Erlich v Fleiszig
[2013] VSC 63
•22 February 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
SCI 2011 00427
IN THE MATTER OF Part 4 of the Administration and Probate Act 1958
and
IN THE MATTER OF the Will and Estate of Rachel Anklewicz deceased
BETWEEN
| RONALD ERLICH | Plaintiff |
| and | |
| GABOR PAUL FLEISZIG | First Defendant |
| THE ADMINISTRATOR GENERAL OF ISRAEL, ON BEHALF OF THE STATE OF ISRAEL | Second Defendant |
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JUDGE: | LANSDOWNE AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 and 25 May 2012 and 1 June 2012; written submissions 18 June 2012 and 4 July 2012. | |
DATE OF JUDGMENT: | 22 February 2013 | |
CASE MAY BE CITED AS: | Erlich v Fleiszig & Anor | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 63 | |
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TESTATOR’S FAMILY MAINTENANCE – application for extension of time to bring claim – applicant called deceased his aunt – deceased and her husband best friends of applicant’s parents – applicant asserts deceased’s relationship to him akin to parent/child – test for assessment of strength of applicant’s case – whether size of claim relevant - case for further provision arguable but not strong - delay of five and a half months - delay not objectively excusable – applicant occasioned loss to the estate -whether that loss is relevant prejudice – whether the prejudice is remediable – overall justice of the case - application refused - Administration and Probate Act 1958 (Vic) ss91,99.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms U Stanisich | Robert Richter & Associates |
| For the First Defendant | Dr D Kovacs | Luis Peter Fleiszig |
| For the Second Defendant | Mr S L Tatarka | Arnold Bloch Leibler |
TABLE OF CONTENTS
Introduction and summary.............................................................................................................. 1
Applicable law and issues................................................................................................................ 3
Discussion of the legal principles............................................................................................... 8
Delay.......................................................................................................................................... 8
Prejudice.................................................................................................................................... 8
Strength of the applicant’s case................................................................................................. 9
Quantum of the claim.............................................................................................................. 18
Approach to evaluation of the evidence...................................................................................... 20
Strength of the plaintiff’s case...................................................................................................... 25
Relationship between the deceased and the plaintiff and related factors.......................... 28
s 91(4)(e): Relationship between the plaintiff and the deceased............................................... 28
s 91(4) (f): Obligations of the deceased to the plaintiff and others........................................... 28
s 91(4) (k): Contributions by the plaintiff to the deceased’s welfare........................................ 28
s 91(4) (l): Benefits previously given by the deceased.............................................................. 28
s 91(4) (m): Whether plaintiff being maintained by the deceased............................................ 28
Size and nature of the estate: s 91(4)(g).................................................................................... 37
Plaintiff’s situation...................................................................................................................... 37
s91(4)(h): financial resources and needs.................................................................................. 37
s91(4)(i): any relevant disability.............................................................................................. 37
s91(4)(j): plaintiff’s age............................................................................................................ 37
s91(4)(n): liability of any other person to maintain the plaintiff............................................. 37
Character and conduct of any person: s 91(4)(o).................................................................... 38
Section 91(4)(p): other relevant matters; promises made by the deceased; deceased’s prior wills........................................................................................................................................................ 38
Conclusion in relation to the strength of the case.................................................................. 40
Delay................................................................................................................................................... 46
Discussion at the funeral............................................................................................................ 47
Conversation with Ruth Kayser in May 2010......................................................................... 50
Conclusion in relation to delay................................................................................................. 53
Prejudice............................................................................................................................................ 55
Evidence....................................................................................................................................... 56
Findings........................................................................................................................................ 61
Obstruction of sale................................................................................................................... 61
Quantification of loss............................................................................................................... 62
Is this relevant prejudice?........................................................................................................ 63
Can the loss be remediated on the making of a final order?..................................................... 65
Conclusion......................................................................................................................................... 67
HER HONOUR:
Introduction and summary
The plaintiff seeks an order under s 99 of the Administration and Probate Act 1958 (“the Act”) to extend time for the making of an application pursuant to Part IV of that Act to the date he filed his originating motion, being 4 February 2011. By the same originating motion the plaintiff substantively seeks an order pursuant to the provisions of Part IV of the Act making further provision for his maintenance and support to the extent of one-half of the deceased’s estate.
The deceased, Rachel Anklewicz, died on 18 December 2009. In the originating motion the plaintiff says he is a cousin of the deceased, and in his evidence he said he called her and her late husband aunt and uncle. The plaintiff’s only blood relationship was to the deceased’s late husband Adash, through the plaintiff’s late father, who was a cousin, although not an immediate one, of Adash. The deceased’s last will was dated 1 June 2004. It provides for a legacy of $20,000 to the plaintiff; a similar legacy to another relative, Mrs Ruth Kayser; legacies in smaller amounts to a number of institutions, principally Jewish institutions; and the balance of the estate to the State of Israel. The plaintiff and the first defendant were jointly appointed executors and trustees by the will. The inventory attached to the grant of probate identifies an estate valued at $2,202,690.21, largely comprised of four parcels of real estate.
Section 91 of the Act, which is within Part IV, empowers the Court to make an order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. Section 99, also within that Part, provides as follows:
99 Time within which application may be made
No application shall be heard by the Court at the instance of a party claiming the benefit of this Part unless the application is made within six months after the date of the grant of probate of the will or of letters of administration (as the case may be):
Provided that the time for making an application may be extended for a further period by the Court after hearing such of the parties affected as the Court thinks necessary, and this power shall extend to cases where the time for applying has already expired but in all such cases the application for extension shall be made before the final distribution of the estate and no distribution of any part of the estate made prior to the application shall be disturbed by reason of the application or of any order made thereon.
Provided further that the time for making an application under this Part shall be extended by a period equal to the period between the commencement of proceedings in an application under Part V and the making of an order by the Court granting or dismissing the application. (Note: the reference to Part V appears to be an error- there is no longer any such Part)
As probate was granted on 19 February 2010 the last date for filing an application under Part IV within time was 20 August 2010. The application was filed by originating motion on 4 February 2011 i.e. five and a half months late. As of the date of filing of the application and at the hearing no part of the estate had been distributed.
First directions were made in the application on 16 August 2011, a previous date having been adjourned by consent. Those directions provided for the separate and initial hearing of the plaintiff’s application for extension of time. They also provided for notification to the residuary beneficiary, the State of Israel, by notification to the Administrator General of Israel. The Administrator General of Israel was subsequently joined on behalf of the State of Israel as second defendant by consent.
On 7 May 2012 Justice Habersberger made an order that the application for extension of time be referred to me for hearing pursuant to Rule 77.05 of the Supreme Court (General Civil Procedure) Rules 2005. I heard the application commencing 24 May 2012. Written submissions followed.
The plaintiff relied on two affidavits of his and an affidavit of his mother in support. Both he and his mother were cross-examined by both defendants. The first defendant relied on an affidavit of Ruth Kayser and one of the first defendant, both of whom were cross-examined. The only evidence called by the second defendant was evidence as to the interest that could have been earned had certain real estate been sold prior to the hearing, deposed to in an affidavit of Nancy Jacqueline Collins sworn 22 May 2012. Ms Collins was not cross-examined.
For the reasons set out in detail in this judgment I will refuse the application for extension of time. The plaintiff has failed to persuade me that an extension is warranted having regard to the overall justice of the case. My reasons in summary are as follows. Although the delay here between the expiration of the time for an application within time (August 2010) and the time the application was actually made (February 2011) is not especially long, the plaintiff’s explanation for that delay is weak, given that he was considering a challenge to the will in general terms by May 2010 i.e. within time. His case for further provision, if an extension of time to make it was granted, is not hopeless, but on the evidence before me it is not strong. Further evidence could possibly be given at a further substantive trial, if the extension were granted, but it would be difficult to overcome the weaknesses in the plaintiff’s case shown by the evidence in this application. In addition, the plaintiff used his position as co-executor to cause delay in the administration of the estate, to preserve in specie assets in which he claimed an interest, and this has caused loss to the estate. I am not persuaded that remediation of this loss would necessarily be possible by adjustment to an award of further provision.
In summary, although no one factor referred to above alone would be sufficient in my view to lead to refusal of the application for extension of time, in combination they do so. The burden of proof is on the plaintiff, who seeks the indulgence, and the test is the overall justice of the case. The plaintiff has not established that it would be unjust that he be penalised for being out of time.[1]
[1]Per Herring CJ in Re Guskett [1947] VLR 212, 214 as cited with approval in Harrison v Harrison [2011] VSC 459
Applicable law and issues
In the exercise of the Court’s discretion to extend time pursuant to s99, a number of factors have been identified as usually relevant.[2] These are the length of the delay and whether the plaintiff has a satisfactory explanation for the delay; the strength of the plaintiff’s case for further provision; and whether the estate or another interested party would suffer prejudice if the application was granted. The parties here have argued their respective cases having regard to these factors. What should not be forgotten however in the consideration of individual factors, in my view, is that the test is the overall justice of the case i.e. whether having regard to all relevant matters the plaintiff should be relieved from the usual consequence that application outside the six month limitation period is not permitted.
[2]See, for example, Stanley v State Trustees Ltd [2012] VSC 24 at [9], Valbe v Irlicht [2001] VSC 53; McCann v Ward and anor [2010] VSC 452 at [11] and Corbett v State Trustees Ltd [2010] VSC 481.
A helpful summary of the required approach to an application for extension of time to make a Part IV claim, which keeps the focus on this overall test, is found in the judgment of Kaye J in Harrison v Harrison[3]. That case concerned a claim for proprietary estoppel, but in the course of determining that claim Kaye J was required to determine if the plaintiffs would have been entitled to an extension of time to make a Part IV claim in respect of their late father’s estate. Kaye J summarised the applicable principles as follows (citations omitted):
[3][2011] VSC 459
The decision of a court, on an application to extend time under s 99 of the Act, is discretionary. The court must be satisfied of circumstances which would induce it, acting judicially, to excuse the applicant from the effect of the six month limitation period prescribed in s 99. In Re Guskett, Herring CJ stated:
It is for the applicant to make out a case that will justify the granting of the indulgence sought. He has to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts, but it would seem necessary for the applicant to satisfy the Court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As, moreover, he is seeking an indulgence, he should apply promptly for an extension of time.
There are no inflexible rules which apply to the determination of the discretionary judgment of an application to extend time under s 99. Obviously, the length of the delay, and the reasons for it, are relevant factors. Ordinarily, it would be expected that an applicant should be able to proffer some reason or explanation why the application was not made within time, particularly where the delay is reasonably substantial. However, there is no requirement that, in every case, the delay should be satisfactorily explained.
Another relevant circumstance is whether the making of an order for an extension of time would occasion prejudice to other interested parties. In Groser v Equity Trustees Limited, Gillard J stated:
What is important in considering the period of delay is the question of prejudice if the indulgence is granted. But absent prejudice, a period of delay and an inadequate explanation should not stand in the way of a just result.
