Re Winter-Cooke (No 2)
[2021] VSC 806
•13 December 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2016 00704
| IN THE MATTER of Part IV of the Administration and Probate Act 1958 (Vic) and the will and estate of SAMUEL ROBERT WINTER-COOKE, deceased | |
| -and- | |
| IN THE MATTER of the Administration and Probate Act 1958 (Vic) and the will and estate of MARCIA WILSHIRE WINTER-COOKE, deceased | |
| ROBERT EDMUND WINTER-COOKE | Plaintiff |
| v | |
| SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) and others according to the attached schedule | Defendants |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 & 25 May 2021 |
DATE OF JUDGMENT: | 13 December 2021 |
CASE MAY BE CITED AS: | Re Winter-Cooke (No 2) |
MEDIUM NEUTRAL CITATION: | [2021] VSC 806 |
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ADMINISTRATION AND PROBATE – Family provision – Extension of time application – Whether claims arguable – Whether delay satisfactorily explained – Whether defendants prejudiced by effluxion of time – Ansett v Moss [2007] VSCA 161; Maher v Maher [2019] VSCA 161.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | The Hon D Ryan QC and Mr M McKenzie | Constable Connor & Co Pty Ltd |
| For the Defendant | Mr R Wells | Kathy Wilson Legal |
SCHEDULE OF PARTIES
BETWEEN:
| ROBERT EDMUND WINTER-COOKE | Plaintiff |
| -and- | |
| SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | First defendant |
| CATHARINE FRANCES WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Second defendant |
| PHILIPPA ROSEMARY RISBEY (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Third defendant |
| WINTER COOKE (MURNDAL) PTY LTD (ACN 004 314 443) (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Fourth defendant |
HER HONOUR:
Introduction
Samuel Robert Winter-Cooke (‘the deceased’) died on 7 January 2008. He was survived by his wife, Catharine, and his four children: Samuel Marcus Winter-Cooke (‘Marcus’), Philippa Risby, Robert Winter-Cooke (‘the plaintiff’) and Arbella Winter-Cooke.
On 8 April 2009 probate of the deceased’s will dated 26 April 2007 was granted to Marcus, Catharine and Philippa as executors and trustees of the deceased’s estate. At that time, the value of the estate was estimated at $6,693,214.
By originating motion filed 26 February 2016, the plaintiff sought, inter alia:
(a) an extension of time to bring an application for further provision from the estate of the deceased, pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (‘the Act’);
(b) further provision from the deceased’s estate; and
(c) orders relating to the plaintiff’s alleged entitlement to certain shares pursuant to the will of the plaintiff’s paternal grandmother, Marcia Wilshire Winter-Cooke (‘Marcia’).
The defendants are also the executors and trustees of Marcia’s estate. On 15 December 2016, the defendants sought summary dismissal of the whole of the relief sought by the plaintiff.
On 11 September 2017, Mukhtar AsJ ordered that the plaintiff’s application for an extension of time be deferred pending determination of his entitlement under Marcia’s will, and that the defendants’ application for summary dismissal of the claim for an extension of time be refused without adjudication on the merits, such that it could be reinstated after determination of the dispute concerning Marcia’s estate.
In February 2020, the plaintiff determined that he would not pursue orders relating to shares under Marcia’s will but would proceed with his family provision claim.
On 1 May 2020, the defendants filed a summons seeking summary dismissal of the remainder of the proceeding, including the plaintiff’s application for an extension of time to bring an application for further provision.
The application for summary dismissal of the plaintiff’s application to extend time was heard on 10 June 2020. On 11 September 2020, the defendants’ application for summary dismissal was rejected.[1]
[1]Re Winter-Cooke [2020] VSC 588 (‘Reasons’).
The summary dismissal reasons set out a detailed account of the relevant factual background and issues in dispute. These reasons assume familiarity with the summary dismissal reasons and adopt the defined terms used therein. Notwithstanding the different legal tests for the defendants’ application for summary dismissal, the evidence relied on for the application for the extension of time is much the same as in the summary dismissal proceeding. The hearing took two days and lengthy written submissions were filed. Overall, the court book comprised 1,210 pages.
Applicable principles
At the date of death of the deceased, the applicable legislation for an applicant to seek an extension of time was the previous s 99 of the Act. This section provided that no application under Part IV shall be heard unless the application is made within six months after the date of the grant of probate. However, a court could extend the time after hearing such of the parties affected as the Court thought was necessary. The current amended s 99 reflects the substance of the previous section. Under the previous and current amended sections, an application for an extension must be made before the final distribution of the estate and no distribution made prior to the application is disturbed by reason of such application.
Section 99 of the Act affords a discretionary power to the Court.[2] While the discretion is to be exercised in accordance with the subject matter, scope and purpose of s 91 of the Act, it is not to be confined by rigid rules.[3] A number of relevant factors ordinarily inform the exercise of the discretion, including the strength of an applicant’s claim for further provision;[4] the length of the delay;[5] the reasons for the delay;[6] and prejudice to other interested parties (other than the prejudice inherent in disturbing the terms of a distribution which would have been in their favour).[7]
[2]Maher v Maher [2019] VSCA 161, [63] (Beach, McLeish and Niall JJA).
[3]Ibid; see also Ansett v Moss [2007] VSCA 161, [6] (Buchanan JA, Redlich JA and Cavanough AJA agreeing).
[4]Ansett v Moss (n 3) [11] (Buchanan JA, Redlich JA and Cavanough AJA agreeing).
[5]Maher v Maher (n 2) [64] (Beach, McLeish and Niall JJA).
