Starke v James

[2009] SASC 40

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

STARKE v JAMES

[2009] SASC 40

Reasons of Judge Lunn a Master of the Supreme Court

23 February 2009

SUCCESSION - WILLS, PROBATE AND ADMINISTRATION

Application by executor/solicitor for remuneration under s 70 Administration & Probate Act - no charging clause in will - held order for remuneration not subject to special circumstances - order made for remuneration which is to be the equivalent of legal costs on Supreme Court scale for the work properly done by the executor and which is to be fixed by the equivalent of an adjudication of those costs.

STARKE v JAMES
[2009] SASC 40

Reasons on applications for commission and costs.

1. JUDGE LUNN:     Kyriakos Lycourinos (“Mr Lycourinos”) died on 17 December 2004.  By his will he left a house property at Goodwood to his wife, Eleni Lycourinos (Mrs Lycourinos) for life, with the remainder to her (but not his) son, Christos Chryssicopoulos (“Christos”). 

2. Mrs Lycourinos died on 2 July 2006.  By her will she left her estate, including what she had inherited from Mr Lycourinos, to Christos, although some question was raised whether there was a partial intestacy.

3. The plaintiff, who is a lawyer practising in Adelaide, was named as an executor in the wills of each of Mr and Mrs Lycourinos.  On 4 December 2007 and 26 March 2008 respectively he alone obtained grants of Probate in their estates.  He used his legal firm of Starke Lawyers to carry out the administration of both estates.  (Although his legal practice is carried on through a company, D A Starke Pty Ltd, it was accepted by all parties that no distinction was to be drawn between the plaintiff and that company for the purposes of the present applications).  The wills of each of Mr and Mrs Lycourinos, which were prepared by Mr Starke on their instructions, did not contain a clause authorising him to charge the estates for legal work done on their behalf.

4. Christos died on 28 August 2007.  As far as it is known his only surviving next of kin was the defendant, Helen James, his daughter.  The original of his will cannot be found, but there is a copy dated 29 March 1988 which shows him leaving his estate to the defendant, although her name had been erased out from it.  No administration has ever been granted to anyone over his estate.

5. On 23 June 2008 the defendant instituted action 856/08 in this Court seeking a declaration that she was the universal beneficiary of Christos under his will dated 29 March 1988, or alternatively, that she was his universal statutory beneficiary under s 72G of the Administration of Probate Act 1919 (“the Act”).  On 8 August 2008 the plaintiff in this action and another solicitor, Arthur Drikas, who was the executor named in the alleged will of Christos, were joined as defendants to that action.  Mr Drikas has elected to take no part in the proceedings.  No judgment has been entered in this action, 856/08, and it has largely been left in abeyance to follow behind the present action, 1127/08.

6. On 7 August 2008 the plaintiff instituted this action against the defendant seeking determinations or directions whether Christos took beneficially in the estates of each of Mr and Mrs Lycourinos and how those estates should be distributed.  On 11 September 2008 the defendant filed a defence which in effect pleaded that no matter what determination was made about the issues raised by the plaintiff concerning the estates of Mr and Mrs Lycourinos, she was entitled under either the will of Christos dated 29 March 1988, or on his intestacy to the distribution of the whole of the estates of both Mr and Mrs Lycourinos.  Thereafter, a partial settlement was reached between the plaintiff and the defendant whereby on 16 December 2008 I made re Benjamin orders authorising the plaintiff to distribute the estate of Mr Lycourinos on the basis that he was survived by Mrs Lycourinos and no other issue and that he was at liberty to distribute the estate of Mrs Lycourinos on the basis that she was survived by Christos and no other issue.  The defendant did not concede that such re Benjamin orders were necessary, but she did not oppose them being made.  The plaintiff has now distributed the estates of Mr and Mrs Lycourinos to the defendant, but subject to holding back in his trust account sufficient moneys to pay what he maintains are his proper legal costs for the administration of the estates.  The defendant concedes that the plaintiff is entitled to his proper disbursements incurred in the administration of the estates, but she disputes that he is entitled to recover any costs or commission in relation to the administration of the estates because of the absence of a charging clause in the wills and because she contends that he was not acting properly in opposing the orders sought in 856/08 and in bringing this action.

7. By an interlocutory application in this action issued on 26 November 2008 the plaintiff seeks commission or other remuneration under s 70 of the Act in each of the estates of Mr and Mrs Lycourinos, including for work done in relation to the estate of Christos and orders that the costs of all parties in this action and in 856/08 be paid out of the estate of Mrs Lycourinos.  The defendant opposes these orders for the costs of this action and 856/08 and orally sought an order that the plaintiff pay her costs of this action.

8. No separate application was taken out in 856/08 in relation to the costs of that action, but it was accepted by the parties to this action that I should deal with them in this action.  Although the plaintiff seeks an order for the costs of Mr Drikas in 856/08, I have not heard him on the question and I do not have any information as to the costs which he might seek. 

