IMO Will of Mirabella, deceased
[2010] VSC 661
•11 March 2010
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| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
IN ITS PROBATE JURISDICTION
S CI 2009 0040P
IN THE MATTER of the Will and Estate of MARIA MIRABELLA, deceased
APPLICATION BY:
| PETER DESMOND SIER | Applicant |
ASSOCIATE JUSTICE: | Gardiner AsJ |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 10 February 2010 |
DATE OF JUDGMENT: | 11 March 2010 |
CASE MAY BE CITED AS: | IMO Will of Mirabella, deceased |
MEDIUM NEUTRAL CITATION: | [2010] VSC 661 |
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ADMINISTRATION AND PROBATE – Application by executor for commission pursuant to s 65 of the Administration and Probate Act (Vic) 1958 – Application opposed by beneficiaries – award of commission made.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr D. C. Harrison | Peter Zablud & Co. |
| Mr Leo Mirabella appeared in person to oppose the application |
HIS HONOUR:
Maria Mirabella died on 23 February 2004.
By her will dated 2 October 2002, Ms Mirabella appointed Peter Desmond Sier as executor.
Probate of the deceased’s will was granted to Mr Sier on 3 September 2004.
By summons filed 11 March 2009, Mr Sier applies to the Court pursuant to s.65 of the Administration & Probate Act 1958 (Vic) (“the Act”) for executor’s commission. The application is supported by an affidavit of Mr Sier sworn 10 March 2009.
The will provides that, after payment of debts, expenses and taxes, the estate be divided into 13 equal undivided parts. Of these parts, the deceased’s surviving children, Stella, Marco and Leo Mirabella are each to receive two parts; the seven grandchildren of the deceased are each to receive one part of the estate. Included amongst those is Elizabeth Mirabella, presently an infant, who is the daughter of Leo Mirabella. The will also makes a specific bequest to Elizabeth of an amount equivalent to the value of any shares the deceased held in listed public companies. The will is silent as to the executor’s right to commission.
Mr Sier is the husband of the deceased’s daughter, Stella. Mr Sier does not seek to obtain commission from the share of the estate going to Elizabeth by reason of her infancy.
Mr Leo Mirabella indicated to the Court at a directions hearing conducted in the matter that he opposed the award of commission and he was served with the summons and accompanying affidavit in support. He has become the contradictor to the application and opposes the award of any commission to Mr Sier.
Consents to the application have been obtained from all of the residuary beneficiaries, save for the infant beneficiary, Elizabeth, and Leo Mirabella. Mr Mirabella has filed lengthy affidavits of 6 August 2009 and 16 December 2009. I shall consider those affidavits below.
The consents which have been obtained are not in Form 3-10C of the Administration & Probate Rules 2004 (“the Rules”). They are a pro forma which states:
“On the basis that you do not seek to obtain commission from the share of the residuary estate to be received by the infant beneficiary, Elizabeth Mirabella, I agree to you receiving a commission in a sum equivalent to three per cent of the gross value of the estate coming into your hands as the executor of the deceased’s will.”
I am nonetheless satisfied that the other residuary beneficiaries do not oppose the award of commission on the basis stated. By reason of Leo Mirabella’s opposition, however, I will consider this application in no way bound by the three per cent figure mentioned save to regard it as the maximum amount which should be awarded without need for further recourse to the consenting beneficiaries.
An amended administration account was filed on 12 June 2009. That amended document reveals that there have been corpus receipts of $905,346.45. The principal asset realised was the deceased’s property at 289 Mt Dandenong Road, Croydon. This property was originally valued at $280,000 but ultimately realised $440,000 at auction. There have been disbursements of $875,722.60 on the corpus account which include distributions to beneficiaries, payments to revenue and utility authorities and other incidental payments. There are a number of payments to Mr Sier’s solicitors, Peter Zablud & Co, which I will consider further below. Mr Zablud’s office has acted generally in the administration of the estate and on behalf of Mr Sier in his capacity as executor in an application commenced under Part IV of the Act by one of the deceased’s sons, Marco Mirabella.
On the income account there have been receipts of dividends from BHP Billiton and interest on a term deposit at the National Australia Bank. Such receipts total $6,195.20. The 649 shares in BHP Billiton have been transferred to Mr Sier as trustee for Elizabeth Mirabella and the dividends from such shares have been paid to him. [An amount of $34,064.17 was in Mr Zablud’s trust account as of 12 June 2009.]
