In the matter of Lamrock Place Property Pty Ltd (No 2)

1. [1]

   On 11 February 2026, I delivered reasons for judgment in these proceedings: In the matter of Lamrock Place Property Pty Ltd [2026] NSWSC 52 (Primary Judgment). These reasons assume familiarity with the Primary Judgment and adopt defined terms used therein.

2. [2]

   In the Primary Judgment (at [347]), I determined that:

   1. (1)

      the Plaintiff, Ms Widhe as trustee of the Sweet Avenue Trust, had established that the affairs of the First Defendant, Lamrock Place Property Pty Ltd (Company) as trustee of the Lamrock Place Property Trust (LPPT), had been conducted in a manner that was oppressive to, unfairly prejudicial to, or unfairly discriminatory against, Ms Widhe, and/or contrary to the interests of the members of the Company as a whole, within the meaning of s 232 of the Corporations Act 2001 (Cth) (Act);

   2. (2)

      orders should be made pursuant to s 233 of the Act that:

   3. (3)

      Mr Shteinman’s Cross-Claim against Ms Widhe and Mr Tolpinrud (brought by way of Interlocutory Process) should be dismissed.

3. [3]

   In the Primary Judgment (at [348]), I stated that costs should follow the event, such that Mr Shteinman and JIS should pay Ms Widhe’s and Mr Tolpinrud’s costs of the proceedings. However, I gave the parties an opportunity to make submissions on costs in the event that any different form of costs order was sought. In addition, I directed the parties to bring in short minutes of order to give effect to the reasons for judgment, and made orders for the provision of written submissions in the event that the form of orders could not be agreed.

4. [4]

   Following this process, there are two main issues that remain in dispute:

   1. (1)

      first, the form of orders to give effect to my determination in the Primary Judgment that a buy-out order should be made on the basis of the Plaintiff’s Open Offer; and

   2. (2)

      secondly, whether the costs order in favour of Ms Widhe and Mr Tolpinrud should be made on an indemnity basis in respect of costs incurred after the date of either of two Calderbank offers.

5. [5]

   The parties exchanged written submissions on these issues, and indicated that they were content for these issues to be determined on the papers.

Form of Buy-Out Order

1. [6]

   There are three matters in dispute regarding the form of the buy-out order.

2. [7]

   The first is whether an amount of $800,000 (described in submissions as the Deduction Amount) should be withheld by Ms Widhe from the amount of $1,167,677 that is, in accordance with the terms of the Plaintiff’s Open Offer, to be paid to JIS in exchange for its units in the LPPT.

3. [8]

   The Plaintiff’s Open Offer did not provide for any such Deduction Amount, but instead offered to pay JIS the amount of $1,167,677 on the transfer of its units in the LPPT to Ms Widhe.

4. [9]

   Ms Widhe and Mr Tolpinrud submitted that the Deduction Amount represented their solicitor’s estimate of the amount of costs recoverable by them on assessment, in the event that the Court orders that their costs are payable on an indemnity basis from after the date of the earlier of the two Calderbank offers (that is, from 13 September 2025). Ms Widhe and Mr Tolpinrud proposed, in the form of final orders which they sought, that in the event that their costs were agreed or assessed in an amount less than the Deduction Amount, then they would pay the amount of the difference to Mr Shteinman and JIS within 14 days of such agreement or assessment.

5. [10]

   Ms Widhe and Mr Tolpinrud submitted that, unless this form of order is made, “the oppression against Ms Widhe continues”, for the following reasons:

   1. (1)

      although Ms Widhe and Mr Tolpinrud will have the benefit of a costs order, they have had to incur substantial legal costs to resolve the oppression dispute in their favour, and any costs assessment is likely to take many months to occur;

   2. (2)

      it will lessen the immediate financial burden on Ms Widhe to complete the buyout transaction in a short time, and release the parties from the deadlock; and

   3. (3)

      unless orders are made in the form proposed, Ms Widhe and Mr Tolpinrud will need to sell shares to fund the buy-out transaction, thereby incurring capital gains tax.

