Gehradte v MUSLOVICH as Trustee and Beneficiary of the Estate of Giorgio MUSLOVICH (Dec)
[2001] WASC 265
•27 SEPTEMBER 2001
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: GEHRADTE -v- MUSLOVICH as Trustee and Beneficiary of the Estate of GIORGIO MUSLOVICH (DEC) & ANOR [2001] WASC 265
CORAM: ACTING MASTER CHAPMAN
HEARD: 17 JULY 2001
DELIVERED : 27 SEPTEMBER 2001
FILE NO/S: CIV 1345 of 2001
MATTER :Section 6(1) of the Inheritance (Family & Dependants Provision) Act 1972
and
Estate of GIORGIO MUSLOVICH (DEC)
BETWEEN: IRMA GEHRADTE
Plaintiff
AND
ALAN MUSLOVICH as Trustee and Beneficiary of the Estate of GIORGIO MUSLOVICH (DEC)
First DefendantIRMA GEHRADTE as Trustee and Beneficiary of the Estate of GIORGIO MUSLOVICH (DEC)
Second Defendant
Catchwords:
Inheritance and succession - Claim by adult daughter not dependant on the deceased - Substantial delay - Estate distributed - Whether leave to file out of time should be granted
Legislation:
Inheritance (Family & Dependants Provision) Act 1972, s 6
Result:
Leave refused
Category: B
Representation:
Counsel:
Plaintiff: Mr K Yin
First Defendant : Mr H Kremer
Second Defendant : Mr K Yin
Solicitors:
Plaintiff: Frichot & Frichot
First Defendant : H Kremer & Co
Second Defendant : Frichot & Frichot
Case(s) referred to in judgment(s):
Clayton v Aust (1993) 9 WAR 364
Re T F Dun (1956) 56 SR (NSW) 181
Spies v Baker (1970) 3 NSWR 39
Case(s) also cited:
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co (1938) AC 463
Coates v The National Trustee & Executive Agency Co (1956) 95 CLR 494
Duncan v Perpetual Trustees WA Ltd (Incorporating WA Trustees Ltd) as Executor of the Will of William Fitzgibbon King, unreported; SCt of WA; Library No 940103; 4 March 1994
In the Will of Roberts (1919) VLR 125
King v Duncan, unreported; SCt of WA; Library No 940103; 4 March 1994
Meynert v Pittorino, unreported; SCt of WA; Library No 990055; 12 February 1999
Re Barrot [1953] VLR 308
Re Claverie (Dec) [1970] 2 NSWR 380
Re Hodgson (1955) VLR 481
Re Salmon (1980) 3 All ER 532
Szilveszterne v Angus, unreported; SCt of WA; Library No 970339; 9 July 1997
ACTING MASTER CHAPMAN:
The application
The plaintiff, by way of originating summons filed on 12 March 2001, seeks leave of the court to bring an application pursuant to s 6 of the Inheritance (Family and Dependants Provisions) Act 1972 ("the Act") out of time.
The originating summons was amended and programming orders were made on 18 May 2001 programming this matter to a special appointment. Regrettably, the programming orders were not complied with. No explanation was given for this. Any cost orders made will take this into account.
The principles
In order for the plaintiff to succeed she has to establish the justice of the case requires that she be given the leave sought. The Act gives no guidance regarding the principles upon which the jurisdiction to extend time is to be exercised. However, guidelines are given in Clayton v Aust (1993) 9 WAR 364 and may be summarised as follows:
1.The discretion is unfettered. No restriction or requirements of any kind are laid down in the Act. The discretion is plainly one that is to be exercised judicially and in accordance with what is just and proper.
2.The onus lies on the plaintiff to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by it of its benefits.
3.The time limit is a substantive provision laid down in the Act itself and is not a mere procedural time limit imposed by Rules of Court. The burden on the applicant is thus no triviality.
4.It is material when examining the details to consider:
(a)how promptly and in what circumstances the applicant has sought the permission of the court after the time limit has expired;
(b)whether or not negotiations have been commenced within the time limit. If they have, and time has run out while they are proceeding, this is likely to encourage the court to extend the time.
(c)negotiations commenced after the time limit, will also aid the applicant if the defendant has not taken the point that the time has expired.
5.It is relevant to consider whether or not the estate has been distributed before a claim under the Act has been made or notified.