Mr Sier states in his affidavit that the role of executor has involved him in considerable personal trouble and loss of time. He states that what should have been a relatively simple estate to administer became protracted, unpleasant and, by reason of the attitude of his brothers-in-law, Leo and Marco, towards Mr Sier and his wife, Stella, the source of considerable acrimony. This was apparent at the hearing of this application. One source of it would seem to be the disposition by the deceased during her lifetime of two properties at Croydon to Mr Sier’s children. When the deceased told Leo and Marco Mirabella about the transfer, relations between Mr Sier and his wife, on the one part, and Marco and Leo on the other, deteriorated markedly. Leo and Marco felt aggrieved that they and their families had been excluded from a share in that part of their mother’s estate.
Following the grant of probate of the deceased’s will, Marco Mirabella commenced proceedings under Part IV of the Act. In the course of that proceeding, Marco Mirabella raised the question of and made allegations in relation to the deceased’s testamentary capacity at the time she made her will and the validity of the transfers of the two Croydon properties to Mr Sier’s children. The Part IV proceedings settled after mediation on terms that Marco Mirabella be paid the sum of $40,000 inclusive of costs in addition to his entitlement to receive two one-thirteenth parts of the deceased’s net estate under the will.
In his affidavit, Mr Sier describes the tasks he has undertaken as executor. These have included making funeral arrangements and attending to payment of debts and testamentary expenses. He states that he spent a considerable amount of time involved in the Part IV proceeding, including considering Marco Mirabella’s affidavit in support of the claim (which was a 94-page document including exhibits), consulting with solicitors in relation to his affidavit in opposition to the application, attending an unsuccessful mediation and instructing the solicitors in relation to the settlement of the Part IV claim. He also details other tasks involving the sale of the Croydon property, preparing the property for auction and finalising arrangements concerning the family grave site at Lilydale which involved the expenditure of approximately $35,000.
Mr Sier estimates that he has spent 120 hours in relation to the administration of the estate, although he has not, as is sometimes the case in these types of applications, kept any type of diary recording the time he has spent. I accept that he would have spent an amount of time of that general order but an award of executor’s commission involves a more sophisticated analysis than mere consideration of the time spent; different tasks involve varying levels of responsibility and anxiety, what the legislation describes as “pains and trouble”.
Mr Sier states that in 2006 the estate’s solicitors wrote a letter to each of the adult beneficiaries notifying them of his intention to make a claim for executor’s commission. The text of that circular letter is exhibit “PDS-4” to Mr Sier’s affidavit. It was in response to that letter that all of the adult beneficiaries, except Leo Mirabella, consented in general terms to the present application. Having regard however, to Mr Mirabella’s opposition, I am required to exercise a discretion on an application of the relevant criteria. Leo Mirabella contended at the hearing of this application that Mr Sier had postponed making application for executor’s commission until after his own son had reached the age of majority and could provide consent. I do not consider that anything turns on that as I have to exercise my own discretion in any event.
The first of Leo Mirabella’s affidavits in opposition to the application was sworn on 6 August 2009. It is a 34-page affidavit with exhibits. In this affidavit, Leo Mirabella descends into considerable detail about the events leading up to his mother’s death.
As I indicated to Mr Mirabella at the hearing, I am obliged to exercise a statutory discretion by applying relevant criteria, and very little of what was contained in his affidavit and the subsequent affidavit were relevant to that task. Mr Mirabella complains in the affidavit that the family estate has been entrusted to a “non-blood family member”. He says that Mr Sier, who has already received benefits through his wife and four children, should not be making a claim for commission. He contends that his mother would not have wanted him to be awarded commission. He also says that Mr Sier’s solicitor, Mr Peter Zablud, has done the majority of the work in connection with the estate and been paid for it. He says that his mother made several wills from August 1972 to October 2002 and that the last six wills illustrated an abandonment “of the traditional Sicilian values, customs and beliefs, and confirmed my opinion they were transgressed with the progress of her dementia. Scrutiny of these six wills shows how her sense of equity and fairness became distorted.”
At the hearing of the application, Mr Mirabella maintained the position put in his affidavits despite me outlining to him on several occasions what the relevant criteria were to be applied by me in considering whether I should award any and if so what amount of commission.
