Walker v Walker
[2004] VSC 94
•29 March 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 9009 of 2003
| ROBERT PHILLIP WALKER | Plaintiff |
| V | |
| ALEXANDRA WALKER (who is sued as executor named in the Will of Robert Gardner Walker deceased) | Defendant |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 March 2004 | |
DATE OF JUDGMENT: | 29 March 2004 | |
CASE MAY BE CITED AS: | Walker v Walker | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 94 | |
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Administration and probate – testator family maintenance – extension of time within which to commence an application – whether acceptable explanation for delay – continuing negotiations – prejudice to beneficiaries – arguable case – Administration and Probate Act 1958 ss 91,99.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Bevan-John | BJT Legal |
| For the Defendant | Mr RC Wells | Aitken Walker & Strahan |
HER HONOUR:
Introduction
In this proceeding, commenced by originating motion on 27 November 2003, the plaintiff seeks an order under the first proviso to section 99 of the Administration and Probate Act 1958 ("the Act"”) that the time for the making of an application by the plaintiff under Part IV of the Act in respect of the estate of the deceased be extended. What is sought is an order extending the time by a period equal to the period between 4 April 2001 (being the date six months after the grant of probate when the time for the plaintiff to bring an application expired) and the day following the order. The authorities are clear that the onus is on the plaintiff to show some reason for the exercise in his favour of the discretion to extend time which is conferred by that proviso[1]. The plaintiff also seeks an order granting leave to amend the originating motion to bring a claim for relief under Part IV in respect of the estate.
[1]Re Barrot [1953] VLR 308 at 313 per Sholl J.
Section 99 of the Act reads, so far as relevant:
99. Time within which application may be made
No application shall be heard by the Court at the instance of a party claiming the benefit of this Part unless the application is made within six months after the date of the grant of probate of the will or of letters of administration (as the case may be):
Provided that the time for making an application may be extended for a further period by the Court after hearing such of the parties affected as the Court thinks necessary, and this power shall extend to cases where the time for applying has already expired but in all such cases the application for extension shall be made before the final distribution of the estate and no distribution of any part of the estate made prior to the application shall be disturbed by reason of the application or of any order made thereon.
Provided further . . .
The evidence
The evidence is contained in affidavits sworn by the plaintiff and the defendant. Neither deponent was cross-examined. The plaintiff’s father, Robert Gardner Walker, made a will on 18 July 1990, naming his wife, the defendant, as executor. He died on 30 September 1999 and probate of the will was granted on 4 October 2000 to the defendant, the executor appointed in the will. The inventory filed in support of the application for grant of probate shows the net assets of the estate as valued at $1,222,738.2 There has been no distribution of the estate, and the defendant has agreed not to distribute the estate pending the outcome of this application.
There are four children of the testator and his wife:
Gail, aged 52, who is married, lives in southern New South Wales and has two children;
Adele, aged 49, who is unmarried, lives in Melbourne and works for the RACV;
The plaintiff, aged 48, who is married, lives in the township of Goroke and has three children; and
Lloyd, aged 46, who is married, lives in Dubbo, New South Wales, and is an insurance broker.
The property known as “Pleasant Park” is a merino stud farm located at Goroke in the Wimmera and has been in the Walker family for several generations. Since 1976 it has been operated by a partnership of the testator, the defendant and the plaintiff. Since the death of the testator it would appear that there has been de facto continuance of the partnership, and the business of the partnership has continued to be managed by the plaintiff. At present the plaintiff, his wife and young children are the only people who continuously work on the property, getting in seasonal workers as required. It is not suggested that the defendant or any of the other children of the testator has played any significant part in the operation of the farm at any time.
The plaintiff deposes that he has worked on the property for over thirty years for less than what would be considered a reasonable salary. He relied on his father’s repeated promises that after his death the plaintiff would inherit, if not the whole property, certainly the bulk of it. None of this is challenged by the defendant.
The property on which the partnership operates extends over nine blocks. The table below sets out the ownership of those blocks at the death of the testator and what would be the effect on each block of the operation of the Will. The calculations of value are taken from a table prepared by the legal advisers of the plaintiff, and were not challenged by the defendant.