6. [11]

   I do not accept this submission. The “deadlock” in the affairs of the Company and the LPPT will be resolved, and the effects of the oppressive conduct will come to an end, when the buy-out order is implemented, and Ms Widhe becomes sole shareholder of the Company and sole unitholder in the LPPT. The issue presently under consideration is not whether this transfer should occur, but whether, on the transfer of the units in the LPPT, Ms Widhe should be obliged to pay the full amount of the consideration in the Plaintiff’s Open Offer ($1,167,677) or should be entitled to pay only around 31.5% of that consideration (with the balance of $800,000 being withheld on account of the costs order in favour of Ms Widhe and Mr Tolpinrud, pending agreement or assessment).

7. [12]

   I decline to make the proposed orders in respect of the Deduction Amount for the following reasons.

   1. (1)

      First, in the Primary Judgment, I determined that relief should be ordered on the basis of the Plaintiff’s Open Offer. This offer provided for the full amount of consideration to be paid to JIS on the transfer of its units in the LPPT, without any amount being deducted or withheld.

   2. (2)

      Secondly, in determining the direction of the buy-out order, I proceeded on the basis that the parties were able to fund the form of orders which they respectively proposed, in the timeframe proposed. If Ms Widhe and Mr Tolpinrud had informed the Court that they were unable to do so, this might have affected the determination of this issue.

   3. (3)

      Thirdly, although Ms Widhe and Mr Tolpinrud may have to wait a significant period of time for costs to be assessed (in the event that a figure for costs cannot be agreed), they are in no different position, in that regard, from other successful parties.

   4. (4)

      Fourthly, Ms Widhe and Mr Tolpinrud do not say that they are unable to fund the payment of the consideration within the timeframe stipulated in the Plaintiff’s Open Offer, but instead that it is inconvenient for them to do so, and they would prefer not to do so, because of the capital gains tax consequences. However, this was a matter which they presumably took into account at the time of proposing the terms of the Plaintiff’s Open Offer. In that regard, the solicitor for Ms Widhe and Mr Tolpinrud, Mr Allan Kawalsky, deposed that the selection of the 42-day period for settlement in the Plaintiff’s Open Offer “reflected the Plaintiff’s need to either procure a share-based loan or facilitate the sale of hedged shares”.

8. [13]

   Further, it is important to have regard to the terms in which Mr Kawalsky’s evidence regarding potential tax consequences was expressed:

9. [14]

   As set out above, it was not suggested in Mr Kawalsky’s evidence that the payment of the stipulated consideration within 42 days of the Court making the buy-out order would cause negative tax consequences, but rather that completion within a shorter time period would have this effect. Otherwise, Mr Kawalsky deposed that Ms Widhe would prefer not to have to liquidate shares at this point in time. I do not consider that this stated preference is decisive in circumstances where Ms Widhe submitted at the hearing in December 2025, notwithstanding any such preference, that the Court should order relief in accordance with the terms stated in the Plaintiff’s Open Offer, and I have accepted this submission.

10. [15]

    The second matter in dispute is the period between the date of the orders and the transfer of the shares and units. Ms Widhe proposed a period of five days if the Deduction Amount were withheld, and otherwise a period of 42 days, in accordance with the terms of the Plaintiff’s Open Offer. Mr Shteinman and JIS proposed that the transfer should instead occur within 28 days of the Court’s orders.

11. [16]

    The proposal for a five-day period can be put to one side, as I have determined that the proposed orders for the Deduction Amount should not be made.

12. [17]

    No submission was made by Mr Shteinman and JIS at the hearing that the Court should decline to make any buy-out order on the basis of the Plaintiff’s Open Offer because the 42-day period proposed for settlement was unreasonably long.

13. [18]

    The only substantive reason now put forward by Mr Shteinman and JIS for the proposed 28-day period is that this is “the standard time period often prescribed in the Courts of NSW for compliance with any orders made”. However, Mr Shteinman and JIS recognised in their submissions that it is open to the Court to order a shorter or longer period, and acknowledged that the 42-day period proposed by Ms Widhe was “reasonable”. Further, as noted above, Mr Kawalsky gave evidence that to require settlement within a shorter time frame would result in negative capital gains tax consequences for Ms Widhe and Mr Tolpinrud.

