O'Brien v Duthie, Van Der Schoor & Prince - [2017] WASC 227

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: O'BRIEN -v- DUTHIE, VAN DER SCHOOR & PRINCE [2017] WASC 227

CORAM: MASTER SANDERSON

HEARD: 1 AUGUST 2017

DELIVERED : 1 AUGUST 2017

PUBLISHED : 9 AUGUST 2017

FILE NO/S: CIV 1118 of 2016

MATTER :Family Provision Act 1972 (WA)
The Estate of Daven John O'Brien (Dec)

BETWEEN: DAVEN JOSEPH O'BRIEN
First Plaintiff
PATRICK GRANT O'BRIEN
Second Plaintiff
AND
GLENN ALEXANDER DUTHIE, LLOYD VAN DER SCHOOR & ALLEN RAYMOND PRINCE (as Executors of the Estate of DAVEN JOHN O'BRIEN (DEC))
First Defendants
TREVOR JOHN O'BRIEN
Second Defendant
MICHAEL JAMES O'BRIEN
Third Defendant
GRAHAM VARISCHETTI
Fourth Defendant
ARIANA VARISCHETTI
Fifth Defendant
JAKE PATRICK VARISCHETTI
Sixth Defendant

Catchwords:

Family provision - Application for leave to file out of time - Whether arguable case - Turns on own facts

Legislation:

Family Provision Act 1972 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

First Plaintiff                  :     Ms E C Hensler
Second Plaintiff             :     Ms E C Hensler
First Defendants            :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     Mr B W Ashdown
Fifth Defendant              :     Mr B W Ashdown
Sixth Defendant             :     Mr B W Ashdown

Solicitors:

First Plaintiff                  :     Contested Wills & Probate Lawyers
Second Plaintiff             :     Contested Wills & Probate Lawyers
First Defendants            :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     Kimberley & Pilbara Lawyers
Fifth Defendant              :     Kimberley & Pilbara Lawyers
Sixth Defendant             :     Kimberley & Pilbara Lawyers

Case(s) referred to in judgment(s):

Clayton v Aust (1993) 9 WAR 364
Craig v Craig [2015] WASC 109
Girando v Girando (1997) 18 WAR 450

