Lees v Tighe

[2011] QDC 27

[2011] QDC 27

DISTRICT COURT

CIVIL JURISDICTION

JUDGE JONES

No 499 of 2011

BERIC LEES	Applicant
and
WENDY NITA TIGHE AND ANOTHER	Respondents

BRISBANE

..DATE 10/03/2011

ORDER

HIS HONOUR:  Well, I will give my reasons ex tempore.  I think,

in these sorts of matters it is preferable to deal with them

as quickly as is practicable, but I reserve the right to tidy

them up in due course before they make their way on to the

Court's website.

This is an application seeking the following

relief; that time be extended under the Succession Act 1988 to

17 February 2011, and that adequate provision be made for the

proper maintenance and support of the applicant pursuant to

section 40 and 41 of that Act.

The factual background to the application, which I do not

intend to go into in great detail, is relevantly that

the deceased died on 5 May 2010.  She was survived by her son,

Beric Lees, who is the applicant in these proceedings, and by

her daughter, Wendy Tighe, who is the respondent.

The deceased made her will on 20 February 2004 in which she,

among other things, appointed the respondent as the sole

executrix and trustee and gave her the estate upon trust to,

among other things, pay debts, funeral and testamentary

expenses, distribute gifts as specified under the will and to

otherwise distribute the property in accordance with the will.

It is not doubted that the most significant asset of the

estate was a unit at Caloundra said to be worth in the order

of $1 million.  Other assets included personal items and

furniture.  The personal items included a number of items of

jewellery.

Leaving aside specific gifts to the grandchildren of the

deceased, the respondent received the bulk of the estate.  By

referring to the breakup as described in Mr Clutterbuck's

outline of submissions, Mr Clutterbuck appearing for the

applicant, the respondent received a number of items of

jewellery and some furniture, but significantly the interest

that the deceased held in the unit at Caloundra.

The applicant received specific requests in respect of a China

cabinet, together with its contents and some framed

photographs.

On 8 February 2011, the respondent finalised the

administration of the estate and took steps to distribute the

various gifts, including gifts to the grandchildren of the

deceased.

There are some aspects of the estate yet to be finalised, and

I will come back to those in a moment.  Relevantly, a

transmission application to have the Caloundra unit registered

in the name of the respondent was lodged in the office of the

Registrar of Titles on 10 February 2011.  A confirmation

statement from the Registrar of Titles confirmed that from 14

February 2011 the respondent became the registered proprietor

or the registered owner of that unit.

The application brought is out of time, by my calculations, in

the order of 10 to 12 days.  It was recognised by both counsel

that the time limit prescribed under section 41(8) of the

Succession Act; namely, the time limit of nine months after

the death of the deceased, is not simply a procedural matter

easily dispensed with.

Both counsel referred me to the decision of Justice White, as

she then was, in Bird v. Bird [2002] QSC 202 where her Honour

relevantly said in paragraph 22:

"Time limits in statutes are for good reason.  Malcolm C J in

Clayton v. Australia [1993] 9 WAR 364 quoted, 'with approval

the approach of McGarry VC in Re Salmon (deceased)' 1981

chancery 170 at 175.  "...the time limit is a substantive

provision laid down in the act itself, and it is not a mere

procedural time limit imposed by rules of court which will be

treated with indulgence appropriate to procedural rules.  The

burden on the applicant is thus, I think, no triviality:  the

applicant must make out a substantial case for it being just

and proper for the Court to exercise its statutory discretion

to extend the time."

By reference to various cases, in deciding whether or not to

exercise the discretion, a number of factors have to be

brought into account.  Relevantly, in this case, in my view,

they include the extent of the delay.  Here, as I have already

said, it is only a matter of days, not weeks.  Second, any

explanation for the delay.  Here the explanation for the delay

is said to be the result of an oversight or error on the part

of the applicant's solicitor concerning the final day on which

the filing of an application could be completed.  Third, the

prejudice of the beneficiaries has to be taken into account as

a consequence of any delay.  Here some prejudice could not be

ruled out, however, on balance, I do not consider the question

of prejudice works against the applicant in this case.

The final two matters are the ones, in my view, central to the

outcome of the case. As much, was really acknowledged by

counsel.  It was around these matters that their respective

arguments really centred, and that is whether there was any

conduct, unconscionable or otherwise

inappropriate on the part of the respondent, concerning the

distribution of the estate.  And wrapped up with that issue,

finally, the likely prospects of the applicant being

successful if the proceedings were allowed to continue.