14. [19]

    Having regard to those matters, I am satisfied that the orders should reflect, consistently with my determination in the Primary Judgment, the terms of the Plaintiff’s Open Offer, which provided for a 42-day settlement period.

15. [20]

    The third matter in dispute is whether (as Ms Widhe proposed) the Court should order that Mr Shteinman give vacant possession of the two apartments, 15A and 15B Lamrock Place, as well as the garage, or (as Mr Shteinman proposed) the Court should simply order that Mr Shteinman give vacant possession of the garage.

16. [21]

    Mr Shteinman submitted that he occupies only the garage (which was not disputed by Ms Widhe), and that he cannot give vacant possession of the apartments which are occupied from time to time by tenants. Further, I note that the Plaintiff’s Open Offer referred only to Mr Shteinman being required to “vacate the Garage”.

17. [22]

    For those reasons, I accept Mr Shteinman’s submissions on this third issue.

Costs on Indemnity Basis?

1. [23]

   It was common ground that, in accordance with the preliminary view expressed in the Primary Judgment, Mr Shteinman and JIS should be ordered to pay Ms Widhe’s and Mr Tolpinrud’s costs of these proceedings.

2. [24]

   The only issue in dispute is whether the Court should order that those costs be paid on an indemnity basis from after the date of:

   1. (1)

      a Calderbank offer made to Mr Shteinman and JIS by a letter from the Plaintiff’s solicitor dated 12 September 2025 (September Offer); or

   2. (2)

      alternatively, a Calderbank offer made to Mr Shteinman and JIS by a letter from the Plaintiff’s solicitor dated 31 October 2025 (October Offer).

3. [25]

   In correspondence sent prior to the exchange of submissions on costs, the Plaintiff’s solicitor confirmed that Ms Widhe and Mr Tolpinrud were not pressing an alternative order that indemnity costs be awarded from after the date of the Plaintiff’s Open Offer.

4. [26]

   The relevant principles are well established. It is convenient to refer to the following summary by Richmond J in Harper v Harper (No 2) [2025] NSWSC 360 at [49]-[51], upon which Ms Widhe and Mr Tolpinrud relied.

   1. (1)

      One situation in which the Court may exercise its discretion to award costs on an indemnity basis is where a party does not accept a Calderbank offer and subsequently fails to achieve a judgment more favourable than the offer. However, in this situation, there is no presumption that such an order should be made: E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296 at [57] per Ward CJ in Eq (as her Honour then was).

   2. (2)

      The onus is on the party making a Calderbank offer to satisfy the Court that it should exercise its discretion to award costs on an indemnity basis, and to show that (a) the Calderbank offer embodied a genuine compromise and (b) it was unreasonable for the other party not to accept it. This is an evaluative judgment to be made by reference to the terms of the offer and all the relevant surrounding circumstances at the time that it was made, and not with the benefit of hindsight: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8], [11], [16]; Wheatley v Lakshmanan (No 2) [2022] NSWSC 851 at [97]; E Group Security at [57]-[58].

   3. (3)

      Relevant factors in determining whether the rejection of an offer was unreasonable include:

   4. (4)

      A finding of unreasonableness should not be made other than on clear grounds: E Group Security at [58].

5. [27]

   The September Offer proposed that Mr Shteinman transfer his shares in the Company, and JIS transfer its units in the LPPT, to Ms Widhe, with consideration being paid on the basis that the Property held by the LPPT was worth $5.350m.

6. [28]

   In contrast, the buy-out order that will be made by the Court is based on the Plaintiff’s Open Offer, which valued the units in the LPPT on the basis that the Property was worth $5.625m (that is, an amount $275,000 higher than the amount stated in the September Offer).