The strength of the applicant’s case is a factor of some relevance. However, ordinarily, an application for an extension of time is considered as a preliminary step in the proposed proceedings. The court does not embark on a detailed analysis of the applicant’s potential claim. Obviously, if the claim is groundless or hopeless, the grant of an extension of time would be futile. On the other hand, the mere fact that an applicant has an arguable case for relief under s 91 of the Act is not, without more, a sufficient reason to extend time.
Ultimately, an application for extension must be determined according to the justice of the case, taking into account, and appropriately weighing, all the relevant factors, to some of which I have referred above. In addition to the factors, which I have described above, it is also important to take into account the size and nature of the estate, the position of the individual applicants, the rightful expectations of those already interested under the will, and, to some extent at least, the importance that there be some finality and certainty in the administration of a deceased person’s estate.[4]
[4]Ibid, at [288]-[292].
In that extract, Kaye J identifies the factors that have been considered of usual relevance in the exercise of the discretion conferred by s 99. He stresses, however, that the overall evaluation is the justice of the case. In my view, it follows that no one factor is necessarily determinative (unless the case for further provision is groundless or hopeless); it is not necessary for the plaintiff to establish a case for extension having regard to every factor (for example, an unsatisfactory explanation for delay will not necessarily be fatal to the application), but nor is a case for extension by reason of one factor, such as an arguable case for further provision, necessarily sufficient. It may also be important to consider the relationship between the various factors, for example, the significance of delay may lie in the prejudice thereby occasioned.
In this case, the plaintiff contends that there is sufficient explanation for the plaintiff’s delay in bringing a claim, being his ignorance of the right to claim under Part IV.[5] The plaintiff contends that no prejudice has been occasioned to the beneficiaries by reason of the delay, or, in the alternative, if it has, then this is a matter to be taken into account at the hearing of the substantive claim.[6] The plaintiff contends that all that he needs to establish in relation to the strength of his putative Part IV claim is that the claim is arguable, not that it is strong. He says that the claim is arguable, on the basis that the relationship between him and the deceased was “akin to a parent/child relationship” and other factors.[7]
[5]Amended outline of plaintiff’s submissions, 1 June 2012, at [16].
[6]Ibid, at [24]-[27].
[7]Ibid, at [38]. See also transcript p p. 201-202.
The defendants contend that each of the usual factors tends against grant of the application for extension. They contend that the plaintiff’s explanation for his delay is insufficient; that his claim for further provision is hopeless or at least weak; and that prejudice has been occasioned to the estate by his delay.
As well as dispute as to the factual conclusions to be arrived at in respect of these matters, there was also some dispute between the plaintiff and the second defendant as to the test to be applied in evaluation of the plaintiff’s case for further provision. In part the dispute as to the relevant legal test turns on whether the correct evaluator for the strength of the plaintiff’s case is whether it is “arguable” (in the sense of “not hopeless”) as used in some cases, or “not improbable that it will succeed”, as used in other cases.
The plaintiff contends that it is sufficient, in relation to this factor, for the plaintiff to establish that his claim is arguable, in the sense of being not hopeless. The first defendant accepts that “not hopeless” is the test.[8] The second defendant, as reflected in the supplementary submissions filed by him on 1 June 2012, contends that the test is whether or not the case is “arguable”[9], rather than whether it is “hopeless”, and that while the plaintiff’s claim is in fact hopeless (and so the application should fail even on the plaintiff’s contention as to the test) “an analysis of the authorities demonstrate that the bar to a successful application is not set as low as that”.[10] After considering the authorities, the second defendant then submits in conclusion
Even if the plaintiff’s claim is not hopeless, it is certainly weak. The second defendant would go further and submit that on the evidence (which has been tested in cross-examination) there is no real prospect that the plaintiff would win. In any event a denial of this application would not be unjust in all the circumstances.[11]
[8]Transcript p. 202 ll 16-23
[9]Ibid and transcript p. 281 ll 8-10.
[10]Second defendant’s supplementary submissions, dated 1 June 2012, at [6].
[11]Ibid, at [21].
There is also some dispute as between the plaintiff and the second defendant as to the relevance, if any, of the size of the plaintiff’s claim, which is for one half of the estate. The second defendant says this claim is an ambit claim that is not justifiable.
In assessing the strength of the plaintiff’s case for further provision, regard must be had to the principles that apply to such an application. On an application filed within time under Part IV of the Act, s 91 provides that the Court must consider three matters. The first two go to the jurisdiction to make an order and require a finding that the deceased had a responsibility to make provision for the applicant, and that the distribution of the estate of the deceased person under the will or intestacy, as the case may be, does not make adequate provision for the proper maintenance and support of the applicant. The third matter the Court must consider, if these threshold jurisdictional questions are answered in favour of the applicant, is the amount of provision that the Court should order. In determining these three matters, the Court is required by s 91(4) to have regard to a list of enumerated factors within s 91(4), including s 91(4)(p) “any other matter the Court considers relevant”.
The parties all agree that the strength of the applicant’s case, for the purpose of an application for extension of time, is to be determined having regard to the first two of these matters only, i.e. the jurisdictional issues. They agree that the amount claimed by the plaintiff is not relevant in determining the viability of the plaintiff’s case for the purpose of determining the application for extension.
Counsel for the second defendant contends that the size of the plaintiff’s claim, which he describes as an ambit claim, is, however, relevant in two other ways. First, he contends it is a matter which the Court can consider as a factor under s 91(4)(p), which allows the Court to consider any other matter that is relevant. Secondly, the second defendant submits that the plaintiff’s claim here to one-half of the estate has no proper basis on the facts. He contends that the claim is made in breach of the overarching obligation imposed on the plaintiff by s 18(d) of the Civil Procedure Act 2010 (Vic) that a party “must not make any claim…that does not, on the factual and legal material available to the person at the time of making the claim… have a proper basis”.
Discussion of the legal principles
Delay
In relation to delay the relevant delay is the period from six months after the grant of probate (the period within which an application under Part IV may be made in time) to the date of the application. In McCann v Ward, Dixon J rejected the contention that an earlier period, there the period of 11 months between the date of death and the grant of probate, was relevant.[12]
[12]Op cit, at [20].
Prejudice
In relation to factor (c), the prejudice to be considered on an application for extension of time to bring a Part IV claim is the prejudice to the beneficiaries caused by the delay, rather than the possibility of a reduction in their entitlements under the will.[13] The Court will consider the causal relationship between the period of the delay and the claimed prejudice. In McCann v Ward there was said to be prejudice to the beneficiaries if the extension of time was granted because the residuary estate consisted largely of shares in a family company rather than assets more readily available for realisation. Dixon J held that this was not relevant prejudice. It did not arise because of the delay, not least because the shares were subject to the life interest of the deceased’s wife in any event, and she was still alive. Thus extra lapse of time did not cause any prejudice. Further, the nature of the assets from which any order for further provision could be made was a matter to be considered upon the determination of the claim, not in relation to an extension of time to make it.[14]
[13]McCann v Ward at [11].
[14]Op cit, at [14] and [24].
In Clark v Burns,[15] an application for extension of time to bring a claim was granted notwithstanding a claim of prejudice to the estate being stress to the executor. Hargrave J held that this prejudice arose from the making of the Part IV claim, not from its lateness, and so, implicitly, was not relevant.[16]
[15][2011] VSC 394
[16]Ibid, at [21].
Discussion of prejudice in the authorities is often expressed to be prejudice that cannot be remedied. For example, prejudice that cannot be remedied may occur if the estate has been distributed to some beneficiaries but not others. By virtue of s 99 the distributions already made cannot be disturbed, and so only the latter group would bear the burden of any order for further provision.[17] The estate in this case has not been distributed, and so this particular issue does not arise.
[17]Valbe v Irlicht op cit at [20].
McCann v Ward shows that it may be relevant whether any prejudice can be remediated by the nature of the award of further provision. In my view, by extension, it may also be relevant whether any prejudice can be remediated by adjustment to such putative award. For example, if financial prejudice to the estate has been occasioned by reason of the delay, but that prejudice is capable of remedy by way of adjustment of the order to be made by way of further provision, then that prejudice is not necessarily a barrier to the grant of an extension of time to make the claim. This is the alternative submission put by the plaintiff as to prejudice. It follows, in my view, that if it is unlikely that any award for further provision would be of such magnitude as to make this adjustment possible, that may tend against an extension of time.
Strength of the applicant’s case
The second defendant has identified that in some cases the test as to the strength of the applicant’s case is expressed as being whether or not the applicant has “an arguable case” and in others whether it “is not improbable that (the applicant) would succeed”. Examples of the use of the descriptor “arguable” appear in McLeod v Troy[18] and Fennessy v Fennessy[19] and more recently in McCann v Ward[20] and Leggett v Jansen[21]. Whether the case is “arguable” has been juxtaposed to whether it is “hopeless” as in McCann v Ward, where Dixon J posed the question in this way:
Does the plaintiff have an arguable case? The merits of the plaintiff’s case have relevance to the exercise of the Court’s discretion as it is obviously futile to let a claim proceed which is flawed or hopeless.[22]
[18][2002] VSC 187 at [8] per Beach J.
[19][2002] VSC 66 at [2] per Beach J.
[20][2010] VSC 452 per Dixon J.
[21][2011] VSC 364.
[22]Op cit, at [11], citations omitted.
By contrast, in the early case of Re Walker[23] Lush J expressed the test in terms of improbability of success in the following words:
The Queensland case of Re Terlier [1959] QWN 5, in my respectful opinion correctly states the proposition that if it is improbable that the action will succeed, an extension of time should not be granted. This improbability may stem either from the condition of the estate – see the last words of the judgment in Brown v Holt [1961] VR 435 – or from the facts relevant to the plaintiff’s claim, or from both, as in Terlier’s case.
[23][1967] VR 890.
The test was similarly expressed by Warren J (as she then was) in Leahey v Trescowthick[24] in these words:
If it is improbable that the application will succeed an extension of time will not be granted.
[24][1999] VSC 409 at [18(8)].
In the abstract, it could be argued that the use of a phrase assessing the likelihood of success (“improbable that will succeed”) rather than the certainty of failure (“hopeless”) implies that the merits of the case should be assessed along a spectrum, and that the applicant may fail even if his or her case is not hopeless, i.e. certain to fail, provided it is improbable that he or she will succeed.
The second defendant points to such a distinction as identified in the Federal Court. Section 31A of the Federal Court of Australia Act 1976 enables that Court to give summary judgment against a party with “no reasonable prospect” of success. Subsection (3) specifically provides that a claim need not be hopeless or bound to fail for it to have no reasonable prospect of success.
