Young v Terence Ross Kestel (as Executor of the Will and Estate of Douglas Tate Young)
[2002] WASC 313
YOUNG -v- TERENCE ROSS KESTEL (as Executor of the Will and Estate of DOUGLAS TATE YOUNG) [2002] WASC 313
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 313 | |
| Case No: | CIV:1812/2002 | 5 DECEMBER 2002 | |
| Coram: | MASTER SANDERSON | 20/12/02 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| B | |||
| PDF Version |
| Parties: | SUZANNE OLWEN YOUNG TERENCE ROSS KESTEL (as Executor of the Will and Estate of DOUGLAS TATE YOUNG) |
Catchwords: | Inheritance (Family and Dependants Provision) Act 1972 Application for extension of time to bring application Turns on own facts |
Legislation: | Inheritance (Family and Dependants Provision) Act 1972 |
Case References: | Bondelmonte v Blanckensee [1989] WAR 305 Clayton v Aust (1993) 9 WAR 364 Gregoriou v George Nitsos (As Executor of the Estate of Athanasois Nichos) & Ors [1999] WASCA 42 Jackamarra v Krakouer (1998) 195 CLR 516 Re Salmon (Dec) (1981) Ch 167 Bath v Perpetual Trustees WA Ltd as Executors of the Estate of Kolecki & Ors [2000] WASC 232 Bosch v Perpetual Trustee Co [1938] AC 463 Cropley v Cropley [2002] NSWS 349 Gregory v Hudson [1999] NSWCA 221 Luciano v Rosenblum (1985) 2 NSWLR 65 Re Allen (Deceased) [1922] NZLR 218 Re Dennis (Deceased) [1981] 2 All ER 140 Re Wherrett [1963] Tas SR 178 Regan v Zoller, unreported; SCt of WA; Library No 6134; 6 December 1985 Sayer v Sayer [1999] NSWCA 340 Singer v Berghouse (1994) 184 CLR 201 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TERENCE ROSS KESTEL (as Executor of the Will and Estate of DOUGLAS TATE YOUNG)
Defendant
Catchwords:
Inheritance (Family and Dependants Provision) Act1972 - Application for extension of time to bring application - Turns on own facts
Legislation:
Inheritance (Family and Dependants Provision) Act 1972
Result:
Application refused
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr L A Tsaknis
Defendant : Mr M H Zilko SC
Solicitors:
Plaintiff : Gibson Tovey & Associates
Defendant : Troika Legal
Case(s) referred to in judgment(s):
Bondelmonte v Blanckensee [1989] WAR 305
Clayton v Aust (1993) 9 WAR 364
Gregoriou v George Nitsos (As Executor of the Estate of Athanasois Nichos) & Ors [1999] WASCA 42
Jackamarra v Krakouer (1998) 195 CLR 516
Re Salmon (Dec) (1981) Ch 167
Case(s) also cited:
Bath v Perpetual Trustees WA Ltd as Executors of the Estate of Kolecki & Ors [2000] WASC 232
Bosch v Perpetual Trustee Co [1938] AC 463
Cropley v Cropley [2002] NSWS 349
Gregory v Hudson [1999] NSWCA 221
Luciano v Rosenblum (1985) 2 NSWLR 65
Re Allen (Deceased) [1922] NZLR 218
Re Dennis (Deceased) [1981] 2 All ER 140
Re Wherrett [1963] Tas SR 178
Regan v Zoller, unreported; SCt of WA; Library No 6134; 6 December 1985
Sayer v Sayer [1999] NSWCA 340
Singer v Berghouse (1994) 184 CLR 201
(Page 3)
1 MASTER SANDERSON: This is the plaintiff's application for an extension of time within which to commence proceedings under the provisions of the Inheritance (Family & Dependants Provision) Act 1972 ("the Act"). The applicant is the widow of the late Douglas Tate Young ("the deceased") who died on 29 August 2000. As the widow of the deceased, the plaintiff is a person entitled to claim under the provisions of s 7(1)(a) of the Act. However, by s 7(2)(a) of the Act, any such application must be brought within six months of the grant of probate. Under s 7(2)(b) of the Act, the time for making an application may be extended if:
"The Court is satisfied that the justice of the case requires the applicant be given leave to file out of time."
2 The principles upon which an application such as the present is to be determined are well settled and were not in dispute. They were set out in detail by Malcolm CJ in Clayton v Aust (1993) 9 WAR 364 at 366 - 367. His Honour quoted with approval what was said by Megarry VC in Re Salmon (Dec) (1981) Ch 167 at 175. The five points which emerge from that case and others referred to therein are as follows:
(1) The discretion is unfettered but must be exercised judicially.
(2) 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 it of its benefits. The time limit is a substantive provision laid down in the Act itself and is not a mere procedural time limit imposed by the Rules of Court. The applicant must make out a substantial case for it being just and proper for the Court to exercise its statutory discretion to extend time.
(3) The whole of the circumstances must be looked at and not least the reasons for the delay. It is material whether or not negotiations have been commenced within the time limit. If they have and the time has run out while negotiations are taking place, then that may encourage the Court to extend the time.
(4) It is relevant to consider whether or not the estate had been distributed before a claim under the Act had been made or notified. In this respect it is relevant to consider whether the beneficiaries have changed their position in reliance on
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- a benefaction they have actually received rather than just the prospect of such receipt.
- (5) It is relevant to consider whether a refusal to extend the time would leave the claimant without redress against anybody.
3 This last point may require some clarification. If the evidence establishes that the delay in making an application has been occasioned by the plaintiff's solicitors and the plaintiff has, for their part, taken all reasonable steps to progress the application, then even if the plaintiff may have an action against his or her solicitors, leave may be granted: see Gregoriou v George Nitsos (As Executor of the Estate of Athanasois Nichos) & Ors [1999] WASCA 42.
4 It is perhaps worth noting that the first two of these guidelines are really statements of broad general principle. They dictate the approach in every case and do not require resort to the facts. The final three points really relate to factual matters which should be considered in each particular case. It is worthy of note that the principles make no reference to the strength or otherwise of the plaintiff's case, should leave be granted. It may be that this issue is picked up by the third principle. But it is perhaps surprising that the strength of the applicant's case does not stand alone as a matter to be considered. In other instances where an exercise of discretion is required, some analysis of the merits of the case is regarded as proper: see Jackamarra v Krakouer (1998) 195 CLR 516 per Kirby J at 540 - 541. I mention this matter because counsel for the defence spent some time analysing the merits of the plaintiff's claim. His submission was that the claim was "as near to hopeless as could be imagined". I will return to this issue later in these reasons.
5 The plaintiff is 63 years of age, being born on 10 July 1939 in London, England. She first met the deceased in or around 1962 at the time the deceased ran a car sales business and the plaintiff and her then husband purchased cars from the deceased from time to time. The deceased met the plaintiff and her then husband socially from time to time and a friendship developed. In 1975 the plaintiff separated from her first husband and was divorced from him in 1978. Thereafter the plaintiff and the deceased met from time to time and the relationship progressed.
6 The plaintiff and the deceased married on 29 November 1983. It is relevant to note that as at the date of the death of the deceased, he had been married to the plaintiff for just under 17 years.
(Page 5)
7 In support of this application the plaintiff filed an affidavit sworn 9 July 2002. The affidavit is lengthy but it is, with respect, more akin to an affidavit one might expect to see filed in support of a substantive application. Given that counsel for the defendant argued that the plaintiff's claim, if allowed to proceed, lacked merit, there is, perhaps, some justification for the amount of detail about the relationship between the plaintiff and the deceased contained in the affidavit. However, for the purposes of deciding this application I have not found it necessary to analyse in detail the nature of the relationship between the plaintiff and the deceased. While I have given the material in this affidavit careful consideration, I do not propose to summarise the evidence. In my view it is not necessary that I should do so.
8 The deceased had four children by his previous marriage. They are Debra Kaye Corrigan, Kylie Anne Cormack, Sharon Lesley Street and Dean Hayman Young. The plaintiff has two children by a previous marriage. There were no children of the union between the plaintiff and the deceased.
9 Probate of the will of the deceased was granted to the defendant on 25 January 2001. The will is a rather complex document. This is due in part to the fact that the deceased was a man of substantial means. By par 2 of the will the deceased referred to a property at 16 Fifth Avenue, Shoalwater Bay which was the residential address where the plaintiff and the deceased resided, certainly for the latter part of their life together. Reference is made to two trusts and a superannuation fund. "The Wichmann Trust" is said to refer to a trust created on 26 June 1979. "The DT Young Family Trust" is said to refer to a trust created on 25 June 1974. "The Young Superannuation Fund No 2" is said to refer to a superannuation fund established by deed dated 15 June 1981. Each of these entities is more elaborately described in the will, but the detail I have given will suffice for present purposes. The references in the will to "my spouse" were said to be references to the plaintiff. Paragraph 8 of the will then sets out a series of bequests. Pursuant to this clause the plaintiff was bequeathed the deceased's interest in the Shoalwater Bay property. Of the remaining 11 bequests 10 are specific and not presently of concern. It is subpar (12) which is important. It is in the following terms:
"the rest and residue of my estate ('My Residuary Estate') of whatsoever nature and wheresoever situated, to the following persons:
(a) MY SPOUSE;
(Page 6)
- (b) DEBRA KAYE CORRIGAN;
(c) KYLIE ANNE CORMACK;
(d) SHARON LESLEY STREET; and
(e) DEAN HAYMAN YOUNG,
in equal shares as tenants in common subject to the following:
(f) prior to any distribution of My Residuary Estate being effected in accordance with clause 8(12), for the purposes of this clause My Residuary Estate is deemed to include an additional amount $400,000, which amount of $400,000 is deemed to have been distributed from My Residuary Estate to MY SPOUSE. I have included this clause 8(12)(f) in my Will because during 1999 and with the concurrence of MY SPOUSE I gifted $400,000 to National Australia Superannuation Pty Ltd as trustee of the National Australia Financial Management Allocated Pension fund for the benefit of MY SPOUSE, which amount I would otherwise have retained and given to MY SPOUSE under this my Will. Notwithstanding that the $400,000 was paid for the benefit of MY SPOUSE during my lifetime, I wish to ensure that other persons referred to in this clause 8(12) receive from me a similar amount, albeit after my death; and
…."
11 Given that probate of the will of the deceased was granted on 25 January 2001, the time limited for making an application under the Act pursuant to s 7(2)(a) expired on 25 July 2001. This application was commenced by originating summons filed 13 June 2002. In other words, the application was brought just under 11 months after the time limit had expired. This is a substantial delay. Clearly it calls for some explanation.
(Page 7)
12 The plaintiff's evidence discloses that she did not consult solicitors until after the time limit for making an application had expired. By par 52 of her affidavit the plaintiff says:
"I first consulted my lawyers, Gibson Tovey & Associates ('Gibson Tovey') on 18 August 2001 because I was concerned about what I had and was also going to receive from Doug's Will. Shortly before seeing Gibson Tovey, Ross (the defendant) had told me verbally that I could expect a further $75,000.00 approximately from Doug's estate which I thought was very low. I had only had the house at 16 Fifth Avenue transferred to my name at that stage. Gibson Tovey wrote on my behalf to Ross so as to establish what assets Doug's estate was comprised of and what stage the administration of his estate had reached."
13 With respect this paragraph says nothing about the reasons why the plaintiff did not take steps prior to 18 August 2001 to bring a claim under the Act. It is not uncommon that a plaintiff will not act because he or she was not aware of their rights under the Act, or perhaps because the terms of the will of the deceased were not clear. Nothing like that is suggested in this case. The plaintiff has sworn a second affidavit in support of her application. It was sworn 7 November 2002. By par 7 of that affidavit, the plaintiff confirms what she said in par 52 of her earlier affidavit, but still says nothing as to why she took no action prior to August 2001. In short, the plaintiff provides no explanation as to why she did not take steps prior to the expiration of the time limit and why she did nothing until August 2001.
14 Once the plaintiff's present solicitors were instructed, they immediately wrote to the defendant advising that they had been retained to advise the plaintiff in relation to her late husband's estate. A record of this correspondence appears as annexures "SOY10" to "SOY28" to the plaintiff's affidavit of 9 July 2002. It is apparent from reading the correspondence that the solicitors were endeavouring to ascertain the value of the deceased's estate, what might be the eventual distribution to the plaintiff and the entitlement of other beneficiaries. However, it was not until 5 November 2001 that the plaintiff's solicitors informed the defendant that they were advising the plaintiff in relation to a possible claim under the Act: see annexure "SOY14". It will be necessary to return to this correspondence later in these reasons but in relation to the explanation for delay in taking action, two points can be made about the conduct of the solicitors.
(Page 8)
15 First, it is very difficult to understand why when they were consulted in August 2001, the plaintiff's solicitors did not take some steps to protect her position under the Act. As at the date they were consulted, the plaintiff's claim was less than a month out of time. If an originating summons had been issued immediately, investigations could no doubt have continued as to the value of the estate. Counsel for the plaintiff, when confronting this issue, submitted that it was, in all the circumstances, proper and appropriate to fully investigate whether the plaintiff had a claim before any application for leave was made. With respect, faced with the time limit in s 7(2)(a) of the Act and mindful of the substantive nature of that time limit, it is open to question whether that was the proper course of action.
16 Secondly, there is no explanation in the evidence as to why it was that the solicitors decided not to act. It is implicit from a reading of the correspondence that before taking any steps the solicitors wished to ascertain the value of the deceased's estate. During his submissions counsel for the plaintiff put the case in that way. But there is no evidence to that effect. It is not clear when counsel was first engaged and what advice was given in relation to when an application for an extension of time should be made. While it may be that the correspondence speaks for itself and the implications to be drawn from that correspondence are sufficiently clear so as to explain the solicitor's position, it might well have been prudent to lead some direct evidence on this question.
17 Taken in the overall, the length of the delay and the lack of any adequate explanation for the delay are factors against the grant of an extension of time.
18 Turning to the fourth point, no negotiations were commenced within the time limit. After time had expired correspondence was commenced, although it is difficult to characterise this correspondence as negotiations. Up until their letter of 5 November 2001 the plaintiff's solicitors had given no indication that a claim under the Act was being contemplated. The possibility of a claim is implicit from the fact of the correspondence itself; any executor receiving correspondence of this nature must have immediately considered the possibility of a claim. Once mention was made of a possible claim under the Act, the defendant moved swiftly. On 13 November 2001 he wrote to the plaintiff's solicitors, responding to their letter of 5 November 2001. He dealt with a number of queries raised in the plaintiff's solicitor's correspondence and then turned to the possibility of a claim under the Act. He said (at p 227 of the plaintiff's first affidavit: annexure "SOY15"):
(Page 9)
- "I note your comments that you are advising your client in relation to a potential claim under the Inheritance (Family and Dependants Provision) Act 1972. I had anticipated making a further partial distribution at the end of November 2001 to the 5 residual Will beneficiaries. However, in view of your comments regarding a potential claim against the Estate, I will need to take legal advice as to any future distributions. I would, however, draw your attention to section 20(5) of the Inheritance (Family and Dependants Provision) Act 1972, which provides as follows:
'Notice to an Administrator of an intended application shall lapse and shall be incapable of being renewed, and the Administrator may act as if he had not received the notice, if , before the expiration of three months after the date on which he first receives notice of the intention to make the application or before the sooner expiration of twelve months from the date on which the Administrator became entitled to administer the estate of the deceased in Western Australia, the Administrator does not receive notice that the application has been made to the Court; but nothing in this subsection shall prevent the subsequent making of an application'
You will likely be aware that Probate was granted to me on 25 January 2001 and accordingly the 12 month period referred to above expires on 24 January 2002."