[6]Ibid.
[7]Ibid.
Ordinarily, the Court does not embark on a detailed analysis of the claim,[8] but each case may be different in that regard. A provisional view is formed as to the merits of the case,[9] specifically as to whether it is ‘arguable’.[10] The burden of proof is on the applicant, who is seeking the indulgence of the Court to extend time. An applicant must establish that it is in the interests of justice to grant the extension.[11]
[8]Ibid [69] (Beach, McLeish and Niall JJA).
[9]Harrison v Harrison [2011] VSC 459, [291] (Kaye J); ibid [72] (Beach, McLeish and Niall JJA).
[10]McCann v Ward [2010] VSC 452, [11] (Dixon J).
[11]Erlich v Fleiszig [2013] VSC 63.
Accordingly, the questions to which the Court’s attention is directed are:
(a) does the plaintiff have an arguable case?
(b) what is the period of delay and the explanation for the delay?
(c) is there any prejudice to the beneficiaries if time is extended?[12]
[12]McCann v Ward (n 12) [11] (Dixon J).
Although the individual factors are to be considered, the Court’s task is to determine whether, having regard to all relevant matters, it is in the interests of justice that the plaintiff should be relieved from the usual consequence that applications outside the six month limitation period are not permitted.[13]
[13]Erlich v Fleiszig [2013] VSC 63, [10] (Lansdowne AsJ).
It is common ground that there has not been a final distribution of the deceased’s estate.
Does the plaintiff have an arguable case?
In the summary dismissal reasons, the Court necessarily considered the strength of the plaintiff’s claim. The test applied for that application was whether the plaintiff’s application for an extension of time to bring an application for further provision had no real prospect of success.[14] It was determined that the Court was not in a position to conclude that the plaintiff’s application for an exercise of discretion pursuant to s 99 of the Act had no real prospects of success, for reasons including that the plaintiff’s claim may not be without merit.[15]
[14]Reasons, [86].
[15]Reasons, [167], [175].
In Erlich v Fleiszig,[16] Lansdowne AsJ considered the interplay, if any, between the test applied for summary dismissal of the claim and the test that applies in relation to the strength of the case for an extension of time in considering the strength of an applicant’s case. Her Honour reasoned:
I do not consider that consideration of the test for summary dismissal is very helpful. It is not necessarily the case that the test as to the strength of the plaintiff’s case on an application by a plaintiff for an extension of time should be the same as the test to be applied on an application by a defendant for summary dismissal of a plaintiff’s claim. One test is to allow a claim to be made, the other to shut it down once made; the onus lies on different parties; and in a summary judgment application by a defendant the assessment of the plaintiff’s case is the sole or most significant factor, whereas on an application for an extension of time by a plaintiff it is one relevant factor amongst others. Too much focus on the assessment of the strength of the plaintiff’s case for further provision may lead to the error of regarding that as a determinative factors, when it is merely one factor amongst others (unless the case is hopeless) to be considered in the overall justice of the case for extension of time.[17]
[16][2013] VSC 63.
[17]Ibid [34] (Lansdowne AsJ).
In her Honour’s view, there was no real doubt as to the test to be applied as to the strength of the plaintiff’s foreshadowed family provision claim in an application for an extension of time:
In my view, the authorities show that an application for an extension of time may be refused if the plaintiff’s case is weak, but not hopeless, where there are other factors that tend towards refusal of extension of time. If, however, the merits of the plaintiff’s case is the determinative factor, then the application may only be dismissed on that basis if the claim is hopeless. Further, if the claim is hopeless, the application for extension should be refused even if the delay is short, there is an adequate explanation for the delay and no prejudice has been occasioned by it i.e. other relevant factors would not tell against an extension of time.
Although different language is on occasion used, on analysis the authorities do not show any real difference whether the test [a]s described is ‘not improbable that [the claim] will succeed’ or ‘arguable’. This is shown most clearly in those cases where the descriptors are used interchangeably.[18]
[18]Ibid [38]-[39] (Lansdowne AsJ), citing Valbe v Irlicht [2001] VSC 53, [71] (Gillard J); Jotkowitz v Keating [2006] VSC 290, [11] (Williams J).
In the summary judgment reasons, the following views were expressed on the plaintiff’s claim.
The deeds
The plaintiff attempts to impugn the deeds on the basis of public policy and the specific circumstances of the case, asserting unconscionable conduct, undue influence and the defendants’ failure to satisfy an ‘anterior duty to disclose’.[19] Taken as a whole, the plaintiff’s arguments attempting to impugn the deeds appear to face considerable difficulties.[20]
[19]Reasons, [135].
[20]Reasons, [154].
First, while it may be open to the plaintiff to impugn the deeds on public policy grounds — such as in Daebritz v Gandy[21] — the interaction of this argument with arguments impugning the deeds on contractual principles, and on what basis the Court should proceed, was not fully explored.[22]
[21][2001] WASC 45.
[22]Reasons, [141]-[143].
Secondly, insofar as the plaintiff seeks to impugn the deeds on contractual principles — unconscionable conduct, undue influence and breaches of fiduciary duty — those claims are attended by various complications. His claim of unconscionable conduct suffers from a significant weakness; the relevant facts appear a long way from establishing the kind of special disability or disadvantage of the type required.[23] Further, his assertions regarding representations made by the defendants that manipulated him into an expectation that if he signed the deeds he would receive favourable distributions under the terms of the testamentary trust do not appear to have an adequate factual basis.[24]
[23]Reasons, [145], [154].
[24]Reasons, [153]-[154].
