Miljanovic v State Trustees Limited (Ruling)
[2016] VCC 1175
•18 August 2016
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
FAMILY PROPERTY LIST
Case No. CI-15-03445
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Estate of RONALD FRANCIS OLIVER, deceased
| MARCELLINE MARY MILJANOVIC | Plaintiff |
| v | |
| STATE TRUSTEES LIMITED (ACN 064 593 148) (which is sued as the Trustee of the Estate of RONALD FRANCIS OLIVER, deceased) | Defendant |
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JUDGE: | HER HONOUR JUDGE KINGS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1 August 2016 | |
DATE OF RULING: | 18 August 2016 | |
CASE MAY BE CITED AS: | Miljanovic v State Trustees Limited (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2016] VCC 1175 | |
RULING
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Subject: PRACTICE AND PROCEDURE – ADMINISTRATION AND PROBATE
Catchwords: Summons seeking summary judgment – application by defendant under s62 and s63 of the Civil Procedure Act 2010 for summary dismissal of application by plaintiff on the basis that it has no real prospect of success at trial – application by plaintiff daughter of deceased under s99(2) of the Administration and Probate Act 1958 (Vic) for extension of time to claim further provision under s91 of the Act – final distribution of estate
Legislation Cited: Civil Procedure Act 2010, s7(1), s8(1), s9(1)(a), s62, s63, s64; Administration and Probate Act 1958 (Vic), Part IV, s91, s99; Mental Health Act 2014 (Vic); County Court Miscellaneous Rules 2009, Order 13
Cases Cited: Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2012] VSC 163; Re Barrot (Dec’d) [1953] VLR 308; Ashhurst v Moss (2006) 14 VR 291; Re Lauer (Dec’d) [1984] VR 180; Re Salmon (Dec’d) [1981] Ch 167; Warren v McKnight (1996) 40 NSWLR 390; Re Wherrett [1963] Tas SR 178; Valbe v Irlicht [2001] VSC 53; Borg v Hawke [2004] VSC 279; Easterbrook v Young (1977) 136 CLR 308; Re Largo (Dec’d) [1984] VR 706; Dawson & Ors v Fitch & Ors (2002) 84 SASR 20; Gilchrist v Equity Trustees Ltd [2011] VSC 107; Public Trustee v J A Kidd [1931] NZLR 1; Groser v Equity Trustees Ltd (2007) 16 VR 101; Barber v State of Victoria [2012] VSC 554; Bird v Bird [2002] QSC 202
Ruling: Summary judgment granted for the defendant. The proceeding is dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J O’Bryan | Russell Kennedy |
| For the Defendant | Mr A Verspaandonk | State Trustees Limited |
HER HONOUR:
1 By Summons dated 18 May 2016, the defendant sought orders:
“1. Pursuant to sections 62 and 63 of the Civil Procedure Act 2010, there be summary judgment for the Defendant on the ground that the Plaintiff’s claim has no real prospect of success.
2. Such further or other orders including as to costs as this Honourable Court deems fit.”
2 My ruling is sought in this instance as to whether the Court should exercise its discretion pursuant to s63 of the Civil Procedure Act 2010 to grant summary judgment for the defendant.
3 In the proceeding against the defendant, the plaintiff makes an application to the Court to extend the time to claim further provision from the estate of the late Mr Ronald Francis Oliver (“the deceased”) pursuant to s99 of the Administration and Probate Act 1958 (Vic). If the Court grants leave, the plaintiff seeks an order that such adequate and proper provision for the maintenance and support of the plaintiff be made out of the deceased’s estate pursuant to s91 of the Administration and Probate Act.
4 Both parties provided written submissions, which both counsel addressed before me in court. I have also read the affidavit of Mr Jose Ramon Paz, the Senior Trust Consultant employed by the defendant, sworn on 19 May 2016.
Background
5 Whilst the facts surrounding this application are not in contention between the parties, it is necessary to outline the relevant background.
6 The deceased died on 5 September 1993 and left a Will dated 23 November 1983 (“the Will”).
7 The deceased appointed Mr Garry Andrew Nicholson, solicitor, as the Executor and Trustee of the Will pursuant to paragraph 1 of the Will.
