Le v Angius; Angius v Angius

Offers of compromise

1. In the proceedings brought by Ms Le, a number of offers of compromise passed between the parties: 1. By letter dated 1 December 2022, Ms Le made an offer to the Estate to compromise the proceedings by way of a payment to her of $8 million and the transfer of title to Shop 3. By a letter dated 5 December 2022, the Estate rejected the offer and made a counter offer with a total value of approximately $532,897 plus an amount in respect of the costs of Ms Le's senior counsel. The letter of 5 December 2022 set out detailed reasons why the claim she was the deceased's de facto partner was not accepted and why the quantum of her claim was also rejected. The offer lapsed without acceptance. The result achieved by Ms Le was better than this offer. 2. By a letter dated 2 August 2023, the Estate made a Calderbank offer to settle the proceedings for a payment of $1,175,959.58 and a transfer of title to Shop 3. The result achieved by Ms Le was less favourable than this offer. This offer was rejected by a letter from Ms Le's solicitor's dated 11 August 2023, which made a counter offer for a cash payment of $7 million and the transfer of title to Shop 3. 3. By a letter dated 22 August 2023, the Estate made an offer of compromise expressed to be made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) (or alternatively to operate as a Calderbank offer) to settle the proceedings for payment to Ms Le of a lump sum of $2.5m, with the plaintiff's costs to be paid out of that amount. This offer was rejected on 30 August 2023. If accepted this would have been a significantly better outcome than the plaintiff achieved in the Judgment. 4. On 7 October 2023, the Estate offered Ms Le (through her senior counsel) to settle the proceedings for a payment of $1,800,000 and the transfer of Shop 3. If accepted this offer would have been a significantly better outcome than Ms Le achieved in the Judgment. This offer was rejected later that day. 5. On Monday, 16 October 2023 (during the hearing), Ms Le through her senior counsel, made an offer to settle the proceedings for a payment to her of $5 million in cash, the transfer of the Shop 3, $750,000 in respect of costs, retention of the sums paid by way of interim provision and the discharge of existing costs orders. This offer was rejected later that day.
2. The legal costs of Ms Le as at 2 August 2023, 22 August 2023 and 7 October 2023 were $422,068, $454,488 and $597,629 respectively, and as at 7 September 2024 were $1,191,555. The Estate submitted that a significant portion of these costs will not be recoverable on an assessment of costs, but accepted that this does not have a bearing on this application.
3. In the proceedings brought by Natalie, the following offers of compromise passed between the parties: 1. By letter dated 15 September 2023, the Estate made a Calderbank offer to Natalie to settle proceedings for a legacy of $100,000 from the Estate with the plaintiff to bear her own costs. This offer was to remain open until 5pm on Tuesday, 19 September 2023. The offer lapsed without acceptance. 2. On 22 September 2023, Natalie's solicitor served an offer of compromise on the basis that the Estate pay her the sum of $1 million. It was expressed to be made in accordance with r 20.26 of the UCPR (or alternatively to operate as a Calderbank offer) and to expire in one week's time (by 5pm on 29 September 2023). This offer lapsed without acceptance.
4. Natalie's legal costs at the date of the Estate's offer exceeded $100,000. The evidence does not indicate the amount of her costs at the time of her offer. I note that the updating affidavit of her solicitor of 29 September 2023 estimated her costs up to an including the completion of the hearing to be $350,000 including GST.