If I could pause here for just a moment to make two

observations:  First, as I have said, the estate has not yet

been finally determined.  According to the affidavit of the

respondent, which was not challenged, as at 8 March 2011,

there remained a positive balance of $2,276.99, less

accounting fees and tax.  Second, leaving aside for the moment

questions concerning the unit at Caloundra, I consider the

affidavit of the applicant, and particularly the matters

summarised in paragraphs 9 (d), 10, 11, 12, 13 and 15 of

Mr Clutterbuck's outline, provide evidence of at least

reasonable prospects of the applicant succeeding if this

matter were allowed to proceed.

However, it is also sufficiently clear, in my view, that if

the unit at Caloundra cannot be traced or otherwise bought

into account in dealing with the estate, then given the

balance of the estate otherwise available, the applicant, on

balance, would be likely to fail.  Simply, insufficient funds

are available.

As I have said, as counsel agreed, the real issues are the

behaviour of the respondents and the status of the unit at

Caloundra.  Perhaps it would be relevant here to note that

under section 44(3) of the Succession Act 1981 "No action shall lie against the personal

representative by reason of the personal representative having

distributed any part of the estate if the distribution was

properly made by the personal representative."

Also under the laws of this State, where an estate has been

fully administered, it has been consistently held that an

extension of time ought not be granted save for what appear to

be exceptional circumstances.

In the judgment of Baker v. Williams &

Another [2007] QSC 226, the Chief Justice at paragraphs 8 and

9 said:  "In 1966, the Full Court in Re Donkin deceased,

Reichelmann and Donkin [1966] Qd R 96 determined that, 'Where

an estate has previously been fully administered, an

application for an extension of time for the bringing of such

an application cannot proceed because there remains no estate

from which further provision may be made.'" Hanger and Gibbs JJ took that view.  Gibbs J dealt with the

issue comprehensively as follows, at pages 113, 14 and 17.

Thereafter, the Chief Justice went on to quote from the

decision of Gibbs J in Donkin that, "The words, the estate of

the testator (the statutory reserve from which further

distributions may be ordered) refer to all property that

belong to the testator and has not yet passed to any other

person absolutely in his own right.  Once the title of a

beneficiary has become complete, so that he holds in his own

right the property given to him by the will, that property

ceases, in any ordinary sense, to be part of the estate of the

testator and becomes part of the estate of the beneficiary.

The (Testator's Family Maintenance Act) gives no power either

to the Court to order that provision to be made out of the

estate of the beneficiary or to the executors to recover

former assets of the testator's estate that have been

distributed to the beneficiaries entitled to receive them.

And then further:  "Once an asset ceases to be an asset of the

testator's estate, and the beneficiary to whom it is given has

received it in his own right, there is no power to subject

that asset to the incidence of an order under the acts, or to

require the beneficiary to restore the asset to the estate or

to make a payment in satisfaction of the order."

Here the estate is yet to be fully administered, but title in

the unit vested thin respondent on 14 February 2011.  Other

gifts under the will were finalised by the respondent on 8

February 2011.

The decision of Donkin referred to by the Chief Justice in

Baker v. Williams & Another and has been referred to with

approval and a number of other cases.  I will mention just two.

Firstly, in the decision of his Honour Justice Keane, as he

then was, in Holdway v. Arcuri Lawyers [2009] Qd R 18; and by

Justice McMeekin in Curran v. McGrath [2010] QSC 172. Justice

McMeekin dealt with that particular matter at first instance.

In paragraph 23, Justice McMeekin referred to the passage from

Re Donkin, to which I have already referred.  That being those

elements of the judgment of Justice Gibbs as he then was.

Justice McMeekin at paragraph 24 then went on to say:  "The

question then is when does property cease to be part of a

testator's estate?  The principles that apply were most

recently considered by the Court of Appeal in

Holdway v. Arcuri Lawyers [2008] QCA 218 by Keane JA as he

then was."  The principles that Keane JA identified from the

authorities can be summarised as follows:  "(A), a transfer of

real property of a deceased by an executor to himself as a

beneficiary under the will, will usually be regarded as

affecting a distribution of the asset to the beneficiary.

(B), the question of whether there has been an assent by the

executor such as to affect the distribution of the beneficial

title to an asset is a question of fact to be determined on

all of the circumstances of the case.  (C), once executors who

are also trustees have got in the estate and performed the

duties of their office they thereafter hold the property

remaining vested in them as trustees for the beneficiaries

under the will and, at that point, those assets cease to be

part of the estate of the testator."

And then, "(E), in absence of evidence to the contrary, it

will be assumed that an executor intends to do what is right,

so despite any transfer of assets by an executor to himself as

beneficiary the asset nonetheless will remain available to the

executor to meet the debts, if any, of the estate if any are

outstanding."

