When Co-Executors Can't Agree: Lessons from Wise-v- Barry

When family dynamics meet executor duties, the results can be catastrophic. The NSW Supreme Court decision in Wise v Barry [2018] NSWSC 1726 serves as a stark warning about what happens when co-executors can't work together, particularly where one has a personal interest that conflicts with their fiduciary duties.

The Facts

Robyn Margaret Wise died in April 2011, leaving a will that appointed her son Shane and her de facto partner Stephen as co-executors. The will gave Stephen half the value of the family home, with Shane and his brother Craig receiving a quarter share each of the remaining half. Probate was granted in March 2013, but the estate remained unadministered for over five years.

The core problem was simple yet devastating: Stephen refused to vacate the Nelson Bay property despite having no legal entitlement to remain there, and despite being repeatedly asked to do so by Shane and Craig. Stephen frankly maintained that "the Nelson Bay property would never be sold whilst he was living there" and that his intention was that it "not be sold."

Compounding matters, Stephen married in 2016 and moved his wife and her two children into the property without informing Shane or seeking permission. None of these additional occupants had any legal basis for residing there.

The Court's Decision

Justice Hallen made two critical orders that fundamentally changed the estate's administration:

1. Removal of Stephen as Executor

The court ordered Stephen's removal as executor, stating: "An order should be made that Stephen be removed as an executor and the grant of Probate should be revoked with an order that there be a grant made to Shane alone, so that the final administration of the estate can conclude promptly."

The court applied the principle from Bates v Messner that removal is justified where "the due and proper administration of an estate has either been put in jeopardy or has been prevented either by reason of acts or omissions on the part of the executor."

2. Dismissal of Stephen's Family Provision Claim

Stephen filed a family provision claim nearly six years out of time. The court found this was not due to inadvertence but a "conscious decision not to commence such proceedings until he was forced to do so." Justice Hallen noted Stephen's "unconscionable conduct" in failing to communicate his non-negotiable position whilst allowing negotiations to continue. The court dismissed the claim without extending time, concluding that adequate provision had been made.

Critical Lessons for Estate Planning Practitioners

1. Executor Selection Requires Surgical Precision

This case demonstrates why "a friend or relative is appointed without really understanding the responsibilities of the role." Acting as executor "can impose a significant burden during a time of grief and can be a complex, lengthy and emotionally draining role to fulfil." When appointing multiple executors, "consider how well those executors might be able to communicate and work together."

2. Conflicts of Interest Must Be Anticipated

The fundamental flaw was appointing someone with a substantial beneficial interest as co-executor. Stephen was "in a fiduciary relationship and was under an obligation not to prefer his own interests to those of the other beneficiaries," but his personal desire to remain in the property created an irreconcilable conflict that prevented proper estate administration.

3. Professional Executors for Complex Dynamics

Where family tensions exist, "an independent professional executor, such as an accountant or solicitor" can "bring important expertise and knowledge to the administration of your estate and can make objective and impartial decisions. Professional executors are commonly appointed where an estate is complex and would benefit from technical expertise, or where there is likely to be friction amongst family members."

4. The High Cost of Dysfunction

The legal costs consumed much of this modest estate - estimated at $127,202 from a net estate of $226,524. Current statistics show that "legal costs associated with removing an executor in NSW can range from $50,000 to over $500,000" and "estates that are subject to disputes over the removal of an executor see a 15-25% reduction in the estate's value due to legal fees and delays."

5. The Executor's Year Still Matters

Australian courts maintain that "the executor has one year from the date of the deceased's death (called 'the executor's year') to finalise the administration of the estate and distribute it to the beneficiaries. If an executor fails to realise and distribute any estate assets within the executor's year, the onus is on the executor to establish some valid reason for the delay."

Practical Recommendations

Before pursuing costly removal proceedings, practitioners should explore alternative resolution methods including "writing to the executor to seek more information," entering "mediation with the executor," or seeking "agreement by consent to the removal of the executor and the appointment of another party." Consent-based solutions "take less time to achieve and legal costs will be much lower compared to contentious probate proceedings."

The Bottom Line

Wise v Barry reinforces that executor appointments should never be made purely on family relationships or to avoid hurt feelings. The court "will not remove an executor simply because of a disagreement," but will act decisively where obstruction prevents proper estate administration.

The case stands as a cautionary tale: poor executor selection can destroy family relationships, consume estate assets in legal fees, and delay distributions for years. In our experience, spending extra time and consideration on executor appointment during estate planning prevents far greater costs later.

For estate planning practitioners, this decision emphasises the critical importance of discussing potential conflicts with clients and steering them toward professional or neutral executors where family dynamics suggest future difficulties.