Fulton v Fulton

The Evidence on the Costs Application 12The Plaintiffs relied upon the following evidence. 13In a letter dated 20 April 2010, Coleman Greig, Lawyers, the deceased's solicitors, wrote to the first and second Defendant setting out "investigations carried out on your father's behalf [showing] that the following amounts have been withdrawn from his accounts". There were then identified the various amounts which demonstrated, it was alleged, that $613,618.47 had been withdrawn from one, or other, of the deceased's accounts by one, or other, of the first and second Defendant. The letter concluded: "... In relation to the amount referred to above my client now seeks the following:- a. An acknowledgment of your indebtedness in relation to these amounts; b. A proposal for payment of interest on the amount outstanding so that he can be compensated for the ongoing loss in this regard. That interest should be capitalised from time to time; c. A proposal for repayment of the amount owing or at least a significant proportion thereof; d. That you provide adequate security for the debt so he can be certain that it will be repaid in due course; and e. That you pay all legal costs incurred in connection with these matters. Mr Fulton has no desire to commence proceedings for recovery but will have no alternative but to do so if a proposal satisfactory to him in relation to the matters referred to above cannot be negotiated quickly. As Mr Fulton has no real understanding of your present financial situation he will leave it to you to make the first suggestion as to how these matters might be addressed. Please let us have a response within fourteen (14) days from the date of this letter." 14In a subsequent letter, dated 16 November 2010, from the deceased's solicitors to the Defendants' then solicitors, MJD Legal, headed "Without Prejudice save as to costs", the deceased's solicitors stated that that the deceased (who was then still alive) would accept $500,000 (inclusive of costs and interest), which amount was payable, by bank cheque, within 28 days of the acceptance of the offer. The offer was said to be open until 5:00 p.m. on 10 December 2010, the acceptance of which was required to be communicated to the deceased's solicitors by that date and time. The letter concluded: "... This offer is made without prejudice save as to costs, in accordance with the principles of Calderbank v Calderbank [1975] 3 All ER 333. Therefore if this offer is not accepted and the outcome of the proceedings is not substantially better for your client than this offer, this letter will be relied on in due course in support of an application that your client pays Reginald Fulton's costs from the date of this letter on an indemnity basis. In the event that it is necessary to commence proceedings, no further notice will be given. Please advise if you have instructions to accept service of documents on behalf of Georgina and Allan Fulton." 15I have, in the principal judgment, referred to the relevant correspondence passing between the lawyers otherwise. It is not necessary to repeat the nature of that correspondence. 16The affidavit of Ms Rowlandson stated: "1. I am a Partner of the firm Rowlandson & Co Solicitors, the Plaintiffs' solicitors. 2. I refer to my affidavit sworn 10 April 2014 and say that the estimate referred to in paragraph 2 thereof was not accurate in that - 2.1 it did not include the hearing fee due and owing to the Supreme Court of New South Wales for the second to fourth days of the hearing in the sum of $2,385.00, and 2.2 it failed to take into account the legal costs paid by the plaintiffs to Coleman & Greig in the sum of approximately $40,000.00. 3. I say that the plaintiffs' costs up to the conclusion of the 4 day hearing on 10 April, 2014 was as follows:- 3.1 in respect of the equity claim on the ordinary basis $171,063.70 3.2 in respect of the Family Provision Claim on the indemnity basis approximately $12,000.00 from 12 March 2014." 17Ms Rowlandson was not required to be available for cross-examination on her affidavit. 18The Defendants relied upon the following evidence. 19In a letter dated 2 April 2014, the Defendants' solicitors, Thomas Booler & Co, Lawyers, wrote to the Plaintiffs' solicitors in the following terms: "The defendants offer the sum of $200,000.00 in full satisfaction of the plaintiffs' claim, pursuant to the principles in Calderbank v Calderbank. This offer is open for acceptance until 10.00 a.m. on Monday 7 April 2014." 20In her written submissions, Ms Evans stated, after referring to the letter of 2 April 2014: "4. In settlement negotiations with plaintiffs' counsel on the first day of the hearing (Monday 7 April 2014) lead counsel for the defendants offered the amount of $500,000.00 as a compromise of the amount repayable by the defendants to the plaintiffs. The plaintiffs did not accept that offer. However, on the final [day] of the hearing (Thursday 10 April 2014) the plaintiffs agreed in open court to an amount of $495,000.00. 5. If the plaintiffs had accepted the defendants' offer, it is likely the hearing would have taken only one day in total. In refusing the offer the plaintiffs elected to go into evidence for the entire amount they claimed. This involved lengthy cross-examination of the defendants as to many individual items of expenditure. 6. As three days of hearing were wasted by the plaintiffs' unreasonable refusal to agree to the offer, the defendants ask for indemnity costs from the date of that offer (See order 6 of Defendants' Proposed Judgment/Order.)" 21Subsequently, on 19 June 2014, Ms Evans stated that she wished to amend the submission as follows: "1. The offer of $500,000.00 made by the defendants' lead counsel on the first day of the hearing was an offer to compromise the amount in dispute not, as incorrectly stated at paragraph 4 of the submissions, an offer to compromise the amount 'repayable'. 2. Had that amount been agreed on the first day, the hearing time would have been significantly reduced because the items in the schedule that were in addition to $500,000 comprised many small items of expenditure about which the plaintiffs cross-examined the defendants. That cross-examination would have been shortened if the plaintiffs had accepted the $500,000.00 offer." 22How this "evidence" could be raised in the way that it has been, as part of the Defendants' submissions, is, to say the least, puzzling. There is no suggestion, in the submissions, that during the conversation between counsel, or otherwise, a statement had been made that the offer would be relied upon. In any event, an affidavit, or at least an agreed statement by counsel who had participated in the relevant discussion, should have been separately filed. Otherwise, the statement made was not admissible in that it was not in proper form. 23Ms Evans, in reply, attached to her submissions, a copy of an affidavit of the deceased to which reference was made in the principal judgment. She submitted that the affidavit illustrated that the Defendants did not unreasonably reject the offer made by the Plaintiffs on 16 November 2010. It was, she submitted, reasonable to reject the offer because, by that date, it was "probable" that the Defendants would make a family provision claim, after the deceased's death. She contended that the affidavit of the deceased was purportedly made "clearly in contemplation of family provision proceedings ... [however] no reference to this" was made in the offer.