MASTER SANDERSON: This was the plaintiffs' application for an extension of time to bring proceedings under the Family Provision Act 1972 (WA). The application was supported by an affidavit of the first plaintiff sworn 22 January 2016 and an affidavit of the second plaintiff sworn 29 January 2016. The fourth, fifth and sixth defendants (defendants) relied on an affidavit of Allen Raymond Prince, one of the first defendants, sworn 31 August 2016. After hearing argument I dismissed the plaintiffs' application. I said I would publish reasons for that decision. These are those reasons.
Prior to the hearing the defendants objected to certain paragraphs of both of the plaintiffs' affidavits. It was the submission of the defendants that the application for the extension of time was a final determination of an issue between the parties. That being so, hearsay evidence was not permitted. The bulk of the objections were raised on this basis.
There does seem to be some doubt as to whether a decision to grant or refuse an extension of time is interlocutory or final. The question was considered briefly by the Full Court in Girando v Girando (1997) 18 WAR 450. In that case the question was raised as to whether or not leave was required to appeal against an order refusing an extension of time under the then equivalent of the present Family Provision Act. Malcolm CJ accepted there was an appeal as of right - that is to say the order was not interlocutory. However, he did so without finally deciding the point. So, while the position may not have been finally determined, it is probably safer to proceed on the basis any decision to grant or refuse an extension of time is a final decision and the affidavit material is constrained accordingly.
Having said that, the paragraphs to which objection were taken were not, in my view, so offensive as to warrant being struck out. Some were conclusory in nature. None of them dealt with facts which even treated in conjunction with other facts were determinative in the outcome of the application. So while it is not strictly necessary for me to decide the question I would be prepared to dismiss the application to strike out the paragraphs complained of by the defendants.
The deceased died on 5 May 2007. He was survived by his four children being the first and second plaintiffs and the second and third defendants. His will was dated 16 January 2007. By the will the deceased appointed the first defendants as his executors and trustees. The will created the Daven O'Brien Testamentary Trust (Trust). The deceased left all of his real and personal property to the Trust. The vesting day of the Trust would be 15 calendar years from the date of the deceased's death or such earlier date as appointed by the trustees. The trustees were directed to distribute funds of the Trust on its vesting so each of the fifth and sixth defendants received $1 million. The fifth and sixth defendants were the step granddaughter and step grandson of the deceased. The balance was to be split evenly between the plaintiffs and the second to sixth defendants. In other words they would each receive one seventh of the residuary estate.
Probate of the will was granted on 11 October 2010 - that is, some three years after the death of the deceased. Pursuant to s 7(2)(a) of the Family Provision Act the plaintiffs had six months from the grant of probate to make any application. That is, they had until 10 April 2011. This application for the extension of time was first notified to the first defendants in November of 2015. Proceedings were then initiated just over two months later. In the scheme of things, I do not regard the delay in foreshadowing proceedings and actually issuing proceedings as of any significance.
The principles for a grant of leave out of time were considered by the Full Court in Clayton v Aust (1993) 9 WAR 364. In summary these principles are:
(1)the discretion of the court is unfettered but must be exercised judicially in accordance with what is just;
(2)the onus lies on the applicant to establish sufficient grounds for taking the matter out of the general six month time limit. The applicant must make a substantial case for it being just for the court to exercise its discretion to extend time;
(3)the court has to consider the reason for the delay and how promptly the applicant acted after finding out about the act. For example was a warning given by letter or otherwise to potential defendants;
(4)did negotiations commence within the six month time limit. Is some part of the delay explicable by attempts to settle the matter out of court;
(5)had the estate been distributed before a claim was made? If it was then the beneficiaries are more likely to have changed their position in reliance on the beneficiation and are more likely to be prejudiced by the granting of leave;
(6)was the delay the fault of the applicant or his or her solicitors? If the applicant has taken reasonable steps to pursue the claim and the delay is attributable to the solicitors then leave will not be refused simply because of the delay by the solicitors since a claim for damages against the solicitors is unlikely to fully compensate the applicant and is likely to cause delay and expense to the applicant;
(7)if leave is refused, will that leave the applicant without regress against anyone; and
(8)does the applicant have an arguable case on the merits?
In my view, there were three factors in this case which were strongly against a grant of leave. First, the length of the delay. Second, and allied with the first reason, was the failure of the plaintiffs to adequately explain the delay. Thirdly, and perhaps of least significance, it is difficult to see how the plaintiffs would have an arguable case. Each of these three matters requires further consideration.
In May of 2007, the plaintiffs and the third defendant approached a firm of solicitors seeking advice about their late father's estate. One of the inquiries they made of the solicitors was whether they had any right to challenge the will if they were not beneficiaries. The solicitors advised in June of 2007 that if the will was challenged the costs could exceed $50,000. A collective decision was taken not to proceed with any challenge to the will. The plaintiffs say the solicitors did not advise them that if proceedings were to be initiated those proceedings had to be brought within six months of the grant of probate. It seems rather startling that a firm of solicitors would not advise as to the time limit. But the evidence of the plaintiffs on this point is quite clear and definite and for the purposes of this application must be accepted.
