim 1 had already been forgiven by the very people seeking here to recover it albeit on behalf of Jill’s estate; and the limitations issues), I accept that there must have been perceived to be reasonable prospects of success in defending Geoff’s primary claim (since it depended on acceptance, in the main, of his evidence of conversations with the deceased – and there is always close scrutiny of such claims). The prospects of success on the family provision claim would surely have been more finely balanced. There are no presumptions that apply in such matters against claims by an “adult son”.

30. [316]

    As to the clarity with which the terms of the offer were expressed, no issue is raised as to this (albeit that there were practical and logistical difficulties perceived with it); and as to whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it, the letter dated 31 May 2019 with which the offers were served clearly did so.

31. [317]

    On balance, I consider that, at the time the offers were made, were the offers only to have been valid as Calderbank offers, it was not unreasonable for Bruce and Merilyn to reject them (having regard to uncertainties as to the value of Bill’s estate and the practical difficulties perceived with their acceptance). Nothing here turns on this conclusion, however, since I have concluded that they were valid Offers of Compromise.

32. [318]

    As to Bruce and Merilyn’s counter-offers, these were not expressed to be offers of compromise under the UCPR but were put forward expressly invoking the Calderbank principles. Apart from the difficulty that acceptance of those offers would not in my opinion have resulted in a more favourable outcome overall for Geoff than the ultimate judgment in the proceedings (which means that the special costs jurisdiction would not have been enlivened in any event), the question would be whether it was unreasonable for Geoff to reject those offers.

33. [319]

    The first offer, made on 9 July 2019 is unclear to the extent that there is a suggestion that it required Sue’s approval but then later in the letter it is expressed in terms which do not seem to include such a requirement. (In submissions on the present application she appears to have considered there to have been a condition to that effect.) The offer effectively required Geoff to walk away from the litigation (including the first cross-claim) with a contribution of just under half of his then legal costs (requiring a capitulation on his part in relation to his claims but involving the dismissal of the first cross-claim). Arguably, this encompassed a genuine element of compromise in that it compromised the claim contained in the first cross-claim, although it amounted to a capitulation in relation to the principal claim. However, in circumstances where it required Sue’s concurrence (since it involved a payment out of the estate), it was not an offer capable of acceptance at that time (and hence it is unnecessary to consider whether it was unreasonable for Geoff to reject this at the time).

34. [320]

    As to the second offer, made on 21 July 2019, this is expressed to be conditional on Sue’s approval (which, for whatever reason – Bruce and Merilyn say due to Geoff’s response), was not obtained. Therefore, the offer was not one capable, on acceptance, of giving rise to an immediately binding agreement. It involved the payment by Geoff of $200,000 to each of Bruce and Merilyn and them obtaining their entitlements under Bill’s Will (which would include their one third of Bill’s half share in The Springs) and them then leaving it to Geoff and Sue to arrange the sale of The Springs at a value of $3.6 million. Bruce and Merilyn concede that it is not possible to make a specific arithmetical calculation of the outcome of that offer but note that it reflected no payment for any sum claimed in the first cross-claim. In any event, the fact that it was not capable of acceptance makes it unnecessary to consider this offer further.

35. [321]

    My conclusion in relation to the proprietary estoppel claim is, therefore, that Geoff should pay the estate’s costs (Sue to 27 May 2019, Bruce and Merilyn thereafter from 27 May 2019 to 31 May 2019 only) up to 31 May 2019 on the ordinary basis and that thereafter (from 1 June 2019) Bruce and Merilyn should pay Geoff’s costs on indemnity basis (subject to the issues discussed below). I consider the separate costs of the family provision claim in due course.

36. [322]

    On the first cross-claim, Bruce and Merilyn raise a number of issues as to the unreasonableness of Geoff’s conduct of the litigation in support of their claim for indemnity costs and in resisting an indemnity costs order against them. Insofar as the claim is based on the concept of unreasonableness in the conduct of litigation, see cases such as Fiduciary v Morningstar as to what kind of delinquency is there contemplated.