The Submissions 24The Plaintiffs' written submissions in chief stated that the issues to be determined were: "a. From the Plaintiffs/Cross-Defendants' perspective, whether the plaintiffs are entitled to indemnity costs on their claim from 17 November 2010? b. From the Defendants/Cross-Claimants' perspective: i. Whether the plaintiffs/cross-defendant's should pay the defendants' costs of the action on the indemnity basis from 2 April 2014? ii. Whether the plaintiffs/Cross-defendants' should pay the defendants/cross-claimants costs of the first three days of the hearing on the indemnity basis? iii. Whether the Estate should pay the costs of the first defendant/first cross-claimant's cross-claim on the indemnity basis? c. Should the Asset Preservation Orders made 11 April 2014 remain in place?" 25The Plaintiffs went on to submit: "2.8. Although the plaintiffs have accepted the setting off of the judgment sum with the amount payable pursuant to the family provision order off, the amount of the judgment on the plaintiff's claim was $495,000. 2.9. On the basis of the information available to the deceased at the time the offer was made there was real compromise of his claim for return of the $613,610.47 by agreeing to accept $500,000. 2.10. Further, at the time when the deceased made the offer he was not entitled to interest on the amount claimed. Upon commencement of proceedings the right to claim interest from the time the cause of action arose commenced. Generally, a plaintiff who successfully recovers a money judgment will be entitled to an award of interest (Ruby v Marsh (1975) 132 CLR 427). By offering to accept $500,000 in 2010 the deceased was agreeing not to commence proceedings and denying to himself the right to interest on that sum. 2.11. Interest could properly have been claimed by the deceased from the time of each withdrawal, however for ease of reference, the last amount of money to be withdrawn by the defendants was on 17 February 2010. At the rates pursuant to section 100 of the Civil Procedure Act, interest from that date to the offer would have been $28,075.99. 2.12. The Orders proposed by Hallen J intend that interest be awarded from the death on 15 May 2011. Once this is taken into account the judgment sum on the Statement of Claim exceeds the offer. 2.13. In any event, although the money judgment, excluding interest, was $5,000 less than the offer, the amount of the judgment is relevant to the determination of whether refusal was unreasonable but is not determinative of it. For this to be determinative it would add an additional test not proposed by the Court of Appeal in Miwa Pty Ltd v Siantan Properties Pty Ltd (supra). 2.14. It is submitted that there was real compromise in agreeing to accept the sum of $500,000 and thereby not commencing proceedings. 2.15. The deceased was alive at the time the offer was made and thereby there was no entitlement of the first defendant to a family provision order at that time. The Will in place at the time of the offer was the 2009 will which made provision for the first defendant equally and in the same fashion as it did for the plaintiffs. The subsequent setting-off of the judgment sum as against the provision should not be considered as a relevant factor. 2.16. The offer was open for 24 days. It is submitted that this is a reasonable time period to consider the offer. 2.17. The offer was clearly put. $500,000 to be paid within 28 days of acceptance of the offer by way of bank cheque. 2.18. The offer was put well before any proceedings were on foot and therefore would have had significant savings for the defendants of the sums expended on the litigation itself. 2.19. The offer foreshadowed an application for indemnity costs. 2.20. The defendants' prospects of success in opposing the plaintiffs claim, were poor. It would have required the court to accept the evidence of large gifts in the face of objective evidence suggesting otherwise. The plaintiffs rely upon the reasoning in the judgment on the factual issues in dispute. 2.21. The defendants conducted themselves improperly in relation to their dealings with the deceased's money and must have been aware of their misconduct in this matter at the time that the offer was made. 2.22. The rejection of the offer was unreasonable. 2.23. The defendants should pay the plaintiffs costs of their claim on the indemnity basis from 17 November 2010 onwards." 26On the question of whether the "freezing order", should be continued, the Plaintiffs submitted: "6.1. The freezing order should be continued in place but reduced to reflect the judgment sum, including interest after the set off. There should also be an allowance for the plaintiff's costs of the proceedings. 6.2. The interest from 15 May 2011 to 6 June 2014 on $175,000 is $40,390.85, a total of $215,390.85. 6.3. On making of the Order the plaintiffs now have an entitlement to costs, the basis of which is yet to be determined. At this stage an allowance of $120,000 should be allowed for plaintiffs' costs. 6.4. The freezing orders should be retained but reflect the value of the judgment, estimated at this stage at $335,000 (rounded down)." 27The method by which the amount of interest is calculated in the submissions is not disclosed. 28In their submissions in reply, the Plaintiffs contended that these proposals regarding the freezing orders continuing were "appropriate" in the light of the "dishonesty ... [and] breaches of fiduciary duties ... established by the plaintiff[s]" in respect of the withdrawals of money from the deceased's accounts by the first and second Defendants. 29It is to be noted, however, that, in the principal judgment, I did not go as far as making a specific finding of dishonesty or breach of fiduciary duty. I concluded that I was not satisfied that the deceased authorised, or conferred authority upon, Allan, or Georgina, to use any of the funds withdrawn for his, her, or their, own benefit. I also was not satisfied that they had his informed consent and that there was no other evidence of oral, or written, instructions from him in respect of the amounts withdrawn. I was also not satisfied that the deceased made a gift of the amounts to one, or both, of them: see [408] - [412] of the principal judgment. 30The Defendants' written submissions in chief were that, because of the offer made on 2 April 2014, they should receive their costs calculated on the indemnity basis from that date. In the written submissions in reply, Ms Evans added "the offer is clearly valid and is clearly inclusive of costs and was intended to dispose of the proceedings including the cross-claim". She went on to contend that it was unreasonable for the Plaintiffs not to accept the offer, or if there was confusion about whether it was to include a reference to the resolution of the Defendants' Cross-Claim, then clarification could have been, but was not, sought by the Plaintiffs. 31In the alternative, the Defendants submitted that, as both parties were partially successful, the most appropriate order might be that each party should pay their own costs of the proceedings. Ms Evans added to this submission that "[i]t is also relevant that these are family provision proceedings, at least in part". 32The Defendants in the submissions in chief commented upon the form of the orders proposed by the Plaintiffs. I do not propose to set out the submissions but I have read them carefully. They do not provide very much assistance to me in determining the issues that must be decided. 33In reply, the Defendants repeated that the Plaintiffs did not better the offer made on 16 November 2010 with the effect that they are not entitled to a costs order based upon that offer. Ms Evans adds that, at the time the offer was made on behalf of the deceased, the Defendants were unaware of the contents of the 2010 Will (which removed the first Defendant as a beneficiary). It was, therefore, not unreasonable for them to reject the offer or allow it to lapse. 34On the issue of interest payable, the Defendants' submission was that "interest ... should be payable at a lower rate than that under s 100 of the Civil Procedure Act 2005 (NSW)". She made no further submissions in reply on this topic. 35On the issue of the "freezing order", the only submissions made on behalf of the Defendants were that "the defendants seek the dismissal of the asset preservation orders on the basis that the defendants should not be punished twice by way of freezing order and the judgment for the same matter"; that "[t]here is no foundation for" the freezing order to continue; and that "the continuation of the freezing orders has the potential to frustrate the ability of the defendants to satisfy [the] other of these proposed orders"; and, in reply, that the Plaintiffs have "pointed to no reason in principle why the freezing order should be retained. They are unduly punitive and should be dismissed."

