Lang v Australian Executor Trustees Ltd - [2013] SASC 171

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
LANG & ORS v AUSTRALIAN EXECUTOR TRUSTEES LTD & ORS
[2013] SASC 171
Judgment of The Honourable Justice Anderson
12 November 2013
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - TREATMENT OF PARTICULAR APPLICANTS - GRANDCHILDREN AND OTHERS
APPLICATION OUT OF TIME - PRINCIPLES
Application by four grandchildren to claim a benefit from their grandfather's estate. The plaintiffs claim they have been left without adequate provision for their proper maintenance, education, or advancement. The summons was issued by the plaintiffs on 10 September 2012, and the time limit for a claim to be made was 28 October 2010. The plaintiffs' application was therefore made out of time.
The plaintiffs submitted reasons for the application being made late. These included lack of knowledge about the will of their grandfather, lack of knowledge about the time limit in which to make a claim and discouragement by and fear of the second defendant, their uncle.
Held: Application refused. Plaintiffs unable to satisfactorily explain the length of delay in making the claim. Onus on plaintiffs not discharged.
Inheritance (Family Provision) Act 1972 (SA), referred to.
In re Gusket [1947] VLR 212; Ansett v Moss [2007] VSC 92, applied.
In the Estate of Barry (1974) 9 SASR 439; Hoffman v Hoffman (1909) 29 NZLR 425, discussed.

LANG & ORS v AUSTRALIAN EXECUTOR TRUSTEES LTD & ORS
[2013] SASC 171
Civil
ANDERSON J.
Introduction

This is an application, out of time, by four grandchildren in respect of the estate of their grandfather to claim a benefit pursuant to the provisions of the Inheritance (Family Provision) Act 1972 (SA) (“the Act”). The applicants are the grandchildren of Hans Fetzer who died on 21 August 2009. Probate was granted on 28 April 2010. Pursuant to s 8(1) of the Act any claim for a benefit in relation to the estate of the late Mr Fetzer had to be made by 28 October 2010. The summons issued by the plaintiffs was filed on 10 September 2012.
The will provided for Mr Fetzer’s children Peter Hans Fetzer, Sonia Heidi Lang (“Heidi Lang”) and Angela Fetzer in a number of different ways including the distribution of the assets of trusts he controlled, specific gifts of property, forgiveness of any loan or debts owing by Sonia Heidi Lang, and an equal share of the balance of the estate for each child. The will gave monetary gifts to two persons specified as “friends”, Janine Ida Moore and Peter Lyall Bacchus, in the sum of $25,000 each. It provided property, or the benefit of his interest in a property, for his partner Erica Deirdre Schultz. In regards to other family trusts in which Mr Fetzer had a beneficial interest he directed a payment of $500,000 be made to Sonia Heidi Lang (taking into account a forgiveness of a loan of $600,000 he made to her), and $100,000 to each of Sonia’s children, the four plaintiffs, upon reaching the age of 25. The first plaintiff Christa was born on 11 April 1981, the second plaintiff Nikki was born on 25 February 1983, the third plaintiff Justin was born on 26 December 1989 and the fourth plaintiff Chloe was born on 17 June 1993. These distributions of $100,000 have already been made from the trusts to three of the four plaintiffs, with the fourth plaintiff Chloe to receive hers upon reaching the age of 25. He also directed that a payment of $1,000,000 be made to his daughter Angela Fetzer and $500,000 each to her children Amelia Duffy and Ella Duffy upon reaching the age of 25.
Each of the plaintiffs and the defendants Peter Fetzer and Angela Fetzer filed affidavits and were cross-examined. Heidi Lang has elected to abide by the outcome of those proceedings. She was called by the plaintiffs and was cross-examined by counsel for the second and third defendants. The administration of the estate proceeded after the grant of probate and the estate is partly administrated. There remains approximately $250,000 undistributed.
The first defendant, Australian Executor Trustees Limited, played no part in the hearing and its counsel was excused from attendance.
Background
Each of the plaintiffs alleges that they had a close personal relationship with the deceased. They claim to have been left without adequate provision for their proper maintenance, education or advancement. Although this aspect of the matter is not to determine the merits of their claim under the Act, it is a relevant consideration as to the grant of an extension of time to consider the likely chances of success by the grandchildren in their claim against the estate.
The reasons given by the plaintiffs in their affidavits and maintained by them under cross-examination were, first, that they were not given details of the grant of probate or the will or a document entitled “Letter of Wishes of Hans Fetzer”. Secondly, they claim that they were discouraged by their mother, the fourth defendant, from making any inquiries as to any entitlements they may have. Thirdly, they say they were further discouraged by the belligerent and bullying attitude of the second defendant who intimidated them effectively into not bringing a claim until some two years later.
