Borg v Hawke
[2004] VSC 279
•2 August 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 4078 of 2004
| LORETTA BORG | Plaintiff |
| v | |
| ROBIN STANLEY HAWKE | Defendant |
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JUDGE: | CUMMINS J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 21 July 2004 | |
DATE OF JUDGMENT: | 2 August 2004 | |
CASE MAY BE CITED AS: | Borg v Hawke | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 279 | |
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Administration and Probate Act 1958 - s.99 - application for extension of time in which to apply for family provision under Part IV - principles applicable - application granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | R. Wells | Slater & Gordon |
| For the Defendant | R. Phillips | Wills & Probate Victoria |
HIS HONOUR:
By summons on originating motion both filed on 13 January 2004 the plaintiff Mrs Loretta Borg seeks leave pursuant to s.99 Administration & Probate Act 1958 to make application out of time for family provision pursuant to Part IV of that Act and for consequential orders. The motion seeks that pursuant to Part IV Administration & Probate Act 1958 such provision be made for her proper maintenance and support as the Court thinks fit out of the Estate of the deceased.
The plaintiff, Mrs Borg, is the daughter of the deceased who made her last Will on 27 August 1991. The deceased died on 28 October 2001. Probate of the Will was granted by the Court on 4 March 2002. The plaintiff says that the distribution of the deceased's Estate was not such as to make adequate provision for her proper maintenance and support.
The defendant, Mr Robin Hawke, is another child of the deceased and was the sole beneficiary of her Estate.
The deceased had seven children: Henry Jones, Loretta Borg, Beryl Jones (since deceased), Francis Edward Hawke, Cheryl Hawke, Robin Stanley Hawke (the defendant) and Neville John Hawke.
The plaintiff in her affidavit of 19 March 2004, which is the substantial matter on which the application proceeds, confirmed in evidence before me, sets forth the family history, some of which but not all of which I shall refer to.
The property constituting the Estate is real estate at 1 Young Street, Albert Park, valued at the time at $380,000, money in the bank of $23,000, small personal effects and no liabilities. At the date of the deceased's death, the deceased owned the property at Young Street as a joint proprietor with the plaintiff's brother Francis Edward Hawke, known as Frank Hawke, who is not a party to these proceedings. The property ultimately was sold, for some $480,000, in circumstances to which I shall come. The Estate, for all practical purposes, is of the order of $260,000 being half of $480,000 (going to the defendant by reason of a property settlement) and $28,000 in personal effects, leaving a net figure relevant to these proceedings of some $260,000.
First in relation to the application for leave to proceed out of time. The plaintiff deposes that at the time of her mother's death she believed that the Estate consisted only of a small amount of cash and her mother's personal assets. That was because the plaintiff knew that the Albert Park property was owned jointly by her mother and her brother Frank and that as a consequence she believed there would be little in the Estate once survivorship operated.
However, the defendant Mr Robin Hawke took proceedings in relation to the Albert Park property, asserting that Frank Hawke held the Albert Park property on trust for his mother's Estate. That proceeding ultimately resulted in a mediation and a settlement, the terms of which are appended to an affidavit of the defendant, being FEH1. In relevant part paragraph 1(e)(ii) thereof states that the proceeds of the sale of the property were to be divided equally between the two brothers. That brings the Estate, as I say, to $240,000 plus personal effects.
The plaintiff attended the mediation but was not a party to it. The plaintiff deposed that her brother Frank told her about the property proceeding shortly after the defendant had filed and served the court documents and that some time later, Frank told her that depending upon the outcome of the property proceeding she might be able to make a claim against her mother's Estate. She deposed that prior to Frank telling her that, she did not know it was possible to make such a claim. Frank told her to wait upon the proceedings being resolved before deciding whether to bring such a claim. She followed his advice as she did not then know that a time limit applied to making an application for provision from an Estate. She deposed that it seemed pointless to her to bring a claim at a time when she believed that the Estate had no significant assets.
On 28 November 2003 Frank and she attended the mediation in the property proceeding. During the course of the mediation Frank's barrister told her that she would be out of time to bring a claim under Part IV Administration & Probate Act 1958. After the mediation Frank suggested to her that she should see solicitors about that matter.
Following the signing of the terms of settlement on 28 November 2003, the plaintiff contacted her present solicitors by telephone on 3 December 2003. She gave certain instructions. She was contacted in return a little later in December. Matters proceeded and, ultimately, on 22 December the relevant solicitor spoke with Frank and confirmed that the settlement of the property proceeding would result in the property being sold and that half the net proceeds of the sale would be transferred into the Estate. On 12 January 2004 the plaintiff provided initial instructions to the solicitor to institute these proceedings. They were in fact filed, as I have stated, the next day.
In terms of the time lapse, chronologically speaking there is thus not a substantial amount of time, given the Christmas/January period in that particular phase of this history.
The plaintiff gave evidence before me and was cross-examined. Her evidence was substantially in accordance with her first affidavit. The plaintiff in her first affidavit sets forth her personal history and that of her relationship with her mother.