P = plaintiff; W = widow; T = testator; t i c = tenants in common
| Block Name | Value | Owner at death of T | Value of T’s share | Owner after operation of Will |
| Carapolac | $79,550 | Testator | $79,550 | Adele |
| Cricks | $132,000 | T 1/330; Lloyd 249/330 P 80/330 all as t i c | $400 | Gail & W 1/330; Lloyd 249/330 P 80/330; all as t i c |
| Doctor’s | $44,175 | T & W as tenants in common in equal shares | $22,087 | Widow |
| Homestead (widow’s house) | $310,490 | Testator | $310,490 | Widow |
| Hobbs | $241,650 | T, P & W as t i c in equal shares | $80,550 | P as to 1/3, W as to 2/3 as t i c |
| Iredells (Plaintiff’s house) | $48,000 | T, P & W as joint tenants | $16,000 | P & W as joint tenants |
| Kiely’s | $307,200 | Testator | $307,200 | Plaintiff (said in the will to be a marriage gift) |
| Pike’s | $362,400 | Testator | $362,400 | Lloyd |
| Compstons | P & W as t i c in equal shares | P & W as t i c in equal shares |
In the context of Kiely’s, it is to be noted that the plaintiff and his wife married in 1989.
The testator’s share of the stock, plant and equipment of the partnership was left as to a quarter share to the plaintiff and as to a half share to Lloyd. The remainder of the testator’s interest in the partnership was left to the widow and the plaintiff. All debts, funeral and testamentary expenses were to be met by the plaintiff and the widow equally.
The plaintiff deposes that “the difficulty with these dispositions is that my father has thereby made it financially impossible for me to carry on the family business” and that he has no cash reserves to buy out the others or to obtain a large enough loan to enable him to buy land from third parties. In his third affidavit the plaintiff expands on the reasons, to do with the proper operation of the stud, why the dispositions in the will would make it impossible for him to carry on the farm without buying back most of the land upon which the stud is operated as well as two-thirds of the stock and equipment. It is not necessary to set out that material here. None of it is denied by the defendant. The defendant deposes that the plaintiff “is highly skilled in stud and livestock work” and I take it therefore that she would not challenge his judgment on this matter, relating as it does to the operation of the stud.
After the death of the testator, negotiations commenced between the plaintiff and the other family members to resolve the issues relating to the estate and the partnership and between the estate, the plaintiff and the defendant. The contents of the plaintiff’s affidavit and the correspondence exhibited thereto are necessarily incomplete, because they expressly exclude “without prejudice” discussions and communications. However, I am satisfied, on the material before me, that bona fide negotiations continued from shortly after the death of the testator until the initiation of this proceeding on 27 November 2003.
By a letter of 27 March 2001 the solicitors then acting for the estate advised the solicitors then acting for the plaintiff that they were instructed to agree not to oppose an application by him to extend time for the making of an application under Part IV, the time for which was due to expire on 4 April 2001, provided that the plaintiff agreed not to oppose such an application by his mother should it become necessary. The plaintiff agreed to this arrangement.
By a letter of 15 November 2002 the new solicitors for the estate advised the solicitors for the plaintiff that that concession was now at an end. In a letter of 15 July 2003 they reiterated that position.
Excusable delay?
What I must first consider is whether the delay in bringing the application is excusable. It is clear from the correspondence to which I have referred that the plaintiff must at all relevant times have been aware both of his right to bring an application under Part IV and of the time constraint imposed by section 99. However, it is important that although the period for bringing an application as of right under Part IV expired on 4 April 2001, the plaintiff was aware, from 27 March 2001 until the receipt of the letter of 15 November 2002, that the bringing of an application to extend time would not be opposed. I am satisfied that the delay in taking action during the period when that concession was available to him is excusable, given that concession. However, it was not until 27 November 2003, twelve months after the receipt of that letter, that this proceeding was commenced, and it is that period of twelve months with which I am concerned.
Byrne J said in McDermott v State Trustees Limited[2] of an application brought 10 months after the expiry of the statutory period “This is, in terms of these applications, a substantial delay, a factor which tells against the application”
[2][2000] VSC 532 at [12]
Mr Wells, for the defendant, submitted that by his delay, the plaintiff must be taken to have made an election not to commence proceedings, and to be bound by that election. [3] I do not accept that submission. Negotiations between the parties were continuing during the whole of that period. It is not possible from the material before me [4] to ascertain the stage which those negotiations had reached. However, it is possible to infer that the plaintiff had some expectation that the issues would be resolved by those negotiations, without the necessity for litigation between members of the family. The fact that there was no distribution of the estate during that period would be likely to support such an expectation.
