Chiro v Linton (No 2) - [2009] SASC 197

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
CHIRO v LINTON (No 2)
[2009] SASC 197
Reasons of Judge Lunn a Master of the Supreme Court
2 July 2009
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION
Application by executor for trustee's commission under s 70 of the Supreme Court Act - Probate granted in 1970 - held defendant/executor at fault in not distributing the estate by no later than mid 1972 - sole beneficiary died in 1975 - partial distribution in 2004 and balance of estate paid into Court - held defendant only to be allowed commission up to mid 1972 - plaintiff to have costs of action on indemnity basis.

CHIRO v LINTON (No 2)
[2009] SASC 197
Reasons on defendant’s application for trustee’s commission and both parties’ applications for the costs of the action.

JUDGE LUNN: Floriano Bandiera was an Italian who had lived for many years in each of this State and the Northern Territory. He had a brother, Luigi Bandiera (“Luigi”), who had also lived for some years in this State, but who had returned to Italy, where he had married and had had a family. The deceased also had a sister, Teresa Doimo (“Mrs Doimo”), who lived in this State.
At the time of his death the deceased owned a house at Alberton and a block of shops at Sefton Park (“the shops”). He had few other assets.
Prior to about 1988 the defendant had carried on practice at Port Adelaide as a landbroker. He had dealings with the deceased and was employed by him to collect rents from the tenants of the shops. The defendant and his wife had lent money to the deceased which was secured by two mortgages over the shops.
On 16 December 1963 the defendant had prepared a will for the deceased. It was a short document which appointed the defendant as the executor and left the whole of the deceased’s estate to Luigi. There were no provisions in it allowing the defendant to charge for his work as executor or authorising any delay in the realisation or distribution of the assets of the estate.
The deceased died on 9 July 1969 in the Northern Territory. Mrs Doimo advanced sufficient money to the estate to enable payment of the funeral expenses. The defendant employed the late Dorothy Somerville as a solicitor to extract Probate of the will and to obtain succession duty clearances in this State and the Northern Territory. On 21 May 1970 this Court granted Probate over the deceased’s will to the defendant. On 31 July 1970 the Commissioner of Succession Duties in this State assessed duty of $1,125.38, which was paid by the defendant on 6 August 1970. Minimal succession duty was assessed on the small amount of the deceased’s estate in the Northern Territory.
On 7 September 1971 the defendant sold the Alberton house for $6,000. He continued to let out the shops and collect the rents from them on behalf of the estate. On 14 December 1971,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chiro v Linton (No 2)

Details

AGLC: Chiro v Linton (No 2) [2009] SASC 197
Case: [2009] SASC 197
Decision Date: 2 July 2009

CaseChat Overview and Summary

In the matter of Chiro v Linton, the executor of a deceased estate sought a trustee's commission for services rendered in administering the estate. The estate in question was subject to a will which was probated in 1970. The executor, Linton, was found to have been negligent in not distributing the estate by mid 1972 as required by the terms of the will. The sole beneficiary of the estate passed away in 1975, and partial distribution of the estate was eventually carried out in 2004. The remaining balance of the estate was paid into court. The primary concern of the court was whether Linton was entitled to a trustee's commission for his services beyond the period of mid 1972, and whether the plaintiff should be awarded costs on an indemnity basis.

The legal issues that the court had to address included whether the executor's negligence in failing to distribute the estate by the specified time warranted a reduction or denial of the commission he sought. The court also needed to determine the appropriate rate of commission for the executor's services up until mid 1972 and if the plaintiff should bear the costs of the action on an indemnity basis. The court had to consider the statutory provisions regarding trustee's commissions under the Supreme Court Act, the executor's duties as outlined in the will, and the equitable principle that a trustee should not profit from their own wrong.

The court held that Linton was only entitled to a trustee's commission for his services rendered up until mid 1972, the date by which he was required to distribute the estate. The court found that Linton's negligence in not adhering to this deadline meant that he was not entitled to any commission for the period thereafter. Furthermore, the court ruled that the plaintiff was to be awarded costs of the action on an indemnity basis. The executor's failure to distribute the estate as required by the terms of the will was deemed significant enough to warrant this outcome. The court's decision was based on the premise that an executor who fails to meet their statutory and fiduciary obligations should not be rewarded for their shortcomings.

The final orders of the court included a determination that Linton was only entitled to a trustee's commission up until mid 1972, with no entitlement to any commission for the period thereafter. The court also ordered that the plaintiff was to be awarded costs of the action on an indemnity basis. This decision underscored the importance of executors adhering to the terms of a will and their statutory obligations, and the consequences of failing to do so. The court's ruling served as a reminder of the high standards of care and diligence expected of those entrusted with the administration of deceased estates.

Orders