8 In accordance with paragraphs 2 and 3 of the Will, the deceased gave, devised and bequeathed his estate as follows:
(i) A bequest to the plaintiff in the sum of $6,000 free of all duties;
(ii) To his Trustee upon trust, a life interest in the property at 81 Rosemary Crescent, Frankston to the plaintiff; and
(iii) To his Trustee upon trust, income from the residuary estate for the life of the plaintiff, consisting principally of the property at 9/21 Williams Street, Frankston (together, “Trust properties”) and thereafter, the residue held for the plaintiff’s children as tenants in common until the youngest attains the age of twenty-one years.
9 On 13 January 1994, Mr Nicholson obtained grant of probate of the Will.
10 Subsequently, I understand that the plaintiff received the bequest in the sum of $6,000 and lived at 81 Rosemary Crescent, Frankston whilst receiving income from the residuary estate pursuant to the Will.
11 On 11 September 2001, the defendant received letter correspondence from Mr Nicholson’s legal representatives whereby Mr Nicholson requested that the defendant take over the role of administering the Trust of the deceased’s estate.
12 On 22 October 2001, Mr Nicholson and the defendant executed a Deed of Appointment (“the Deed”). The Deed provided, amongst other things, that:
(i) Mr Nicholson wished to retire as Trustee and the defendant wished to be appointed as Trustee; and
(ii) The Trust properties would, upon execution of the Deed, be transferred into the name of the defendant as New Trustee.
13 The Deed did not contain any provision whereby Mr Nicholson resigned or otherwise renounced his role as legal personal representative of the estate.
14 Following the execution of the Deed, the defendant executed Transfers of Land of the Trust properties, which were dated 10 May 2002 and exhibited to Mr Paz’s affidavit.
15 On 17 May 2002, the defendant became the sole registered proprietor of the Trust properties as stated on both of the Certificate of Titles, which were also exhibited to Mr Paz’s affidavit.
16 In May 2010, the plaintiff was involuntarily admitted under the Mental Health Act 2014 (Vic) to the Aged Mental Health Unit of Frankston Hospital. She suffers from schizophrenia. Subsequently, I understand she has lived in supported accommodation in Frankston and the Mornington Peninsula.
17 Between 2013 and 2014, pursuant to the Deed and the Will, the defendants, as Trustees, sold the Trust properties and invested the proceeds of sale in managed funds. The Assets and Liabilities Statement for the estate prepared by the defendant states the total sum held as $481,789.25 at 6 April 2016.
18 Counsel for the plaintiff submitted that the plaintiff requires further provision from the estate in order to fund an accommodation security bond for the assisted living accommodation she requires.
19 On 17 July 2015, the plaintiff filed an originating process to seek further maintenance and provision from the deceased’s estate.
Legislative framework
20 Section 63 of the Civil Procedure Act 2010 provides:
“(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim … has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a)…
(b)on the application of a defendant in a civil proceeding;
… .”
(my emphasis).
21 Section 99 of the Administration and Probate Act 1958 provides:
“(1) An application to the Court for a family provision order must be made within 6 months after the date of the grant of probate of the will or of letters of administration, as the case may be.
(2) Despite subsection (1), on application, the Court may extend the period for making an application for a family provision order if, after hearing such of the parties affected as the Court thinks necessary, the Court considers it appropriate to extend the period, including in any case where the time for making an application has already expired.
(3) An application for extension under subsection (2) must be made before the final distribution of the estate .
(4) The making of an application for extension under subsection (2) and any order of the Court in relation to the application for extension does not disturb or affect the distribution or any part of the estate made prior to the making of that application.”
(my emphasis).
No real prospect of success
22 Essentially, s63 of the Civil Procedure Act provides that, on the application of the defendant or on its own motion, the Court may give summary judgment in any civil proceeding if satisfied that the plaintiff’s claim, or part of that claim, has “no real prospect of success”.
23 In Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd,[1] Warren CJ and Nettle JA stated the following useful propositions:
[1][2013] VSCA 158 at paragraph [35]
“35 Upon the present state of authority:
(a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
(c) it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.”
24 Neave JA agreed with this analysis, however, made the following observation at paragraph [41]:
“Nevertheless I am concerned that undue emphasis on the caution with which a court must exercise the power of summary dismissal runs the risk of reinforcing the historical approach to summary dismissal and may result in the legislative liberalisation of the test in s 63 having little impact in practice. That approach would be inconsistent with the objective of reforming the law relating to summary judgment, expressed in s 1(2)(e) of the Civil Procedure Act, and with that requirement that the court give effect to the over-arching purposes of that Act, imposed by s 8.”