These submissions were put in response to my request in the course of the hearing for submissions in relation to the difference, if any, between the tests that would apply for summary dismissal of the claim and the test that applies in relation to the strength of the case for an extension of time. The parties made helpful submissions.
Section 63 of the Civil Procedure Act 2010 introduced into Victorian law the power of the Court to dismiss a claim with “no real prospect of success”. Prior to that Act, the power to give summary judgment was limited to claims were there was no real question to be tried, which was generally interpreted to mean hopeless or bound to fail.[25] In a series of judgments, judges of the Trial Division of this Court have concluded that the intention of that Act was to introduce a lower threshold for summary judgment than previously applied, and that after scrutiny of the merits of the claim summary judgment could be given even if it could not be said that the claim was certain to fail.[26]
[25]Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99.
[26]Wheelahan and Anor v City of Casey and Ors (No.3) [2011] VSC 15 at [8] (Osborn J. as he then was); Matthews v SPI Electricity Pty Ltd and SPI Electricity Pty Ltd v Utility Services Corporation Limited and Ors(Ruling No.2) [2011] VSC 168 at [18] to [22] (J.Forrest J.); Ottedin Investments Pty Ltd v Portbury Developments Co. Pty Ltd and anor [2011] VSC 222 at [8] to [18] (Dixon J.); JBS Southern Australia Pty Ltd and anor v Westcity Group Holdings Pty Ltd and ors {2011] VSC 476 at [39] to [50] (Croft J.); Dattner v Wharton [2011] VSC 610 at [43] (Habersberger J.); Samfa Pty Ltd v Hilane Pty Ltd and ors [2011] VSC 644 at [9]-[10] (Davies J.). The Court of Appeal in Manderson M & F Consulting v Incitec Pivot Ltd [2011] VSCA 44 (“Manderson”) cautioned at [30] that there is not yet sufficient judicial attention to clearly differentiate s.63 from the procedure under the Rules but did not overrule the cases earlier cited.
Of course, the application before me is not an application by the defendants for summary dismissal of the plaintiff’s claim. The second defendant concedes this, but says that the tests are inconsistent, in that the threshold for summary judgment is lower; that inconsistent tests should not be applied; and, by implication, that this can inform the test for assessing the strength of the applicant’s case in relation to his application for extension.
The argument is an interesting one, but on reflection I do not consider that consideration of the test for summary dismissal is very helpful. It is not necessarily the case that the test as to the strength of the plaintiff’s case on an application by a plaintiff for extension of time should be the same as the test to be applied on an application by a defendant for summary dismissal of a plaintiff’s claim. One test is to allow a claim to be made, the other to shut it down once made; the onus lies on different parties; and in a summary judgment application by a defendant the assessment of the plaintiff’s case is the sole or most significant factor, whereas on an application for extension of time by a plaintiff it is one relevant factor amongst others. Too much focus on the assessment of the strength of the plaintiff’s case for further provision may lead to the error of regarding that as a determinative factor, when it is merely one factor amongst others (unless the case is hopeless) to be considered in the overall justice of the case for extension of time.
Some doubt may also now be cast on earlier decisions of Trial Division judges that the threshold for summary judgment has been lowered by the Civil Procedure Act by the Court of Appeal decision Karam v Palmone Shoes Pty Ltd[27] where Justices Nettle and Osborn held that:
the change in terms was not intended to establish a new or different test; rather to express more accurately the way in which the rule had been interpreted by the courts.[28]
[27][2012] VSCA 97.
[28]Ibid, at [28].
That judgment was delivered shortly prior to the hearing in these proceedings but was not adverted to by any party. I say doubt may be cast because the point does not appear to have been fully argued in that case and it concerned, in any event, a claim that was bound to fail.
In relation to the formulation of the test as to the strength of the plaintiff’s foreshadowed Part IV case in an application for extension of time to bring it, on detailed analysis of the authorities I do not consider that there is any real doubt as to the test.
In my view, the authorities show that an application for extension of time may be refused if the plaintiff’s case is weak, but not hopeless, where there are other factors that tend towards refusal of extension of time. If, however, the merits of the plaintiff’s case is the determinative factor, then the application may only be dismissed on that basis if the claim is hopeless. Further, if the claim is hopeless, the application for extension should be refused even if the delay is short, there is an adequate explanation for the delay and no prejudice has been occasioned by it i.e. other relevant factors would not tell against an extension of time.
Although different language is on occasion used, on analysis the authorities do not show any real difference whether the test is described is “not improbable that will succeed” or “arguable”. This is shown most clearly in those cases where the descriptors are used interchangeably. In Valbe v Irlicht[29], a case relied upon by Dixon J in McCann v Ward, Gillard J used the descriptors interchangeably in the following words:
It is important that the plaintiff establish that her claim is arguable, in other words, that it is not improbable that she would succeed.
[29][2001] VSC 53 at [71].
Williams J in Jotkowitz v Keating[30] did the same in the following words:
If it is improbable that an application for provision would succeed, an extension should not be granted. An applicant should demonstrate an arguable case that the deceased had a responsibility to make provision for his or her proper maintenance and support and failed to do so.
[30][2006] VSC 290 at [11].
Counsel for the second defendant has not identified, in the cases to which he refers, any identification of the difference between the descriptors, or elaboration of the significance of such difference. I conclude that the terms are interchangeable.
The test for the assessment of the strength of the applicant’s claim was most recently considered by the Court of Appeal in Ansett v Moss & Ors.[31] In that case the appellant had sought an extension of time to make an application under Part IV in respect of the estate of his late father, Sir Reginald Ansett. The delay in that case was very considerable, being 24 years after the deceased’s death, and the appellant was an adult, with legal qualifications. He, together with his brother, had been left only a small legacy in the will and the estate was very large. His application for an extension of time to make a Part IV claim was refused by the trial judge but on appeal he was successful, and the application was remitted for rehearing. In relation to the test as to the strength of the applicant’s claim, Justice Buchanan, with whom Justices Redlich and Cavanough agreed, said:
The strength of an applicant’s claim for relief is a relevant factor to be considered, together with other factors, in an application to extend the time for applying for further provision to be made from the estate of a deceased person. The trial judge in this case, however, used this factor to determine the application. That required a high threshold to be met, namely, that the appellant’s case was hopeless.[32]
[31][2007] VSCA 161.
[32]Paragraph [11] of the judgment.
In the instant case, Justice Buchanan held that the appellant’s case was not hopeless because
In my view, it is at least arguable that a wise and just testator, with very large means at his disposal, was under a duty to make better provision for the vicissitudes of life facing a son currently without significant financial means.[33]
[33]Paragraph [12].
It is clear following Ansett v Moss that if the lack of strength of the applicant’s case is the determinative factor, then it must be hopeless to justify refusal of the application.
The second defendant relies on Stanley v State Trustees Ltd[34] to support his contention that an application may be dismissed notwithstanding that the claim is not hopeless. That case concerned an application by a former domestic partner of the deceased who died intestate. The estate was very small. The applicant had no entitlement pursuant to the law of intestacy to the estate. In addition to seven next of kin entitled to participate in the distribution of the estate, another person claiming to be the current domestic partner of the deceased had made a claim pursuant to Part IV of the Act.
[34][2012] VSC 24.
Kaye J refused the application for extension of time. After reciting the factors in favour of the applicant’s claim he said the following:
Based on those matters, I would not characterise a claim, by the plaintiff, under Part IV of the Act, to be hopeless. However, at the same time, the prospects of such a claim could hardly be characterised as strong. Indeed, on the materials which were placed before me, I would not be sanguine at all that the plaintiff would succeed in any such claim. The deceased’s estate is not large. The plaintiff’s assets and means are modest, but he is by no means indigent. The material, which I have described as sparse, indicates the possibility of an existence of a moral claim based on desserts. However, on the matters contained in the affidavits, it could not be stated, at this stage, that such a claim has good prospects of success.
Thus, while the plaintiff’s potential claim under Part IV could not be properly characterised as untenable or hopeless, nevertheless, on the materials which have been put forward in support of this application, I would consider that the plaintiff’s prospects of success are quite weak.
In thus characterising the plaintiff’s claim, I am conscious that there are, of necessity, limitations in forming an assessment of the strength of the claim of the plaintiff at this preliminary stage. However, this is clearly not a case, in which the plaintiff’s claim is sufficiently strong, that to deny the plaintiff an extension of time could amount to an injustice.[35]
[35]Paragraphs [30]-[32] of the judgment.
Kaye J did not, however, dismiss the application solely on the basis of the weakness of the plaintiff’s case. It is apparent from the portion of the judgment commencing at paragraph 36 under the heading “Conclusions” that his Honour considered a range of factors, being the length of the delay (which was relatively short); the explanation for the delay (which was not considered acceptable); the strength of the case (not hopeless, but weak); the size of the estate (small); and that the grant of the plaintiff’s application would expose the estate to costs (disproportionate to the size of the estate). Having regard to all those factors, the application was refused. In particular, in that case the plaintiff had made a conscious decision, at a time when he was legally represented, which decision was communicated to the executor, not to issue proceedings within the time specified by the Act, and within the extended period expressly allowed to him by the defendant executor.
In my view, Stanley v State Trustees Ltd is entirely consistent with Ansett v Moss. Weakness of the applicant’s case was not the sole or determinative factor in refusing the application. There were other factors tending to this conclusion, not least that the applicant had reversed a previous decision not to proceed. Accordingly, refusal of the application did not require that the applicant’s case be hopeless.
Stanley v State Trustees Ltd is a demonstration that the guiding factor in determining an application for extension of time is the overall justice of the application. It is that sense that Kaye J confirmed his inclination to refuse the application before him, notwithstanding that the case had some prospects of success, in the concluding words quoted above. The justice of the application is informed by the various considerations identified, but the court may be led into error if any one consideration is viewed in isolation or too much emphasis placed upon it. Again, this is entirely consistent with Ansett v Moss. Specifically in relation to the consideration of delay, Justice Buchanan in that case expressed the view that
The discretion conferred by s 99 should not be confined by any rigid rules and accordingly, there is no requirement, in every case, that delay be satisfactorily explained.[36]
[36]Paragraph [6].
In that case Justice Buchanan held that the applicant’s explanation for the delay of some months which ensued following the date upon which the appellant learned of his sister’s application, and thus became aware of his ability to make a claim upon the estate, was “not altogether satisfactory”. Nevertheless he held that
I do not consider that the delay necessarily doomed the application to failure, or, in combination with any other circumstances, led to such a result.
Justice Redlich expressed a similar view. He rejected a submission by the respondent that the applicant could not succeed unless he established that there was a satisfactory explanation for the delay. He said
The consequence of failing to provide a satisfactory explanation should not be laid down in such absolute terms. The cases to which the respondent has referred should not be viewed as authority for such a broad principle. The absence of a satisfactory explanation will in some circumstances be decisive but in others it will not.[37]
[37]Op cit, at [18].
