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[2026] NSWSC 644
Supreme Court of NSW
2026-06-04
Bennett J
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Gardiner v Wong (No 2) [2026] NSWSC 644
Hearing dates: On the papers
Date of orders: 4 June 2026
Decision date: 04 June 2026
Jurisdiction: Equity – Probate and Family Provision List – Family Provision
Before: Bennett J
Decision: (1) The plaintiff is to pay the defendant’s costs, on the ordinary basis.
(2) The defendant, as executor, is entitled to pay any costs payable by the plaintiff to the defendant, in his personal capacity, pursuant to Order 1 from the plaintiff’s interest in the residuary estate of the deceased.
Catchwords: COSTS — Party/Party — Payable out of a fund — Deceased estate — Plaintiff made claim that defendant held property on trust for deceased — Trust claim failed — Plaintiff argues conduct of deceased caused litigation — Plaintiff made family provision claim in relation to deceased’s estate, of which defendant is executor — Family provision claim failed — Where family provision claim took up minimal time in hearing — Whether plaintiff should receive her costs out of the estate — Whether defendant should receive his costs out of the estate — Whether defendant in substance was acting in his own interests — Whether defendant should be able to look to plaintiff’s share of estate to satisfy any costs plaintiff does not pay to defendant under costs orders — No issues of principle
Original judgment source is linked above.
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) rr 20.26, 42.1, 42.4, 42.25
Cases Cited: Bates v Cooke (No 2) [2014] NSWSC 1322
Benz v Armstrong (No 2) [2022] NSWSC 668
Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Calderbank v Calderbank (1975) 3 All ER 333
Campbelltown Central 2 Pty Ltd v Chief Commissioner of State Revenue (No 2) [2026] NSWSC 305
Cherry v Boultbee (1839) 4 My & Cr 442; 41 ER 171
Davies v Gregory (1873) LR 3 PD 28
Fuda v Dawes (No 2) [2026] NSWSC 492
Gardiner v Wong [2026] NSWSC 421
Harris Health Care Pty Ltd (receivers and managers appointed) (in liq) v Hayes (2024) 116 NSWLR 273; [2024] NSWCA 301
Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697
Reeves v Reeves (No 2) [2024] NSWSC 386
Texts Cited: Practice Note SC Eq 7
Category: Costs
Parties: Queenie Hin Wan Gardiner (Plaintiff)
Edwin Wong (Defendant)
Representation: Counsel:
M Evans (Plaintiff)
CP Birtles (Defendant)
Solicitors:
O’Brien Lawyers (Plaintiff)
L Rundle & Co (Defendant)
File Number(s): 2024/00399299
Publication restriction: Nil
I gave the principal judgment in these proceedings on 24 April 2026: Gardiner v Wong [2026] NSWSC 421 (Principal Judgment or PJ). Defined terms in the Principal Judgment are used here. This judgment also presumes familiarity with the Principal Judgment. I will also continue to refer to the plaintiff and the defendant as Queenie and Edwin, respectively.
In the orders I made on 24 April 2026, I directed the parties to reach an agreement to resolve the issue of costs. Failing any agreement, I also made orders timetabling the provision of written submissions by the parties on costs.
The parties could not agree on the appropriate costs orders and have provided to my Chambers written submissions in accordance with the Court’s orders. I have received and had regard to the following sets of written submissions:
Queenie’s written submissions on costs filed 1 May 2026 (PWS Costs);
Edwin’s written submissions on costs filed 1 May 2026 (DWS Costs);
Queenie’s written submissions on costs in reply filed 8 May 2026 (PWS Costs Reply); and
Edwin’s written submissions on costs in reply filed 8 May 2026 (DWS Costs Reply).
On consideration of the submissions of the parties, on 11 May 2026 I caused my Associate to send an email to the parties in the following terms:
“Dear Practitioners,
Justice Bennett has instructed me to send the following email on her Honour’s behalf.
The defendant’s costs submissions at [5] submit that the defendant is “otherwise entitled to his costs out of the estate pursuant to r 42.25 of the UCPR”.
Her Honour refers to notation 3 of Slattery J’s notations made on 4 March 2025 where his Honour noted, with reference to paragraph 41 of Practice Note SC Eq 7, “that because this is a contest among persons with competing claims over the size of the estate that no party should hold any expectation that the Court will order the reimbursement out of the estate of any party’s costs whether that party is successful or unsuccessful” [the Slattery J Costs Notation].
Her Honour is seeking clarification from the parties on one point which her Honour does not consider has been clearly addressed, namely, the defendant’s entitlement to payment of his costs out of the estate of the deceased.
Having regard to the notation from Slattery J noted above, and the terms of UCPR r 42.25(2)(b), her Honour wishes to be addressed further in writing as to the basis for the defendant’s entitlement to payment of his costs out of the estate of the deceased in relation to the trusts claim, where it appears the defendant is being sued as the registered proprietor of the Henry Street Property, as opposed to the family provision claim, where it is apparent the defendant is being sued in his capacity as executor.
Her Honour would be assisted by the provision of a short written submission of no more than 2 pages, which can be provided by email to her Honour’s Chambers by 13 May 2026 at 4:00pm.”
In accordance with the terms of the email:
Queenie’s supplementary written submissions on costs were filed on 12 May 2026 (PWS Costs Supp); and
Edwin’s supplementary written submissions on costs were filed on 13 May 2026 (DWS Costs Supp).
