Starke v James (No 2) - [2009] SASC 221

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
STARKE v JAMES (No 2)
[2009] SASC 221
Reasons of Judge Lunn a Master of the Supreme Court
29 July 2009
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION
Remuneration to solicitor/trustee under s 70 of the Administration and Probate Act - preliminary issues on assessment of remuneration - remuneration not to be limited to that for legal work - not appropriate to deal with allegations of negligence against the solicitor/trustee for alleged defaults occurring before he embarked on the administration of the trust in an application for remuneration - at least some costs to be allowed for solicitor/trustee's work in 2 actions in this Court and the quantum to be left to the adjudication - effect of trustee having sought an indemnity from the beneficiary in excess of his legal entitlement as a condition of distribution.

STARKE v JAMES (No 2)
[2009] SASC 221
Reasons on determinations of preliminary issues on the assessment of trustee’s commission.

JUDGE LUNN: For reasons published as [2009] SASC 40 on 25 February 2009 (“the first reasons”) I ordered that the plaintiff as the executor of the estates of each of Kyriacos and Eleni Lycourinos be allowed remuneration under s 70 of the Administration of Probate Act 1919 (“the Act”) and that “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”. By his affidavit filed on 23 March 2009, (FDN 19), the plaintiff exhibited five itemised Schedules of costs (FDN 19A-19E) setting out the remuneration he sought. The defendant has filed notices of dispute to all of these Schedules. By a procedure akin to that under 6R 271(6) it was agreed that I should initially determine the following four preliminary issues on general matters going to what remuneration should be awarded to the plaintiff as follows:
(1)Whether the plaintiff has any legal entitlement to remuneration for the work done by him and described in the itemised schedule entitled: Events on death of the late Christos Chryssicopoulos being exhibit DAS 1 to the affidavit of David Starke filed on 23 March 2009.
(2)Whether, pursuant to the order of his Honour Judge Lunn made on 23 February 2009, the pltf is entitled to remuneration for all work properly done as executor of each of the estates of Kyriakos Lycourinos and Eleni Lycourinos, or only the proper legal work for the administration of the estates.
(3)Whether the pltf is entitled to charge fees for work the sole purpose of which was the conduct of action 1127 of 2008.
(4)Whether the pltf is entitled to charge for work the sole purpose of which was the conduct of action 856 of 2008.
Background facts.
What follows is a summary of the facts established by the affidavit evidence, but it is confined to the matters necessary to determine the four preliminary issues. The plaintiff is a solicitor and his legal…

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 Starke v James (No 2)

Details

AGLC: Starke v James (No 2) [2009] SASC 221
Case: [2009] SASC 221
Decision Date: 29 July 2009

CaseChat Overview and Summary

The case of Starke v James (No 2) involved the plaintiff, David Starke, a solicitor who had been appointed as the executor of the estates of Kyriacos and Eleni Lycourinos. The defendant contested the plaintiff's application for remuneration under section 70 of the Administration and Probate Act, raising issues about the extent and nature of the work for which remuneration could be claimed. The case required the court to determine several preliminary issues concerning the scope of the remuneration the plaintiff was entitled to for his work as executor, particularly whether it should be limited to legal work or could include non-legal tasks.

The court faced the task of interpreting the scope of remuneration allowed under section 70 of the Act, specifically whether it should be restricted to legal work or if it could include non-legal tasks. Additionally, the court had to decide if it was appropriate to address allegations of negligence against the plaintiff in the context of a remuneration application, and whether remuneration should be awarded for work done in two specific court actions. The court also needed to consider whether the plaintiff was entitled to costs related to actions he had taken against beneficiaries of the estates.

The court held that the plaintiff was entitled to remuneration for work done as executor, regardless of whether it was legal or non-legal, as the order for remuneration was to be calculated based on the Court Scale which allows for allowances beyond purely legal work. The court decided that it was not appropriate to deal with allegations of negligence in the context of a remuneration application, and these matters should be reserved for other litigation. Regarding the work done in the two court actions, the court found that the plaintiff was entitled to some remuneration for his work as executor in those actions, leaving the quantum to be determined in the adjudication. The court also noted that the plaintiff's attempt to seek an indemnity from the beneficiary beyond his legal entitlement did not affect the assessment of his remuneration.

In conclusion, the court determined that the plaintiff was entitled to remuneration for his work as executor, which could include non-legal tasks, and that the allegations of negligence were not to be considered in the context of this remuneration application. The court also found that the plaintiff was entitled to some remuneration for his work in the two court actions, with the exact amount to be determined in the adjudication.

