Indyk Estate - Wiernik v Indyk

[2010] NSWSC 713

CITATION:	Indyk Estate - Wiernik v Indyk [2010] NSWSC 713
HEARING DATE(S):	25 June 2010
JUDGMENT DATE :	25 June 2010
JURISDICTION:	Equity Division Probate List
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	25 June 2010
DECISION:	Commission of $120,000 allowed.
CATCHWORDS:	PROBATE AND SUCCESSION – EXECUTOR’S COMMISSION – No point of principle.
LEGISLATION CITED:	Probate and Administration Act 1898 (NSW) – s 86
CATEGORY:	Principal judgment
CASES CITED:	Creer re Estate of Peters [2007] NSWSC 1291 Indyk v Wiernik [2006] NSWSC 868
PARTIES:	Phylis Carol Wiernik (Plaintiff) Searle Myron Indyk (Defendant)
FILE NUMBER(S):	SC 2004/171280
COUNSEL:	S.J. Burchett (Plaintiff) J.E. Armfield (Defendant)
SOLICITORS:	McCabe Terrill (Plaintiff) TressCox Lawyers (Defendant)

2004/171280 Indyk Estate: Wiernik v Indyk

JUDGMENT – Ex tempore

25 June , 2010

1 This is a contested application under s 86 of the Probate and Administration Act 1898 (NSW) for the passing of executor's accounts and for executor's commission.

2 Such applications are normally heard by the Registrars or Deputy Registrars under their delegated powers. Reasons for the Registrars’ decisions are not published: see, for example, Creer re Estate of Peters [2007] NSWSC 1291 at [9]. This procedure contemplates that these applications will not become elaborate litigious contests. This application comes before me as Probate Judge only because there is heavy pressure in the Registry to deal with commission applications and this particular application is regarded as unusual, for reasons which will appear.

3 The contest in this case has been exceedingly bitter and protracted. Nevertheless, I intend to give only brief reasons for my decision. I do this for two reasons. First, the considerations in fixing an executor's commission are largely discretionary and depend upon the particular facts of each case. My conclusion in this application does not deal with any point of principle and is founded entirely on the facts. Second, I do not wish to provide any precedent or encouragement for departure from the usual practice of this Court that applications for commission are heard by a Registrar, not by a Judge. That practice is intended to ensure that commission applications, even contested ones, are dealt with quickly, expediently and without the necessity for the delivery of elaborate, published reasons.

4 The basic facts are as follows. The Plaintiff, Mrs Wiernik, is the executrix of the will of her late mother, who died in April 2003. The estate is a substantial one, valued in the order of some $6M. The will gave comparatively small legacies to grandchildren and divided the residue equally amongst the deceased's three children, namely, Mrs Wiernik, the Defendant, Mr Indyk, and their brother. Mrs Wiernik now applies to have the estate's accounts passed and payment of commission. Mr Indyk strongly opposes the application. The other brother has taken no part in the proceedings and consents to such orders as the Court may make.

5 Mrs Wiernik's application is part of a long and bitter history of dispute with Mr Indyk about the administration of the estate. Indeed, it is upon the necessity of dealing with that dispute in all of its bitterness and litigious complexity that Mrs Wiernik relies heavily in claiming commission for "pains and trouble" in an amount based upon what is at the upper range of the generally accepted percentages, namely two percent of realised capital, four percent of received income and two percent of the value of assets transferred in specie. That calculation in the present case, according to Mrs Wiernik, should result in a sum of $128,700 in round figures. To that sum should be added another $20,000, according to Mrs Wiernik, to take a account of extensive work done by her not reflected in the value of the estate but required by the nature of the estate and the particular work necessary to be done by her in administering it.

6 Mr Indyk says that Mrs Wiernik should receive a very much reduced commission because she has unreasonably delayed the administration of the estate and has put the estate to unnecessary and improper cost.

7 In reality this is a dispute between a brother and a sister. The accounts which have been provided by Mrs Wiernik show nothing of any substance of which complaint could reasonably be made. I will come to some of those items questioned by Mr Indyk in a moment.