25 The effect of s63 is that there is a new, less stringent and more liberal test for summary judgment. The new provisions are directed at achieving the overarching obligations to “facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”.[2]
[2]Section 7(1), s8(1) and s9(1)(a) of the Civil Procedure Act 2010; Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2012] VSC 163 at paragraphs [8] and [10]
26 Caution should be exercised by the Court in terminating proceedings. Proceedings should be terminated summarily when it is clear that there is no real question to be tried. Regard should be had to the fact that, if the application is granted, it will deprive the party of the opportunity to pursue her claim.
27 The question is therefore whether the plaintiff’s claim pursuant to s99 has “no reasonable prospect of success”, that is, no real question to be tried.
Factors as to whether to grant an extension of time
28 Briefly, s99(1) of the Administration and Probate Act is not applicable, as the plaintiff’s claim was not made within six months of the grant of probate, which was 13 July 1994. Instead, the plaintiff made her application for an extension of time on 17 July 2015, which is twenty-two years outside of time.
29 Therefore, the plaintiff seeks the Court’s leave to extend the time within which she can bring a claim under Part IV pursuant to s99(2).
30 Turning to s99(2), the power given to the Court is discretionary and must be exercised judicially.[3] The onus of proof rests on the applicant; that is, the applicant must show reason why her failure to apply within the time should be excused and justify the granting of an indulgence from the Court.[4]
[3]Re Barrot (Dec’d) [1953] VLR 308; Ashhurst v Moss (2006) 14 VR 291
[4]Re Lauer (Dec’d) [1984] VR 180, Re Salmon (Dec’d) [1981] Ch 167
31 Pursuant to the Act, s99(3) and s99(4) qualify the Court’s power; that is, an extension can only be granted before “final distribution” of the estate, and any distribution that occurred prior to the application is not disturbed.
32 The central issue argued between the parties before me was whether there had been a final distribution of the estate, which would preclude the Court’s use of power to grant an extension of time in this instance.
33 As to whether and how to exercise the discretion, the legislation has not been exhaustive.[5] However, a number of authorities have recognised relevant considerations as the reasons for the plaintiff’s delay in making an application and strength of the plaintiff’s claim for provision.[6]
[5]Re Barrot (Dec’d) (supra)
[6]Warren v McKnight (1996) 40 NSWLR 390; Ashhurst v Moss (supra); Re Wherrett [1963] Tas SR 178 at 179-180
(a) The Plaintiff’s delay
34 Counsel for the defendant did not submit that the failure to issue an application within the six months was for a good reason. In my view, counsel seemed to argue that the delay should be excused because the plaintiff finds herself in great financial need, albeit twenty-two years following the grant of probate.
35 However, both parties were in agreement that the application arose twenty-two years later due to the very recent need of the plaintiff for additional provision from the deceased’s estate.
(b) Merits of the Plaintiff’s claim for provision
36 I am not required to determine the claim for further provision. However, counsel for the plaintiff argued that she had a strong claim on the merits. In particular, that the plaintiff has mental health problems and has great practical need for a security bond to reside in assisted living accommodation.
37 It is recognised by the Courts that the mere fact that the plaintiff has an arguable or even strong case for relief in a Part IV claim is not without more a sufficient reason for the Court to extend time.[7] However, to deny an extension of the time in the face of a strong claim could amount to an injustice.[8]
[7]Ashhurt v Moss (supra) per Hansen J at paragraph [110]
[8]Valbe v Irlicht [2001] VSC 53; Borg v Hawke [2004] VSC 279
38 In my view, the merits of the application are not so weak that it would be bound to fail and cause an unjust delay in the administration of the estate by a grant of an extension of time by the Court.
(c) Final distribution
39 Notwithstanding the above, the threshold question is whether there has been a final distribution of the estate to allow the Court to consider whether and how the discretion to extend time should be exercised.
The Defendant’s submissions
40 Counsel for the defendant argued that the Court could not extend time because there had been a final distribution of the estate, as that term was understood in the leading High Court decision of Barwick CJ and Mason and Murphy JJ in Easterbrook v Young.[9]
[9](1977) 136 CLR 308 (“Easterbrook”)
41 The proceeding concerned a widow appellant who sought an extension of time from the Court for further maintenance out of the estate of her late husband, which comprised a single property. The property was registered in the administrator’s name, who also held office as the trustee of the estate. Pursuant to corresponding legislation in New South Wales, the High Court considered whether there had been a “final distribution of the estate”, which prevented the Court from granting an extension of time.
