Waters v Frank; Frank v Waters (No 2)

I handed down the principal decision on 28 November 2025 (Waters v Frank; Frank v Waters [2025] NSWSC 1389). I did not decide costs but made this observation at [221]:

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:

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:

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:

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:

My assessment of Mr Frank was that less weight should be given to his affidavit evidence, but this was not because of any failing on his part, but rather because of his ill health. I said at [85]-[86] of my primary reasons:

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 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]:

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]:

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]:

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:

The plaintiff wishes the order to be changed to:

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: