McLean v Cree (No 2)

1. [1]

   I delivered judgment in these proceedings on 30 May 2025: McLean v Cree [2025] NSWSC 577 (the principal reasons). I ordered pursuant to s 59 of the Succession Act 2006 (NSW) that further provision in the sum of $75,000 should be made for the plaintiff. I further ordered that the interest which the deceased held in the Malabar property and which was distributed by the defendant, as executor of his estate, to herself as sole beneficiary should be designated as notional estate for the purpose of satisfying the order for further provision.

2. [2]

   These reasons deal with the question of the costs of the proceedings.

3. [3]

   The plaintiff submits that he has been successful in the proceedings and that costs should follow the event. He further submits that he should be entitled to his costs on an indemnity basis for the whole of the proceedings or, alternatively, from the time of an offer made on 29 April 2025.

4. [4]

   As to his general claim to indemnity costs for the whole of the proceedings, the plaintiff submits that the defendant unreasonably refused the plaintiff’s requests for reimbursement in relation to the repair of the lake Cathie property well prior to the commencement of the proceedings. The plaintiff points to paragraph [28] of the principal reasons where I expressed the view that his requests were reasonable. The plaintiff submits that if the defendant had acceded to those requests earlier then the proceedings could have been avoided altogether.

5. [5]

   The plaintiff relies in the alternative on an offer sent to the defendant on 29 April 2025 (the Offer). The Offer was attached to a letter, headed ‘without prejudice save as to costs’, sent from the plaintiff’s solicitors, Halyburton Legal, to the defendant’s solicitors, Turner Freeman. The Offer was explicitly made pursuant to rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’). It was also expressed to be an offer made in accordance with the principles in Calderbank v Calderbank [1976] Fam 93.

6. [6]

   The terms of the Offer were (a) an order pursuant to s 59 of the Succession Act in favour of the plaintiff in the amount of $70,000 and (b) the plaintiff’s costs to be paid on the ordinary basis out of the estate.

7. [7]

   The plaintiff submits that he has achieved a more favourable outcome than that proposed in the Offer. He submits that pursuant to rule 42.14 of the UCPR, he is entitled to costs on the indemnity basis from 29 April 2025.

8. [8]

   The plaintiff also submits that any costs order in his favour should be made against the defendant personally. That submission is made with reference to s 95 of the Probate and Administration Act 1898 (NSW):

9. [9]

   The plaintiff points to the reasons of Handley JA in Melbourn v Stephenson [2002] NSWCA 403 at [13] where his Honour said in obiter dicta:

10. [10]

    Finally, and in light of what I said in paragraphs [70]-[87] of the principal reasons, the plaintiff submits that I should make notional estate orders in relation to any costs order, in addition to a personal order against the defendant.

11. [11]

    The defendant submits that the Court should depart from the ordinary rule that costs follow the event and that the appropriate order is that each party bear its own costs. The defendant’s various submissions in support of this position are as follows.

12. [12]

    First and foremost, the defendant submits that the principal reasons ‘rest fundamentally’ on the circumstance that the plaintiff made a contribution to the Lake Cathie property, this being a circumstance of the kind described in s 60(2)(h) of the Succession Act. This is despite, the defendant submits, the plaintiff at all times having advanced his claim as a ‘global’ one, centred on the argument that the deceased had failed in his moral duty to make adequate provision for the plaintiff in his will. The defendant says that, prior to the hearing, the fact that the plaintiff had made a contribution to the Lake Cathie property was only one of several factors addressed by the plaintiff.

13. [13]

    The defendant submits that she had ‘no notice at any time that the plaintiff’s claim was based on s 60(2)(h)’ and that the case was never put in that way. I was referred to transcript references where counsel for the plaintiff submitted that her client’s claim was broader than an exercise in seeking ‘compensation’ for work done on the Lake Cathie property. In this respect, the defendant submits that the case is analogous to Bryant v Quinn [2022] NSWCA 163. The defendant also submits that whilst the evidence relied upon by the plaintiff at the hearing did contain details about the property repairs, the defendant ‘could not readily discern (at least up to the point of the plaintiff’s outline submissions filed on 16 May 2025) that the evidence would be relied upon for a submission under s 60(2)(h)’.

14. [14]

    The defendant puts this argument in a slightly different way as well. She submits that she in fact achieved a measure of success in the proceedings, in the sense that ‘but for the single matter of the repairs to the Lake Cathie property, the plaintiff’s claim would have failed.’ This is a reference to my reasons at paragraph [48] of the principal reasons where I explained that if the plaintiff had not made significant contributions to conserving the deceased’s estate by doing the repairs to the Lake Cathie property, I would not have been persuaded that all of the other circumstances were a sufficient reason to conclude that an order for further provision should be made.

15. [15]

    The defendant also says she had some success in that the amount for which the plaintiff contended in her opening submissions was $150,000, twice the amount of the $75,000 awarded. The defendant notes also that the plaintiff had not quantified his claim prior to the written submissions filed before the final hearing.

