Re Lowe

[2000] NSWSC 1180

CITATION:	Re Lowe [2000] NSWSC 1180
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 4560/2000
HEARING DATE(S):	23/11/2000
JUDGMENT DATE:	23 November 2000
PARTIES :	James David Lowe (P)
JUDGMENT OF:	Young J

COUNSEL :	E Holt (P)
SOLICITORS:	McMillan & Dawson (P)
CATCHWORDS:	SUCCESSION [263]- Getting in the estate- What are testamentary expenses for which executor may sell assets- Reasonable costs of defending Family Provision Act proceedings are testamentary expenses SUCCESSION [335]- Family Provision Act- Costs- Executor's costs are testamentary expenses.
CASES CITED:	Re Prince [1898] 2 Ch 225 Re Woodman (1940) 11 ABC 159 Sharp v Lush (1879) 10 Ch D 468
DECISION:	See paras 11 and 12.

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

YOUNG J

THURSDAY 23 NOVEMBER 2000

4560/2000 - RE LOWE

JUDGMENT

1    HIS HONOUR: This is an application for judicial advice by the executor of the estate of George Henry Horn who died on 6 November 1998. Mr Horn left three parcels of real estate in the general Newcastle area, namely his matrimonial home at Valentine, an investment property at Soldiers Point and a property at Sandgate. Each was specifically devised so that his widow, being the deceased’s second wife, has what might well be a life estate in each property.

2 A daughter of the deceased by his first wife, Jennifer Anne Spiller, has, in proceedings 3767/99, sought provision under the Family Provision Act 1982.

3 In the statement of facts the executor has indicated that he has incurred costs to date of $26,345. The statement is not particularly explicit, nor does it appear how the sum of about $12,000 in liquid funds detailed in the inventory attached to the probate has been expended. The schedule of costs includes motor car expenses for a motor car specifically bequeathed to the executor of $3,704; moneys advanced by the widow for probate costs etc of $12,281; legal fees which are not designated but which appear to refer to the Family Provision Act proceedings for $10,000; and some $200 for fares and wages.

4    An executor has power to sell assets after administration of the estate. That includes meeting the probate, funeral and testamentary expenses. Testamentary expenses are those which are necessarily incurred by an executor in the proper performance of his or her duty. Woodman on Administration of Assets, 2nd edition (LBC, 1978) at p 10 says these expenses include:

(a) the costs and expenses of obtaining a grant of probate or administration;

(b) the costs and expenses of getting the assets of the deceased into the hands of the personal representative;

(c) the costs and expenses of obtaining proper legal advice, including costs of any application to the Court as to the interpretation of a will, or as to entitlement on intestacy;

(d) the corpus commission of a trustee company; and

(e) death and estate duties.

5 So far as (c) is concerned, the authorities show that the executor's proper costs of defending an application under the Family Provision Act are ordinarily testamentary expenses; see Re Woodman (1940) 11 ABC 159, 175; Sharp v Lush (1879) 10 Ch D 468 and Re Prince [1898] 2 Ch 225.

6 Accordingly, the $10,000 costs, if they be costs of the executor in the Family Provision Act application, are testamentary expenses.

7 Mr Van Aalst, for Ms Spiller, says one needs to wait until the hearing of that application because the Judge or Master who hears it may decide that the executor should pay the costs personally and not out of the estate. This is a theoretical possibility but, it seems to me, in matters concerning administration of estates, solicitors expect to be paid by their clients as the matter proceeds. An executor performs a duty of his office in protecting the estate against a Family Provision Act application, and almost always the executor’s reasonable costs are testamentary expenses. He is entitled to raise money to pay costs as they become due. The moneys owed to the widow would be in a similar plight.

8    So far as fares and expenses are concerned, these would normally fall under heading (d) as expenses in the nature of commission. However, the executor has been given a motor car and ordinarily any gift given to an executor is taken to be consideration for his pains and trouble and he needs either to renounce the gift and take the commission, or take the gift. I accordingly have some doubts about that $200 at this stage.

9    The motor car expenses would not under any view appear to be a testamentary expense. Either the car should have been sold or, alternatively, passed to the beneficiary. However, when giving judicial advice the Court does not go into the minutiae. Nor does the Court order that an executor should do something. It merely advises the executor that he or she would be justified in doing something.

10 In the present case, it must be questionable whether this application was necessary. However, because there was opposition today, and because there are the current Family Provision Act proceedings, it would seem to me that it was probably necessary to clear the air, especially as the executor had written to Ms Spiller and she had declined to agree that the Soldiers Point property be sold.

11    The executor seeks an order that he should sell the Soldiers Point property. However, the Court can only advise that the executor would be justified in selling Unit 9/3 Mitchell Street, Soldiers Point, being the property described in Folio Identifier 9/SP17261 if he considered it necessary that such sale was required in order to meet testamentary expenses of the estate of the late George Henry Horn.

12    I order that the costs of the applicant be paid out of the estate.

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Last Modified: 12/14/2000