Day v Raudino
[2009] VSC 463
•14 October 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8002 of 2009
| IN THE MATTER OF Part IV of the Administration and Probate Act 1958 - and - IN THE MATTER OF the Will and Estate of Colin Keith McManus (deceased) | |
| BETWEEN | |
| BENITA DORETTE DAY and | Plaintiffs |
| - and – | |
| MARYLYN MARGARET RAUDINO, MURRAY RODERICK McMANUS and PETERIA LOUISE BAILEY (who are sued as the executors of the estate of Colin Keith McManus deceased) | Defendants |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 October 2009 | |
DATE OF JUDGMENT: | 14 October 2009 | |
CASE MAY BE CITED AS: | Day & Anor v Raudino & Anor | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 463 | |
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TESTATOR’S FAMILY MAINTENANCE – Application for extension of time to bring claim – Adult grandchildren of testator – Small period of delay – Explanation – No prejudice to estate or to beneficiaries – Arguable claim – Administration and Probate Act 1958 Part IV ss 91, 99.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr A Dickenson | Rogers and Every |
| For the Defendants | Ms C Sparke | Darrer Muir Fleiter |
HIS HONOUR:
This is an application by two plaintiffs, pursuant to s 99 of the Administration and Probate Act 1958 (the Act), for an extension of time to commence proceedings for provision under s 91 of the Act.
The plaintiffs are the grandchildren of Colin Keith McManus, who died on 17 November 2007. Mr McManus (“the testator”) left a will dated 28 August 1998, by which he appointed the three defendants to be his executors and trustees. Probate of the will was granted to the defendants on 3 November 2008. The testator left a gross estate valued, for probate purposes, in the sum of $1,791,051.
Mr McManus had nine children. The plaintiffs’ father, Dougald Keith McManus, was the eldest son of the testator. Dougald McManus himself died on 18 November 1981. Another son of Mr McManus, Ian Alexander McManus, also predeceased the testator. By his will, the testator divided his estate into seven parts, and established seven discretionary trusts. Each of the seven surviving children of the deceased is a “primary beneficiary” of one of those trusts. The trusts also include other grandchildren of the testator within the definition of “general beneficiaries”.
The present application was commenced, by originating motion, on 28 July 2009, almost three months after the expiration of the time fixed by s 99 for the institution of an application for further provision out of the deceased’s estate.
The Court has a wide discretion in determining an application for an extension of time under s 99 of the Act. Ordinarily, the exercise of the discretion involves issues such as the length of the delay in making the application, the reasons for that delay, any prejudice to the estate and the beneficiaries, and the question whether the plaintiff has an arguable case for relief under s 91 of the Act.[1]
[1]Ansett v Moss [2007] VSCA 161, [18] (Buchanan JA); Groser v Equity Trustees Ltd [2007] 16 VR 101; [2007] VSC 27 [27]-[30] (Gillard J); Re Guskett [1947] VLR 212, 214 (Herring CJ).
In this case, the delay by the plaintiffs in bringing their application has been relatively short. As I stated, the application was made less than three months after the expiration of the time limit fixed for instituting proceedings under s 91 of the Act. Further, the defendants have not contended that there has been, or will be, any prejudice to the estate or to the beneficiaries resulting from a late application by the plaintiffs for relief against the estate, should an extension of time be granted to them.[2] There has not been any distribution of the estate of the testator. In this context, it is relevant that the children of Ian Alexander McManus have already issued proceedings, within time, seeking an order for provision under s 91 of the Act. Accordingly, the distribution of the estate will be delayed in any event, until the determination of that action.
[2]Groser v Equity Trustees Ltd (above), [28].
There was some debate before me as to whether an appropriate explanation has been given by the plaintiffs for their delay. The first plaintiff, Benita Day, is 33 years of age, having been born in June 1976. The second plaintiff, Helena Troy, is 36 years of age, having been born in May 1973. They each had little or no contact with their late grandfather, the testator, since the early 1990s. After they learnt of his death, their maternal grandmother told them that they should give consideration to making an application for provision from the estate of the testator. Accordingly, Ms Day wrote to the solicitors for the estate and requested a copy of the will. Six weeks later, she received a response advising that, as she and her sister were not beneficiaries, they were not entitled to a copy of the will. They were invited to view the will, which was then located in Swan Hill.
