Emily Alison Harrison by next friend Joanne Alison Weston v Stephanie Rose Verrall as executor of the will of Edward Mark Harrison - [2021] WASC 190

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   EMILY ALISON HARRISON by next friend JOANNE ALISON WESTON -v- STEPHANIE ROSE VERRALL as executor of the will of EDWARD MARK HARRISON [2021] WASC 190
CORAM:   MASTER SANDERSON
HEARD:   12 MAY 2021
DELIVERED          :   11 JUNE 2021
PUBLISHED           :   11 JUNE 2021
FILE NO/S:   CIV 2236 of 2020
BETWEEN:   EMILY ALISON HARRISON by next friend JOANNE ALISON WESTON
Plaintiff

AND

STEPHANIE ROSE VERRALL as executor of the will of EDWARD MARK HARRISON
First Defendant

ALEX WILLMOTT VERRALL
Second Defendant

DYLAN ROSS VERRALL
Third Defendant

MORGAN LEE HARRISON
Fourth Defendant

MITCHELL GRAHAM HARRISON
Fifth Defendant

Catchwords:

Family Provision Act - Extension of time sought - Claim by disabled child of deceased - Turns on own facts

Legislation:

Family Provision Act 1972 (WA)

Result:

Extension granted

Category: B

Representation:

Counsel:

Plaintiff	:	Mr P A Nevin
First Defendant	:	Mr J R Brooksby
Second Defendant	:	Mr J R Brooksby
Third Defendant	:	Mr J R Brooksby
Fourth Defendant	:	Mr J R Brooksby
Fifth Defendant	:	Mr J R Brooksby

Solicitors:

Plaintiff	:	Taylor Smart
First Defendant	:	Ian Watson Lawyer
Second Defendant	:	Ian Watson Lawyer
Third Defendant	:	Ian Watson Lawyer
Fourth Defendant	:	Ian Watson Lawyer
Fifth Defendant	:	Ian Watson Lawyer

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

Clayton v Aust (1993) 9 WAR 364

MASTER SANDERSON:

This is the plaintiff's application for an extension of time to bring proceedings under the Family Provision Act 1972 (WA) (the Act). The application is supported by two affidavits of Joanne Alison Weston, one sworn 27 January 2021 and the second, sworn 5 March 2021. The first defendant has sworn an affidavit in her capacity as executor of the deceased's estate. The relevant facts are as follows.
The deceased died on 24 April 2019, leaving an estate with a net worth of $633,583.67. He was not married at the date of his death and his only child was the plaintiff. The plaintiff is the child of the deceased's former relationship with Ms Weston who acts as the plaintiff's next friend. The plaintiff is 28 years of age. She was born with severe disabilities and is non‑verbal. She has cerebral palsy and epilepsy, right sided hemiplegia with associated spasticity and requires full assistance with movement. It is common ground she has significant present and future needs.
Ms Weston's separation from the deceased was acrimonious. It destroyed Ms Weston's relationship with the first defendant who is married to Ms Weston's brother. In the end, it is this complete relationship breakdown which determines the outcome of this application.
The deceased's last will was made on 19 July 2005. Relevantly, it provided that:
(a)the first defendant (the deceased's sister) was appointed executor;
(b)a protective trust was to be created of which the first defendant was trustee for the benefit of the plaintiff;
(c)during the plaintiff's lifetime, the first defendant, in her absolute discretion, could pay income with recourse to capital of the trust if she considered necessary for or towards the plaintiff's maintenance, advancement or benefit; and
(d)on the plaintiff's death, the accumulated residue of the capital and income of the trust was to be paid to the second, third, fourth and fifth defendants who are the deceased's nieces and nephews.
Probate of the will of the deceased was granted on 6 August 2019. The first defendant has since the grant of probate created the 'Emily Harrison Special Disability Trust' with her son, the second defendant, as co‑trustee. She has paid the funds comprising the residue of the deceased's estate into a bank account for that trust. Since the creation of the trust the first defendant has paid a total of $4,842.15 from the trust for the plaintiff's benefit.
It is obvious, just by setting out details of the trust, the present arrangement is problematic. It is Ms Weston who has the primary care of the plaintiff and is best placed to know the plaintiff's needs. Yet it is the first defendant, in consultation with her son, who determines what payments, if any, will be made to the plaintiff. In a perfect world, Ms Weston and the first defendant could perhaps agree on what provision out of the trust ought be made from time to time to the plaintiff. But when the relationship between Ms Weston and the first defendant is dysfunctional there is a real risk productive discussions will not occur. It follows the trustees, with the best will in the world, may not be in a position to make decisions which are in the plaintiff's best interests.
Furthermore, on the plaintiff's death, any residuary amount held in the trust will pass to the first defendant's children. That puts the first defendant in a very difficult position. The first defendant says she has a deep affection for the plaintiff and Ms Weston says nothing to the contrary. But careful management of the trust will necessarily require decisions to be made which will protect the plaintiff into the future. In other words, the trustees will have to decide whether to expend funds in the short term or maintain the capital of the trust for the medium and long term benefit of the plaintiff. In a situation such as that, there must be some question over every decision not to expend funds ‑ is the decision taken because the trustees are protecting the medium to long term interests of the plaintiff or is the decision made because in the end any capital retained in the fund will pass to the trustees' family. It would perhaps be going too far to say there is an obvious conflict of interest. But when there is a fractious relationship between Ms Weston and the first defendant there are bound to be disagreements; each decision is likely to be treated by Ms Weston with suspicion.
These concerns are not unfounded. In her first affidavit, Ms Weston details interaction she has had with the first defendant in relation to the plaintiff. Without wishing in any way to suggest either side is at fault, it is clear the unhappy relationship between Ms Weston and the first defendant has led to conflict over how funds held in the trust should be expended. On the one hand the first defendant is obviously concerned that as a trustee she should adopt a cautious approach to the expenditure of funds. On the other hand, Ms Weston finds the attitude of the first defendant to what she sees as expenses which should obviously be met as irritating, bureaucratic and counterproductive. There is no reason to think this antipathy will not persist.
In answer to the plaintiff's application, counsel for the first defendant noted the funds from the deceased's estate were placed in what is known as a special disability trust (SDT). This trust was drawn by Dr John Hockley, a very able and experienced barrister. SDT is an arrangement approved by the Department of Human Services and it attracts certain social security means test concessions. In broad terms, that means the funds, up to a certain level - currently $694,000 - can be protected from Centrelink means test requirements in respect of the plaintiff's NDIS pension. The beneficiaries are entitled to draw on the funds to the extent of $12,500 per annum for discretionary spending without affecting an NDIS pension. Furthermore, certain other expenses, including accommodation and care can be paid from the SDT.
The legal principles applicable to an application such as this were not in dispute. They were set out in pars 1 to 6 of the plaintiff's written submissions. Reference was made to the decision of Malcolm CJ in Clayton v Aust (1993) 9 WAR 364 and other decisions which have built upon the principles set out in that case. The two factors of importance here are first, the strength or otherwise of the plaintiff's claim and second, the length of the delay allied with the reasons for the delay.
This is a slightly unusual case. It may be said that the plaintiff is seeking further provision from the estate but in fact she has actually received the benefit of the whole estate. There is no question of any amount being paid to her directly. Any amount she receives would have to go into a trust. So really, if the plaintiff succeeded in her claim, the result would be the funds would pass to a new trustee. On the face of it, at least, the best way to hold funds to maximise the benefits to the plaintiff are through an SDT. So if the plaintiff was to succeed in her application, the orders made by the court may be to replace the present trustees of the SDT with new trustees. Really that is the outcome the plaintiff, through the agency of her next friend, seeks. On the available evidence she clearly has an arguable case for that relief.
The delay in bringing this application is approximately 70 weeks. In her affidavit Ms Weston goes to some lengths to explain the reasons for the delay. It is clear she could have acted more expeditiously. That is not to be critical – it is merely an observation based upon the evidence in Ms Weston's affidavit. But given the circumstances of this case, even if the delay is long and the explanation for the delay is not entirely satisfactory, weighing that in the balance with the fact the plaintiff has an arguable case, leads inevitably to the conclusion leave should be granted. In making that decision I have been mindful the plaintiff is a person under a disability.
One of the factors raised by the first defendant was the size of the estate. It is relatively modest and proceedings under the Act will further deplete the resources available to the plaintiff. While that is a factor which is against the grant of leave, it is not of such consequence in this case to be decisive.
The plaintiff will have leave to bring proceedings under the Act. On publication of these reasons the parties should agree a minute of orders. It would be appropriate for a period of 14 days after orders are made to be given to the plaintiff to commence proceedings. My preliminary view is costs of this application should be reserved to the main proceeding. If agreement cannot be reached as to costs, the parties should file short submissions on the question within seven days.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AH
Secretary
11 JUNE 2021