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Re Ghidella[2005] QSC 106

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Re Estate of Celestino Ghidella [2005] QSC 106

PARTIES:

IN THE WILL of CELESTINO GHIDELLA

FILE NO/S:

473 of 2004

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

20 April 2005

DELIVERED AT:

Cairns

HEARING DATE:

14 March 2005

JUDGE:

Jones J

ORDER:

1. The account of the executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani, in respect of the period from 29 September 1999 to 16 August 2004 be passed and certified by the Registrar without amendment.

2. The executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani be allowed a commission in connection with their administration of the estate of the late Celestino Ghidella in the sum of $52,616.50.

3. The executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani be further allowed out of the estate of the late Celestino Ghidella their costs of and incidental to the preparation, filing, examination and passing of their account, including their costs of and incidental to this application to be assessed on an indemnity basis.

CATCHWORDS:

SUCCESSION – EXECUTORS AND ADMINISTRATORS – commission – where executors seek executors’ commission – assessment of commission

Uniform Civil Procedure Rules (Qld), r 650(7)

Re Lack (1983) 2 QdR 613

Re Murphy (1928) St R.Qd 1

Re Barr Smith(1920) SALR 380

Re Sheppard (1972) 2 NSWLR 714

COUNSEL:

Mr M Jonsson

SOLICITORS:

MacDonnells Solicitors

  1. The executors and trustees under the will of Celestino Ghidella make application pursuant to r 650(7) of the Uniform Civil Procedure Rules (UCPR) for the passing of the accounts of the administration of the estate and seeking an allowance by way of executors’ commission.  The executors are the testator’s solicitor Ignazio Sciacca and Olivia Reghenzani, a daughter of the testator.  A third executor renounced his executorship soon after the testator’s death.  The commission is not formally opposed, although a letter dated 26 October 2004 was sent to the Registrar inviting the Court to have regard to duplication of effort between the executors and their solicitors and the expense of legal applications.
  1. The testator died on 28 September 1999 at the age of 81 years. He was survived by his wife Virginia and their child Gizelle (then aged four years) and by adult children from an earlier marriage, Olivia Reghenzani and Maurice Ghidella. The accounts presented by the executors were examined by the Registrar, who certified that “the total amount received by the executors and trustees is $1,225,689.80 and the total amount disbursed by them as executors and trustees is $1,104,711.45”.
  1. The composition of the estate and the value of the principal items as shown in the certified accounts is as follows:-

Value of Estate at 28/09/99

Details

Net Asset Value

  996 Ordinary fully paid shares in Dranline Pty Ltd ACN 011 012 525 shares

  Navigator personal Plan Portfolio (valued at $494,060.52 on 19/08/99)

  2 Booran Drive, Woodridge (valued at $960,000 as at 28/09/99)

  3 Butler Street, Tully (valued at $350,000.00 as at 28/09/99)

  Commonwealth Bank Premium Business Account ($101,664.84 as at 28/09/99)

$1,905,725.30

  Other assets

  12-14 George Street, Gordonvale

$135,000.00 (as at the date of valuation on 28/09/99)

  27 Grey Street, Meringa

$275,000.00 (as at the date of valuation on 25/10/00)

  First Australian Building Society (joint account with Virginia Ghidella)

$67,000.00 (1/2 share of the total balance on $125,000.00)

  Nissan Patrol 1993 Wagon (value based on M&W Publishing Car guide: September to December 2001)

$13,500.00

  Holden Commodore Executive Sedan (value based on M&W Publishing Car Guide: September to December 2001)