Although the plaintiff’s claim of undue influence appears stronger than the claim of unconscionable conduct, it suffers from the fact that the documentary evidence appears to favour the defendants’ case that any pressure applied was not undue. There were factors, however, supporting the plaintiff’s case that the pressure may have been undue.[25]
[25]Particularly that although the plaintiff had legal representation, it was not clear what protection was afforded by those solicitors where their role was managed by the plaintiff himself: Reasons, [147]-[148].
Thirdly, the legal basis for the plaintiff’s arguments regarding a breach of fiduciary obligations and a failure to provide material information was unclear.[26]
Strength of the plaintiff’s claim
[26]Reasons, [149]-[152], [154].
The Court concluded it was difficult to assess the strength of the plaintiff’s claim pursuant to ss 91 and 91A of the Act in light of a lack of evidence concerning the plaintiff’s assets in 2008 and the value of the estate now. Based chiefly upon the size of the estate, the Court considered it may be that the plaintiff’s claim was not lacking in merit. Additionally, the evidence suggested that since the death of the deceased, the plaintiff’s needs may have increased. Consideration of those issues, however, would be affected by the approach adopted in respect of the deeds.
Defendants’ submissions
The defendants maintain that the deeds operate as a bar to the plaintiff’s claim for further provision, either because the deeds bind the plaintiff and he has specifically released the estate from any claim or application pursuant to Part IV of the Act or, in the case that the deeds do not formally bind the plaintiff, the existence of the deeds and the plaintiff’s conduct in proceeding as though the deeds were binding should in any event persuade the Court not to exercise the discretion to extend time. The defendants submit that, the deeds having been entered into in the period in which the plaintiff could have made a family provision claim against the estate, there is no public policy reason why the releases ought not be enforceable against the plaintiff. These submissions do not differ in any material way from those made on the application for summary dismissal, and do not address in any real way the issues identified by the Court in those reasons in response to similar submissions.
Accepting that the strength of the plaintiff’s claim alone is not sufficient to disqualify an application for an extension of time unless the claim is ‘hopeless’, the defendants submit the ‘extreme weakness (if not hopelessness)’ of the plaintiff’s claim when considered in combination with other relevant factors should persuade the Court to refuse to exercise its discretion in favour of the plaintiff.
In summary, the defendants submit that the plaintiff’s financial position is sufficient to meet his own needs, and that he has not provided a basis or explanation for the amount of further provision that would be sought. Further, while the estate’s value may be large, the majority of that value is held in pastoral land which is farmed by Marcus. Under the terms of the will, those assets are held on trust for Catharine during her lifetime. The defendants submit these are matters that negatively impact the strength of the plaintiff’s case, such that the Court should decline an extension of time.
Plaintiff’s submissions
The plaintiff submits that three principal factors influencing the assessment of the strength of his claim are relevant: the structure of the deceased’s will; the size of the estate; and the financial circumstances of the plaintiff compared with those of his mother Catharine (the life tenant), and his siblings Marcus, Philippa and Arbella.
First, the only benefits conferred on the plaintiff under the will are a legacy of $100,000 deferred for five years, a contingent share of income from the deceased’s interests in the Murndal company and Murndal partnership at the executors’ unfettered discretion; and a share of the deceased’s life insurance policies. The concern of the deceased that the Murndal farming enterprise remain viable within the family as recorded in the will explains why no further provision for the plaintiff was possible. The plaintiff says he was a loving and caring son entitled to better treatment in the will, and that the deceased ‘does not seem to have considered whether a limited further provision could have been made without imperilling the future retention or enjoyment of ‘Murndal’ within the family’.
Secondly, the size of the estate remains unclear, but the plaintiff submits there is no doubt it is ‘abundant’. A value of $12 million is suggested, with the Court invited to take judicial notice of the ‘increase in the thirteen years from 2008 to 2021’. It was not entirely clear what, specifically, the Court is invited to take judicial notice of in this regard. The plaintiff submits that in a large estate, the Court may consider that a plaintiff’s need may extend ‘beyond “the bread and butter of life” to include “a little of the cheese and jam that a wise and just parent would appreciate should be provided if circumstances permit”’.[27] On that basis, the plaintiff submits that the further provision in the sum of $500,000 suggested by senior counsel in opening was ‘most conservative’, and that if the value of the estate was assessed at $12 million or higher, the estate would be well able to sustain a generous further provision in the sum of $1–$1.5 million.
[27]Citing Blore v Lang (1960) 104 CLR 124, 135 (Fullagar and Menzies JJ).
Thirdly, the plaintiff submits the paucity of financial information made available to him by the defendants makes it difficult to compare his financial circumstances with those of his mother and siblings. He invites the Court, however, to make certain inferences about their circumstances, namely that:
(a) Marcus has sufficient resources to maintain a lifestyle and educate his children ‘in a manner appropriate to a wealthy Western District grazier’;
(b) Catharine has sufficient resources to live comfortably at 11 McIntyre Street, Hamilton, which she formerly owned jointly with the deceased;
(c) Philippa’s resources are more affluent than those of the plaintiff — she is married, has worked as a physiotherapist, and has been able to educate her two sons at Melbourne Grammar; and
(d) While Arbella’s financial circumstances may be closest to those of the plaintiff, the plaintiff understands that she is to receive a lump sum of $200,000 pursuant to a third deed and has a remainder interest in a half share of 11 McIntyre Street.
By contrast, the plaintiff and his wife have modest earnings. The plaintiff’s only ‘unearned’ funds have come from the residuary legacy under Marcia’s will, an equal share with his sisters of the proceeds of the deceased’s life insurance policy, and a distribution from the Pybus Trust.
