Re the Estate of Diana Noelle Whiteman (deceased)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
IN ITS PROBATE JURISDICTION
TRUSTS, EQUITY AND PROBATE LIST

S PRB 2023 14389

IN THE MATTER of the Estate of the DIANA NOELLE WHITEMAN (deceased)

- and –

IN THE MATTER of Section 65 of the Administration and Probate Act 1958 (Vic)

APPLICATION BY:

DAVID WILLIAM JAMES FOTHERGILL	First Plaintiff
- and-
ERICA HORSFIELD	Second Plaintiff

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JUDGE:	Irving AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 August 2024
DATE OF JUDGMENT:	20 December 2024
CASE MAY BE CITED AS:	Re the Estate of Diana Noelle Whiteman (deceased)
MEDIUM NEUTRAL CITATION:	[2024] VSC 793

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WILLS — Executor’s commission — Section 65 of the Administration and Probate Act 1958 (Vic) — Whether requirements of s 65D complied with — Application refused.

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APPEARANCES:	Counsel	Solicitors
For the First Plaintiff	Ms E Coates of counsel	Wills & Wealth
For the Second Plaintiff	Mr M O’Connor of counsel	Erica Horsfield t/as Hunt McCullough Kollias & Co

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Materials relied upon........................................................................................................................ 2

The Will.......................................................................................................................................... 2
Ms Horsfield’s evidence............................................................................................................... 3
Mr Fothergill’s evidence............................................................................................................ 13
Ms Horsfield’s submissions....................................................................................................... 20

Statutory provisions and principles............................................................................................. 22

Consideration.................................................................................................................................... 25

Did Ms Hosfield inform each interested beneficiary?........................................................... 26
Was the information provided ‘as soon as reasonably practicable’?.................................. 27
Did Ms Horsfield’s emails of 6 December 2023 and 28 February 2024 provide the interested beneficiaries with the information required by s 65D(1) of the Act?......................... 29
Disentitling conduct................................................................................................................... 32
Quantum of commission............................................................................................................ 35

Conclusion......................................................................................................................................... 35

HIS HONOUR:

Introduction

Diana Noelle Whiteman (deceased) died on 15 February 2023 leaving a last will dated 20 May 2019 (Will). The Will appointed David William James Fothergill, the first plaintiff, and the senior partner of the firm Hunt McCullough Kollias & Co (HMCK), the firm that prepared the Will, as executors of the estate. Mr Fothergill is the husband of the deceased’s second cousin and, along with his wife, is a beneficiary of the estate. Ms Erica Horsfield, the second plaintiff, is a solicitor at HMCK, and the co-executor of the estate. The executors obtained a grant of probate on 23 June 2023.

Ms Horsfield, seeks payment of executor’s commission pursuant to s 65 of the Administration and Probate Act 1958 (Vic) (Act). Ms Horsfield seeks payment of 2% of the value of the estate.

The inventory of assets and liabilities of the estate, filed as part of the application for a grant of probate, detailed a net value of the estate of $5,182,972.30. According to the administration account filed as part of this application for commission, the gross value of the estate was $5,729,386.80.

Mr Fothergill opposes Ms Horsfield’s application on the bases that:

(a) Ms Horsfield did not notify the residuary beneficiaries of the estate of her intention to claim commission ‘as soon as reasonably practicable’ as required by s 65D of the Act and nor did her notification include all of the information required by that section;

(b) if Ms Horsfield did comply with s 65D of the Act, she has engaged in conduct that the Court should find disentitles her from payment of an executor’s commission; and

(c) alternatively, Ms Horsfield’s claim for commission is excessive given it was a simple estate to administer and the legal work was carried out by an independent law firm, to whom professional fees have been paid.

For the reasons that follow, I have refused Ms Horsfield’s application for executor’s commission because I have found that she did not comply with the requirements of s 65D of the Act. I have also found that if I am wrong and Ms Horsfield has complied with s 65D of the Act, she has engaged in conduct which disentitles her to the payment of an executor’s commission.

Materials relied upon

Ms Horsfield relied upon the following in support of her application:

(a) affidavit of Erica Horsfield affirmed 29 February 2024 in support of her application for commission (First Horsfield affidavit);

(b) affidavit of Erica Horsfield affirmed 2 May 2024 verifying and exhibiting the administration account (Second Horsfield affidavit);

(c) amended affidavit of Erica Horsfield affirmed 2 May 2024 (Third Horsfield affidavit); and

(d) affidavit of Erica Horsfield affirmed 28 August 2024 (Fourth Horsfield affidavit).

Mr Fothergill relied upon the following in opposition to Ms Horsfield’s application:

(a) affidavit of David William James Fothergill sworn 5 June 2024 (First Fothergill affidavit); and

(b) affidavit of David William James Fothergill sworn 15 July 2024 (Second Fothergill affidavit).

Both Ms Horsfield and Mr Fothergill provided written submissions to the Court.

The Will

The Will was prepared by HMCK.

Clause 3 of the Will states:

I DIRECT that any of my executors who practises a profession is entitled to be paid all usual professional fees for work done by that executor or his or her firm (as executor, trustee or both) on the same basis as if he or she were not one of my executors but employed to act on behalf of my executors and may in addition apply to the Court for commission for his or her pains and trouble.

Clauses 4, 5 and 6 make relatively modest specific gifts to Jean Audrey Whiteman ($15,000), Sally Rushton ($20,000) and the Pastor in charge of St Peter’s Anglican Church, Mornington ($15,000).

Clause 7 contains the residuary provisions of the Will. It divides the residue of the estate into ten equal parts and directs two parts to be paid to each of David Whiteman Callaghan, Richard James Alexander Callaghan, Clair Thomasina Whiteman, David William James Fothergill and Jane Fothergill.

At the time of death the deceased’s estate comprised:

(a) a unit at Koorootang Village Retirement;

(b) a refundable accommodation deposit at BlueCross, ‘The Mews’ in Canterbury;

(c) cash held in bank accounts; and

(d) a share portfolio managed by Bell Potter.

Ms Horsfield’s evidence

In the First Horsfield affidavit, Mr Horsfield deposed that she and Mr Fothergill were the executors to whom probate of the Will had been granted on 23 June 2023. Wills & Wealth Estate Lawyers (Wills & Wealth), the firm acting for the executors on the probate application, continue to act as the estate administrator and hold the net estate assets. Ms Horsfield said that following an interim distribution to the residual beneficiaries of the estate, the balance of the net estate is awaiting final distribution.

According to Ms Horsfield, Mr Fothergill is a substantial beneficiary of assets of the estate and has already received $670,000.

Ms Horsfield deposed that the exhibited administration account was a true and just account of the estate as at 26 February 2024. She stated that throughout the administration of the estate she had dedicated significant time, effort and expertise to ensure that all matters were handled with care, efficiency and transparency.

Ms Horsfield also clarified that while the Will and an acknowledgment dated 20 May 2019 signed by the deceased allowed Ms Horsfield to charge professional fees, she intended to charge only a commission.