Legislative Framework 36So far as I can discern, the parties did not seem to be in dispute on the statutory framework and the principles that apply in relation to the substantive case of the Plaintiffs, the case brought for a family provision order and the effect of the making of a Calderbank offer. In case I am wrong, I shall briefly set out the relevant legislation and the general principles that apply. 37The Civil Procedure Act 2005 (NSW), s 98(1), provides that, subject to the rules of Court, and that, or any other, Act, costs are in the discretion of the Court. The discretion extends to the costs of all proceedings whatsoever, including the costs of the administration of any estate, or trust, and the Court has full power to determine by whom, to whom, and to what extent, costs are to be paid. It is a judicial discretion to be exercised on a principled basis. 38It is clear that the discretion to award costs is unconfined or "absolute and unfettered" (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 per Dawson J, at 557). However, it must be exercised judicially, that is, according to relevant considerations, and taking account of the contextual features and facts of the litigation. 39The purpose of a costs order is to compensate, or indemnify, the person in whose favour it is made, not to punish the person against whom it is made: Ohn v Walton (1995) 36 NSWLR 77, at 79, per Gleeson CJ (as his Honour then was). 40As was noted (albeit in another context), in Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136, at [9] (by Greenwood and Rares JJ): "The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognizes the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party. As to the importance the community attaches to legal costs incurred of and incidental to the resolution of controversies before courts, see Clark v Commissioner of Taxation [2010] FCA 415 at [90]; Uniline Australia Ltd v S Briggs Pty Ltd (No. 2) [2009] FCA 920; (2009) 82 IPR 56 at [38]; and, Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [130] to [132]." 41Ultimately, the Civil Procedure Act and the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), require the Court to make such costs order as it thinks just in the particular circumstances of the case: Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343 at [10]. 42Black J, in In the matter of Employ (No 96) Pty Ltd (in liquidation) [2013] NSWSC 456, at [7], commented: "The principles underlying an award of costs include that costs are awarded to compensate the successful party for the expense of being put to the necessity of litigation; a wholly successful defendant should ordinarily receive its costs unless good reason is shown to the contrary; and the discretion to order costs must be exercised judicially and not against the successful party except for some reason connected with the proceedings: Milne v Attorney-General (Tasmania) [1956] HCA 48; (1956) 95 CLR 460 at 477; Oschlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 97-98 per McHugh J, at 129-123 per Kirby J; Ruddock v Vardalis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at 234. In Howard's Storage World Pty Ltd v Haviv Holdings Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84, Gray J observed at [17] that: 'The overriding principle that costs are in the discretion of the court can also be expressed in terms of the negative proposition that no rule or principle should be applied mechanically in the determination of the question where costs should lie in any particular case. Attention must always be paid to the particular circumstances of the individual case. The aim is to do substantial justice in relation to costs, based on the outcomes of the various issues in the proceeding, as between the entities that are parties to that proceeding.'" 43Section 98(4) of the Civil Procedure Act provides: "In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) Costs up to, or from, a specified stage of the proceedings, or (b) A specified proportion of the assessed costs, or (c) A specified gross sum instead of assessed costs, or (d) Such proportion of the assessed costs as does not exceed a specified amount." 44The Succession Act 2006 (NSW) does not contain any relevant provision to which s 98(4) would be subject. However, s 99 of the Succession Act provides: "The Court may order that the costs of proceedings under this Chapter in relation to the estate or notional estate of a deceased person (including costs in connection with mediation) be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit." 45No longer is there any difference between categories of eligible persons, as there was in the Family Provision Act 1982 (NSW), in s 33(3). The direction in s 33(2) of the former Act that "[t]he Court shall not order ..." the payment of costs out of the estate "in respect of an application in relation to a deceased person made by an eligible person who is such a person by reason only of the fact that" they fell within a certain category, is not repeated. 46Rather, it is clear that the section in the Succession Act also provides for an unfettered discretion as to how the costs of the proceedings may be borne. Importantly, the section relates to the payment of costs out of the estate or notional estate or both. It does not appear to relate to how costs may be borne otherwise. 47UCPR rule 42.1 provides that costs follow the event, unless it appears to the Court that some other order should be made as to the whole, or any part, of the costs. The "event" is generally taken to be the practical outcome of the proceedings. 48The rule provides that the discretion to award costs, ordinarily, will require an order that the successful party's costs will be paid by the unsuccessful party. The power to "make any order as to costs" enables the Court, in an appropriate case, to depart from the general rule if it would be unjust to apply it. Thus, there is flexibility in determining questions of costs. Again, the rule extends to the costs in any proceedings. 49UCPR rule 42.2 provides: "Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis." 50There is no suggestion that either of the rules does not apply to proceedings for a family provision order. 51Thus, subject to what I shall say regarding the offers made by one, or other, of the parties, and other matters to which I shall refer, the effect of the Civil Procedure Act, the Succession Act and the rules to which I have referred, in this case, is that the unsuccessful Defendants ought to pay the Plaintiffs' costs, calculated on the ordinary basis, of the substantive claim made by the Plaintiffs against the Defendants; that the first Defendant should receive his costs, calculated on the ordinary basis, of the family provision proceedings, out of the estate of the deceased; and that the second Defendant should pay the Plaintiffs' costs, calculated on the ordinary basis, of her family provision proceedings, which were dismissed. As I have stated, the Court may otherwise order but it can only do so if there is a discretionary decision to depart from what the rules provide: Australiawide Airlines Ltd t/as Regional Express v Aspirion Pty Ltd [2006] NSWCA 365, at [10]. 