Keil v Cook & Anor

[2008] VSC 53

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 1157 of 2006

In the matter of an Application pursuant to Part IV of the
Administration and Probate Act

MADELEINE IRENE KEIL	Plaintiff
and
ANTHONY NORTON PYM COOK and ANTHONY JOSEPH NAUGHTON (who are sued as Executors of the Will and Estate of Valda Keil)	Defendants

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JUDGE:	HOLLINGWORTH J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 February 2008
DATE OF JUDGMENT:	27 February 2008
MEDIUM NEUTRAL CITATION:	[2008] VSC 53

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PROBATE – Application for extension of time to bring application under Part IV of the Administration and Probate Act 1958 – Delay of approximately three months – Ignorance of rights – Arguable case – No prejudice to other beneficiaries – Application granted – Administration and Probate Act 1958, ss 91(4) and 99.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms L Englefield	Riordan Legal
For the Defendants	Mr R B Phillips	Morley Naughton Pearn & Cook

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HER HONOUR:

The application

1. The deceased, Valda Keil, died on 5 November 2005, aged 72. The plaintiff is a niece of the deceased. The plaintiff seeks an order under s 99 of the Administration and Probate Act 1958 that the time for the making of an application by her under Part IV of the Act in respect of the deceased’s estate be extended.

1. The last will was made on 27 January 2000.  The will appointed the defendants as executors, made some bequests totalling $76,000 and left the residue equally to five charities.

1. Probate of the will was granted on 30 December 2005. Therefore, under s 99 of the Act, the time for bringing a Part IV application expired on 29 June 2006.

1. The originating motion in this proceeding was filed on 2 October 2006. It seeks an extension of time under s 99, as well as substantive relief under Part IV of the Act.

1. The present application is brought by summons issued on 23 October 2006. In support of the summons the plaintiff has sworn two affidavits, dated 6 October 2006 and 15 May 2007, respectively.  She also relies upon the affidavit of her father, Graham Keil, and her father’s solicitor, Peter Tovey of Engel & Partners in Bairnsdale, both sworn 16 May 2007.  The matter was listed for hearing in the Civil Cases List, rather than the Practice Court, because the defendants wished to cross-examine the plaintiff and her father.  The only material relied upon by the defendants is an affidavit of the first defendant sworn 22 March 2007.

1. The plaintiff’s father, the deceased’s brother, brought his own Part IV claim against the estate within  time.  That claim settled in late October 2006, for approximately $34,000 in total.

1. The deceased’s estate consisted primarily of two properties, being a house at Bentleigh, which the deceased had inherited from her parents, and an investment property in Carlton.  The inventory filed with the application for probate valued the total estate at just over $812,000.

1. Section 99 of the Act provides that no application for relief under the Act shall be heard unless the application is commenced within six months after the date of the grant of probate of the will. The section also provides that the time for making an application may be extended for a further period by the court, but no application for extension is to be made after the final distribution of the estate. In this case the estate remains totally undistributed.

1. An applicant must make out a case to justify the granting of the indulgence sought, namely the extension of time.  The court’s discretion in this regard is broad and unfettered, but must be exercised judicially.  As Buchanan JA affirmed in the leading judgment of Ansett v Moss:[1]

In my view, the discretion conferred by s 99 should not be confined by any rigid rules.[2]

[1][2007] VSCA 161.

[2]Ibid at [6].

1. I turn to consider the relevant arguments raised in this case.

Period of delay

1. The total delay in this case was from 29 June (being the last date of the six month period) to 2 October 2006, a period of just over three months.

1. I accept that the plaintiff was not aware of the possibility that she could bring a Part IV claim until a conversation with her father on 21 August 2006.  She first saw a solicitor about this matter on 25 August 2006 and, after a further meeting with the solicitor, commenced this proceeding some five weeks after she first learned of her rights.

1. In the circumstances I conclude that the delay is short and has been fully explained. The plaintiff acted promptly once she became aware of her rights.

Ignorance of rights

1. Ignorance of the right to claim under Part IV has been accepted as a reasonable excuse for delay.[3]  There is no onus on an applicant to prove ignorance of the ability to claim upon the estate.  Rather, ignorance is a relevant factor, the weight of which will vary according to all the circumstances.[4]

   [3]Re McPhail [1971] VR 534; Valbe v Irlicht [2001] VSC 53, see particularly [69]; and Ansett v Moss, op cit.

   [4]Ansett v Moss , op cit at [6].

1. The plaintiff first learned that her aunt had left her nothing in the will in a phone call with her mother on Christmas Day 2005.  Her mother volunteered to her advice to the effect that she could not do anything about the will, because she was not a dependant of the deceased.  The plaintiff accepted that advice, as it accorded with her own understanding of the situation based on what had happened after her younger brother had died.  Although hurt, upset and angry at the contents of the will, the plaintiff decided she had better get on with her life, as there was nothing she could do about the will.

1. The plaintiff’s clear and consistent evidence was that she did not know that she might be able to bring a Part IV claim until her father first mentioned it to her on 21 August 2006.  Her father confirmed that the first time he told her of this possibility was on that date.