Relevant principles

1. There is no dispute that the Court has a wide discretion when making orders as to costs: Civil Procedure Act 2005 (NSW), s 98(1). Although broad, the Court's discretion must be exercised judicially: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] (McHugh J).
2. The usual order is that costs follow the event and are payable on the ordinary basis: UCPR, r 42.1, r 42.2. This applies to family provision matters: see eg. Haertsch v Whiteway (No 2) [2020] NSWCA 287. The usual order 'embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour': Oshlack at [67] (McHugh J). The 'event' may be characterised in more than one way, but generally refers to the result of the claim or counter claim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15].
3. Section 99 of the Act confers a further discretion on the Court to order that costs in family provision applications be paid out of the estate or notional estate in such manner as the Court thinks fit. As noted by Ward CJ in Eq (as her Honour then was) in Karpin v Gough (No 2) [2022] NSWSC 682 at [14], it is not uncommon for the reasonably incurred costs of all parties in cases of this kind to be paid out of the estate.
4. The operation of the general rule that costs follow the event and are assessed on the ordinary basis is qualified by Part 20 of the UCPR, r 20.26 which provides for the making of offers of compromise which comply with that rule (rules offer). In the case of an offer made less than two months before the hearing date, the closing date for acceptance must be 'such date as is reasonable in the circumstances': r 20.26(5)(b). Under r 42.14, where a rules offer is made by the plaintiff but not accepted by the defendant and the plaintiff obtained an order no less favourable than the terms of the offer, then unless the court otherwise orders, the offeror is entitled to an order for costs on the indemnity basis from the day after the offer was made (in circumstances where it was made before commencement of the trial) and the ordinary basis for costs incurred before that time.
5. The making of an offer of compromise which is a Calderbank offer rather than a rules offer is one of the circumstances in which the Court may exercise its discretion under r 42.1 to make some order other than costs following the event on the ordinary basis. The making of a Calderbank offer does not automatically result in a favourable costs order, notwithstanding that the judgment is more favourable to the party making the offer than the terms of the offer.
6. The onus is on the party making a Calderbank offer to satisfy the Court that it should exercise the costs discretion in its favour, in particular that (a) the Calderbank offer embodies a genuine compromise and (b) it was unreasonable for the other party not to accept it, which is an evaluative judgment to be made by reference to the terms of the offer and all the circumstances at the time that the offer was made: Wheatley v Lakshmanan (No 2) [2022] NSWSC 851 at [97]-[99].
7. Relevant factors in determining whether the rejection of an offer was unreasonable include (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed at the date of the offer; (e) the clarity with which the terms of the offer were expressed; and (f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it: Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25]; Wheatley at [98].
8. The practice of treating Calderbank offers in this way is informed by the public policy objective of providing an incentive to the parties to end their litigation as soon as possible and discouraging wasteful and unreasonable behaviour by litigants: Commonwealth Bank of Australia v Gretton [2008] NSWCA 117 at [41]. However, the mere fact that the offer is a reasonable one does not make it unreasonable for the offeree to have rejected it: Gretton at [74] and [120].
9. 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 costs: Chandrasekaran v Western Sydney Local Health District (T/A Westmead Hospital) (No 2) [2024] NSWCA 21 at [12]; Gretton at [121] per Hodgson JA (Mason P agreeing at [1] and Beazley JA agreeing at [91]).
10. While generally the impecuniosity of a party is irrelevant when exercising the costs discretion, a more relaxed position applies in family provision cases, where the Court exercises a greater degree of 'liberality and discrimination' than usual in deciding whether to depart from the usual rule: Haertsch at [6]. The main reasons for that more liberal approach are that the impecuniosity of the unsuccessful applicant may in some circumstances be a relevant matter (in contrast to other types of proceeding) and that family provision claims are often decided on difficult evaluative and discretionary judgments: Haertsch at [7], [9] and [11].
11. In Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 at [141] Barrett JA (Gleeson JA agreeing) made the following observations regarding the principle that impecuniosity is generally not relevant to costs: That general principle may be subject to some relaxation in family provision cases by application of "liberality and discrimination" - but only, I think, where the claim, although ultimately unsuccessful, had merit and involved a genuine question whether the scheme of testamentary benefaction in fact applying was, in the particular circumstances, one reflecting community standards. In Jvancich v Kennedy (No 2) (above), Giles JA recognized an analogy, as to costs, between family provision cases and probate proceedings. He noted that, in probate cases, departure from the rule that costs follow the event is often recognized as appropriate where the testator has been the cause of the litigation - where, for example, the will is ambiguous. In such cases, the costs of unsuccessfully opposing the executor may be ordered to be paid out of the estate. It may be said, in the same way, that if the testator has been the cause of family provision litigation by failing to make some disposition that he or she arguably should have made in accordance with community standards, the costs burden should fall on the estate, even if the ultimate decision of the court does not accommodate that disposition.