8 The character of this dispute and some of its litigious history is recounted in a judgment of Young CJ in Eq in proceedings between the parties concerning the costs of earlier litigation which had been settled: see Indyk v Wiernik [2006] NSWSC 868. Having regard to the evidence in this application, I think that the following observations by his Honour are accurate, with some qualification:

“[14] Now it would appear that [Mr Indyk’s] letters started the nastiness, but the situation was not helped by [Mrs Wiernik’s] previous solicitors replying in tones that [Mr Indyk] just had to put up with the fact that his mother had named [Mrs Wiernik] as executrix and [Mrs Wiernik] has a discretion as to how she would administer the estate, and she would do, at least within the law, what she thought she should do, and not be harassed or badgered by [Mr Indyk].

[15] That would have been all right had [Mrs Wiernik] administered the estate in an efficient fashion. Even allowing for the fact that she was continually harassed by [Mr Indyk], it is hard to see how, in a simple estate such as the present, things took so long to be done, and why it was that, whenever [Mr Indyk] made a suggestion or demand, there was merely an answer – yes, we will get around to doing that in due course.

[16] [Mr Indyk] has been trying to get satisfactory answers about the estate since two or three years ago. Unfortunately, in my view, he has always been asking too much. Now I realise in negotiations one always asks for too much and will settle for something a little less but it seems to me that, almost always along the line, [Mr Indyk] was demanding a little too much of his sister.

[17] On the other hand, the attitude that she would administer the estate as and when she felt like it, and she had some sort of discretion, was, again, not a satisfactory answer, and not an answer that a reasonable person would have made under all the circumstances.”

9 The qualification which I would make to his Honour's observations are in relation to his remarks that Mrs Wiernik delayed administration unduly and fobbed Mr Indyk off with unsatisfactory answers.

10 In this application, Mrs Wiernik has been searchingly cross examined by Mr Armfield of Counsel, who appears for Mr Indyk, and she has been taxed with delay in having the home of the deceased sold and in distributing amongst the beneficiaries a very large number of paintings done by the deceased. There are other aspects of complaint to which I will come in a moment.

11 To my mind, the Mrs Wiernik's responses have been entirely reasonable and appropriate. She has had the benefit of experienced solicitors and accountants to assist her in the administration of the estate and there is no suggestion that she has acted contrary to their advice.

12 Mr Indyk, on the other hand, has demonstrated a most hostile attitude to Mrs Wiernik and it is very clear that this attitude has permeated his questioning of the administration of the estate almost from the beginning. Indeed, although Mr Armfield very properly disavowed any suggestion of dishonesty on the part of Mrs Wiernik in her administration, Mr Indyk in the witness box made that allegation assesrtively and without any basis whatsoever in any evidence to which I have been taken.

13 I accept that Mrs Wiernik has been put to very considerable trouble in administering this estate. The very large volume of the correspondence between the parties' solicitors and its unfortunate tone leave little doubt about that. As Young CJ in Eq said, the deceased's will is simple enough; however carrying out its instructions to the satisfaction of Mr Indyk was what became excessively difficult.

14 For example, large complaint is made by Mr Indyk that Mrs Wiernik acted unreasonably in deciding not to accept a verbal offer for the purchase of the deceased's property at a sum of $3.9M and in deciding to put the property to auction, where it realised $3.8M.

15 To my mind, this is a very cavilling criticism. The evidence shows clearly that Mrs Wiernik took careful advice from real estate agents as to the market value of the property. The property was extensively advertised. The agent kept Mrs Wiernik informed of all offers. The agent expressed the view that a sum higher than $3.9M was quite conceivable. In those circumstances, and bearing in mind that we are dealing with a very expensive property in what is commonly known to be an overheated property market in Sydney, I cannot think it unreasonable that Mrs Wiernik decided to put the property to auction to see what the best price realisable would be.

16 It so happened that the highest offer received was $100,000 less than the verbal offer that had been made before. Such are the chances and vagaries of the property market. I do not think that Mrs Wiernik acted unreasonably in testing that market by putting the property to auction.

