Pyke v Pyke (Ruling)

[2012] VCC 1334

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CIVIL DIVISION

Revised
Not Restricted
Suitable for Publication

DAMAGES AND COMPENSATION

FAMILY PROPERTY DIVISION

Case No.  CI-11-06335

IN THE MATTER of the Estate of NEIL ALISTER PYKE, deceased

CHRISTOPHER GLEN PYKE (who brings this proceeding by his Administrator, State Trustees Limited)	Plaintiff
v
DANNY HENRY PYKE (who is sued in his capacity as the Executor of the Estate of the above-named deceased)	Defendant

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	13 September 2012
DATE OF RULING:	18 September 2012
CASE MAY BE CITED AS:	Pyke v Pyke (Ruling)
MEDIUM NEUTRAL CITATION:	[2012] VCC 1334

RULING
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SUBJECT: TESTATOR'S FAMILY MAINTENANCE

CATCHWORDS: Settlement – necessity for the executor to provide an accurate account of the administration of the estate – failure of the executor to do so – application for compromise of the plaintiff's claim – plaintiff under a disability – failure by the defendant to comply with s28(1) of the Administration and Probate Act 1958 or to provide an accurate accounting in a satisfactory manner – consent orders providing for an accurate accounting – application for costs against the executor
LEGISLATION:  Administration and Probate Act 1958, s28(1) and s65
RULING: the defendant provide accurate accounting in his administration of the estate; repay commission wrongfully paid to him by the estate; pay the plaintiffs costs and the estate’s costs from 9 March 2012 to 13 September 2012.     

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Smith	State Trustees Limited, Legal Branch
For the Defendant	Ms U Stanisich	Peter Saunders Lawyers

HIS HONOUR:

Introduction

1       Neil Alister Pyke (“the deceased”) died on 24 December 2010.  He is survived by four sons: Peter John Pyke, David Neal Pyke, Christopher Glen Pyke (the defendant) and Danny Henry Pyke (the plaintiff).  He made a Will dated 29 September 1999.  He appointed the defendant as the executor of his estate.

2       The plaintiff is a person under a disability.  State Trustees Limited (“STL”) was appointed the administrator for the plaintiff pursuant to the provisions of the Guardianship and Administration Act 1986 by an order of the Victorian Civil and Administrative Tribunal.

3       The defendant obtained a grant of probate over the deceased's estate on 15 February 2011.

4       On 22 December 2011, STL filed and served an Originating Motion on behalf of the plaintiff seeking proper provision for his maintenance and support out of the estate of the deceased pursuant to the provisions of the Administration and Probate Act 1958 ("the Act").  The proceeding has essentially resolved, subject to the provision by the defendant of an accurate account of his administration of the deceased’s estate, and once that has been provided, an application will be made to me to approve a compromise of the plaintiff's claim.

5       The matter which the plaintiff and the defendant have ventilated before me is whether the defendant should be held personally liable to pay a portion of the plaintiff's costs, the costs of the estate, and payment of commission into the estate wrongfully paid by the estate to the defendant.

6       Mr J Smith of Counsel appeared for the plaintiff, and Ms U Stanisich of Counsel appeared for the defendant.

7       The evidence which Mr Smith and Ms Stanisich put before me in support of the submissions they each made is as follows:

·        The affidavit of Mr Paul Traianedes, solicitor, sworn 11 September 2012 with  exhibits “PT1” – “PT26”.

·        The affidavit of the defendant sworn 11 May 2012 with exhibits “A” – “O”.

·        A medical certificate concerning the defendant provided by Dr Kirwan, general practitioner, dated 10 September 2012.

The Deceased's Estate

8       In early 2011, Betty Florence Wells (“Wells”) commenced a Part IV application in the Supreme Court.  Wells alleged that she was the domestic partner of the deceased.  The proceeding was settled at mediation on 5 December 2011.  Wells received $70,000 inclusive of costs.

9       STL was not made aware that the deceased had died; that Wells had commenced a proceeding; that the Wells’ proceeding had proceeded to mediation, and had settled at mediation.  STL wrote to the defendant’s solicitors raising each of these matters.  What transpired was an exchange of correspondence which I do not propose to summarise.  However, what those matters led to was the filing of the plaintiff's proceeding by STL to protect the plaintiff's interests.

10      At this point I pause to make the following observations.  I do not accept that the defendant did not know that the plaintiff suffered from a general level of ill‑health, schizophrenia and hepatitis C, which led to STL being appointed his guardian.  The defendant should have informed his solicitors and counsel of the position of the plaintiff before the mediation.  It is plain that he did not, because counsel would have advised that any settlement of Wells’ claim would need to be approved by the Supreme Court because the plaintiff was under a disability, and any monies paid out of the estate in settlement of Wells’ claim might affect the receipt by the plaintiff of his deserts under the deceased’s Will, and any claim that he might have.

