Columbus v Efstathis - [2019] SASC 149

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules)
COLUMBUS v EFSTATHIS & ORS
[2019] SASC 149
Judgment of The Honourable Justice Stanley
20 August 2019
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - DUTY OF TESTATOR - OTHER APPLICANTS
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION
Application for joinder as a plaintiff to a claim under the Inheritance (Family Provision) Act 1972 (SA) (the Act) for benefit out of the estate of the late Eva Columbus (the deceased). The deceased died in 2014. The applicant is a granddaughter of the deceased. The applicant’s father, a beneficiary under the deceased’s will, died in 2015. The applicant was not a beneficiary under the deceased or her father’s will. The application is brought out of time.
In issue is whether the applicant has a moral claim on her deceased grandmother’s estate and whether the deceased has not made adequate provision for the applicant’s proper maintenance, education or advancement in life.
Held:
1. There is no reasonable prospect of the applicant establishing any moral obligation on the part of the deceased to have made provision for the applicant from her estate.
2. The applicant’s claim does not have a reasonable prospect of success.
3. The application for joinder as a plaintiff to the proceedings pursuant to s 8(7) of the Inheritance (Family Provision) Act 1972 (SA) is dismissed.
4. The application for an extension of time is refused.
5. The parties are to be heard as to costs.
Inheritance (Family Provision) Act 1972 (SA) s 7, s 8; Supreme Court Civil Rules 2006 (SA) r 314, referred to.
Bowditch v NSW Trustee and Guardian [2012] NSWSC 275; Wall v Crane & Ors [2009] SASC 382, applied.
Delisio v Santoro [2002] SASC 65; Krol & Anor v Australian Executor Trustees Ltd & Anor [2010] SASC 302; Andre v Perpetual Trustees WA Ltd [2009] WASCA 14; Chapple v Wilcox (2014) 87 NSWLR 646; Simonetto & Anor v Dick (2014) 87 NSWLR 646, discussed.

COLUMBUS v EFSTATHIS & ORS
[2019] SASC 149
Civil
STANLEY J:
Introduction

In this matter the plaintiff has brought a claim pursuant to the Inheritance (Family Provision) Act 1972 (SA) (the Act) for an order that provision be made for his benefit out of the estate of the late Eva Columbus (the deceased). The applicant, Yiannoula Constantina Lisson, by interlocutory application, seeks to be joined as a claimant to the plaintiff’s action. The applicant also seeks an order that the time within which the application for joinder may be brought be extended. The application was made on 12 March 2019. The respondents to this application are the plaintiff and first to third defendants in the action. The plaintiff did not wish to be heard on the application.
Background
The applicant is a granddaughter of the deceased. The deceased died on 20 August 2014. The deceased was survived by three children, the first defendant, Olga Efstathis and the second defendant, Stephanie Columbus, and a son, Frederick Steven Columbus. Another son, John Constantine Columbus, died in 1993. The plaintiff is his son.
On 26 June 2018 probate of the deceased’s last will dated 13 July 2011 was granted to the first and second defendants.
At the date of her death, the deceased had a net estate of approximately $1.7 million substantially comprising a house property at West Beach and 99 ordinary shares in a private company she controlled, Columbus Enterprises Pty Ltd. At the date of the deceased’s death Columbus Enterprises Pty Ltd was the registered proprietor of three units being numbers 2, 3 and 6 in a block of units adjoining the residential property at West Beach.
The deceased’s will provided, inter alia, that the residential property was to be given to the first and second defendants beneficially and the shares in Columbus Enterprises Pty Ltd were to be given to the first and second defendants as executors who were directed to cause the company to distribute unit 2 to the second defendant, unit 6 to the first defendant and unit 3 to Frederick.
Frederick died on 24 December 2015.
The evidence before the Court is that the value of those units now are $385,000 for unit 2 and $240,000 each for units 3 and 6. The third defendant is Frederick’s widow and the executor of his estate. She was joined to the action on 13 March 2019. The value of the residential real estate has increased to $1,475,000. The current net value of the deceased’s estate is not clear but may be in the vicinity of $2 million.
