BICKFORD v Robert Neil BICKFORD (as Executor of the Estate of SAXON BICKFORD) - [2006] WASC 268

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BICKFORD -v- ROBERT NEIL BICKFORD (as Executor of the Estate of SAXON BICKFORD) & ORS [2006] WASC 268

CORAM: MASTER NEWNES

HEARD: 30 OCTOBER & 27 NOVEMBER 2006

DELIVERED : 5 DECEMBER 2006

FILE NO/S: CIV 1683 of 2006

MATTER :Inheritance (Family and Dependants Provision) Act 1972
and
Estate of SAXON BICKFORD late of 7 Muriel Court, Dawesville in the State of Western Australia deceased

BETWEEN: ROBERT NEIL BICKFORD
Plaintiff
AND
ROBERT NEIL BICKFORD (as Executor of the Estate of SAXON BICKFORD)
First Defendant
PUBLIC TRUSTEE (as Executor named in the Will of MAVIS ETHEL BICKFORD widow deceased)
Second Defendant
GLORIA DAWN MACKEY
Third Defendant
ERNEST KEITH MACKEY
Fourth Defendant

Catchwords:

Succession - Inheritance (Family and Dependants Provision) Act 1972 (WA) - Application to file application out of time - Effect of s 65(5) of Trustees Act 1962 (WA) - Whether adequate explanation for delay - Whether plaintiff has arguable case for relief - Turns on own facts

Legislation:

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6, s 7, s 7(2), s 7(2)(a), s 7(2)(b), s 8
Trustees Act 1962 (WA), s 65, s 65(1), s 65(3), s 65(5), s 65(5)(a), s 65(6), s 65(8)

Result:

Leave to file out of time granted

Category: B

Representation:

Counsel:

Plaintiff:     Mr M J C Bateman
First Defendant             :     No appearance
Second Defendant         :     Ms L M Hudson
Third Defendant           :     Ms L M McFarlane
Fourth Defendant          :     Ms L M McFarlane

Solicitors:

Plaintiff:     Batemans
First Defendant             :     No appearance
Second Defendant         :     Public Trustee
Third Defendant           :     O'Connor Partners
Fourth Defendant          :     O'Connor Partners

Case(s) referred to in judgment(s):

Clayton v Aust (1993) 9 WAR 364
Pugh v Bernard John Delgado as Executor of the Estate of the late Audrey May Hamilton the Administrator of the Estate of Ronald Wilson Hamilton (Dec) [2006] WASC 267

Case(s) also cited:

Bath v Perpetual Trustees WA Ltd as Executors of the Estate of Sheila Catherine Kolecki [2000] WASC 232
Bondelmonte v Blanckensee [1989] WAR 305
Brown v Holt [1961] VR 435
Clayton v Aust (1993) 9 WAR 364
Conlan v Registrar of Titles (2001) 24 WAR 299
Duncan v Perpetual Trustees WA Ltd (Incorporating WA Trustees Ltd) as Executor of the Will of William Fitzgibbon King, unreported; SCt of WA; Library No 940103; 4 March 1994
Easterbrook v Young (1977) 136 CLR 308
Kitson v Franks [2001] WASCA 134
Pead v Perpetual Trustees WA Ltd, unreported; SCt of WA; Library No 980209; 24 April 1998
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9
Re Allen (decd) [1922] NZLR 218
Re Salmon (decd) [1981] Ch 167
Re Walker (decd) (1967) VR 890
Regan v Zoller, unreported; SCt of WA; Library No 6134; 6 December 1985
Roberts v Roberts, unreported; SCt of WA; Library No 5193; 22 December 1983
Singer v Berghouse (No 2) (1994) 181 CLR 201
Tester v William Henry Tester as Executor of the Estate of Barry John Tester (Dec) [2006] WASC 134
Young v Kestel (As Executor of the Will and Estate of Douglas Tate Young (Dec)) [2003] WASCA 190

MASTER NEWNES: This is an application by the plaintiff for leave to bring an application under s 7(2) of the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Inheritance Act") for provision to be made out of the Estate of the testator, his late father.
The grant of probate of the testator's Estate was obtained on 6 October 2005. An application under s 7(2) of the Inheritance Act was therefore required to be made by 6 April 2006. The current application for leave was made on 4 July 2006. The period of the delay is therefore some three months.