Legal principles
Section 65 of the Act provides as follows:
“It shall be lawful for the Court to allow out of the assets of any deceased person to his executor, administrator or trustee for the time being such commission or percentage not exceeding five percent for his pains and troubles as is just and reasonable.”
Smith J in the case of Patterson v Halliday [2003] VSC 298 referred to a number of factors which would be relevant in exercising the required discretion in this type of application. His Honour did not purport to suggest that they were the only criteria but the case is nonetheless a convenient source of the relevant matters which might be taken into account.
The criteria include:
“(a)the work and judgment involved in the realisation of assets and earning income;”
In this case the deceased’s affairs were not particularly complicated. Mr Sier arranged for the sale by auction of the property at Mt Dandenong Road, Croydon. He liaised with agents and apparently carried out some cleaning work leading up to the sale. The investments were not particularly complex to administer.
“(b) the extent of administrative activities; and
(c) the responsibility generally;”
These factors generally overlap with (a). The size of the estate is relatively modest and the executorship is a relatively straightforward one. There appear to have been no difficulties experienced in realising the assets of the estate. Perhaps the major responsibility undertaken has been defending the Part IV proceeding commenced by Marco Mirabella. Mr Sier was the defendant to the proceeding and I accept that there would have been a degree of responsibility and anxiety involved in that role, particularly having regard to the tensions within the family. This was particularly so when time came the consider settlement of the claim as there was a potential for tension and conflict with the other residual beneficiaries from whose shares the funds used to effect settlement with Marco Mirabella were sourced.
“(d) how long the estate was administered;”
Mr Sier has been executor of the will since September 2004, although there has been only intermittent activity in that six-year period. Most of that activity occurred relatively early in the piece and it could not be said to be a long drawn-out administration.
“(e)the work of a non-professional character not undertaken by the applicant and performed by professionals;”
As mentioned above, Mr Sier instructed Mr Peter Zablud as the solicitor for the estate. Mr Zablud was apparently engaged with the deceased’s affairs prior to her death and drew her will. At the hearing of this application, I enquired of Mr Harrison, Counsel for Mr Sier, about the details of the legal expenses incurred by the estate. In response, he tendered a number of tax invoices from Peter Zablud & Co. These invoices were as follows:
(i)7 September 2004. This invoice, for $1,344.50 was for work in respect of obtaining a grant of probate and the other formal legal work required for the grant of probate. I am satisfied that those charges were appropriate to be incurred and that Mr Sier was entitled to engage a solicitor to carry out that work of that nature on behalf of the estate.
(ii)4 October 2004. This invoice was for $3,636.18. The invoice contains a detailed narrative in respect of the work done. It is apparent that during this period, which ran from 23 March 2004 to 30 September 2004, Mr Zablud undertook a significant amount of communication on behalf of the executor. This included communicating with Leo and Marco Mirabella by telephone and dealing with facsimiles from
Mr Marco Mirabella. I am satisfied that it was appropriate for Mr Zablud and his assistants to carry out this work on behalf of the estate. The animosity between Leo and Marco Mirabella and Mr Sier was such that it was understandable that Mr Sier would require the interposition of a solicitor between him and Marco and Leo Mirabella.(iii)8 November 2004. This invoice covered the period 1 October 2004 to 31 October 2004. This invoice, for $1,145, was for similar types of tasks to the previous invoice.
(iv)1 November 2004 to 31 January 2005. This invoice, for $616, was said to be for communication with the various beneficiaries of the estate in regard to the sale of the property. I am satisfied that it was appropriate legal work for the executor to have engaged a solicitor to perform.
(v)4 February 2005. This invoice, for $850, was for the conveyancing work in connection with the sale of the Mt Dandenong Road, Croydon, property and was appropriate legal work for the executor to engage the solicitor to perform.
(vi)14 July 2005. This invoice, for $2,750, has no narrative. It is said to be in respect of the Part IV application and commenced by Marco Mirabella for the period leading up to 30 June 2005. The executor was entitled and, indeed, obliged to engage competent solicitors to defend the claim on behalf of the estate.
(vii)20 October 2005. This invoice for $3,545 was in connection with the Part IV application for the period 17 September 2005 to 18 October 2005. Of that sum, $2,200 inclusive of GST was in respect of the events leading up to and attending the mediation with Ms Sparke of Counsel on 17 October 2005. The balance of the invoice was in respect of the mediator’s fees of $1,345.