$2,500.00

  Total

$2,399,225.30

  1. The bases upon which the executors claim entitlement to a commission are set out in their respective affidavits. Essentially, the executors describe having attended to the funeral arrangements, organising bank accounts for the estate, instructing solicitors and accountants and organising for the maintenance of the assets of the estate by various tradespersons. Mr Jonsson of Counsel argues that because of the diversity of the estate assets and the value of those assets there was a higher than usual burden upon the executors.
  1. Although the terms of the will allowed Mr Sciacca to be paid for any professional legal work he performed for the estate, the executors in fact retained a firm of solicitors to undertake such work. In the end result Mr Sciacca received only the sum of $2,085.00[1] which appears to be for fees not associated with the main work of his executorship.
  1. The firm of solicitors acting on behalf of the estate were involved in receiving the estate’s income and paying outgoings. These receipts of payments were recorded in the firm’s trust account which was duly audited for the purpose of passing the accounts. It was necessary for the executors to have some ongoing contact with the solicitors in relation to these matters but it appears they were spared the day to day responsibility of banking income, paying bills and maintaining accounts.
  1. In addition, there were two separate proceedings in which the estate required legal representation. The first involved an application for the proper construction of the will which had in fact been drawn by Mr Sciacca and the second was the defence of claims for further family provision made by Olivia Reghenzani and Maurice Ghidella pursuant to s 41 of the Succession Act 1981.
  1. The former application being a construction argument did not require any particular contribution from either executor. Whilst both executors had an interest in the outcome of the application, the conduct of the case did not require personal effort in terms of supplying information or arranging for evidence to be presented. It did no doubt involve some additional work in instructing solicitors and executing supporting affidavits.
  1. In the latter application Olivia Reghenzani was not involved on behalf of the estate but rather on her own account. The resolution of the claims appears to have been struck between solicitors with only the direct involvement of Mr Sciacca in his executorial role.
  1. The costs incurred by the executors in those proceedings and indeed the costs of all parties were assessed on an indemnity basis and were thus borne by the residuary beneficiaries.
  1. Mrs Reghenzani received from the estate the amount of $64,334 to be shared between her and her three children. Mrs Reghenzani and her three children are also between them entitled to the deceased’s share in real estate property situated at 12-14 George Street, Gordonvale valued at the date of death at $135,155.[2]  The total value of Mrs Reghenzani’s entitlement on these figures is slightly under $50,000.  This gift under the will was not expressed to be related in any way to her acceptance of the role of executor.
  1. Rule 650(7) of the UCPR in its terms simply provides for an executor “to apply for the allowance of commission”.  The origin of the jurisdiction to allow executors commission was considered by McPherson J in Re Lack.[3]  That case dealt specifically with the question of whether an executor who receives a benefit under the will is additionally entitled to a commission.  His Honour considered the decision of the Full Court in Re Murphy[4] to the effect that where the testator gives a legacy to an executor or trustee stating that it is for his services in that capacity the executor is not entitled to anything more than he has been given under the will.  Where, however, the testator’s intention to that effect has not been expressed or cannot be determined, the jurisdiction to allow a commission in addition to the benefit exists.  McPherson J said (at p 617):-

“Whatever the underlying reason for the distinction between the law in England and Australia in this respect, that distinction has certainly been recognized in the many cases in which the courts have been at pains to elicit the intention of the testator on the point.  In the absence of some indication in the will of that intention, I do not consider that there is in Queensland any presumption that a legacy given to a person named as executor is, if he accepts it, prima facie to be regarded as exhausting his right to apply for, and the court’s power to grant, commission for time and trouble taken in performing duties as executor or trustee of the will.  To the extent that the decisions in In the Will of Steele (supra) and In the Will of Paulton (1909) 26 W.N. (N.S.W.) 51 suggestion otherwise, I do not propose to follow them.  To this I would add only that in Queensland the provisions of s 101(1) of the Trusts Act (1973-1981), which by virtue of s 79 are not excluded by the expression of a contrary intention in the instrument creating the trust, may now mean that even the principle expressed in Re Murphy (supra) has been displaced by statute.  By definition in s 4 of that Act, “trustee” includes a personal representative, and “instrument creating the trust” includes a will.  However, the point was not argued before me, and I need say no more about it here.”