The First Horsfield affidavit set out the pains and troubles Ms Horsfield said she had incurred in administering the estate:

(a) discussions with the co-executor and his legal representative on whether Ms Horsfield’s law practice should be handling the estate administration (as preferred by the testator) or whether another firm should be engaged;

(b) addressing the co-executor’s objection to Ms Horsfield’s role as executor, including his questioning the validity of the testator’s acknowledgment of commission, and objecting to the legitimacy of whether Ms Horsfield’s firm can claim both probate administration costs and executor commission;

(c) managing the co-executor’s demands for Ms Horsfield to step aside as the estate administrator;

(d) handling the co-executor’s pressure for Ms Horsfield to step aside as co-executor;

(e) identifying and engaging Wills & Wealth to handle estate administration matters;

(f) locating and providing the original Will to Wills & Wealth including the deceased’s acknowledgment;

(g) attending meetings in Brighton with Wills & Wealth to execute documents and discuss estate affairs;

(h) executing (including organising witnessing by a qualified witness) of numerous legal documents and conveyancing documents to effect the sale and transfer of estate assets;

(i) overseeing and approving the payment of the deceased’s debts vis a vis instructions to Wills & Wealth;

(j) considering and objecting to the co-executor’s claim for reimbursement of costs associated with a celebration of life at the RACV Club;

(k) considering emails from the beneficiaries on the celebration of life and communications with Wills & Wealth on the same;

(l) reviewing, assessing and responding to a significant number of emails and queries from the co-executor on estate matters;

(m) clarifying the co-executor’s misunderstanding of the role of Wills and Wealth in that firm’s handling of estate matters;

(n) reviewing, assessing and approving the deceased tax returns for 2022 and 2023 including assessments for Capital Gains Tax;

(o) managing all matters that required the executor’s input on behalf of the estate;

(p) administering a large estate valued at over $5,000,000.00;

(q) conducting extensive investigations into activities of the financial power of attorney, Mr Fothergill, for the deceased;

(r) locating and liaising with the co-financial power of attorney (Ms Sue Milton) previously of Wootton’s Chartered Accountants Mornington – now retired) on any communications Mr Fothergill had concerning the financial matters of the deceased. This was done with a view to ensuring the preservation and possible reclamation of estate assets;

(s) reviewing the deceased’s bank statements from 2 April 2017 to 2 March 2023 for unusual, questionable and/or large transaction;

(t) seeking clarification from the financial power of attorney/co-executor on unusual transactions that occurred during his role as attorney;

(u) dealing with the lack of transparency from the co-executor in responding to inquiries about his role as financial power of attorney;

(v) dealing with the co-executor’s suspicion, aggression and mistrust in response to queries concerning his role as attorney [noting that he has not provided any attorney administration accounts despite requests to do so];

(w)corresponding with the residual beneficiaries and co-executor’s legal advisor (Ms Angela Costin) on the matter of executor’s commission;

(x) facing continuous scrutiny from both the co-executor and his legal advisor regarding Ms Horsfield’s costs and the quantum of her claim for executor’s commission, despite providing detailed responses on numerous occasions;

(y) dealing with the co-executor’s and his legal advisor’s demands for detail of Ms Horsfield’s administration costs, despite not being the administrator, and demands for an accurate dollar value of the executor’s commission, though the estate was months away from finalisation;

(z) responding that the dollar amount of the executor’s commission could not be determined until the realised value of the estate was known; and pointing out that the commission amount would be affected by the quantum of executorial tasks undertaken;

(aa) preparing estimates of the commission sought pursuant to the requirements of 65D of the Act, on 6 December 2023 and again on 28 February 2024;

(bb) noting that the co-executor appears to have served as a spokesperson for the residual beneficiaries and has been instrumental in their objection to the request for payment of executor’s commission, as several emails from the residual beneficiaries mirrored the language and sentiments expressed by the co-executor;

(cc) it was particularly arduous in the circumstances to act as an executor in an atmosphere of hostility and distrust which meant the period of the executorship was uneasy and stressful.

I interpose here to note that almost one third of the matters outlined above relate to either the issue of whether Ms Horsfield’s firm should be engaged to act for the estate while Ms Horsfield remained a co-executor, or to the issue of Ms Horsfield’s executor’s commission. In my view neither of these issues is properly to be regarded as an executor’s troubles in administering an estate.

Ms Horsfield estimated that from the date of death to 29 February 2024 she had spent 82 hours on executorial tasks. Significantly, Ms Horsfield exhibited an activity task list (First Task List) to the First Horsfield affidavit. I will return to the First Task List later in these reasons.

Ms Horsfield deposed that she had acted expeditiously and efficiently so as not to incur unnecessary additional costs to the estate. Ms Horsfield said she acted impartially toward all the beneficiaries and had taken care to observe and comply with the testamentary directions in the Will. Ms Horsfield said she acted to avoid delay in realising the estate assets, had ensured estate assets were preserved and had approved the payment of a significant interim distribution to the beneficiaries. Ms Horsfield ensured proper estate accounts were kept.

Ms Horsfield requested executor’s commission at a rate of 2% of the value of the estate, being $103,043.00 (on an estimated estate value of $5,152,132.75), which Ms Horsfield said was just and reasonable in light of her pains and troubles.

Finally, Ms Horsfield said she had informed the interested beneficiaries as soon as practicable:

(a) that she was seeking payment as executor of the Will on the basis of clause 3 of the Will;

(b) the method of calculation of the payment, being a commission or percentage of the assets of the estate, and the applicable commission or percentage;

(c) the estimated value of the payment to be made to Ms Horsfield; and

(d) the right of any interested beneficiary to have the payment claimed or charged by the executor reviewed by the Court under s 65A(2)(a)(i) of the Act.

The First Horsfield affidavit exhibited an email to the interested beneficiaries dated 28 February 2024, said to evidence provision to the beneficiaries of the information required by s 65D of the Act. As a central issue in this application is whether Ms Horsfield has complied with the requirement of s 65D of the Act to provide certain information to beneficiaries, I will set out the contents of the email below.

On 28 February 2024 at 11:37am Ms Horsfield sent an email to the beneficiaries in the following terms:

Dear Beneficiaries,
I refer to our previous email to you and advise that the deadline for reply is in fact 3:00 pm Thursday 29 February 2024. The deadline in the previous email sent on 26 February 2024 was a typo and in error.
There is no prejudice to you as to the deadline as my request for commission has been flagged for several months now and notification of an imminent Supreme Court application has been notified several times.
I reiterate the executor’s commission request as follows:-
I confirm that I am a Co-Executor of Diana Whiteman’s estate together with Mr David Fothergill and refer to my email sent to you on 6 December 2023.
I again write to you seeking your approval under the Administration and Probate Act (1958) (Vic) (Act) for the payment of my Executor’s Commission in the amount of $103,043.00, for my role as executor, being calculated at 2% of the estate corpus and income of the estate and being pursuant to Clause 3 of the Will.
As my commission has not been approved by the interested beneficiaries, I intend to make application to the Court for payment of my commission in the amount of $103,043.00.
As previously advised, I again provide information to you as interested beneficiaries, pursuant to section 65D of the Act. Please have regard to my responses, highlighted in green below, being the information to be provided by me as executor, to you as the interested beneficiaries, with respect to my claim for Executor’s Commission.
ADMINISTRATION AND PROBATE ACT 1958 – SECT 65D
Information to be provided by an executor to interested beneficiaries
(1)As soon as reasonably practicable, an executor of a will who seeks to be paid must inform interested beneficiary of the following —
(a)the basis on which the executor is to be paid, being either in accordance with —
(i) a clause in the will; or
The claim for Executor’s Commission is based on the specific clause in the deceased’s will permitting the payment of commission – see clause 3 of the attached will.
The attached Commission Acknowledgment signed by the deceased confirms the right to be paid commission.

(ii)with the consent of the interested beneficiaries under section 65C; or
As clause(1)(a)(i) applies, this sub clause is not applicable.

(iii) an order of the Court made under section 65;
As the interested beneficiaries have not approved, my claim for Commission of $103,043.00, I will now also seek an order from the Court under section 65 for a commission or percentage not exceeding 5% for my pains and troubles as is just and reasonable.

(b) the method of calculation of the payment to be made to the executor, including whether the payment will be-
(i)a commission or percentage of the assets of the estate and, if so, the applicable commission or percentage; or
I seek a commission of 2% of the estimate corpus and income.

