Manning v Matsen

EX TEMPORE Judgment

1. This is the Court's second judgment in these proceedings. In the Court's principal judgment, Manning v Matsen [2015] NSWSC 1801, the Court declined to make a family provision order under Succession Act, Pt 3.2. The Court held in the principal judgment that such an order would lack utility because of the insufficiency of funds in the estate and because no order for notional estate could be made.
2. The parties have today argued about questions of costs. The plaintiff rightly concedes that it follows from the Court's judgment that the plaintiff should pay the defendant's costs of the proceedings on the ordinary basis. But the defendant contends that the plaintiff should pay the defendant's costs on the indemnity basis, an argument grounded upon two Calderbank letters that the defendant served on the plaintiff before trial: the first on 23 December 2013 and the second on 9 May 2014.
3. In the first Calderbank letter the defendant offered that he would pay his own costs of the proceedings up to and including 7 February 2014, if the proceedings were withdrawn by the plaintiff before that date. It is clear from the first Calderbank letter that the plaintiff was expected to pay her own costs of the proceedings, if the proceedings were withdrawn.
4. The second Calderbank letter offers that the defendant should pay the plaintiff to end the proceedings a sum of $20,000 plus the indemnity for legal costs up to a figure of $20,000 including GST, disbursements and counsel's fees incurred by the plaintiff. No time limit was placed upon the acceptance of the offer in this second letter, so it can be assumed that the offer so made was open for a reasonable time.
5. The plaintiff says that her rejection of the Calderbank offers was not unreasonable.. There is no issue that the December 2013 and the May 2014 letters were structurally sufficient to qualify as Calderbank letters. The present question between the parties is whether or not it was unreasonable of the plaintiff in the circumstances not to have accepted the letters and whether they contained an offer that embodied a compromise: see Jones v Bradley (No. 2) [2003] NSWCA 258 and Leichhardt Municipal Council v Green [2004] NSWCA 341.