At the same time, the plaintiffs’ maternal grandmother suffered a serious back injury and was confined to bed for almost five months. She was also diagnosed with a bacterial infection. The plaintiffs, and other family members, took responsibility for the fulltime care of their grandmother. In addition, the plaintiffs’ mother was suffering from mental health problems, and the two plaintiffs were caring for her. Ms Day is a part-time social worker, and she and her husband have two children, aged three and one years respectively. In January 2009, her husband was hospitalised for almost one week as a result of a serious bout of arthritis in his lower back.
The second plaintiff, Helena Troy, now has three children. Her eldest child is 2½ years of age, and she also has twin children born on 6 April 2009. In February 2009, Ms Troy was ordered to have bed rest for a period of six weeks before the birth of the twins.
Taking all those matters into account, it is clear that until at least May 2009, the two plaintiffs were understandably too heavily preoccupied with their domestic and family concerns, to have sufficient time to seek legal advice as to whether they should bring an application in respect of their late grandfather’s estate. Ms C. Sparke, who appeared for the defendants, accepted that was so, but submitted that the plaintiffs have not established any adequate reason why they delayed making the present application from May 2009 until late July 2009. While there is some force in Ms Sparke’s submissions, nevertheless I take into account the fact that the plaintiffs had been sorely beset with domestic problems in the first half of 2009, and that they each have young children and heavy family commitments. Further, they did not have ready access to the will of their late grandfather, in respect of which they needed to seek advice. Bearing those matters in mind, I accept that the plaintiffs have established a reasonable explanation for their delay in making the present application.
The next question is whether the plaintiffs are able to establish that, if they are granted an extension of time, they have an arguable case to claim relief in respect of their grandfather’s estate under s 91 of the Act. The authorities have used various different formulae to describe the appropriate test as to whether a potential plaintiff’s case might be arguable for the purposes of an application for extension of time under s 99 of the Act. In Ansett v Moss[3] Buchanan JA stated that, in order that the lack of merits act as a disqualifying factor on an application for an extension of time, it must be shown that the applicant’s potential case under s 91 is “hopeless”.[4] No doubt the underlying reason for that requirement is that, unless the plaintiff is able to establish some sensible prospects for success in the substantive claim, it would be futile to grant the plaintiff an extension of time within which to bring that claim.[5]
[3][2007] VSCA 161, [11].
[4]See also Menzies v Marriott [2009] VSC 345, [19] (Hollingworth J); Re Walker deceased [1967] VR 890, 892 (Lush J).
[5]Re Walker (above), 892 (Lush J).
The question, then, is whether the plaintiffs, on the materials before me, have been able to establish that they have an arguable claim, or, at least, that the claim is not groundless or hopeless. It was this issue which was the most agitated before me in the course of submissions. The affidavit materials show that, when the plaintiffs were young, they spent time with their paternal grandparents, and that they were particularly close to their paternal grandmother. However, their grandmother died in 1991, and since then they had little or no contact with their paternal grandfather, the testator, until his death in November 2007.
The plaintiffs’ father was, as I stated, the eldest of nine children. It would appear that the father (Dougald McManus) and the testator had a close relationship. Dougald McManus worked on the family farm with the testator until his death in 1981. They farmed sheep and crops. It would appear that Dougald McManus share‑farmed with the testator and worked largely for no wages. When the crops were sold, he received a portion of the sale proceeds. Dougald McManus and Ian McManus were the only two of the nine siblings who worked on the family farm.
The plaintiffs’ father was a chronic alcoholic throughout his lifetime. His relationship with the plaintiffs’ mother was marred by domestic violence. In approximately 1978, Dougald McManus and the plaintiffs’ mother separated and eventually they divorced. The plaintiff Helena Troy was then six years of age, and the plaintiff Benita Day was only two years of age. A trust fund was established, from which Dougald McManus paid maintenance for the upbringing and support of his two daughters. Three years later, in 1981, Dougald McManus died as a result of a motor vehicle accident leaving a small estate, comprising his remaining one‑half interest in the former matrimonial home, and a small amount of cash.
The second plaintiff, Helena Troy, is married and, as I stated, has three children under the age of three years. She and her husband jointly own their home at Strathfieldsaye, valued at $310,000. It is encumbered by a mortgage debt of $260,000. Helena Troy’s husband is self‑employed, but is only on a small income of approximately $32,000 per annum. In her affidavit Helena Troy states that she and her husband “live week to week”.
The first plaintiff, Benita Day, is married and has two young children. She and her husband own a home at Sedgwick valued in the sum of $480,000. It is encumbered by a mortgage debt of approximately $280,000. Benita Day is employed on a part‑time basis as a social worker, and earns approximately $1,200 per fortnight (net). Her husband is the joint owner of a plumbing business. However, he suffers from severe arthritis in his back, and his long term employment prospects are problematic. Apart from the equity in their home, they have few other assets.