The plaintiff commenced these proceedings on 5 December 2018. That was within the limitation period of six months from the date of the grant prescribed by s 8(1) of the Act.
The application for joinder was filed on 12 March 2019. However, the accompanying statement of claim to be filed in accordance with r 314(5) of the Supreme Court Civil Rules 2006 (SA) (the Rules) was not filed until 8 April 2019.
Section 8(7) of the Act provides:
Where an application has been made for the benefit of this Act, the Court may, if satisfied that it is just and expedient to do so, permit at any time prior to the final determination of the proceedings, the joinder of further claimants as parties to the application.
The time and manner for such an application is prescribed by r 314(4) and (5) of the Rules. They provide:
By no later than 14 calendar days after the commencement of the action, the initiating claimant is to serve on each potential claimant by prepaid post sent to his or her last known address notice of the action and a statement in an approved form of his or her right to make a concurrent claim.
Within 28 calendar days after service of a notice under subrule (4), a potential claimant may file an interlocutory application seeking permission under section 8(7) of the Act to be joined as a further claimant, together with a statement of claim making, and stating the basis of, a claim for provision out of the estate and any other claim for relief that could properly have been made in the statement of claim filed by the original plaintiff.A notice in accordance with r 314(4) was sent to the applicant on 7 December 2018.
Therefore the time in which the application under r 314(5) was to be made was on or before 9 January 2019.[1] Accordingly, the applicant requires an order extending the time under r 314(5) from 9 January 2019 to 8 April 2019 and an order pursuant to s 8(7) joining her as a further claimant to the proceedings.
[1] Noting that time does not run during the Christmas vacation: r 5(6).
In Delisio v Santoro[2] Besanko J considered that, where an action for the benefit of the Act is on foot, a claimant may either issue a new action and seek an extension of time under s 8(2) or seek joinder under s 8(7) to the existing action. Section 8(2) empowers the Court, after hearing such of the persons affected as the Court thinks necessary, to extend the time for making an application for the benefit of the Act. His Honour saw no reason to read down the words of s 8(7) of the Act.
[2] [2002] SASC 65.
Besanko J considered that if the application is made pursuant to s 8(7) considerations relevant to the Court’s decision whether to extend time under s 8(2) are likely also to be relevant to the Court’s decision pursuant to s 8(7).
However, in Krol & Anor v Australian Executor Trustees Ltd & Anor[3] Judge Lunn held that a different threshold test applied pursuant to s 8(7) from s 8(2). His Honour considered the threshold test pursuant to s 8(2) to be more onerous that the test pursuant to s 8(7). His Honour said:[4]
While it would be “unjust” to allow a claim which is clearly untenable to be pursued, the strength of that case for the purposes of s 8(7) need not be necessarily be as great as that which is needed for an extension of time under s 8(2). In any event, the arguments about the merits, or lack of them, of the claim, are essentially for the trial.
[3] [2010] SASC 302.
[4] [2010] SASC 302 at [15].
Contrary to the approach taken in Krol, I consider that the purpose of s 8(7) is not to provide a different threshold but rather is to avoid a multiplicity of actions by conferring a grant of express power to join additional claimants to the one action. In these circumstances there is no reason to apply different threshold tests pursuant to s 8(7) from s 8(2). Further, the textual test of “just and expedient” does not suggest any lesser threshold is required. On the contrary, they support the purposes of the provision as being procedural.
Whether it is just and expedient to permit joinder to occur requires consideration of the nature of the test imposed.
Of course, not every application for joinder will be brought out of time. In those circumstances an extension of time would not be required. Obviously considerations relevant to the grant of an extension of time in those circumstances would not be considered. Nevertheless, considerations relevant to the merits of the claim would be required whether the Court was exercising a discretion pursuant to s 8(2) or s 8(7). There is no sound reason why the weight to be given to the assessment of merits should be any different whether the application is being made pursuant to s 8(2) or s 8(7). There is nothing in the text, context or purpose which would support applying some different test as to merit or affording the assessment as to merit any different weight depending upon which provision was being applied.
I am satisfied that in order to meet the just and expedient test in s 8(7) an applicant for joinder must satisfy the Court that, accepting the factual basis of the application at its highest from the perspective of the applicant, he or she has a reasonably arguable case. That is to say, it has reasonable prospects of success.