Consideration
What legal approach should the Court take to the deeds?
As identified in the summary judgment reasons, there is a degree of doubt surrounding the applicable legal approach to be adopted in respect of the deeds —whether the Court should follow the approach of Daebritz and other first instance decisions or give precedence to contractual principles. The parties having made no further submission on this question, the Court’s conclusion in the summary judgment reasons, that is, that it would be open for the plaintiff to argue that the first and second deed are not a bar to his claim, and instead, at most are an indication of what he thought was adequate provision at the time, remains applicable.
Of note is that even if the plaintiff did fully pursue the approach of Daebritz, in that case the Court used the amount agreed to in a deed as an evidentiary support of what the plaintiff considered an appropriate amount for proper maintenance and support. As noted in the summary judgment reasons, even if the plaintiff were able to impugn the deeds on public policy grounds, he may not receive a more beneficial distribution through the statutory process than that which he already received through the execution of the deeds.
Unconscionable conduct and special disadvantage
The plaintiff maintains his special vulnerability was being ‘susceptible to appeals to sacrifice his own financial interests to preserve the viability of Murndal for the benefit of the wider family’ and his ‘long-standing commitment to preserving control of Murndal by family for the benefit of future generations’. Further, the plaintiff points to a gross inequality of financial resources between the plaintiff and the defendants.
These arguments reflect those made by the plaintiff in the defendants’ application for summary dismissal. In the summary judgment reasons, the Court stated that the evidence then before the Court disclosed that:
over the year leading up to his entry into the deeds, the plaintiff had been involved in negotiations surrounding his father’s estate, with and without the assistance of Maddens. His email to Mr Stratmann on 4 October 2008 concerning the Pybus Trust displays a relatively sophisticated understanding of the issues at hand, as do the emails sent by him in August and September 2009. While he claims a special vulnerability in the sense that he strongly identified with the Murndal dynasty and desired to preserve the property, the events of 1997 suggest that he was capable of asserting his financial interests while maintaining that desire. While the plaintiff also points to a vulnerability, in that the defendants knew of his financial needs, there is no evidence that he was under financial strain to the extent that is seriously affected his ability to protect his interests. Rather, the evidence suggests that he had negotiated to receive $100,000 in April 2009, and a further $20,000 ahead of signing the deeds in September.[28]
[28]Reasons, [145].
Without delving into the numerous examples of unconscionable conduct alleged against the defendants, it is sufficient to note that there is nothing further before the Court on this application to alter the conclusion that the plaintiff’s case in this regard appears very weak, based on his inability to establish a key threshold requirement, that is, he was under a special disadvantage or disability which seriously affected his ability to make a judgment as to his own best interests.[29]
Undue pressure
[29]See, eg, Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, 474 (Deane J); Mackintosh v Johnson (2013) 37 VR 301, [11] (Buchanan, Whelan JJA and Hargrave AJA.).
The plaintiff points to largely the same conduct from the defendants in his claim that the deeds are impugned due to undue influence as he does in his claim for unconscionable conduct. In the summary judgment reasons, the particulars put forward by both the plaintiff and defendant in support of their positions was set out and the Court concluded that taking the plaintiff’s claim at its highest, it was arguable that the deeds were signed pursuant to undue pressure from the defendants.[30] The Court considered that the plaintiff’s peculiar dealings with his lawyers at the time, in which he actively attempted to limit their involvement in negotiations surrounding the estate of the deceased, may have been caused by undue pressure from the defendants.[31] However, taking the evidence as a whole, the Court found that the weight of the documents favoured the defendant’s position that the plaintiff entered into the deeds as a result of his own free will, a voluntary act.[32]
[30]Reasons, [146]-[148].
[31]Reasons, [148].
[32]Union Bank of Australia Ltd v Whitelaw [1906] VLR 711, 720 (Hodges J).
In light of documents produced by the defendant subsequent to the hearing of the application for an extension of time, the plaintiff’s claim of undue influence or pressure leading up to the signing of the two deeds is further weakened. These documents indicate that the plaintiff maintained a high level of involvement in, and understanding of, the negotiations regarding the deeds of family arrangement.
The significance of the plaintiff’s purported lack of reliance on legal advice is diminished considering the manner in which the plaintiff expressed himself in emails to his siblings during the negotiations to the deeds. In an email from November 2008, produced by the defendants subsequent to the hearing, the plaintiff clearly expresses that he understands that he has been advised that he could potentially have an ‘additional benefit under fair provision’ and then goes on to say that he does not wish to pursue this, and as such has not ‘engaged any further legal assistance beyond Grans estate review’.
In February 2009 he emailed Marcus, Arbella, Catharine and Colin Risbey (Philippa’s husband), and while professing his support for Marcus’ ‘lineal inheritance’ of Murndal, also wrote that:
All legal advice under Victorian Law indicates that this “oldest son” structure” [sic] is an inequitable, outdated model that if tested in a court, would result in personal gains of millions of dollars of assets to Phillipa, Arbella and Myself. If of interest, I can send you a legal summary of what my legal advice actually is.
This suggests that the plaintiff understood that he was trading an opportunity to bring a Part IV claim, for the benefit (as he saw it) of maintaining the viability of the Murndal farming enterprise, for an accelerated payment of his entitlement under his father’s will, for right of access to Murndal, as well as the intangible benefit of maintaining family goodwill.