My conclusion is that all relevant factors must be considered, including the length of the delay, the explanation for the delay, whether it has occasioned any prejudice to the executor or any beneficiary, and the strength of the applicant’s case. If the applicant’s case is hopeless, the application should be refused, even if the delay is short and there is adequate explanation for it and no prejudice thereby occasioned. The application may be refused even if the applicant has some prospect of success ie the claim is not hopeless, having regard to other considerations, but if the application is to be determined solely on the basis of the strength of the applicant’s claim, the claim must be hopeless to justify refusal. Similarly, the fact that the applicant has an arguable case, even perhaps a strong one, is not without more a sufficient reason to extend time.[38] The over-riding test is the justice of granting or refusing an extension of time. It is in this sense, that Justice Kaye noted that it would not be unjust to deny the applicant in Stanley v State Trustees Ltd an extension of time notwithstanding that his claim was not hopeless.
[38]Ashurst v Moss [2006] VSC 287, [111] per Hansen J.
Three cases in particular provide further examples of the application of these principles. In Valbe v Irlicht,[39] Gillard J expressed the overall test thus:
In my opinion, justice is the most important factor to take into account in an application such as the present and if, after taking into account all circumstances justice demands that there should be an extension of time then, in my view, time should be extended.[40]
[39][2001] VSC 53.
[40]Ibid, at [36].
He held that the short delay in making the application before him was sufficiently explained and there was no prejudice occasioned to the executor or beneficiaries. Nevertheless, he refused the application for extension of time on the basis that the plaintiff had failed to establish that it was not improbable that the proceeding would succeed. He held that the true relationship between the deceased and the plaintiff was a contractual one i.e. a relationship of a commercial nature rather than a relationship pursuant to which a moral obligation arose imposing an responsibility on the deceased to make provision for the plaintiff.[41]
[41]Ibid, at [103].
An application for extension of time was also refused in Corbett v State Trustees Ltd[42] solely on the basis of the weakness of the applicant’s claim. Kyrou J held that the three month delay in that case was sufficiently explained and there was no prejudice occasioned to the defendant or beneficiaries. He held, however, that it was “inevitable” that the claim would fail having regard to the size of the existing devise to the applicant, the nature of the relationship between the applicant and the deceased, and the fact that the deceased had changed his will apparently to reflect the changes in that relationship.[43]
[42][2010] VSC 481.
[43]Paragraphs [112], [121] and [123].
By contrast, in McCann v Ward & Anor[44] an application for extension of time was granted where there was an acceptable explanation for delay and no prejudice and the plaintiff’s application was considered “not hopeless”.[45] The plaintiff in that case was an adult stepchild of the deceased and the deceased had made specific provision in his will for all children, both step and biological, except for the plaintiff.
[44][2010] VSC 452.
[45]Paragraph [16].
Quantum of the claim
In McCann v Ward, the executors also opposed the application for extension because the applicant had not made it clear what she sought by way of provision. Dixon J held that this was not a matter that was relevant to whether or not the claim was arguable, as it relates to the amount of provision that the Court might order i.e. the third stage of the enquiry. He held only the first two stages of enquiry under s 91 are relevant for the purposes of an application for extension of time.
Here the second defendant contends that the size of the proposed claim is nevertheless relevant to those first two stages, the issues of responsibility to make provision and whether the existing provision is adequate, as a factor under s 91(p); and is also relevant because of claimed breach of the obligation to make only claims with a proper basis in law and fact under the Civil Procedure Act. I will deal with the second of these contentions first.
Section 28(1) of the Civil Procedure Act allows the Court to take contravention of an overarching obligation into account in the exercise of “any power” in relation to a civil proceeding, which presumably would include the grant or refusal of an extension of time to bring a claim. For a contravention fairly to be taken into account, however, clear notice of such an application should be given by the party contending that there has been a contravention to the party said to be in breach. I do not consider that raising the matter in closing submissions is sufficient to make the application or to give notice of it. Further, proof of contravention of the overarching obligation imposed by s 18(d) would require analysis of the “factual and legal material available to (the plaintiff) at the time of making (his) claim” and determination as to whether or not the claim thus made was justified on that material. There is insufficient evidence before me to undertake this analysis.
Finally, I accept the submission of the plaintiff that the better point in time to undertake this analysis, if an application in relation to a claimed contravention is to be made under either s 28 or 29 of the Civil Procedure Act, is at the hearing of the substantive claim, after all evidence is given and the Court is in a position to form a view as to the appropriate quantum for further provision, if any.
I now return to the second defendant’s proposition that the amount sought may be, and is here, relevant to the first two jurisdictional questions of responsibility to make provision and the adequacy of the current provision. Section 91(4) directs the Court to take into account the factors there listed in relation to all three questions to be determined on the hearing of a Part IV application. The size of the claim is not a factor specifically listed, but the Court is permitted, and indeed required, to consider by s 91(4)(p) “any other matter the Court considers relevant”. Each specified factor must be considered in relation to each question, although it is usually the case that some factors have more relevance to some questions than others. By construction of the section, the Court is free to determine both if the size of the claim is relevant, and, if so, to what questions. In a particular factual scenario, the size of the claim may then, theoretically, be relevant to the jurisdictional questions.
In this case, however, I do not consider it to be a relevant factor in determining whether it is arguable that the deceased had a responsibility to make provision for the plaintiff, and did not make adequate provision. The size of the claim speaks to the plaintiff’s view of his entitlement, not what community expectations require of a wise and just testator, that being the measure to be applied in determining these jurisdictional requirements of a Part IV claim.[46]
[46]Blair v Blair (2004) 10 VR 69, per Nettle JA at [41]; Forsyth v Sinclair [2010] VSCA 147, per Neave JA at [83].
By contrast to the amount claimed, the amount of the existing provision is, however, clearly relevant. In Corbett v State Trustees Ltd[47] Kyrou J refused an application for extension of time to make a Part IV claim notwithstanding a short delay, a satisfactory explanation for it, and no prejudice to the estate by reason of the delay, in part because he did not consider that the applicant could establish a basis for provision in excess of the substantial provision already made by the will.[48]
[47][2010] VSC 481
[48]Ibid, at [112] and [123].
Approach to evaluation of the evidence
I now turn to evaluation of the evidence having regard to the applicable legal principles. First, however, it is necessary to dispose of a submission by counsel for the plaintiff at the commencement of the hearing that the plaintiff need show only a prima facie case based on his affidavit material and that cross‑examination as to the merits of his case should be limited. I declined to rule on that application in advance of cross‑examination, but gave counsel for the plaintiff the opportunity to object if appropriate in the course of cross‑examination. In the event, little objection was taken. In my view, the submission was also somewhat misconceived. The plaintiff relies on the statement of Hargrave J. in Clark v Burns[49] that:
Accordingly, the prospects of success must be judged on the premise that the applicant’s version of events may be established at trial, unless their evidence is so unreasonable or contradicted by contemporaneous documents and could not be true.
[49][2011] VSC 394.
It appears, however, that in that case there was no cross examination of the plaintiff. In the preceding paragraph to that relied upon by the plaintiff and quoted above, Hargrave J noted that he had considered all of the affidavit evidence and that it was diametrically opposed. He then made the observation “the factual disputes cannot, of course, be resolved on a conflict of affidavits.”
In this case, by contrast, there was very extensive cross‑examination of the plaintiff, the defendant and witnesses. The cross examination canvassed the plaintiff’s explanation for the delay in bringing a claim and prejudice, but also canvassed some matters going to the merits of his claim. It would be entirely artificial in my view for the Court to disregard the evidence elicited in cross‑examination and the opportunity to observe the plaintiff while giving evidence.
I am conscious in making these observations that the application before me is not the substantive hearing and it is possible that the parties would wish to call more evidence as to the merits of the substantive case at such hearing. Counsel for the first defendant put to the plaintiff in cross‑examination that the orders made for the filing of affidavits were intended to elicit all evidence, including substantive evidence. I am not persuaded that this is apparent from the face of the orders, which made specific provision for the application for extension of time to be heard separately. Accordingly, I accept that it is not appropriate in this application to make detailed or final findings as to the merits of the plaintiff’s substantive case.
Nevertheless, substantial evidence as to the merits of the plaintiff’s case is in fact on affidavit. The plaintiff made his application for extension of time as part of his substantive application, and his first affidavit is expressed to be in support of his substantive application. It is only his second affidavit that is expressed to be limited to the application for extension of time. Similarly, portions of the affidavits of both Ruth Kayser and the first defendant deal with factors under s 91 of the Act, i.e. as to the merits of the claim, as well as matters relating to delay and prejudice, and, as stated, all witnesses have been extensively cross examined on the whole of their affidavits.
In reaching my conclusion that the plaintiff’s case is not hopeless, but is not on the material before me strong, I have evaluated the whole of the evidence. Counsel for the plaintiff submitted that if I am satisfied that the plaintiff has an arguable case, then I should make no further findings in relation to his case for further provision (as opposed to credit, delay and prejudice) and in particular should not assess the strengths and weaknesses of his case.[50] The defendants disagreed with this submission.
[50]Closing submissions in reply, at transcript pp. 305 l 14-p.307 l 28.
In my view, if my overall conclusion as to the justice of the case was that the extension should be granted, then it would not be appropriate to say more than that the case is arguable. The merits would be fully examined and findings made in the subsequent trial. As my overall conclusion is that it is not unjust to refuse the application for extension, I consider it necessary to express some views as to the strength of the case, which in turn requires detailed examination of the evidence before me, to show my path of reasoning. I do not, however, intend in so doing to make final findings on matters going to the substance of the Part IV claim. Detailed consideration of the strength of the applicant’s claim was undertaken, for example, by Kyrou J in Corbett v State Trustees Ltd, in which case the extension was refused.[51]
[51]Op cit, at [73]-[124]
I also reject the opening submission, also made in closing[52], by counsel for the plaintiff that the mere fact that the plaintiff was cross‑examined at length including as to the nature of his substantive case shows that that substantive case is arguable. Whether or not it is arguable is to be determined having regard to the whole of the evidence, including evidence solicited in cross‑examination, not by reference to the mere fact that the defendants felt it necessary to cross‑examine him.
[52]Transcript p.305
I have considered whether I should draw any adverse conclusions as to the plaintiff’s credit having regard to his demeanour and manner of response in the witness box. The defendants both sought that I do so, the second defendant particularly vigorously .[53]
[53]Transcript pp. 211-217 (first defendant) and pp. 249-263 and ff.(second defendant).