17 I will deal now with some of the criticisms made by Mr Indik, but not in great detail. Mr Indyk says that Mrs Wiernik delayed too long in putting the deceased's home on the market. Mrs Wiernik has given an explanation, which I accept. That is, that there was discussion between herself and her brothers about leaving the home for at least a year in the state in which their mother left it so that they could mourn her during that period. This, she says, is in accordance with Jewish custom and tradition and, apparently, it was observed by the parties in this case. In other words, the delay in putting the property on the market was, as I accept, with the express wish and consent of all beneficiaries. Mrs Wiernik can hardly be blamed for carrying out the uniform desire of the beneficiaries in this regard.

18 Next, Mr Indyk criticises Mrs Wiernik for the fact that by reason of the delay in putting the deceased's property on the market, land tax was payable. The incurring of this expense was in accordance with the express desire of the beneficiaries that the property be kept for a year to allow the deceased's children time to mourn. Mrs Wiernik cannot be criticised for the inevitable consequences of complying with the beneficiaries' wishes in this regard.

19 Mrs Wiernik is criticised for overstating the amount of time that she took in sorting out the effects of the deceased. The evidence is uncontested that the deceased had a very large number of paintings, most of them done by her. There are said to be some hundreds of paintings. Many of the paintings are said to have little, if any, commercial value, although they are of considerable sentimental value to the members of the family, particularly her children. I accept that it took a great deal of time on the part of Mrs Wiernik, in conjunction with valuers and other assistance, to sort through the considerable volume of personal effects in the deceased's home, to apportion it and to provide for its storage.

20 Mrs Wiernik is criticised for failing to distribute promptly the deceased's paintings amongst the beneficiaries and for incurring storage charges in the meantime. I accept Mrs Wiernik's evidence that it was certainly far from easy to agree upon distribution of the pictures promptly in light of the very hostile atmosphere existing between herself and Mr Indyk. In my view, Mrs Wiernik cannot be criticised for storing the paintings until either the atmosphere calmed sufficiently to enable a rational and agreed distribution or else some litigious proceedings would remove the decision from her hands.

21 I accept that the accusations of delay and even dishonesty made by Mr Indyk against Mrs Wiernik in the course of her administration have caused her a great deal of anguish. It is anguish for which I think she deserves to be compensated.

22 I have arrived at a figure of $120,000 as the commission which ought to be allowed to Mrs Wiernik. I have arrived at this sum – which is, of course, largely a matter of discretion and impression – by reference to the usual percentages which can be used and to which I have referred earlier, at the higher rather than the lower end of the scale. I have had regard to the higher end of the scale because of the unusual anguish and pain and trouble to which I think Mrs Wiernik has been put in this bitter administration.

23 I have had regard in arriving at this figure to the observations of Young CJ in Eq, to which have I have referred, as to unreasonable refusal by Mr Indyk to provide information and to act promptly. As I have noted, I would modify his Honour's criticisms in light of the explanations given by Mrs Wiernik in the witness box. I have taken into account that Mrs Wiernik may have delayed a little in carrying forward the administration simply because she found it difficult to deal with Mr Indyk's constant criticism. I have taken into account also that Mrs Wiernik retained $6,000 taken from the deceased's account in order to meet small estate expenses for almost two years before repaying it to the estate. I accept Mrs Wiernik’s explanation that the retention of that amount escaped her attention.

24 I take into account also that Mrs Wiernik claims compensation for time spent by her in opposing an application by Mr Indyk in the Guardianship Tribunal for the appointment of Mr Indyk as financial manager for their brother. I do not think that those activities were part of Mrs Wiernik’s executorial duties.

25 I do not reduce the commission because Mrs Wiernik receives one-third of the residual estate under the will. That bequest is not compensation for the pains and troubles taken by her in performing her executorial duties. It must be remembered that Mr Indyk and her brother receive an equal bequest, without the burden of executorial duties.

26 In short, although Mrs Wiernik seeks commission in a sum of almost $150,000, I think a fair assessment of the amount to which she is entitled by way of commission is the sum of $120,000. That is the amount which I propose to award.

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