Re Estate of Badstuebner

In the case of Re Estate of Badstuebner, the applicant, Thomas, was appointed as the sole executor of his deceased father’s estate. The dispute arose when Thomas sought to condition his performance of his executor duties on the payment of an executor’s fee or commission. Thomas' siblings, Karl and Jennifer, resisted the application, arguing that Thomas was not entitled to receive a commission. The estate, which was not complex, comprised the deceased’s home, cash in various accounts, two motor vehicles, and sundry household chattels. Thomas pursued a distribution of the estate which would have seen him receive ownership of the deceased’s home, the motor vehicles, and household chattels, but this attempt ultimately failed. Thomas rented out the Kirby Close property and eventually engaged a real estate agent to sell the house, which sold in September 2019. The interim distributions made to all beneficiaries totalled $917,000, yet no distributions were made after the house sale settled on 5 September 2019. As at the hearing of this application in late April 2020, over seven months after the Kirby Close property was sold, the amount of $447,500 still remained in the estate’s accounts.

The legal issues the court was required to decide included whether Thomas was entitled to receive a commission, and if so, what amount. The court considered the value and composition of the estate, the conduct of the parties, and the efficiency of the administration of the estate in deciding the application for commission. The court found that Thomas had breached his executor duties, and his conduct was a relevant consideration in the decision-making process. The court determined that the occurrence and consequence of any breach of the executor’s duties would be relevant, and that an executor’s breach of duty may result in the court refusing to authorise payment of a commission. The court also found that the effect of the breach upon the estate would be relevant and that the degree of seriousness of a breach of duty would remain a relevant consideration.

The court dismissed the application for commission and ordered that Thomas was not entitled to receive a commission. The court will hear the parties as to costs at 9.15 am on 10 June 2020, if the Registrar has not in the meantime been notified in writing that costs are agreed.