19 By the time this letter was received by the plaintiff's solicitors it was 10 months since the grant of probate. They had been put on notice in blunt terms that the defendant was contemplating a further distribution from the estate. Implicit in s 20(5) of the Act is that an executor who has had a grant of probate for 12 months or longer can, with impunity, distribute an estate whether or not a claim under the Act had been foreshadowed. In other words, a potential claimant who fails to act does so at his or her peril. In any event, it cannot be said that in negotiations, if that is how the correspondence is to be characterised, the defendant did not take the point that time had expired. It was raised directly as soon as a claim was foreshadowed.
20 On 21 February 2002 the plaintiff's solicitors wrote to the defendant's solicitors (the defendant by this stage having engaged solicitors) seeking a meeting. A meeting was held on 12 March 2002. No doubt for very good
(Page 10)
- reason there is no evidence as to what occurred at this meeting. What can be said is that it failed to satisfy the plaintiff that there was no claim to be made under the Act. In my view the mere fact of this meeting cannot be held against the defendant. There is nothing in the evidence to suggest that at any time the defendant misled the plaintiff or did anything to encourage her in the belief that no objection would be taken to the bringing of an application out of time.
21 On this point the evidence is against the plaintiff. Negotiations were not commenced within the time limit and consequently the time did not expire while negotiations were continuing. When negotiations did commence, the defendant cooperated but at no time did anything to suggest to the plaintiff that the point the time had expired would not be taken. In short, there is nothing in the evidence which could excuse the plaintiff not taking action because of negotiations.
22 Turning then to the distribution of the estate, it would seem now that for all practical purposes, the estate has been fully distributed. By letter dated 24 May 2002 (annexure "SOY24" to the plaintiff's first affidavit) the defendant advised that subject to one or two minor matters, he intended to make the final significant distribution from the estate. He indicated this distribution would be made on 31 May 2002. On 30 May 2002 the plaintiff's solicitors wrote to the defendant asking him to refrain from making the distribution pending the plaintiff further considering her position. Not unreasonably, the executor declined to take that course. The amount remaining in the estate now is relatively insignificant. If a claim were to be made and were that claim to be successful, the deceased's four children, as four of the five residuary beneficiaries, would be forced to disgorge funds to satisfy the plaintiff's claim. The defendant would be protected by the provisions of s 20 of the Act. In any event, he has obtained indemnities from each of the deceased's four children, ensuring that were any liability to attach to him as a consequence of his distribution of the estate, he would be indemnified by those receiving funds.
23 Each of the four children of the deceased filed an affidavit setting out the amount they had received from the estate and what use they have made, or intend to make, of the money they received. Each is in a slightly different position. Consuelo Patricia Young is the wife of Dean Hayman Young. In Mr Young's absence, Mrs Young has sworn an affidavit dated 2 December 2002 setting out her and her husband's financial position. She says she is a law student in her final year at Murdoch University. She confirms that her husband has received by way of distribution from his
(Page 11)
- father's estate a pre-tax cash amount of $565,046 and property to the value of $53,750. She then goes on to say (at par 6):
"Of the amount referred to in par 5(1) (the amounts I have referred to above):
(1) I am advised by my Accountant, Tom Lawrence of Lawrence Business Management and believe to be true that $447,500 has been lent to Jetscape Pty Ltd as trustee of the Fierro-Young Family Trust ('FY Trust'). The FY Trust is a family trust established by myself and my Husband for the purpose of carrying on a crayfishing business. The FY Trust has used the funds lent to it as follows:
(a) $305,000 has been used to purchase a crayfishing boat;
(b) $10,000 has been used to purchase crayfish pots;
(c) $125,000 has been used as working capital for the business, including the purchase of ancillary equipment and supplies and maintenance; and
(d) $7,300 as a deposit on a new 2000 Toyota Prado motor vehicle. The balance of the purchase price of $43,000 has been paid by way of funds borrowed from a financial institution.
Currently the bank account for FY Trust is in overdraft;
(2) $100,000 has been used as the deposit on our new family home at 3 Thompson Road, Fremantle, Western Australia. The balance of the purchase price of $445,000 has been paid by way of funds borrowed from a financial institution."