6.It is relevant to consider whether a refusal to extend the time would leave the claimant without redress against anybody.
I accept that there is no exclusive circumstance which justifies an extension of time and the list referred to above is not exhaustive.
Parties
The plaintiff, who is also the second defendant ("the plaintiff"), and the first defendant ("the defendant") were the joint executors and trustees together with their mother of the deceased estate. The plaintiff was thus aware of the application for and the grant of probate. The mother did not join the parties in an application for a grant of probate.
The plaintiff and the defendant are the only surviving children of the deceased. At the date of death of the deceased he was survived by his wife, who had a life interest in the property at 44 Leura Street, Nedlands ("the property").
The plaintiff is now aged 70 years and the defendant 67 years. Neither of them have any dependant children. Each of them is of independent means. The plaintiff is the owner of the property in which she lives at 16 Taylor Road, Nedlands.
Estate
As is conceded by counsel for the plaintiff, I have no direct evidence of the extent of the assets and liabilities of the estate of the deceased, either at the date of his death or now. When one examines the evidence carefully, one comes to the conclusion that the major asset of the estate was the property. That is hardly a satisfactory situation, given the onus on the plaintiff and the substantial delay which has occurred. Counsel for the plaintiff submitted that: "It's the very reason for why there is some difficulty in the evidence because of the delay ... ".
That submission seems to overlook the fact that the plaintiff was appointed a joint executor with the defendant of the estate of the deceased on 21 March 1973 which was some nine months after the death of the deceased. One would expect that an executor would be familiar with the assets and liabilities of the estate and would have kept appropriate records.
The widow of the deceased had a life interest in the property which terminated on her death in June 1999. The property then passed to the defendant pursuant to the terms of the deceased's will.
The property was transferred into the name of the defendant on 5 May 2000 and since that date a half‑interest in the property has been sold to the son of the defendant. The transfer of the share to the son took place before this application was brought.
It is clear the estate was distributed before the claim was made although on the plaintiff's evidence after she had indicated she was unhappy with what she had been left from the estate.
Delay
The father of the parties (the deceased) died on 27 June 1972 with probate being granted on 21 March 1973. That being the case, the application pursuant to the Act should have been brought by 20 September 1973. Thus, the delay in bringing the application is some 27 years, which is a substantial period indeed. It was rightly conceded by the plaintiff the delay has been long.
Reason for the delay
Counsel for the plaintiff submits that there are two relevant periods of delay. The first he submits is from the date of death of the deceased to the date of death of the mother. The second is from the date of death of the mother to the date these proceedings were commenced.
I think the first period should more correctly start from 21 March 1973 which was the date upon which probate of the will of the deceased was granted. Whichever date is taken this period is significant.
Counsel for the plaintiff readily concedes there is no excuse for the first 18 years of delay. It was submitted that for the whole of that period a life interest in the property remained in existence and thus no prejudice was caused by the delay as someone else had a life interest in the estate. With respect I do not consider that necessarily follows.
There was some suggestion that prior to the plaintiff receiving advice from Smith Williamson, barristers and solicitors, dated 11 June 1990 she did not know of her rights pursuant to the Act. That suggestion is not supported by any evidence, nor in my opinion should it properly be inferred from the evidence before the court. Even if that were the case I do not consider it would alter the outcome of this matter, particularly given the delay which occurred after that date.
The plaintiff maintains that from 1990 and intermittently thereafter the defendant represented that upon the death of the mother the property would be sold and the plaintiff would receive one‑third of the proceeds. The defendant disputes this. Even though the defendant disputes that any agreement was reached, it is apparent from the evidence that some discussions as to settlement had taken place.
The plaintiff maintains these negotiations did not break down until December 2000. Counsel submits that this action was commenced very soon thereafter. For myself I would not have thought a three month lapse would fit within that description. There is no explanation for the delay of that three months.
It was submitted by counsel for the plaintiff that after the defendant made the representation in 1990 she did not assert any right under the provisions of the Act because of those representations.