Ms Le's submissions

1. Ms Culkoff, appearing for Ms Le, submitted that the appropriate costs order is the one indicated at Judgment [436], that Ms Le's costs on the ordinary basis are to be paid out of the Estate. While the offers made by the Estate on 2 August 2023, 22 August 2023 and 7 October 2023 each bettered the quantum of the family provision order made in her favour, it is necessary for the Estate to demonstrate that the offers were unreasonably rejected by Ms Le and even if that onus is discharged, that does not mean that the defendant is automatically entitled to indemnity costs or any costs.
2. Any indemnity costs order in favour of the Estate is likely to leave Ms Le with a zero entitlement, bearing in mind the costs incurred after the offers were made and as at 7 September 2024, noted earlier.
3. Ms Le submitted that in rejecting the Estate's offers she reasonably took into account: (a) the objective evidence, including recordings, various AVOs, letters from the solicitors for Laura and Robert, Laura's statements to Waverley local Court, and the statements made to her by Gabrielle that she should engage a family provision lawyer and that 'No one's gonna go to court'; (b) the evidence of her lay witnesses whose observations were that she was in a de facto relationship with John, with two believing she and John had secretly married and identified Ms Le in their phone records as 'Le Angius'; (c) recordings of her conversations with the deceased where he did not deny that she was entitled to be left a legacy under his will; (d) her strong belief that she was in a committed de facto relationship with the deceased and cared for and loved him for 19 years, up to the date of his death; and (e) the significant value of the Estate.
4. If the costs order suggested by the Court is not made, and if an indemnity costs order against her is made in favour of the defendant, this will have a very detrimental effect on her financial position. It will not only leave her with a zero amount based on the evidence, but it will probably result in bankruptcy, based on the legal costs she has incurred. That is not an outcome that the deceased would have wanted, bearing in mind that he gave instructions to Mr Devine for Ms Le to be appointed jointly with Natalie as his attorney and enduring guardian. While the detrimental effect on the plaintiff's financial position may not alone be determinative, it is a relevant factor in determining the overall interests of justice and fairness.
5. It was submitted that while the Estate's offer of 22 August 2023 was stated to be a rules offer, it did not comply with r 20.26(2)(c) and accordingly was to be treated as a Calderbank offer. This was not in dispute (T3.43).

The Estate's submissions

1. Ms Painter SC, appearing for the Estate, submitted that the appropriate orders were: (1) that Ms Le's costs to 2 August 2023 on the ordinary basis as agreed or assessed be paid out of the Estate; (2) Ms Le to pay the Estate's costs on the indemnity basis, as agreed or assessed, from 3 August 2023, the day after the Estate's offer of 2 August 2023, and (3) the Estate's costs (not covered by (2)) be paid out of the Estate. The Estate's offer of 2 August 2023 would have delivered to Ms Le about $1 million more (in cash) than she actually received.
2. It was submitted that the offer of 2 August 2023 was received by Ms Le at a time when the evidence had closed, and she was in a position of having all the evidence on which the Estate relied. All of her evidence (bar an updating affidavit of 29 September 2023 and the affidavits which were proffered as supplementary evidence during the course of the hearing) was on. All of the Estate's evidence (bar updating evidence) was on. Ms Le and her legal advisers had, or ought to have had, a very clear understanding of the opposing case which had been explained in the Estate's letter dated 5 December 2022. At all times Ms Le was on notice that her claim to be the deceased's de facto partner was denied, and strenuously denied, by the deceased's daughter and granddaughter. The factual basis of their denial was crystal clear - their position was that Ms Le did not live with the deceased in a de facto relationship and that she had never lived with the deceased in a de facto relationship. There could not have been any doubt in Ms Le's mind that her claim to be the deceased's de facto partner was challenged and that that issue would be the primary issue for determination by the Court.
3. The sums demanded in Ms Le's various offers bore no relationship to her actual needs. She had no need to live in Coogee, she had given up her secure tenancy in furtherance of her intention to live with the deceased during the last six months of his life and save for that precipitous move on her part, had no need for secure housing which she already had had for many years. In any event, the provision appropriate for a person claiming to be in a close personal relationship is not geared towards the acquisition of secure housing but is much more modest in scope. Ms Le's approach to the litigation was not to secure a lifestyle the deceased had accustomed her to living, but demonstrably to secure for herself a significant uplift in living standards and a financial windfall. That is properly characterised as the conduct of commercial litigation, and is subject to the usual risks of litigation, including failure.
4. The evidence addressing Ms Le's inability to satisfy a costs order is not a relevant factor: Karpin v Gough at [30].
5. In all of the circumstances, it is appropriate to order that Ms Le be responsible for costs attributable to the Estate's defence of her proceedings on the indemnity basis from 3 August 2023. Alternatively, the Estate relies on the further offers made on 22 August 2023 and 7 October 2023 on the basis that they were also unreasonably rejected by Ms Le.