(Page 12)
25 It must be acknowledged that this is not a case where the beneficiaries, ignorant of the prospect of a claim under the Act, have organised their affairs in such a way the position cannot be wound back. Assuming the executor was in constant contact with the residuary beneficiaries (and there is no reason to think otherwise), from August 2001 they must have been aware of at least the prospect of an application to extend time and the possibility of a claim being made. But it is difficult to suggest that any of the beneficiaries have acted unreasonably. Now, if leave is granted, they face the prospect of having to re-arrange their affairs. In my view this is another factor which runs counter to the grant of an extension to the plaintiff.
26 Fifthly, there is the question of whether, if leave is refused, the plaintiff will be left without redress against anybody. It is not appropriate in these reasons to speculate on the likely outcome of any proceedings the plaintiff might bring against her solicitor. It must be said that by not seeking advice within the prescribed time, the plaintiff was, at least in part, the author of her own misfortune. It may well be then that she would be left without redress against any party. To that extent it is a consideration in her favour. However, there is no evidence as to whether or not subsequent to her consulting solicitors in August 2001 the plaintiff took any steps to ensure an application for leave was brought. In the Nitsos case, the evidence given by the appellant in the Court of Appeal was to the effect that she had consistently contacted her solicitors to check on the progress of her claim. Each time she was told that the matter was in hand and there was no cause for concern. The Court concluded that she could have done nothing more to protect her own interests. In the circumstances then, this was a factor in her favour and justified the grant of leave. There is no such evidence in this case. Nothing is said in any of the affidavit material as to what contact there was between the plaintiff and her solicitors, what advice she was given about seeking an extension of time and what steps she personally took to ensure that the matter was pressed. So although the prospect of the plaintiff being left without redress if this application is unsuccessful is a factor in her favour. It is a matter which, in my view, is of little or no weight.
27 Finally, there is the matter which I alluded to earlier in these reasons and the question of the strength or otherwise of the plaintiff's claim. Counsel for the defendant put the position in this way. A party who makes a claim under the Act must first establish jurisdiction - that is to say, the plaintiff must establish that as at the date of the death of the deceased she was left without adequate provision for her proper maintenance, support, education or advancement in life: see
(Page 13)
- Bondelmonte v Blanckensee [1989] WAR 305. The evidence in this case showed that in all, the plaintiff had received cash and assets from the estate of the deceased of over $1 million. This takes into account the $400,000 given to her before his death by the deceased and included in his residuary estate. It was said that there was nothing in the evidence which could establish that such a provision from the estate was not adequate for the needs of a 63-year-old woman with no dependants.
28 It is not proper on an application such as this to attempt in any way to try the proceedings. For that reason, as I have said, I do not propose to analyse the evidence led by the plaintiff and the limited evidence led by the defendants. It may well be that if leave is granted, further evidence would be put on by the plaintiff which would greatly expand the evidence in support of her case. But what can be said about her position is this. She is a long way short of destitute. She has an unencumbered property and significant cash assets. This is not a case where a wife of many years standing has been left without means and where she faces penury. To that extent there is no over-arching compelling reason why leave should be granted.
29 That said, I acknowledge, as was submitted by counsel for the plaintiff, that the Act is remedial and is to be beneficially interpreted. The marriage between the plaintiff and the deceased was of long-standing and appears to have been happy and fulfilling for both. A widow deserves every consideration and care must be taken not to so rigidly interpret the Act as to deny a person in the position of the plaintiff the opportunity to bring a claim. I have borne this submission carefully in mind in reaching my conclusion in this matter.
30 On balance, I am satisfied that leave ought not be granted. In my view, weighed dispassionately, each of the relevant matters falls against the plaintiff. Put simply, she has delayed too long and has lost her opportunity. The beneficiaries have received the distribution under the will of the deceased, they have altered their position and they should be allowed to get on with their lives. The time limit in the Act is substantive and in this case there is no good reason why the children of the deceased should not have the benefit of that time limit.
31 I would dismiss the application. I will hear the parties as to costs.
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