Although it could be possible for the plaintiff to submit further evidence at trial to show that the defendants were exerting pressure on him to sign the deeds, the documents submitted by the defendants lend weight to their argument that the plaintiff was committing a ‘free act’ in that he was able to assess alternatives and decide between them, and that he did not make the decision to forego a Part IV application as a result of effect of another’s will upon his own.[33]
Breach of fiduciary duty/failure to provide material information
[33]Thorne v Kennedy (2017) 263 CLR 85, 99 (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).
The plaintiff submits that the defendants breached their fiduciary duty in failing to provide material information regarding the Murndal partnership and Murndal company. Though the plaintiff has an entitlement to information regarding the trust property,[34] courts have mostly interpreted this as an entitlement to be provided with information after requesting it, rather than a positive obligation on the trustee to provide information to the beneficiaries, especially when the beneficiary is the holder of a mere expectancy.[35] There is no evidence that the plaintiff requested such information, and that it was refused by the defendants. If the defendants had in fact refused information regarding the trust, the plaintiff would at best, have a right to issue proceedings to obtain information, the cost of which would be borne by the defendants personally.[36]
[34]Spellson v George (1987) 11 NSWLR 300, 316–7 (Powell J).
[35]Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 432 (Mahoney JA).
[36]Ibid.
The interaction between the defendants’ duty to inform the plaintiff about the contents of the trust, and how it sits alongside the duty to account and the defence of consent was not satisfactorily explored by the plaintiff.
Did the defendants manipulate the plaintiff into an expectation that he would receive favourable distributions under the terms of the testamentary trust?
The plaintiff did not submit anything further to show that the defendants manipulated him into signing the deeds based on an expectation that he would receive favourable distributions under the terms of the testamentary trust. The findings of the Court remain unchanged on this issue.
Plaintiff’s financial circumstances
As an adult child of the deceased, the plaintiff must be able to show that he has financial need in order to be eligible for family provision.[37] The plaintiff provided documents detailing his financial circumstances to establish whether or not he has financial need. According to that information, the plaintiff’s income from his employment at Telstra in the financial year 2019-20 was $150,971 and his wife’s earnings in the financial year 2020-21 were likely to amount to approximately $70,000. In addition, the plaintiff deposes that he has $148,162.24 in superannuation from Telstra, and that his wife has $53,900 in superannuation. They also operate a self-managed superannuation fund that owns a unit in Port Douglas valued at approximately $140,000. The plaintiff’s home in the Townsville area is worth around $440,000 and approximately $340,000 is owed on the home. The plaintiff and his wife both have cars on hire purchase agreements, which the plaintiff pays for through a salary-sacrifice scheme. The plaintiff’s daughter attends a catholic school in Townsville.
[37]The Act s 91(4)(c).
The plaintiff attests to suffering from sudden permanent deafness in association with a severe reaction to medication and thought that this might cause him to not be able to enjoy the long working life that he had previously expected.
No further information was tendered as to the financial position of the estate. In the summary judgment reasons, the defendants valued the estate at $7 million. The plaintiff estimated that it was worth approximately $15 million at the time of the deceased’s death.
The defendants did not attest to any competing claims on the estate based on their financial need.
At best, the plaintiff’s additional evidence provides a basic idea of his circumstances, and his potential needs going into the future. The Court’s view expressed in the summary judgment reasons that plaintiff may have an arguable claim of financial need considering the considerable size of the estate remains unchanged.
Conclusion
The facts material to an assessment of the merits of the plaintiff’s case are far from clear and are disputed. Having considered the evidence on this application, the Court is not in a substantially better position to assess the strength or otherwise of the plaintiff’s claim than it was when publishing the summary judgment reasons.
The plaintiff managed to provide a more detailed picture of his financial circumstances, though this has not assisted in strengthening his case. Whether or not the plaintiff has financial need and whether or not the deceased has fulfilled his moral duty to provide for the plaintiff’s proper maintenance and support is unclear from the evidence now before the Court. However, considering the considerable size of the estate, it is arguable.
As to unconscionable conduct, the plaintiff’s claim of being at a special disability or disadvantage remains problematic. The Court is satisfied that the plaintiff strongly identified with the Murndal dynasty, and had a desire to preserve the farming property. However, the Court is not convinced that this left him unable to assert his own interests, as indeed he did at various points during the negotiations both in relation to Marcia’s estate in the 1990s, and his father’s estate in 2008 and 2009.
The evidence sheds little light on the contested factual issues on which the plaintiff relies to make out his claim of undue influence, such as the phone calls from Phillipa, or whether Marcus really threatened to deploy a ‘war chest’ if the plaintiff were to pursue a Part IV claim. The defendant’s evidence considerably weakens the plaintiff’s case for undue influence as it shows a consistent tone of amiability and sophisticated understanding of the proceedings on the part of the plaintiff. While the pressure could have come from outside of the emails presented and it would remain open to the plaintiff to show that at trial, the overall weight of the documentary evidence would render that a difficult task.
The weight of the documents before the Court suggest that the plaintiff was fully cognisant of the choice that he was making in signing the deeds and forgoing a Part IV claim. Although it would be open to the plaintiff to argue his case more substantially at a full trial, he would face considerable difficulties attempting to impugn the deeds based on the contractual grounds set forth. It would, however, remain open to the plaintiff to mount a public policy argument as per Daebritz and to attempt to invalidate the deeds on the basis that reliance on them would fail ‘to effectuate the specific policies of the Act’.[38] The strength or otherwise of this argument was not fully explored in oral arguments or submissions and the Court is in no better position to evaluate it as it was when the summary judgment reasons were delivered.
[38]Bartlett v Coomber [2008] NSWCA 100, [57]-[58] (Mason P) .