The only issue remaining to be determined is costs.
“(a) The costs of the plaintiff to be paid out of the Estate on the ordinary basis;
(b) The costs of the defendant to be paid out of the Estate on the trustee basis.”
“1. Order the Plaintiff pay the Defendant’s costs of the proceedings on the:
i. Ordinary basis up to and including 9 July 2025; and
ii. Indemnity basis from 10 July 2025 onwards.
2. Order to the extent the Defendant’s costs are not paid by the Plaintiff, they be paid on the indemnity basis from the estate of Elisa Lai Sum Wong (‘the deceased’).
3. Order the Defendant be entitled to pay any costs payable by the Plaintiff pursuant to order 1 from the Plaintiff’s interest in the residuary estate of the deceased.”
In the final supplementary written submissions, the position of Queenie changed. Queenie submitted (at PWS Costs Supp [9]) that Edwin is not entitled to an order that he be paid his costs out of the estate. I will refer to the basis of that submission below.
For his part, in his supplementary written submissions, Edwin maintained his claim that he was entitled to an order that any costs not paid by Queenie are to be paid out of the estate of the indemnity basis (DWS Costs Supp [9]).
Another issue was raised by Edwin: whether Edwin can draw on Queenie’s share of the estate to satisfy any costs liability Queenie has to Edwin (DWS Costs [18]-[19]). However, how that issue is to be resolved does not appear to be in dispute.
Edwin relied on what was said by the Court in Cherry v Boultbee (1839) 4 My & Cr 442; 41 ER 171 (Cherry v Boultbee), and other cases applying Cherry v Boultbee (DWS Costs [18]-[19]). Edwin described this “rule” in Cherry v Boultbee as a simple technique of netting-off reciprocal monetary obligations by allowing an administrator of a fund to deem a claim as having been satisfied out of a debt the claimant still owes to the fund (DWS Costs [19](c), per Harris Health Care Pty Ltd (receivers and managers appointed) (in liq) v Hayes (2024) 116 NSWLR 273; [2024] NSWCA 301 (Harris Health Care) at [73]-[123] (Leeming JA, Bell CJ and McHugh JA agreeing)).
Queenie did not make any submissions in relation to the Cherry v Boultbee issue, either to the contrary, or at all.
It is not apparent to me that the principles emerging from Cherry v Boultbee and explored at some length in Harris Health Care have any relevance to the actual making of a costs order of the kind sought by Edwin. Impressionistically, it seems to me that any costs order adverse to Queenie here would not have the effect of increasing the funds available within the estate to be distributed, such as to make Queenie a “contributor” to the estate thus potentially justifying the invocation of Cherry v Boultbee. It is Edwin, not the deceased’s estate, who is benefitting from a costs order.
Additionally, even if one assumes Edwin was to be indemnified from the assets of the estate in relation to his legal costs to the extent Queenie does not pay them (such as the difference between party/party costs payable by Queenie on the ordinary basis and the solicitor/client costs payable by Edwin, or if Queenie simply has insufficient assets), Queenie’s fulfilment of any costs liability would not seem to involve a contribution to the deceased’s estate. If Queenie personally totally satisfied any liability imposed on her by a costs order, then the assets of the deceased*’*s estate do not increase. This appears to be in contrast to cases which have applied Cherry v Boultbee where the starting point is that a person entitled to payment out of a fund is also a debtor to that fund who should be contributing to that fund in the first place so as to increase the assets available to be distributed to all beneficiaries of the fund (see Harris Health Care at [102], [114]-[117]).
It is therefore not immediately clear to me how Cherry v Boultbee or similar cases are relevant. Edwin’s submissions also did not cite an example of the principles in Cherry v Boultbee being directly applied to fashion a costs order in a matter pertaining to a deceased’s estate (noting that there is no doubt that Cherry v Boultbee may be generally relevant to how a deceased person’s estate might ultimately be administered). To be clear, none of what I have said is to be taken as definitively concluding that the principles sourced from Cherry v Boultbee are irrelevant to the issue of costs in a matter related to a deceased’s estate. Rather, in the absence of more detailed submissions being advanced, I do not consider it appropriate to simply accept the proposition that Cherry v Boultbee should “apply” to the issue of costs.
That being said, I do accept that it is appropriate to make the actual order Edwin sought, being an order that Edwin is entitled to draw from Queenie’s share of the estate to satisfy the costs payable to him to the extent Queenie herself does not satisfy any costs she is liable to pay Edwin. This is not because I accept Edwin’s submissions that Cherry v Boultbee itself is being applied. Rather, I am really just accepting that Edwin being able to look to Queenie’s share of the deceased’s estate to satisfy Queenie’s unpaid costs liability is a convenient and practical way to enable Edwin to receive the fruits of the costs order against Queenie. This is so even where, for reasons to be developed below, I do not consider Edwin should be entitled to draw his own costs from the deceased’s estate.
I will make an order substantially in the terms of the third of Edwin’s proposed orders, quoted above.
The remaining issues that appear to be in dispute in relation to costs can be framed in the following questions:
Should Queenie have her costs paid out of the estate of the deceased?
Should Edwin be entitled to a special costs order on the basis of a Calderbank offer?
Is Edwin entitled to be indemnified out of the estate for the costs not covered by the costs order in relation to Queenie?