[3]Re Barrot (supra) at 315.
[4]See [10] above
In Amos v Amos[5] an application under section 99 was brought 13 months after the grant of letters of administration, and thus there was a period of seven months’ delay to be considered. The applicant, like the present plaintiff, was the son of a farmer, and had assisted his father for many years in the management of the farm. The applicant and other members of the family were engaged for some time in negotiations for an arrangement as to the realisation and distribution of the assets of the estate, and the applicant had reasonable grounds for hoping that those negotiations would result in an agreement. The applicant was aware of his position under the Act. Lush J found that for some five months of the seven months period the delay was excusable by virtue of the continuance of the negotiations, and for the remaining two or three months by the applicant’s being too busy on the farm to attend to the matter.
[5][1966] VR 442
Lush J cited, as other judges dealing with these applications have done, the following passage from the judgment of Sholl J in Re Barrot [6] :
The legislation contemplates that the Court or Judge must be satisfied of some circumstances which should induce it or him, acting judicially – i.e., fairly and properly, upon relevant materials and in relation to relevant considerations – to excuse the applicant from what would otherwise be the privative operation of the section as a result of the delay. That this is a wise and sensible provision is clear when one considers, first, that, if the extension is granted, no antecedent distribution is to be disturbed – which means that the rights of some beneficiaries may have become conclusively indefeasible and beyond the possibility of adjustment – and secondly, that once the six months’ period has elapsed without an application, the rights of all beneficiaries have become prima facie indefeasible, and that they may have acted on that basis.
[6](supra) at 312
In the present case, there has been no distribution, and no rights have become “conclusively indefeasible and beyond the possibility of adjustment”. Further, the continuing negotiations have clearly had the effect that with one exception the beneficiaries have not felt able to act on the basis that their rights became prima facie indefeasible after the expiration of six months from the grant of probate.
The only matter relied upon as constituting prejudice to a beneficiary should this application be granted is described in paragraph 21 of the affidavit of the defendant. That paragraph reads:
Under the terms of my husband’s Will, my daughter Adele was left a property known as “Carpolac” [sic]. It was valued at the time of my husband’s death at approximately $80,000, and I believe is now worth significantly more. The various proposals and counter proposals that were put in relation to Phillip‘s claim against the Estate contemplated that Phillip would purchase that property from Adele at its market price. Adele tells me that last year [2003], in the expectation that the matters would be finally resolved and she would be paid out, she made certain commitments for building work to be carried out on her home. She tells me that when it became apparent that the Estate could not be distributed because of these proceedings, she went ahead with the work. I understand from Adele that her liability is in the order of $250,000, a substantial part of which would have been met had she received her entitlement under the Will. I believe that Adele has suffered specific prejudice as a result of the delay in the institution of Phillip’s claim.
That paragraph is largely hearsay. This is an interlocutory proceeding, and hearsay is therefore permissible in an affidavit, if it is based on information and belief and the grounds are set out. [7] However, the deponent’s statement of her belief does not, with one exception, extend to the facts contained in the paragraph, but only to the existence of prejudice. The exception is her expression of belief as to the current value of the property described as “Carpolac”, for which no ground is set out. Further, the passage appears to disclose material not otherwise before the Court (see [10] above) concerning negotiations which have not come to fruition, and it is to be presumed that those negotiations were expressed to be without prejudice.
[7]see Rule 43.03(2).
In any case it is difficult to evaluate that passage in the absence of evidence from Adele. The admissibility of hearsay does not necessarily render that hearsay a satisfactory source of evidence. It would seem that Adele assumed that issues had been settled which had not been settled, but for the reasons set out in [10] above I am unable to draw any conclusion on that point. It does not seem to be suggested that Adele will be unable to meet the cost of the building work. Even if I were to ignore the reasons for not taking that paragraph into account, I am not able to rely on it as demonstrating relevant prejudice.
It is not suggested that the administration of the estate will be prejudiced by the granting of an extension of time, a factor regarded as significant by the High Court in Neil v Nott[8].