37. [323]

    Bruce and Merilyn point to: changes in the case (the abandonment, though not consistently, of the reliance on the alleged 1984/1985 agreements); duplication of costs, including by reference to the change of solicitors; unnecessary costs, including by reference to Ms Fielding’s affidavit which was “rejected” (I note that Geoff decided not to read this affidavit based on the evidentiary objections raised - T 2.30); complaints as to non-provision of documents and non-compliance with timetables set by the Court; the so-called “sabotage” of the single joint expert process; and the fact that serious allegations were made as to non-production by Bruce and Merilyn of documents.

38. [324]

    As to those matters, I accept that there was a change in the way Geoff’s proprietary estoppel case was put in opening submissions from that in which it was pleaded. However, it is difficult to see how the need to address the pleaded claim as it was up to that point would have sounded in extensive or additional costs. The making of the alleged promises or representations back in 1984 and 1985 was adhered to by Geoff in his cross-examination at the hearing and would have formed part of the factual substratum for the family provision claim in any event.

39. [325]

    As to the duplication of costs as a result of the change in solicitors (and the complaint that five days of conferencing was excessive) or the complaint as to the time spent by Geoff’s new solicitor in reviewing the pleadings after a computer difficulty in his office, those are matters that would be relevant in considering an amount to be allowed on a costs assessment (since even on an indemnity basis not all costs might be recoverable). Similarly, as to the costs of preparation of affidavits (such as Ms Fielding’s affidavit to which reference was made in the submissions) which were either not read or rejected outright, those would go to the assessment of recoverable costs not the basis on which costs would be ordered.

40. [326]

    As to the complaint about the failure to comply with Court timetables or to provide documents in answer to notices to produce or the like, while that is unsatisfactory and not to be condoned, I am not persuaded that it rises in the present case to the level of unreasonableness that would warrant a special costs order. Nor is it clear, other than in relation to some costs incurred in chasing up such matters, that this has led to any significant cost or prejudice to Bruce and Merilyn.

41. [327]

    As to the complaint that Geoff made serious allegations in relation to non-production of documents, it is not clear to me that an allegation rising to the level of fraud was made. Certainly none seems to have been pleaded. If the complaint includes the allegations made as to the fact that there was no production of the letter that Bill was said to have sent to Bruce (a copy of which was requested by Sue and not produced at the time apparently on the basis that it would make her more sympathetic to Geoff), I have referred in my principal reasons to the problematic aspects of Bruce and Edwina’s evidence in that regard and I do not here propose to repeat that. Suffice it to say that I do not consider that this is a case where the assertions that have been made in relation to non-production of documents warrant the making of an indemnity costs order.

42. [328]

    Finally, as to the complaint that the single joint expert process was “sabotaged”, the complaint appears to be that Geoff’s solicitor (Mr Martin) sought a copy of the curriculum vitae for the already court-appointed expert and that he (or Geoff) did not co-operate with the single expert accountant in terms of the provision of instructions or responses to the single appointed expert, culminating in that expert seeking permission to withdraw from her referral, and as to the non-payment of or delay in payment in relation to Geoff’s share of the fees of that expert (see Ms Kennedy’s affidavit sworn 21 November 2017). I am not in a position to test the various assertions made in relation to the ultimate outcome of the single expert process. I accept that the evidence suggests that Geoff’s lawyers may have been dissatisfied with the expert’s expertise and/or work. Without a full review of the circumstances it is not appropriate for me to make findings in relation to that issue. Suffice it to say that if there were duplicated costs referable to the aborted attempt for an accounting report to be prepared by the single appointed expert, then this can be raised in a costs assessment process.

43. [329]

    Therefore, I have concluded that Bruce and Merilyn should pay Geoff’s costs of the first cross-claim and (subject to an exclusion for costs that the costs assessor considers were inappropriately or unreasonably incurred) that those costs should be on the indemnity basis from 1 June 2019, having regard to the Offers of Compromise that were made (and not accepted).