I note the various observations made by me in the Principal Judgment in relation to Queenie’s family provision claim, being that:
Queenie did not include any submissions on this part of her (albeit alternative) claim in her opening submissions (PJ [249]), and that written submissions going to the family provision claim were only made at a later stage (PJ [250]);
no updating affidavits were provided, with Edwin noting the paucity of evidence put on by Queenie in relation to her family provision claim (PJ [255]-[259]); and
Queenie made no oral submissions of substance in closing on the issue (PJ [253]-[254]).
For his part, whilst Edwin did address the issue of the family provision claim, he was limited in the extent to which he was able to do that given there was little evidence, or few submissions, to reply to.
Overall, in light of the above mentioned observations I made in the Principal Judgment and what is said in the previous paragraph, I am of the view that little time and resources were devoted to the issue of the family provision claim. Impressionistically, I am of the view that well below 10 percent of the preparation time or time during the trial was spent on it.
“I also note that Edwin, in DWS Opening at [1], referred to an order by Slattery J on 4 March 2025 pursuant to r 42.4 of the UCPR which fixed the maximum costs recoverable by one party from another. I cannot find a costs-capping order made by his Honour on that day. However, on 4 March 2025, his Honour made the following relevant notations:
‘The Court:
1. NOTES that the total value of the estate in contest is said to be no more than $500,000.
2. NOTES that if these proceedings do not settle at mediation the Court is minded to order that the proceedings be set down for a hearing of no more than 1 day on a stop-watch hearing and that pursuant to UCPR 42.4 that the maximum costs that one party may be able to recover from the other for costs from now to the completion of the matter at final hearing following a mediation will be fixed in the sum of $70,000. …’
What is contained in his Honour’s notations seems to provide a further reason to provide the parties with an opportunity to be heard further on the appropriate costs orders.”
I will refer to the second notation as the “putative Costs Capping Order”.
As will be considered further below, Edwin refers to these “orders” (which, as is apparent, were not orders) in his purported “Calderbank offer”.
Queenie relies “by analogy” on the principle that, “on the question of costs, the Court should inquire, if so directed, as to whether the testator is ‘by reason of his conduct, to be considered the cause of the reasonable litigation which has occurred after his death as to the validity of his will’”; Queenie cited Davies v Gregory (1873) LR 3 PD 28 at 31 per Sir J Hannen as authority for the underlying principle (PWS Costs [6] – I note there were two paragraphs numbered 6). In her submissions, Queenie elaborated on this submission (PWS Costs [6]-[17]).
Against this, Queenie properly draws the attention of the Court to “the current practice note on probate matters”, being Practice Note SC Eq 7 (PN EQ 7) at [41], which states:
“In probate matters, no presumption with respect to the making of an order for costs arises by reason only of the fact that the testator was the cause of the litigation or because the circumstances led reasonably to an investigation concerning the testator’s Will.”
Edwin makes the primary submission that he has been wholly successful in the proceedings and that ordinarily costs should follow the event, citing Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1.
In his submissions in reply, Edwin submits the “conduct of the testator” justification that Queenie sought to apply by analogy does not warrant departure from the ordinary rule that costs follow the event, and notes that whilst the Court has a broad discretion in relation to costs, the “conduct of the testator” has not been embraced as a reason for departing from the usual rule as to costs in family provision matters (DWS Costs Reply [2]-[4]).
In relation to the trust claim, Edwin submitted the following (DWS Costs Reply [5]-[10]):
“5. As to the trust claim, although not expressly pleaded, the Plaintiff’s reliance on Rochefoucauld v Boustead [1897] 1 Ch 196, necessarily involved an allegation of the Plaintiff’s fraud. Even in a Probate claim, the ‘conduct of the testator’ as an exception to the usual rule as to costs is overtaken by other considerations where an unsuccessful allegation of undue influence or (equitable) fraud is made. Unsuccessful allegations of that kind will usually be followed by condemnation in costs: Becker v Public Trustee of NSW [2006] NSWSC 1146 at [13] to [19]; [41] to [46] (not disturbed on appeal Trustee for the Salvation Army (NSW) Property Trust & Anor v Becker [2007] NSWCA 136 at [125] to [136]). The present facts stand in stark contrast to those found in Schwanke v Alexakis [2024] NSWCA 118 at [328] to [331].
6. Having regard to the Court’s findings in the Judgment, there was no reasonable basis for the Plaintiff to make an allegation of fraud.
7. Upon registration of the Transfer, the Plaintiff obtained an indefeasible title: s42(1) Real Property Act 1900 (NSW). The Transfer which is registered takes effect as a Deed: s36(11) Real Property Act 1900 (NSW). Receipt for consideration in the body of the Deed shall be a sufficient discharge: s39(1) Conveyancing Act 1919 (NSW).
8. Contrary to the Plaintiff’s submission at para [16] of the Plaintiff’s Costs Submissions, no further written memorandum or document setting out the deceased’s intention was necessary. The Plaintiff had the burden of establishing a trust. The lack of evidence of words or conduct establishing a trust at the time of the transaction or so close in time to the transaction to be considered part of it should have been clear.
9. In any event the Court found the deceased mentioned the Henry Street Property in the Will Instructions Conference in the manner that the Defendant describes in his affidavit: J[204]-[206]. In view of the findings the Court did make, there is no room for a finding the deceased was the cause of the litigation.