52In the present case, because there were claims brought by each of the first and second Defendant, two of which were unsuccessful, it is necessary to refer to an additional principle, being that, unless a particular issue is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those in which he, or she, failed: Waters v PC Henderson (Aust) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328. 53In Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256, at [107], Campbell JA, after referring to Waters v PC Henderson (Aust) Pty Ltd, added: "In the application of that principle, an issue or group of issues is 'clearly dominant' when it is clearly dominant in the proceedings as a whole." 54More recently, in Coshott v Barry [2014] NSWSC 238, Adams J, at [8], wrote: "A successful party will usually be entitled to costs, although it may be sometimes appropriate to make an adjustment as to the extent of that entitlement if, although the result favoured the party, issues were raised in the proceedings as to which the other party was successful. However, differentiation between issues on which the party ultimately successful failed will generally not be attempted unless a particular issue or group of issues is clearly dominant or separable. Ordinarily, costs of the proceedings should be awarded to the successful party without attempting such a differentiation. Even where such differentiation is appropriate, variation of the usual order as to costs will rarely be made if the matters in respect of which the ultimately successful party failed did not take up a significant part of the trial, either by way of evidence or argument. This is a matter of fact and degree, as to which the Court has a wide discretion: Elite Protective Personnel Pty Ltd & Anor v Thomas Salmon (No 2) [2007] NSWCA 373 at [6] - [11]; Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]." 55I have, recently, dealt with the relevance of a Calderbank offer in some detail in Walsh v Walsh (No 2) [2013] NSWSC 1281, at [39] - [56]. I shall not repeat all that I wrote but state some of the passages which are particularly relevant: "What is commonly referred to as a 'Calderbank offer' (a written offer made without prejudice except as to costs that does not comply with the relevant rules of court relating to the making of offers of compromise) is a well recognised means of making an offer of settlement in circumstances where the party making the offer ultimately seeks a costs advantage if the offer is not accepted: Jones v Bradley (No. 2) [2003] NSWCA 258 at [5]; Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194, at [27]. The offer is not admissible until the substantive issues have been determined. The result of the court's adjudication must be as, or more, favourable to the offeror than the offer made. (In the case of an offer by defendants, the court's adjudication must be less favourable to the plaintiff than the offer.) If a party wishes to rely upon a Calderbank offer, the terms of the offer should be clear and unambiguous: Coregas Pty Limited v Penford Australia Pty Limited (No 2) [2013] NSWCA 11, at [12]. The offer should embody 'a real and genuine element of compromise'. The meaning of that phrase is set out in cases such as Leichhardt Municipal Council v Green [2004] NSWCA 341, per Santow JA, at [23]; Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375, per Handley JA, at [5]; The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; (2006) 67 NSWLR 706, per Basten JA, at [8]. ... A Calderbank offer does not attract the same cost consequences as a formal offer of compromise made under the UCPR. Its presence does not yield any presumption of a cost order outside the normal rules. In an appropriate case, the existence of a Calderbank offer may influence, but not govern, the exercise of discretion supporting a different order as to costs. It enables the Court to consider whether it should exercise its discretion to make a costs order other than as provided by the UCPR rule 42.1 and rule 42.2. Nor does the making of a more favourable Calderbank offer appear to be determinative of what kind of (more favourable) costs order (or order other than the usual) should be made: In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932, per Ward J (as her Honour then was), at [54]. The party making a Calderbank offer carries the onus of satisfying the Court that it should exercise the costs discretion in his, her or their favour: Evans Shire Council v Richardson (No 2). Even where it is held that a Calderbank offer should have been accepted, and the offeree achieves a result as or less favourable than the offer at the trial, there is no automatic consequence: Mainteck Services Pty Limited v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165, at [15]. ... As can be seen, one critical question is whether the rejection of the Calderbank offer was unreasonable in the circumstances. In Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 (referred to by Ward J), the Court of Appeal, at [23], saw 'no justification for a more stringent test such as 'manifestly' or 'plainly' unreasonable'. ... Deciding whether conduct is 'reasonable' or 'unreasonable' will always involve matters of judgment and impression. In Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2005] NSWSC 481, McDougall J discussed the meaning of 'unreasonableness' in the context of the rejection of a Calderbank offer. At [30], his Honour wrote: '... the failure to accept a Calderbank offer does not create a presumption as to indemnity costs when the offeror receives a more favourable outcome than that offered, then the corollary is that it is necessary to show that there exist sufficient circumstances to displace the general rule as to costs (where the offeror was a defendant and the offeree a plaintiff). In many cases - maybe most - that will be done by demonstrating that rejection of the offer was unreasonable in some way. In this context, I think, 'unreasonable' may mean either that the rejection was not supported by any process of reasoning whatsoever or that the reasons for rejection that were advanced, or that may be inferred, were legally or factually (or both) inadequate.' In Gretton v Commonwealth of Australia [2007] NSWSC 149, Studdert, J wrote in relation to 'unreasonableness': '17 What emerges from SMEC and from Jones v Bradley and from Leichhardt Municipal Council v Green is that all the relevant circumstances have to be considered in determining whether the plaintiff's rejection of the settlement offer was unreasonable. Rejection would be unreasonable if it occurred without any consideration or without due consideration of the offer made. Rejection of an offer would be unreasonable if the plaintiff could not reasonably hope to match the offer by proceeding to a hearing. Rejection of an offer would be unreasonable if it involved a disregard of serious problems confronting the plaintiff in establishing liability. However, none of the decisions to which I have referred has sought to define what amounts to unreasonable rejection. I instance the above circumstances as examples of situations in which an offeree would act unreasonably in not accepting an offer, but it has to be recognised that there can be no all embracing definition as to what amounts to unreasonable conduct in failing to accept an offer. All the relevant circumstances of the particular case have to be considered.' An appeal was dismissed in Commonwealth of Australia v Gretton. In Foster v Galea (No 2) [2008] VSC 331, Byrne J, at [11] in relation to the onus being on the