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[2025] NSWSC 1586
Supreme Court of NSW
2025-12-19
Elkaim AJ
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Waters v Frank; Frank v Waters (No 2) [2025] NSWSC 1586
Hearing dates: On the Papers
Date of orders: 19 December 2025
Decision date: 19 December 2025
Jurisdiction: Equity
Before: Elkaim AJ
Decision: 1. Order 2 of the orders made on 28 November 2025 is amended so as to read:
Letters of Administration in solemn form of the will of the late Percy Lloyd Waters dated 3 June 2009 is granted to Laura Marie Waters.
2. The plaintiff is entitled to recover her costs from the estate on an indemnity basis.
3. The first defendant is entitled to recover his costs from the estate on an indemnity basis.
4. No order is made as to costs in respect of the second defendant, with the intent that she should pay her own costs and should not be liable for the costs of any other party.
5. The third defendant is entitled to recover, or retain, his costs from the estate on an indemnity basis.
6. No other party in the proceedings may have recourse to the third defendant for any personal liability in relation to his conduct as a defendant and cross-claimant.
7. Noted that no subsequent order has been made to affect the orders made by Lindsay J on 8 November 2024 in respect of the costs of the third defendant.
8. The stay granted by me on 9 December 2025 applies equally to the orders made in this judgment.
Catchwords: SUCCESSION — Contested probate — Costs of unsuccessfully propounding wills — Costs of unsuccessful beneficiary who joined the proceedings — Overall attempt to achieve a fair and just result.
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 36.17
Cases Cited: Dawson v Peters (No 2) [2007] NSWSC 1421
Estate of Moyle: Moyle v Moyle (unreported, 18 June 1998)
Nobarani v Maticonte (No 2) (2018) ALR 296; [2018] HCA 49
Perpetual Trustee v Baker [1999] NSWCA 244
Rahman v Rahman (No 2) [2025] NSWCA 266
Waters v Frank; Frank v Waters [2025] NSWSC 1389
Category: Costs
Parties: Laura Marie Waters (Plaintiff)
Philip Andrew Frank (First Defendant)
Lavinia Williment (Second Defendant)
Kevin Emanuel (Third Defendant)
Fleming Law (Interested Party)
Cross Claim
Andrew Philip Frank (Plaintiff)
Laura Marie Waters (First Defendant)
Lavinia Williment (Second Defendant)
Representation: Counsel:
J Brown (Plaintiff)
L Ellison SC (Second Defendant)
J Lee (Third Defendant)
Solicitors:
Fleming Law (Plaintiff)
Mitchell Lawyers (Second Defendant in Claim and Cross Claim)
Boyd House & Partners (Third Defendant)
File Number(s): 2022/184567
Publication restriction: No
“My preliminary view on costs is that the costs of the plaintiff and the first and third defendants should be paid out of the estate and there should be no order as to costs in respect of the second defendant. However, I will not make any formal order on costs and will invite written submissions from the parties.”
The parties have provided written submissions, all except for the second defendant, seeking a variation of my preliminary view.
The plaintiff’s primary request for orders is in the following terms:
Order that the first and second defendants jointly and severally pay the plaintiff’s costs of the proceedings on the ordinary basis.
Order that the first defendant pay the third defendant’s costs on the ordinary basis.
Order that, to the extent the plaintiff and third defendants’ costs are not recoverable by reason of costs orders in paragraph 1 and 2, those costs are to be paid from the estate on an indemnity basis.
Order that the personal time of Mr Andrew Frank [and Mr Kevin Emanuel] charged through their legal practices is not recoverable.
In addition to written submissions, the plaintiff has provided an affidavit from her solicitor, Ms Christine Vrahas, dated 12 December 2025.
The first defendant seeks an order that his costs be paid from the estate on an indemnity basis.
The second defendant has endorsed my preliminary view that there should be no costs order against her, and she should pay her own costs.
The third defendant seeks the same order as that sought by the first defendant. I will begin with the third defendant because I think the position is clear. On 8 November 2024 Lindsay J made the following orders:
“1 ORDER that the first defendant be excused from further conduct of the proceedings, save as to costs.