11 The next observation I make is that the Will does not provide for commission to be paid from the estate to the defendant in his capacity as executor. Therefore, the only basis upon which commission can be charged against the estate is pursuant to s65 of the Act which vests the Court with a discretion to allow such commission, not exceeding 5 per cent, for the pains and trouble of an executor which the Court thinks is just and reasonable.

12      The defendant claimed and was paid a total of $6,540.12 by way of commission.  That was disclosed by the solicitors for the defendant under cover of a letter dated 16 April 2012.[1] The defendant intends to claim commission at 3.5 per cent of the estate, which would entitle him to $14,702.92 less what he has already been paid by the estate.

[1]Mr Traianedes’ affidavit - Exhibit “PT21”

13      The tenor of the letter of the defendant’s solicitors dated 18 April 2012 is expressed in unnecessarily aggressive terms.  It seeks to explain the defendant's failure to provide an accurate account of his administration of the estate by alleging that it was caused by the plaintiff commencing his proceeding, and some delay on the part of STL in pursuing the issue of the accounting.  Then it threatens that if an application for approval of the compromise of the plaintiff's claim was not brought by 22 May 2012, that the defendant would seek an order that it be done and that the plaintiff pay the defendant's costs.

14 Much of the correspondence I was taken to resonates with requests by STL for information and tit-for-tat accusations mostly coming from the defendant’s side. The defendant and his solicitors seem to have entirely missed the point of the requests made by STL. Firstly, once the plaintiff commenced this proceeding, a mandatory obligation was imposed upon the defendant pursuant to s28(1) of the Act to exhibit a true and perfect inventory and account of the real and personal estate of the deceased.  Secondly, I would not entertain an application to approve a compromise of the plaintiff's claim on the material I have read in the affidavits.  It is trite to say that unless the plaintiff can satisfy me of the net position of the estate, then I will be unable to make an assessment whether the compromise should be approved.

15      The statutory duty imposed upon the defendant, and what is required for the approval of a compromise, seem to have been lost on the defendant and his solicitors.  I consider the conduct of the defendant and his solicitors to be disquieting.  In the end, the recalcitrance of the defendant led to the necessity for a directions hearing, and the making of orders by consent that the defendant provide an accurate accounting of his administration of the estate.  This is something which could have been avoided with ease.

Disposition

16      I consider that the defendant must pay the plaintiffs costs from 9 March 2012 to 13 September 2012, and on a solicitor-client basis.  It seems to me to be clear that it was during that period that STL was forced to chase the defendant to obtain the very material which the defendant now consents to providing.

17      Furthermore, I find that was the defendant's conduct, and indeed, his recalcitrance in complying with reasonable requests for an accurate account of his administration of the estate which caused the tit-for-tat paper war that broke out between STL and his solicitors.  He should not obtain any costs for his maladministration of the estate of the deceased from 9 March 2012 to 13 September 2012, but should pay the estate costs incurred during that period.

18 Lastly, I will order that all monies paid to the defendant from the estate for commission be repaid to the estate. I will reserve leave to the defendant to make application to me for commission in a proper way and pursuant to s65 of the Act.

Orders

19      I will make the following orders by consent:

(1)   Within 21 days of this date the defendant file and serve on the solicitors for the plaintiff an accurate account of his administration of the estate of the abovenamed deceased, containing full particulars of:

(a)     all assets of the estate collected by him;

(b)     the proceeds of all assets realised by him;

(c)     all monies received or collected by him in the course of administration of the estate;

(d)     all funeral, legal, and administrative expenses paid by him in the course of administration of the estate;

(e)     all debts and liabilities paid by him in the course of administration of the estate;

(f)     all monies which have been distributed by him in the course of administration of the estate, including all monies distributed to Betty Florence Wells (who brought proceedings against the estate seeking provision for her maintenance and support);

(g)     all assets retained in specie by him;

(h)     all funds retained by him, whether on trust or otherwise;

and that such account be verified by affidavit.

(2)   Within 21 days of this date, the defendant pay to State Trustees Ltd, for the plaintiff, the whole of his unpaid entitlements in the estate of the deceased.

(3)   The further hearing of this directions hearing be adjourned to a date to be fixed.

(4)   The defendant personally pay:

(a)     the plaintiff’s costs;  and

(b)     the estate’s costs

from 9 March 2012 to date, including the costs of the directions hearing on 13 September 2012, on a solicitor-client basis.

20      I will also make the following orders:

(5)   The defendant pay back into the accounts of the estate the sum of $6540.12 wrongfully paid to him for commission.

(6) Any claim which the defendant intends to make for commission pursuant to s65 of the Act must be made on fourteen (14) days notice in writing to the plaintiff and the other beneficiaries, accompanied by an itemised breakdown of the claim.

(7)   The plaintiff must inform the defendant of the date upon which the plaintiff intends to seek approval of the Court to compromise his claim for the purpose of the defendant making his claim for commission either before or on that date.

(8)   Liberty to apply.

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