42 Giving great weight to the policy and purpose of the testator’s family maintenance legislation, the High Court, at 316, said that what renders the estate finally distributed:
“… is the actual distribution of the estate, its removal from the hands or name of the personal representative and its placement in the hands or name of the testamentary or statutory beneficiary. … .”
43 Further, at 317:
“It is not without significance that the Wills, Probate and Administration Act, 1898 (N.S.W.), as amended, uses the word ‘distribute’ in the sense of a physical parting with the asset, i.e. by delivery or transfer of title. … . Further, the words ‘distribute’ and ‘distribution’ are used in the Act itself, not in the sense of a change in the capacity in which the personal representative held the asset, but clearly in the sense of a physical parting with that asset and its placing in the hands or name of an intended beneficiary. … It is, in our opinion, only when the personal representative has parted with all the assets which came to his hands by the grant of probate or letters of administration that there has been a final distribution of the estate of the testator or intestate. … .”
44 Relevantly, at 318:
“In our opinion, the expression ‘out of the estate of the testator’ refers to the assets of which the testator might at his death dispose and which have come or could come to the hands of the personal representative by reason of the grant of probate or letters of administration. … In that case, only a complete removal of the whole of the assets of the deceased from the hands or name of the personal representative will prevent the court extending the time for making an application for an order of maintenance. … .”
45 Essentially, the High Court established that final distribution requires some physical parting, by delivery or transfer of title, with the whole of the estate’s assets out of the hands or name of the personal representative and placed into the hands or name of the entitled beneficiaries.
46 In Easterbrook,[10] the High Court found that there had not been a final distribution and were able to grant an extension of time.
[10]Supra
47 Applying Easterbrook, counsel for the defendant submitted that the physical transfer of the Trust properties to the defendant in its capacity as a Trustee, which occurred through executing a Transfer of Land dated 10 May 2002, amounted to a complete removal of all of the assets from the hands and name of the personal representative and thus a final distribution of the estate.
48 Whilst the principles enunciated by the High Court are binding on this Court, the facts in Easterbrook can be easily distinguished to the present case. Here, the personal representative who received assets from the deceased’s estate in that capacity clearly transferred the assets to the defendant to hold in a trustee capacity. In contrast, the High Court considered a situation where the personal representative who had received estate assets in that capacity then retained those assets in a trustee capacity. As such, counsel for the defendant considered its position even stronger than that in Easterbrook due to a clear separation between the legal personal representative and the Trustee of the estate.
49 Counsel for the defendant sought to reinforce its position with the Victorian case of Re Largo (dec’d),[11] which applied Easterbrook. Here, the only substantial asset of the deceased’s estate was a farm. The executor respondents lodged a transmission application at the Titles Office and a transfer of the farm, transferring it to the beneficiaries as tenants in common. The transfer had not yet been registered when the application of extension was lodged.
[11][1984] VR 706
50 Brooking J relevantly said, at 709, that:
“… if the present transmission application and transfer had already been registered, a final distribution would clearly have taken place … .”
and further:
“To begin with, Easterbrook’s Case itself makes it plain that in ss. 99 and 99A of the Administration and Probate Act, ‘distribution’ is an act of delivery or transfer, not something that may result from the transmogrification of the personal representative. … .”
51 Brooking J held that the steps taken by the executors amounted to registration of the property and therefore the physical transfer of the property resulted in a final distribution of the deceased’s estate. Counsel for the defendant submitted that Brooking J’s decision supported its argument even moreso as the Trust properties were actually registered as transferred on the Certificates of Title to the defendant, which thus amounted to a “final distribution” under the Act.
52 Further, counsel for the defendant relied heavily on the Full Court of the Supreme Court of South Australia decision of Dawson & Ors v Fitch & Ors,[12] which cited Re Largo and Easterbrook. This case has been cited with approval in the Supreme Court of Victoria decision of Gilchrist v Equity Trustees Ltd.[13]
[12](2002) 84 SASR 20
[13][2011] VSC 107
53 Lander, Williams and Wicks JJ upheld the decision that the act of the executors transferring the half shares in the deceased’s estate to the widow and Public Trustee on trust for the deceased’s daughters constituted a final distribution, but were divided as to whether legacy monies were distributed.