10. Contrary to the Plaintiff’s submissions at Plaintiff’s Costs Submissions para [13], the Court did not and should not accept the deceased told Queenie that Edwin held the unit on trust. Apart from anything else, para [36] of Plaintiff’s affidavit did not refer to a trust, it did not refer to any agreement with the Defendant, it did not say when the conversations took place, and the evidence referred to took the matter nowhere: J[116] - [119].”
I accept Edwin’s submission that he has been wholly successful in the proceedings and that costs should follow the event (per UCPR r 42.1). Having regard to the submissions made on this issue by Queenie, and by Edwin against those submissions, it does not appear to the Court that some other order should be made.
More specifically, I do not accept the submission of Queenie that her costs should be paid out of the estate, for the following reasons.
First, I do not accept that the deceased was the cause of the litigation, given the findings I have made in the Principal Judgment (particularly, at PJ [204]-[206], as referred to by the Edwin at DWS Costs Reply at [9], quoted at paragraph [32] above). I accept Edwin’s submissions on this issue.
Second, I do not accept that the “conduct of the testator” principle, which could otherwise justify a plaintiff receiving her costs out of a deceased’s estate, should apply by analogy to the context of these proceedings, as Queenie sought to do. The principle could not apply directly: these proceedings were not about the validity of the deceased’s will.
The main issue was whether the Henry Street Property was subject to a trust in favour of the deceased. I emphasise that this dispute was not about the deceased’s will itself. It was about an alleged trust relationship that existed between Edwin and the deceased.
It is not apparent to the Court that it would be appropriate to extend the “conduct of the testator” principle by analogy to a dispute such as the present. There is no evident principled justification for such an extension of the principle beyond its existing scope. To the extent the Court could properly consider the long bow of the “analogy” proposed by Queenie, she provided no authority for such an analogy having been accepted by any other Court in similar circumstances.
I am of the view that the terms of the Slattery J Costs Notation are consistent with the general approach of the Court, which is reinforced by PN EQ 7 [41], on the issue before it in these proceedings. To the extent the parties may have thought otherwise, the parties have been on notice of this since at least 4 March 2025, being the date of the Slattery J Costs Notation. I note that no party referred to, or otherwise acknowledged, the notation in any of their written submissions (albeit PN EQ 7 [41] was cited by Queenie).
On this issue, I have concluded that the burden of the costs that Queenie is to pay are to be paid by her personally.
“The offer is open for acceptance until 5:00pm on 8 August 2025.
The Defendant offers to compromise the claim by accepting the entry of orders and notations to the following effect:
1. Orders, pursuant so 59 of the Succession Act 2006 (NSW), in addition to the provision made for the Plaintiff in clause 3(b)(1) of the will dated 14 August 2023 of Elisa Lai Sum Wong (‘the deceased’), the plaintiff receive a lump sum of $100,000 (‘the lump sum’) out of the estate of the deceased.
2. Order that the lump sum paid to the Plaintiff be paid out of the Defendant’s entitlement to one half of the real and personal estate of the deceased given to him in cl 3(b)(2) of the Will of the deceased.
3. No order as to the Plaintiff’s costs to the intent that she will bear her own costs of the proceedings.
4. No order as to the Defendant’s costs to the intent that he will bear his own costs of the proceedings.
5. Orders the Statement of Claim filed 28 October 2024 otherwise be dismissed.”
Queenie referred to the decision of Bates v Cooke (No 2) [2014] NSWSC 1322 (Bates) (per Kunc J) which was said to contain a summary of matters to be taken into account by the Court when deciding whether to “order otherwise” when an application was made for a special costs order on the basis that a party had failed to accept an offer of compromise.
I do not accept that Bates is an appropriate case to guide my discretion in this matter, given that the circumstances in B**ates were such that there was no dispute between the parties that the offer made in the case was an offer of compromise made in accordance with UCPR Part 20, r 20.26 (Bates at [5]). In the matter before me, it will be the principles in relation Calderbank offers that apply as opposed to those offers of compromise made under the UCPR, accepting that there is some level of overlap between them. I accept the submissions made by Edwin as to the appropriate principles to be applied in this context (see below).
In relation to the facts of this case, Queenie stated (at PWS Costs [19]):
“In this case the Executor, in making the offer, did not address adequately the central question in the litigation, whether, notwithstanding the fact that the Henry Street unit had been transferred to him without payment by him of any consideration, he held title to the property on trust for the deceased. In addition to that, the penultimate paragraph of the offer the executor refers to a cost-capping order allegedly made by Slattery J on 4 March 2025. Slattery J did not make any such order. His Honour only foreshadowed making such an order. Accordingly, the offer of compromise is predicated on a premise that does not exist. If the Court is to permit the defendant to rely on the offer of compromise made on 9 July 2025, it is submitted that it can only do so if any costs orders made include and order capping the costs as envisaged but not ordered by Slattery J.”