At the time of the death of their grandfather the plaintiffs were aged respectively Christa 28, Nikki 26, Justin 19 and Chloe 16. There is evidence that the fourth plaintiff Chloe suffers from what is described as a triple X syndrome which means effectively that she had some decreased insight into matters generally and it was suggested that she in particular could not have understood the complexities of making any claim under the Act.
The suggestion by the plaintiffs that they spent significant amounts of time with their grandfather and especially towards the end of his life is disputed by the defendants, Angela in particular. Her two children will receive or have received $500,000 each upon turning 25 in comparison with the $100,000 provided for the plaintiffs. It is obvious that this is a motivating factor in the claim by the plaintiffs.
I will deal briefly with each of the witnesses.
The witnesses
I thought each of the plaintiffs in giving evidence was genuine in what they told me. I believe they did have some apprehension, because of the first defendant’s belligerent attitude generally, as to what might happen in relation to peace within the family should they bring an application. However, as a counterbalance to this it is my view that the family was so dysfunctional in any event that this consideration probably cannot prevail.
It is my impression that although they spent time with their grandfather in earlier years they did not spend so much time in the time leading up to his death probably because he and their mother Heidi Lang had a falling out. I believe their evidence was more slanted to earlier times than recent times.
I thought the second defendant Peter Fetzer was a most unsatisfactory witness. I formed the view that he said anything which he thought would help his cause and likewise I was not impressed by the evidence given by his partner, Sonia Grace. I thought she was merely attempting to play what she perceived to be her role in helping his cause and did not give reliable evidence. It was a case of misguided loyalty.
In relation to both Angela and Heidi Lang I thought they gave evidence honestly and demonstrated to me the extent of the dysfunction within the family. Angela and Heidi are estranged from each other and have been so for some time and they are both estranged from Peter. They have each inherited, as a result of the shares in the trusts operated by the deceased, considerable and valuable assets and the only time they ever co-operate (or communicate generally) is in relation to the matters related to the businesses when they have no choice but to co-operate.
Having said all that, it is my view that although I believe that the plaintiffs to varying extents were apprehensive of the defendant Peter Fetzer and were privy to two threats he made over the years, this does not give a sufficient explanation as to why they waited two years before initiating proceedings. One threat was shortly prior to when they took out the application and was not a threat in the real sense but colourful advice on an unrelated issue. That is, unrelated to the estate.
The plaintiffs’ submissions
I have already summarised at [6] in these reasons the three main heads of argument upon which the plaintiffs rely for their application made out of time.
It was put to me by Mr Stewart for the plaintiffs that the Court should have regard to the subjective factors influencing the claimants not to bring an action earlier, in this case the dissuasion by their mother and the alleged intimidation by their uncle. Mr Stewart submitted that the matters relevant to the exercise of the discretion to grant an extension of time were, one, the length of the delay, two, the reasons for the delay, and three, any prejudice caused to the defendants. He relied on In the Estate of Barry (1974) 9 SASR 439. Zelling J in that matter adopted a test applied by Sim J in Hoffman v Hoffman (1909) 29 NZLR 425. Sim J said:
… an extension of time should be granted in any case where the failure to apply earlier arose from honestly ignorance by claimants of their rights and the defendants will not be placed by such extension in any worse position … the issue in each case is: is it just that leave be granted?
Mr Stewart submitted that the four plaintiffs had been exposed to the bullying conduct of the second defendant during their upbringing. He mentioned an incident at the airport where the second defendant attempted to hold up a plane by running onto the runway and standing in front of the aircraft. He also mentioned an incident of a threat by the second defendant to “knock their heads together”. That is the threat I have referred to earlier. Finally he mentioned an incident in which Nikki Lang said that her uncle made a threat to “slit her throat”, unless she repaid a debt.
I thought that Mr Stewart’s cross-examination of both Peter Fetzer and Sonia Grace was effective and to the point. He exposed them as being less than frank in their statements to the court. However, as I will later find, it is not sufficient to get the plaintiffs past the barrier they have to overcome in making their application some two years out of time.
Mr Stewart submitted that because of the plaintiffs’ youth and the attitude and the behaviour of the second defendant there is a good reason why they did not bring their proceedings in time. When I asked him what had changed to cause them to bring the proceedings at this time he submitted that it was a build-up of courage which came with increased maturity.
At the relevant time when the proceedings were brought Justin Lang was just a few weeks short of his 23^rd birthday, Nikki was 29, Christa was 31 and Chloe was 19.
Mr Stewart submitted that Chloe was in a different position in any event because she was the youngest and was intellectually disadvantaged by her triple X syndrome. Mr Stewart pointed to the evidence of the plaintiffs’ mother Heidi Lang to the effect that she did not encourage the children to become involved in litigation and also for the reason that she confirmed the threat in relation to Nikki made by the second defendant.