44. [330]

    I have taken into account the financial submissions as to the circumstances of the siblings and I accept that the litigation has come to an unfortunate impasse. However, I did make clear when reserving judgment that parties might wish to consider their position as to settlement on the basis that no one might be happy with the final outcome (T 612.25) and this is the unfortunate consequence of parties choosing to fight litigation to the bitter end.

45. [331]

    As to whether Bruce and Merilyn should be reimbursed out of Bill’s estate, I note what was said in Warton v Yeo (2015) 15 ASTLR 462; [2015] NSWCA 115 (Warton v Yeo) at [72] as to the situation (not there the case) where the costs were incurred by the executor in the furtherance of a personal interest or where there was impropriety (referring to Miller v Cameron at 578; Re Jones at 197), as well as situations of unreasonableness on the part of the executor in taking a partisan stance. At [78], I noted that:

46. [332]

    I consider that Merilyn and Bruce should be indemnified for the costs of the primary proceeding (in respect of the party/party costs component of the costs they are ordered to pay to Geoff) but not the costs of the first cross-claim. As to the former, I see nothing irregular in the defence of that claim on behalf of Bill’s estate. It is unfortunate, however, that their rejections of the Offers of Compromise have led to indemnity costs orders. I consider that they should not be indemnified for the additional component of those costs in circumstances where their rejection of the Offers of Compromise was largely predicated on the practical and logistical difficulty it would pose to their personal interests.

47. [333]

    As to the latter, the first cross-claim was a claim to recover moneys or assets said to have been the subject of maladministration of Jill’s estate. It was not a devastavit claim per se. Moreover, and relevantly for present purposes, though brought (with leave) by Bruce and Merilyn as representatives of Jill’s estate, it was a claim the benefit of which would to a very large extent have enured to Bruce and Merilyn as residuary beneficiaries of her estate (although Sue would also have shared in that benefit, she did not seek to join in any such claim). This seems to be an attempt to trawl through accounting documents (many years after Jill’s death) in order to see what could be recovered for their ultimate benefit.

48. [334]

    As to the family provision claim, on the ordinary basis, Bruce and Merilyn should be indemnified for their costs out of Bill’s estate but, having regard to the rejection of the Offers of Compromise (and having regard to the fact that their own offers of compromise make very clear that it was for their benefit that the proceedings were being conducted by them), I would limit that to an indemnity for the difference between the costs assessed on the ordinary basis (for which they should be indemnified) and the costs on an indemnity basis (for which additional amount they should only be indemnified out of their share of the residuary estate).

49. [335]

    As to Geoff’s costs of the family provision claim, they should be paid on an indemnity basis (having regard to the rejection of the Offers of Compromise). I was inclined to cap these costs (approaching the matter on a broad brush basis) at, say, $100,000 to reflect the disproportionality of the costs incurred in relation to the family provision claim. I would not have considered that a further oral hearing was warranted on that issue given that all the parties have had ample opportunity to make submissions (at the very least in the various sets of reply submissions) on this question.

50. [336]

    However, I have concluded that it is not appropriate here to do so in circumstances where there is a difficulty, on the material before me, in separating out the costs referable to the family provision claim (which is what I would have capped) and those referable to the other claims, in particular the costs of the first cross-claim. In this regard, it seems not coincidental that Geoff’s costs up to the point at which he instructed new solicitors (in April 2017, which was around the time that the first cross-claim was filed; and after the earlier unsuccessful mediation in 2016) were around $80,000 (and not therefore “out of the ball park” for a contested family provision claim – albeit that this was obviously before any costs were incurred in the contested hearing). The bulk of Geoff’s costs were incurred thereafter (by which time, of course, there had been a new level of complexity arising from the need to investigate the issues referable to the first cross-claim). Sue’s costs of representation in relation to the estate up to the time that she was removed as representative (in May 2019), which obviously included costs incurred after the filing of the first cross-claim, were in the order of some $400,000. (This suggests that at least one cause of the very considerable costs incurred on both sides was referable to the first cross-claim, not the family provision claim.) Moreover, insofar as much complaint was made by Bruce and Merilyn as to unnecessary or wasted or duplicated costs, that will most efficiently be dealt with during the costs assessment process. Further, there is the overlay of the special costs orders to consider.