The plaintiff was undeniably a poor witness. His evidence was very general on most matters, lacking in detail or specific examples, and there were occasions where he was non‑responsive, obfuscating and possibly even evasive in his answers in cross‑examination[54]. Some of his answers in cross examination suggested that the account he gave of his assistance to the deceased in his affidavits was exaggerated.[55] As set out later in the body of this judgment, in some instances where his evidence and that of Mr Fleiszig or Mrs Kayser were in conflict I have preferred their evidence for the reasons there set out. I do not, however, consider that I should draw the conclusion that none of his evidence is to be believed, unless corroborated, as invited to do by the second defendant. I think some of the manner in which he gave his evidence may be explicable by personality, in not having a forthcoming manner and wishing to give consideration to issues before him, or the stress of giving evidence.
[54]For example, transcript pp. 9, 36-38 and 40.
[55]Compare, for example, his first affidavit at [27] and [34] with his evidence at transcript pp. 81 ll 17 to p. 82 ll 10.
The manner of his evidence does relate very significantly, however, to discharge of the burden of proof which he bears. It is here that the lack of detail, what I consider to be an exaggeration of his role in the deceased’s life (although I make no finding as to whether or not that exaggeration was deliberate) and his inability to give plausible explanations of inconsistencies in his own case becomes very significant.
Also significant is that the plaintiff did not disclose relevant material in his own affidavits, even after it was raised by the defendants. He does not in any affidavit address the conversation that he agrees he had with Ruth Kayser in May 2010 about the possibility of challenging the will, even after she referred to it in her affidavit. Nor did he on this application call any evidence to corroborate his account of various relevant matters other than from his mother, although it emerged in cross-examination that some other corroborative evidence may have been available.
He said in cross‑examination, for example, that his wife was present during a conversation with the first defendant at the funeral of the deceased, during which the plaintiff says he asked the first defendant if he could do anything about the fact that he had not received an expected gift of a property. The plaintiff, by way of explanation for his delay in making a claim, says that the first defendant replied that he could not, and he relied on this (and Mrs Kayser’s views) until he obtained legal advice to the contrary in October 2010. Despite this being a crucial event in his case for extension, there is no mention in his affidavit that his wife was present and he did not call any evidence from her on this (or indeed any) issue, even though it was clear from Mr Fleiszig’s affidavit that the contents of the conversation were in dispute.
Similarly, in cross‑examination he said that the deceased had repeated to others the promises he said she had made to him to make provision for him and in particular to give him a property, but he called no evidence from any such person other than his mother.
The defendants seek that I draw a Jones v Dunkel inference from the failure of the plaintiff to call these witnesses. The plaintiff did give some explanation for the absence of evidence from such persons, being that some friends of the deceased were themselves deceased or reluctant to give evidence, and that his wife was ill, and her evidence at this point in time was not considered relevant. I accept those explanations, bearing in mind that this is not the trial of the substantive proceeding. I do not draw a Jones v Dunkel inference that this corroborating evidence was not called because it was unlikely to support his evidence. In relation to the conversation at the funeral at least, however, it means there is no corroboration at all of his account, which is critically different to that of the first defendant.
Strength of the plaintiff’s case
The power to afford provision to an applicant, whether or not already a beneficiary under the will, is afforded by Section 91 of the Act. The section provides as follows:
(1)Despite anything in this Act to the contrary, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision.
(2)The Court must not make an order under subsection (1) in favour of a person unless—
(a)that person has applied for the order; or
(b)another person has applied for the order on behalf of that person.
(3)The Court must not make an order under subsection (1) in favour of a person unless the Court is of the opinion that the distribution of the estate of the deceased person effected by—
(a) his or her will (if any); or
(b) the operation of the provisions of Part I, Division 6; or
(c) both the will and the operation of the provisions—
does not make adequate provision for the proper maintenance and support of the person.
(4)The Court in determining—
(a)whether or not the deceased had responsibility to make provision for a person; and
(b)whether or not the distribution of the estate of the deceased person as effected by—
(i)the deceased's will; or
(ii)the operation of the provisions of Part I, Division 6; or
(iii)both the will and the operation of the provisions—
makes adequate provision for the proper maintenance and support of the person; and
(c)the amount of provision (if any) which the Court may order for the person; and
(d)any other matter related to an application for an order under subsection (1)—
must have regard to—
(e)any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship;
(f)any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate;
(g)the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject;
(h)the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future;
(i)any physical, mental or intellectual disability of any applicant or any beneficiary of the estate;
(j)the age of the applicant;
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased;
(l)any benefits previously given by the deceased person to any applicant or to any beneficiary;
(m)whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility;
(n)the liability of any other person to maintain the applicant;
(o)the character and conduct of the applicant or any other person;
(p)any other matter the Court considers relevant.
Consideration of a claim under s 91 is undertaken in two stages. The first stage grounds the Court’s jurisdiction and requires the plaintiff to establish both that the deceased had a responsibility to make provision for him or her (s 91(1)) and that the will has not made adequate provision for his or her proper maintenance and support (s 91(3)). If the plaintiff so establishes, the Court moves to a discretionary consideration of the proper amount of further provision. In respect of both stages, the Court is required to consider the factors enumerated in s 91(4).[56] As set out earlier, the second stage is not relevant to the assessment of the strength of the plaintiff’s case for the purposes of an extension application.
[56]Per the Court of Appeal in Blair v Blair (2004) 10 VR 69 (“Blair”) and Forsyth v Sinclair [2010] VSCA 147 Neave JA at [58]-[66].
In reasoning from the s 91(4) factors to a conclusion that the testator had a responsibility to make provision for the claimant and had failed to make adequate provision for his or her proper maintenance and support, the Court is required to apply a standard or make a value judgment,[57] often expressed as the “moral duty” of the testator. What is considered a testator’s moral duty will depend on prevailing community attitudes.[58]
[57]Blair v Blair (2004) 10 VR 69, per Nettle JA at [41]; Forsyth v Sinclair [2010] VSCA 147, per Neave JA at [83].
[58]Forsyth v Sinclair, per Neave JA ibid.
In this case the defendants contend that the deceased had no responsibility to make provision for the plaintiff. If I consider it arguable that such responsibility did exist, the next question becomes whether it is arguable that the provision in fact made by the will, of $20,000, was inadequate. At trial, if an extension were granted, the Court in undertaking the next stage i.e. determining what further provision to order, would be required to exercise its discretion so as to not “transgress unnecessarily upon the testatrix’s freedom of testation, but rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just (testator)”.[59]
[59]McKenzie v Topp, [2004] VSC 90, per Nettle J. at [63]
The Court determines whether or not the testator made adequate provision for the claimant by consideration of the relevant facts and circumstances as at the testator’s death. The question of what further provision to order is determined having regard to the facts and circumstances at trial.[60]
[60]Prosser v Twiss [1970] VR 225 at 232 per Lush J.
I now assess the strength of the plaintiff’s case on the first two questions, having regard to the statutory criteria.
Relationship between the deceased and the plaintiff and related factors
s 91(4)(e): Relationship between the plaintiff and the deceased
s 91(4) (f): Obligations of the deceased to the plaintiff and others
s 91(4) (k): Contributions by the plaintiff to the deceased’s welfare
s 91(4) (l): Benefits previously given by the deceased
s 91(4) (m): Whether plaintiff being maintained by the deceased
The plaintiff and the deceased’s late husband Adash were distantly related through the plaintiff’s father, the plaintiff’s father being a cousin (although not immediate) of Adash. Ruth Kayser, the other extended family member for whom the will made equal provision, was also related to Adash through her father. Her evidence, which was not disputed, was that her father and Adash were first cousins.[61] The plaintiff’s parents, and the deceased and her husband, were all born in Poland and emigrated to Australia with the assistance of Ruth Kayser’s father after the Second World War. The deceased was a Holocaust survivor, having been imprisoned in a concentration camp during the war. It appears that the parents of the plaintiff and the plaintiff and his two brothers, and the parents of Ruth Kayser and she and her two sisters, were the only family members of the deceased or her husband in Australia.
[61]T 152.
An immediate family relationship is not essential to a claim under Part IV. The plaintiff’s evidence, supported by his mother and not disputed by the defendants, is that his parents and the deceased and her husband Adash were best friends. The plaintiff always referred to the deceased and her husband as aunt and uncle. His evidence is that his parents and the deceased and her husband would have holidays together almost every year and saw each other at least every week. He says “Each family was always involved in all of the family social and religious celebrations of the other”.[62] He says that as he lived with his parents until he was 36 years of age he was part of this interaction and that as the youngest of the three children of his parents he was particularly close to the deceased and her husband, who had no children of their own. The plaintiff says that his aunt and uncle were involved in significant occasions in his life, including occasions at school and religious occasions such as his Bar Mitzvah and wedding.
[62]Affidavit of 4 February 2011 at para 18.
The defendant contend that the plaintiff’s relationship to the deceased was a derivative one i.e. based on his parents’ relationship with the deceased and her husband and so similar to that of a nephew and aunt. The plaintiff’s case is that his relationship to the deceased was more than this. His case is that it was akin to a relationship of parent and child. He sets out in his affidavits instances of direct assistance by him to both the deceased and her husband while he was alive, and subsequently by him to the deceased. He says that the deceased and her husband did not drive and that as he became an adult he gradually took over the task from his parents of driving them and his parents around. He said he drove his aunt and uncle to the airport for their regular annual trip to Surfers Paradise and collected them on their return, and, after his uncle’s death, continued to drive his aunt “whenever she needed transport”.[63]
[63]Affidavit of 4 February 2011 at para 27.
The deceased suffered from diabetes, and walked a great deal to manage this condition. As well as her flat in St Kilda, where she lived while in Melbourne, and two investment properties, she owned a flat in Surfers Paradise, and would spend six months of every year there, from April to September. In his primary affidavit, the plaintiff deposed that he would “generally go and spend several weeks with (the deceased) at the Surfers Paradise apartment”.[64] Further, that after his marriage in 1997 he and his wife “both went to stay with my aunt each year when she was staying at Surfers Paradise”.
[64]Affidavit of 4 February 2011 at para 29.
While the deceased was in Surfers Paradise, the plaintiff says that he checked on her apartment in Melbourne and collected her mail, remained in regular contact with her and spoke to her at least once every week undertaking such errands as she required.[65]
[65]According to paragraph 28 of affidavit of 4 February 2011.
In his primary affidavit the plaintiff deposes to regular contact when his aunt was in Melbourne as follows:
When my aunt was in Melbourne my wife and I took her out to lunch every week, and she was regularly invited to our home for meals and to all family occasions. My aunt continued to call upon us at any time of day or night, whenever she needed any assistance in her home. I took her shopping and assisted her wherever I could on a very regular basis and also regularly took her to the bank allowing her to undertake her banking affairs. I also took her to the travel agent so that she could arrange her travels and I continued to accompany her to medical appointments.
My aunt played cards with her friends once every week, and I drove her to and from that game every week.