The evidence

The plaintiff is the only surviving child of the testator, who died on 17 July 2005. The testator left a Will dated 22 March 1976 in which he appointed the plaintiff to be the executor and trustee of his Estate. The plaintiff obtained probate of the Will on 6 October 2005. The testator's Estate consisted of some personal belongings and furniture which were held jointly by the testator and the plaintiff's late stepmother ("Mavis"), a bank account in their joint names and a house at 7 Muriel Court, Florida in Western Australia (the "house") in the name of the testator.
At the time of the testator's death, the house was valued at $180,000. The plaintiff does not say how much was in the joint bank account of his father and Mavis, beyond saying that the amount was "reasonably substantial". That amount, of course, passed to Mavis.
It is convenient, before turning to the circumstances in which the delay in making the application occurred, to set out the background against which this application is made.
The plaintiff was born on 26 March 1942. He had a younger brother who died approximately 12 years ago. The plaintiff and his brother were brought up in Wyalkatchem where the testator conducted a drycleaning business. His parents divorced when the plaintiff was about 11 years of age.
According to the plaintiff, the divorce was acrimonious. The proceedings were instituted by his mother and Mavis was named as the co‑respondent. Custody of the plaintiff and his brother was given to their mother who moved to Perth to operate a bedsitter business. The plaintiff and his brother were sent to an Anglican home for children in Merredin from which they attended the Merredin High School. They visited each of their parents from time to time and the plaintiff says he got to know Mavis through the visits to the testator. The periodic visits continued until the plaintiff joined the Royal Australian Navy at the age of 18 years, when his visits to his parents tapered off.
The plaintiff subsequently married and he has a daughter who is now 34 years of age. After his marriage and over the years, the plaintiff and his wife and daughter would spend holidays and weekends with the testator and Mavis.
The house was built by the testator and Mavis. According to the plaintiff, on a number of occasions the testator said to the plaintiff and his brother that "this house will be yours one day". On these occasions Mavis would nod and smile.
In 1992, the plaintiff obtained employment as a computer technician at All Hallows School in Brisbane and, with his wife and daughter, moved to Brisbane. He says he kept in contact with the testator and Mavis by sending small gifts and birthday cards.
For approximately the last five years of his life, the testator resided at the Mandurah Care Facility in Mandurah. Mavis resided alone in the house and visited the testator from time to time. The plaintiff says that he and his wife would telephone Mavis at least once a fortnight to ensure that she had no worries and they also rang the testator once a week.
On 5 July 2005, the plaintiff received a telephone call from Mavis to say that the testator was dying. The plaintiff says he was shocked to receive the news as he was not aware that the testator's condition was that serious. The plaintiff contacted the testator's doctor in Mandurah who explained the testator's condition and also said that Mavis too was sick and he suspected bowel cancer. The plaintiff and his wife immediately flew to Perth, arriving the following day. They visited the testator on a daily basis until the testator's death on 17 July. They also took Mavis to various medical appointments. They learnt that her colon cancer was terminal and she had a life expectancy of between six months and two years.
The plaintiff says that, following the testator's funeral, Mavis informed him that she and the plaintiff were joint executors of the testator's Will but that she did not have a copy of it. The plaintiff says that following his return to Brisbane he was contacted by Mavis's next‑door neighbour, the third defendant ("Mrs Mackey"). Mrs Mackey said she was sending documents to him and she wanted him to sign them to say that he lived at Lot 217 Muriel Court. The plaintiff says he refused to do so. When the documents arrived he saw that he was in fact his father's sole executor. Under the terms of the testator's Will, the whole of his Estate was left to Mavis if she survived him and, if she did not, then equally to the plaintiff and his brother.
The plaintiff says that in light of the assurances of the testator and Mavis that in their respective Wills they would leave everything to the surviving partner, or if the partner predeceased them, then to the plaintiff and his brother, he would not countenance any application under the Inheritance Act to vary the terms of the Will of the testator. He considered that that would appear insensitive and would be an unnecessary cause of worry to Mavis in the short time that she had left to live. The plaintiff says he was more than happy to allow Mavis to live out the rest of her life in the security of the house.
The plaintiff says that he paid for the grant of probate of the testator's Will and for the transfer of the house to Mavis.
The first occasion on which the plaintiff had any misgivings that, as he put it, "all was not well", was when he received, through his cousin, a copy of a proforma letter signed by Mavis in which she said she had asked Mrs Mackey to be her carer and that the Public Trustee had a copy of Mavis's Will and was the executor. This was the first occasion on which the plaintiff became aware that he was not the executor of Mavis's Will.
Mavis died on 22 May 2006. Under the terms of Mavis's Will, the whole of her residual Estate went to her next‑door neighbours, the third and fourth defendants ("the Mackeys"). The Estate consisted, in substance, of the house and cash in an amount of some $70,000.
There was a good deal of evidence from both the plaintiff and the Mackeys as to their respective relationships with the testator and Mavis, each suggesting that the other has overstated the closeness of the relationship. It is unnecessary, for present purposes, to canvass that evidence. It is not possible to make any findings of fact in that respect on the affidavit evidence before me and, in the end, I do not think much turns on it.
I should say, however, that it does appear from the evidence that the testator was unaware that Mavis was suffering from a terminal condition and, indeed, in the later stages of his life when Mavis's condition had been diagnosed, Mavis and the plaintiff deliberately kept it from the testator in order to avoid causing him further stress and anxiety.
The plaintiff says that in the testator's last days he was assured by the testator that the house had been left to Mavis but that ultimately it would come to the plaintiff.
In fact, Mavis made her Will through the Public Trustee on 21 September 2005, some two months after the testator's death.
The plaintiff has given details of his financial circumstances at the present time and says they do not differ in any material respect from those that existed at the time of the testator's death.
The plaintiff and his wife have a house which they jointly own and which the plaintiff says is valued at $350,000. An amount of $150,000 is currently owing under a mortgage over the property. The plaintiff and his wife have household furniture of an estimated value of $25,000, a motor vehicle valued at $9,500, Telstra and Commonwealth Bank shares to the value of some $19,000 and a small amount in a bank account. The plaintiff also has a superannuation fund, the current balance of which was not in evidence but which he estimates would not exceed $150,000.
The total liabilities of the plaintiff and his wife are estimated at some $152,000, the principal component of which is the amount owing under the mortgage. They therefore have a surplus of assets over liabilities in an amount of approximately $250,000.
The plaintiff is employed as a computer technician at a salary of $32,999.42 per year and his wife is employed as a personal assistant to the executive director of a company at a salary of $30,323.09. The plaintiff is currently 64 years of age and will retire when he reaches the age of 65.