By reference to the cases to which I have referred, it seems

to me that the application must fail, unless I am sufficiently

satisfied that the behaviour of the respondent was, in effect,

to use the language of the cases to which I am about to refer,

designed to deliberately avoid or defeat the applicant's

claim.

In the Court of Appeal, decision of Curran & Ors v. McGrath

[2010] QCA 308, that being an appeal against the decision of

Justice McMeekin.  And here I should pause to note that during

argument, Mr Nevison comforted me by advising that that part

of the judgment of Justice McMeekin, to which I have referred,

was not disturbed on appeal.

In the Court of Appeal decision Justice Muir, in appeals, in

paragraph 48, said in part, "The authorities do not establish

that there is absolute prohibition on distributions by

executors while a claim on the estate is pending or

threatened, but an executor who distributes estate property in

such circumstances runs the risk of being held personally

liable to make up for any shortfall in the assets available to

meet the claim."

In paragraph 46, his Honour said, "The appellants relied on Re

Faulkner.  In that case, the respondent executors distributed

the estate assets after the applicant had made application for

relief under section 41(1) of the Act within time and after

the Court had made directions for the conduct of the

proceeding.  The applicant applied by originating summons,

pursuant to section 8(1) of the Trusts Act 1973 for an order

that the transfers of the relevant properties be set aside.

The Judge, Moynihan J held that, 'It was impossible to avoid

the conclusion that the respondents had made the distribution

for the purpose of defeating the applicant's claim.'  He found

that the applicant had, at least, a 'contingent interest in

the trust property and a right of due administration in

respect of the trust property sufficient to give her standing

to make the application.'"

The core of his Honour's reasons is to be found in the

following passage.  His Honour then referred to the following

passage from Justice Moynihan in Re Faulkner.

"The applicant also has a right of due administration in

respect of the trust constituted by the will.  A trustee who

has received notice that a fund in his possession is or may be

claimed is liable to the claimant for dealing with the

property in disregard of the notice should the claim prove

well founded."

His Honour then went on to say, "Distribution with notice of

claim under similar legislation was held to be a failure by

the executers to provide for contingent liabilities so as to

constitute a breach of trust."

Reference is then made to the case of Re Winwood (Deceased).

There are a number of distinguishing features between the

facts in this case, and cases such as those referred to in

Faulkner, being Winwood and the Guardian Trust and Executers

Company case.

Those cases, as best as I can discern, involved

applications brought under trust legislation and not the

legislation in issue here. However I do not think that is a

definitive or determinative in anyway.

It is of note that in Faulkner a claim had already been

made and, in fact, directions had been made by the Court for

the future conduct of the case.  The distribution, in the face

of those facts, led Justice Moynihan to conclude that it was

impossible to reach any conclusion other than the

distribution was made so as to avoid the claim.

The other case to which his Honour, Justice Moynihan, referred

to in Faulkner was that of Guardian Trust and Executor Company

of New Zealand v. The Public Trustee of New Zealand [1942]

Appeal Cases 115 at 127. A decision of

the Privy Council.

The relevant passage is at 127, but before I read that I

should note that, as Mr Nevison pointed out, that case is now

quite dated in a number of respects and was dealing

specifically with New Zealand legislation. But that aside it

still seems to me to be worthy of consideration, particularly

in circumstances where it was referred to by Justice Moynihan

in Re Faulkner, that being a decision in 1999 and then, again,

referred to with apparent approval by his Honour Justice Muir

in Curran. It being a decision of the Court of

Appeal in 2010.  At page 127 Their Lordships relevantly said,

"The question to be decided is whether they are by reason

thereof liable to make good the said sum to Ms Smith's estate.

There does not appear to be any statute enforced in New

Zealand that governs the case.  It falls, therefore, to be

decided in accordance with the well established principles of

equity.  One of those principles is that, 'If a trustee or

other person in a fiduciary capacity has received notice that

a fund in his possession is, or may be claimed by A, he will

be liable to A if he deals with the fund in disregard of that

notice should the claim subsequently prove well founded.'"

To my mind, this application can be decided by determining

whether or not, to use the words in Faulkner;  “The respondent

acted so as to defeat or avoid a claim” or to

use the words in the Guardian Trust case, "To have acted in

disregard of the notice to defeat the claim." Those circumstances exist here.