Consideration

1. The Calderbank offer of 2 August 2023 was a genuine offer of compromise. The evidence discloses that the offer would have left Ms Le with Shop 3 and approximately $753,891 after payment of her own costs.
2. The defendant has the burden of establishing that it was unreasonable for Ms Le to have rejected the offer. In considering that question, I will first address each of the matters referred to [16] above.
3. As to (a) (the stage of the proceeding when the offer was made), the evidence had closed and all the evidence for Ms Le and the Estate (except for updating affidavits) had been served. It can be said that Ms Le had a clear understanding of the Estate's case against her.
4. As to (b) (the time for acceptance), the offer allowed Ms Le four weeks to accept the offer which was an adequate time.
5. As to (c) (the extent of compromise), the offer would provide her with a real benefit but against this it can be said that if she had succeeded in her claim that she was in a de facto relationship with the deceased, the benefit she received would likely have been significantly greater.
6. As to (d) (the offeree's prospects of success), it is necessary to make an assessment of what would have been a reasonable view of Ms Le's prospects of success at the time the offer was made, without the benefit of hindsight. In my view, while she was unsuccessful in establishing that she was in a de facto relationship with the deceased, it cannot be said that at the date of the offer she had no prospects of success in that contention or that it was unreasonable for her to bring her claim on that basis. That question turned on findings of fact based on a substantial body of evidence. While the evidence relied on by Ms Le was challenged by this date, there was evidence in support of her claim which made it reasonable for her to consider that she could succeed if that evidence was accepted. Ultimately, the resolution of the question turned on factual findings made on a review of all the evidence before the Court.
7. As to (e) and (f), the offer was clear and foreshadowed an application for indemnity costs. While the offer did not expressly refer to the Estate's earlier letter of 5 December 2022 which set out the Estate's position on her claim, nevertheless Ms Le was in no doubt that the nature of the matters put against her were set out in that earlier letter. However, for the reason given above, it can be said that the position put by the Estate did turn on disputed questions of fact and as noted above, I do not regard it as unreasonable for her to have considered that the evidence on which she relied should be preferred.
8. Taking into account all of these matters, but particularly (d), in my opinion it was not unreasonable for Ms Le to have rejected the 2 August offer. I do not regard the position as any different for the later offers on 22 August 2023 and 7 October 2023.
9. More generally, I consider that this conclusion is also supported by three considerations which inform the exercise of the costs' discretion in the present case and indicate that the fair and just outcome is that the Estate should not recover indemnity costs against Ms Le. First, while Ms Le failed on one part of her claim, the existence of a de facto relationship, it was not without merit. In addition, the question of whether and what provision should be made to her if she was an eligible person turned on a difficult evaluative judgment by the Court, which is a relevant matter in the exercise of the costs discretion: see [19] above. Second, if she does not receive her costs out of the Estate on the ordinary basis, the benefit of the Judgment will be largely undermined. That would be inappropriate in circumstances where the deceased can be seen as the cause of the family provision claim brought by her, due to his failure to make any provision for her in his will: see [20] above. This was in circumstances where, on the evidence, I was satisfied that he recognised she had a claim to his testamentary bounty (Judgment [388]). Third, the Estate is sufficiently large that the costs order in her favour will not adversely affect other beneficiaries, including the defendant.
10. Ms Painter SC did not contend that if the defendant failed to discharge her onus of establishing that rejection of the relevant offer(s) was unreasonable, some other order should be made than the one I suggested in the Judgment at [436]. In all the circumstances, for the reasons given above, in my view the appropriate order as to costs is that Ms Le receive her costs out of the Estate on the ordinary basis, as agreed or assessed.

