Prince v Harry Donald John Prince, the Executor of the Estate of the Late Tanya Prince - [2019] WASC 436

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   PRINCE -v- HARRY DONALD JOHN PRINCE, THE EXECUTOR OF THE ESTATE OF THE LATE TANYA PRINCE [2019] WASC 436
CORAM:   MASTER SANDERSON
HEARD:   21 OCTOBER 2019
DELIVERED          :   28 NOVEMBER 2019
FILE NO/S:   CIV 1044 of 2019
BETWEEN:   KASEY SHANE PRINCE
Plaintiff

AND

HARRY DONALD JOHN PRINCE, THE EXECUTOR OF THE ESTATE OF THE LATE TANYA PRINCE
First Defendant

HARRY DONALD JOHN PRINCE AS BENEFICIARY OF THE ESTATE OF THE LATE TANYA PRINCE
Second Defendant

Catchwords:

Family Provision Act - Application for extension of time to bring proceedings - Estate of no, or very little value - Turns on own facts

Legislation:

Family Provision Act 1972 (WA)
Non-Contentious Probate Rules 1967 (WA)

Result:

Application for extension of time dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr J T London
First Defendant	:	Ms C H Thompson
Second Defendant	:	Ms C H Thompson

Solicitors:

Plaintiff	:	Robertson Hayles Lawyers
First Defendant	:	Fourlion Legal
Second Defendant	:	Fourlion Legal

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

Clayton v Aust (1993) 9 WAR 364
Scott v Hamilton [2014] WASC 365

MASTER SANDERSON:

This was the plaintiff's application by originating summons for an extension of time to bring an action under the Family Provision Act 1972 (WA) (the Act). The plaintiff is the son of the late Tanya Prince (deceased) who died on 8 August 2017. He is presently 23 years of age. The deceased is survived by the plaintiff, his younger brother Jake Daniel Prince and her estranged husband, the defendant.
Probate of the deceased's will was granted to the first defendant on 28 September 2017. The first defendant is the plaintiff's father. To comply with the time limit prescribed in the Act any application for further provision should have been commenced by 28 March 2018. The plaintiff's application for leave to extend the time period was filed on 11 January 2019. So, the plaintiff is seeking an extension of time which is 9 ½ months beyond the six month time limit prescribed in the Act.
The will of the deceased effectively grants the whole of the deceased's estate to the second defendant. The plaintiff does not receive any portion of the estate. The main argument between the parties was as to the value of the estate. The first defendant in his capacity as executor maintained that the estate was of no value or was perhaps insolvent. The plaintiff put the value of the estate at around $400,000 but accepted further inquiry would be needed to ascertain its precise value. Before dealing with this issue I should briefly set out the principles governing an application for an extension of time. The parties were in agreement as to the applicable principles and were largely in agreement as to the issues to be determined in this particular application.
Both parties relied on the Full Court decision of Clayton v Aust (1993) 9 WAR 364. The facts as relevant to the court's discretion are:
i)the length of the delay;
ii)the reason for the delay;
iii)the promptitude with which the plaintiff gave warning of the proposed application to the defendant;
iv)whether negotiations commenced within the time but have not been concluded when the time elapsed;
v)whether the estate had been distributed at the time the executor had notice of the action and whether any beneficiary has changed their position in reliance upon a distribution; and
vi)whether the plaintiff has an arguable case and whether if the extension was refused the plaintiff would be left without redress against any other party.
It may also be relevant whether a plaintiff who instructed solicitors took steps to ensure the solicitors pursued the claim: Scott v Hamilton [2014] WASC 365. The onus lies on the plaintiff to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by the limitation of its benefits.
The value of the estate is not generally a relevant consideration in determining whether an extension of time ought be granted. It is not one of the factors mentioned in Clayton v Aust. If, however, the granting of leave would be futile because there was nothing in the estate and no order could be made then perhaps it could be said that the case is not arguable. It may even be the case if the estate is so small that the litigation itself would consume all available funds leave should not be given. If this is a new factor above and beyond what is contained in Clayton v Aust it should be noted that the grant of leave is discretionary and so long as the discretion is exercised judicially the factors to be taken into account are dependent on the circumstances of each case.
Appearing as attachment HDJP-1 to the affidavit of the first defendant affirmed 13 September 2019 is a copy of the assets and liabilities of the estate pursuant to r 9B of the Non‑Contentious Probate Rules 1967 (WA). The total moveable assets are said to be valued at $161,676.49. Of that amount just over $132,000 is a superannuation payment due from Colonial First State. There is an entry for an entity known as 'Supa Group Discretionary Trust' but no dollar figure is given for that asset. The immoveable property in Western Australia is two properties in Parkwood. They are said to have a combined value of $1 million. For the purposes of this application there was no dispute between the parties as to the value of these properties. The total assets then are put at $1,161,676.49.
Three significant debts are shown. The first is a debt to Pepper Finance Corporation Limited in an amount of $808,275.95. There is an amount said to be owing to the Supa Group Discretionary Trust of $140,192. There is a further personal loan debt due to the National Australia Bank in an amount of $37,586.77. In total the debts of the estate are said to amount to $1,003,477.24. Allowing for the uncertain value of some of the assets (for instance jewellery), the r 9B statement shows a value of the estate to be zero.
In his affidavit, the first defendant says that Supa Group Nominees Pty Ltd was trustee of the Supa Group Discretionary Trust. The company ran a business which generated income for the first defendant and the deceased. It would seem the first defendant and the deceased paid both their personal expenses and business expenses from the company account. In any event, just prior to the deceased's passing she transferred her interest in the company to the first defendant.[1] Given the company was a corporate trustee and nothing more, that transfer is really of no significance.
[1] Affidavit of Harry Donald John Prince as Executor, affirmed 13 September 2019 [12] ‑ [15].
The two Parkwood properties were held in the name of the deceased. In December of 2016 the deceased and the first defendant borrowed $808,400 from Pepper Finance Corporation Ltd (Pepper Finance). The loan documentation showed it was a joint borrowing. However, it was secured against the two properties owned by the deceased. Almost all of the funds went to pay off debts. The major creditor paid out was the Australian Tax Office. An amount was paid to the Bank of Queensland ‑ presumably to pay out an existing mortgage. The funds leftover appear to have been used by the deceased and the first defendant for both business and private purposes.
Appearing as attachment HDJP-3 to the affidavit of the second defendant are trust financial statements for the financial years 2016 to 2019.[2] The 2017 accounts show as a non‑current liability a 'Pepper loan' in an amount of $808,329. Strictly speaking that is not correct. The loan was taken out by the first defendant and the deceased. They then on lent the funds to the trustee, although the trustee appears not actually to have received any money because Pepper Finance paid the debtors directly. So, the accounts do not accurately reflect the position at law. The company is not indebted to Pepper Finance ‑ it is indebted to the first defendant and the deceased. If any documentation exists reflecting that arrangement (none was attached to the affidavits) it would presumably show the debt from the company to the first defendant and the deceased was joint and several.
[2] Affidavit of Harry Donald John Prince as Beneficiary, affirmed 13 September 2019.
Whatever may be the position at law, and no matter how the borrowings are treated in the accounts, the fact remains there is very little equity in the two Parkwood properties. There might be $200,000. If there is, the estate of the deceased is probably entitled to that amount. The estate would then probably be entitled to recover from the trust. But, it appears from the accounts the trust has little or nothing in the way of assets. In fact, the accounts suggest the deceased was indebted to the trust. There is a significant degree of speculation in all of this. No evidence was led by the plaintiff to explain the accounts. During the course of his submissions I explored with counsel for the plaintiff how he valued the estate. He did so by reference to the accounts but, in the end, the position was not entirely clear. That said, on balance, I am satisfied the estate of the deceased is either worthless or of nominal value. If that is not the case, it will be necessary to engage an accountant to carry out what would be effectively an audit of the company's affairs. The cost of undertaking that exercise relative to the size of the estate would make the whole endeavour problematic. On that basis the size of the estate is a significant factor in refusing an extension of time.
Turning to other discretionary considerations I would accept the plaintiff has an arguable case. He has virtually no assets being dependent on his girlfriend's parents for his accommodation. He is a student who has not yet completed his studies and who has no employment. He clearly has an uncertain future. Prior to the death of the deceased he was living in accommodation provided by her. In the circumstances it is arguable the deceased's will did not adequately provide for him. Having determined the plaintiff has an arguable case it is not appropriate for me to attempt to assess the strength of that case.
In relation to delay the plaintiff consulted solicitors on 6 August 2018. By then the limitation period had expired. The plaintiff explains the delay in consulting solicitors as partly due to his impecuniosity and partly due to his being assured by the first defendant he would benefit from the estate. In [76] to [78] of his affidavit the plaintiff explains why his solicitors did not forthwith bring an application to bring proceedings out of time.[3] While not entirely satisfactory, it does appear that the solicitors gave serious consideration to making an application for a revocation of the grant of probate. On balance I am satisfied there is an adequate explanation for the delay in bringing this application.
[3] Affidavit of Kasey Shane Prince, sworn 11 January 2019.
None of the other discretionary considerations referred to in Clayton v Aust are relevant. So, the matter comes down to weighing in the balance the fact the estate is either worthless or of very little value and other considerations which favour the grant of an extension of time. In the end, it comes down to this: there is no point in granting an extension of time when even if the application brought was successful, there would be nothing to distribute to the plaintiff. I am not satisfied on the evidence as it stands at present the plaintiff is able to establish the estate of the deceased has any value. Even if it does have some value, the amount in issue is so small as to not warrant litigation.
For these reasons I would dismiss the plaintiff's application. I will hear the parties as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
Associate to Master Sanderson
28 NOVEMBER 2019