In Law of Succession, Professor G E Dal Pont states:
[A]ssuming that the facts are amenable to an assessment of the merits, the strength of the case can support the claim for an extension if the case is strong, or have the converse impact should the case be weak or hopeless. Between these poles, the merits arguably present more as a neutral factor in the court’s quest to attain a just outcome than anything else.[39]
[39]G E Dal Pont, Law of Succession (LexisNexis Australia, 3rd ed, 2021) 612 [17.37].
The plaintiff’s claim is not hopeless, but does face significant difficulties. Accordingly, the merits of the plaintiff’s claim will not in this case be a determinative factor, but will be one factor amongst others that may tend either towards refusal or acceding to an extension of time.
What is the period of delay and the explanation for it?
Defendants’ submissions
The defendants contend that the reason for the plaintiff’s considerable delay is his entry into and reliance upon the deeds executed in September 2009. The main thrust of their argument is that prior to entering into the deeds, the plaintiff understood that he could have made a Part IV claim and made a deliberate and informed decision not to do so.
Plaintiff’s submissions
Fundamentally, the plaintiff seeks to explain his delay in commencing any Part IV claim against the estate by reference to the following five matters.
First, the plaintiff was of the belief that he may be entitled to 10,000 shares in the Murndal company by reason of Marcia being the owner of those shares and the plaintiff being the residuary beneficiary of Marcia’s will. Those shares were a very valuable asset and would have avoided the need for the plaintiff to bring a family provision claim against the estate of the deceased. The plaintiff says he was not disabused of that belief until 2016.
Secondly, the defendant executors failed over an extended period of time to provide the plaintiff with copies of documents and other information which were necessary for him to decide whether to bring a family provision claim.
Thirdly, the plaintiff was under a special disadvantage in that he was concerned at all times to give effect to the deceased’s wishes that the Murndal farming enterprise remain viable.
Fourthly, the plaintiff contends there has been unconscionable conduct on the part of the defendant executors in the circumstances leading up to the execution of the deeds.
Fifthly, and relatedly, there were ongoing negotiations between the plaintiff and the defendant executors.
Defendant’s reply submissions
The defendants submit that the plaintiff has not established any of those matters that he seeks to rely on to explain his delay.
As to the plaintiff’s belief that he had an interest in Marcia’s shares by reason of being the residuary beneficiary of Marcia’s will, the defendants contend that the plaintiff did not express any belief that he was entitled to 10,000 Murndal shares until he commenced the present proceeding.
The defendants submit that the plaintiff was not misled, or refused information about the existence and nature of disbursements that may be exercised by the executors of the estate and, indeed, that the plaintiff was given no expectation that he would receive distributions from that income, but instead urged that the income from the estate be directed to the plaintiff’s mother.
Likewise, the defendants contend that any negotiations as to the disbursements from the estate were completed by the time the defendant brought his claim, and that during the negotiations, the plaintiff conducted himself in a manner strongly indicating that he was fully cognisant of the nature of potential gains that he was giving up by entering into the deeds.
Consideration
Marcia’s shares
On the plaintiff’s evidence, there was significant confusion surrounding his potential entitlement to 10,000 shares in the Murndal company as per Marcia’s will. The plaintiff does not contend that the defendants deliberately concealed information regarding his grandmother’s estate. Regarding the plaintiff’s request in 2008, the estate lawyers sent the plaintiff’s lawyers 23 documents regarding Marcia’s estate. From these documents, in 2009 the plaintiff’s lawyer, Mr Pendergast of Maddens, advised the plaintiff that the nature of Marcia’s interest in the shares was unclear. Subsequent lawyers were equally unable to provide the plaintiff with definitive information regarding the status of the shares and the plaintiff’s entitlement to them per Marcia’s will. It was only in 2016, in documents related to the present proceeding, that the plaintiff ascertained that Marcia’s shares in the Murndal company had in fact been held on trust by the testator and his solicitor, Mr Robert Aitken, for Marcia for life, with the remainder to the testator and, accordingly, did not form a part of her estate.
Whether or not the plaintiff was entitled to shares in the Murndal company was a material fact relevant to the plaintiff’s claim for family provision. Had the plaintiff come into possession of 10,000 of a total of 40,005 issued shares in the Murndal company, which is valued at at least $7 million, the necessity and likelihood of success of a Part IV claim would have both diminished significantly.
The lack of knowledge by an applicant of a material fact, which is not caused or contributed to by any fault or lack of action on the applicant’s part, may provide a ground for extension of time, provided that the applicant acts promptly to enforce their rights.[40] It was not unreasonable for the plaintiff to believe he had an interest in the Murndal shares, given the fact that the ASIC register showed Marcia as a beneficial shareholder and also given the advice of various lawyers who were not able to determine whether the plaintiff had an interest in the shares as residuary beneficiary of Marcia’s estate.
[40]Re Nassim [1984] VR 51, 57 (Nicholson J).
If the defendants had deliberately concealed material information regarding Marcia’s estate from the plaintiff, it could be the case that they hid a material fact, which caused the plaintiff’s decision not to bring a claim under Part IV of the Act, would be a justifiable reason for the delay.[41] However, there is no evidence that the defendants attempted to conceal the nature of Marcia’s interest in the Murndal company and the plaintiff conceded in cross examination that he did not believe that the defendants deliberately concealed information pertaining to this fact.
[41]Ibid.