The deceased fell and broke her arm (or wrist according to Mrs Kayser) whilst in Surfers Paradise in 2006. The plaintiff deposes in his primary affidavit to travelling with his wife to Surfers Paradise after his aunt was discharged from hospital and staying with her there to care for her. On the deceased’s return to Melbourne, the plaintiff and his wife organised home help from Jewish Care. He[66] or he and his wife[67] were the first emergency contact for Jewish Care. In that capacity he was contacted on the morning of 18 December 2009 when his aunt, who had died that morning, failed to answer the door to them. In submissions, counsel for the plaintiff asserts that the deceased was increasingly dependent on the plaintiff as she aged, “which enabled her to remain living at home”.[68]
[66]According to his oral testimony.
[67]According to paragraph 40 of his primary affidavit.
[68]Amended outline of plaintiff’s submissions dated 1 June 2012 at [38].
The plaintiff subsequently dealt with the police and Coroner’s Court and organised the deceased’s funeral. He wrote and presented the eulogy and arranged the religious services for her. At her funeral he recited Kaddish, being the memorial prayer usually recited by a son for a deceased parent. He also undertook the necessary contact to all relevant authorities after her death. The plaintiff was appointed by the deceased’s will co‑executor with her solicitor, the first defendant.
The plaintiff laid particular stress on promises he said that the deceased made to him and his wife that she would make provision for him in her will. In his primary affidavit he said:
My aunt told us both (being he and his wife), very often, that she would “look after” me in her will, and she often said that she would leave me a flat and money.
His evidence is corroborated by his mother’s affidavit. She says:
Rachelka (the deceased) would tell me that Ronnie was the son that she never had. When Adash became very sick, my late husband and I asked Ronnie to do everything he could do to help Rachelka. He was single and living in his parents’ home. Rachelka could not drive and was alone and so we who were her close family felt sorry for her. Ronnie continued this great role after Adash died and did this dutifully and without question up until Rachelka died and even attended to other matters beyond. I am very proud of him.
That after the death of Adash in approximately 1994 and thereafter, Rachelka always promised Ronnie and did so to his face and occasionally in my presence that she would leave him an apartment.
That for the remainder of Rachelka’s life Ronnie would do many of Rachelka’s errands as requested by her including many of the day to day collection of shopping and taking her to the hairdresser and doctor’s appointments. Ronnie dutifully performed the role of a son which unfortunately my cousins were not blessed. No other family member took on these chores to the extent that Ronnie did which involved multiple visits each week on behalf of Rachelka. Ronnie did so with love, affection and respect. Ronnie married late in life and has an ill wife and could not work normal hours. Ronnie also looked after his elderly parents and therefore was available to do many of these things. Rachelka had often told me that Ronnie would be looked after very well in her Will.[69]
[69]Affidavit of Hela Erlich, sworn 20 September 2011, at [3]-[5].
The impression thus created by the evidence‑in‑chief for the plaintiff is of a relationship with the deceased in which the deceased was dependent upon him for assistance, which involved frequent contact and the sharing of many social occasions, and was a special relationship in the sense that no other family member provided as much assistance. Moreover, the plaintiff’s case is that his role in organising care for the deceased after her accident and being the emergency contact for that care, and his religious role at the deceased’s funeral attest to a relationship of parent and child.
Having regard to the evidence in the first defendants’ case, however, and the evidence in cross‑examination of the plaintiff and his mother, I do not consider his case to be this strong.
Ruth Kayser, to whom the deceased also devised $20,000 by her will, gave evidence in a forthright manner, the content of which I accept. Notwithstanding substantial cross‑examination with a view to establishing that the deceased was frail in her later years and needed assistance, the thrust of Mrs Kayser’s evidence was that, although the deceased needed help with some physical tasks, particularly after her fall in 2006, she was not dependent, or even primarily dependent, on the plaintiff for assistance. Mrs Kayser’s evidence is that the deceased had a number of sources of help, including the plaintiff, Mrs Kayser herself, and paid assistance that the deceased organised independently. Further, Mrs Kayser gave evidence that the deceased was very strong minded and independent and largely managed her own life to her death.
This impression of the deceased is reinforced by the evidence of the first defendant, the deceased’s solicitor, whose evidence is that the deceased consulted him over a number of years in relation to business affairs and did so in an independent and decisive manner. The first defendant first met the deceased and her husband in 1992 when they sought his assistance to make wills, and he met the deceased again in 1994, after the death of her husband, to take instructions in relation to his estate. He prepared a further will for her in 1996 and her last will in June 2004. He also acted for her in respect of leases for her investment properties, and for the proposed purchase of a unit in an aged home facility in 2009, which also required the sale of her apartment in East St Kilda.
In relation to assistance, Mrs Kayser’s evidence is that the deceased organised such assistance as she required to a large extent herself. For example, organising her own cleaner, for her accountant to come to her house, for a manicurist to attend her house and sometimes to have her hair done at home as well.[70] These were sources of assistance in addition to the home nursing organised by the plaintiff through Jewish Care. Mrs Kayser’s evidence is also that the deceased herself arranged for driving assistance from a taxi driver in return for allowing him to use her parking space at her flat. Under cross‑examination the plaintiff conceded that the deceased obtained some driving assistance from this taxi driver, and also that he himself was not always available to drive her where she wanted to go because of his work commitments.[71]
[70]Transcript p. 119.
[71]Transcript p. 82.
It is also significant in my view that both the plaintiff and Mrs Kayser agreed that the deceased would spend six months of the year in Queensland and yet, at its highest, the plaintiff’s evidence is that he spent a week a year there with her. That is, for half the year his assistance to the deceased was by way of checking her flat and running errands in Melbourne, rather than by way of personal assistance or social contact.
In relation to contact while the deceased was in Melbourne, the plaintiff’s evidence under cross‑examination as to driving the deceased to the German Consulate, attending weekly lunches with her and taking her shopping[72] is consistent with that assistance to the deceased being part of a family occasion where assistance and a social occasion were shared with his mother as well.
[72]Transcript p. 82.
Mrs Kayser answered:
I think he wanted more money, yes. And I presume that that means he’s got to do what he’s got to do. He has to find out what the law is that will enable him to do it, otherwise, otherwise he can’t do it.[117]
[117]Transcript p.151
The plaintiff and Mrs Kayser agree that she said she did not want to take any action. In the plaintiff’s account, Mrs Kayser consulted her family and did not want to proceed because she was satisfied with what she had received and did not want it eaten up in legal costs. He says he relied on her advice and opinion.[118] In Mrs Kayser’s account, she told the plaintiff in their first conversation that the deceased was very independently minded and so she would not have changed her mind unless she wished to. She says she told the plaintiff that Rachelka had a clear mind and was not suffering from dementia and on that basis did not want to challenge the will[119]. The plaintiff then suggested she talk to a lawyer and she then spoke to her husband and daughter about the issue, they both being lawyers. She agrees that she probably then rang the plaintiff to confirm that she did not wish to challenge the will, but disagreed with the plaintiff’s evidence that she said she did not wish to challenge the will because of the legal costs.[120]
[118]Transcript p. 76.
[119]Transcript p.146 ll 11-28.
[120]Transcript p. 147-148.
On the basis of this evidence I find that by May 2010, that is within the period of time to make a claim under Part IV, the plaintiff was seriously considering challenging the deceased’s will. The challenge at that time in his mind was on the basis not of inadequate provision by someone who had a responsibility to provide for him, but of undue influence. The substance of his grievance was, however, the same i.e. that the final will did not make provision for an apartment for him, and generally made inadequate provision for he as a family member.
The plaintiff denies that he was aware of any time limit and in the absence of corroboration of the competing accounts of he and Mrs Kayser on this point I do not consider it possible to make a finding. It is not, however, in my view essential that the plaintiff at this stage knew of the time limit to bring a claim. What is significant is that he was seriously considering it.
Thus on the plaintiff’s account there were two occasions within time for making an application when he considered whether something could be done to challenge the will – the first at the funeral, the second after he found the unexecuted will in late April or early May 2010. His evidence is that after each occasion, when told that he could not make a claim or that Mrs Kayser did not wish to join in a claim, he was content to leave the matter at that. When asked specifically by Mr Tatarka why he did not seek legal advice after finding the unexecuted will, he said that he relied on Mrs Kayser’s opinion knowing that she had close family members in the legal profession.
The plaintiff did not at any subsequent time positively seek out legal advice until by chance he came into contact with his current solicitor on an errand for his mother in conjunction with his father’s estate in October 2010. The defendants do not take issue with the delay from October 2010 to February 2011, as much of this relates to the obtaining of counsel’s advice, but I note that there is no evidence that the plaintiff’s solicitor put the other executor on any notice as to a possible claim, which would ordinarily be a prudent step. I accept the evidence of Mr Fleiszig that he was unaware of any claim until the plaintiff advised him by telephone on 3 February 2011.
Conclusion in relation to delay
I accept that the plaintiff was unaware of the legal right to make a claim under Part IV until October 2010. While in many cases ignorance of legal rights has been sufficient, I do not consider this case to be so straightforward.
The plaintiff was clearly unhappy with the provision made for him under the will from the beginning. As indicated, I do not accept the plaintiff’s explanation that his initial delay is explained by advice from Mr Fleiszig that he could not make a claim. Even if it were, however, that can no longer be an explanation from May 2010. By that time his disappointment had flared into real anger at Mr Fleiszig after he found the unexecuted will that showed the deceased had at one time contemplated devising him a flat and formed the view that Mr Fleiszig may have influenced the deceased to direct her estate away from family.
Counsel for the plaintiff sought to draw a distinction between challenging the will on the ground of undue influence and making a Part IV claim. I consider that is too fine a distinction. It is clear that by May 2010 the plaintiff thought there may be a basis for challenging the will in such a way as to make more provision for him. This was the time at which reasonably he should have sought legal advice. It was within time to make a claim under Part IV, as well as other possible challenges to the will.
In Stanley v State Trustees,[121] one of the reasons for rejection of an application for extension of time was that the plaintiff, through his solicitors, had elicited from the defendant executors an extension of time to make a claim and within that time the plaintiff elected not to issue proceedings against the estate. The facts here are not so prejudicial to the plaintiff. On my findings he did not receive any legal advice from the first defendant and there is no evidence that he obtained any other legal advice prior to October 2010. However, at a time when on his own evidence he “saw red” about the provision made to him, he was not prepared to proceed in the absence of Mrs Kayser being willing to jointly mount a challenge. The plaintiff was at liberty at that time to seek legal advice as to the challenge he had under contemplation, on the ground of undue influence, which may well have elicited advice as to a possible Part IV claim. It was not reasonable for the plaintiff to rely on Mrs Kayser’s reluctance to participate in a challenge in lieu of legal advice. Certainly the plaintiff may have been concerned that without her participation a challenge would be less strong, but she herself is not a lawyer, to his knowledge, and there is no suggestion that he felt a claim could not be brought without her participation as a matter of law.