1. Although her father had first seen a lawyer about bringing his own Part IV claim some months earlier, I accept that he did not tell the plaintiff or any of his children that he had done so. He regarded his financial matters as private, not to be discussed, even with family.  He did not himself realise that his daughter might have a claim until his own solicitor told him of that in August 2006.

1. Both the plaintiff and her father were cross-examined at some length about the relevant conversations and about the plaintiff’s state of mind.  I found both of them to be consistent and credible witnesses and accept their evidence.

Merits of the plaintiff’s case

1. I turn to consider the question of the merits of the plaintiff’s case. In Ansett v Moss Buchanan JA said at paragraph 11:

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.

1. The court must have regard to the criteria set out in s 91(4) of the Act. The following matters are of particular relevance here:

Size of the estate (s 91(4)(g))

1. The value of the total estate is just over $812,000.  Specific bequests total $76,000.  Just over $34,000 is to be paid to the plaintiff’s father in settlement of his Part IV claim.  That leaves a current value of the residuary estate of approximately $700,000.

Relationship with the deceased and contributions to her estate and welfare (s 91(4)(e) and (k))

1. The plaintiff is the deceased’s niece.  The deceased was unmarried and had no children.  There appears to have been a close and long-standing relationship between the plaintiff and her aunt, which was of a much closer nature than the deceased enjoyed with any of her other nieces and nephews.  The detail of that relationship, as set out in the plaintiff’s affidavits, was not really challenged in cross-examination and is not repeated here.

1. There is no suggestion that the plaintiff contributed to the building of the deceased’s estate.  However, during the last six to seven months of the deceased’s life, when she was in declining health, the plaintiff took her into her home and cared for her.  During this period the deceased seems to have been very heavily dependent on the plaintiff.

1. I express no final view as to whether the plaintiff will ultimately succeed at trial in establishing that there was effectively a de facto mother/daughter relationship, which went beyond the type of family connection discussed by Harper J in Schmidt v Watkins,[5] but her claim in this regard is at least arguable.

   [5][2002] VSC 273, particularly at [21]-[25].

Issues of financial obligation and responsibility (s 91(4)(f) and (m))

1. The defendants place considerable weight on the undisputed fact that the plaintiff was never financially dependent on the deceased.  However, the fact that the niece was not financially dependent on the aunt did not preclude the niece in Jotkowitz v Keating[6] from succeeding and obtaining an extension of time.  I agree with counsel for the plaintiff that there appear to be many factual similarities between that case and this.

   [6][2006] VSC 290.

1. In Iwasivka v State Trustees Ltd,[7] the daughter of the testator’s husband’s half brother succeeded in recovering under Part IV as a niece.  Although she had lived with the testator for four years as a teenager, once again, there was no evidence of financial dependency in adulthood.

   [7][2005] VSC 323.

1. The plaintiff has given evidence that on one occasion in 2002, and another occasion in 2005, the deceased told her that she intended to leave the Carlton property to the plaintiff as thanks for all the help the plaintiff had given her in caring for the plaintiff’s grandmother.  However, this is not a case where there is any suggestion that the plaintiff in any way acted in reliance on that promise, so as to give rise to some sort of moral obligation on the part of the deceased.[8]

   [8]Valbe v Irlicht, op cit at [101].

1. There does not appear to be any other person who has any relevant moral claim against the deceased’s estate.

Plaintiff’s age, health, employment and earning capacity (s 91(4)(h), (i) and (j))

1. The plaintiff is a 53 year old disability pensioner in poor health, who generates a small additional income by running a boarding kennel and cattery. Her total annual income is approximately $25,000.

1. Although she obtained a diploma in library studies and originally worked as a librarian, she has not worked as such since the early 1990s.  She does not appear to have a substantial income-earning capacity.

1. Her only real property is her home, which is worth approximately $300,000 and is subject to a mortgage of approximately $94,000.  Apart from household furnishings, her only other asset is a car worth less than $10,000.  She has no other significant assets, including superannuation.

1. Based on that material, it would have to be said that the plaintiff would have good prospects of establishing some financial need.

Other sources of support (s 91(4)(n))

1. The plaintiff is unmarried.  Her parents are still alive, however there is no evidence as to whether they would be in a position to assist her financially.  There does not appear to be any other person who would have an obligation to support the plaintiff.

Prejudice

1. Finally, I turn to consider the question of prejudice to beneficiaries.  There having been no distribution at all of the estate, this is not a case where the burden of a late claim might fall unfairly on only some beneficiaries.  Counsel for the defendants informed the court that no other claim for prejudice was pressed, notwithstanding some assertions to the contrary in the first defendant’s affidavit.

Conclusion

1. In summary:

(a)The estate is undistributed;

(b)The delay is short and has been explained by ignorance of rights.

(c)The plaintiff acted promptly once she became aware of her rights;

(d)Whilst I would certainly not describe the plaintiff’s case as particularly strong on the material before me, it is certainly not hopeless; and

(e)There is no prejudice to the residuary beneficiaries.

1. In the circumstances, I am satisfied that the plaintiff’s application for an extension of time should succeed.

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