“[30] Turning to the first, as to the consequences of non-acceptance of a Calderbank offer, in Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 (Miwa) Basten JA (McColl and Campbell JJA agreeing) summarised at [8] the principles involved, noting that there were two questions, namely, whether there was a genuine offer of compromise and whether it was unreasonable for the offeree not to accept it. Whether a rejection of a Calderbank offer (or other offer of settlement) was unreasonable is an evaluative judgment to be made by reference to the terms of the offer and all the relevant surrounding circumstances (King Network Group Pty Ltd v Club of the Clubs Pty Ltd (No 2) [2009] NSWCA 204 at [11] per Young JA, with whom Hodgson and Campbell JJA agreed). It has been said that a finding of unreasonableness should not be made other than on clear grounds (Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 at [113] per Basten JA with whom Young CJ in Eq and Giles JA agreed).
[31] The factors to which regard is to be had when considering whether the rejection or non-acceptance of the offer was unreasonable (referred to in Miwa at [12]) include those identified in *Hazeldene’*s Chicken Farm Pty Ltd v WorkCover Authority (Vic) (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25] per Warren CJ, Maxwell P and Harper AJA, namely: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree’s prospects of success, assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it (see also Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (NSW) (No 2) [2020] NSWSC 519 (Favotto); Commissioner of State Revenue v Challenger Listed Investments Ltd (No 2) [2011] VSCA 398 at [8] per Buchanan and Tate JJA and Sifris AJA).
[32] Factors that have been found to be relevant in determining whether the rejection of a Calderbank offer was not unreasonable, and tending against such finding, have included: all relevant evidence not having been served at the time of the offer (Vale v Eggins (No 2) [2007] NSWCA 12 at [22] per Beazley JA, as her Excellency then was, with whom McColl JA agreed); the full parameters of the dispute remaining uncertain at the time of the offer (Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278 at [192] per Allsop P, as his Honour then was, Beazley and McColl JJA agreeing); the offeror’s case changing after the making of the offer (South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [85] per Hunt AJA, Mason P and McColl JA agreeing); the inclusion of conditions in the offer (Magenta Nominees Pty Ltd v Richard Ellis (WA) Pty Ltd (FCAFC, Spender, French (as his Honour then was) and Lee JJ, 29 August 1995, unrep)); and the issues in dispute in the proceedings being complex (MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236; [1996] FCA 862 at 242D per Lindgren J).”
Specifically in relation to the Calderbank Offer made, Edwin submitted that:
Queenie obtained a result less favourable than that offered (DWS Costs at [11]).
At the time of the Offer, Queenie had served all of her evidence, noting however that Edwin did serve further evidence both before and after the offer expired (DWS Costs at [13]).
There was an “element of speculation” about Queenie’s family provision claim. I understand the submission to mean that Queenie approached the family provision claim by considering whether the deceased intended that Edwin would get the Henry Street Property as well as half of the estate if the trust claim failed, which is speculative in circumstances where the evidence in relation to the trust claim itself “lacked substance from start to finish”. Edwin also referred to the failure of Queenie to specify what provision she sought, and that she had served no updating evidence (DWS Costs at [14]).
The Offer was a genuine compromise involving payment to Queenie of $100,000 in addition to the provision made to her under the Will, and with Edwin giving up his entitlement to an indemnity from the estate for his costs (DWS Costs at [15]).
The terms of the Offer were clear (DWS Costs at [15]).
The Offer was open for 30 days (DWS Costs at [15]).
The reference to Calderbank v Calderbank would have been understood as a reference to an intention to seek indemnity costs from the date of the offer if it was rejected and Queenie did not obtain a more favourable outcome after a hearing (DWS Costs at [15]).
I accept that the Calderbank Offer was a genuine offer of compromise, accepting, as Edwin submitted, that Queenie was to receive an additional lump sum of $100,000 and that the risk of an adverse costs order was removed in the proposed order by providing that each party bear their own costs (DWS Costs [11]).
However, I do not consider that it was unreasonable for Queenie to reject the Offer.
In this, I accept Queenie’s submission that the Calderbank Offer did not adequately address the central question in the litigation, which goes to the clarity of the offer. In the covering letter to the Offer, Edwin merely stated of the trust claim “The Defendant considers the Plaintiff’s [sic] has not established sufficient evidence to rebut the presumption of advancement”. The case as ultimately successfully defended by Edwin was far more extensive than this and, perhaps more importantly, the presumption of advancement issue was not ultimately one of the bases Edwin relied upon in his defence to Queenie’s claims. At [79] of the Principal Judgment, I ultimately considered that Queenie’s case was not one in which she pressed the Court to find that the presumption of resulting trust applied in this case. Whilst Queenie’s pleadings did not specify what kind of trust she was alleging, in the response to a request for particulars referred to at [67] of the Principal Judgment, Queenie’s solicitors signalled that Queenie would be intending to establish there was a common intention constructive trust. Accordingly, contending only that the presumption of advancement had not been sufficiently rebutted was only a partial answer to what Queenie’s case was at the time of the offer (even allowing for the vagueness of the pleadings).
Furthermore, and as implicitly conceded by Edwin, all of the evidence in the proceedings had not been filed by the time of the making of the Offer, nor by the time of the expiry of the Offer. It was the evidence of Edwin that came later, and so Queenie may well have considered that her case had higher prospects than it ultimately did at the time of when the Offer was made and then again when the Offer closed.
