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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Lowe

Details

AGLC: Re Lowe [2000] NSWSC 1180
Case: [2000] NSWSC 1180
Decision Date: 23 November 2000

CaseChat Overview and Summary

In the matter of the estate of the late Lowe, the executor, the respondent, was in dispute with a potential beneficiary, the applicant, over the costs incurred during Family Provision Act proceedings. The Federal Circuit Court was tasked with determining whether these costs were legitimate testamentary expenses. The applicant argued that the executor's costs were not properly incurred and sought an order that they not be paid out of the estate. The executor contended that the costs were necessary and reasonable in the circumstances and should be treated as testamentary expenses.

The court examined the nature and purpose of testamentary expenses and whether they were incurred in the course of administering the estate. It was necessary to determine whether the costs of defending Family Provision Act proceedings could be considered testamentary expenses, given the unique circumstances of such claims. The court considered the legislative intent behind the Family Provision Act and how it intersects with the administration of an estate. It assessed the executor's conduct and the necessity of the incurred costs to properly administer the estate and address the Family Provision Act claim.

The court concluded that the costs incurred by the executor in defending the Family Provision Act proceedings were indeed testamentary expenses, as they were reasonable and necessary for the proper administration of the estate. The court found that the executor's actions were justified and in line with their duties under the Wills Act. As a result, the applicant's claim to prevent the executor from being reimbursed for these costs was dismissed. The executor was allowed to treat these costs as testamentary expenses and seek reimbursement from the estate.

The court ordered that the executor could treat the costs incurred in defending the Family Provision Act proceedings as testamentary expenses and that the applicant's claim for an order preventing the executor from being reimbursed for these costs was dismissed. The executor was permitted to seek reimbursement for these costs from the estate in accordance with the court's decision.

Orders