(viii)10 July 2006. This invoice, described as being for the period 19 October 2006 (sic) to 30 May 2006, was in respect to work done in connection with the defence of the Part IV claim. The total of the invoice was for $8,687, of which $3,270 plus GST was in connection with Mr Zablud’s fees and the balance for the fees of Ms Carolyn Sparke of Counsel for acting on behalf of the estate. The narrative for this invoice details matters attended to by Mr Zablud in defending the claim which were proper matters for Mr Sier, as executor, to engage Mr Zablud to perform. Further, the engagement of Ms Sparke, who specialises in Part IV and other probate work, was appropriate.
(ix)The final invoice of 6 July 2009 relates to the current application which will be taken up in the consideration of what order should be made about costs of the application itself.
In my view, although there were some minor tasks carried out by Mr Zablud’s office which could have been carried out by Mr Sier, they are a very small proportion of the total work undertaken by the solicitors. I regard the work undertaken by the solicitors as being of the character for which it was appropriate that the executor to engage solicitors. Further, I do not consider that there has been “double dipping” to any significant degree whereby Mr Sier seeks commission for performing tasks for which the solicitor has been paid fees. The engagement of Mr Zablud’s office was, in my view, appropriate and involved the obtaining of specialist advice rather than the delegation of administrative tasks which could have been performed by Mr Sier without charge to the estate.
“(f) the size of the estate and its capacity to pay;”
The estate is a relatively modest one but I consider that an award of some commission can be made which is not disproportionate to the size of the estate and its capacity to pay. That is to say, there are sufficient funds in the estate to pay a reasonable level of executor’s commission having regard to the tasks that the executor has undertaken.
“(g) executor’s pains and troubles relative to the result;”
As has been detailed above, the estate has been a relatively straightforward one to administer, save for dealing with the ongoing animosity amongst family members which elevates this administration to one above the normal. The need to defend the Part IV application and resolve it would have occasioned inconvenience, stress and anxiety.
Mr Mirabella asserted that there should be no commission awarded because his mother did not intend that Mr Sier be awarded commission. Further, he says that members of his immediate family, namely his children, have benefited greatly already from his late mother’s assets and he should not be further rewarded. In my view, these are not relevant factors to be taken into consideration. There is no admissible evidence of what his mother’s wishes were in this regard. The Act provides for a discretion in the Court to award commission where appropriate and I consider that Mr Sier is entitled to an amount for commission.
Mr Harrison submitted proposed orders whereby Mr Sier be awarded commission at the rate of two per cent of the corpus and income of the estate. In my view, this would be a just and reasonable award. The calculations in such proposed orders take into account that commission will only be sought from 12/13ths of the corpus and income receipts. It will be recalled that the consents provided by the adult beneficiaries other than Mr Mirabella were provided on that basis. Those consents mentioned the figure of three per cent but, in all the circumstances, I consider the suggested figure of two per cent is the appropriate amount to award.
With regard to costs, Mr Harrison submitted that Mr Mirabella should pay the costs of the application. I decline to adopt that course. Mr Mirabella was under no obligation to consent to the award of commission and, by reason that he did not do so, this application had to be made to the Court supported by the material which has been filed on behalf of Mr Sier. It is true that the affidavits filed by Mr Mirabella in opposition to the application contained mostly irrelevant material venting Mr Mirabella’s acute discontent with matters concerning the deceased’s estate. While some costs were no doubt involved in considering the affidavit, it was susceptible to a reply by way of a short affidavit from Mr Sier denying the allegations made.
I will make orders as follows:
(1)Commission is allowed to Peter Desmond Sier, the executor of the estate of Maria Mirabella, as follows:
·On corpus receipts of $875,346.45.
Percentage of 12/13ths thereof – two per cent, $16,160.24.
·On income receipts of $6,195.20.
Percentage of 12/13ths thereof – two percent, $114.37.
Total - $16, 274.61.
(2)Mr Sier is to be paid his costs of the application out of the estate on a solicitor client basis.
As to those costs, I will hear from counsel for Mr Sier as to the appropriate mechanism to be employed in determining the amount of such costs given that it is unlikely that Mr Mirabella will reach an agreement with Mr Sier in that regard. My preliminary view is that they be assessed by the Law Institute costing service.
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