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[2025] NSWSC 400
General information, not legal advice.
Supreme Court of NSW
2025-04-28
Hammerschlag CJ in Eq
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Serves Pty Ltd atf The Rosemont Trust v Roche (Deceased); Roche (Deceased) v Serves Pty Ltd atf The Rosemont Trust (Costs) [2025] NSWSC 400
Hearing dates: 28 April 2025
Date of orders: 28 April 2025
Decision date: 28 April 2025
Jurisdiction: Equity - Real Property List
Before: Hammerschlag CJ in Eq
Decision: (1) The cross-claimant is to pay the cross-defendant’s costs of the cross-claim on the ordinary basis.
(2) The cross-claimant is to pay the costs of the defendant, Fiona Roche, of the costs argument on the ordinary basis.
(3) The cross-claimant is not entitled to recover from the estate any part of the costs, incurred by her, of and incidental to the cross-claim or payable by her to the cross-defendant or the defendant, Fiona Roche.
Catchwords: COSTS — Conveyancing Act 1919 (NSW) s 66G — Uniform Civil Procedure Rules 2005 (NSW) rr 42.1 and 42.25 — SUMMONS — Proceedings by Summons for the appointment of trustees for sale of real property co-owned by a deceased estate and a company associated with the deceased during his lifetime — Where orders for sale are made after initial opposition by a co-executor who then does not oppose the sale, but only a forced sale on the basis she will cooperate in the sale — Where the orders for sale reserve the co-executor’s costs of the Summons — Where the co-executor seeks a portion of her costs of the Summons principally being the costs of an affidavit sworn by her to be paid out of the proceeds of sale of the property — Where the co-executor did not seek judicial advice that her opposition to the Summons was justified — Where she did not in fact cooperate in the sale — Where the affidavit could not have contributed in any meaningful way to the resolution of the Summons and where the amount claimed in any event is trivial — HELD: no order for payment out of the proceeds of sale should be made in her favour
CROSS-CLAIM — Where the co-executor on behalf of the estate brings an unsuccessful cross-claim against the co-owner for equitable contribution of expenses met by the estate in relation to the property — Where there was clear and uncontested evidence that the deceased did not intend there to be any such contribution — Where the claim included amounts plainly not the subject of joint or coordinate liability — Where to prove the amount claimed the co-executor relied only on an admission arising from a non-answer to a notice to admit facts which admission did not establish any amount the subject of a joint or coordinate liability — Where the co-executor did not seek judicial advice that the estate was justified in bringing the cross-claim — Where the cross-claim amount is small and the cross-claim was unlikely to have yielded any benefit for the estate even if successful — Where the cross-claimant accepts that she should pay the cross-defendant’s costs of the cross-claim but seeks, and her co-executor opposes, indemnity from the estate, of a portion of her costs, excluding costs of, and incidental to, other cross-claims not persisted in — Where the cross-defendant to the cross-claim seeks its costs on the indemnity basis based on the non-acceptance by the co-executor of a Calderbank offer — HELD: the co-executor in substance, acted other than for the benefit of the estate and unreasonably in bringing and maintaining the cross-claim; she should not be indemnified in respect of any of her costs of the cross-claim out of the estate — HELD FURTHER: in context and given the terms of the Calderbank offer, its non-acceptance was not unreasonable to the extent of warranting an order for indemnity costs against her
Legislation Cited: Conveyancing Act 1919 (NSW) s 66G
Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 42.25
Cases Cited: Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411
Foundas v Arambatzis [2020] NSWCA 47
Hamilton v Roche [2022] SASC 103
Serves Pty Ltd atf The Rosemont Trust v Roche (Deceased); Roche (Deceased) v Serves Pty Ltd atf The Rosemont Trust [2025] NSWSC 336
Category: Costs
Parties: Serves Pty Ltd in its capacity as trustee for the Rosemont Trust ACN 008 086 888 (Plaintiff/Cross-Defendant)
Deborah Ann Hamilton as joint executor of the estate of John Justin Roche (Defendant/Cross-Claimant)
Fiona Roche as joint executor of the estate of John Justin Roche (Defendant)
Representation: Counsel:
S Docker SC (Plaintiff/Cross-Defendant)
T O’Connor (Defendant (Hamilton)/Cross-Claimant)
E Keynes (Defendant (Roche))
Solicitors:
Thomson Geer (Plaintiff/Cross-Defendant)
Grope Hamilton Lawyers (Defendant (Hamilton)/Cross-Claimant)
Iles Selley Lawyers (Defendant (Roche))
File Number(s): 2022/00372048
Publication restriction: Nil
On 8 April 2025, I handed down the principal judgment dismissing the cross-claim: Serves Pty Ltd atf The Rosemont Trust v Roche (Deceased); Roche (Deceased) v Serves Pty Ltd atf The Rosemont Trust [2025] NSWSC 336.