Natalie's submissions

1. Mr Pesman SC, appearing for Natalie, submitted that the appropriate orders were that her costs be paid out of the Estate on the ordinary basis up to 22 September 2023 and on the indemnity basis from 23 September 2023.
2. The basis on which those orders are sought is Natalie's offer, the effect of which, if accepted, would have been a judgment in her favour of $1 million. She obtained a judgment very substantially more favourable to her than the offer. As a consequence, the plaintiff is entitled to indemnity costs from the day following the offer: UCPR r 42.14; LCM Operations Pty Ltd v Robah Enterprises Pty Ltd (No 3) [2023] NSWSC 869 at [41]-[56].
3. It was submitted that there was no lack of clarity as to the plaintiff's situation in late September 2023, when the offer of compromise was made, which was about a month prior to the hearing. Natalie's principal affidavit was served in April 2023, and there can have been no doubt as to the existence or severity of her MS from that time (that being the principal basis on which a need was asserted). The expert medical evidence was served on 14 and 19 September 2023, prior to the making of the Natalie's offer which confirmed Natalie's medical issues, and none of that evidence indicated new conditions.
4. It was submitted that the fact that Ms Le had made a claim for provision of $8 million has no relevance to the Estate's assessment of Natalie's offer, given the size of the Estate and that at no stage did the defendant put in issue her personal circumstances or allege any competing need. Insofar as the Estate complains that it had no opportunity to seek its own medical evidence, Natalie's offer was not the subject of any response at all, let alone any request that it be extended while the additional medical evidence was considered. To the contrary, the only offer made by the Estate to settle this claim was a Calderbank offer made on 15 September 2023 (a week before Natalie's offer) and open for only four days, and as that offer was inclusive of costs, had it been accepted she would have received nothing.

Estate's submissions

1. Ms Painter SC submitted that the critical function of formal offers of compromise is the requirement, encapsulated in UCPR r 20.26(5), that where an offer is made within two months of the hearing date, the closing date for acceptance must be 'such date as is reasonable in the circumstances'. Natalie's offer was within two months of the hearing date and the closing date for acceptance of 29 September 2023 was not a date reasonable in the circumstances. First, the offer was open only for five business days and at a time when the plaintiff's case was expanded by the service of a raft of medical and other reports (as well as additional lay affidavits), all well out of time and without leave. These reports were directed to the plaintiff's health - an obvious and necessary factor to be addressed in the course of her evidence and which would necessarily have been apparent as an essential element to be proven from the commencement of her proceedings. There was no adequate explanation for the plaintiff's failure to file and serve such evidence in accordance with the case management orders made by Hallen J on 5 April 2023.
2. Second, the obvious and inevitable outcome of the late service of reports and affidavits was to deny the Estate the ability, within the short time envisaged by the offer, to assess the import and impact of the new evidence, all within the competing demands of final preparations for the upcoming hearing.
3. Third, in the week of 25 September 2023 (being the week in which the offer was open) the Estate was gearing up to finalise objections to evidence (keeping in mind the significant number of affidavits in the two proceedings which were to be heard together) which were due on 3 October 2023 as well as written submissions due on 5 October 2023.
4. It was submitted that the following observations of Basten JA (Giles and Tobias JJA agreeing) in Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 85 at [20] are apposite: In considering whether the time allowed for acceptance is "reasonable in all the circumstances" once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.
5. As to the first of three factors identified in this passage, the late service of the medical and other reports meant that the Estate could not be expected to have, and did not have, a clear perception of the strength or weakness of her position because the Estate had not been afforded a reasonable period to review and have assessed by other practitioners the contents of those reports. As to the second, significant costs were accruing on a daily basis in both proceedings given the preparations for the hearing and the short time until the hearing commenced. As to the third factor, there was insufficient time in all of the circumstances to address the terms of the offer, receive and provide advice and obtain instructions, within the context of final preparations of the hearing involving two plaintiffs and dozens of affidavits over both sets of proceedings (Ms Le was relying on 24 affidavits and, leaving aside the medical reports, Natalie was relying on 14 affidavits).
6. In all the circumstances of the case, the late service of critically important medical evidence and other lay evidence, the inability of the Estate to have that specialist medical evidence reviewed and assessed and to receive advice concerning it, as well as the lack of time within the self-selected narrow timeframe for acceptance, all occurring within the context of last-minute preparations for a demanding case brought by two plaintiffs with completely separate cases and an unusually high number of witnesses, the date for acceptance of the offer was not reasonable.
7. As a consequence, the offer did not comply with the rules and operates as a Calderbank offer. It was not unreasonable for the Estate to reject the offer for essentially the same reasons. The appropriate order in the case of Natalie's proceedings is that costs should be paid on the ordinary basis and not the indemnity basis. In addition, the Estate seeks costs out of the Estate on an indemnity basis.