54 As to the transfer of shares, Lander J, said, at paragraph [65]:
“In my opinion, there has been a distribution of the assets referred to in par 1.1. There has been a complete removal from the hands of the personal representatives of those assets and a complete placement of those assets in the hands of the beneficiaries who must hold those assets upon the trusts erected in the will. All of the documentation necessary to transfer the assets from the executors to the trustees of the trust created in cl 6(ii) of the will was completed. There has therefore been a physical transfer of the assets.”
55 Further, Lander J considered to whom the shares were transferred by the personal representative at paragraphs [66] and [67]:
“If the answer were otherwise and there has been no distribution of the assets in cl 6(ii), it is only because the distribution in cl 6(ii) is to trustees rather than to the beneficiary herself. That cannot be the point of distinction. If it was, it would mean that there could never be a distribution of an asset where the distribution is to a trustee who then holds, in accordance with trusts erected under the will, until such time as the assets vest in the ultimate beneficiary.
That would mean that where, as in this case, there has been a physical distribution of most of the residue in accordance with the obligations imposed upon the trustees under cl 6(i) to the ultimate beneficiary and under cl 6(ii) to the trustees who hold on behalf of the ultimate beneficiary, that in the latter case there has not been a distribution in law but in the former case there has.”
56 Applying Lander J’s comments to the present case, counsel for the defendant submitted that it is irrelevant to my assessment that Mr Nicholson transferred the Trust properties to the defendant rather than the ultimate beneficiaries.
57 Williams J agreed with the analysis and conclusion of Lander J.[14]
[14]See paragraph [99]
58 Wicks J agreed that the act of transferring the shares into the names of the Public Trustee and deceased’s widow amounted to a “distribution”. He said, at paragraph [171], that:
“… Such vesting amounted to a ‘distribution’ of the property concerned within the meaning given to that expression by the High Court in Easterbrook v Young. The vesting could be effected by conventional means such as the transfer of land or shares or an assignment of book debts etc … Such vesting was not to be disturbed by an application for extension of time under the Act or an order made thereon.”
59 In regards to the legacies, a separate bank account in the name of each legatee was set up until each child attained the relevant age set out under the will.
60 Lander J agreed with the Master at first instance, that there had not been a distribution of the bank account. He said, at paragraphs [69] and [70]:
“I also agree with the Master that there has not been a distribution of the $250,000 which has been deposited with the Adelaide Bank. The deposit is held in the name of the estate. While the account has been designated ‘A/C Leneve A Fitch’, there has not been a removal from the hands of the personal representative and a placement of that asset in the name of the beneficiary. There has not been a complete delivery of that asset to the deceased's daughter.
No documentation has been created to effect a transfer from the executors to the legatee’s trustees. This asset has not been dealt with in the same manner as the assets comprising the residue. There has been no physical transfer of the asset from executors to trustees.”
61 It was advanced by counsel for the defendant that this was in complete contrast to the present situation whereby Mr Nicholson executed documentation in the form of a Transfer of Land to effect a transfer from the executor to the defendant Trustee.
62 In Dawson & Ors v Fitch & Ors,[15] a similar factual situation arose where a deed of retirement was executed in order for Mr McFarlane to retire as a trustee and Mr Kennedy to be appointed as the new incoming trustee, along with the other two remaining trustees. Despite finding that the appointment of Mr Kennedy was ineffective,[16] Wicks J considered that:
“… if it had been valid, proceedings by the executors to recover trust assets could be resisted lawfully by him.”[17]
[15]Supra
[16]See paragraphs [186] – [190]
[17]At paragraph [192]
63 Applying Wicks J’s analysis, this further supports the defendant’s position that the appointment of a new trustee to hold the Trust assets would amount to a distribution of those assets to the beneficiaries of the estate.
64 It appears that the decisions of Easterbrook and Dawson & Ors v Fitch& Ors weigh heavily in favour of the defendant’s position.
The Plaintiff’s submissions
65 Interestingly, counsel for the plaintiff also referred me to Easterbrook to support their position as to the final distribution of the estate.
66 Counsel urged me to apply the obiter comments of the High Court regarding Public Trustee v J A Kidd.[18] In Kidd, the testator gave his daughter, who had mental health issues, an annuity for her life, and devised and bequeathed all of his property to his trustees upon trust to convert to money and held the residue on trust for the defendant son. The testator authorised his trustees to appropriate and retain a sufficient part of his estate to answer the annuity for his daughter. The daughter sought further provision and an extension of time under corresponding New Zealand legislation.