In my view, this is consistent with the approach taken to the construction of the cognate provision in s 8(2) found in the equivalent legislation in other jurisdictions. In Andre v Perpetual Trustees WA Ltd[5] Steytler P, with whom Pullin and Buss JJA agreed, held that “the justice of the case” did not require a grant of leave in a case in which no arguable prospect of success had been shown.[6] His Honour came to this conclusion after conducting an extensive survey of applicable authority in various States. His Honour said:[7]
It is also settled that the strength of the case of an applicant for an extension of time is a relevant consideration. In a number of cases it has been said to be relevant to ask whether the applicant has 'an arguable case'. Other formulae have also been used. In Re Terlier, Townley J said that, if it was 'improbable' that the substantive application would succeed, 'it seems idle to grant the extension' (although others have understood the use of the word 'improbable', in the context in which it was used, to have been intended to mean that the application was bound to fail. The words 'a case fit to go to trial' were used in Re Dennis, Deceased and, in Warren v McKnight, Hodgson J used the expression 'so weak that it would be pointless … to go to a full hearing on the merits'. In other cases there has been a general assessment of the strength of the applicant's case, and see generally the discussion by Muir JA in Hills.
It seems plain enough that, if there is no arguable case on the merits, the application will be doomed from the outset and the justice of the case will not require that there be a grant of leave. However, when there is an arguable case the strength of that case may be an important factor (although still only one factor to be considered in the overall exercise of a wide discretion).
[Citations omitted].
[5] [2009] WASCA 14.
[6] [2009] WASCA 14 at [58].
[7] [2009] WASCA 14 at [41]-[42].
The strength of the applicant’s case
A claimant for the benefit of the Act must establish, inter alia, that he or she has been left without adequate provision for his or her proper maintenance, education or advancement by reason of the testamentary dispositions or the operation of the laws of intestacy in respect of the estate against which the claim is brought. Whether a claimant can satisfy the Court of this matter depends on the Court’s satisfaction that the testator was under a moral obligation to make such adequate provision for the claimant from his or her estate.
In Bowditch v NSW Trustee and Guardian,[8] Hallen AsJ (as his Honour then was) suggested guidelines for claims made by grandchildren in the following terms:[9]
In relation to a claim by a grandchild, the following general principles are, in my view, relevant and should be remembered:
(a)As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased's testamentary recognition.
(b)Where a grandchild has lost his, or her, parents at an early age, or when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes in loco parentis, these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. The fact that the grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Even then, it should be demonstrated that the deceased had come to assume, for some significant time in the grandchild's life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild's support and welfare, or else that the deceased has undertaken a continuing and substantial responsibility to support the applicant grandchild financially or emotionally.
(c)The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created in a particular case by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent.
(d)Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence.
(e)The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act.
(f)It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.
[8] [2012] NSWSC 275.
[9] [2012] NSWSC 275 at [113].
In Chapple v Wilcox[10] Barrett JA approved the guidelines identified in Bowditch as providing a useful touchstone that may be applied with circumspection by judges called upon to ascertain and apply “the feeling and judgment of fair and reasonable members of the community” in such cases.[11] With minor qualifications those guidelines were also approved by Basten JA[12] and Gleeson JA.[13] This statement of principle was followed by the Court of Appeal of the Northern Territory in Simonetto & Anor v Dick.[14]
[10] [2014] NSWCA 392, (2014) 87 NSWLR 646.
[11] [2014] NSWCA 392 at [67], (2014) 87 NSWLR 646 at 662.
[12] [2014] NSWCA 392 at [21], (2014) 87 NSWLR 646 at 651.
[13] [2014] NSWCA 392 at [150], (2014) 87 NSWLR 646 at 682.
[14] [2014] NTCA 4 at [40]-[41] and [54].