2 ORDER that Kevin Emanuel be joined as a third defendant to these proceedings.
3 ORDER that Kevin Emanuel be given conduct of the proceedings so far as it relates to the defence filed 11 July 2023 and cross-claim filed 2 December 2022, by the first defendant or as amended as he may be advised.
4 ORDER that, subject to further order of the Court:
a. the costs of Kevin Emanuel in these proceedings be paid from the estate of the deceased on the indemnity basis; and
b. no party in the proceedings may have recourse to Kevin Emanuel for any personal liability in relation to his conduct as defendant and cross-claimant.
5 NOTE that nothing in these orders prevents any party making a 3rd party costs application at a later stage against the first defendant and/or any beneficiary.
6 ORDER that the first defendant deliver up to the court the original grant in common form of the estate granted on 30 April 2021.
7 ORDER that, until further order of the Court, administration of the estate of Percy Lloyd Waters (the ‘deceased’) be granted to Kevin Emanuel limited to:
a. filing, or having conduct of, the defence and cross claim in these proceedings, and generally defending and representing the interest of the deceased in these proceedings;
b. the collection, maintenance and preservation of all assets of the deceased including if necessary commencing proceedings on behalf of the estate;
c. establishing, and operating, in the ordinary course, of a bank account or accounts in the name of the estate of the deceased;
d. paying the accounts, or any liabilities, of the estate, or liabilities of the independent administrator incurred in the performance of his functions under these orders including the costs order in order 4(a) above;
e. keeping an account of all receipts and disbursements in administration of the estate of the deceased;
f. appointing an agent (including a solicitor, accountant or real estate agent) to do any business that the interim administrator is unable to do, or that it is unreasonable to expect the interim administrator to do, in person;
g. lodging tax returns on behalf of the estate, as well as any objections, on behalf of the estate, in respect of any assessments made; and
h. doing all such other things as are incidental to the powers hereby conferred.
8 NOTE that nothing in the orders in Paragraph 5 authorises the independent administrator to make a distribution of the estate of the deceased, or any part thereof, without the leave of the Court.
9 ORDER that the independent administrator be authorised, subject to further order of the Court, to allow to be paid to himself, out of the estate of the deceased, such remuneration as may be just and reasonable (at a rate not exceeding $550 per hour including GST), or such other amount as may be approved by the Court, in respect of legal costs, together with the reasonable out-of-pocket expenses for work done by him (including professional and non-professional services) in the discharge of his duties as independent administrator of the estate of the deceased.
10 ORDER that the solicitor of the first defendant provide a copy of these orders to the administrator no later than 11 November 2024.
11 ORDER that the proceedings be placed in the Probate List on 22 November 2024 for further consideration, or directions, as the nature of the case might require.
12 NOTE that on that occasion the Court anticipates that the plaintiff will apply to the Court for leave to adduce evidence from a forensic medical expert.
13 NOTE that, as presently advised, the evidence in these proceedings is complete save for the question of such expert evidence.
14 ORDER that the plaintiff file and serve no later than 18 November 2024 a short written submission in support of her application for leave to adduce expert evidence.
15 ORDER that the defendants file and serve no later than 21 November 2024 a short written submission in response.
16 RESERVE the question of the first defendant’s costs of the proceedings for later determination, when the question of costs of the proceedings are to be dealt with.
17 RESERVE to the parties (including the administrator) liberty to apply generally.
18 RESERVE all questions of costs.
19 ORDER that these orders be entered forthwith.”
Although the costs orders made by Lindsay J were expressed to be “subject to further order”, I do not see any basis upon which I would make any further order. There is no suggestion that the third defendant acted other than within the bounds of Lindsay J’s orders or otherwise acted improperly or unreasonably.
The orders were made by Lindsay J because the first defendant had become very unwell and was unable to remain involved in the litigation. Although obviously to be paid for his efforts, the third defendant was essentially a person assisting the court by taking over the running of the case on behalf of the first defendant.