The plaintiff's submissions

It was submitted that the plaintiff's financial circumstances were, and are, modest, and he faces the prospect of retirement within a year or so when his current income will cease. His superannuation will be barely sufficient, if sufficient, to discharge the mortgage over his home.
Counsel argued that the delay in making the application was very short and the plaintiff had a meritorious claim for provision from the Estate of the testator. The only reason the plaintiff had not made an application sooner was that he had acted in reliance upon the promises made to him by the testator and Mavis that ultimately the house would be left to him by the survivor in their Will. Mavis had no children and the plaintiff was the only surviving child of the testator. The plaintiff had no reason to believe that Mavis would not adhere to the promises that had been made. It was in those circumstances that, as executor of the testator's Estate, the plaintiff had transferred the house to Mavis.
It was submitted that the Court has power under s 65(5) of the Trustees Act 1962 (WA) (the "Trustees Act") to make an order for further provision despite the fact that the assets of the testator's Estate have been distributed.

The third and fourth defendants' submissions

It was submitted on behalf of the Mackeys that s 65 of the Trustees Act has no application. Where assets of the Estate of a deceased have been distributed, an order cannot be made under s 65 of the Trustees Act unless the application is made within the time permitted by the Inheritance Act, namely six months from the grant of probate. The exception provided by s 65(6) of the Trustees Act relates to the distribution of assets forming part of the Estate of the deceased when the distribution was not known to the applicant at the time the application was made. That clearly had no application in this case, the plaintiff having been the executor of the testator's Estate. It follows that no relief is available to the plaintiff in respect of the testator's Estate.
It was submitted that, in any event, the plaintiff did not have an arguable claim against the testator's Estate. The testator and Mavis had been married for 44 years. The sole asset of the testator's Estate was the home in which they had lived for some 30 years. At the time of the testator's death, Mavis was 79 years of age. Her claim on the Estate was overwhelming. As at the time of the testator's death it would not have been sufficient that she be left a life interest in the house because her life expectancy was uncertain and she might later have needed managed care, which would require the house to be sold in order to provide the necessary funds.
On the other hand, the plaintiff has a house, a car and other assets and he and his wife were earning a joint income in the order of $65,000 a year. It was submitted that the plaintiff had not been forthright about the amount of his superannuation in that he had failed to disclose the actual amount of that superannuation and had not produced any documents to verify the vague estimate he has given of its value. Nor had he disclosed whether he had received any benefit from the Estate of his late mother, who died shortly before the testator.
It was submitted that the plaintiff has not provided a reason for the delay, but simply an explanation for why he chose not to make a claim for further provision from the testator's Estate. He had legal advice at the time but elected to do nothing. As executor of the testator's Estate he conveyed the house to Mavis on 3 November 2005, with the result that the testator's Estate was fully distributed. The plaintiff was always aware of the size of the testator's Estate and the fact that the assets of the Estate passed to Mavis. As he elected to take no action then, he is now bound by that election.