(ii) by charging fees:
As 1(b)(i) applies, there is no need to charge by fees.

(c) the estimated value of the payment to be made to the executor;
Wills and Wealth have confirmed the value of the net estate and income as $5,152,132.75. The estimated value of the commission payment to be made to me, as executor, is $103,043.00 being 2.0% of $5,152.132.75.

(d)the right of any interested beneficiary to have the payment claimed or charged by the executor reviewed by the Court under section 65A(2)(a)(i).
Any interested beneficiary has the right to have the payment claimed or charged by me as executor reviewed by the Court under section 65A(2)(a)(i). I have no objection to any interested beneficiary seeking to have the claimed payment reviewed by the Court. I will now seek approval from the Court for my claimed executor’s commission.

I look forward to your urgent reply by email.
In the absence of receipt of your written consent to my proposed commission by 3:00 pm Thursday 2 March 2024, I will commence proceedings without further notice. In those proceedings, I will seek an order from the Court under section 65 of the Act, for a commission or percentage of $103,043 for my pains and trouble, as is just and reasonable together with my costs of such an application.

…

The Second Horsfield affidavit exhibited the administration account, signed by both executors and their lawyers, Wills & Wealth Pty Ltd.

In the Third Horsfield affidavit, Ms Horsfield deposed that following payment of all estate debts, liabilities, expenses and specified interim distributions, the sum of $926,416.51 remained with the estate lawyers for distribution. Ms Horsfield said it was proposed to distribute approximately $565,796.00 for capital gains tax, and $203,040.00 for legal costs and executor’s commission. Ms Horsfield stated that she had provided the interested beneficiaries with the information required by s 65D of the Act in her emails sent 6 December 2023 and 26 (sic) February 2024.

I interpose to note that only one email to the interested beneficiaries, sent 28 February 2024, (and reproduced above) was exhibited to the Third Horsfield affidavit.

The Third Horsfield affidavit set out the responsibilities and tasks Ms Horsfield had undertaken in the administration of the estate. While reformatted, these appeared to be, in substance, the same matters raised as pains and troubles in the First Horsfield affidavit. Ms Horsfield included an activity task list, setting out by dates commencing 16 February 2023 and concluding 2 May 2024 the specific tasks she had undertaken (Second Task List).

Ms Horsfield deposed that she had not charged the estate any professional fees for work she had undertaken as an executor and was only claiming executor’s commission pursuant to the deceased’s Will and her acknowledgment of commission. Ms Horsfield requested commission calculated at 2% of a revised value of the estate of $5,729,386.80, being $114,587.74.

In the Fourth Horsfield affidavit, Ms Horsfield deposed that the administration of the estate was complete, subject to a final assessment by the Australian Tax Office and the outcome of Ms Horsfield’s application for executor’s commission. Ms Horsfield stated that she had approved without delay two requests from the administrator for payments of interim distributions to each of the five beneficiaries in January/February 2024 and March/April 2024.

Ms Horsfield then referred to an email exchange with Mr Fothergill and Mr O’Sullivan of Wills & Wealth Pty Ltd regarding her request for executor’s commission and deposed that there was no delay to the administration of the estate or any distribution. The substance of that email exchange referred to is as follows.

On 19 December 2023 Ms Horsfield sent an email to Mr Fothergill and Mr O’Sullivan noting that she had not received a direct response to her request for executor’s commission but that an email she had received from Mr Fothergill strongly suggested that the beneficiaries opposed Ms Horsfield’s request. Ms Horsfield stated it was essential that all beneficiaries respond to her request and noted the potential costs for the estate associated with any application she might make to this Court for executor’s commission. Relevantly, Ms Horsfield gave her consent to selling the deceased’s shares while the market was favourable before stating, ‘I propose that no further distributions from the estate be made until the matter of the executor’s commission is resolved through the Supreme Court application.’

Mr O’Sullivan responded to Ms Horsfield by email sent 20 December 2023. His email was not copied to Mr Fothergill. Mr O’Sullivan reported that two beneficiaries had told him they objected to Ms Horsfield’s application for executor’s commission and that he intended to follow up with the remaining beneficiaries. Mr O’Sullivan requested that Ms Horsfield clarify her statement about making no further distributions from the estate, saying:

…do you mean no further distributions after the current proposed initial distribution to residuary beneficiaries from the share sale proceeds? Or are you saying no further distribution from now? I am hoping the former, as I feel there is a possibility that the Court might take a dim view of the latter.

Ms Horsfield responded to Mr O’Sullivan on 20 December 2023, clarifying,

I am happy for the proposed distribution to be made.
Clearly, no further distribution should be made beyond that proposed because estate funds will be needed to fund the costs of the SC litigation – should I be required to make that application.

The Fourth Horsfield affidavit then addressed the timing of Ms Horsfield’s provision of information regarding her claim for executor’s commission to the beneficiaries in her emails sent 6 December 2023 and ‘26 (sic) February 2024’. Ms Horsfield deposed that the emails were sent six months after probate was granted and shortly after the testamentary debts were discharged, before the estate’s final tax returns were filed. Ms Horsfield stated that she had examined the website of Moores Legal, a firm of solicitors located in Hawthorn Victoria, which stated that a request for executor’s commission should not be made until the estate administration was completed or near completion because that would best allow the beneficiaries to properly assess the request and understand the tasks undertaken by the executor.

Ms Horsfield deposed that she believed her emails to Mr Fothergill sent 8 and 15 July 2023 were effective notice to the beneficiaries because Mr Fothergill purported in his affidavits filed on this application to speak on behalf of the residual beneficiaries. These emails were not exhibited to the Fourth Horsfield affidavit. Ms Horsfield stated that Mr Fothergill was always aware that she had requested an executor’s commission and that she had asked Wills & Wealth to inform the other residual beneficiaries of her request.

Ms Horsfield stated that she believed it was proper to review Mr Fothergill’s conduct during his time as the deceased financial attorney, notwithstanding that no beneficiary had requested such a review. Ms Horsfield said it was an executor’s duty to ensure that all assets of an estate are called in, including any that had been improperly handled. She noted that in this matter, some of the beneficiaries were located outside of Australia and may have been unaware of ‘what was going on and Mr Fothergill’s antagonistic approach made me vigilant’. Ms Horsfield noted that quite apart from the transfer of $500,000 from the deceased’s accounts to Mr Fothergill’s daughter which Ms Horsfield’s firm had been involved in, there had been unusual transactions which required investigation. Ultimately, following Ms Horsfield’s investigations, ‘some reasonable explanation was provided’. Ms Horsfield believed she had done a proper job in independently scrutinising the estate to ensure assets were properly accounted for.

Ms Horsfield deposed that she acted diligently in her capacity as executor, in the face of unwarranted criticism.

Finally, Ms Horsfield noted that activities she had undertaken that were related to the application for commission may be unclaimable and so she exhibited a revised task list excluding ‘unbillable’ tasks and showing she had spent 101.20 hours on ‘billable’ tasks (Third Task List).

Mr Fothergill’s evidence

In the First Fothergill affidavit, Mr Fothergill waived any claim for executor’s commission, and said that the waiver was intended to benefit the estate and not Ms Horsfield.

Mr Fothergill swore the Second Fothergill affidavit in response to the First, Second and Third Horsfield affidavits. In it Mr Fothergill deposed that he is married to Jane Fothergill, a second cousin of the deceased and that both he and his wife are among the residuary beneficiaries under the deceased’s Will. Mr Fothergill said he and his family enjoyed a close and supportive relationship with the deceased. The deceased appointed Mr Fothergill and the deceased’s accountant, Ms Susan Milton, as her joint and several financial attorney in 2009. Mr Fothergill became the deceased’s sole financial attorney when Ms Milton retired but did not act as the deceased’s financial attorney until 2017, when the deceased asked for assistance with her financial affairs.