The third defendant has also asked for an ‘indemnity’ order in these terms:
“Option 1
(a) The Court notes orders made by Lindsay J on 8 November 2024, and in particular, order 4 that the costs of the third defendant in these proceedings be paid from the estate of the deceased on the indemnity basis, and that no order subsequently made affects order 4 made by Lindsay J on 8 November 2024, to the intent that:
i. the costs of the third defendant in these proceedings be paid from the estate of the deceased on the indemnity basis; and
ii. no party in the proceedings may have recourse to Kevin Emanuel for any personal liability in relation to his conduct as defendant and cross-claimant.
Option 2 – in the alternative
(b) Orders that the costs of the third defendant be paid, or retained, as the case may be, from the estate of the deceased on the indemnity basis, and no party in the proceedings may have recourse to the third defendant for any personal liability in relation to his conduct as defendant and cross-claimant.”
I will return below to a qualification to the orders in favour of the first and third defendant that was sought by the plaintiff arising from the recent NSW Court of Appeal case of Rahman v Rahman (No 2) [2025] NSWCA 266.
Turning now to the first defendant, it is correct, as submitted by the plaintiff, that I was critical of the first defendant, essentially in failing to recognise the overt warning signs heralded by the presence of the second defendant at the execution of each will (after 2009) and missing the indicators which led to my findings of undue influence by the second defendant.
I was however careful to note that the first defendant was not “shonky”, repeating the position taken by the plaintiff’s counsel when opening the case. Mr Brown stated:
“In particular, your Honour will perhaps already have appreciated that at every meeting where Mr Frank ‑ and we don't say that he's a shonk solicitor, as Mr Murray said.”
“Mr Andrew Frank was called to give evidence but his time in the witness box was limited. This was because he made it clear that any answers he gave were unreliable because of his tendency to be ‘muddled’. This description applied to the answers he gave in chief and under examination from senior counsel for the second defendant.
Mr Frank is not only suffering from advanced cancer, but he also had a fall in St Vincent’s Hospital on 21 July 2024 causing a concussion and the consequent befuddlement of his memory.”
My criticism of Mr Frank must not only be tempered by the fact that he was not able to respond to cross-examination but because I had the distinct impression that in his dealings with the deceased he may well have not noticed the influence of the second defendant because of his friendship with the deceased.
In addition, the first defendant had no personal interest in the estate. I agree with counsel for the first defendant that the general rule expressed by the High Court in Nobarani v Maticonte (No 2) (2018) ALR 296); [2018] HCA 49 at [2], is applicable:
“The general rule concerning executors, like that concerning trustees, is that costs properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate. These costs can include litigation expenses. Some examples of recoverable litigation expenses are: where an executor has a reasonable and bona fide belief in the validity of the will albeit one that is found to be incorrect; where an executor is unsuccessful in reasonably defending an action brought by legatees; or where an executor unsuccessfully, but reasonably, seeks to uphold a grant of probate on appeal.” (footnotes omitted)
The first defendant’s written submissions set out the quantum and ‘make up’ of the costs incurred. They total $451,752.99. This seems a very large amount especially as the first defendant’s involvement came to an end before the lengthy hearing commenced. I am not in a position however, to say that any of the costs were improperly incurred or are unreasonable.
The plaintiff has pointed out that the first defendant obtained indemnities from “some of the beneficiaries”. According to Reply Submissions by the first defendant, the only indemnities obtained were from three minor beneficiaries, Sheila Stephenson, Camden Stephenson, and Josephine Kennedy. I do not see any relevance to the indemnities, even assuming they are not effectively ‘empty’ promises. The financial position of the three beneficiaries is unknown. The terms of the indemnities are also unknown.
Returning to the case of Rahman, the plaintiff submitted that if I was minded to make orders in favour of the first or the third defendant for their costs to be paid from the estate, then those orders should have the qualification that the personal time of the defendants that was charged through their respective legal practices should not be recoverable. The Court stated at [74]-[79]:
“74. The High Court in Bell Lawyers Pty Ltd v Pentelow explained that solicitors who appear for themselves cannot recover costs for the value of their time spent in litigation. The Chorley exception (named after the English case The London Scottish Benefit Society v Chorley (1884) 13 QBD 872) was abolished. The Court, however, did not disturb the ‘in-house solicitor rule’ which allows in-house lawyers to represent their employers in litigation and recover costs for that work. The High Court returned to this issue in Birketu.