The relevant principles for leave to apply out of time

It was accepted by the parties that the principles to be applied on an application for leave to apply out of time under the Inheritance Act are set out in Clayton v Aust (1993) 9 WAR 364 and are as follows:
(1)The discretion is unfettered but is one that is to be exercised judicially and in accordance with what is just and proper.
(2)The onus lies on the applicant to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by it of its benefits.
(3)The time limit in the Act is a substantive provision and not a mere procedural time limit. The burden on the applicant is not trivial.
(4)It is material when considering the application to consider:
(a)how promptly and in what circumstances the applicant has sought the permission of the Court after the time limit has expired;
(b)whether or not there have been negotiations with the defendant. If negotiations were commenced within the time limit and time has run out while they are proceeding, this is likely to encourage the Court to extend the time. Negotiations commenced after the time limit will also aid the applicant if the defendant has not taken the point that the time has expired.
(5)It is relevant to consider whether or not the Estate was distributed before a claim was made or notified.
(6)It is relevant to consider whether refusal to extend the time would leave the applicant without redress against anybody.
Probate of the Estate of the testator was obtained on 6 October 2005 and, accordingly, any application by the plaintiff was required to be made within six months of that date. The proceedings were therefore some three months out of time.

The application of the Trustees Act

As the assets of the Estate of the testator have been distributed, the plaintiff relies upon s 8 of the Inheritance Act, which provides that where the Estate has been wholly or partially distributed the Court may make an order under s 65 of the Trustees Act in lieu of an order under the Inheritance Act. In determining whether and in what manner an order under s 65 of the Trustees Act shall be made, the Court shall have regard to s 65(8): s 9 of the Inheritance Act.
Section 65 of the Trustees Act applies where a trustee has distributed any assets forming part of the Estate of a deceased person: s 65(1). Section 65(3) provides, in effect, that the Court may order that a person to whom any assets were distributed (or any person who has received the assets from that person other than in good faith and for valuable consideration) pay to the person making the claim a sum not exceeding the value of the assets received.
Section 65(5) of the Trustees Act provides as follows:
"(5)Subject to the provisions of subsection (6), an order under this section shall not be made by the Court -
(a)where the claim is an application for an order under the Inheritance (Family and Dependants Provision) Act 1972, unless that application is made within the time permitted by that Act; or
(b)in the case of any other claim, unless the application for that order is made within the time within which the applicant could have enforced his claim in respect of the estate, without special leave of the Court, if the assets had not been distributed;
but, notwithstanding the foregoing provisions of this subsection, the order may be made, with the special leave of the Court, on application made within the time within which the applicant could have enforced his claim, in respect of the estate, with special leave of the Court, if the assets had not been distributed."
Section 65(6) of the Trustees Act provides, in effect, that in certain circumstances s 65(5) does not prevent an order being made if the claimant was not aware that the assets had been distributed. It is clear that that provision has no application in this case.