Mr Fothergill said the deceased had capacity to manage the bulk of her own affairs up until a few months before her death, but asked Mr Fothergill to help, particularly with the deceased’s share portfolio. As the deceased became more physically frail Mr Fothergill took over paying her bills, although by that time the deceased had set up direct debit payments for the majority of her regular bills;

Mr Fothergill believed Ms Horsfield contributed to a delay in obtaining a grant of probate by insisting that her firm be retained to carry out the estate’s legal work. Mr Fothergill contacted Ms Horsfield by email on 16 February 2023 to inform her of the deceased’s passing and to request a meeting to discuss how to proceed. On 21 February 2023, Mr Fothergill received a telephone call from Mr Nick Grounds of Lendlease, informing Mr Fothergill that Lendlease had obtained an offer for the sale of the deceased’s unit at Koorootang Retirement Village. Mr Fothergill informed Mr Grounds that, as the deceased had recently died, he no longer held a financial power of attorney and the sale would have to await a grant of probate.

Mr Fothergill and his wife attended Ms Horsfield’s Mornington office on 7 March 2023 at which Mr Fothergill took Ms Horsfield through the estate assets with which, as the deceased’s financial attorney, he was familiar and provided Ms Horsfield with a copy of the medical certificate confirming the deceased’s death. Mr Fothergill also told Ms Horsfield about the offer on the deceased’s unit and his desire that the sale proceed. At that meeting Mr Fothergill asked Ms Horsfield about her costs for acting as an executor to which Ms Horsfield responded that she would not normally provide a statement of fees until she had been given an engagement letter. Mr Fothergill told Ms Horsfield he thought that engaging her own firm to administer an estate of which she was an executor was a conflict of interest. Ms Horsfield did not agree and insisted her firm be engaged. Ms Horsfield told Mr Fothergill that if he agreed to engage her firm, she would not seek executor’s commission but would charge professional fees for acting as the estate solicitors and administering the estate. Mr Fothergill suggested that to avoid a conflict of interest Ms Horsfield could relinquish her role as executor and her firm could provide the administration and probate services to the estate. Ms Horsfield informed Mr Fothergill that she could make an application to the Supreme Court of Victoria to have him removed as an executor;

Following the meeting, Mr Fothergill contacted his solicitor, Ms Costin of Millens Lawyers, for assistance. On Mr Fothergill’s instructions, Ms Costin wrote to Ms Horsfield to request a costs agreement and disclosure statement as to her estimated fees to act as executor and for her firm to act in the administration of the estate; and a copy of the deceased’s consent as required by s 65B of the Act. Ms Horsfield responded on 10 March 2023 providing hourly rates for solicitors and a probate clerk but did not otherwise provide an estimate of costs.

On 21 March 2023 Ms Horsfield called Mr Fothergill seeking an answer about whether her firm would be retained by the estate. Mr Fothergill said he informed Ms Horsfield that he was awaiting legal advice before making a decision. Mr Fothergill said Ms Horsfield again mentioned the possibility of making an application to the Court to remove Mr Fothergill as an executor. This was repeated in Ms Horsfield’s email to Ms Costin sent 21 March 2023, in which Ms Horsfield complained that Mr Fothergill was ‘belligerent, tardy and obstructive’ and ‘not acting in the best interests of the estate’. Ms Costin responded by again asking Ms Horsfield to provide the deceased’s acknowledgement and, if the deceased had not provided consent, the information required by s 65D of the Act.

On 23 March 2023 Ms Costin received an email from Shan Tong of HMCK enclosing the deceased consent signed in 2017. The email stated that once HMCK was engaged, Ms Horsfield would not seek an executor’s commission but would seek payment on the basis of the solicitor and clerk hourly rates provided. Ms Costin replied the same day querying the 2017 consent provided and suggesting an independent law firm be retained to obtain probate and conduct the administration of the estate.

Later on 23 March 2023, Ms Tong acknowledged she had sent the incorrect consent and provided Ms Costin with the acknowledgement signed by the deceased on 20 May 2019, the same date the Will was executed. Mr Fothergill noted that the acknowledgement stated that commission ‘may be payable up to 5% plus GST’, whereas s 65(1) the Act provides for a maximum commission of 5%.

On 30 March 2023 Ms Horsfield wrote to Ms Costin responding to Ms Costin’s request for the information required by s 65D of the Act. Ms Horsfield stated that commission would be calculated pursuant to the clause 3 of the Will and, while currently uncertain, would likely amount to between 0.5% and 1% of the gross value of the estate. Ms Horsfield stated that, while she did not agree there would be any conflict between her status as co-executor and her firm acting for the estate, she agreed to retain an independent law firm to obtain probate and undertake the administration of the estate. Ms Horsfield stated she would claim commission and indicate the amount to be claimed when the independent firm advised it was an appropriate to do so.

On 5 April 2023 Ms Costin sought clarification from Ms Horsfield about whether she intended to seek an hourly rate or a percentage commission. Ms Horsfield replied on the same day that she would discuss this with the firm retained by the estate but that her charges would be dictated by clause 3 of the Will.

In late April 2023 the co-executors agreed to retain Mr O’Sullivan of Wills & Wealth to obtain probate and administer the estate.

Mr Fothergill and Ms Horsfield continued to email each other between 15 July 2023 and 25 July 2023 about how Ms Horsfield intended to charge fees and seek commission. On 15 July 2023 Ms Horsfield said she did not have to settle her commission rate at that time as the final rate would depend on the extent of the tasks she undertook in her role as co-executor. Ms Horsfield indicated she anticipated claiming executor’s commission of 1.5%. Mr Fothergill said he remained confused about whether Ms Horsfield intended to seek fees on an hourly rate or whether she intended to seek commission based on a percentage of the estate value. On 18 July 2023 Mr Fothergill asked Ms Horsfield to clarify her estimated total cost and said he would not consent to such a significantly high commission. On the same day Ms Horsfield replied that she would not claim an hourly rate because Wills & Wealth had now been retained, but would claim a percentage commission.

On 20 July 2023 Ms Horsfield emailed Mr O’Sullivan of Wills & Wealth, requesting that he notify the beneficiaries that she intended to claim executor’s commission, pursuant to clause 3 of the Will, and would claim a commission of 1.5% of the estate’s assets and 3% of the estate income which she estimated to be in total $75,000.00.

On 25 July 2023 Mr Fothergill responded to Ms Horsfield telling her that she should notify the beneficiaries and disclose her proposed fees as it was not the role of Wills & Wealth to do so and that the estate should not be charged for that work. In response Ms Horsfield sent an email to Mr O’Sullivan complaining that Mr Fothergill’s interference in administrative matters was unhelpful.

On 21 November 2023, in the context of discussions about payment of the Will’s specific legacies and an interim distribution to the residuary beneficiaries, Ms Horsfield sent an email to Wills & Wealth. Ms Horsfield’s email stated that while she consented to the legacy payments, she wanted to emphasize the importance of reserving funds to cover her executor’s commission, noting she had previously proposed be a flat rate of 2% on both the corpus and income of the estate.

Mr Fothergill deposed that the administration of the estate was not complex. He said that he and his wife had cleared the deceased’s unit at Koorootang Village Retirement in September 2022 when the deceased moved into care. The unit was ready for sale and Mr Fothergill, as the deceased’s attorney, had organised its sale through Lendlease. An offer was received through Lendlease but was withdrawn during the period the co-executors were discussing whether an independent law firm should be retained for the estate.