In Simonetto Riley CJ, with whom Southwood and Barr JJ agreed, noted that while the New South Wales legislative scheme differed from that in the Northern Territory, by requiring that a grandchild could only apply if he or she was wholly or substantially maintained or supported by the deceased, the guidelines in Bowditch remained apposite to the Northern Territory legislation.[15] The Northern Territory legislation is in substantially the same terms as the Act. As the trial judge in Simonetto Hiley J observed, the guidelines, with the exception of sub-paragraph (e), are apposite to claims made under legislation elsewhere than New South Wales, including the Northern Territory, because they apply to the adequate provision for the proper maintenance, education and advancement in life of the claimant.[16]
[15] [2014] NTCA 4 at [41].
[16] [2013] NTSC 77 at [38].
In this State a similar approach was taken in Wall v Crane & Ors[17] where White J said:[18]
Courts will often find in IFP claims that a grandchild of a testator has not been left without adequate provision. That is in part because the parents of the grandchild can be expected to provide the necessary support and in part because of the relative remoteness of the relationship between the grandchild and the deceased.
[Citations omitted].
[17] [2009] SASC 382.
[18] [2009] SASC 382 at [133].
However, White J recognised that in particular circumstances the blood relationship can give rise to a valid moral claim by a grandchild on the bounty of the deceased. That moral claim may be less than that of the deceased’s own children but may nevertheless be a valid moral claim.
In that case, White J found that a grandchild did have a valid moral claim on his grandfather’s bounty in circumstances where for various reasons, neither the child’s father nor mother could be relied upon to provide adequately for his proper maintenance, education and advancement in life.
The applicant’s evidence
The applicant was born in Brisbane on 16 October 1993. She has lived in Queensland all her life. She completed Year 12 and then undertook studies in early childhood care and business administration. Since leaving school, the applicant has worked at various times in childcare, retail and hospitality. She has two children by her marriage to Adrian Lisson. Her sons are six and three years of age. In the last financial year the applicant’s husband earned $49,000 as a machine operator. Due to ill health the applicant is not presently undertaking paid employment.
The applicant and her husband purchased a house in September 2018 for $415,000. This was financed by a bank loan of $196,000 and a loan from the applicant’s mother for the balance of the purchase price and associated costs. The loan from the applicant’s mother is repayable upon any subsequent sale of the property.
The applicant suffers from extensive health problems. It is unnecessary to set out the details save to note that during November and December 2018 she was diagnosed with a pineal cystic tumour of the brain which is surgically untreatable. The applicant deposes that the treatment of her condition and other health worries relating to her husband and children meant she was unable to concentrate on personal matters or contemplate any return to work. However, since she has received the diagnosis referred to above she has been able to move forward somewhat. Nonetheless she deposes that she is still hard pressed to concentrate on issues such as this litigation. The applicant further deposes to her reliance upon the support and assistance of her mother for the care of their children and for some financial assistance.

The applicant deposes to a very close relationship with the deceased notwithstanding that she has always been resident in Queensland. She says that from the time she was born until her teenage years the deceased would come to Brisbane to stay with her and her parents on a regular basis. These visits would frequently last for a couple of months. She said that the visits were of such a regular nature that in building their house her father made specific provision for separate accommodation and a bathroom for the deceased. The applicant further deposes that while in later years, when her grandmother came to Brisbane she would tend to stay with the first defendant in Ipswich because of her need for personal domestic assistance, nonetheless the applicant would see her on a regular basis and would often spend school holidays with her aunt so that she could spend time with the deceased. The applicant says that her family would also go to Adelaide every year, either at Easter or at Christmas and would stay at the family house at West Beach. She says there were additional times when she would fly on her own to Adelaide to spend time with her grandmother. She says she spoke very regularly with the deceased by telephone.
She deposes to the deceased being a central and important part of her life.
It is apparent from an answering affidavit filed by the second defendant that much of the applicant’s claims in relation to the nature and history of her relationship with the deceased will be contested.
The applicant claims that her father, when he was younger, contributed to building up the assets of Columbus Enterprises Pty Ltd, both financially and by his physical exertions. This claim is also contested.
Consideration
The applicant submits that her claim is arguable and joinder of her claim to the current proceedings would not occasion any prejudice to the existing parties. Further, she contends that the period of delay in respect of which an extension of time is sought is not egregious. The delay is explained by her ill-health. She submits the joinder of her claim is not likely to extend the length of trial unduly.