It is clear that the plaintiffs will not be able to mount a claim under s 91 of the Act on the basis of any close bond with their grandfather, or any moral desserts arising from care which they gave to him in his later years. Rather, it was submitted to me by Mr Dickenson, who appeared for the plaintiffs, that the plaintiffs have an arguable case that their late grandfather had a moral obligation to support them, arising from the circumstances in which their father had worked, for little or no pay, for their grandfather before his death. Mr Dickenson submitted that, in that way, the plaintiffs’ father had contributed to the assets of the testator, while at the same time foregoing the opportunity to build up an estate of his own which he might have left to his two daughters. Accordingly, it was submitted by Mr Dickenson that it is arguable that the testator had a moral duty to make some provision for the support of his grandchildren from the estate, to which the plaintiffs’ father had made a contribution.
For the purpose of this application, it is not necessary for me to consider, in any detail, the basis upon which a grandchild may make an application for further provision out of the estate of a grandparent under s 91 of the Act. In MacEwan Shaw & Anor v Shaw[6], Dodds‑Streeton J considered the authorities, relating to such claims, at some length. Her Honour reached the following conclusion:
“… where children are in the primary care of their own parents, who are capable of fulfilling their basic needs, prevailing community standards would not, in the absence of some special factor or unusual circumstances, impose on a grandparent a responsibility to provide.”[7]
[6](2003) 11 VR 95; [2003] VSC 95.
[7]121, [222].
However, there is no hard and fast rule relating to applications made on behalf of grandchildren. As Mandie J observed in Petrucci v Fields[8], grandchildren can neither be “ruled in” nor “ruled out”, until all the relevant facts are examined. In such a case, the test ultimately is whether a wise and just testator would have thought it his moral duty to make any, and if so what, provision in favour of each of the plaintiffs.[9]
[8][2004] VSC 425, [64].
[9]Blair v Blair (2004) 10 VR 69, 75, [13] (Chernov JA), 84, [39] – [41] (Nettle JA); Lee v Hearn (2006) 11 VR 258.
The materials, in support of the primary submission made on behalf of the plaintiffs, are quite slim. As Ms Sparke has correctly pointed out, their affidavits do not disclose what work the plaintiffs’ father carried out on the testator’s farm. Further, it does appear that the plaintiffs’ father did receive a share of the profits out of the sale of the crops, which the testator and the father share‑farmed.
However, the submission made by Mr Dickenson is, in my view, strengthened by a further consideration which emerged in the course of argument. When the plaintiffs’ father died, they were both young infants. At that time, the plaintiffs’ father had only worked on the testator’s farm. He was an alcoholic. As young children, the plaintiffs had been left with little support from the estate of their late father. In those circumstances, a wise and just grandfather might well regard it as his moral obligation to make some provision for his late son’s children, particularly given that, at that time, they themselves were raising young children with limited financial resources. In my view, there is at least a tenable argument that a wise and just grandfather, whose alcoholic son had died young leaving infant children of his own with little support, would consider it his moral duty to remedy that circumstance, by himself making some provision for his late son’s children, particularly where his son had worked with, or for, him for some time, and particularly where the grandchildren were themselves of limited means. That argument is fortified by the circumstance that the testator’s estate was itself reasonably large, and was certainly sufficient to enable the testator to make some provision for the plaintiffs.
In those circumstances, I consider that the plaintiffs’ claim, for substantive relief under s 91, could be properly characterised as arguable, and certainly not hopeless or groundless. In so concluding, I do not otherwise express any view as to the merits of the plaintiffs’ claims, nor on their prospects of success in the substantive application. It is sufficient for me to have concluded that some purpose may be served by making an order for the extension of time, in the sense that it cannot be maintained that the plaintiffs’ claim, under s 91, would be hopeless or destined to fail.
Conclusion
Accordingly, in my view the delay has been of short duration. The plaintiffs have established an appropriate explanation for most of that delay. No prejudice will be occasioned to the estate, if leave is given to the plaintiffs to make an application, out of time, under s 91 of the Act. On the materials available to me, the plaintiffs’ substantive claim may not appear particularly strong. Nevertheless, I have concluded that it is arguable, and certainly it is not hopeless or groundless. For those reasons, it is appropriate to grant the plaintiffs’ application for an extension of time, within which to bring proceedings pursuant to Part IV of the Administration and Probate Act.
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