51. [337]

    Accordingly. I have concluded that the costs of none of the parties should be capped and the reasonableness or otherwise of the respective costs dealt with during the cost assessment process (if they cannot be agreed in the interim).

52. [338]

    As to a gross sum cost order, as adverted to in the above discussion, I have concluded that this is not an appropriate case for a gross sum costs order, since I am not persuaded that I am in the position appropriately to make such a determination, and that the quantum of costs should be for a costs assessor to determine.

53. [339]

    As to Sue’s costs, Sue has already been ordered (by Pembroke J) to pay Bruce and Merilyn’s costs of opposing the application for her removal as representative of Bill’s estate for the purpose of the proceedings. The question reserved by his Honour was whether she should be indemnified out of the estate for her costs (that issue being raised having regard to his Honour’s tentative or preliminary view as to the animosity between the parties). I consider that Sue should not be indemnified out of Bill’s estate for the costs (including the adverse costs order) of Bruce and Merilyn’s notice of motion filed on 14 March 2019 and determined by his Honour on 27 May 2019. I accept that Sue was not bound to accede to demands from the other residuary beneficiaries as to the conduct of the case. However, by the time of their motion it should have been apparent that there was a difficulty in Sue continuing to represent Bill’s estate and, but for the initial opposition to her removal (or the terms on which she would agree to that removal) the costs of the motion would not have been incurred. I do not suggest that there was impropriety in the sense of dishonesty in that context. Rather, I think that this is a case where Bill’s estate should not bear those costs. However, I do not propose otherwise to limit Sue’s indemnity out of Bill’s estate for costs incurred by Sue in representing the estate up to 27 May 2019. While there is some force to the argument that Bruce and Merilyn should not have to pay double costs for the first cross-claim (they say, that since Sue was not an active contradictor, they should not have to pay Sue’s costs of the first cross-claim), it was necessary in my opinion for Sue as representative of Bill’s estate to address the issues in relation to that claim; and any question of unreasonableness should be dealt with on a costs assessment.

54. [340]

    In that regard, I note that it is a well-established rule that a trustee who has acted properly in the exercise of their duties, whether by commencing or defending proceedings, is entitled to be indemnified out of the estate. As noted by Lord Justice Lindley in Re Beddoe: Downes v Cottam [1893] 1 Ch 547 (Re Beddoe) at 558:

55. [341]

    This rule extends to circumstances where the litigation is unsuccessful, the executor acted mistakenly and the other party to the litigation is found to be entitled to a costs order (see Drummond at [43] per Austin J; Bovaird v Frost [2009] NSWSC 917 (Bovaird) at [28] per Brereton J as his Honour then was).

56. [342]

    There are two exceptions to this rule (as adverted to above). First, an executor will be deprived of indemnity costs out of the estate in cases of impropriety. In Re Beddoe (at 562), it was noted that “mere errors in judgment which fall short of negligence or unreasonableness” do not meet the threshold of impropriety. Rather, it is necessary that the executor incurred the costs unreasonably, negligently or unnecessarily (Drummond at [45]; Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133 (Mead) at [12]-[13] per Sheller, Ipp and Tobias JJA; Warton v Yeo [12], [72]). In Mead (at [14]), the Court of Appeal stated that a degree of personal misconduct or wilful recklessness is not required (see also Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100 at 111 per Northrop, Wilcox and Cooper JJ).

57. [343]

    The second basis precluding an executor from indemnification out of the estate is where the executor has incurred costs in furtherance of a personal interest (Miller v Cameron at 578-579; Bovaird at [28]).