Definitions in the principal judgment are used here.
On 25 May 2023, Robb J, by consent, made orders under s 66G of the Conveyancing Act 1919 (NSW) for the sale of the Property. The orders included the standard ones appointing trustees for sale, but they also included a stay of those orders for some months, together with orders which would operate during the period of the stay, to enable a cooperative sale. The evidence before me, principally by way of an affidavit of Serves’ solicitor, Peter Leigh Harrison, sworn 24 April 2025, establishes that Hamilton failed to cooperate. The result was that the stay ceased to operate by effluxion of time (but not before Serves filed a motion to have it lifted because of Hamilton’s non-cooperation) and the Property was ultimately sold by the trustees for sale, as the principal judgment records.
The orders provided that Serves’ costs of the Summons be paid out of the proceeds of sale of the Property and that Hamilton’s costs in respect of the Summons be reserved.
In the principal judgment, I provisionally ordered that the cross-claimant (Hamilton) pay the costs of the cross-defendant (Serves) of the cross-claim, unless a party sought some other orders. Other orders have been sought.
Robb J has retired. He is unavailable to determine the question of costs reserved.
This judgment deals with the reserved costs and the costs of the cross-claim.
Hamilton seeks an order that her costs of the Summons for orders under s 66G of the Conveyancing Act only for the period 19 to 25 May 2023 inclusive, be paid out of the proceeds of sale of the Property. She concedes that there should be an order for her to pay Serves’ costs of the cross-claim on the ordinary basis and seeks that her costs of the cross-claim be paid out of the estate on an indemnity basis, but excluding those costs relating to cross-claims she advanced or sought to advance in her capacity as a beneficiary of the JJR Investment Trust (JJRIT) (the residuary trustee beneficiary of the estate). Those particular cross-claims were dismissed by Peden J as is referred to later. There was no appeal.
Serves seeks an order that Hamilton pay its costs of the cross-claim on the indemnity basis from 29 August 2023, when Serves made a Calderbank offer to Hamilton, which offer Serves says Hamilton, acting unreasonably, declined to accept.
Roche resists any order that any of Hamilton’s costs be paid out of the proceeds of sale of the Property. She resists any payment of Hamilton’s costs of the cross-claim out of the estate. She seeks an order against Hamilton for her costs of the costs argument.
42.1 General rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the 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.
…
42.25 Costs of trustee or mortgagee
(1) Subject to subrule (2), a person who is or has been a party to any proceedings in the capacity of trustee or mortgagee is entitled to be paid his or her costs in the proceedings, in so far as they are not paid by any other person, out of the fund held by the trustee or out of the mortgaged property, as the case may be.
(2) The court may order that the person’s costs not be so paid if—
(a) the trustee or mortgagee has acted unreasonably, or
(b) in the case of a trustee, the trustee has in substance acted for his or her own benefit rather than for the benefit of the fund.
I will deal first with Hamilton’s claim that a portion of her costs of the Summons be paid out of the proceeds of sale of the Property.
The Summons was filed on 9 December 2022. On 14 February 2023, Hamilton filed a Notice of Motion seeking transfer of the proceedings to the Supreme Court of South Australia, the joinder to the proceedings of Australian Executor Trustees (AET) (the trustee of JJRIT) and security for costs.
On 4 April 2023, she filed a motion seeking judicial advice on behalf of the estate, Serves and AET, in the course of which she asserted that the sale was directly contrary to the intentions of the deceased. She did not persist with that application.
On 14 April 2023, the Court fixed her transfer application to be heard on 10 May 2023 and provisionally fixed the Summons for hearing on 22 May 2023.
On 3 May 2023, the Supreme Court of South Australia gave judicial advice to Roche, relevantly, that the executors of the estate would be justified in not opposing the Summons.