offeror to establish unreasonableness, commented: 'This apparently simple test contains its own difficulties. The offeror, who bears the burden of establishing this, is very often not in a position to demonstrate that the response of the offeree was or was not unreasonable. Whether this is so may depend upon the legal advice given to the offeree and to evidentiary uncertainties known only to that party. The offeror cannot know these matters without piercing the veil of professional privilege. Moreover, what is meant by unreasonable in this context? It is certainly not that the offeree's case was so hopeless that it might be struck out as an abuse of process. The clue to its meaning must be found in the policy behind the court's acceptance that an offer may be used in this way. This is of course to compel the offeree to consider seriously the offer by introducing into its decision-making process the prospect that a failure to accept it may in the appropriate circumstances attract a cost penalty. Where a party makes a Calderbank offer which is reasonable in all the circumstances, especially in comparison to the offeree's prospects of success or where the offeree's prospects of success were not good, the Court has displayed a readiness to make a special order. As I observed in the Lorden Holdings case, the policy of the court is to encourage litigating parties to undertake genuine settlement negotiations and, for the purpose, to face up to serious offers of settlement.' In Aljade v OCBC [2004] VSC 351, Redlich J, at [93], noted: 'It is not necessary to establish misconduct by the offeree before the rejection of the offer can be viewed as unreasonable. Lack of merit in the way a party has conducted its case is not a pre-requisite for the making of an indemnity costs order.' An offer that appears to be reasonable, that is simply allowed to lapse, with no response made to it at all, in my view, tends to suggest unreasonableness. Whether it was unreasonable for a party not to accept the Calderbank offer (or, as in this case, allow it to lapse) is not to be determined with hindsight: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368, at [33]. The strength, or otherwise, of the claim should be considered prospectively as at the time of the offer: Noon v Bondi Beach Astra Retirement Village Pty Ltd (No. 2) [2010] NSWCA 285, at [11]. It is to be approached objectively in the circumstances known (or which should reasonably have been anticipated) by both parties at the time the offer was made: Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 2) [2013] NSWCA 211 at [17]. In Dobb v Hacket (1993) 10 WAR 532, Murray J wrote, at 540: 'The courts should preserve in the minds of litigants, the conscious consideration that their behaviour may place the matter at risk as to costs if they refuse reasonable offers of settlement. The court should be careful not to foster the proposition that obstinacy and unreasonableness will not be punished by orders as to costs.' Finally, as Kunc J recently observed in Harris v Harris (No 2) [2013] NSWSC 1157, at [30]: 'For a Calderbank offer to be able rationally to affect the exercise of the discretion to displace the usual consequence of the costs following the event and being assessed on the ordinary basis, the event the subject of the Calderbank letter must be substantially the same as the event constituted by the issues at the hearing. That nexus will be broken for the purposes of determining whether a refusal was unreasonable if the issues in or shape of the case at the time of a Calderbank offer are materially different to those which ultimately were the subject of the hearing.'" 56What I said in that case and what has been said in the other cases to which I have referred, leads me to reject the Plaintiffs' submission that it is not necessary for the offeree to better the result than the offer made, for the offer to have relevant effect. 57In Commonwealth of Australia v Gretton [2008] NSWCA 117, Hodgson JA (with whom Allsop P and Campbell JA agreed), at [120]- [123], wrote: "However, uninstructed by authority, I would have thought that the question whether refusal of a Calderbank offer displaced (to any and if so what extent) the ordinary rule that costs follow the event, would not depend solely on whether the Court was satisfied that the offeree acted unreasonably in refusing the offer. As this case indicates, where there is a wide range of possible verdicts, an offer may be a reasonable one, yet it may not be positively unreasonable for the offeree not to accept it. As at present advised, I do not think this would necessarily make the offer and refusal irrelevant to the general discretion as to costs. In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach." 58Another matter is that neither party's counsel referred in their, or her, submissions to the following passage that appeared in the Transcript from the first day of the hearing: "HIS HONOUR: What was intriguing me, Mr Tregenza is this. Let's assume for the purposes of the discussion, and no one should draw any conclusion from this - Mr Evatt, I am making it clear that no one should draw any conclusion from what I am about to say. Let's assume for the purposes of the argument that you are successful in establishing that $765,000 was taken out of the accounts of the deceased. Let's assume for the purpose of the argument that you are successful in establishing, or the defendants aren't successful in establishing that that was with authority. That means the estate would have a value of something in the order of $2 million; correct. TREGENZA: Yes. HIS HONOUR: In circumstances where it would appear that, at least, up till the events giving rise to this dispute, the deceased and the first and second defendant appear to have had a good relationship and in circumstances where no provision has been made for the first and second defendant, and I leave aside whether or not the second defendant is an eligible person, in her case, if there are factors warranting, let's deal for the purposes of the argument with just the first defendant, who is a son. The prospects might very well be that he would succeed in a claim for a Family Provision order. I am not saying he would, but with ... an estate worth $2 million and unless the conduct was such that the Court considered it required the eradication of any obligation owed to him, one might have thought that he would receive something by way of Family Provision order. In those circumstances, have the parties given any consideration to taking that into account in working out a solution to the problem? TREGENZA: Yes, we have." 59It will be appreciated from reading the substantive judgment that this is how the case was ultimately determined. There is no evidence suggesting that, following the death of the deceased, and once there was a grant of Probate of the 2010 Will, either party gave consideration to this manner of determining how the claim, or potential claim, should be resolved. I do not say this critically, particularly in the case of the Plaintiffs, since it was not until about one month or so prior to commencement of the hearing that the first and second Defendant sought a family provision order in the Cross-Claim. However, once the Cross-Claim was filed, it ought to have been considered by the parties as an available method of resolving the disputes between them.

