There was no response to the letter.
3 In the event I found that the plaintiff was entitled to a charge over the fund representing the sale proceeds of the subject property, subject to the first defendant's entitlement to costs and expenses of her executorship which had not been recouped and allowance for a rent or occupation fee in restect of a period when the plaintiff had occupied the subject property without payment. As I have said, I have ordered the first defendant to pay the plaintiff's costs. The plaintiff says that, allowing for payment of rent/occupation fee and the first defendant's costs and expenses (estimated at $29,000), the plaintiff now looks likely to receive an amount of approximately $75,000, plus costs. She says that she has therefore bettered the offer and ought be awarded indemnity costs from the date of the letter.
4 The parties agree (correctly) that the critical question is whether the first defendant has acted unreasonably in refusing to accept the plaintiff's offer of settlement. In determining this the Court looks to all the circumstances of the case: see Nobrega v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (No 2) [1999] NSWCA 133 [20], [21]; SMEC Testing Services Pty Limited v Campbelltown City Council [2000] NSWCA 323 [37], [43] and [85]. In the latter case, Giles JA said at [37]:
"The making of an offer of compromise in the form of a Calderbank letter (from Calderbank v Calderbank [1976] Fam 93), where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree 's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure: see for example, John S Hayes & Associates Pty Ltd v Kimberley-Clarke Australia Pty Ltd (1994) 52 FCR 201; MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (1996) 70 FCR 235."
5 It is said that the first defendant could not accept the offer because it involved the second defendants being prepared to consent to their being no order as to their costs, but that would not have prevented the first defendant accepting on her part, and the costs of the second defendants have been no great consideration in these proceedings in any event. More importantly, it is not inherently very easy to apply the Calderbank doctrine in these proceedings. The reasons for this appear in the written submissions for both contesting parties. The subject matter involved the declaration of a charge over the balance of the mother's estate, the question of whether the first defendant had a continuing role as executor of that estate and the accounting to Dr Brand's estate, represented by the second defendants, for half the balance of the mother's estate. The plaintiff concedes that the first defendant had the right to test the veracity of the plaintiff's claim. In the end, apart from anything else, in my view the ultimate result of the proceedings was not at all clear at the time the offer was made. This is a case with some similarity to MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (1996) 70 FCR 235 in that the evidentiary considerations on which the decision was finally made became plain only during the trial. One example is the first defendant's concession that she relied entirely on her brother in matters relating to the tenancy of the subject premises because she trusted him. Whilst this fact was always known to the first defendant personally, there is no reason to think that its ultimate significance was plain to her or her advisers at the time of the offer.
6 In the light of all the circumstances, I am unable to conclude that it was unreasonable for the first defendant not to accept the offer, and the plaintiff's application for indemnity costs is refused.
THE RULE IN CHERRY v BOULTBEE
7 The rule in Cherry v Boultbee was formulated by Sargant J in In re Peruvian Railway Construction Company Limited [1915] 2 Ch 144 at 150 thus:
"Where a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, he cannot be allowed to participate unless and until he has fulfilled his duty to contribute."