75. Subsequent to these decisions, Leeming JA, sitting at first instance, in Elias No 3, closely analysed the relevant principles in the case of an incorporated legal practice and concluded that:
[53]…Whether or not there is professional independence, whether or not litigation is used to make profits, and whether or not there is equality before the law are not answered by the proposition that there is a distinction between the solicitor and the corporation which the solicitor owns and controls. For that reason, the recoverability of professional costs should not depend on whether the solicitor is a sole practitioner or is employed by his or her own company.
- As Leeming JA pointed out, one purpose for abolishing ‘the Chorley exception’ was its affront to equality before the law. It is now impossible to justify to the defendant faced with a costs order obtained by a solicitor that if the solicitor had been a sole practitioner, the costs would not include the solicitor’s time, but because the solicitor had incorporated a company of which he or she was the sole director and shareholder, the solicitor was entitled to recover his or her costs of work undertaken personally. If the former is an affront to equality, so too is the latter. We agree.
- In Elias No 3, a solicitor retained an incorporated legal practice of which he was the sole shareholder and director to act for him. The claim for that time was the largest component of the costs order sought. Leeming JA held that the solicitor was not allowed to recover his own costs, even though billed via the incorporated legal practice. For essentially the same reasons as given by Leeming JA, we are not persuaded that the structure of the firms within which Mr Fleming and Mr Calabretta work, as incorporated law firms, makes any difference to the analysis.
- In Elias No 3, as here, an individual personally acted through the vehicle of an incorporated legal practice and charged costs of defending litigation in which the individual was a party. This was the case for both the second and third respondent. Recovery of costs charged by the second and third respondents for personal work via an incorporated legal practice is dissonant with the rule against sole practitioners recovering costs for work done defending themselves in litigation. We accept that the position of Mr Fleming and Mr Calabretta is perhaps ‘theoretically’ more aligned with the in-house solicitor exception preserved in Bell Lawyers (see Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333 referred to in Bell Lawyers by the plurality at [47]-[48]). Nevertheless, it seems to us incongruous that the second and third respondents could essentially recover the legal costs of personally acting for themselves (albeit through an incorporated legal practice). Mr Fleming and Mr Calabretta are a long way removed from the ‘employed solicitor’ of the Commonwealth Bank Legal Department the subject of Hattersley.
- Mr Fleming and Mr Calabretta are entitled, of course, to be indemnified against the trust corpus. It is appropriate that they do so by order of the primary judge, Slattery J. Mr Fleming and Mr Calabretta are not entitled to be paid costs charged personally by each via an incorporated legal practice.”
The third defendant has the protection of the orders made by Lindsay J to ward off the application of Rahman. As to the first defendant, he was not acting for himself in the litigation and so does not fall within [78] of Rahman. The first defendant was doing no more than upholding the wish of the deceased that he execute the terms of the will.
Accordingly, I will make the orders as sought by the first defendant, without the qualification requested by the plaintiff.
Turning now to the second defendant, the starting point is that costs follow the event and the second defendant unquestionably lost. In addition, the second defendant elected to join the proceedings notwithstanding that the first defendant, having obtained a grant of probate in common form in respect of the 2019 will, in propounding that will, would have been bound to advance the interests of the second defendant. There is no suggestion that the first defendant at any time took the view that there was any merit in the plaintiff’s allegations against the second defendant.
It is also relevant that not only did the second defendant lose, but that I made specific findings against her in respect of undue influence upon the deceased.
I also agree with the plaintiff that a litigant’s financial position, no matter how parlous, should not dictate a costs’ order.
Thus far all of the above indicators point to a costs order against the second defendant requiring my preliminary view to succumb to the plaintiff’s submissions.