58. [344]

    See in this regard Zupicic v La Camera Paino as Trustee for the Estate of the Late Mario Novick [2018] NSWSC 1117 at [24] per Sackar J; Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Dobrijevic (No 3) [2017] NSWCA 109 (Free Serbian Church) at [14] per Payne JA (with whom Gleeson JA and I agreed).

59. [345]

    Neither exception is established in my opinion, at least up until the point at which Sue did not accede to the request for her removal as representative to the estate in these proceedings. At that stage, while I am not persuaded that there was such impropriety on the part of Sue in not immediately acceding to the demands by Bruce and Merilyn for her removal as representative of Bill’s estate, it does seem to me that there were costs unnecessarily incurred in relation to that application so as to warrant a refusal of indemnity for the costs of that application (but not otherwise in relation to the proceedings at that point).

60. [346]

    As to the amount held in the solicitors’ trust account, there was no order of which Sue was directly in contravention; his Honour simply reserved for consideration in due course the question whether Sue should be indemnified out of the estate.

61. [347]

    As to the observations made by Pembroke J (on an avowedly preliminary basis), my impression of Sue at the hearing was that she had found herself very much in the middle of an acrimonious dispute between her siblings; and, while that may not excuse delay in addressing the appropriateness of her continued representation of Bill’s estate, in all the circumstances, it seems to me that she should not bear sole responsibility for that acrimony (which I consider would be the case if the orders sought by Bruce and Merilyn were to be made). In his regard, to the extent that Bruce and Merilyn may have drawn comfort from the observations that fell from Pembroke J, it is clear that those were only preliminary views and not based on the whole of the evidence (that being the basis on which his Honour expressly left the matter for the trial judge to determine). No doubt those observations had a cautionary effect (in submissions they were described as in terrorem) on Sue; however, if they encouraged Bruce and Merilyn in their assessment of the matter, then this is unfortunate (and illustrates the caution to be observed in making preliminary or tentative observations without the benefit of all of the evidence or that evidence being tested).

62. [348]

    Finally, by way of observation, as to the financial circumstances of the respective parties, to which my attention has been drawn in the submissions, I note (as Hallen J has observed – see above) that parties should not proceed in family provision cases on the assumption that their costs will necessarily be indemnified out of the estate. Nor should parties such as Bruce and Merilyn assume that, where they are representing an estate (here, Jill’s estate) ultimately in their own personal interests (as residuary beneficiaries of that estate) that they will recover their costs even if the claim is unsuccessful (particularly where, as here, Jill’s estate has already been administered and they are looking to be indemnified out of the estate of her executor).

63. [349]

    In assessing the difficulty now faced by Bruce and Merilyn as to costs, the rationale and public policy objectives for special costs orders must be kept firmly in mind. It is clear from the reasons expressed in their solicitor’s correspondence when rejecting the Offers of Compromise that they did so having regard to their own personal interests. If litigants choose, in effect, to pursue litigation to the bitter end in the face of such Offers of Compromise, then they do so at their own risk.

Orders

1. [350]

   For the above reasons, I make the following orders:

   1. (1)

      As to the costs of Geoff’s proprietary estoppel claim, order that:

   2. (2)

      As to the costs of the family provision claim, order that:

   3. (3)

      As to the first cross-claim, order that:

   4. (4)

      As to the reserved costs, order that:

   5. (5)

      Order that Sue be authorised to retain, from the respective entitlements of Geoff and Merilyn and Bruce in Bill’s Estate, for her costs as ordered above, (after having recovered as much as possible of the costs from the persons liable to pay them) the difference between the costs paid or payable on the ordinary basis by these orders and costs on the indemnity basis where so ordered above.

   6. (6)

      Order that Sue not be indemnified out of Bill’s estate for her costs (including the adverse costs order) of Bruce and Merilyn’s notice of motion filed 14 March 2019 by Pembroke J on 27 May 2019.