[121]Op cit
Accordingly, while I would not characterise his decision in May 2010 not to proceed as a positive election, and it was certainly not communicated as such to the other executor, he allowed the opportunity to seek legal advice and to make a claim to pass. He did not take positive action at a time when reasonably he should have. Clearly the issue did not go away in his mind, however, as he took the opportunity of an encounter with the solicitor acting on his late father’s estate to enquire again.
I add that it is apparent from the evidence that the plaintiff’s father died in about May or June 2010. Mr Fleiszig said in the course of his evidence that illness in the plaintiff’s family was given to him as a reason for the slowness in clearing out the deceased’s flats. The plaintiff did not, however, rely on his father’s illness and subsequent death as an explanation for his delay in bringing this claim.
It is clear following Ansett v Moss that even very lengthy delay that is not satisfactorily explained is not necessarily a bar to a successful application for extension of time. Nor should passivity or lack of initiative be regarded as seriously as a positive election not to proceed subsequently reversed. Nevertheless, here the plaintiff was not only an aggrieved beneficiary, he was also the joint executor. In that capacity he had duties to promptly administer the estate. That in itself should have lead to him seeking earlier effective legal advice as to any possible claim he could make on the estate or in respect of the will.
For all these reasons, I consider the plaintiff’s explanation for his delay in bringing a claim from May 2010 to be inadequate. While inadequate explanation for delay is not in itself fatal to his application for extension, it is a factor to be considered in conjunction with others.
Prejudice
Delay will be particularly significant where it has caused prejudice to the estate that cannot be remedied on the making of a final order. The defendants’ case is that the plaintiff has occasioned loss to the estate by delaying the sale of the residential apartments, notwithstanding requests by the other executor to facilitate sale. The apartments were unoccupied from the testator’s death and so not generating any income, although they continued to incur liabilities, and the defendants say that the plaintiff obstructed their sale. The defendants concede that this loss is not within the usual categories of prejudice considered on an extension application, but say that it is relevant to the overall discretion.[122]
[122]Closing submissions of first defendant, transcript p.240 and of second defendant, transcript p.298.
The plaintiff says in response that it was the obligation of the other executor, once the plaintiff had made his claim, to proceed with administration of the estate. In particular, the plaintiff says that the other executor, the first defendant, could have taken the action he threatened to remove the plaintiff as executor, if concerned that the plaintiff was affecting the administration of the estate, and the first defendant did not do so. To the extent the plaintiff was responsible for delay in the sale of the apartments, counsel for the plaintiff seeks to draw a distinction between delay by the plaintiff in administration of the estate and his delay in making his application under Part IV. As I apprehend it, it is said that any prejudice was occasioned by delay in administration, and so is not attributable to the delay in making application. For that reason, it is not relevant prejudice.[123] The plaintiff also says that if any financial loss did flow from delay in the sale of the residential apartments, this is a matter to be ascertained at trial of the substantive action, and, if found, can be taken into account at the time in the making of any order for further provision.
[123]Amended Outline of Plaintiff’s Submissions dated 1 June 2012 at [26].
Evidence
The deceased’s estate contained four parcels of real estate – two commercial investment properties, and two residential properties, being her units at East St Kilda and at Surfers Paradise. Mr Fleiszig deposes in his affidavit that after the funeral he and the plaintiff made several visits to the East St Kilda unit searching for bank accounts, titles and “relevant items”. He says that the administration of the estate proceeded in a “businesslike manner” until the plaintiff telephoned him on 3 February 2011 to say he was making a claim.[124]
[124]Affidavit of Gabor Fleiszig, sworn 10 October 2011, at [10].
Mr Fleiszig’s evidence in this affidavit is that the commercial properties were “sold” on 3 June 2011 i.e. well over a year after the grant of probate, and four months after the plaintiff’s originating motion seeking both further provision and an extension of time to make it. There is no evidence as to whether this was the date of the contract of sale, or the date of the settlement, and, if the latter, the time between the two. The plaintiff suggested in cross-examination that his discussion with his current solicitor in October 2010 began with an enquiry about signing a document for the sale of the commercial properties, rather than a residential property as his affidavit had asserted, so it may be that the marketing for sale of the commercial properties commenced about this time.[125] In any event, the thrust of Mr Fleiszig’s affidavit is that there was nothing untoward in this lapse of time after the grant of probate for sale of the commercial properties.
[125]Transcript p28 ll 24-28
The first evidence of written advice or request from Mr Fleiszig to the plaintiff that the sale of the residential apartments should proceed is after the sale of the commercial properties, being email dated 16 June 2011, which is GPF-1 to Mr Fleiszig’s affidavit. The opening line reads “We should now proceed with sale by public auctions of Estate’s remaining properties” (emphasis added). Mr Fleiszig said prior to the date of this email he had been speaking to the plaintiff on the telephone about sale, the plaintiff had said he needed more time and he was prepared to give him that time until “I understood that he was actually challenging the will”.[126]
[126]Transcript p181 ll18-26.
That the plaintiff was challenging the will was presumably evident from February 2011. Indeed, Mr Fleiszig’s immediate reaction on being told by the plaintiff that he was bringing a Part IV claim was to tell him that he should resign as an executor. In response, the plaintiff’s solicitors replied by letter 16 February 2011 that the Rules did not require the plaintiff to resign as executor but “Obviously my client will not be the decision maker on behalf of the Estate”.[127] In another portion of his cross-examination by counsel for the plaintiff, Mr Fleiszig said that up until his email of June 2011, and the reply thereto, the plaintiff had been slow, but “(u)p to that point he hadn’t at any stage said that this (being the sale) wasn’t going to happen.”[128]
[127]GPF-7 to the affidavit of Gabor Fleiszig.
[128]Transcript p.169 at ll 14-15.
Exhibited to Mr Fleiszig’s affidavit is the correspondence that then ensued. By letter dated 17 June 2011, the solicitors for the plaintiff refused the request for keys to enable sale of the residential properties on the basis that the plaintiff did not wish any sale to take place until mediation, as he may “be prepared to take assets in specie rather than in cash”. The first defendant replied through his solicitor insisting on sale by letter dated 21 June 2011, and the solicitors for the plaintiff again sought a mediation by letter dated 23 June 2011. The first defendant again insisted on sale by letters dated 10 and 23 August 2011, threatening an application to remove the plaintiff as executor if agreement to sale was not forthcoming. In the event, no such application was made, and no mediation took place. Mr Fleiszig said in cross examination that he considered mediation to be inapplicable until the extension application was determined.[129] Directions were made by the Court on 16 August 2011 i.e. in between the last two letters from the first defendant including a direction that the application for extension of time be heard after 9 November 2011. No order for mediation was made, and counsel confirms that no order was sought.
[129]Transcript p. 175
In cross-examination by counsel for the plaintiff, Mr Fleiszig gave further evidence as to the steps taken in relation to sale of the properties after the grant of probate. He said that there were “issues” to be addressed, noting the following: that neither the plaintiff nor he knew the location of the titles, and indeed had to make application for new titles for some of the properties (which property or properties was not identified); the residential properties needed to be cleared of furniture and effects; and the commercial properties were both leased, and both leases gave the incumbent tenants a right of first refusal. He said this process of addressing these options took time, and but when complete those properties were put up for auction and sold. In relation to the residential properties, he said that the plaintiff continued to assert he had not finished cleaning out the St Kilda flat; the plaintiff was reluctant to expose the flats to early sale because he felt the market would not yield a satisfactory outcome; and there was an “issue” of the flood in Queensland in relation to sale of the Surfers Paradise flat.
Mr Fleiszig concluded:
So, in my opinion, the sales of the commercial properties occurred as soon as they could, and the sales of the residential properties cannot occur because I’m being obstructed.[130]
[130]Transcript, pp. 166- 167.
In answer to the immediately following question, “Prior to the claim being brought there wasn’t any obstruction by Ron, in your evidence; is that right?” Mr Fleiszig added another instance of the plaintiff causing delay, even prior to his claim (and so extension application) by objecting to the real estate agent retained by the deceased prior to her death in relation to the proposed sale of the East St Kilda flat, and elaborated on the plaintiff’s delay in failing to complete cleaning out that flat. In that regard, Mr Fleiszig said he suggested the use of contract cleaners to empty out the flat at the very beginning, but
Mr Erlich said that he wanted to clean the flat himself, and he wasn’t busy, that he was looking out for things of interest, didn’t want to have stuff just removed and disposed of, and so I did give him that latitude.[131]
[131]Transcript, p 168 ll21-25.
Mr Fleiszig said in cross-examination by counsel for the second defendant that he had been prepared to give the plaintiff time to go through the flat carefully because it was possible there was something of value there, but he had become frustrated with the delay by the time of his letter of June 2011. He said he considered the flats could have been ready for sale two to three months earlier.
So by the time you wrote the letter in June 2011, that was really the end of the line as far as you were concerned?---I was getting frustrated.
How much earlier than June would you say - if he had acted expeditiously or in a straight line manner, when do you say the properties could properly have been ready for sale?---It's possible it could have been got ready in a couple of months, three months earlier. The thing is that he told me he hadn't finished going through the effects in the flat, he was doing this carefully because there might be something of value there, and I certainly didn't disagree with the proposition because I didn't know exactly what assets the testatrix had. It had to be discovered. So, knowing the type of lady that the deceased was, by that I mean a Holocaust survivor, and knowing how people like this behave, that they sometimes hide things in their homes, things of value, I thought that it was sensible to give every opportunity to have any of that material uncovered if it existed. While I was being informed that the process of looking through the flat hadn't been completed for various reasons, sickness in the family, in the Erlich family and others, I was prepared to wait. But then, having concluded the sales of the commercial properties, I started to - I lost patience.
He said he had no opportunity to inspect the flat other than in the company of the plaintiff and did not have a key of his own.[132]
[132]Transcript pp186 line 16-187 line 8.
The plaintiff’s evidence on this issue had been given earlier in the trial. He said he had still not, by the first day of the trial, 24 May 2012, completed cleaning out the East St Kilda flat, although he finished cleaning out the Surfers Paradise flat by the middle or end of 2010.[133] He agreed he had not provided keys to either flat despite request. He said this was on the basis of legal advice. Accordingly, this can only have been after October 2010. The plaintiff confirmed that he did not want the sales of the flats to proceed because he wanted a mediation to be held to determine which flat would become his by way of further provision. He said he was seeking mediation from February 2011 i.e. when he made his claim.[134] At the conclusion of the trial on 1 June 2012 the plaintiff provided keys to both flats to his co-executor.
[133]Transcript p.36
[134]Transcript pp 34-35, 44.