7. [29]

   If it is assumed that the calculations and adjustments required (once the value of the Property is known), in order to determine the value of the units in the LPPT are the same under the September Offer and under the Plaintiff’s Open Offer (being a matter to which I return below), the amount that JIS would have received for its units in the LPPT pursuant to the September Offer is $137,500 less than the amount that it stands to receive under a buy-out order which is based on the terms of the Plaintiff’s Open Offer (the amount of $137,500 being 50% of the $275,000 difference in the value ascribed to the Property as between the September Offer and the Plaintiff’s Open Offer).

8. [30]

   I acknowledge that the September Offer also included an offer that there be no order as to costs. However, the September Offer did not state the amount of costs incurred by Ms Widhe and Mr Tolpinrud as at 12 September 2025. Instead, it asserted that the Plaintiff’s legal fees as at that date exceeded the amount of $110,000 (this being said to be the amount of the benefit which Mr Shteinman stood to receive if he was successful in his claim challenging the 2.01% margin on the On-Loan to the LPPT).

9. [31]

   According to Mr Kawalsky’s affidavit on the present application for costs, the amount which Ms Widhe and Mr Tolpinrud would be likely to recover, in respect of fees and disbursements incurred in the period from the commencement of the proceedings to 12 September 2025, is around $215,000. (However, this depends on assumptions regarding the level of recovery that may not be established on assessment.)

10. [32]

    I accept the submission by Ms Widhe and Mr Tolpinrud that an offer made by a plaintiff, which proposes an outcome substantially similar to the relief sought by the plaintiff, may nonetheless contain a sufficient element of compromise where the plaintiff offers to the defendant that there should be no order as to costs (provided that the costs incurred by that point in time are substantial rather than trivial): see, for example, South Western Sydney Local Health District v Gould (No 2) [2018] NSWCA 160 at [6] (Basten, Leeming, Meagher JJA); and Taheri v Vitek (No 2) [2014] NSWCA 344 at [13] (Bathurst CJ, Leeming and Emmett JJA).

11. [33]

    While a “walk-away” offer on costs can provide a sufficient compromise, it is relevant to consider the extent of the compromise that is offered. That is because, as was observed in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd (Costs) [2025] FCAFC 29 at [35] (Katzmann, Wheelahan, Hespe JJ), an offer of compromise which provides little benefit to the offeree may be relevant to the question of whether the offeree’s failure to accept the offer was unreasonable: “there are degrees of reasonableness which, amongst other things, must ordinarily be assessed by reference to the extent of the compromise which was offered” (quoting JMC Pty Ltd v Commissioner of Taxation (Costs) [2023] FCAFC 95 at [13] (Bromwich, Thawley and Hespe JJ)).

12. [34]

    In JMC at [13], the Full Court went on to observe that “[i]t may be reasonable to reject an offer which amounts to something close to capitulation where the case is reasonably and properly arguable [and] unreasonable to reject a generous offer where the [offeree’s] prospects are slim”.

13. [35]

    Although the September Offer represented a compromise, in that Ms Widhe and Mr Tolpinrud were offering to forego any claim for their costs up to 12 September 2025, the extent of the economic benefit that would have flowed to Mr Shteinman and JIS from accepting that offer is, to a substantial degree, offset by the fact that such acceptance would have involved JIS receiving significantly less for its units in the LPPT than it will receive under the buy-out order (based on the Plaintiff’s Open Offer).

14. [36]

    Accordingly, I accept the submission by Mr Shteinman and JIS that, to the extent that there was any element of compromise in the September Offer, it was a slight one and that the September Offer otherwise proposed capitulation by Mr Shteinman and JIS, in circumstances where the Defendants’ case was reasonably and properly arguable.

15. [37]

    Further, it is necessary to consider whether Mr Shteinman’s and JIS’s rejection of the September Offer was unreasonable having regard to the matters known to them at the time. In particular, as at the date of the September Offer:

    1. (1)

       Mr Shteinman and JIS had no information regarding the amount of costs that had been incurred by Ms Widhe (other than the statement by her solicitor that the amount of costs which she was likely to recover exceeded $110,000); and

    2. (2)

       the parties had not served any valuation evidence regarding the market value of the Property. (Both parties filed their respective expert reports on 29 October 2025. The expert retained by Mr Shteinman and JIS only inspected the Property on 23 and 28 October 2025.)