Mr Fothergill said Wills & Wealth called in the refundable accommodation bond held by BlueCross ‘The Mews’ Aged Care provider and arranged for the deceased’s bank accounts to be closed and the funds paid into Wills & Wealth’s trust account. Mr Fothergill said that he told Ms Horsfield and Mr O’Sullivan in June 2023 of the substantial income of the deceased’s share portfolio and advised them that the shares should not be sold until after the real property had been sold. Bell Potter provided further advice on which shares to sell and when. No shares were transferred in specie. The deceased’s tax returns were prepared by accountants who also calculated the capital gains tax from the sale of the shares. Wills & Wealth obtained the grant of probate and attended to most of the administrative tasks required in the administration of the estate including payment of bills and distributions to beneficiaries.

Mr Fothergill said that as the deceased’s financial attorney, he was familiar with her financial affairs and briefed Wills & Wealth and Ms Horsfield accordingly.

Mr Fothergill said that Ms Horsfield’s contribution to the administration of the estate was limited to reviewing emails, approving the engagement and actions of the estate’s advisors and signing forms when required. Ms Horsfield did not prepare documents nor provide any legal advice. She was not required to identify the estate’s assets or liabilities because Mr Fothergill had already done that. The deceased’s personal chattels had been dealt with.

Mr Fothergill stated that by email sent 19 December 2023 Ms Horsfield threatened to hold up making an interim distribution pending resolution of her claim for a commission. The relevant contents of this email were set out at paragraph [33] above.

According to Mr Fothergill, Ms Horsfield took it upon herself to investigate his actions as the deceased’s attorney. Mr Fothergill said he was not aware that any beneficiary asked Ms Horsfield to investigate. Ms Horsfield insisted on reviewing the deceased’s bank statements from 2009 despite the fact that Mr Fothergill informed her that he did not take any action as attorney for the deceased until 2017. Mr Fothergill said he did not ultimately object to Ms Horsfield asking Wills & Wealth to obtain historical bank statements and provided Ms Horsfield with a spreadsheet of the deceased’s expenditure from April 2017 to her death, the period when Mr Fothergill was active as the deceased’s attorney. Mr Fothergill said he answered all Ms Horsfield’s questions and provided receipts and invoices.

Mr Fothergill referred to various gifts made by the deceased to his daughter in 2019 and 2021. The deceased confirmed her wish to make these gifts in writing. Mr Fothergill said that when the deceased told him she wanted to gift his daughter $500,000.00 to assist with her studies and to establish a share portfolio, he insisted the deceased receive independent legal advice, which was provided by HMCK, Ms Horsfield’s firm. Following that advice, a solicitor from HMCK wrote to Mr Fothergill stating the solicitor was satisfied the deceased’s decision to gift the $500,000.00 to Mr Fothergill’s daughter was freely made and that the deceased had capacity to make the decision. Mr Fothergill also requested the deceased be assessed by her doctor who confirmed that the deceased had capacity to make the decision. Mr Fothergill provided a copy of the deceased’s doctor’s letter to HMCK by email dated 28 October 2021. Mr Fothergill stated that the other beneficiaries are aware of the deceased’s gifts to his daughter and have not raised any concerns.

Mr Fothergill said that while the beneficiaries agreed to him being reimbursed by the estate for his family’s accommodation costs for the weekend the deceased’s ashes were scattered at Arthurs Seat on the Mornington Peninsula, Ms Horsfield objected. Ultimately Mr Fothergill agreed, on advice from Mr O’Sullivan, to bear these costs personally.

Mr Fothergill estimated that an amount of $926,416.41 remains undistributed in the estate and that the estimated total tax of $595,796.00 was payable by the estate.

Mr Fothergill disputes that he has acted in an aggressive, hostile or otherwise inappropriate manner towards Ms Horsfield, noting that apart from their initial meeting and one subsequent telephone call, all their communications had been by email copied to Mr O’Sullivan.

Ms Horsfield’s submissions

At the hearing, Ms Horsfield’s counsel clarified that Ms Horsfield’s application for commission did not rely on clause 3 of the Will. Accordingly, counsel submitted that Mr Fothergill’s contention that Ms Horsfield had not complied with s 65B of the Act was misguided because she does not apply for fees for work done under that clause of the Will, but rather she applied for executor’s commission.

In relation to Ms Horsfield’s compliance with s 65D of the Act, counsel submitted that Ms Horsfield’s email sent 28 February 2024 to the residual beneficiaries was evidence of her compliance. Counsel submitted the Court should take the following matters into account in assessing Ms Horsfield’s compliance:

(a) it is common for estates to be treated as being held during the six months following a grant of probate to allow any person to bring an application under Part IV of the Act;

(b) interim distributions were made in the first part of 2024 and so the residual beneficiaries suffered no prejudice;

(c) the only amount held back was an amount necessary to pay Capital Gains Tax and the executor’s commission;

(d) notice could not have been given much earlier because the administration of the estate was not complete due to Mr Fothergill’s delay until 1 May 2024 in signing the estate accounts;

(e) the authorities urge against applying for executor’s commission too soon;

(f) Ms Horsfield’s notice to Mr Fothergill of her intention to seek executor’s commission was effective notice to the interested beneficiaries because Mr Fothergill, as executor, purported to speak on their behalf, provided his legal advice to them and ‘undoubtedly passed on the commission claim and the requirements of s 65D to the other beneficiaries; and

(g) numerous communications from Mr Fothergill to the residuary beneficiaries from as early as 11 December 2023 raised the issue of Ms Horsfield’s request for executor’s commission and Mr Fothergill had assured the beneficiaries he intended to get the information the beneficiaries needed to made their decision and that he would share his lawyer’s advice with them.

Counsel submitted that s 65D of the Act was raised in executor communications on numerous occasions including:

(a) 23 March 2023 email from Ms Costin;

(b) 30 March 2023 email from Ms Horsfield;

(c) 5 April 2023 email from Ms Costin;

(d) 30 March 2023 email from Ms Horsfield in which she addressed the issue of delay;

(e) 15 July 2023 email from Ms Horsfield;

(f) 18 July 2023 email from Ms Horsfield;

(g) 20 July email from Ms Horsfield to Mr O’Sullivan of Wills & Wealth requesting he notify beneficiaries of certain matters;

(h) 21 November 2023 email from Ms Horsfield to Mr O’Sullivan.

Counsel said that Ms Horsfield’s statement in her email of 19 December 2023 that there should be no further distributions until her claim for executor’s commission was resolved, was clarified by her the following day. Counsel submitted that the distribution of the estate had not been delayed pending the resolution of the issue of Ms Horsfield’s request for executor's commission.

Statutory provisions and principles

Section 65(1) of the Act provides that:

It shall be lawful for the Court to allow out of the assets of any deceased person to his executor administrator or trustee for the time being such commission or percentage not exceeding Five per centum for his pains and trouble as is just and reasonable.

Section 65D of the Act sets out the information to be provided by an executor to interested beneficiaries.

(1)As soon as reasonably practicable, an executor of a will who seeks to be paid must inform each interested beneficiary of the following—
(a)the basis on which the executor is to be paid, being either in accordance with—
(i) a clause in the will; or
(ii)with the consent of the interested beneficiaries under section 65C; or

(iii) an order of the Court made under section 65.
(b)the method of calculation of the payment to be made to the executor, including whether the payment will be—
(i)a commission or percentage of the assets of the estate and, if so, the applicable commission or percentage; or

(ii) by charging fees;

(c) the estimated value of the payment to be made to the executor;
(d)the right of any interested beneficiary to have the payment claimed or charged by the executor reviewed by the Court under section 65A(2)(a)(i).

