Re Estate Schutt

[2023] NSWSC 1159

Supreme Court

New South Wales

Medium Neutral Citation:

Re Estate Schutt [2023] NSWSC 1159

Hearing dates:

25 September 2023

Decision date:

26 September 2023

Jurisdiction:

Equity

Before:

Lindsay J

Decision:

Order that an application for review of a decision made by a Senior Deputy Registrar in Probate be dismissed with no order as to costs.

Catchwords:

CIVIL PROCEDURE – Registrars – Review of Registrar’s decision under rule 49.19 of the Uniform Civil Procedure Rules 2005 – Claim by executor for management fees and commission – Registrar disallowed the executor’s claim for management fees and allowed the executor’s claim for commission – Registrar’s decision upheld – No orders as to costs

Legislation Cited:

Probate and Administration Act 1898 NSW

Uniform Civil Procedure Rules 2005 NSW

Cases Cited:

Lawteal Pty Ltd v Ofo [2005] NSWSC 984

Tomko v Palasty (No 2) (2007) 71 NSWLR 61

Category:

Principal judgment

Parties:

Applicant (Executor): Williams Landers Schutt
Respondent (Beneficiary): Margaret Yvonne Mills

Representation:

Counsel:
Applicant: David Robert Legg
Respondent: In person

Solicitors:
Applicant: David Legg, Burridge & Legg
Respondent: Self represented

File Number(s):

2021/00051387

JUDGMENT

INTRODUCTION

1. Before the Court is a notice of motion filed on 6 June 2023 by the executor of a deceased estate seeking (pursuant to rule 49.19 of the Uniform Civil Procedure Rules 2005 NSW) a review of a decision made by a Senior Deputy Registrar on 10 May 2023 to disallow a claim for $56,800 made by the executor for “management services” said to have been provided by him to the deceased during her lifetime.

2. The Registrar’s decision was made in the course of dealing with a notice of motion for the passing of accounts filed by the executor on 6 October 2022, and amended on 10 May 2023, in response to a notice of motion filed (on 10 May 2022) by one of several residuary beneficiaries of the estate of the deceased seeking an order that the executor file and pass his accounts.

3. The effect of the amendment to the executor’s notice of motion was to allow him to claim commission (under section 86 of the Probate and Administration Act 1898 NSW) despite earlier (in an affidavit sworn on 22 September 2022) having disclaimed any intention to do so.

4. In accordance with usual practice, an application for review of the Registrar’s decision having been made, she provided to the Court and the parties a “Report to Court” (dated 18 July 2023) which provided formal reasons for her decision.

5. As the Registrar’s Report explains, although she disallowed $56,800 of the sum (of $64,400) claimed by the executor for “management fees”, she allowed him commission of $15,000.

6. No challenge has been made to the Registrar’s decision to allow commission in favour of the executor.

7. Nevertheless, the Registrar’s Report includes the following statement:

“Although there is no specific review on the issue of commission [the Report addresses] the commission order as the exercise of discretion in relation to commission in this matter (both for executor in allowing commission and for the benefit of the estate in the amount actually allowed) included consideration of the various refunds that had been made to the estate.”

THE DECEASED’S WILL

8. Sylvia Yvonne Schutt (“the deceased”), a widow, died on 11 January 2021 aged 99 years, leaving a will dated 7 April 2017 probate of which was granted to her son William on 7 May 2021.

9. The will appointed William as the deceased’s sole executor, with another of her sons nominated as a substitute executor.

10. The deceased was predeceased by her husband (who died in 1994) and a son (who died in 2001) but she was survived by her four remaining adult children and the widow of the son who had died before her.

11. A statement in the form of a certificate on the front page of the will records that the will was “prepared by” William “in consultation with” the deceased and “reviewed by” a named solicitor. The address of the deceased is stated in the will to have been that of a nursing home. Her execution of the will was witnessed by two persons each of whom was identified, by occupation, as a “hairdresser”.

12. The scheme of the will is encapsulated in the following extract from clause 3:

“3   MY Executors [sic] hold my estate on trust:

1. to pay thereout all my just debts, funeral and testamentary expenses including all duties (if any);

2. pay my son WILLIAM LANDERS SCHUTT the amount of $120,000 in appreciation of the considerable wealth he has added to my investments since 1994;

3. to divide the remainder of my estate, including personal and household effects, into five (5) equal parts to be distributed [between the deceased’s four surviving children, including William the executor, and her daughter-in-law].”

13. The evidence before the Registrar left her in doubt about the nature and extent of any management services provided by the executor to the deceased during her lifetime, a doubt accompanied by her observation of deep disharmony within the deceased’s family during the last decades of her life.

14. The deceased died at an advanced age. Her executor’s assumption of “management” responsibilities was the subject of controversies which, on the materials presently before the Court, cannot be resolved.

15. The inventory of property of the deceased attached to the executor’s grant of probate discloses that at the time of her death the deceased had an estate worth approximately $1.6 million, substantially all of which (other than a refund of her nursing home bond) took the form of shares in public companies or the like.

NOTICE OF PROCEEDINGS

16. At the direction of the Court, notice of the executor’s application for review was served on the deceased’s residuary beneficiaries not otherwise involved in the proceedings. None chose to appear before the Court.

CONSIDERATION

17. A review of a Registrar’s decision under rule 49.19 (which brings into play, rule 49.20) of the Uniform Civil Procedure Rules 2005 does not, like an appeal from a judge to the Court of Appeal, require demonstration of error on the part of the Registrar. It is not restricted to a reconsideration of the material before the Registrar but it is nevertheless customary that, on a review, the parties are restricted to the material before the Registrar unless the interests of justice dictate otherwise: Tomko v Palasty(No 2) (2007) 71 NSWLR 61 at [6]-[10]; Lawteal Pty Ltd v Ofo [2005] NSWSC 984 at [19]-[21].

18. In these proceedings, the executor (over the objection of the respondent beneficiary) sought to read, on review, an affidavit intended to overcome a criticism of the Registrar directed to the absence of copies of tax returns of the deceased.

19. In my opinion, nothing turns on the provision of those tax returns on an analysis of the Registrar’s reasoning because, on my reading of her reasons, she had (with good reason) broader doubts about the nature of any management services provided by the executor to the deceased and his entitlement, if any, to charge management fees to the estate of the deceased.

20. It is common ground between the parties that the executor bears the forensic onus to persuade the Court that it should intervene upon a challenge to the Registrar’s decision.

21. I am not satisfied that there is any reason to intervene. The Registrar’s reasons were well considered and sound. She rightly observed that the substantial legacy allowed by the deceased in favour of the executor might reasonably be taken into account against the executor’s contention that he had an agreement with the deceased to charge her separately as if she were receiving a commercial service.

CONCLUSION

22. For these reasons, I order that the executor’s notice of motion filed on 6 June 2023 be dismissed.

23. As invited by the respondent beneficiary, I make no order as to costs, with the intention that the parties pay or bear their own costs.

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Decision last updated: 26 September 2023