[18][1931] NZLR 1 (“Kidd”)
67 Adams J held that once the two executors had completed their duties of that office, they thereafter held the property, remaining vested in them as trustees, for the beneficiaries under the will. Consequently, the whole estate, including the applicant’s annuity, had been distributed and no order could be made.
68 Counsel for the plaintiff emphasised the obiter comments of the High Court in Easterbrook at paragraph [31]:
“We do not understand why in Public Trustee v J A Kidd, …, the court could not have made some provision out of the amount set aside to satisfy the annuity, if it thought that rather than an annuity a capital sum was presently required by the daughter’s situation. For the reasons already given the fact that the money was technically held on trust on the terms of the will did not preclude the court from altering those very terms by an order operating as a codicil. The testator could by codicil have done so; and the order would operate as if he had done so. … .”
69 Further, at paragraph [38], it seemed to the High Court that:
“… insufficient attention has been given to the basic question of the construction of the words of the statute in the context in which they appear, including the evident purpose and policy of the statute.”
70 On this basis, counsel submitted that even if there had been a final distribution, having regard to the legislation, the Court should make provision for the plaintiff out of the monies held by the defendant as Trustee on trust.
71 I acknowledge that in this proceeding, and in Kidd, the beneficiaries are in a similar position in terms of suffering from mental health issues and requiring further provision from the deceased’s estate to afford accommodation. However, in my view, the facts are distinguishable. In the case of Kidd, and indeed Easterbrook, there was continuity of personal representative and trustee, in that both were the same entity. However, in the case before me, Mr Nicholson has retired as Trustee and appointed the defendant to take on the character of the New Trustee. Further, in the case of Kidd, there was a trust created for the sole benefit of the daughter. In this case, the Trust was created for the benefit of his daughter and her children. Consequently, I reject counsel for the plaintiff’s submission that the High Court’s obiter dicta regarding Kidd must be applied to the present facts before me.
72 Counsel for the plaintiff also argued that Easterbrook made clear that the fact that executorial duties had been completed did not necessarily justify the denial of a jurisdiction to make further provision if the estate is not distributed. This approach was confirmed by Gillard J in Groser v Equity Trustees Ltd.[19] However, I understand that the defendant was not reliant upon Easterbrook for this proposition. Instead, the defendant makes clear in its submissions that it is the physical transfer as required by the High Court in Easterbrook that amounts to a final distribution of the estate.
[19](2007) 16 VR 101 at paragraphs [73], [74] and [76]
73 Counsel for the plaintiff also submitted that although Dawson & Ors v Fitch & Ors weighed heavily against her, it was an idiosyncratic example and did not appear to have full regard to the authority of Easterbrook. Whilst Dawson & Ors v Fitch & Ors may not be an authority that binds this Court, a Full Court decision of a South Australian Supreme Court is extremely persuasive. Further, the case upheld the principles established by the High Court in Easterbrook and the authority has been adopted by the Victorian Supreme Court in Ashhurst v Moss and cited by Zammit As J in Gilchrist.
Conclusion on final distribution
74 In accordance with the meaning given to it in Easterbrook, whether there has been a “final distribution” of the deceased’s estate is a question of whether there has been a physical parting of the assets from the hands or name of the personal representative of the deceased’s estate to the Trustee of the deceased’s estate, which can be shown through conventional documentation.
75 The Deed evidences that, on 22 October 2001, Mr Nicholson retained his capacity as the executor and personal legal representative and retired in his capacity as the Trustee; and the defendant was appointed as the New Trustee of the deceased’s estate.
76 On 10 May 2002, Mr Nicholson, in his capacity as personal representative, executed Transfers of Land to transfer the Trust properties to the defendant’s name as a Trustee of the deceased’s estate. On 17 May 2002, the defendant received the Trust properties and held them as a Trustee.
77 In the present circumstances, in my view, there is a clear physical parting of the deceased’s assets from the name of Mr Nicholson to the name of the defendant to hold on trust for the plaintiff as Trustee. The defendant’s case is stronger than in Easterbrook and Gilchrist where the executors and the trustees were not the same entities. According to the principles set out in Easterbrook, the act of transfer of the Trust properties to the defendant amounted to a “final distribution” of the deceased’s estate on 17 May 2002.