9. The plaintiff acknowledges that in the absence of a charging clause in the wills of each of Mr and Mrs Lycourinos he or his company have no legal right to charge profit costs against those estates.  However, he contends that s 70 of the Act empowers the Court to grant him remuneration for his work as executor and trustee in each estate, even in the absence of such charging clauses.  He concedes that he cannot recover both commission under s 70 and profit costs for legal work and he elects to take as remuneration under s 70 an amount equal to the profit costs on the applicable Supreme Court Scale for the work he did in lieu of any other commission.  (It was not disputed that he was entitled to his proper out of pocket expenses, but these are yet to be identified or quantified).  In the alternative to such a claim for remuneration under s 70 of the Act he maintains he is entitled to an equivalent order under the inherent jurisdiction of the Court.  The defendant contends that any remuneration to be allowed by the Court under s 70 or the inherent jurisdiction to an executor/ trustee who does not have a charging clause is limited to where special circumstances are established which, she submits, do not exist here.

10. S 70 of the Act provides:

    70     Commission may be allowed to executors, administrators or trustees.

    (1)The Court may allow to any executor, administrator, or trustee, whether of the estate of a deceased person or otherwise, such commission or other remuneration out of the estate or trust property, and either periodically or otherwise, as is just and reasonable.

    (2)No allowance shall be made to any administrator who neglects –

    (a)to deliver the statement and account required by section 56, as by such section required, or within such reasonable time as is allowed by the Court; or

    (b)to dispose of any estate with which he is chargeable according to the due course of administration.

    A section equivalent to s 70, and to similar effect, has existed in this State since 1856 and existed in New South Wales and Victoria at the times of the decisions in relation to those States mentioned below.

11. The power of the Court to allow commission or remuneration under s 70 extends to where it is just and reasonable to do so, and is not limited to where special circumstances are established:  Nissen v Grunden (1912) 14 CLR 297; re Craig (1952) 52 SRNSW 265; re Whitehead [1958] VR 143. Insofar as dicta in re Gambling (deceased) [1966] SASR 134 are to the contrary, it is not to be applied in preference to the High Court, New South Wales and Victorian decisions. Likewise the authorities in England are not to be followed: Halsbury’s Laws of England Vol 17, paras 738, 739, 740, 741 and 744.  Counsel for the defendant sought to distinguish re Craig and re Whitehead (above) on the grounds that in those States there was a Charter of Justice which expressly conferred power on the Supreme Courts of those States to award commission to executors and trustees.  Such a provision does not exist in this State.  In re Craig above at 266, Roper J expressly based his decision on the equivalent of s 70 without further support from the Charter of Justice.  I follow Roper J in not making the proper interpretation of s 70 dependent on the existence of any Charter of Justice.  The cases of re Taylor (1867) 1 SALR 43, re Johnson [1924] SASR 31 and re Salom [1929] SASR 387, which deal with other issues under s 70, are all consistent with a broad and liberal interpretation being given to it.

12. Accordingly, I hold that in determining whether the plaintiff should be entitled to remuneration under s 70, it is only necessary to look to whether such an allowance is just and reasonable and it is not necessary for him to establish any special circumstances.  Without going into the details of the remuneration claimed, I consider in general terms that it is just and reasonable that he should have an award of remuneration under s 70 assessed as the costs payable for the work he has properly done under the relevant Supreme Court costs Schedule.  If the plaintiff had renounced his appointment as executor because there was no charging clause in the will, the executor or administrator appointed would have been entitled to significant commission under s 70 and the costs of employing a lawyer to perform the proper legal work for the administration of the estate would have been an expense in the administration of the estates.  What amount is to be allowed for such remuneration under s 70 will need to be determined upon a formal adjudication of those costs.

13. Although a number of criticisms were raised by counsel for the defendant about much of the work done by the plaintiff, and for which he now seeks to have remuneration assessed, it is not appropriate to rule on a piece-meal and ad hoc basis on these items of work.  The proper course is for an itemised Schedule under 6R 273(1) to be filed by the plaintiff for all of the costs which comprise what he seeks for remuneration in both estates and for this action and action 856/08.  The defendant will then need to file a notice of dispute under 6R 273(2) identifying with proper particularity her objections to each of the items in the Schedule.  If those objections are matters of principle and extend to a significant number of items, it may be appropriate to give directions as under 6R 271(6) for the identification and resolution of particular questions as preliminary issues on the adjudication:  Catto v Hampton, Full Court, 22 August 2008, [2008] SASC 231.

14. What costs the plaintiff can recover in respect of work done for this action and action 856/08 will be the same as what he will be allowed for such work under s 70 of the Act.  Therefore, it is not necessary to make any further order about his costs in these actions.

15. This leaves the defendant’s oral application for the costs of this action and any application, if made, by the defendant in respect of action 856/08.  These issues are likely to be resolved in the course of the adjudication process under s 70 of the Act.  They will be adjourned to be raised at an appropriate point in the course of such adjudication.

    I have today made the following orders:

    1That the plaintiff be allowed remuneration out of the estates of Mr and Mrs Lycourinos under s 70 of the Act.

    2That such remuneration be the equivalent of the proper legal costs for such work under the relevant Supreme Court scale to be fixed by the equivalent of an adjudication of those costs under 6R 273.

    3The plaintiff is to lodge an itemised Schedule for such costs within 28 days or such further time as is allowed by the Court.

    4The defendant is to file a notice of dispute to the itemised Schedule within 28 days of its service or such further time as is allowed by the Court.

    5Costs of paras 4-7 of the application, FDN 11, reserved.

    6Fit for counsel.

    7Liberty to apply.

    8Adjourned for directions to 22 April 2009 at 9.15 am.