The applicant submits that her claim is based in the discrepancy between the provision made by the deceased in respect of her father compared to her aunts. She contends that by reason of her father’s contribution to the assets of Columbus Enterprises Pty Ltd and the nature of her relationship with the deceased, she has a legitimate moral claim on her bounty and, in these circumstances, the deceased has not made adequate provision for her proper maintenance, education and advancement in life.
The first and second defendants oppose the application. They submit that the applicant should not be joined as a claimant to the proceedings as her claim is hopeless. Further, they submit that the applicant has not provided a reasonable explanation for her failure to bring the application within time.
In my view, the indulgence sought by the applicant should be refused.
Assuming the facts set out in the applicant’s affidavit will be proved, I consider that if the applicant was joined to the existing proceedings her claim would not enjoy a reasonable prospect of success.
In accordance with Bowditch, as a general rule a grandparent does not have a responsibility to make provision for a grandchild in his or her testamentary disposition. That obligation rests on the parent of the child. Nor is a grandchild normally regarded as a natural object of the deceased’s testamentary recognition. The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. While a moral obligation may be created in a particular case by reason of the care and affection provided by a grandchild to her grandparent, there is no evidence of that in this case.
At its highest the evidence goes no further than establishing the existence of a close and loving relationship between the applicant and her grandmother. There is no evidence that would support a finding of the kind identified in Bowditch, where a grandchild has lost her parents at an early age or where she was taken in by the grandmother in circumstances where the grandmother became in loco parentis, which would give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandmother. There is no evidence to support a finding that the deceased had come to assume, for some significant time in the applicant’s life, a position more akin to that of a parent than a grandparent, with direct responsibility for the applicant’s support and welfare, or else that the deceased had undertaken a continuing and substantial responsibility to support the applicant financially or emotionally.
There is simply no evidence of that nature. The applicant’s grandmother predeceased her father. The applicant’s father died when she was 21 years of age and married. The applicant’s mother, the third defendant, is still alive and financially supporting her. The applicant’s mother stands to benefit from the father’s inheritance in accordance with the terms of the deceased’s will. While the applicant is not a beneficiary under her father’s will, there is no evidence of whether her mother has made a will or, if she has, its terms and, specifically, whether the applicant is a beneficiary. Nonetheless, the evidence is that the applicant’s mother is supporting her emotionally and financially.
In all the circumstances, there is no reasonable prospect of the applicant establishing any moral obligation on the part of the deceased to have made provision for her from her estate. If her father had been entitled to some greater provision from his mother’s estate than she made, it was for him or his estate to bring a claim. The basis of the claim sought to be propounded by the applicant has all the appearances of a vicarious claim being made on behalf of her father. There is no basis for such a claim to succeed.
Further, there is nothing that fell from this Court in Wall v Crane which would suggest the applicant’s claim enjoys a reasonable prospect of success. The factual circumstances of that claim are clearly distinguishable from the position of the applicant. In Wall v Crane, the plaintiff was three years old at the time of his grandfather’s death. He was living in circumstances of impecuniosity with no foreseeable prospects of improvement. His father was not willing or able to support him financially. There was no foreseeable prospect of his mother being able to do so. That is not this case. The applicant’s mother is supporting her financially as well as emotionally. That financial support has already been substantial. There is no reason to consider that the applicant will not ultimately benefit from her mother’s estate. Further, Wall v Crane is authority for the proposition that a grandchild of a testator will generally not be found to have been left without adequate provision because the parents of the grandchild can be expected to provide the necessary support, and because of the relative remoteness of the relationship between a grandchild and a grandparent.
In my view, it would be pointless to order the joinder of the applicant’s claim to the current proceedings. On the contrary, I consider it to be in the interests of the applicant not to be joined. To join her to the proceedings when she does not have an arguable case would only expose her to the risk of an adverse costs order at the conclusion of the proceedings.
In these circumstances it is unnecessary to determine the question of whether the extension of time sought should be granted. However, I would have refused the application for an extension of time on the basis of the absence of a reasonably arguable case.
Conclusion
I would dismiss the application for joinder pursuant to s 8(7) of the Act. I would refuse the application for an extension of time. I would hear the parties as to costs.