(2)If an executor of a will becomes aware that there is likely to be a substantial change in the amount referred to in subsection (1)(c), the executor must inform each interested beneficiary of the change as soon as reasonably practicable.
(3)The information given to each interested beneficiary under subsections (1) and (2) must be in plain language and—
(a)in English, or in another language if the interested beneficiary does not have sufficient knowledge of the English language; and

(b) verbally if an interested beneficiary is illiterate.

…
(5)An executor who contravenes this section is not entitled to payment from the estate of—
(a) a commission or percentage of the assets of the estate; or
(b) fees.

An executor and trustee owes a fiduciary duty to the beneficiaries under a will. As T Forrest J noted in Walker & ors v D’Alessandro,[1]

Equity has historically regarded trusteeship as an honorary position. As a general rule trustees must not profit by their trust. The rule seeks to avoid any conflict between the duties of the trustee and his personal interests.
…
Section 65 of the Act contemplates executor remuneration in appropriate circumstances. Such contemplation has been extant since colonial times. The first Supreme Court in Australia, established in New South Wales by the Charter of Justice, authorised the Court to allow “any executor” a percentage of a deceased person’s assets “as shall be just and reasonable, for their pains and troubles therein”. Additionally the instrument of trust itself (the will) contemplates an executors “fee for the administration of (the) Estate.”
Executor commission therefore can constitute an exception to the general rule that a fiduciary cannot profit from his position as executor/trustee, but only in appropriate circumstances and after close scrutiny. “The courts scrutinise such agreements very closely, are ‘extremely cautious and wary’ in upholding them and will refuse to enforce them at the slightest sign of unfairness or undue pressure.
Any benefit or gain acquired by a fiduciary in circumstances where a significant possibility of a conflict existed or where the benefit or gain was acquired by reason of the fiduciary position itself must be the subject of a full account by the fiduciary to the person to whom his obligation is owed. In other words a beneficiary must be fully informed as to any potential benefit to be made by the fiduciary before he can give an informed consent to the fiduciary receiving that benefit.

[1][2010] VSC 15, [23].

While in that case T Forrest J was dealing with the statutory scheme as it was before its amendment to include s 65D, the same principles regarding the requirement for full disclosure by an executor, close court scrutiny and great caution apply to applications for executor’s commission under the current statutory regime. This is because the nature of the relationship between trustees and beneficiaries remains the same. In addition, the legislature, by amending the Act to include s 65D, has seen fit to prescribe the timing of the provision of information to the beneficiaries, the content of the information to be provided and the disentitling effect of non-compliance with the requirements of the section. The level of prescription in s 65D is underscored by the historic nature of the relationship between trustee and beneficiary and reinforces the scrutiny and caution that apply in applications for executor’s commission.

In his scholarly volume, Executors Commission, Eric Vance noted that:

On the whole the Australian and New Zealand Courts are very reluctant to grant commission and excuse irregularity even where it is not flagrant or, having been compensated for and made good, has not injured the estate.
……
Honest administration, but one which has been irregular and unsatisfactory, is not sufficient to justify a grant of commission. See Re Spencer dec. approving and applying the principle laid down in the earlier case of The Public Trustee v French that “to entitle himself to commission an administrator must administer the estate with the utmost punctuality, regularity, impartiality and honesty”.[2]
[citations omitted].

[2]Eric S Vance, The Law and Practice in Victoria and an Examination of the Case Law of Australia and New Zealand relating to Executors Commission (The Law Book Company Ltd, 1^st ed, 1969), 220-221.

The Court will consider the following factors in assessing an application for executor’s commission:

(a)the work and judgment involved in the realisation of assets and earning income;
(b)the extent of administrative activities;
(c)the responsibility generally;
(d)the amount of work done not reflected in financial terms;
(e)how long the estate was administered;
(f)the size of the estate and its capacity to pay;
(g)the work of a non-professional character not undertaken by the applicant and performed by professionals; and
(h)executors’ pains and troubles relative to the result;

…
(i)whether there has been any litigation, or other conflict, necessary to the administration of the estate; and
(j)whether there has been any delay in the administration of the estate – if so, ‘such conduct may disentitle or reduce an executor’s commission, such as no commission on certain assets after the date when distribution should have occurred’.[3]

[citations omitted].
[3]Re will and estate of Macleod, [2017] VSC 67, [45]-[46] (per Ierodiaconou AsJ).

Consideration

It was only when Ms Horsfield’s application came on for hearing that her counsel abandoned any reliance on clause 3 of the Will as the source of her entitlement to executor’s commission and made clear that the application was made pursuant to s 65(1) of the Act. While this concession was entirely appropriate it should, in my view have been made much earlier. This was a topic that had been the subject of discussions between Ms Horsfield, Mr Fothergill and his solicitor, Ms Costin, since early March 2023. Ms Horsfield’s counsel’s late concession resulted in both parties expending time and resources preparing affidavit material and written submissions that were ultimately, at least in part, irrelevant to Ms Horsfield’s application.

One result of Ms Horsfield’s concession was that Ms Horsfield’s counsel abandoned reliance on her email of 6 December 2023 to the residuary beneficiaries and identified her email to the residuary beneficiaries on 28 February 2024 as evidence of her compliance with the requirements of s 65D of the Act. If Ms Horsfield has not complied with the requirements of s 65D of the Act, her application for executor’s commission must fail. This is because the plain meaning of s 65D(5) of the Act is that non-compliance with the requirements of s 65D is disentitling.

Did Ms Hosfield inform each interested beneficiary?

Section 65D(1) requires the executor to provide each interested beneficiary with the information specified in the section. Subsection 65D(1) places the obligation to provide the information to the interested beneficiaries squarely on the executor. In my view it would be too narrow a reading of this subsection to require an executor in every instance to provide the requisite information directly to the interested beneficiaries such that the provision of information to a nominated and recognised legal or other representative of the beneficiaries could never be sufficient. Each case will depend on its own facts.

In this case, Mr Fothergill was both a co-executor and a residual beneficiary. He had sought and was receiving legal advice from Ms Costin, at least some of which he shared with the other residual beneficiaries. However, at no stage did Mr Fothergill represent to Ms Horsfield that he or his solicitor represented the other residual beneficiaries or that Ms Horsfield was entitled to deal with him as their representative to the exclusion of providing information directly to the other interested beneficiaries. In fact Ms Costin informed Ms Horsfield in writing on 25 January 2024 that she acted only for Mr Fothergill and not the other beneficiaries. For that reason I do not accept that Ms Horsfield can rely on information she provided to Mr Fothergill or his solicitor, Ms Costin and not to the other residual beneficiaries as evidence of her compliance with the requirements of s 65D of the Act. Similarly, Ms Horsfield is not entitled to rely on information and advice that Mr Fothergill passed on to the other residual beneficiaries as evidence of her compliance with the requirement that she provide those beneficiaries with that information.

The estate instructed Wills & Wealth to administer the estate. In my view Ms Horsfield’s request that Mr O’Sullivan convey information to the residual beneficiaries relevant to her application for executor’s commission was inappropriate and likely beyond the scope of their engagement. Wills & Wealth were the estate’s lawyers and were retained to administer the estate on the instructions of the co-executors. Ms Horsfield had no authority to instruct Wills & Wealth to convey information about her own application for executor’s commission to beneficiaries at the expense of the estate. Relaying information to beneficiaries about one co-executor’s application for executor’s commission was not work carried out in the administration of the estate. I am not satisfied that Ms Horsfield can rely on her request to Mr O’Sullivan of Wills & Wealth to convey information to the residual beneficiaries as evidence of her compliance with the requirements of s 65D.