Hamilton filed a cross-claim, to be heard with the Summons, seeking an order for the transfer of the Property to the estate and JJRIT.
On 10 May 2023, the Summons was fixed for final hearing before Robb J. Hamilton’s motion was dismissed with costs. She was granted leave to file a cross-claim by 17 May 2023. She filed a Cross-Summons on 18 May 2023 seeking, as executor, an equitable accounting between the estate and Serves out of the proceeds of the Property and an order for payment out to the estate on the taking of accounts and, as a beneficiary of JJRIT, an equitable accounting between it and Serves out of the proceeds of sale and order for payment out.
On 19 May 2023, Hamilton swore an affidavit (the Affidavit). It runs to 43 paragraphs and it deals with the basis for her filed cross-claim (as it then stood). Significantly, in the Affidavit she did not oppose the sale of the Property but opposed orders for the appointment of trustees for sale on the basis that she would cooperate in the sale of the Property by Serves.
I observe that before me at the hearing of the cross-claim, a redacted version of the Affidavit was read. The only paragraphs left were those apparently relevant to the cross-claim as it stood at the time of the hearing before me. This had nothing to do with the s 66G application itself.
What was left is eight paragraphs including introductory and concluding paragraphs. They contain nothing of substance, let alone anything which could meaningfully have contributed to the determination of the Summons or would justify payment out of the proceeds of the Property of Hamilton’s costs incurred in relation to them.
Hamilton’s original position on the Summons was that she opposed it “on all grounds”. Her principal basis was that a sale was contrary to the testamentary wishes of the deceased. She maintained her full-on opposition until 19 May 2023, without taking the appropriate step of promptly seeking judicial advice. Indeed, she did not seek any. This is in stark contrast to what Roche did in seeking and obtaining judicial advice from the Supreme Court of South Australia, that the executors were justified in not opposing the sale. The warning bells had been sounded loudly and clearly.
**********
Serves Pty Ltd atf The Rosemont Trust
Roche
The following two Uniform Civil Procedure Rules 2005 (NSW) (UCPR) are pertinent:
Added to this, there are very limited available grounds of resistance to an application under s 66G for the appointment of a trustee for sale of jointly owned property (see Foundas v Arambatzis [2020] NSWCA 47 at [62]-[63] (White JA); Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36] (Tobias AJA)). The reality of this is no doubt reflected by the fact that orders for sale were ultimately made by consent.
In all the circumstances, I consider that, Hamilton’s claim for any reimbursement from the proceeds of sale of the Property to be without merit, and I decline to so order any such reimbursement.
The claim is, in any event, trifling.
I turn now to her cross-claim.
The cross-claim as ultimately motivated was something of a remnant of the earlier emanations of Hamilton’s cross-claims, disposed of by Peden J.
The orders made by Robb J on 26 May 2023 included orders for Hamilton to file and serve a Statement of Cross-Claim (as opposed to a Cross-Summons) by 5 June 2023. This date was extended to 23 June 2023. She filed an Amended Statement of Cross-Claim on 26 June 2023, which included claims for an equitable accounting on behalf of the estate and on behalf of AET as trustee of JJRIT, a declaration that Serves held its interest in the Property and the net proceeds of sale on trust for the estate or, alternatively JJRIT, and in the alternative, an equitable charge over Serves’ proceeds of the sale.
On 29 August 2023, Serves made a Calderbank offer to settle Hamilton’s cross-claim as it then stood. The offer was that it would pay $100,000 to AET and the cross-claim would be dismissed with no order as to costs, and Hamilton would pay her own costs of the Summons.
On 31 August 2023, Hamilton swore an affidavit in support of her cross-claim. It runs to 220 paragraphs and exhibited 521 pages.
The stay of the s 66G orders ended on 22 September 2023.
The Calderbank offer expired on 27 September 2023.
On 4 October 2023, Hamilton filed a Notice of Motion seeking the joinder of AET (as trustee of JJRIT) to the cross-claim and for leave to serve an Amended Cross-Summons and a Second Amended Statement of Cross-Claim.
On 27 October 2023, Peden J dismissed (on Serves’ motion) Hamilton’s claim for relief on behalf of AET (also striking out the paragraphs of the pleading supporting that claim). Her Honour dismissed Hamilton’s joinder motion and ordered Hamilton to pay Serves’ costs.