Her mother's first husband was Harold Arthur Jones. There was one child of that marriage, Harold Arthur Jones junior, who was born in 1940. Harold senior was called away to the War and during the War, the plaintiff deposed, her mother had a relationship with Francis Edward Hawke and had two children by him, Beryl Lorraine Jones born in 1942 and the plaintiff herself, born in 1945. Beryl died in 1993. Harold senior returned from the War and commenced again living with the deceased but ultimately that relationship failed. Francis senior and the deceased married on 20 November 1954.
The circumstances of the upbringing of the plaintiff and of her mother's conduct towards her, as stated by the plaintiff, are set out in paragraphs 26 to 36 of her first affidavit and I shall not repeat them.
Francis senior and the deceased had four children: Frank born in 1948, Cheryl in 1952, Robin, the defendant, in 1956 and Neville in 1960. Having had what, on the plaintiff's affidavit, was a very difficult and unhappy childhood and a difficult and unhappy relationship with her mother, the plaintiff ultimately left home when she was 20. She married her husband, Michael Borg, in December 1966. Over many years her relationship with her mother was estranged. When, however, she married Michael the relationship with the mother partially was reconstructed but certainly not fully.
The plaintiff and her husband have three children: a boy, born in 1967, a girl in 1969 and another girl in 1974.
The circumstances of Francis senior's last illness and death, which were again most unhappy, are set forth in the plaintiff's affidavit and I shall not repeat them. He died in 1988. Her mother did not tell the plaintiff about Francis's death and insisted that she not attend his funeral.
The plaintiff is presently 59 years of age. Her husband is 60 and is unable to work. He receives a disability pension of $380 per fortnight net and has a heart condition and will be unable to work in the future. The treatment for his heart condition is expensive and they have significant ongoing medical expenses. She receives a partner's allowance of $347 net per fortnight, is unemployed and receives no other income. They own their own home in St Albans. It is worth by estimate some $180,000 to $200,000 but it has not been valued recently. They have a Commodore sedan with about $25,000 and her husband has superannuation entitlements of about $100,000 with no other cash or savings. Further details of the plaintiff's financial situation are set out in her second affidavit, sworn 22 June 2004 at paragraph 16.
In cross-examination counsel for the defendant, Mr Phillips, rightly in part focused upon the course of the mediation and the plaintiff's quiescence during that course as to the potential of a Part IV matter. The plaintiff agreed that during the course of the mediation she did not inform the defendant, Mr Robin Hawke of an intention by her to claim against the mother's Estate. She said that she was not trying to “deplete Robin's share”. She believed that there was nothing in the Estate initially but she thought that she did have a claim, to use her words: "Because for the life I had I think I deserved a share." In re-examination she said that she would have loved her life with her mother to have been different and she would have loved her mother to have loved her and accepted all her children equally. I will return to that matter of the plaintiff's quiescence a little later.
Although not a party to the proceeding, the plaintiff's brother Mr Francis Hawke swore an affidavit of 19 March 2004, substantially in support as far as his knowledge went, of the matters deposed to by the plaintiff as to the history of the marriage and in particular the history of the mediation. He deposed that prior to the death of the deceased, the deceased and he were registered as joint proprietors of the Albert Park property. He also deposed that he told his sister, the plaintiff, that their mother and he owned the property as joint proprietors and that on their mother's death it should pass to him and not to her Estate. He said that belief was based on legal advice that he had received prior to speaking with his sister.
The defendant Mr Robin Hawke, now 46 years of age and 13 years younger than the plaintiff, by affidavit sworn 18 May 2004 sets forth the history of the matters in that affidavit and which matters were confirmed by him in evidence before me.
Mr Robin Hawke, who is not married and who has not been married, stated that during his childhood his parents rented several properties in South Melbourne. His mother worked at Tom Piper, now IXL and his father was a truck driver. His parents were hard-working people and were never secure financially. He deposed that his parents gave their children a good upbringing and his recollections of childhood were happy ones. He deposed that during 1972 his parents had the opportunity to purchase a property at Young Street South Melbourne. At the time they were living in rented accommodation in Union Street, Albert Park. That property was intended to be the parents' matrimonial home. He deposed that his parents were not able to purchase the property in their own names due in part to their age and financial position. He deposed that with the assistance of his brother Frank who was able to obtain financial favourable terms from the AMP Society, the purchase proceeded. It was agreed that because of that assistance, Frank would join in the purchase of the property but would obtain no interest therein. Accordingly, in August 1972 his mother and Frank were registered as the joint proprietors of the property. He deposed that the whole of the purchase price of the property was paid by the mother and for the most part by the father. After his father died his mother paid all the water rates, insurance, gas, electricity and telephone and mortgage payments.
The defendant, Mr Robin Hawke, sets forth in the affidavit his care of his mother over many years. I must say I was most impressed by Mr Hawke's commendable care over many years. That is set forth in his affidavit and was confirmed in his evidence before me.
After his mother died he commenced proceedings against Frank to recover the property into the deceased's Estate. He contended that Frank held the property on a resulting trust for the Estate. Mr Robin Hawke deposed that from the time that the family moved into the Young St property he had lived there until his mother died and continued to live there since her death. He looked after his mother and cared for her as set forth in his affidavit, particularly paragraphs 7 and 8.