Prima facie, the respondent was entitled to proceed on the

basis that any claim against the estate would be brought

within the timeframe prescribed under section 41 of the Act,

namely nine months after the date of death.  Indeed, to an

extent, that expectation, if anything, was reinforced by the

letter sent by the applicant's solicitors which relevantly

stated that the application would be made within the time

"Mandated".  That could only be a reference to the time limit

prescribed by the Act.

No representations were made by the respondent that she would

not deal with the estate before a claim was received.  And

while the transmission application was executed on 27 January

2011 it was not lodged until after the time limit had been

expired.

In paragraphs 8, 9 and 10 of the respondent's affidavit, she

deposes, "On or around 8 July 2010, I was advised by my

solicitors, Messrs Rees R & Sydney Jones' solicitors off

Rockhampton that my brother, Beric Lees, the applicant herein,

had notified their office by way of letter from his solicitor,

Mylne Lawyers of the Gold Coast, that he intended to file a

Family Provision application in the Court within nine months

of the deceased's date of death.

The date, which is nine months from the date of the deceased's

death, was Saturday, 5 February 2011.  Following the close of

business on Monday, 7 February 2011, I contacted my solicitor

and made inquiries as to whether their offices had been served

with any originating application.  I was informed by my

solicitor that, to their knowledge, no application had been

filed in the Court by the applicant, and they had not received

notice from the applicant's solicitor that the applicant had,

or intended to imminently file such application.  On 8

February 2011, I instructed my solicitor, though I intended to

administer the deceased's estates in accordance with the

deceased's will."

It is also relevant in this regard that the letter referring

to the claim was dated 8 July 2010.  Most of the documents

sought in that letter were provided by the respondent's

solicitor by 12 July 2010.

In paragraphs 6 to 9 of the affidavit of Ms Gillard, it is

deposed that, "On or about 9 November 2010, Mr Clutterbuck was

engaged as counsel in the matter, and the same day the

applicant met with Mr Mylne and Mr Clutterbuck in chambers in

Brisbane to provide instructions.  On 22 December 2010, at

approximately 1.03 p.m., Mrs King of this office telephoned

the respondent's solicitors to request a copy of this death

certificate of the late Mrs Lees."

And then in paragraph 8:  "On or about 22 December 2010, Mylne

Lawyers received a letter by facsimile from the respondent's

solicitor enclosing a copy of the death certificate of the

late Mrs Lees, recording the date of death as being 5

May 2010."

And then in paragraph 9:  "On or about 16 February 2011, I am

advised by Mr Mylne, the principal of Mylne Lawyers, and

verily believe it to be true that when Mr Mylne was reviewing

the applicant's forwarding affidavit material it came to his

attention that a notation on the office file recording that

the applicant was required to make an application to Court on

or before March 2011 was incorrect and should have read 5

February 2011 or the next business day being 7 February 2011."

It seems to me that the application could have been brought at

any time after, at least, 19 November 2010.  No real

explanation has been provided as to why the matter was left, or

what appears to be left, relatively unattended until 16 February

2011 when the mistake as to the date was discovered.

The reference to the paragraphs, to which I have referred in the

affidavit of the applicant, suggest to me, and leaves me to

conclude, that I do not consider that the respondent acted in

disregard of the notice.  It would appear that she acted

having regard to it.  To put it another way:  I do not

consider that the behaviour of the respondent is such to

justify the extension sought.  As I have said, prima facie, in

my view, absent any persuasive reason, which I have not found

here, the respondent was entitled to act at the conclusion of

the nine month period.

In reaching this conclusion, I am conscious that the applicant

may or will suffer some hardship.  However, as was recognised

by counsel on both sides it is at least arguable that a remedy

may lie elsewhere.  Albeit, perhaps more costly and time

consuming. But in any event I do not consider that those are

factors that would justify making the orders sought.

Also, action may lie against the respondent personally for not

acting properly in the distribution of the estate. But

whatever options might be open to the applicant, they do not

lie against the estate.

For these reasons the distribution of the property and

more particularly the distribution of the unit at Caloundra

has been lawfully finalised in my view.  Accordingly, the application is dismissed.  And I will hear from the

parties as to costs.

...

HIS HONOUR:  On balance, whilst I consider the application for

costs on an indemnity basis not to be, as sometimes is the

case, as Mr Clutterbuck pointed out, based mainly bluster, here I

think the application for costs on an indemnity basis is not

without some merit. But on balance I do not consider that the

application was so hopeless as to be doomed to fail nor could

it be said, in my view, on any reasonable construction that it

could be described as being vexatious or otherwise an abuse of

process.

Therefore, on balance, costs will be ordered on a standard

basis.

...

HIS HONOUR:  The orders will be in the terms that has been

provided.

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