Orders

Orders of the court

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Background

Background to the litigation

JUDGE LUNN: For reasons published as [2009] SASC 40 on 25 February 2009 (“the first reasons”) I ordered that the plaintiff as the executor of the estates of each of Kyriacos and Eleni Lycourinos be allowed remuneration under s 70 of the Administration of Probate Act 1919 (“the Act”) and that “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”. By his affidavit filed on 23 March 2009, (FDN 19), the plaintiff exhibited five itemised Schedules of costs (FDN 19A-19E) setting out the remuneration he sought. The defendant has filed notices of dispute to all of these Schedules. By a procedure akin to that under 6R 271(6) it was agreed that I should initially determine the following four preliminary issues on general matters going to what remuneration should be awarded to the plaintiff as follows:(1)Whether the plaintiff has any legal entitlement to remuneration for the work done by him and described in the itemised schedule entitled: Events on death of the late Christos Chryssicopoulos being exhibit DAS 1 to the affidavit of David Starke filed on 23 March 2009.(2)Whether, pursuant to the order of his Honour Judge Lunn made on 23 February 2009, the pltf is entitled to remuneration for all work properly done as executor of each of the estates of Kyriakos Lycourinos and Eleni Lycourinos, or only the proper legal work for the administration of the estates.(3)Whether the pltf is entitled to charge fees for work the sole purpose of which was the conduct of action 1127 of 2008.(4)Whether the pltf is entitled to charge for work the sole purpose of which was the conduct of action 856 of 2008.Background facts. What follows is a summary of the facts established by the affidavit evidence, but it is confined to the matters necessary to determine the four preliminary issues. The plaintiff is a solicitor and his legal practice is now carried on through a company, D A Starke Pty Ltd (“the Starke company”). He prepared wills for each of Kyriacos and Eleni Lycourinos in 2001, (although he was apparently then practising under the name of “Starke & Associates Lawyers” and not “Starke Lawyers” as he has in more recent times). He was appointed the executor under each of those wills, but neither will contained a solicitor’s charging clause. Each will contained a provision about the creation of a trust in which Christos Chryssicopoulos (“Christos”) was to be the appointor, the trustee and the primary beneficiary and the plaintiff was to be the settlor. The ultimate beneficiary under each will was to be the trust, but the effectiveness of the gift required that the necessary trust deed had to be prepared and executed by Christos. Kyriacos died on 17 December 2004 and under his will his estate passed to his wife Eleni. Eleni died on 2 July 2006. As far as was known she only had one child, Christos. However, as no trust deed had been executed there was an issue whether there was an intestacy and whether she might have had other children who would have shared in her estate with Christos on such an intestacy.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The plaintiff’s application is for remuneration under s 70 of the Act and not for an award of costs. The reference in my order of 23 February 2009 to “legal costs”, as quoted above, was to the means by which the quantum of the remuneration was to be calculated. While the relevant Scales are primarily couched in terms of work of a legal nature there is an overriding discretion built into Note A to each version of the Scale which enables the Court to make such allowance as is appropriate for the particular circumstances of the case. This is wide enough to enable allowances to be made for work of a non legal nature. Hence the reference to “legal costs” does not limit the scope of the work for which remuneration may be allowed to legal work. In the context of the first reasons it is clear that the intent of my order was that the plaintiff should receive remuneration for the work which he performed as executor where it was proper to remunerate him for that work, whether it was legal work or not. The cases referred to by counsel for the defendant about what could be allowed under a solicitor’s charging clause are not applicable to an application for remuneration. In any event, in such cases the Court had a discretion where a solicitor’s charging clause was held to be confined to legal work done by the solicitor to allow other commission to the solicitor/executor for non legal work performed by him calculated as a commission on capital value or income: Vance Executor’s Commission 173. Here under my order the basis of remuneration is to be wholly calculated under the Court Scale. What amounts are to be allowed for particular items of non legal work will be a matter of argument in adjudicating on the particular items. It will be open then to the defendant to pursue the argument that the plaintiff should be allowed no more for such work than would have been payable by the estate if a professional agent had been employed to perform it.(3)Remuneration for action 1127/08. Both (3) and (4) are directed to whether the plaintiff should be entitled to recover from the estate remuneration for the work which he did in connection with two actions brought in this Court. All I intend to determine now is whether he is entitled to any remuneration as executor/trustee for what he did in these actions. If he is entitled to any such remuneration, then the amount of it will be determined on the adjudication of the applicable Schedule. I am not determining whether under s 40 of the Supreme Court Act an order should be made as part of the determination of action 1127/08 about who should pay what costs in connection with that action. No such application for costs has been made by the plaintiff. If his application for remuneration under s 70 succeeds, there is no point in him making such an application. The major argument of the defendant was based on the allegation that the plaintiff had been negligent in the drawing of Eleni’s will. It was contended that the provision for the creation of the trust deed was pointless and created complications which led to the major problems which have occurred in the distribution of Eleni’s estate. In addition, it was contended that it was the responsibility of Mr Starke as the solicitor who had prepared Eleni’s will to take the necessary steps to see that the trust deed was prepared and executed by Christos before his death. (It is unclear who would have been responsible to pay for such work). I am prepared to assume these facts without making any findings about them as I am against the submission on other grounds, and they may be the subject of future litigation between the parties.