Mr Robin Hawke deposed that his present financial position apart from the Estate is that he has $10,000 in deposit with the ANZ Bank, $3000 in a cheque account and 1000 AMP shares. His superannuation entitlements are of the order of $25,000 and he does not own a motor vehicle. He has no other assets. He works 30 hours per week part-time for OK Electrics. He worked part-time because he wished to help his mother and did help his mother over those years, and since her death he has found it difficult to get full-time work so he remains working on a part-time basis. He is an electrician by trade. His gross income is of the order of $25,000 per year. He now resides at East Bentleigh on a house-sharing arrangement paying $125 per week.
In relation to the settlement at the mediation with his brother Frank, Mr Robin Hawke deposed that at no time prior to 30 January 2004 did the plaintiff inform him that she intended to bring a Part IV proceeding. He Mr Robin Hawke settled the proceeding against Frank on the basis that he would receive 50 per cent of the net proceeds of the sale of the property and he worked on that basis in good faith. Mr Robin Hawke deposed that the plaintiff had never lived at Young St and had not seen the deceased for 16 years prior to her death.
In relation to the contribution to the real estate to which I have referred, in reply Mr Francis Hawke by affidavit filed 18 June 2004 denied that the deceased and his father paid the whole of the purchase price. He deposed that the property was purchased for $13,500 of which he Frank contributed $5,500 as well as paying the conveyancing costs. He also paid a further $1000 to replace the roof on the property as finance could only be obtained on condition that the repairs were completed prior to settlement. He was responsible for obtaining finance of $8000 from the AMP to fund the remainder of the purchase price. He then made mortgage payments for the first two years following the purchase. When he stopped making those mortgage payments the repayments were approximately $68 per month.
The criteria in relation to a claim out of time pursuant to s.99 Administration and Probate Act 1958 are not contained in the terms of the legislation. The legislation thus leaves a discretion in the Court as to whether it is just in all the circumstances to grant an application to proceed out of time. The authorities establish the obvious principles that the matters which should be taken into account are the period of delay; whether the excuse is reasonable; the matter of prejudice to persons affected; and whether there is an arguable case on the substantive s.91 matter by the plaintiff.
In my view in the holistic circumstances the period of delay is not substantial in this case. The reason advanced by the plaintiff as to the non-taking of the action within six months I accept as reasonable. I would have a different view if I considered that the plaintiff had lain in wait by arrangement with her brother Frank until Robin had locked himself into the mediation settlement but I am not satisfied that that has occurred. I consider that the plaintiff has given truthful evidence before me as to the reasons why she took no proceedings until after the mediation: that is to say that she did not consider there was any substance in the Estate and, secondly, that she did not know her true legal rights. In that circumstance I consider that the delay is excusable.
I agree with Gillard J in Valbe v. Irlicht[1] that the question whether the plaintiff has an arguable case on the s.91 matter, is a relevant consideration. It would appear that the old cases propounded a different view: see Re Guskett[2]. However, the view today, and in my view the correct view, is that the circumstance whether the plaintiff has or has not an arguable case is a matter to be taken into account: Re Walker[3] and Re Barrett deceased[4], negatively expressed as it was by Gowans J in Re McPhail[5]:
"It cannot be said that there is no prospect of success."
In Re Walker Lush J said at p.872:
"If it is improbable that the action will succeed the extension of time should not be granted."
[1][2001] VSC 53
[2][1947] VLR 212 per Herring CJ at 214
[3][1967] VR 890 at 892 per Lush J
[4][1953] VLR 308 at 312 per Sholl J
[5][1971] VR 534 at 548
Suffice it to say that I am not satisfied that it is improbable that the plaintiff's action would succeed; that is, I am not satisfied that there is no prospect of success and on that criterion I am satisfied that the plaintiff has met that onus which applies to s.99 applications.
The matter which has caused me the greatest concern has been prejudice to the defendant. I am concerned that the defendant has been caused prejudice by proceeding to the mediation settlement in the expectation that he would receive half of the value of the real estate. It may be, as counsel for the plaintiff put, that the defendant acted under a confusion between being a beneficiary and an owner. I accept the evidence of Robin that "Had I been aware that the Plaintiff intended to pursue a claim against my mother's Estate on the basis that I had reached an agreement with Frank, I may not have settled that proceeding or I might have settled on different terms". However, in the end I do not consider that the prejudice to the defendant is insurmountable and I do not consider it is such that it should cause a potential claim by the plaintiff that the deceased has not made proper provision for her support when the deceased had a responsibility to do so to be precluded.
Accordingly I consider that the s.99 application ought be allowed.
I have not heard argument or evidence on the substantive matter, the s.91 matter. Given the modest size of the Estate and given the modest circumstances of the defendant I would hope that the children Loretta and Robin (and although not a party to it also Frank) can between themselves reach an accommodation which will ensure that the property is fairly considered without excessive legal costs impinging upon it.
For those reasons I grant the application by the plaintiff for leave to make application out of time for provision for her maintenance and support out of the Estate of the deceased pursuant to Part IV Administration and Probate Act 1958.
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