16. [38]

    Accordingly, there was insufficient information available to Mr Shteinman and JIS as at 12 September 2025 to determine:

    1. (1)

       whether the value ascribed to the Property in the September Offer represented an amount above or below the amount that the Court would likely determine to be the market value of the Property; and

    2. (2)

       therefore, whether the offer to purchase JIS’s units on the basis of the Property having the value stated in the September Offer, coupled with the offer to forego any claim for (an unknown amount of) costs, represented a compromise relative to the likely outcome in the event that Ms Widhe established her claims (and, if so, the extent of any such compromise).

17. [39]

    Having regard to those matters, I am not satisfied that it was unreasonable for Mr Shteinman and JIS not to accept the September Offer. It follows that I will not make any order for costs to be paid on an indemnity basis from after the date of that offer.

18. [40]

    The October Offer was in substantially similar terms to the September Offer, with the exception that it was proposed by the October Offer that the value of the units in the LPPT be assessed by ascribing a value to the Property of $5.45m. This was an amount $100,000 greater than that specified in the September Offer, but still $175,000 less than that specified in the Plaintiff’s Open Offer.

19. [41]

    The October Offer also did not provide any information regarding the amount of the costs incurred by Ms Widhe and Mr Tolpinrud in the proceedings as at the date of that offer, other than stating that “substantial further legal costs have been incurred by [Ms Widhe] since the date of [the September Offer]”.

20. [42]

    By the time that the October Offer was made, Mr Shteinman and JIS had the benefit of the parties’ respective expert reports, which estimated the market value of the Property to be $4.8m (the Plaintiff’s expert) or $5.35m (the Defendants’ expert). The October Offer proposed that JIS’s units be transferred for consideration determined on the basis that the Property had a value in excess of the higher of those two values.

21. [43]

    However, it was unclear, from the terms of the October Offer, what methodology would be applied in order to determine, from the stated value of the Property, the value of the units in the LPPT. By the date of the October Offer, Mr Shteinman and JIS had served the report of Mr Stephens, which provided a value for the units based on the value of the Property. However, the October Offer expressed some doubts about the methodology adopted by Mr Stephens, without identifying whether some alternative or modified methodology was proposed.

22. [44]

    Mr Shteinman and JIS were therefore not in a position to assess the amount that the Plaintiff proposed to pay for JIS’s units in the LPPT in the event that the October Offer was accepted, or the methodology by which this amount would be determined (including whether this remained a matter that was to be determined between the parties, and might be the subject of further dispute).

23. [45]

    In summary, the October Offer, like the September Offer, proposed what was in substance a capitulation by Mr Shteinman and JIS, with the only compromise being in respect of (an unstated amount of) costs, and with the economic benefit afforded by this compromise being offset, to a substantial degree, by the fact that the value of the units was to be determined on the basis of the Property having a value significantly below the value subsequently ascribed to the Property in the Plaintiff’s Open Offer, which has formed the basis of the buy-out order (and with, in addition, there being uncertainty regarding how the value of the units was to be determined under the October Offer).

24. [46]

    Having regard to those matters, I am also not satisfied that it was unreasonable for Mr Shteinman and JIS not to accept the October Offer. It follows that I will not make any order for costs to be paid on an indemnity basis from after the date of that offer.

25. [47]

    For the reasons given above, I make the following orders.

    1. (1)

       Within 42 days of these orders, or such earlier period as nominated by the Plaintiff upon the Plaintiff’s solicitors providing 3 days’ notice to the Second and Third Defendants’ solicitors:

    2. (2)

       The Second and Third Defendants are to pay Ms Widhe’s and Mr Tolpinrud’s costs of these proceedings on the ordinary basis, as agreed or assessed.

    3. (3)

       Liberty for the parties to apply with 5 days’ notice.