From September of 2008 the plaintiffs and the second and third defendants acting through the agency of the deceased's brother corresponded with the solicitors for the executors. There is no suggestion in this correspondence the challenge to the will under the provisions of the Act. While the deceased's sons were clearly suspicious of the motives and actions of the executors, the correspondence appears to have been both cordial and conducted with decorum. There is no mention of the prospect of challenging the provisions made by the will.
Both plaintiffs in their affidavit acknowledge probate of the will was granted on 11 October 2010. Neither affidavit says when the plaintiffs became aware of the grant of probate. It is not suggested that it was not on or about the date the grant was made. There is no suggestion there was any attempt on the part of the first defendants to conceal from the plaintiffs the grant had been made.
In or about September of 2013 the plaintiffs and the third defendant consulted solicitors Maurice Blackburn. They were advised the time limit for bringing an application had expired and they would need to apply for leave for an extension of time. They were further advised that a factor in favour of obtaining leave was the fact the estate had not been distributed. Prudently they were warned of the costs involved in bringing the application. The plaintiffs say that before the meeting with Maurice Blackburn, they had not been aware of the six month time limit. They were certainly aware of the time limit thereafter. They say they decided not to commence proceedings because of the potential cost.
On 15 October 2015, the solicitors for the executors wrote to the beneficiaries saying they were considering winding the Trust up. They estimated the amount distributable to each of the residuary beneficiaries was $231,634. That was indicative advice only. Certain properties had to be sold to realise the assets of the Trust. The amount available for distribution might be more or might be less than the quoted figure. The beneficiaries were advised to obtain legal advice. That is what the plaintiffs did and that led to these proceedings being brought.
The delay of four and a half years is excessive. It is to be borne in mind that the time limit prescribed in the Act is six months. As was made plain in Clayton v Aust that time limit is not some arbitrary rule - it is a substantive time limit and it must be given content. Assuming the plaintiffs were not advised by their first solicitors of that time limit, they were certainly given sound advice by Maurice Blackburn. They made a decision after that advice was received not to proceed with an application. Neither plaintiff discloses what advice they were given by Maurice Blackburn - that is to say, they do not say whether or not Maurice Blackburn took the view there were grounds for applying for an extension of time. There is no suggestion the advice the plaintiffs received was wrong or in some way misled them. Some consideration must have been given by the solicitors as to the merits of the claim. Given there is no evidence on this point it cannot be taken much further. What can be said is having received competent advice and cognisant of the costs involved the plaintiffs decided not to proceed. That was their decision and they must bear the consequences of it.
Attached to the written submissions of counsel for the defendants is a chronology. Counsel describes the period between 11 October 2010 and 9 November 2015 as 'unexplained delay'. It seems to me the delay between the grant of probate and the plaintiffs' consultation with Maurice Blackburn solicitors is unexplained. There appears to be no reason why given their concerns about the estate the plaintiffs could not have sought further legal advice. They had taken some advice from solicitors just after their father's passing but why they did not consult other solicitors is unexplained. Thereafter the delay is explained. The plaintiffs received proper advice and decided not to act. But, in both instances there is no compelling reason advanced for the plaintiffs not having taken any action.
That then leaves the question of whether or not the plaintiffs have an arguable case. There is no doubt since the decision of Mitchell J in Craig v Craig [2015] WASC 109 closer attention has been paid to the question whether the plaintiffs have an arguable case. It may well be that Craig v Craig did not affect a change in the law. It certainly affected a change in the attitude and approach of counsel and solicitors. It must always be borne in mind that what is to be determined is whether the plaintiffs have an arguable case. At first instance in Clayton v Aust, the master determined that the plaintiff's case was 'weak' or 'barely arguable'. The Full Court was at pains to point out this was not a correct approach. The question was whether the case was arguable. Once that point is reached no further inquiry is required.
It is difficult to see in this case how either of the plaintiffs could have maintained a claim for further provision from the estate. The first question is whether as at the date of death of the deceased the disposition in the will failed to make adequate provision for the proper maintenance, support, education or advancement in life of the plaintiff. Given that the plaintiffs were adult children at the date of death of the deceased the question is whether the will of the deceased failed to provide for the advancement in life of the plaintiffs.
At the time the plaintiffs were in gainful employment and appear to have been in good health. Both were married and each of their wives was working. Although the affidavit material is not directed at the financial position of each plaintiff as at the date of death of the deceased it would appear both were at least comfortably placed. Doubtless each would have been advantaged by further provision from the estate. But, neither was in a position where without that contribution they were in financial difficulty. Moreover, each stood to receive a significant benefit from the estate even if that benefit was delayed for a period of up to 15 years. In my view, the plaintiffs' claim was bound to fail.
Looking at the other factors referred to in Clayton v Aust, a number do favour the grant of leave. The estate has not been distributed and no beneficiary appears to have changed their position on reliance upon the distribution. If leave is not granted, the plaintiffs will not have recourse against anyone else. If they may have had a cause of action against the solicitors they first consulted, that claim would not be time barred. The estate is substantial and a reordering, if it were appropriate, is certainly possible.
All these factors are to be weighed in the balance. In the end I am not satisfied it would be in the interests of justice to grant the extension of time sought by the plaintiffs. Accordingly I would dismiss the application. On publication of these reasons, I will hear the parties as to costs.