  1. The assessment of the level of commission appears to be at the discretion of the hearing judge. In Re Lack McPherson J referred to a practice of allowing commission assessed on a percentage basis, but in fact awarded commission based on the value of the work undertaken by the executors.  Statutory scales provided for work undertaken by trustee companies or the Public Trustee provide some percentage commissions and also provide some guidance for this particular assessment.  Such percentages do not necessarily equate to a proper allowance for the “pains and trouble” involved by the executors in carrying out their duties.  It is the assessment of the “pains and troubles” which underpins the exercise of the discretion in fixing the allowance.  The manner of exercise of that discretion can be by selecting a percentage of the value of the estate or by assessing a lump sum.  In Re Barr Smith[5] the Full Court of South Australia favoured the view that assessment by way of percentage of the assets to be realised and the income to be managed is the most appropriate course to follow.  As with statutory trustees where the percentage is fixed according to a sliding scale – percentage reducing as the estate is larger – there is a need for moderation in circumstances where the value of the estate is large.  However, the assessment must have regard to the value of the efforts of the executors.  In Re Sheppard[6] Helsham J said (at p 721):-

“There may be of course an indirect effect again by reason of the size of the estate.  It may be that activities resulting in an allowance of commission in the period covered by one set of accounts might render very much easier and less onerous the remaining work to be done in connection with the realization of the estate.  But this would be taken into account in assessing the work value when the subsequent accounts are being passed and commission allowed, and it seems to me that the mere fact that the estate is of a particular size is not a factor which requires any a priori limitation upon the rate of commission to be allowed.”

  1. Mr Jonsson of Counsel has helpfully made available an extract of Wills, Executors and Probate Administration (Queensland) by John de Groot which sets out a list of rates applied for executors’ commissions as applied by the courts in different cases.  The range is quite wide spanning from 0.4 % to 5.0%.  The text suggests a rule of thumb of 2.5% on income and 4% on capital in a large estate.  These figures considerably exceed what is allowed in statutory scales for the receipt of a large estate.
  1. I have perused the nature of the activities reflected in the accounts passed by the Registrar which rather suggests that the receipt and despatch of money into and out of the estate was largely left to the retained solicitors. The supervision and maintenance of property particularly the property of Dranline Pty Ltd no doubt necessitated activity and care on the part of the executors and these are matters which properly guide my selection of the appropriate percentage. The applicants seek an allowance of 5% on income and 3% on corpus resulting in an aggregate allowance of $87,417.54. That claim greatly exceeds what I consider the appropriate allowance in the circumstances outlined by the accounts and the affidavit material placed before me. In the exercise of my discretion I will allow the following:-

On income ($308,815.57) - 1.5%$4,632.00

On corpus ($2,399,225.30) - 2%  $47,984.50

$52,616.50

  1. My orders will be as follows:-
  1. The account of the executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani, in respect of the period from 29 September 1999 to 16 August 2004 be passed and certified by the Registrar without amendment.
  1. The executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani be allowed a commission in connection with their administration of the estate of the late Celestino Ghidella in the sum of $52,616.50.
  1. The executors and trustees Ignazio Sciacca and Olivia Diana Reghenzani be further allowed out of the estate of the late Celestino Ghidella their costs of and incidental to the preparation, filing, examination and passing of their account, including their costs of and incidental to this application to be assessed on an indemnity basis.

Footnotes

[1] Item 31 ex “A” to affidavit of Sciacca filed 5 October 2004

[2] See Item 3 of Part C and Item 3 of Part D of accounts exhibited to affidavit of Mrs Reghenzani filed 5 October 2004.

[3] (1983) 2 QdR 613

[4] (1928) St R.Qd 1

[5] (1920) SALR 380

[6] (1972) 2 NSWLR 714

Close

Editorial Notes

  • Published Case Name:

    Re Estate of Celestino Ghidella

  • Shortened Case Name:

    Re Ghidella

  • MNC:

    [2005] QSC 106

  • Court:

    QSC

  • Judge(s):

    Jones J

  • Date:

    20 Apr 2005

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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