Determination 60I should deal with the question of the separate issues upon which the Defendants were unsuccessful first. 61In the present case, other than short submissions being made at the conclusion of the hearing, I consider that the construction issue upon which the first and second Defendants failed and the claim for a family provision order by the second Defendant, did not add very much time to the whole of the proceedings. I am of the view that the substantive claim of the Plaintiffs, and the claim for a family provision order by the first Defendant, were clearly the dominant issues in the proceedings. Accordingly, I have not determined the costs issues solely upon the basis that the Defendants were unsuccessful on some of the other issues. I have, however, taken into account that the first and second Defendants made those claims. 62In relation to the Calderbank offer relied upon by the Plaintiffs, it seems to me that it is not determinative of how costs should be borne. Firstly, the amount which the deceased offered to settle the dispute ($500,000) was for more than the parties agreed, ultimately, at the hearing, was payable to the deceased's estate by the Defendants ($495,000). Even then, what was agreed was a compromise on the part of each of the parties that was reached, presumably, to avoid an even lengthier hearing. (This point was made in the Plaintiffs' submissions in reply.) 63Secondly, even with the statement that the offer made was inclusive of interest and costs, at the time the offer was made, no interest was payable, although it had been sought. At that time, the Defendants may, or may not, have been liable for costs incurred by the deceased. 64Furthermore, at that time, the deceased was alive and, had the proceedings been heard during his lifetime, he would have been cross-examined on some of the events that occurred. Whether that would have altered the result of the case, in whole or in part, cannot be predicted, but, in my view, it is a relevant consideration. The case, at the hearing, was significantly different, to the case the Defendants had to meet at the time the offer was made. 65It must also be remembered that the Plaintiffs, during the course of the proceedings, came to accept that some of the money withdrawn, was, in fact, used by, or for the benefit of, the deceased. 66I also wonder whether, at the time the deceased's offer was made, it was a genuine compromise. Initially, the Plaintiffs sought to establish an amount in excess of $600,000 as the amount payable; then, an amount of $524,287; then, $502,451 was the amount submitted could be established; and finally, with encouragement, the parties agreed on $495,000. Although that was said to be a compromise, I am unable to say how much the Plaintiffs would have been able to establish had the amount not been agreed. Whether they would have been able to establish a greater amount cannot be predicted. 67I must also remember that the first and second Defendants each brought a claim for a family provision order, albeit late in the proceedings, and that the first Defendant, at least, was successful. 68It is difficult, in all the circumstances, to conclude that it was unreasonable for the Defendants to reject the offer made, particularly at a time when the prospect of being able to cross-examine the deceased still existed. 69Furthermore, in regard to the claims for a family provision order, each party, for different reasons, relied upon much of the evidence that had been read in respect of the Plaintiffs' substantive claim. Certainly, it became necessary to consider the facts ultimately established on their claim. 70It should be remembered, in this regard, that the Plaintiffs asserted that the conduct of the first and second Defendants was such that each was disentitled, completely, to an order for provision out of the estate of the deceased. 71This is not to say that the conduct of each of the first and second Defendants, in not acknowledging that certain amounts, as identified by Georgina, of $483,740 (see [11] of the principal judgment), during the course of the hearing, is irrelevant. Had these amounts been admitted, it would have narrowed the quantum issues on which a substantial amount of time, prior to the actual hearing, and some time at the hearing, in all likelihood, would have been saved. Even with the admission of the amounts withdrawn, the Defendants could have maintained, the assertion that those amounts had been withdrawn with the knowledge and approval of the deceased. In this regard, in the events that happened, they did not satisfy me that the deceased had consented to, or authorised, the use of the funds withdrawn that the first and second Defendants utilised for their own benefit. 72In relation to the Defendants' offer made on 2 April 2014, it is to be noted that the amount of $200,000 was offered "in full satisfaction of the plaintiffs' claim". At the time the offer was made, the Defendants had filed the Cross-Claim (on 24 March 2014). The offer did not state that it would result in the dismissal of the Cross-Claim and there can be no suggestion, from the reading of the offer, that it was intended to have such a result. It always remained a matter for the Defendants to express the terms upon which any Calderbank offer was to be advanced for the consideration of the Plaintiffs. In this regard, I reject the contentions of the Defendants. 73I also do not accept the submission made on behalf of the Defendants that the offer contained in the letter of 2 April 2014, was "clearly" intended to dispose of the proceedings, including the Cross-Claim. When one reads the Defendants' offer, what is submitted is far from "clear". 74Furthermore, I note there is no evidence suggesting that, following what I said on the first day of the hearing, the Defendants informed the Plaintiffs that the offer made had been made with the intention that it would dispose of the Defendants' claims as well as those of the Plaintiffs. 75The offer made by the Defendants was made at what may be described as the eleventh hour, shortly before the hearing was to commence. It did not allow very much time, in fact, only two working days, to be considered. Bearing in mind all of the issues in the case, in my view, it was not open for a reasonable period of time and it was not made a reasonable period before the hearing of the proceedings commenced. 76It will be remembered, also, that the judgment in favour of the Plaintiffs was for $495,000. That $175,000, plus interest, will be payable, arises only because of the family provision order made in favour of the first Defendant, and because he consented to it being used as a part repayment of the judgment amount. Without that agreement, the Defendants would have had to pay the Plaintiffs the whole amount of the judgment, plus interest, from which the family provision order in favour of the first Defendant would then have been satisfied. 77It follows that the Calderbank offer made on behalf of the Defendants is not determinative of the issue of how the costs of the proceedings should be borne. It might have been more relevant had it been made upon the basis of the Cross-Claim being dismissed. Even then, the Court would have had to consider the late service of such an offer and whether it allowed the Plaintiffs a reasonable time to consider it. 78Taking all the matters into account, the application by each of the parties for indemnity costs is refused. 79Doing the best that I can, taking into account all of the matters, including the result of the proceedings and how the evidence relied upon was utilised during the hearing, and in order to avoid further disputes as to the quantum of costs, the fair and just order for costs is that the Defendants should pay two thirds of the Plaintiffs' costs and disbursements, calculated on the ordinary basis, of the proceedings, including the costs and disbursements of the Cross-Claim. The difference between those costs and the Plaintiffs' costs, calculated on the indemnity basis, which costs order I shall also make, should be paid out of the $175,000 and interest, which amount is payable by the Defendants to the estate. 80I shall make no order for the Defendants' costs and disbursements, to the intent that they should bear their own costs and disbursements of the proceedings, including those of the Cross-Claim. 81In the principal judgment, I determined that interest should be calculated on the lump sum of $175,000 from the date of the deceased's death until the date of repayment. The parties were not able to agree on the rate of interest. 