As such, this element of the case turns on timing. If, after disabusing himself of the belief that he was entitled to Marcia’s shares, the plaintiff had promptly pursued a family provision claim, then it might be that the delay was reasonable. This is not what occurred. The plaintiff suspected that he had an interest in the Murndal company due to being the residuary beneficiary of Marcia’s estate at all relevant times, including during the time that he was negotiating the deeds with his siblings. He did not take serious steps to resolve either issue until 2016, when he issued proceedings for both. Given the timing, it is difficult to explain the plaintiff’s delay as being caused by his pursuit of Marcia’s shares and his evidence that this was the case is rejected.
Lack of access to relevant documents
The plaintiff contends that with more information, he would have been better able to understand the likelihood (or not) of receiving disbursements from the trust created pursuant to his father’s will, and that this would have helped him to decide whether or not to he should make a family provision claim. This explanation for delay is unsatisfactory. The plaintiff has had legal representation for much of the intervening time between the grant of probate in 2008 and the bringing of proceedings under Part IV of the Act in 2016. The plaintiff could have requested access to specific documents personally, or through his legal representation, either prior to signing the deeds, or indeed at any point since.
As observed, if the defendants deliberately concealed material information from the plaintiff which would impact his decision as to whether or not to make a Part IV claim, as in Re Nassim (deceased)[42] the plaintiff might be able to explain his decision to delay bringing a claim. On the evidence, however, the evidence does not support that the defendants deliberately concealed any pertinent information from the plaintiff regarding potential distributions of the trust. The plaintiff claims that the information made available to him by the defendants was confusing and equivocal, which may be the case, but that does not in itself indicate deliberate concealment of material facts.
Special disadvantage
[42][1984] VR 51.
The plaintiff asserts that one reason he did not bring a family provision claim was due to his desire to uphold his fathers’ wishes to preserve the Murndal farming enterprise. Indeed, emails produced subsequent to the hearing by the defendant indicate the plaintiff’s respect for his father’s wishes was an important motivation for him to enter into the deeds, and to not bring a family provision claim within time, as was his desire to have access to the Murndal property. The plaintiff’s evidence is accepted that when his access to the Murndal property was restricted, if not legally, then by virtue of the deterioration of family relations, he re-evaluated his decision to not bring a family provision claim.
Although it is understandable that the plaintiff’s priorities may have changed as his relationship with the defendants worsened, a change of mind is not usually a sufficient reason to grant an extension of time.[43] In Re Guskett,[44] Herring CJ relied on the fact that if a person has known of their rights in the past and has chosen not to exercise them, that person cannot seek the Court’s indulgence for an extension of time because it is now thought to be desirable to exercise those rights. As his Honour observed:
[the applicant] had her opportunity and such injustice as she may now consider herself to be suffering is her own doing and not one brought about by the time limit from which she seeks to be relieved.[45]
[43]Groser v Equity Trustees Ltd (2007) 16 VR 101, [32] (Gillard J).
[44]Re Guskett [1947] VLR 212.
[45]Ibid 215 (Herring CJ).
The fact that the plaintiff once prioritised the viability of the Murndal farming enterprise and therefore chose not to bring a family provision claim within time, and now is persuaded that it is not in his interest to maintain the family legacy is, on its own, not a compelling reason to extend time for a Part IV claim.
Unconscionable conduct
One reason for which an applicant for an extension of time might reasonably change their position regarding a decision to decline to make a family provision claim within time is if that decision was not made pursuant to their genuinely free will.[46] The plaintiff contends that the unconscionable conduct of the defendants leading up to, and after the signing of the deeds, led him to delay his decision to bring a Part IV application, in essence contending that his decision was not made pursuant to free will. In Ng v Morgan[47], Slattery J determined the applicant had not made a genuinely free decision to pursue a claim, due to her will being completely overborne by her mother who threatened her with legal prosecution for a forgery incident related to the will of the deceased.
[46]Ng v Morgan [2014] NSWSC 536.
[47]Ibid [164] (Slattery J).
As observed, the evidence surrounding the alleged unconscionable conduct of the defendants is far from settled and the weight of documentary evidence before the Court favours the defendants version of events, that is, that they did not act unconscionably. Taking the plaintiff’s evidence at its highest, the circumstances of this case are very different to the kinds of facts present in Ng v Morgan which might show the plaintiff’s will being overborne. It is also different to Woodward v Holmes[48] where the applicant was under a misapprehension as to her entitlement under her mother’s will and once that was clarified, her further delay of a few months was caused only by her need to obtain legal advice.
Ongoing negotiations
[48][2009] NSWSC 707, [17] (Macready AsJ).
Where an applicant fails to bring a claim within a time limit because of ongoing negotiations that commenced within the time limit, a court is likely to grant an extension of time.[49] To not do so would run counter to the policy of encouraging settlements outside of court.
[49]Re Salmon (deceased) [1981] Ch 167, 175 (Megarry VC).
The evidence does not support the plaintiff’s assertion that he did not bring a Part IV claim because negotiations were on foot. The plaintiff concedes in his written submissions that the ‘most intense and protracted’ negotiations between the plaintiff and the executors were concluded with the execution of the deeds in 2009.
The plaintiff contends that the negotiations concerned the exercise of the executor’s discretion in relation to the estate trust. In 2011, the plaintiff requested a distribution of income from the estate which was refused. It is difficult to characterise requests for distributions from a discretionary trust as negotiations in any meaningful way. In 2012, Catharine sent two letters indicating that she intended to make distributions from the trust. It seems as though this was a unilateral declaration of her intention rather than the result of negotiations between the plaintiff and his mother that may explain the length of the plaintiff’s delay in claiming family provision. In any event, the plaintiff did not initiate proceedings until February 2016, almost four years after his mother’s letters.