The second defendant, recognising her loss as a party, has, however, highlighted certain factors which could influence my decision. It was submitted that the second defendant was not the cause of the litigation, rather it was the deceased. I was referred to the decision of Santow J in the Estate of Moyle: Moyle v Moyle (unreported, 18 June 1998), quoted with approval in Perpetual Trustee v Baker [1999] NSWCA 244, at [14]:
“As was said by Santow J in In the estate of Moyle: Moyle v Moyle (18 June 1988, unreported), if a testator is by his mental frailty and other circumstances in a position where the circumstances reasonably call for investigation of the validity of the will ‘in one sense the testator, though usually with no sense of blameworthy fault, has by his or her conduct caused the litigation to occur’. A party reasonably but unsuccessfully propounding or challenging the will, and so bringing about the necessary investigation, should no more have to bear his own costs than pay the costs of the other party. So it has been said that where the conduct and habits and mode of life of a testator have given ground for questioning his testamentary capacity the costs of the unsuccessful party should be paid out of the estate, as distinct from being left to be borne by that party (Davies v Gregory (1873) 3 P & D 28; Roe v Nix (1893) P 55; In the will of Millar (1908) VLR 682), and the costs of both sides in testamentary capacity cases have often been allowed out of the estate (In the will of Severs (1887) 13 VLR 572; Phillips v Dundas (Smith J, VSC 4 December 1995, unreported); Redroff v at (Santow J, NSWSC, 22 April 1996, unreported); re Ryan: Williams v Ryan (1998) VSC, 109; In the will of Ryan: Williams v Rya**n (Byrne J, VSC, 23 October 1998, unreported); cf Middlebrook v Middlebrook (1963) 26 ALJR 216 where Dixon CJ and McTiernan, Taylor and Owen JJ ordered that the parties bear their own costs but Menzies J would have ordered that the costs be paid out of the estate).”
The second defendant does not seek her costs to be paid out of the estate. She only asks that there be no costs order against her. The second defendant also pointed out that it would always have been necessary “to investigate the circumstances of the last four wills.”
In Dawson v Peters (No 2) [2007] NSWSC 1421, Bryson AJ said, at [11]:
“As findings in my judgment show, Mrs Godbee's conduct in the events leading up to the testator signing the document was unsatisfactory in several ways and there were important parts of her evidence which I was not able to believe. As I earlier stated, I considered whether she should recover her costs out of the estate; and I now regard that as inappropriate because of the way she participated in the events leading to the creation of the informal document, and because of her lack of success at the hearing.”
The important factor arising in Dawson was not whether Mrs Godbee should pay anyone else’s costs, but only whether she should recover her costs from the estate.
In addition, the second defendant submitted that the amendments to the pleadings by the plaintiff, in which “… in exhaustive detail sought specific relief against the second defendant even if the Cross-Claim was successful in propounding the (last) 2019 Will” justified the continuing resistance to the plaintiff’s action by the second defendant.
There is also, of course, the fact that the second defendant was a beneficiary under the last four wills and was entitled to protect her position. I have said above that impecuniosity should not dictate a costs order, but that does not mean it cannot be a factor, amongst others, to influence a costs order.
A court has a very wide discretion in respect of costs, the governing principle being that the court should endeavour to achieve a fair and just result. Perhaps I am stretching the relevant factors to their limit, but I nevertheless remain of the view that the appropriate order is that there be no order as to costs in respect of the second defendant. By this I mean she should pay her own costs, and she should not pay anyone else’s costs.
As to the plaintiff’s request that her costs be paid on an indemnity basis out of the estate, I think such an order is appropriate. I do not think the plaintiff should be in any worse position, in respect of costs, than the third defendant.
A final matter that I need to deal with arises not from costs, but from a request by the plaintiff that Order 2 in the principal judgment be amended. The original order is:
“Probate in solemn form of the will of the late Percy Lloyd Waters dated 3 June 2009 is granted to Laura Marie Waters.”
“Letters of Administration in solemn form of the will of the late Percy Lloyd Waters dated 3 June 2009 is granted to Laura Marie Waters.”
The original order that I made was derived from the written submissions of the plaintiff which had erroneously sought an order in the above terms. The error having been noticed, the plaintiff has made the request for the new order.
None of the other parties to the litigation have expressed any opposition to the change. I think I am able to make the change pursuant to r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW).
I make the following orders:
Order 2 of the orders made on 28 November 2025 is amended so as to read:
Letters of Administration in solemn form of the will of the late Percy Lloyd Waters dated 3 June 2009 is granted to Laura Marie Waters.
**********
(2001) 51 NSWLR 333
(1963) 26 ALJR 216