The defendants assert that the residential properties could not be sold as required by the will due to obstruction by the plaintiff up until this delivery of the keys. They say this has occasioned financial prejudice to the estate, being at least the cost of outgoings on both apartments; the loss of interest on sale proceeds had sale proceeded at an appropriate time; and possible loss due to falls in the real estate market. Mr Fleiszig deposes that the outgoings for both flats total $6,191 p.a. Ms Collins deposes in her affidavit to the loss of interest occasioned by non-sale from October 2010 to May 2012 in the order of $60,000. That calculation assumes the value ascribed to the flats in the inventory of assets and liabilities as at February 2010 of $520,000 (East St Kilda) and $250,000 (Surfers Paradise) respectively i.e. a total of $770,000 invested at historical interest rates. Given that the first written demand for sale was made in June 2011, counsel for the second defendant conceded that the lost interest was no less than the reduced figure of $33-34,000 from 1 July 2011.[135]
[135]Transcript pp. 184 and 189.
The plaintiff’s response to these assertions was that the outgoings were “more than adequately covered” by interest on bank deposits including the money from the sale of the commercial properties and that the properties would have increased in value. In relation to the properties continuing to incur outgoings without any income, he says it was never suggested to him by Mr Fleiszig that the apartments be rented out while the claim was pending.[136]
[136]Transcript pp. 50 ll6-28, 54-55 at ll 25-6. See also transcript
Findings
Obstruction of sale
I find that the plaintiff obstructed the sale of the residential properties. This obstruction commenced at least by June 2011 when the plaintiff was put on written notice that the co-executor required sale in accordance with the will, and continued until June 2012 when he delivered the keys. His own evidence is that he had completed the clean out of the Surfers Paradise flat by the end of 2010. He said that he had not by the first day of trial, 24 May 2012, finished cleaning out the East St Kilda flat but nevertheless was able to deliver the keys to both flats on 1 June 2012. Thus, to the extent it was true that he had not by 24 May 2012 finished cleaning out the flat, he was able to do so very quickly thereafter. I infer that he would have been able to complete the clean out of the East St Kilda flat quickly at an earlier point in time, or allow the co-executor to do so, had he so wished.
These matters, and his evidence that the reason he opposed sale was because he wanted a mediation to determine which flat he would receive, put it beyond doubt in my view that he obstructed sale after he commenced his proceedings because of his interest in obtaining one of the flats in specie (or both given the size of his claim) in satisfaction of his claim for further provision. It is not necessary in these proceedings to determine if this was in breach of his duty as executor or whether or not he was entitled to claim an asset in specie. By his own admission, expressed in the letter from his solicitors to the solicitors for the co-executor dated 16 February 2011, he remained an executor although a claimant on the basis that he would not be the “decision maker” for the estate. By his actions in refusing to hand over the keys, he nevertheless made himself the de facto decision maker.
It is not to the point to say that the first defendant could have acted on his threat to bring proceedings to remove the plaintiff as executor, or otherwise to obtain orders for sale. There is no claim against the first defendant in these proceedings, and, indeed, no claim against the plaintiff for damages in respect of loss occasioned to the estate. This issue arises only in the context of the plaintiff seeking an indulgence from the Court. In that context, the fact that the co-executor could have taken certain action, which may have minimised the loss, is not relevant. I make no finding as to whether or not Mr Fleiszig should have taken further steps. I note that he gave reasons for not doing so, being that it would increase costs, and at that time the parties anticipated an earlier hearing of the extension application.[137] These are matters that a prudent executor could appropriately consider. Further, just as the first defendant did not bring matters to a head by application to the court, nor did the plaintiff by seeking a court order for mediation.
[137]Transcript pp 177-178.
Quantification of loss
I consider that the loss occasioned by the plaintiff’s actions should include the outgoings without adjustment for income that could have been earned by way of rental for two reasons. First, it was the plaintiff’s responsibility, as well as that of his co-executor, to be conscious of the expense to the estate constituted by the outgoings. The plaintiff’s evidence shows that he was, but mistakenly considered that they were not a concern because there was adequate income from other estate sources to pay them. The plaintiff did not suggest that the flats be rented to generate income and it is not sufficient explanation for him to say simply that it was up to Mr Fleiszig to suggest it to him.
In any event, I accept the evidence of Mr Fleiszig that, in his experience, rental of properties where the will requires sale can be undesirable because it may complicate marketing for sale and may lead to increased costs.[138] The will required sale. Accordingly, some outgoings pending that sale, if the properties were not to be rented, could be expected, but here a whole year was lost due to the plaintiff’s actions.
[138]Transcript pp 178 l l26- 179 l l28.
For these reasons, I consider that the financial loss occasioned by the plaintiff’s actions in obstructing sale of the apartments can be quantified as one year’s outgoings, and one year’s lost interest on the sale proceeds, adjusted by any difference in the realised value if and when the properties are sold compared with what they may have realised if sold at an earlier point in time. It is not possible to calculate the loss exactly until that sale, but, unless the price realised on sale after June 2012 is very considerably more than the price that would have been realised on sale after June 2011, I estimate the loss to the estate as being at least in the order of $40,000, being $6,191 for one year’s outgoings, and approximately $33-34,000 for lost interest. It could be more, if the delay also reduced the sale price, or less if some adjustment should be made for the other executor not seeking court orders.
Is this relevant prejudice?
I have considered to date the loss occasioned by the plaintiff’s obstruction of sale between June 2011 and June 2012. Counsel for the plaintiff says that if this is loss occasioned by the plaintiff, it was prejudice to the estate arising from his role as executor i.e. in the administration of the estate, and did not arise from the delay in making his claim. The implication is that it is only prejudice arising from the delay that is relevant when considering an extension application.
I accept that the prejudice on which the defendants rely is not the usual sort of prejudice to which the cases refer. However, I consider it here relevant, if not strictly as prejudice occasioned by the delay, then as a factor in the exercise of the overall discretion.
First, in my view it is taking too fine a point to seek to distinguish between prejudice to the estate effected by the plaintiff as executor, and prejudice effected by him as Part IV claimant. The plaintiff was able to obstruct sale because he was an executor and had been permitted to undertake the preparatory steps for sale. I find that he did so, however, because of his grievance about the provision made for him by the will and belief that he should have been left an apartment. Thus the prejudice that he caused the estate arose from the same factors that lead to his claim.
I have considered whether this prejudice should be viewed as arising from the claim, and not from the delay in making it. As indicated earlier, in Clark v Burns, for example, prejudice was not regarded as relevant because Hargrave J considered it arose from the claim itself, not the delay in making it. Here, the other executor considered that the sale of the residential property was not unduly delayed until, on his evidence, at the earliest two or three months prior to June 2011 i.e. the delay arose after the claim was made, not during the period of, and because of, the delay in making it.
Again, I think that in this case that is too fine a distinction. First, the plaintiff is seeking an indulgence that depends on an assessment of the overall justice of the case. That assessment can, and in my view should, fairly include an assessment of the plaintiff’s conduct in relation to the claim. Accordingly, it is not appropriate to disregard the loss he has occasioned the estate arising from the claim because that loss arose from his actions after he had brought his claim, and not in the period from expiration of the statutory time limit to February 2011.
Secondly, on the plaintiff’s own evidence it seems the Surfers Paradise flat at least could have been made available for sale by the end of 2010 i.e. prior to his claim. His evidence is he completed the clean out by the middle or end of 2010. By October 2010 he had received legal advice that he might have a claim, and was awaiting counsel’s advice. He advances no explanation other than his belief he should have received a gift of an apartment as to why the Surfers Paradise flat could not have been sold more quickly. In particular, his evidence is that he had no particular sentimental attachment to that apartment, as opposed to the East St Kilda apartment.[139] The financial cost to the estate from the failure to put that property on the market at least can thus be attributed to the delay in bringing a claim.
[139]Transcript p.49.
Can the loss be remediated on the making of a final order?
Counsel for the plaintiff contends that, even if the plaintiff has occasioned financial loss to the estate, that loss can be taken into account on the making of a final order, and so should not stand in the way of an extension of time.
The loss here is purely financial, and so remediation is of course theoretically possible if the plaintiff were to be successful in obtaining an award for further provision. Whether it will be possible in fact, depends on both his chances of success in establishing that the deceased had a moral responsibility to make provision for him, and failed to do so adequately, and the size of the award then made.
In relation to the first, as discussed earlier, I consider it possible that he will succeed, but by no means certain. As to the second, this would be a discretionary matter for the judge at the subsequent trial. It could also depend on new evidence as to the plaintiff’s financial circumstances at trial. It is not possible or appropriate to assess it now.
The judge at such trial would be required, however, to be conscious of the importance of freedom of testation[140] and to exercise his or her discretion in relation to amount conservatively as set out in the passage from McKenzie v Topp referred to earlier i.e. so as to not
transgress unnecessarily upon the testatrix’s freedom of testation, but rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just testatrix.[141]
[140]Grey v Harrison [1997] 2 VR 359 per Callaway JA at 363 and 366 as approved in Blair v Blair [2004] VSCA 149 per Chernov JA at [15].
[141][2004] VSC 90 at [63].
This may mean that an award for further provision in favour of the plaintiff may be relatively modest. Here the deceased’s wishes as expressed in her last will, and in preceding executed wills, were clear- she wished to benefit the State of Israel and agencies associated with Israel. The plaintiff in his eulogy at her funeral acknowledged as much, giving as her reason her experiences in the Holocaust. I do not consider that a Court would lightly disturb that wish to any great extent.
For that reason, remediation in the order of $40,000 may be significant compared to the size of an award of further provision in excess of the current bequest of $20,000.
The costs of a further trial on the substantive claim may also be relevant. In Stanley v State Trustees Ltd Kaye J. held that the costs of the substantive trial, if the application was granted, while not a matter of prejudice, were not irrelevant.[142] There the estate was very small and so the costs of a further trial were held to be disproportionate. Here the estate is not small, but costs are a significant matter in any litigation, particularly in estate litigation where the costs of all parties are often borne by the estate. I appreciate that this is speculation, as the incidence and size of further costs is subject to a range of matters, and in any event could be the subject of costs orders at that trial. With that significant qualifier, however, I do not think the costs of further litigation should be ignored in the exercise of the discretion to grant or refuse an application for extension of time to commence that litigation, when loss has already been occasioned.
[142]Op cit, at [38].
Having regard to all these matters, I am not persuaded that the possibility of remediation by adjustment of the final order at subsequent trial is an entire answer in this application to the loss occasioned by the plaintiff’s actions.
Conclusion
No one factor in this case compels my conclusion that the application for extension of time should be refused. Nor is there any factor, or combination of factors, such as a very strong case for relief, that would make it unjust to refuse the application. I reach my conclusion having regard to the overall justice of the case, to both the plaintiff and to the defendants, and the combination of the factors examined at length in this judgment. They are an arguable, but not, on the evidence before me, a strong case for further provision; delay that is not objectively excusable; and loss already occasioned to the estate by the plaintiff’s actions. I also take into account that the plaintiff owed duties to the estate as an executor, yet favoured his personal position as applicant.
I will refuse the application. I will hear the parties as to costs.
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