[8](1994) 68 ALJR 509 at 511
In all the circumstances, namely the absence of evidence of any valid claim of prejudice, the fact that distribution has not commenced, the absence of evidence that the beneficiaries have regarded their rights as having become indefeasible, and most significantly, as in Amos v Amos, the continuation of the negotiations throughout the relevant time, I find that the delay between the letter of 15 November 2002 and the bringing of this application on 27 November 2003 is excusable. I now turn to consider whether the plaintiff has an arguable case.
Arguable case?
In Re Walker [9] Lush J said:
. . . the proper approach is that an applicant, seeking the indulgence of the Court as the present applicant does, must show he has an arguable case to present if time is extended in his favour. . . .
The Queensland case of Re Terlier, [1959] QWN 5, in my respectful opinion correctly states the proposition that if it is improbable that the action will succeed, an extension of time should not be granted. This improbability may stem either from the condition of the estate – see the last words of the judgment in Brown v Holt, [1961] VR 435 – or from the facts relevant to the plaintiff’s claim, or from both, as in Terlier’s Case.
[9][1967] VR 890 at 892
In Brown v Holt[10] , Pape J found that as a result of the distribution of land to the testator’s widow, the amount left in the estate was quite insufficient to support the claims of the plaintiffs. Accordingly, the application to extend time was dismissed. No such consideration arises in this case, there having been no distribution.
[10][1961] VR 435 at 443
Mr Wells submitted that the testator owed a stronger obligation to provide for his widow, rather than for the plaintiff. However, as Mr Bevan-John said in reply, that submission did not take account of the possibility of a disposition involving a life interest to the widow.
Section 91(1) of the Act provides that the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. Section 91(3) provides that the Court may not make such an order unless it is of the opinion that the distribution of the estate of the deceased effected by the will does not make adequate provision for the proper maintenance and support of that person. Section 91(4) sets out a number of matters to which the Court must have regard in forming that opinion. They include:
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased;
Some of the evidence relevant to the issue of whether the will made adequate provision for the proper maintenance and support of the plaintiff is set out in [4] to [9] above, which derive from the plaintiff’s affidavits. The affidavit of the defendant was sworn in response to the first and second affidavits of the plaintiff. Paragraph 2 of the defendant’s affidavit reads:
In this Affidavit I do not respond to all the matters in Phillip’s First and Second Affidavits, I depose to matters which I am advised are relevant only to the Application for the extension of time for Phillip to bring a claim for further provision from my late husband’s Estate.
It is to be presumed that the defendant was advised of the relevance to that application of the plaintiff’s demonstrating that he has an arguable case. Accordingly, where material in the plaintiff’s affidavits goes to that issue and is unchallenged by the defendant, I may assume that it is not proposed to challenge that material on the trial of the plaintiff’s substantive application should the time for bringing that application be extended.
It is relevant that the plaintiff has lived and worked on the farm, save for one period of a few weeks in 1984, since he left school, and that in the years preceding the death of the testator he devoted his time to successfully building up the business of the partnership, and thus the value of his father’s estate. Mr Wells submitted that the will already made substantial provision for the plaintiff, in the gift of “Kiely’s” plus a one-quarter share of the partnership. However, that provision must be evaluated in the context of the partnership property as a whole and the use which can appropriately be made of it. Given that the business of a merino stud carried on by the partnership uses, for reasons explained by the plaintiff in his third affidavit, a total of 3370 acres, it is clear that he would be unable to operate a similar business on the 640 acres which constitute Kiely’s, which is the only property of which he is the sole owner. His part shares in certain of the other blocks are useable only in the context of the partnership business.
Conclusion
As Hansen J said in Scammell v Colman[11] :
The case throws up an issue of a type commonly encountered in such cases, and which is often the subject of dispute, namely whether a child’s contribution does or does not constitute the basis of a claim under Part IV against his or her parents’ estate.
There is more to this case than that issue. However, I find, on the material to which I have referred, that the plaintiff has an arguable case to present if the extension of time which he seeks is granted.
[11][1999] VSC 111 at [6]
For the reasons given, there will be an order in the terms sought by the plaintiff extending the time for the plaintiff to bring an application under Part IV of the Act. I invite submissions from counsel as to the form of the order and as to costs.
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