The children of the plaintiff have filed affidavits in support of her claim regarding the agreement which is said to have taken place between her and her brother. In the main, these make bald statements about the existence of the agreement but in each case that seems to rest solely on what they were told by their mother, save in two instances. Alan Paul Gehradte at par 12 and par 15 of his affidavit sworn on 10 July 2000 deposes as follows:
"12.I first telephoned Aldo in late July, 2000 and spoke to Aldo's wife Anna. Anna commented to me that she was of the view that my mother deserved to receive nothing from the Leura Street property, and then put Aldo on the phone. Aldo at first denied that he and my mother had ever had any agreement in relation to the Leura Street property but later in the conversation admitted that he did make the agreement with my mother.
…
15.One of the reasons I suggested meeting with Aldo and Anna was because Aldo had confirmed with me during the first telephone conversation that he had made the agreement with my mother, but made the further comment that he had only made the agreement to 'shut her up'."
Alyse Gina Barrington, in her affidavit sworn on 10 July 2000, deposes at par 16 as follows:
"16.I asked Aldo how he was coping and he said he was coping alright, but mentioned that he would probably get emotional at the funeral the next day. Aldo made the comment to me that he didn't want my mother to worry about the cost of the funeral, as he would 'take care of it'. Aldo told me not to worry about my mother's financial position because he and my mother had already spoken about a number of matters and had reached an agreement in relation to my grandmother's house at Leura street. He said to me that he would look after my mother."
On the evidence before me I am not in a position to determine whether or not an agreement was reached between the plaintiff and the defendant and if so the terms of such agreement. The plaintiff has commenced a separate action against the defendant in CIV 1346/01 based on these alleged discussions. Should that action proceed these questions should properly be determined in that action.
Arguable Case
Counsel for the plaintiff submitted that it is now generally accepted that the strength of the plaintiff's claim is not a relevant factor at all in an application to extend time, provided that the applicant can show that she has at least an arguable case. In that regard I was referred to the decision of Re T F Dun (1956) 56 SR (NSW) 181 and Spies v Baker (1970) 3 NSWR 39. Jacobs JA delivered the judgment of the court in Spies v Baker (supra) where at 40 he said:
"The likelihood of success or failure of the application, if it were permitted to be made, was in our view a relevant factor and itself involved the exercise of a discretion. The test of this factor of likelihood of success or failure in applications of this kind has been stated in various ways. In Re Dun (1956) 56 SR(NSW) 181. Myers J, stated it in terms, using the words, 'bound to fail'. He said: 'If it appears that an application for maintenance would be bound to fail, it would be unjust to extend the time for applying …'
A little later he said: 'But where it is not unreasonable to suppose that the application may succeed, the time should, in my opinion, be extended …' In Re Newton (1959) 76 WN (NSW) 479, McLelland CJ in Eq, after accepting the test of the likelihood of failure, said: '… although I would not say that such an application must fail, I am of opinion that there would be little reasonable chance of it succeeding unless some very material evidence to alter the situation were put before me, which appears to be unlikely.' In Victoria in Re Walker [1967] VR 890, at p 892 Lush J used the expression 'arguable case' and applied the test which was applied in a Queensland case of Re Terlier [1959] QWN 5, that: '… if it is improbable that the action will succeed, an extension of time should not be granted'."
At par 9 of the written submission of the plaintiff the following is found:
"9.There is no doubt that on the plaintiff's side, her case is at least arguable because:
9.1She is the daughter of the deceased and therefore someone who was entitled to make a claim pursuant to section 7 of the Act. On her evidence, her moral claim is satisfied by the close familial ties with the deceased.
9.2She obtained effectively nothing under his will. She was at all material times the beneficial owner of the Francis Street Property, which although was in the name of the deceased, was paid for by the plaintiff at all material times. Indeed at the time of the deceased's death, the Francis Street property was no longer in his name.
9.3A subsidiary issue of fact arises from the allegation that the plaintiff also obtained a gift inter vivos, of 42 Leura Street in that the family (in a loose sense, to denote the defendant and the deceased) effectively contributed or subsidised its acquisition. This fact is in dispute.
9.4Inter vivos gifts are a relevant consideration - see Dickey supra page 94. The first defendant obtained 52 Merriwa Street during the lifetime of the deceased."
In my view those factors alone do not establish the plaintiff has at least an arguable case. For example, those submissions have failed to take into account factors such as the age and financial positions of the respective parties and the evidence which the plaintiff gave in her two divorce applications. For myself, I am of the view that unless some very material evidence is brought it is unlikely that a substantive application would succeed.