The submissions of the second defendant (Peter Fetzer)
Mr White for the second defendant added to the factors relevant to extending time referred to by Mr Stewart as assessing the strength of the claim and in particular whether the plaintiffs have been left without adequate provision for their proper maintenance, education and advancement was also relevant. Mr White additionally suggested that the size of the estate was to be taken into consideration.
Mr White analysed the evidence of the four plaintiffs. He emphasised the case of Nikki who waited until she got the payment of $100,000 before she agreed to make the application. He submitted that there was no evidence showing there was any actual obstacle which prevented the plaintiffs from going to see a lawyer.
In relation to the alleged threats, he dealt with the alleged threat to knock the plaintiffs’ heads together. I note the second defendant actually admits saying this but says it was in a different context. It appears from the evidence of the plaintiffs that he is correct and that it was in a different context. Mr White submitted that it had nothing to do with the estate and it was in fact connected to the impending marriage of Chloe and her partner. That of course would not necessarily mean that the plaintiffs were not intimidated, even if the threat was not related to the estate. It was after that threat that the decision to make this application was made.
Mr White emphasised the nature of the application under s 8(1) of the Act. He emphasised the fact that there were substantive rights being sought by the plaintiffs and it was not a matter of merely attempting to restore substantive rights which had lapsed due to the passage of time.
Mr White emphasised that the plaintiffs knew of the will of their late grandfather two or three weeks following his death and they knew that they could seek to interfere. Christa in particular kept questioning her parents. Mr White submitted that she was mature woman and there was nothing stopping her from seeing a lawyer. This was also the case with Nikki.
Mr White characterised the plaintiffs’ evidence as an attempt to build up the second defendant as a “bogey man”. In relation to Christa, Mr White pointed out that she continued to question her parents for some twelve months. Mr White noted that it did cross her mind to go and see a lawyer and in relation to the incident regarding knocking their heads together she said she felt threatened but did not resent her uncle telling her to get along with her siblings. She said she was never threatened in relation to the estate. Nikki, as Mr White pointed out, waited for the $100,000 to be safely in her hands before taking action. She says that they all discussed the affidavits before swearing them. She also discussed with her mother about wanting to see a lawyer. In relation to the incident relating to a threat to cut her throat she did not report this to her parents or the police but says she was upset by it. Mr White submitted that her mother’s evidence is unsatisfactory on this topic and does not corroborate Nikki’s version of events.
He points to the evidence that Justin has been observed getting along with his uncle and indeed it was Justin who his uncle took fishing on one occasion, although the second defendant denies this. On Justin’s evidence he spent a day fishing with his uncle.
Mr White emphasises the delay of almost two years and the lack of a satisfactory explanation for the delay. Mr White’s submissions can be summarised by the fact that the four grandchildren were not kept in the dark. They knew what was going on. They knew that their cousins had got more than they had from their grandfather and they knew that they could interfere, namely, that they had the right to go and see a lawyer and get advice and there is just simply no satisfactory explanation as to why they changed their minds some two years later.
Finally Mr White pointed to the fact that there is prejudice to the defendants because of the fact that the estate has been substantially administered. If these claims are allowed out of time it will prolong the administration of the estate and in all probability exhaust the estate if legal fees are paid out of it. He finally points to the potential for failure in relation to grandchildren’s claims where the grandchildren have been provided for by the grandfather. It cannot be shown, Mr White submits, that the testator ignored his responsibilities and he further submits that a provision of $100,000 each for the grandchildren is generous. Mr White submitted that it was obvious that the testator has arranged his affairs specifically to ensure that his estate was limited and that provision was made outside of the estate for the grandchildren.
It is noteworthy that of the remaining $250,000 which is undistributed, under the will each of the defendants gets a third. The plaintiffs could only expect to get a share of their mother’s entitlement, namely, one quarter of one third of $250,000, or in simple terms just over $20,000 each.
The submissions of the third defendant (Angela)
Mr Hurren for Angela Fetzer submitted that the evidence led against Mr Fetzer by the plaintiffs relates to apparently irrational behaviour by him some 25 years ago. That is the incident at the airport. He points out that the threat to cut Nikki’s throat was in 2001 and that the knocking heads together incident was one and a half years after the time limit expired. Mr Hurren noted the incident occurred in April 2012, and proceedings were issued only a few months later in September 2012. In other words, the incident did not deter them from issuing proceedings.
He submitted that if it was a question of building up courage as submitted by the plaintiffs then it seems odd that after an allegation of knocking their heads together they would then proceed and issue the proceedings.
Mr Hurren’s main point is that the plaintiffs have simply rested their case on the fact that they were not aware of the time limit in which to make a claim but they were aware of their rights to make a claim. In those circumstances he referred to the decision of In re Gusket [1947] VLR 212 in which the plaintiff was aware of her rights to contest the estate but was not aware of the time limits in which to make the application. Herring CJ held that it was not enough for an out of time applicant to assert they did not know about the time limit as a reason to give an extension. The court held if a person has knowledge of their rights to contest an estate, the application should have been made within the time limits.