82The purpose of the provision of interest is to compensate a party for being held out of his, her, its, or their, money: MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657, at 663; Grincelis v House [2000] HCA 42; (2000) 201 CLR 321, at [16]. In Ruby v Marsh (1975) 132 CLR 642, at 652, a second purpose was identified by Barwick CJ, which, in my view, is particularly relevant to the facts of this case: "In the second place, the power to award interest on the verdict from the date of the writ is to provide a discouragement to defendants ... from delaying settlement of the claim or an early conclusion of the proceedings so as to have over a longer period of time the profitable use of the money which ultimately the defendant agrees or is called upon by judgment to pay." 83This does not mean, of course, that the purpose of an award of interest is to punish the Defendant for having been dilatory in settling the Plaintiffs' claims or for any other conduct. 84There is no rate of interest prescribed by s 100 of the Civil Procedure Act. The section relevantly provides: "(1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money, and (b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect." (My emphasis) 85In Maestrale v Aspite [2014] NSWCA 182, Beazley P (with whom Macfarlan and Barrett JJA agreed), at [135] - [137], wrote: "The award of pre-judgment statutory interest is discretionary and there is no prescribed rate of interest that may be awarded. This is to be contrasted with the position in respect of post-judgment interest payable pursuant to s 101: see UCPR, r 36.7, which prescribes the rate at which interest is to be calculated on the judgment debt. Nonetheless, it is desirable for there to be some uniformity in the interest rate adopted, provided that the rate bears sufficient relation to commercial reality: see R W Miller & Co Pty Ltd v The Ship Patris [1975] 1 NSWLR 704. In Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600, Mason P said, at [30]: 'It would be intolerably burdensome if a court required evidence and argument in every case as to what rate or rates of interest would do justice to the principles which I have endeavoured to summarise. The interests of the parties and of the court, including the interest of consistency as a component of justice, are served by taking a broad, standard approach whereby interest is calculated according to pre-determined rates that the parties can take into account in their dealings during the litigation and in their endeavour to avoid wasteful disputation concerning its outcome.' In conformity with this view, the Supreme Court's Practice Note 16 (16 June 2010) provides: '5. Practitioners and litigants should expect that where, pursuant to s 100 (1) and (2) of the Civil Procedure Act 2005, interest in respect of a pre-judgment period is to be included in a judgment, the Court will have regard to the following rates, being rates agreed upon by the Discount and Interest Rate Harmonisation Committee established following a referral by the Council of Chief Justices: (a) in respect of the period from 1 January to 30 June in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced, and (b) in respect of the period from 1 July to 31 December in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced.' The terms of the Practice Note do not preclude a party from adducing evidence as to the appropriate rate of interest in a particular case, as the remarks of the court in Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49 indicate. In that case, a question arose as to the proper rate of interest post-judgment. Brereton J stated, at [18], that: '[W]hile as a matter of practice the court is often guided in the award of pre-judgment interest by the prescribed rate, that is always subject to evidence, and even in respect of post-judgment interest, [CPA, s 101(2)], and more so prejudgment [CPA, s 100(1), (2)], evidence may show that another rate is appropriate. Although the calling of accountants and other experts to give evidence on applicable rates of interest in every case, or even frequently, has been discouraged [Serisier Investments Pty Ltd v English [1989] 1 QdR 678; Smallacombe v Lockyer, 575; Wheeler v Page (1982) 31 SASR 1, 7], it must be permissible to a party to call evidence to show that in particular circumstances a rate other than the statutory post-judgment rate is appropriate.' 86I have concluded in the principal judgment that interest should not be paid on the whole amount of $175,000 from the date of the deceased's death (15 May 2011) until the date that judgment is pronounced (in the events that have happened, 30 June 2014). The rate of interest is more difficult to assess since neither party provided any evidence of the particular rate to be paid. It may be that each was of the view that the Practice Note, to which Beazley P referred, would apply. 87In my view, the rate of interest that should be applied is the rate that the deceased was entitled to receive had the bulk of the moneys continued to be invested in the account in which it had been held. Most of the money withdrawn appears to have come from what is described in the correspondence as the "Cash Investment Account (616)": see, [92] of the principal judgment. There is no suggestion of any alternative form of investment that the deceased considered. 88In this way, the deceased's estate will be compensated for being kept out of the monies to which the deceased would have been entitled had it not been for the withdrawal of the amounts by the first and second Defendants. 89The rate of interest on that account should not be difficult to ascertain since the type of account in which the bulk of the deceased's funds were held, and from which most of the money was withdrawn, is known, as is the account number. The financial institution in which the account was held, should be able to inform the parties of the applicable rate of interest available on the account, or if no account of that specific type has continued to exist, the type of account that is the closest to the account from which most of the money was withdrawn. That should provide the appropriate rate of interest. 90In order to avoid complexity, the rate of interest should be determined as at 1 January and then at 1 July of each year and calculated accordingly at 6 monthly rests. 91From the day after judgment is pronounced (1 July 2014) until the date of payment, the amount of interest should be calculated using the prescribed rate, from time to time, under s 101 of the Civil Procedure Act, on any amount unpaid. There is no reason advanced why such an order should not be made. 92In this regard, UCPR rule 36.7 provides: "36.7 Payment of interest (1) The prescribed rate at which interest is payable under section 101 of the Civil Procedure Act 2005 is: (a) in respect of the period from 1 January to 30 June in any year-the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced, and (b) in respect of the period from 1 July to 31 December in any year-the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced." 93This leaves the final issue of the discharge of the freezing order. 94The freezing order was made on 11 April 2012 by the Equity Registrar in accordance with Consent Orders, of that date, signed by the legal representative of each of the parties. The Consent Orders were made "without admission". 95The freezing order was made on "terms set out in the Penal Notice[s] annexed to [the] orders". Relevantly, the following clauses within the Penal Notices were applied to each of the first and second Defendant: "4. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD $850,000.00. ... 8. This order does not prohibit you from: (a) paying up to $1,500.00 a week on your ordinary living expenses; (b) paying $20,000 on your reasonable legal expenses; (c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and (d) in relation to matters not falling within (a), (b) and (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation." 96The freezing order was subsequently continued, by consent, on each of 7 May 2012, 29 May 2012, 18 July 2012, 15 August 2012, 25 October 2012 and 31 January 2013. On 31 January 2013, the order that was made was in the following terms: "1. That consent orders made on 11 April 2012 continue pending further order." 97After 31 January 2013, the freezing order was not the subject of any application until 12 March 2014. On that date, the Defendants filed a Notice of Motion seeking, among other things: "1. That the freezing order made by consent and without admission against the first and second defendants on 11 April 2012 by Registrar Musgrave, Equity Registrar, be varied pursuant to Rule 36.16(3) of the Uniform Civil Procedure Rules 2005 (NSW) to permit the defendants to obtain finance of not more that $100,000.00 against property at... Quakers Hill, such property being an asset subject to the freezing orders." 