16. [16]

    The defendant also relied on evidence from her solicitor, Mr Goldberg. Mr Goldberg swore an affidavit dated 11 June 2025 in which he explained his rationale for having made various forensic decisions in the course of the litigation, including his decision not to seek production of documents relating to the expenditure on and in relation to the Lake Cathie property which the plaintiff claimed to have incurred. Mr Goldberg says that if he had been given notice that the plaintiff’s claim was being put ‘solely – or even chiefly – under s 60(2)(h)’ he would have taken different steps in the proceedings.

17. [17]

    The defendant made no submissions regarding the Offer dated 29 April 2025.

18. [18]

    Rule 42.14 of the UCPR is as follows:

19. [19]

    As mentioned, the defendant made no submissions in relation to the Offer. She did not suggest that it did not comply with UCPR r 20.26 or that it did not allow a reasonable time for acceptance. I find that the Offer complied with the rules.

20. [20]

    Because the plaintiff has done better in the principal reasons than what was proposed in the Offer, it follows from UCPR r 42.14 that the plaintiff is entitled to his costs on an indemnity basis from 30 April 2025, unless I order otherwise.

21. [21]

    In Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248 Meagher JA (with McCallum JA and Simpson AJA agreeing) addressed the circumstances where a judge might ‘order otherwise’ at [10]-[13]:

22. [22]

    Although not put this way, I will proceed on the basis that the defendant submits that I should order otherwise within the meaning of UCPR r 42.14(2).

23. [23]

    The defendant’s primary argument is that the principal reasons were determined solely, or at least primarily, on the basis of the plaintiff’s contributions to the Lake Cathie property, being a relevant consideration under s 60(2)(h) of the Succession Act. The defendant says that the plaintiff never put their case in a way that centred around s 60(2)(h) and that the defendant could not have predicted the ultimate way in which the proceedings played out.

24. [24]

    Inherent in the whole of the defendant’s submissions on costs is the proposition that the plaintiff succeeded on the basis of the circumstance described in s 60(2)(h) but that the defendant succeeded on the other circumstances described in s 60(2). I do not accept this premise. It does not reflect the way ss 59 and 60 of the Succession Act operate generally. Nor does it reflect my reasons set out in the principal judgment.

25. [25]

    The Succession Act contemplates that in making a family provision order, the Court will have regard to all relevant circumstances disclosed in the evidence, including but not limited to circumstances described in s 60(2). Generally speaking, the task involves identifying whether particular circumstances existed, making findings in relation to the nature of those circumstances, and then determining whether, in the light of those findings, it is appropriate to make an order under s 59. It will sometimes be true to say of a party that they have ‘succeeded’ in relation to the existence or non-existence of a particular circumstance. However, it is incorrect to say that a plaintiff who has succeeded in demonstrating that the Court should make a family provision order has succeeded on any particular paragraph of s 60(2) or, indeed, on any particular circumstance at all.

26. [26]

    The point may be illustrated by reference to the facts of this case. As I said at paragraph [48], I would not have been willing to make a family provision order in favour of the plaintiff if he had not made any contribution to the conservation of the deceased’s estate. That is because, when all of the other circumstances were taken into account, those other circumstances would not have led me to conclude that it was appropriate to make a family provision order. But it by no means follows that the only consideration that led to the making of the order was the fact that the plaintiff made a contribution to the conservation of the deceased’s estate. That fact alone would rarely if ever justify the making of a family provision order and it was far from the only relevant circumstance here. The plaintiff could not have succeeded by showing only that he made a contribution to conserving the deceased’s estate. He succeeded because his contribution to conserving the deceased’s estate, when combined with all of the other circumstances most notably the historical relationship of step-father and step-son and the relationship between them created by the plaintiff’s mother’s will (s 60(2)(a)), led me to conclude that a family provision order was appropriate.

27. [27]

    I also do not accept that the defendant was not on notice of the extent to which the plaintiff relied on s 60(2)(h). The plaintiff’s affidavit sworn 3 April 2024 contained the usual list of headings corresponding to the circumstances described in s 60(2). One of the headings corresponded precisely to paragraph (h). Under that heading, the plaintiff said:

28. [28]

    Other evidence, both from the plaintiff and his wife, expanded on this very same point. I also note that the defendant responded to this evidence with evidence of her own.

29. [29]

    There can be no doubt that the existence of the s 60(2)(h) circumstance was central to the plaintiff’s claim and that this was apparent right from the very beginning of the litigation.

30. [30]

    There can also be no doubt that the defendant appreciated the centrality of this circumstance to the plaintiff’s case. In fact, a central feature of the defendant’s own submissions was that the plaintiff’s reliance on his contributions to the Lake Cathie property meant that the proceedings were an abuse of process, because the plaintiff was in truth prosecuting the case to recover the loss involved in renovating the Lake Cathie property. That submission demonstrates that the defendant well understood that the plaintiff relied on this circumstance but that she altogether failed to appreciate the significance of it in the context of ss 59 and 60 of the Succession Act.