Section 65(8) provides, so far as relevant:
"Where a trustee has made a distribution of any assets forming part of the estate of a deceased person … relief … shall be denied, wholly or in part, if the person from whom relief is sought received the assets or interest in good faith and has so altered his position in reliance on his having an indefeasible interest in the assets or interest, that, in the opinion of the Court, having regard to all possible implications in respect of the trustee and other persons, it is inequitable to grant relief or to grant relief in full."
In order to consider the effect of s 65(5)(a) of the Trustees Act it is necessary to refer to s 7 of the Inheritance Act which, so far as relevant, provides:
"(2)No application [for provision out of the estate of a deceased person] shall be heard by the Court unless -
(a)the application is made within 6 months from the date on which the Administrator becomes entitled to administer the estate of the deceased in Western Australia; or
(b)the Court is satisfied that the justice of the case requires that the applicant be given leave to file out of time.
(3)A motion for leave to file out of time may be made at any time notwithstanding that the period specified in subsection (2)(a) has expired."
As I have mentioned, the Mackeys contend that s 65(5) of the Trustees Act permits an order to be made under s 65 only where the application under the Inheritance Act is made within the time specified in s 7(2)(a) of the Inheritance Act; that is, within six months of the grant of probate. No order can be made where, as here, the application is out of time, even if leave were granted to the plaintiff to file out of time. The plaintiff, on the other hand, contends that s 65(5) permits an order to be made where the application is made within the time specified in s 7(2)(a) of the Inheritance Act or any extended time allowed by the Court under s 7(2)(b).
In Pugh v Bernard John Delgado as Executor of the Estate of the late Audrey May Hamilton the Administrator of the Estate of Ronald Wilson Hamilton (Dec) [2006] WASC 267, I concluded that the effect of s 65(5) was that an order may be made under s 65 of the Trustees Act where the application is made within the time specified in s 7(2)(a) of the Inheritance Act or within any extended time allowed by the Court under s 7(2)(b). Nothing that has been put to me in this case would cause me to depart from that view. It follows that in the present case the plaintiff is not necessarily precluded from obtaining an order under s 65 of the Trustees Act.
The question, then, is whether the plaintiff has made out a sufficient case for a grant of leave under s 7(2)(b) of the Inheritance Act.
I have before me only the plaintiff's evidence as to what passed between him, on the one hand, and the testator and Mavis, on the other, in respect of the latter's intentions as to the house and that evidence has not been tested in cross‑examination. At this stage, however, it is not controverted and is not obviously to be disbelieved, and I think it must be accepted for the purposes of this application.
The delay by the plaintiff is short, a period of some three months. It has, in my view, been sufficiently explained by the plaintiff as being due to his reliance on the promises he says were made to him by the testator and Mavis that, upon the death of one, the house would pass to the survivor and upon their death would be left to the plaintiff. In the circumstances, there was no reason for the plaintiff to believe that that promise would not be adhered to by Mavis. There had been no apparent rift between them and Mavis had no obvious claimants upon her Estate.
While the Mackeys say that they had been friends and neighbours of the testator and Mavis for many years, and that they had provided care and assistance to Mavis during her final illness, it was not suggested that they had any particular claim upon Mavis's bounty that might have alerted the plaintiff to Mavis's testamentary intentions. I should say that the duration of the friendship and the extent of the assistance provided by the Mackeys were disputed by the plaintiff.
It is clear that the plaintiff has no claim under the Inheritance Act against the Estate of Mavis: s 7(1) of the Inheritance Act.
It is well‑established that in relation to the merits of the claim for relief under s 6 of the Inheritance Act, the plaintiff need only establish that he has an arguable case.
The defendants submit that he does not, contending that at the time of the testator's death the plaintiff was in a relatively secure financial position compared to Mavis who was elderly and in ill health and who, apart from the immediate need of the accommodation provided by the marital home, needed it as an asset to provide her with funds if she required more intensive care as she aged and her health deteriorated.
The plaintiff, on the other hand, says that he was at the time of the testator's death, and is, very near retirement with a superannuation entitlement that will do little, if any, more than discharge the mortgage over his house and will leave him with no funds on which to draw in his retirement. He and his wife have otherwise total savings and investments in the order of some $20,000.
It is unnecessary to assess the strength of the plaintiff's case for relief beyond concluding that it is arguable. On the evidence, in my view, it is arguable. The plaintiff faced, and faces, the prospect of imminent retirement with little by way of assets beyond his home to support his everyday needs and to meet any contingencies. While it can readily be accepted that, at the time of the testator's death, Mavis's need for appropriate accommodation and financial security for the remainder of her life weighed more heavily than any claim the plaintiff had, that is not to say that Mavis's needs inevitably precluded greater provision being made for the plaintiff. Arguably they did not. It is, however, neither appropriate nor necessary at this stage to canvass the various means by which, consistent with the first, the second might have been achieved, those being properly matters for trial.
In the circumstances, I am satisfied that the plaintiff has made out a case for leave to file the application out of time and I would grant such leave.
I will hear the parties on the form of the orders and on costs.