98 On 27 March 2014, I made the following orders: "1. Orders that the costs of the Defendant's Notice of Motion filed 12 March 2014 be the Plaintiff's costs in the cause. 2. Directs the parties to deliver to Hallen J's Chambers, by 11:30 a.m. tomorrow, Friday, 28 March 2014, a minute of a proposed consent order recording the variation agreed to of the freezing order signed by or on behalf of the parties." 99Pursuant to those orders, the Court received a minute of order, signed by the legal representative of each of the parties, and dated 28 March 2014. I then made the following order in Chambers: "1. Orders in terms of Short Minutes of Order dated 28 March 2014, namely: That subparagraph 8(b) in the Freezing orders made in relation to each of the first and second [Defendants] on 11 April 2012, be varied by substituting the sum of '$35,000' for '$20,000' where it appears in the said subparagraph in each order." 100I did not mention the freezing order at all in the principal judgement. There were no submissions made by either party as to the continuation, or discharge, of that order at the hearing, and, so far as I am aware, the evidence relied upon in support of the making of that order, initially, was not read in the proceedings. 101No evidence was advanced on, or referred to in, the submissions made in the substantive proceedings, for the continuation or the discharge of that order. 102Division 2 of UCPR rule 25 provides for the making of a freezing order. Rule 25.11 provides that the Court may make a freezing order upon, or without notice to, a respondent, for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied and that a freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets. 103UCPR rule 25.14 relevantly provides: "(1) This rule applies if: (a) judgment has been given in favour of an applicant by: (i) the court, or... (2) This subrule applies to a judgment if there is a sufficient prospect that the judgment will be registered in or enforced by the court. ... (4) The court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur: (a) the judgment debtor, prospective judgment debtor or another person absconds, (b) the assets of the judgment debtor, prospective judgment debtor or another person are: (i) removed from Australia or from a place inside or outside Australia, or (ii) disposed of, dealt with or diminished in value." ... (6) Nothing in this rule affects the power of the court to make a freezing order or ancillary order if the court considers it is in the interests of justice to do so." 104In TZ Ltd v ZMS Investments Pty Ltd [2010] NSWSC 196, Barrett J (as his Honour then was) wrote, at [26]: "A general law freezing order is warranted only if, in the words of Bryson J in Acquasun Pty Ltd v Coverdale Ram Pty Ltd [2000] NSWSC 1146, there has been 'conduct on the part of the defendants which can reasonably be interpreted as potentially having the effect of frustrating the ordinary processes of the court and the enforcement of its judgments or of being intended to do so or of being in any way evasive indicating dishonesty or otherwise indicating actually or potentially that the assets of the company have been or will be dealt with in an irregular way'." 105In Lake v Crawford (No 2) [2010] NSWSC 419, Harrison J reiterated that the jurisdiction to grant freezing orders is not intended to enable a plaintiff or judgment debtor to obtain security for its judgment in advance of execution but, rather, is founded on the jurisdiction of the Court to prevent abuses of its process by preventing a defendant or judgment debtor from embarking on a course of conduct that would have the effect of defeating the Court's jurisdiction and noting that the fact that a judgment may not be satisfied for reasons of impecuniosity does not mean that there is an abuse of process. 106As in Lake v Crawford (No 2), the court is not aware of any dealings by any of the Defendants that have the characteristics of an attempt to avoid the reach of these proceedings such as the dissipation or disposal of assets or anything similar. As Harrison J wrote, at [24], in that case: "Moreover, nothing arguably or apparently untoward, suspicious or surreptitious attends anything that the first defendant has done. To adopt the plaintiff's contention that the unanswered request for assurances and undertakings gives rise to an adverse inference against the defendants upon the basis of which this Court should act would be blatantly and inappropriately to reverse the onus of proof. The plaintiff's evidence has not reached the stage that requires the defendants to do anything more in an evidentiary sense than to remain silent. That is what they have done." 107I am not satisfied that the Plaintiffs have established a basis for the continuation of the freezing order. Their application appears to rest on no more than the financial and material circumstances of the first and second Defendants. Nor is there evidence of any refusal to provide an undertaking in relation to any further encumbrance or dealing with any property they own. There is no evidence to show that there remains a reasonable apprehension that the assets of the first and/or second Defendants will be dissipated in a manner designed to frustrate the processes of the Court. Accordingly, I propose to discharge the freezing orders that were made. 108In the circumstances, the Court: (a) Orders that there be judgment for the Plaintiffs, as executors of the estate of Reginald Fulton, deceased, as against each of the Defendants, on the Plaintiffs' claim, in the sum of $495,000 ("the Judgment Sum"). (b) Orders, sufficient cause having been shown, that the time for the making of the first Defendant/Cross-Claimant's application for a family provision order be extended until 24 March 2014, the date of the filing of the Cross-Claim herein. (c) Orders that the first Defendant/Cross-Claimant is to receive a lump sum of $320,000 by way of provision out of the estate of the deceased ("the family provision order"). (d) Orders that there be no interest paid on the family provision order. (e) Notes that the first Cross-Claimant/first Defendant directs the Plaintiffs, as executors of the estate of the deceased, and they agree, to use the family provision order to repay part of the Judgment Sum, leaving a balance of $175,000 payable to the Plaintiffs as the executors of the deceased's estate. (f) Orders that the balance of the amended Statement of Claim be dismissed. (g) Orders that balance of the Cross-Claim be dismissed. (h) Orders that, from the date of death of the deceased (15 May 2011) until the date judgment is pronounced (30 June 2014), the amount of interest payable should be calculated on the amount of $175,000 using the rates payable, from time to time, on the account described as the Cash Investment Account from which most of the deceased's funds were withdrawn. (i) Orders that, from the day after the date judgment is pronounced (1 July 2014) until the date of payment, the amount of interest payable should be calculated on the amount of $175,000, or part thereof, outstanding, using the prescribed rate, from time to time, under the Civil Procedure Act, s 101. (j) Orders that the Defendants pay two thirds of the Plaintiffs' costs and disbursements, calculated on the ordinary basis, of the proceedings including of the Cross-Claim. (k) Makes no order as to the Defendants' costs and disbursements of the proceedings, including the Cross-Claim, to the intent that they should pay their own costs and disbursements. (l) To the extent that the Plaintiffs' costs and disbursements are not recovered from the Defendants, those costs and disbursements, calculated on the indemnity basis, be paid, or retained, as the case may be, out of the estate of the deceased. (m) Orders that the freezing orders made on 11 April 2012 against each of the first and second Defendants be discharged. (n) Grants liberty to any party to apply, in these proceedings, for consequential and ancillary orders for the purpose of, or with respect to, giving effect to, and implementing, the orders made. (o) Orders that the exhibits be returned forthwith to the parties who tendered the exhibits to be held by them in compliance with Practice Note No SC Gen 18, para 28.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 June 2014