78 Applying Dawson v Fitch, in this case, the distribution to the defendant as a Trustee to hold on trust for beneficiaries is a “final distribution” under the Act.
79 For the foregoing reasons, I reject the submission advanced by counsel for the plaintiff that the Court must order the defendant to make further provision for the plaintiff from the deceased’s estate pursuant to the obiter dicta of the High Court in Easterbrook.
80 Section 99(2) of the Administration and Probate Act permits time to be extended only if there has been no final distribution. As a final distribution of the deceased’s estate has occurred, it follows that I am barred by the statute to exercise my power to extend the time for the plaintiff to make an application and hear an application for further provision from the deceased’s estate. It follows that once the assets are gone, there is no estate out of which an order for provision can be made.
81 As the plaintiff cannot make an application for provision out of the estate of the deceased, it necessarily means that her claim cannot succeed as there is no real question to be tried. Consequently, the plaintiff’s claim has no reasonable prospect of success and, in my view, it should be summarily dismissed subject to the proviso in s64 of the Act.
The proviso in Section 64 of the Act
82 Notwithstanding there is no real prospect of success, s64 of the Act operates so that a court may allow a matter to proceed to trial if:
· First, it is not in the interests of justice to summarily dispose of the proceeding; or
· Second, the dispute is of such a nature that only a full hearing on the merits is appropriate.
83 As to the first proviso, I agree with counsel for the defendant’s submission that the interests of justice require that the Trust funds not be depleted by further legal costs, particularly given that this is a small estate and the plaintiff being in desperate need of the Trust funds.
84 As to the second proviso, whether a proceeding should be allowed to go to a full hearing must be determined according to the circumstances of each case.[20] Counsel for the defendant submitted that there was nothing further to be gained by a full hearing on the merits as the facts were clear and undisputed. Counsel for the plaintiff submitted that there would be further evidence led at trial in regards to the circumstances that surrounded the Trust property. However, the indefeasibility of title in respect of the Trust property was not in issue.
[20]Barber v State of Victoria [2012] VSC 554 at paragraph [15]
85 Alternatively, counsel for the plaintiff submitted that if it was not clear whether there had been a final distribution of the estate, then the proceeding should be listed for trial. For the foregoing reasons, it is clear, in my view, that the authorities support the defendant’s submissions on final distribution.
86 In my view, the repetition of legal submissions will lead to a waste of Trust funds available for the use of the plaintiff and the beneficiaries and a waste of the Court’s time. It is unnecessary for a full hearing on the merits.
87 Ultimately, the proviso in s64 does not apply to the present case.
Correctly named party as Defendant
88 For the sake of completeness, I will briefly address counsel for the defendant’s submission that the plaintiff’s solicitors incorrectly named the defendant as the defendant to the proceeding.
89 Applications pursuant to Part IV of the Administration and Probate Act are governed by Order 13 of the County Court Miscellaneous Rules 2009.
90 In particular, Order 13.04 governs the parties to the application, which states:
“(1) Each personal representative shall be a defendant unless that personal representative is a plaintiff.
…
(3) No other person shall be a defendant to the application in the first instance.”
91 The Act defines “personal representative” as:
“personal representative means the executor original or by representation or administrator for the time being of a deceased person”.
92 Whilst Mr Nicholson transferred his capacity as a Trustee to the defendant, the terms of the Deed did not transfer his capacity as the executor and personal representative of the deceased. Further, Mr Nicholson has not made an application to the Court to remove himself as executor pursuant to s34 of the Act.
93 Pursuant to Order 13.04, the correct defendant for the plaintiff to issue proceedings against was Mr Nicholson, as the personal representative.
Conclusion
94 The Act provides a strict limitation period of six months within which an application may be brought. The rationale behind the time limit is that estates should be administered promptly without undue interference from claims from family provision. Actual beneficiaries are entitled to arrange their affairs and utilise resources on the basis that once the time limit has expired, claims can no longer be made.[21]
[21]Bird v Bird [2002] QSC 202; Re Salmon (Dec’d) (supra)
95 Whilst I acknowledge the unsatisfactory outcome for the plaintiff given her need for provision, I have made my decision within the constraints of the legislation and taking into account all the evidence and case law before me.
96 For the foregoing reasons, I grant summary judgment for the defendant. I will therefore dismiss the proceeding.
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