Duties in relation to costs of solicitors acting for deceased estates

Ireland as Executor of the Estate of the Gordon v Retallack [2011] NSWSC 1096 is a decision by a trial judge disallowing certain of the plaintiff’s solicitors’ costs as between solicitor and client on the basis that they were unnecessarily incurred.  Justice Pembroke exercised power under the Civil Procedure Act, 1995 (NSW) and the Court’s inherent jurisdiction where:

’13.  There was no need for expert evidence to resolve any legitimate question of construction arising out of Clauses 4, 5 and 16 of the will. There appeared to be a misapprehension that the resolution of the questions of construction would be assisted by evidence of the various commercial methodologies that might be utilised to achieve the testator’s objective. This was simply woolly thinking. On several occasions, senior counsel for the first defendant submitted, with admirable restraint, that the case could and should have been conducted on one document, namely the will. He was right of course. That would have been the conventional approach. Instead, I was presented with a plethora of highly complex and unnecessary accounting and taxation evidence. In addition, a great deal of irrelevant factual evidence was adduced – for no purpose and to no avail.’

His Honour made the following observations in relation to the obligations of solicitors acting for executors of deceased estates:

‘8. … On the one hand, the opportunity for a solicitor acting on behalf of an estate to incur unnecessary expenditure and to make excessive demands for legal costs, is patent. On the other hand, the existing beneficiaries of the estate repose trust in the executor and his or her solicitor to conduct legal proceedings, and incur expenditure on behalf of the estate, with the same care, prudence and circumspection that would be expected of a reasonable person of business looking after his or her own affairs. This is after all, the executor’s legal duty as a trustee: Breen v Williams (1996) 186 CLR 71 at 137 (Gummow J); Speight v Gaunt (1883) 9 App Cas (HL) 1 at 19 (Lord Blackburn).

  1. A reasonably competent solicitor will know and understand that fundamental duty of the executor. That duty must necessarily control and govern the actions of the executor. It must also guide the solicitor’s conduct of the proceedings and the choices that he recommends or makes on the executor’s behalf. To that end, the solicitor must endeavour to ensure that he does not make decisions or incur expenditure that may result in conduct by the executor that is inconsistent with that duty. In particular, the solicitor must ensure that the work done and the expenditure incurred is prudent, appropriate and proportionate to the real issues in dispute. A reasonable person looking after his or her own affairs would expect nothing less. The court, in its supervisory role, has the same expectation.’

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