Further, the Offer did not explicitly foreshadow an application for indemnity costs in the event of the offeree’s rejecting it. The letter attached to the Offer simply states that it was made “in accordance with the principles of Calderbank v Calderbank [1975] 3 WLR 586”. If I am wrong and the reference to Calderbank v Calderbank was itself sufficient to signal Edwin’s intention to apply for an indemnity costs order if the Offer was rejected, then in the circumstances I consider that the intention itself was not clearly signalled. I therefore still consider that the way in which the foreshadowed application for an indemnity costs order was referred to ought to count against Edwin.
I observe that the covering letter which came with the Offer referred to the putative Costs Capping Order made by Slattery J that had not in fact made. In the circumstances where I have otherwise considered Queenie’s rejection of the Offer was not unreasonable, I do not think it necessary to consider how the incorrect reference to “orders” made by Slattery J affects my assessment of whether it was unreasonable for Queenie to reject the Offer in this case. Edwin conceded in his supplementary written submissions (DWS Costs Supp [8(a)]) that for any between-the-parties costs order, the putative Costs Capping Order referred to in the covering letter should nonetheless be given effect if I were otherwise minded to accept Edwin’s submissions. This is effectively a concession that the mistaken statement in the covering letter might have impacted Queenie’s consideration of the Offer, and that fairness to Queenie would justify it being given effect to as if it was a term of the Offer. Given that I have concluded that it was not unreasonable for Queenie to reject the Offer without having regard to the putative Costs Capping Order, Edwin’s concession does not change things.
More generally, I note that any finding of unreasonableness should not be made other than on clear grounds, and I am of the view that clear grounds have not been made out in the circumstances of this offer.
For those reasons, Edwin should not have an indemnity costs order in his favour because of Queenie’s rejection of the Offer.
Edwin claims he is “entitled” to his costs out of the estate pursuant to r 42.25 of the UCPR on the indemnity basis (DWS Costs [5], [7]). Whilst this a rule directed towards “trustees”, it is often relied on by executors when seeking payment of their costs out of the estate of a deceased person (see Fuda v Dawes (No 2) [2026] NSWSC 492 at [17]-[22]).
It was on this issue that I sought further submissions, namely the issue of “the defendant’s entitlement to payment of his costs out of the estate of the deceased”. In this, it will be recalled that the actual order for indemnity sought was an order that Edwin be indemnified from the estate for the amount of any of his costs that are not otherwise paid by Queenie.
“5. In those circumstances, the defendant was defending his own interest and maintaining that the Henry Street unit was not the subject of any trust, not held in trust by him in favour of his late mother and not held by him as an asset of the estate of his mother.
6. The defendant was not a party to the proceedings in the capacity of a trustee or executor but in his personal capacity defending himself against a claim that he held certain property on trust.
7. The plaintiff did not sue the defendant in his representative capacity. In his application for probate of the Estate of the late Elisa Lai Sum Wong the defendant did not list the Henry Street unit or the beneficial interest in the unit as an asset of the estate.”
In his supplementary submissions, Edwin referred to the principles relevant to the right of indemnity of a trustee as set out in Reeves v Reeves (No 2) [2024] NSWSC 386 (Reeves) at [87]-[103].
Edwin also sought to cast the trustee claim as being one against an executor, in that the trust component of the claim was that the executor had failed to call in an estate asset in the form of the Henry Street Unit (DWS Costs Supp [5]).
In relation to his role as executor, Edwin submits there has been no claim that he acted unreasonably in defending each claim (DWS Costs Supp [8]).
Edwin also submits that this is not a case where the trust issue was so dominant and separable that the executor should be deprived of the usual indemnity from the estate (DWS Costs Supp [8(c)]). Relevant to this submission, Edwin had earlier in his submissions referred to the principles relevant to apportionment of costs which had been summarised in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Beazley, Ipp and Basten JJA agreeing) at [38] and by Ward CJ in Eq in Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 at [7] (DWS Costs Supp [4]).
I agree with Queenie that Queenie’s claim was, “in essence”, a trust claim. In keeping with this, I do not accept the submission of Edwin that the trust issue was not so dominant that the executor should be deprived of the usual indemnity from the estate.
I am of the view the trust claim heavily dominated the proceedings, in terms of the evidence and submissions, and time spent in the hearing.
As explained earlier, I am of the view that, having regard to the evidence that was filed in the proceedings, time taken during the hearing, and focus of oral and written submissions, that the hearing of the family provision issue only occupied a small part of the time and resources devoted to the proceedings as a whole, which I have impressionistically estimated to have well below 10 percent (see [23] above).
I also accept the submission of Queenie that Edwin was acting in his personal capacity in his defence of the trust claim, for the reasons she had stated.
In his submissions Edwin referred to the decision of Meek J in Reeves which sets out the relevant principles in relation to the right of indemnity of a trustee, at [87]-[103] of that decision, which I accept to be the case, as far as it goes. However, I am of the view that paragraphs [268]-[272] of Reeves are of greater assistance to me in determining the real issues in dispute in this matter in relation to costs. Those paragraphs relate to the determination of a Court as to whether someone is acting in their own interests, as opposed to in a representative capacity, as here, where Meek J stated:
“[268] Having regard to the above-mentioned caselaw, the assessment of whether a party is acting in his or her own interest, as opposed to acting in a representative capacity, is:
(1) case specific, with the Court looking at the whole of the evidence in the case and all its circumstances, as well as the context surrounding the litigation: Cumming at [12]; Zupicic at [49], [54]; and
(2) approached substantively, with the Court looking at the reality of the circumstances, the quality of the ‘representative’s’ conduct and whether the conduct of the matter was ‘essentially’ in the party’s own interest and adversarial: Nowell at 581F-G; Cumming at [12]; Nadilo at [38], [40]; Zupicic at [40], [43]-[44], [54].