31. [31]

    It is hard to know what more the plaintiff could have done to telegraph his reliance on the fact that he contributed to the conservation of the deceased’s estate by fixing up the Lake Cathie property. The point was in his evidence, and not as a mere throwaway point. It was central to the way the parties themselves addressed the issue before the litigation was commenced. The fact that the defendant made a forensic decision not to pursue this issue in discovery and that, through her counsel, she did not challenge the evidence in relation to this issue at the hearing, is not something that can be laid at the plaintiff’s feet.

32. [32]

    Nor does this case bear any resemblance to Bryant v Quinn. That was a case in which the successful point was one identified for the first time by the trial judge and where the point, gratefully adopted by the plaintiff, took the matter well outside the pleaded case.

33. [33]

    Ward P said at [81]-[82]:

34. [34]

    That is not this case. The passages of the transcript to which the defendant referred me on this issue demonstrate that it was counsel for the plaintiff, not me, who pressed the point that the plaintiff’s contribution to the deceased’s estate by fixing up the Lake Cathie property was an appropriate matter to take into account in making a family provision order. It was counsel for the plaintiff who drew the Court’s attention to s 60(2)(h) and not the other way around. For example, on the morning of the first day of the hearing, echoing the defendant’s own submissions, I pointed out to counsel for the plaintiff that the case seemed to turn to a large extent on the fact that the plaintiff did work on the Lake Cathie property for which he may have an alternative remedy. I challenged counsel on the question of whether those circumstances disclosed a proper basis for making a family provision order. The following exchange occurred:

35. [35]

    This passage of the transcript, and the other passages to which the defendant referred me, do not make out her submission that the basis on which the case was decided was lit upon only by the Court at trial.

36. [36]

    I am unable in these circumstances to accept that there is a proper basis to order otherwise than that the defendant pay the plaintiff’s costs in the manner prescribed by UCPR r 42.14.

37. [37]

    As to the plaintiff’s claim to indemnity costs for the whole of the proceedings, it does not follow from the fact that I considered the plaintiff’s original requests for reimbursement to be reasonable (see paragraph [28]) that he should have his costs of the entire proceedings on the indemnity basis. Once the proceedings were commenced, it was reasonable for the defendant to defend them. I note that it was open to the plaintiff to make an offer on the terms of the 29 April Offer at any time.

38. [38]

    It is however appropriate for the notional estate orders made on 30 May 2025 to be extended to accommodate the order for costs. As with any notional estate orders, it is important that such orders not be made without first considering the matters which the legislation requires the Court to consider. To that end, I note the following.

39. [39]

    At paragraphs [70] to [87] of the principal reasons, I explained why it was appropriate in my view for notional estate orders to be made for the purpose of satisfying the order for further provision. As I pointed out, this is a case in which the estate has been fully distributed. The property of the estate was comprised of cash and an interest in the Malabar property, all of which has been distributed to the defendant in her personal capacity as sole beneficiary under the deceased’s will.

40. [40]

    The circumstances that, in my view, made it appropriate to make notional estate orders to accommodate the payment of the family provision order equally make it appropriate for the notional estate orders to be expanded to accommodate the plaintiff’s costs of the proceedings. Such an order will further interfere with the defendant’s reasonable expectations in relation to the Malabar property, which has been her home for decades (s 87(a)), however the failure to make such an order would involve a substantial injustice to the plaintiff, who otherwise has no ability to recoup the costs of this litigation from the estate. The limited evidence as to the value of the deceased’s interest in the Malabar property satisfies me that an order designating that interest as notional estate to the additional extent required to meet costs will be appropriate (s 89).

41. [41]

    I note that the Court may order that the costs of proceedings be paid out of the estate or notional estate or both, in such manner as the Court thinks fit: s 99. Notwithstanding the plaintiff’s submission that I should also make a costs order against the defendant in her personal capacity, it is appropriate in this case for the costs order to be made against the defendant in her capacity as executor of the deceased’s estate and also to order that the costs be paid out of the notional estate. That is because the value of the deceased’s half interest in the Malabar property, being the property now held by the defendant and which I have already indicated should be designated as notional estate, appears to me to be sufficient to cover the costs of the further provision as well as the plaintiff’s costs. I will however also make an order against the defendant as executor, because in the ordinary course the executor should be liable for the costs in any event.

42. [42]

    I did not make orders on 30 May. I instead invited the parties to bring in short minutes of order to give effect to my reasons. Those short minutes are yet to be received but they should take into account these further reasons, with the intent that they will provide for the defendant to pay the plaintiff’s costs, such costs to be paid on the ordinary basis up to and including 29 April 2025 and on the indemnity basis thereafter. The short minutes should also contemplate that the costs order be made against the defendant in her capacity as executor, as well as out of the notional estate.

43. [43]

    I will then make orders in chambers giving effect to my principal reasons as well as these reasons on costs.

Orders

1. [44]

   I direct the parties to bring in short minutes of order to give effect to these reasons, and my principal reasons, by 5:00pm on Monday 14 July 2025.