On 30 November 2023, Hamilton filed a Further Amended Statement of Cross-Claim, which accommodated the orders made by Peden J, and Serves filed its Defence to that cross-claim on 6 December 2023.
On 14 June 2024, Peden J gave Hamilton leave to file an Amended Cross-Summons and a Second Further Amended Statement of Cross-Claim, which were filed on 17 June 2024. All that was left of the cross-claim was the claim ultimately heard by me, for equitable contribution. That claim failed.
The only basis for an indemnity costs order put by Serves is that Hamilton acted unreasonably in not accepting the Calderbank offer.
Whilst it would manifestly have been prudent for Hamilton to have accepted the offer (which was reasonable and would have brought these unfortunate proceedings to an end), I am not persuaded that it follows that, as things then stood, her failure to accept it was unreasonable to the extent of warranting an indemnity costs order against her. The ultimate cross-claim was not yet on foot.
The payment offered was to AET, as trustee of JJRIT, rather than to Hamilton, who is a general but not a specified beneficiary of that trust.
What was offered was a dismissal of the cross-claim with each party to pay their own costs. In context, I view that offer as more calling for a capitulation on the cross-claim than for a realistic commercial compromise of it. Against this, however, her cross-claim as it then stood never got off the ground. Even so, I am unpersuaded that an order for indemnity costs is warranted.
I do, however, consider that Hamilton’s failure to accept a reasonable offer is a relevant, although not determinative, circumstance which contributes to the conclusion I have reached that no part of Hamilton’s costs of the cross-claim should be paid out of the estate. Her failure is consistent with a cavalier attitude to the true interests of the estate.
Even had the cross-claim succeeded, it could only have yielded a maximum of $42,999 (plus interest) for the benefit of the estate. If Serves had a corresponding claim for equitable contribution in respect of joint or coordinate liabilities discharged by it with respect to the Property, the maximum benefit the cross-claim could have yielded was $27,670.
The Court does not have information on the level of costs incurred by Hamilton in motivating that modest claim, but experience tells me that the costs would significantly, if not entirely, erode that modest benefit. I would not be surprised if the costs are more than what was being fought about. She no doubt had her own reasons for persisting in the cross-claim, but they could not realistically have been that it was in the interests of the estate to pursue it.
Hamilton’s solicitor, Mark Eric Hamilton, deposed to the fact that he conferred with Counsel in relation to the proposed cross-claim and received advice that the cross-claims ultimately advanced were reasonably arguable, and that he held the same view. He provides no detail. It is difficult to see how a view could have reasonably been formed that the claims described in [36] of the principal judgment were reasonably maintainable or that the admission derived from the Notice could have sustained any claim.
It is also difficult to see how it could have been reasonably considered, if the estate were to bear the costs of such a claim, that the proceedings were in its interests even if it had succeeded and Serves was ordered to pay the estate its costs on the ordinary basis.
Added to this is the clear and uncontested evidence that the deceased never intended there to be a contribution to the expenses incurred by him in maintaining the Property.
Hamilton also did not take the precaution of obtaining judicial advice in relation to the cross-claim.
Roche did not join with her in the cross-claim.
I am satisfied that, objectively viewed, Hamilton in substance acted other than for the benefit of the estate.
Moreover, and perhaps more importantly, I am satisfied that in bringing and maintaining the cross-claim, Hamilton acted unreasonably.
In my opinion, this case falls within the exception in UCPR r 42.25(2)(a).
Finally, I turn to Roche’s claim that Hamilton pay her costs of the costs argument. In resisting orders that Hamilton be paid a portion of her costs out of the estate Roche has succeeded, for the benefit of the estate. Roche’s costs of that application should follow the event.
I make no order for the payment to the defendant to the Summons, Deborah Ann Hamilton, of any of her costs of the Summons out of the proceeds of the sale of the Property, to the intent that she shall bear her own.
I make the following orders:
The cross-claimant is to pay the cross-defendant’s costs of the cross-claim on the ordinary basis.
The cross-claimant is to pay the costs of the defendant, Fiona Roche, of the costs argument on the ordinary basis.
The cross-claimant is not entitled to recover from the estate any part of the costs, incurred by her, of and incidental to the cross-claim or payable by her to the cross-defendant or the defendant, Fiona Roche.