[269] Factors that have led judges to conclude that a party is acting in his or her own interest, as opposed to acting in a representative capacity, include the following:
(1) the representative is the sole beneficiary, or the main or substantial beneficiary, of the estate or the disputed property: Nowell at 581F-G; Nadilo at [36];
(2) the purpose of the representative’s claim or defence was intended to produce a personal benefit: Drummond at [66];
(3) the estate has been distributed to the beneficiary who has purported to deal with such property in his or her own right: Nowell at 581F-G;
(4) the representative seems to have personal knowledge of the relevant facts underlying the dispute, and provides instructions to counsel to challenge the opposing party’s evidence on the basis of that knowledge: Nadilo at [36]-[37];
(5) the party’s role in the litigation goes far beyond merely defending the integrity of the deceased’s Will: Zupicic at [40]-[44]; and
(6) the party’s conduct is active and adversarial, even if not dishonest or spurious: Zupicic at [55].
[270] Where the Court concludes that a party is acting in his or her own interest, the claim to indemnity out of the estate may be denied and the Court may proceed on the basis that the cost outcome should be treated no differently than ordinary adversarial litigation: e.g. Cumming at [12]; Zupicic at [36], [39].
[271] Specifically, the fact that the party seeking the indemnity claims (a) to be upholding the Will of the deceased and ensuring that the testamentary intentions of the deceased are honoured, (b) not to have personal knowledge of the relevant facts which occurred decades ago and (c) that there is no objective or independent evidence upon which to assess the worth of the claims on the estate, will not necessarily preclude a finding that the party is acting in his or her own interest: Nadilo at [36]-[37].
[272] In Zupicic, examples of the executrix’s role in the litigation going far beyond defending the integrity of the deceased’s Will included submitting that the deceased did not make the alleged representations or promises to the plaintiff, denying in cross-examination the plaintiff’s account of events and criticising the plaintiff’s evidence as unacceptably vague as to any reliance or detriment of the plaintiff as a result of the deceased’s promises, thus contesting key elements of the plaintiff’s equitable estoppel case: Zupicic at [40]-[43].”
Of course, there is no doubt that Edwin’s defence of the family provision claim was in his capacity as executor. However, as already noted above, this aspect of Queenie’s claim was near invisible.
Given I consider that Edwin was acting in his personal capacity in defending the trust claim, and that I accept that he was defending the family provision claim in his role as executor, I consider this raises the question of whether I ought to separate the costs incurred in relation to the trust matter from those arising from the family provision claim, and make an order that Edwin be permitted to indemnify himself out of the estate for the costs associated with Edwin’s defence of Queenie’s family provision claim that are not covered by Queenie.
Perhaps Edwin considered this possibility in his supplementary submissions in referring to the legal principles going to apportionment of costs (DWS Costs Supp [4]).
In Campbelltown Central 2 Pty Ltd v Chief Commissioner of State Revenue (No 2) [2026] NSWSC 305 (Campbelltown) I considered the issue of apportionment of costs in the context of proceedings where there had been separate issues, and stated the following (at [39]):
“[39] It is well established, and the Taxpayers did not suggest otherwise, that while the general approach is to order costs in accordance with the outcome of proceedings as a whole, the costs of proceedings may be ordered by reference to the determination of different issues: Avopiling Pty Ltd v Bosevski (2018) 98 NSWLR 171; [2018] NSWCA 146 at [172] (Payne JA, McColl and White JJA agreeing). The principles governing such a costs order were recently summarised and elaborated on by the Court of Appeal (Bell CJ, Payne JA and Basten AJA) in Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd (No 2) [2024] NSWCA 274 (Michael Hill (No 2)) at [17]-[22]:
‘[17] It remains to consider the respondent’s motion seeking to vary the order as to the costs of the appeal so that it pay only 50% of the appellant’s costs. The basis of that application is that there were separate or severable issues on which it was successful.
[18] The applicable principles were stated by this Court in Elite Protective Personnel Pty Ltd v Salmon (No 2) [[2007] NSWCA 373 (Beazley, McColl and Basten JJA)] in the following terms:
“6 Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. Unless a particular issue or group of issues 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 on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).
7 As the appellants submit, the commencing position is that costs follow the event so that a successful party is entitled to costs. In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 (at [24]). A similar approach is adopted in the Court of Appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 (at [27]).
8 Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 (at [18]) per Hislop J (with whom Beazley JA and Tobias JJA agreed).”
[19] These principles have subsequently been applied in many cases and were restated in Bostik Australia Pty Ltd v Liddiard (No 2) [[2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA)].
[20] The phrase “dominant or separable” should not be applied as if it were a statutory test. It involves two concepts, each of which should be treated flexibly. Most cases will involve multiple issues and one expects a judgment to be structured accordingly. A number of issues may arise from a common factual basis, so that it is difficult to disentangle them. Further, disentanglement may work at different levels. One issue may be entirely separate from others, and thus truly separable. On the other hand, it may not be possible to state a fraction of the time taken in preparation, or presentation at trial, of that issue. For that purpose, it may not be sufficiently dominant to warrant separate treatment in relation to costs.