Consideration

1. I accept the submission of Ms Painter SC that Natalie's offer did not comply with r 20.26(5)(b), and accordingly is to be treated as a Calderbank offer rather than a rules offer.
2. Natalie's offer was a genuine offer of compromise. As to the question whether it was unreasonable for the defendant to have rejected it, it is necessary to consider each of the relevant matters referred to at [16] above.
3. As to (a) (the stage of the proceeding when the offer was made), the offer was received on 22 September 2023, which was the beginning of the week before a number of significant steps were required to be taken by the defendant in both sets of proceedings, which were to be heard concurrently starting two weeks later on 9 October 2023 (being objections to evidence on 3 October 2023, court books on 4 October 2023 and written submissions on 5 October 2023).
4. It is relevant in this regard that on 14 and 19 September 2023 Natalie had served five expert reports on the defendant, comprising four reports by medical experts and one of Mr Christian Byrne, an occupational therapist, whose evidence was relevant to the question of Natalie's needs. At a pre-trial directions hearing on 7 September 2023, I directed that Natalie serve on the defendant any expert medical evidence by Friday 15 September 2023 (which did not in terms extend to Mr Bryne's report), but reserved the question whether she was entitled to rely on such evidence at the hearing. It is also relevant that in September 2023, Natalie served two additional lay affidavits which gave further evidence of facts relevant to her eligibility to make a claim (both out of time and without leave): one of Mr Domenic Dodaro served on 6 September and a further affidavit of Natalie was served on 29 September (the day the offer expired). The defendant has explained by affidavit evidence the difficulties encountered by her in obtaining responsive evidence by the commencement of the hearing, and did not have responsive evidence at the time the offer expired.
5. As to (b) (the time for acceptance), the time allowed for acceptance of the offer was five business days. This was relatively short in the context of the amount of new material Natalie had served on the defendant in September 2023 and everything else which was required to be done in the proceedings at that time.
6. As to (c) (the extent of compromise), the extent of the compromise offered was difficult for the defendant to assess because of the late service of Natalie's further evidence referred to above.
7. As to (d) (the offeree's prospects of success), approaching the matter at the time the offer was made and without the benefit of hindsight, in my view, the defendant was entitled to consider that she had reasonable prospects of establishing that Natalie was not eligible to make a claim. The issues raised by that question are set out at Judgment [357]. Those issues turned on disputed questions of fact, including the two further lay affidavits served by Natalie in September 2023.
8. As to (e) and (f), the offer was clear and did foreshadow an application for indemnity costs if rejected. However, the offer did not include an explanation or reasons why the defendant should accept the offer, which is a matter which can in an appropriate case be taken into account in determining whether the rejection of the offer was unreasonable: Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1 at [8]; Hazeldene's Chicken Farm at [26]-[27]. In my view, it is relevant here because in light of the large body of evidence which had been served on the defendant a short time before the offer is made, the inability of the Estate to respond to that evidence in the short time it was left open for acceptance and the absence of pleadings, it was necessary for the offer to have been accompanied by an explanation for why in all the circumstances it ought to be accepted. Natalie's opening submissions were not served until 5 October 2023.
9. In my view, taking into account all these matters and assessing the question at the time the offer was made, it was not unreasonable for the Estate to have rejected Natalie's offer. Natalie was allowed indulgence by the Court in being permitted to rely on a significant body of expert and lay evidence which was served late and without leave. It was unreasonable to expect the defendant to absorb the offer and evaluate it in the relatively short time allowed for acceptance, in circumstances where the defendant was busily engaged in preparing her defence of both Natalie's claim and Ms Le's claim, each of which involved different legal and factual issues and the latter a large number of witnesses and a claim for around $8 million.
10. In my view, in all the circumstances the appropriate order as to costs to reflect what is fair in regard to the parties' responsibility for costs, is that Natalie's costs be paid out of the Estate on the ordinary basis.
11. If, contrary to the conclusion reached above, Natalie's offer is a rules offer, I would conclude for the same reasons set out above, that it is appropriate to 'otherwise order' under r 42.14, because in the interests of justice the default position under that rule should not apply.

Conclusion

1. For the above reasons, the Court orders that: 1. In proceedings 2022/00041064, the costs of the plaintiff be paid out of the estate of the deceased on the ordinary basis, as agreed or assessed. 2. In proceedings 2023/00031399, the costs of the plaintiff be paid out of the estate of the deceased on the ordinary basis, as agreed or assessed. 3. The costs of the defendant in both proceedings be paid out of the estate of the deceased on the indemnity basis.

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: 07 November 2024