Accordingly, I find that the information Ms Horsfield provided to the interested beneficiaries is to be found in her email to them sent on 28 February 2024.

Was the information provided ‘as soon as reasonably practicable’?

The Act requires the executor to inform each interested beneficiary of the basis on which they are to be paid, the method of calculation of the payment, an estimated value of the payment and the beneficiaries’ rights to have the claimed payment reviewed by the Court. That information is required to be provided as soon as reasonably practicable. Non-compliance with these requirements by an executor is disentitling.

It is noteworthy that the Act does not specify a timeframe by reference to a number of days or weeks. What period constitutes as soon as reasonably practicable will depend on the facts of individual cases. What is clear from the terms of s 65D(2) of the Act, which require an executor to inform interested beneficiaries if the executor becomes aware that there is likely to be a substantial change in the estimated value of the commission, is that it is not necessary for an executor to fix a final commission figure before providing the requisite information to interested beneficiaries. This is reinforced by the statutory language of s 65D(1)(c) which requires the executor to provide an estimated value of the payment to be made to the executor.

It is clear that as early as the meeting between Mr Fothergill and Ms Horsfield on 7 March 2023 that Ms Horsfield was considering whether she would seek an executor’s commission. At that time Ms Horsfield told Mr Fothergill that she would forego executor’s commission if her firm was engaged to act as the estate’s solicitors.

From 7 March 2023 until at least 18 July 2023 Ms Horsfield still maintained the possibility of seeking both a percentage commission and a commission based on hourly rate fees. By 20 July 2023 Ms Horsfield had seemingly settled on a percentage commission and requested that Wills & Wealth inform the beneficiaries she would seek a commission estimated at $75,000.00. Ms Horsfield estimated that sum based on a commission of 1.5% of the estate’s assets and 3% of the estate income.

By late April 2023 the co-executors had agreed to engage Wills & Wealth to obtain probate and administer the estate. Probate had been granted to Ms Horsfield and Mr Fothergill on 23 June 2023. By early May 2023 Mr Fothergill had provided Mr O’Sullivan of Wills & Wealth with a summary of the estate’s financial affairs. Settlement on the sale of the deceased’s unit occurred in October 2023. The sale of the deceased’s share portfolio followed. The estate tax returns appear to have been prepared by early December 2023.

Given that Ms Horsfield had settled on a percentage commission claim in late July 2023, why she waited until the 28 February 2024 to provide the necessary information to the interested beneficiaries requires explanation.

Ms Horsfield submitted that she informed the beneficiaries of her intention to claim commission six months after probate was granted, soon after the testamentary debts were discharged and before the estate’s final tax returns were lodged. Ms Horsfield understood from looking at the website of another legal firm that executors should not make a request for commission until the estate administration was near completion so as to allow the beneficiaries to properly assess the request by reference to the tasks the executor had undertaken.

I do not accept either of these arguments. The deceased died on 15 February 2023 and probate was granted on 23 June 2023. Ms Horsfield’s email of 28 February 2024 was therefore over one year after the deceased had died and more than eight months after probate had been granted. It is true that an extract of the information on another legal firm’s website exhibited to Ms Horsfield’s Fourth Affidavit states that an application to the Court for executor’s commission should only be made towards the end of the estate administration process because this allows the applicant executor to provide detailed records of all the work they have undertaken. Leaving to one side the reasonableness of Ms Horsfield relying on information contained on another firm’s website, it appears that Ms Horsfield has conflated the concepts of the requirement to inform beneficiaries under s 65D of the Act with making an application to the Court for executor’s commission under s 65(1) of the Act. I accept that an application to the Court for executor’s commission should be made at a time when the extent of executor’s pain and troubles are known, likely towards the end of the estate administration process. There is no reason, however, why beneficiaries cannot be informed of an executor’s intention to seek executor’s commission, along with the other matters required by s 65D, at a much earlier time.

In this case, notwithstanding Ms Horsfield had been considering the bases on which she would seek executor’s commission since 7 March 2023, she only informed the residuary beneficiaries on 28 February 2024 at 11:37am of her intention to apply to the Court for an executor’s commission. Ms Horsfield filed her application in this Court on 29 February 2024 at 1:55 pm, one day later.

It is clear from the affidavit material that Ms Horsfield had raised the issue of executor’s commission with the interested beneficiaries in an email sent on 6 December 2023. In that email, however Ms Horsfield sought to rely on clause 3 of the Will as the source of her entitlement to commission, a position she has now abandoned.

In all the circumstances of this case I am not satisfied that Ms Horsfield provided the information as soon as reasonably practicable to the interested beneficiaries.

Did Ms Horsfield’s emails of 6 December 2023 and 28 February 2024 provide the interested beneficiaries with the information required by s 65D(1) of the Act?

Ms Horsfield relied on the contents of her email to the residual beneficiaries sent on 28 February 2024 as evidence of her compliance with the requirements of s 65D of the Act. That email made reference to her earlier email of 6 December 2023. In my view neither of those emails met the requirements of s 65D.

Ms Horsfield’s email of 6 December 2023 was deficient for the following reasons. First, it stated that Ms Horsfield sought executors commission on the basis of clause 3 of the Will and the deceased’s signed acknowledgement. As was made clear by Ms Horsfield’s counsel at the hearing, Ms Horsfield’s claim is not based on clause 3 of the Will. Rather, Ms Horsfield seeks an order of the Court under s 65 of the Act. Ms Horsfield’s email of 6 December 2023 incorrectly informed the beneficiaries that subsection 65D(1)(a)(iii), which refers to commissions sought on the basis of an order of the Court, was not applicable.

Second, under s 65D(1)(d) which requires the executor to inform beneficiaries that they have a right to have the payment claimed or charged by the executor reviewed by the Court, Ms Horsfield informed the beneficiaries that she had no objection to any interested beneficiary seeking to have her claimed payment reviewed by the Court. In doing so Ms Horsefield placed a gloss on the information required to be provided that is potentially misleading. The Act requires Ms Horsfield to inform the beneficiaries of the right to have the executor’s commission reviewed by the Court. Ms Horsfield’s statement implies she had a right to object to the beneficiaries exercising their rights. It is irrelevant whether Ms Horsfield would object to the beneficiaries exercising their rights under the Act.

Third, Ms Horsfield’s additional comments stated that the deceased’s Will permitted her to claim a commission and that she did not require the beneficiaries consent. Ms Horsfield has since abandoned reliance on clause 3 of the Will as the basis of her claim. Coupled with Ms Horsfield’s unclear statement of the beneficiaries rights to seek a review of her claim by the Court, this statement is misleading as it undercuts the rights of the beneficiaries to either consent or seek the Court’s review of the claimed commission.

Fourth, Ms Horsfield’s costs estimates for her application to this Court for executor’s commission are high, particularly the estimate of costs of greater than $50,000 for more complex claims. The issue with this statement is that Ms Horsfield does not identify whether she considers her claim to be straightforward, moderate or more complex, leaving the beneficiaries with no way to assess whether the estate might incur fees of around $5,000 or $50,000. The more concerning issue is that by providing an unrealistically high estimate of the costs in complex cases, Ms Horsfield is effectively implying the costs of her application could cost the estate $50,000. Such an inference is capable of being understood as an attempt to pressure beneficiaries to agree to Ms Horsfield’s claim.

Ms Horsfield’s email to the beneficiaries of 28 February 2024 is defective for the following reasons.