[21] The term “separate treatment” is itself imprecise. Such treatment may involve a separate costs order. For example, in a civil claim for damages, where liability is established but the claimed loss is not, separate orders may be made as to liability and damages. On the other hand, the distinction may not be so clear, but the court may be able to satisfy itself that the length of a trial would have been reduced by a significant proportion of the time and resources devoted to it had a particular matter not been raised. Again, a 10% reduction might suggest that the issue was not sufficiently dominant to warrant a variation of the usual order. In the case of an appeal which has been completed within a single day, some adjustment to the usual costs order would, in many cases, not be appropriate unless the issue were so clearly separable that the resources devoted to its preparation could readily be identified and allowed for. Often the exercise will require a degree of speculation, or explanation based on a reassessment of the parties’ preparation, which is either not warranted or is inappropriate. While accepting the importance of costs for the parties, the Court should be wary of encouraging satellite litigation with respect to the precise nature of a costs order. In Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin (No 2) [[2021] NSWCA 98 (White JA, Basten and Macfarlan JJA agreeing)], a case discussed in relation to the costs of the trial, an issue which was treated as clearly separable, but involved a low proportion of the outcome on the appeal, did not lead to a reduction of the costs of the appeal, but, conversely, did affect the order for the costs of the trial.
[22] Furthermore, while a successful party may be deprived of costs, either in part or in whole for misconducting litigation, generally it would not be appropriate to deprive a successful party of costs of claims or defences which were not unreasonably maintained, even if not made good. Nor should the parties be discouraged from seeking settlement on the basis that adverse costs orders may be limited by the unsuccessful party winning some points but losing the game. Indeed, there is also a risk that there will be demands on the Court to resolve all issues, where that is not necessary to dispose of the proceedings, so that the unsuccessful party can seek to reduce the expected adverse costs order. Nor is it insignificant that the parties exchanged offers of compromise intended to dispose of the proceedings on a global basis.’”
I set out the principles in relation to the apportionment of costs between different issues in Campbelltown in relation to a different issue to that being considered here. Nonetheless I still consider the principles to offer some guidance when a court is contemplating making different costs orders in relation to separate and severable claims. For example, I consider that, in principle, the Court’s wide costs discretion would permit the Court to make an order for an executor to be permitted to be indemnified out of the estate for one part of a claim, but not for another. Whether such an order ought to be made would seem to depend partly on whether one or more issues are dominant and separable, thus requiring the invocation of the principles I set out in Campbelltown at [39], as quoted above.
However, I propose to make the costs order on a global basis. To the limited extent the family provision claim was advanced by Queenie, as Edwin himself recognised in DWS Costs at [14], there were facts common to both claims (acknowledging the greater temporal focus of Queenie’s trust claim). Edwin’s own submissions at [14] of DWS Costs recognise that the trust claim was entangled with the family provision claim because Queenie framed the family provision claim by considering whether the deceased intended that Edwin would get the Henry Street Property as well as half of the estate if the trust claim failed. It is evident then the trusts claim is not separable from the family provision claim. As already stated, there was very limited time devoted to Queenie’s family provision claim. The costs order I will make, awarding costs on a global basis, will recognise that Edwin was essentially and predominantly acting in his own interests in these proceedings and that he is not entitled to any indemnity out of the estate.
Edwin did refer, at DWS Costs Supp [2] and [8(c)], to the fact that Queenie’s pleaded case initially also sought an order revoking the grant of probate to Edwin and the appointment of an administrator, a claim which was only abandoned at the hearing. I do not accept the contention that this aspect of Queenie’s pleaded case changes matters. While I can accept that formally the probate issues appeared to be live until the hearing, no time was spent on the issue before the claim was abandoned. Edwin also made no submissions to suggest that particular work had gone into responding to the probate claims that was separate from the work done in responding to the trust and family provision claims, nor that so much separate work was done that it justifies separating out the costs of the probate issues from the other issues. I am therefore not satisfied the probate issues pleaded by Queenie provide any residual justification for Edwin to have his costs out of the deceased’s estate.
While I acknowledge Slattery J’s second notation made on 4 March 2025, I do not consider it appropriate to make a costs capping order myself. Edwin and Queenie submitted I should proceed as if the costs capping order had been made if otherwise minded to give effect to the Calderbank Offer. Consideration of whether to proceed on that basis would only be necessary if I was otherwise minded to make a special costs order as sought by Edwin to give effect to the Calderbank Offer. I have determined I will not do that. More generally, each of Queenie and Edwin have at all times been legally represented in these proceedings. To the extent one party or the other was minded to make an application for actual cost capping orders to be made, it was open to them to do that. Those steps were not taken in these proceedings. I am not minded to make an order of my motion.
For the reasons set out above, I make the following orders:
The plaintiff is to pay the defendant’s costs, on the ordinary basis.
The defendant, as executor, is entitled to pay any costs payable by the plaintiff to the defendant, in his personal capacity, pursuant to Order 1 from the plaintiff’s interest in the residuary estate of the deceased.
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Gardiner
Wong (No 2)
[2026] NSWSC 492
[2026] NSWSC 421
[2011] VSCA 398
(2024) 116 NSWLR 273
(2005) 13 VR 435
(2008) 74 NSWLR 102
(1996) 70 FCR 236
(2018) 98 NSWLR 171