Prejudice
I agree with the submissions of counsel for the defendant that the mere fact that a life interest in the property continued until June 1999 of itself would not necessarily indicate there was no prejudice to the defendant. He correctly points out the defendant could have dealt with the property subject to the life interest.
Further, it would seem to me that the mother would have been a potential witness in any application pursuant to the Act. This is particularly so, given the conflict on a number of issues dealing with family matters which the affidavit evidence indicates were discussed in her presence. The opportunity to call her has now of course passed as indeed is the opportunity to call the solicitor who drew the deceased's will. This lack of opportunity has the potential to cause significant prejudice to the defendant.
Intervivos Gifts
The plaintiff claims she purchased a property at 9 Francis Street, Subiaco for 2300 pounds with a deposit of 500 pounds on 21 March 1958, which was some 4 years after her first husband had left her in acute financial difficulties with no property of any significance. The plaintiff gave evidence under oath in the divorce proceedings on 6 April 1965 on two occasions that the property at 9 Francis Street, Subiaco belonged to her father.
The plaintiff remarried in 1965, having given birth to one child prior to that date and another early in the marriage, as a result of which she could not work. She states her husband made the loan repayments on the house. The plaintiff further states that six months prior to this marriage a vacant piece of land at 42 Leura Street came on the market for 1400 pounds. She says she told her father she could not afford to pay off the two properties, but then goes on to say she did buy this land. She says her husband took over payments of the land as well as the Francis Street property.
The second husband left the plaintiff in February 1967, less than two years after the marriage, at which time her total income was some $60 per week.
Subsequently, the plaintiff says she sold the Francis Street property in 1967 and used the proceeds to purchase a property at 50 Merriwa Street, Nedlands. This took place just before the second marriage ended. The plaintiff says that in late 1970 the Merriwa Street property was sold and a property at City Beach was purchased by the plaintiff.
In approximately 1994 the plaintiff purchased a property in Taylor Road, Nedlands. I have not been told what that property is worth, nor indeed what other assets the plaintiff may own at this time.
The property at 42 Leura Street was sold in 1969. The defendant at par 27 of his affidavit sworn on 11 May 2001 deposes as follows:
"27.Prior to my fathers death, Irma had received substantial financial assistance and benefits from him which I indirectly contributed to by my wages being handed over to my father during the fourteen year period that I lived at 44 Leura Street. I went through many sacrifices, including my youth, towards achieving the ultimate goal of owning 44 Leura Street upon the death of both my parents. I did not receive any benefit at all from the estate of my father until some twenty‑seven years later when my mother died. To assess the benefit that I received from my fathers estate by reference to the current value of 44 Leura Street is grossly unfair as the property was no where near its current value at the time. On the other hand Irma had already received the financial benefit arising out of the generosity of my father during his life time, Irma owning outright at the time of his death 50 Merriwa Street which she sold on 8 July 1976 for $53,000.00, when she moved to City Beach to live with her former defacto partner (D16). That Irma was able to achieve such a financial position, on a deserted wifes pension and having over the years five children and only occasional casual work as a shop assistant is proof of the financial help that she received from my father and indirectly from me over the years."
This evidence is in conflict with the evidence of the plaintiff. I am not in a position on the evidence before me to determine the truthfulness of the evidence other than to say the evidence the plaintiff gives in connection with the two divorces tends to support the defendant's evidence and refutes her own.
The plaintiff deposes to the fact that in approximately April 1958 she went with her father to see a solicitor, Mr Hammond. On her own evidence her father at that time told Mr Hammond that the Francis Street property was in his name. This was less than a month after the purchase of the Francis Street property.
Conclusion
The delay in this matter is inordinate. The evidence relied upon by the plaintiff does not include the detail which one would expect to explain a delay of this magnitude and no adequate reason is given for this. On its face the evidence should be available to the plaintiff.
To the extent that the delay is explained that explanation relies upon an agreement which is said was made between the plaintiff and the defendant around June 1990. That agreement forms the basis of a claim by the plaintiff against the defendant in CIV 1346/01.
In the circumstances of this matter I am not persuaded that it would be just and proper to extend the time which the plaintiff could bring an application pursuant to the Act. This does not necessarily leave the plaintiff without a remedy, she having already commenced the action previously referred to.
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