First, Ms Horsfield sent the email on 28 February 20924 at 11.37 am. The email imposes a deadline for the beneficiaries to respond of 3:00 pm on 29 February 2024, just over 24 hours after the email was sent. Elsewhere the email requires the beneficiaries urgent response by 3:00 pm on 2 March 2024, failing which Ms Horsfield would commence a Court proceeding to claim commission. The imposition of more than one deadline is irregular and confusing. The imposition of a deadline of just over 24 hours is unreasonable and likely to be construed as applying unnecessary pressure on the beneficiaries to consent to Ms Horsfield’s claim. This is particularly so in circumstances where some beneficiaries resided outside of Australia.

Second, the 28 February 2024 email continued to refer to the basis of Ms Horsfield’s claim as clause 3 of the Will, albeit with the additional information that because the beneficiaries had not approved her claim for commission, Ms Horsfield would seek an order from the Court. Section 65D(1)(a) requires the executor to identify which of the three possible bases identified in the statutory provision on which they seek payment. The use of the word ‘or’ indicates that the three options are intended to be mutually exclusive. In effectively choosing two options, Ms Horsfield has rendered the basis on which she sought payment unclear and confusing.

Third, under s 65D(1)(a)(iii) Ms Horsfield states that because the beneficiaries have not consented to her claim for commission of $103,043.00 she would seek an order of the Court under s 65 of the Act for a commission not exceeding 5% for her pains and troubles. Under s 65D(1)(b) Ms Horsfield stated that she claimed a commission of 2% of the estate corpus and income. Then under s 65D(1)(c) Ms Horsfield stated that she estimated the value of the commission payment to be $103,043.00 being 2% of the net value of the estate and income. In my view Ms Horsfield’s statement under s 65D(1)(a)(iii) was apt to mislead beneficiaries as to whether she was claiming 5% or 2% of the net value of the estate and income.

Section 65D requires the requisite information to be provided to the beneficiaries in plain language. In my view neither of Ms Horsfield’s emails achieve this requirement. Principally this is the result of Ms Horsfield’s decision to reproduce the legislative provision in the body of her emails and then provide highlighted information under various subsections. The result, particularly as is the case here, where not all the additional information provided is actually highlighted, is a confusing and disjointed mixture of statutory provisions and information provided by Ms Horsfield. This approach to the provision of clear information is not recommended. Rather than assist by providing clarity, the format chosen by Ms Horsfield detracts from both a clear understanding of the legislative requirements and also a clear understanding of the information Ms Horsfield sought to impart.

It follows from the above that, by virtue of s 65D(5), because Ms Horsfield has not complied with the requirements of s 65D, she is not entitled to payment of a commission or fees from the estate.

Disentitling conduct

If I am incorrect and Ms Horsfield has complied with the requirements of s 65D of the Act, noting the vigilance of the Court to the slightest sign of unfairness or undue pressure, I would find that the following matters, taken collectively, disentitle her from payment of a commission.

First, the imposition of the deadline of one day for the beneficiaries to respond to Ms Horsfield’s email of 28 February 2024 was not only unreasonable but operated to exert pressure on the beneficiaries to consent to Ms Horsfield’s request.

Second, the filing of Ms Horsfield’s application in this Court before the passing of her deadline for the beneficiaries to respond, particularly in circumstances where she was aware that some beneficiaries lived overseas in different time zones, was unreasonable and inappropriate. Again, it was conduct by Ms Horsfield that increased the pressure on the beneficiaries to agree to her request for commission.

Third, Ms Horsfield sought to rely on tensions between herself and Mr Fothergill to argue that she had undertaken her work as executor in hostile circumstances. There is no doubt that the relationship between co-executors was not an easy and harmonious one. Ms Horsfield, however, sought to rely on a number of file notes and emails that contained disturbing anomalies. Ms Horsfield’s Fourth Affidavit contained two versions of her file note of a conversation Ms Horsfield had with Mr Fothergill on 23 March 2023. Both versions were identical other than in relation to the final paragraph dealing with how the conversation ended. In one version Ms Horsfield noted that Mr Fothergill hung up abruptly. In the second version Ms Horsfield stated that she ended the call. Ms Horsfield’s counsel, on instructions obtained during the hearing, submitted that Ms Horsfield had revised the file note and that the revised version, in which Ms Horsfield ended the conversation, was not inconsistent with the earlier version. I cannot accept that the versions are consistent and the existence of the two inconsistent versions, with no explanation on oath by Ms Horsfield, raises some question about the frankness of her evidence.

Fourth, Ms Horsfield’s prepared at least two activity lists which recorded the units of time spent against listed activities: the First Activity List and the Third Activity List. Both of these Lists contained numerous activities undertaken by Ms Horsfield that were related to non-executorial duties, including discussions and correspondence with Mr Fothergill about whether HMCK should be retained to undertake the estate’s legal work, preparation of the administration accounts and preparation of Ms Horsfield’s application for executor’s commission. Ms Horsfield’s Third Activity List purports to identify entries in the List that are not ‘billable’, ie, not relevant to her claim for executor’s commission. Notwithstanding that Ms Horsfield has necessarily gone through the list of activities to identify those which are not properly ‘troubles’, her Third Activity List includes multiple entries as ‘billable’ which relate to her application for executor’s commission, clearly not part of an executor’s troubles in administering an estate. More disturbingly, the Third Activity List includes actions recorded in the First Activity List but with unexplained adjustments made to some of the time units. In three instances the time claimed has been reduced. In thirty-four instances the time claimed has been increased. Ultimately, the overall time claimed on these adjusted entries is similar, ie, the adjustments result in very little extra time overall being claimed. Despite referring to the Third Activity List as updating the activities undertaken since the First Activity List, Ms Horsfield’s affidavit makes no mention of the changes made to the time units claimed, nor the basis upon which she made those changes. On instructions obtained at the hearing, Ms Horsfield’s counsel explained that for the Third Activity List, Ms Horsfield had migrated the data from the First Activity List using new software. This was not a plausible explanation for the differences in time units claimed. Ms Horsfield explained that she had made adjustments to the time claimed after reviewing her files. Assuming that to be the case, Ms Horsfield’s failure to mention that in her affidavit, in circumstances where she is acting as a fiduciary is irregular and troubling.

Based on her Third Activity List, Ms Horsfield claimed to have spent just over one hundred and one hours on her executorial duties. A careful examination of the Third Activity List, removing the activities unrelated to Ms Horsfield’s troubles as executor in administering the estate, shows that Ms Horsfield’s listed activities relevant to her executorial duties took less than sixty three hours, a reduction of almost forty percent.

Fifth, Ms Horsfield’s email of 19 December 2023 to Mr Fothergill and the estate’s solicitor proposed ‘that no further distributions from the estate be made until the matter of the executor’s commission is resolved through the Supreme Court application’. Ms Horsfield clarified the following day at the request of the estate’s solicitor that she meant there should be no further distributions after the proposed initial distribution to residuary beneficiaries from the proceeds of the sale of the deceased’s share portfolio. Ms Horsfield’s clarification was not communicated directly to Mr Fothergill, a residuary beneficiary. There is no evidence before the Court that the other residuary beneficiaries were aware of Ms Horsfield’s proposal to limit distributions. Nevertheless, Ms Horsfield’s linking interim distributions to payment of her executor’s commission was inappropriate and capable of being construed, albeit for a short time only, as putting pressure on beneficiaries to agree to her claim for commission.

Quantum of commission

As I have found that Ms Horsfield is not entitled to payment of a commission it is not necessary for me to determine an appropriate amount of commission.

Conclusion

For the reasons provided above I have found that Ms Horsfield is not entitled to payment of executor’s commission from the estate. Accordingly, I will dismiss her application.

I request that the parties confer on the question of costs of Ms Horsfield’s application. If the parties are unable to reach agreement on costs by 31 January 2025, I will relist the proceeding for oral submissions on costs.

[2024] VSC 793

20 December 2024