Mr Hurren submits that the evidence of the plaintiffs is that they are relying on the second limb, namely, that they did not know the time limit as distinct from the first limb being their right to make a claim. This knowledge is stated in each affidavit to be two to three weeks following the death of Hans Fetzer. He submitted in those circumstances the law has made it clear that that is not sufficient. He submitted that the real reason why the claims were made late was that two of the plaintiffs had received their $100,000, had spent in one case all of it, and in another case most of it. He said the reason for this application was simply that they had run out of money.
He submitted that although a 16 year old, Chloe in this case, would not necessarily be expected to understand the concept of the grant of probate, a 16 year old would nevertheless understand that they could challenge. This was especially so given her relationship with her mother who did not encourage a challenge. He submitted that her position was different from the others. She has the support of her mother who is now wealthy as a result of her inheritance. She is about to be married to someone with a university degree and would be hard put to establish any entitlement under the provisions of the Act.
He also mentions the prejudices referred to by Mr White and points to the delay and in particular the inability for the finalisation of the various businesses which the children of the testator have inherited and the fact that all of this will be put on hold until the resolution of this matter.
The role of the fourth defendant (Heidi)
Although she gave evidence when called by the plaintiff and was cross-examined, the fourth defendant was a reluctant party in giving evidence. She was represented by Mr Jappe who really took no part in the proceedings other than indicating that they were prepared to abide the decision of the Court.
Consideration

The plaintiffs were aware generally of the provisions of the will within a few weeks of their grandfather’s death. There were discussions within the family about their dissatisfaction on hearing that their cousins had received four times the amount provided for them.
They were told by their mother, the fourth defendant, who took a pragmatic view, that they should effectively be grateful for what they got.
The real reason that they did not take any action, it seems, was because they did not realise that there was a time limit running. It appears that they appreciated that they may have had rights to take action but they did not seek any advice and took no action until out of time by about two years.
It was put on their behalf that they were discouraged because of the overbearing and belligerent attitude of their uncle, the second defendant. However, despite his unsatisfactory evidence and my impression that he gave evidence to suit himself there is no evidence that he made any relevant threats direct or indirect which could have caused the plaintiffs any concern in relation to the bringing of an action. I assessed him to be a bully and to some extent a bluff merchant. His threats were not to be taken seriously as it was his manner of asserting himself and I believe that is how the plaintiffs viewed him.
As against the plaintiffs there is the fact that, although apparently apprehensive of their uncle and possibly for good reason, nothing really changed in the time between their grandfather’s death and the time in which they made their application. There are no new facts or circumstances. It was not a case like Barry where there was an honest ignorance by the claimants of their rights. I do not accept that the factor which changed and caused them to issue the application was their added maturity because of the effluxion of time. By the date of their grandfather’s death the first three plaintiffs had been adults for some years and were not naïve in the ways of the world. Those same considerations do not apply necessarily to Chloe but she was cared for by her mother. One assumes that her mother looked after her interests. There is no suggestion that her mother specifically discouraged her from taking any action. This is aside from her mother’s general advice to all the plaintiffs that they should be grateful for what they got. I do not consider that Chloe, because she was in the care of her mother, should be looked at differently.
The defendants are prejudiced in their finalisation of the estate as any action by the plaintiffs would involve a complicated trial and possibly a particularly complicated accounting exercise in relation to the administration of the trusts of the deceased. There is nothing before me at the moment to assist in relation to that accounting exercise and I have to assume that there is only $250,000 or one-quarter of one-third of that available for distribution on a successful claim.
Conclusion
For the reasons which I have set out it is my view that this application must fail. The plaintiffs are unable to satisfactorily explain the length of the delay. A lot of time was devoted in their evidence relating to the character and nature of their uncle. I am not convinced at the end of the day that they have overcome the difficulty and onus they bear in this matter to provide sufficient reason to justify an application out of time.
Another factor against granting the application is the consideration of the strength of the claim and the situation in which any grandchildren are placed when they make such a claim. On the face of it, they have a difficult onus in establishing any entitlement. The defendants will say the evidence of the grandchildren has been exaggerated and is inaccurate. There is strong contested evidence which, at best for the plaintiffs, is evenly balanced. Because they have the difficulties of any grandchild not provided for, and because their evidence is disputed, it is impossible to say that they have a potentially good claim. In addition, it seems to me on the limited evidence available, that the plaintiffs may have difficulty in establishing that they have been left without adequate provision for their proper maintenance, education and advancement.
Finally, they have been provided for to the extent of $100,000 each. The testator gave careful consideration, from an examination of his will and his “letter of wishes” to many people including the plaintiffs.
I therefore refuse the application.