The plaintiff has not shown that there were ongoing negotiations beyond 2009 when the deeds were signed. The plaintiff has not provided a reasonable explanation for his delay.
Is there any prejudice to beneficiaries if time is extended?
Defendants’ submissions
The defendants identify the following prejudice which would be suffered by Marcus and the other beneficiaries if time were extended.
First, since the death of the deceased in 2008, Marcus has continued to farm and improve the Murndal land on the basis that he would receive it upon the death of his mother.
Secondly, by entering into the deeds, the plaintiff reinforced and confirmed to the beneficiaries that, save for the benefits provided to the plaintiff pursuant to the deeds, the beneficiaries would otherwise receive the benefits provided for them in the will, thus removing the uncertainty attending whether the plaintiff would contest the will.
Thirdly, Marcus and Catharine have taken on specific obligations pursuant to the deeds, including:
(a) if the Murndal assets were sold before Marcus’ 60th birthday, Marcus would not inherit the remainder interest in the land but the proceeds of sale would be distributed in equal shares to Marcus, Marcus’ wife Julia, Catharine, Arbella, the plaintiff and Philippa;
(b) being obliged to allow the plaintiff to visit and stay on the Murndal property for not less than five days per year;
(c) the payment of $100,000 to the plaintiff under the will was accelerated by more than three years;
(d) Marcus covenanting to ensure distributions totalling $120,000 would be made from the Prybus Trust to the plaintiff.
Plaintiff’s submissions
The plaintiff contends that the delay in the present case has not caused any demonstrable prejudice to the other beneficiaries. Any detriment to them will flow from an order making further provision for the plaintiff which is a detriment not relevant to the Court’s consideration.
Consideration
In Law of Succession, Professor G E Dal Pont states:
[a]lthough the presence or absence of any one factor is said not to be determinative of a claim to extend time — the unfettered nature of the court’s discretion would otherwise be impugned — it has been observed that ‘[p]rejudice is a weighty factor in a court’s consideration, if beneficiaries are likely to be prejudiced by the extension of time’.[50] In particular, while the absence of prejudice may incline the court, together with other matters, towards granting an extension of time, the presence of prejudice, especially if it is substantial, will almost invariably preclude an order extending time.[51]
[50]Groser v Equity Trustees Ltd (n 43) [28] (Gillard J).
[51]G E Dal Pont, Law of Succession (LexisNexis Australia, 3rd ed, 2021) 613 [17.39] (citations omitted).
In Maher v Maher,[52] the Court of Appeal held there was no error by the trial judge on the question of prejudice. Her Honour had concluded that there was prejudice to the residuary beneficiaries in that case as ‘[i]t could be presumed that they knew of the terms of [the deceased’s] will for many decades and “may have organised their affairs accordingly”’.[53] The appellants contended there was no evidence that the respondents had done so, an argument rejected by the Court of Appeal in the following manner:
The short answer to this contention is that the associate judge found only that the respondents ‘may’ have so organised their affairs. That conclusion was obvious and did not call for evidence. The associate judge relied on the observation of Nicholson J in Re Nassim[54] to the effect that an obvious purpose of the time limit in s 99 is to enable some certainty about the ordering of the affairs of the named beneficiaries of the estate.[55]
[52][2019] VSCA 161.
[53]Ibid [31] (Beach, McLeish and Niall JJA).
[54][1984] VR 51, 57 (Nicholson J).
[55]Maher v Maher (n 2) [79] (Beach, McLeish and Niall JJA).
In McCann v Ward,[56] Dixon J considered the question of prejudice, having regard to the specific nature of the assets forming the estate. The assets were shares in a fifth generation private family company that provided the bulk of the value of the estate. The will provided for a life interest in the shares in favour of the deceased’s wife, and thereafter the shares were to be divided between the deceased’s children from a former marriage.[57] His Honour concluded there was no relevant evidence of any detriment or prejudice to the beneficiaries arising during the approximately fourteen months’ delay, noting specifically that this conclusion was hardly surprising, ‘having regard to the extant life interest granted in favour of the deceased’s wife’.[58] The matters put on behalf of the beneficiaries as establishing prejudice — ‘that any award in favour of the plaintiff which affects the family shareholding would be detrimental to the fabric of a fifth generation family enterprise, abhorrent to the legacy left by the deceased and his ancestors, in stark contradistinction to his clearly stated wishes as set out in his will and would be difficult to enforce in the circumstances of the type of holding in the company’[59] — were matters to be considered upon the final determination of the application for provision from the estate.[60]
[56][2010] VSC 452.
[57]Ibid [5]-[6] (Dixon J).
[58]Ibid [24] (Dixon J).
[59]Ibid [14] (Dixon J).
[60]Ibid [24] (Dixon J).
Conclusions
The prejudice to the defendants in granting an extension of time is not excessive as the estate has not yet been distributed and the specific acts undertaken by the defendants in reliance on the deeds were not onerous. However, the significant period of delay means that the defendants are likely to have arranged their affairs in reliance on the deeds. All things considered, the issue of prejudice neither falls heavily for the defendants nor the plaintiff.
As such, the determinative factor is that the plaintiff has failed to provide satisfactory explanation for his delay. This lack of adequate explanation coupled with the weakness of his claim are such that in all of the circumstances, it is not in the interests of justice to grant an extension of time under s 99 of the Act.
Orders
The Court orders that the plaintiff’s application for the extension of time be dismissed. In the event that the parties are unable to agree on the costs of the application, the parties are to file and serve short written submissions on costs by 31 January 2022 with the issue to be determined on the papers.
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