Stanley v State Trustees Limited [2012] VSC 24 (8 February 2012)

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Stanley v State Trustees Limited [2012] VSC 24 (8 February 2012)

Last Updated: 8 February 2012

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

SCI 2011 7109

IN THE MATTER OF PART 4 OF THE ADMINISTRATION AND PROBATE ACT 1958

and

IN THE MATTER OF THE ESTATE OF PAULA LEE CUMMING (DECEASED)

BETWEEN

TERENCE JOHN STANLEY	Plaintiff

and

STATE TRUSTEES LIMITED (WHO IS SUED AS THE ADMINISTRATOR OF THE ABOVE NAMED DECEASED)	Defendant

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 February 2012
DATE OF JUDGMENT:	8 February 2012
CASE MAY BE CITED AS:	Stanley v State Trustees Ltd
MEDIUM NEUTRAL CITATION:	[2012] VSC 24

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TESTATOR’S FAMILY MAINTENANCE – Application for extension of time to bring claim – Former de facto partner of deceased – Plaintiff aware of time limit – Defendant granted plaintiff further time – Plaintiff failing to commence proceedings in extended time – No reasonable explanation for failure – Weak, but not hopeless, prospects of success if application granted – Small estate – Application refused – Administration and Probate Act 1958 (Vic) ss 91, 99.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G Baker	Nicholas P Byrne

For the Defendant	Mr R Boaden	Legal Department, State Trustees Limited

HIS HONOUR:

1 This is an application by the plaintiff, pursuant to s 99 of the Administration and Probate Act (“the Act”), for an extension of time to commence proceedings for provision, under s 91 of the Act, from the estate of Paula Lee Cumming (“the deceased”).

Background

2 The deceased died intestate on 16 August 2010. Letters of administration to her estate were granted to the defendant, State Trustees, on 14 January 2011. The application in this case is brought by originating motion issued on 29 December 2011. Section 99 of the Act provides that no application, under Part 4 of the Act, shall be heard by the Court, unless the application is made within six months after the date of the grant of letters of administration. The section further provides that the time for making an application may be extended for a further period by the Court as the Court thinks necessary.

3 At the date of her death, the deceased was 59 years of age. She left an estate, which was valued for probate purposes at $273,000. It comprised $267,232 in bank accounts, a motor vehicle worth $3,000, and other personal chattels valued at $2,352. There are seven next of kin of the deceased, namely, five nephews and nieces, and two uncles, who are each entitled to participate in the distribution of the estate. In addition, in proceeding no. 5462 of 2011, Richard John Osborn (“Osborn”) has claimed provision from the estate for his maintenance and support under Part 4 of the Act. According to Osborn’s affidavit, the deceased and he met in July 2009, and they commenced living together in a domestic relationship in March 2010.

4 The plaintiff is 67 years of age. From August 1997 he lived in a de facto relationship with the deceased for a period of ten years. According to the affidavit sworn by the plaintiff, during that period, he assisted the deceased in many ways, both practically and financially. In 2003, the deceased purchased a home at 8 Paisley Court, Gowanbrae. The plaintiff states that he assisted and supported her by maintaining her home and garden. After the deceased and the plaintiff separated in September 2007, the plaintiff did not continue to contribute financially to her support, but he did assist her in the care and maintenance of her home and garden, and he cared for her until her death.

5 In his affidavit, the plaintiff further states that, at various times, the deceased had assured him that she had made financial provision for him in her will, and, specifically, in relation to her superannuation entitlements. However, the two superannuation funds, in which the deceased held entitlements, have informed the plaintiff that the deceased did not nominate any beneficiaries in relation to her superannuation entitlements.

Submissions

6 Although the discretion, reposed in the court under s 99, is expressed in general terms, nevertheless that discretion must be exercised judicially and upon proper considerations. The plaintiff comes to this Court seeking an indulgence, and therefore the onus is on the plaintiff to persuade the Court that there is an appropriate basis upon which the discretion, to extend time, should be exercised in his favour. Ordinarily, the matters, which the court takes into account, on an application such as this, include the length of the delay, the reasons for the delay, prejudice to the estate or to any other party, and whether the plaintiff has a prima facie claim, which, at the least, is not hopeless.[1]

7 In support of the application, Mr G Baker, who appeared on behalf of the plaintiff, submitted that the delay on behalf of the plaintiff was short. While the reason given by the plaintiff for that delay (to which I shall shortly refer) was, in hindsight, illogical, nevertheless it explains why the plaintiff did not issue proceedings within time. Mr Baker accepted that the plaintiff’s claim, for provision from the estate of the deceased under s 91 of the Act, is not particularly strong. Nevertheless, he submitted, it is not hopeless. Mr Baker also contended that the defendant had not demonstrated that the estate, or any other interested party, had suffered any prejudice, or would suffer any prejudice, arising from the delay by the plaintiff in instituting proceedings under Part 4 of the Act.

8 In response, Mr R Boaden, who appeared on behalf of the defendant, relied, principally, on the lack of any appropriate explanation by the plaintiff for the delay in issuing proceedings under Part 4 of the Act. In this respect, Mr Boaden referred me to the affidavit of its instructing solicitor, which set out correspondence with the applicant’s solicitor, and to which I shall refer shortly. Mr Boaden also submitted that the plaintiff’s claim for provision under s 91 of the Act would, in any event, be hopeless. He further submitted that, in light of the small size of the estate, the defendant, and others with lawful claims on the estate, would suffer prejudice, if I were to accede to the plaintiff’s application in this case.

9 Thus, the main matters, which were in contention before me, raise the following questions:

(a) Whether the plaintiff had given a satisfactory explanation for the delay;

(b) Whether the plaintiff would, in any event, have a viable claim under s 91 of the Act, which is not hopeless;

(c) Whether the estate, or another interested party, would suffer prejudice, if I were to grant the plaintiff’s application.

Reason for delay

10 The affidavit of the defendant’s solicitor sets out a series of correspondence, which is relevant to the issue whether the plaintiff has proffered a sufficient reason or excuse for his delay in issuing proceedings in this matter.

11 On 28 January 2011, the plaintiff made an inquiry of the defendant as to the current position of the estate. By a letter dated 23 March, the defendant provided the information currently available concerning the estate. On 3 May, the plaintiff’s solicitor wrote a letter stating that he had instructions to issue a claim against the estate on behalf of the plaintiff. On 31 May, the defendant’s solicitor provided further information about the estate, and noted that the defendant was yet to receive any details relating to the claim, which the plaintiff would make against the estate of the deceased. The letter requested that such details be provided to the defendant’s solicitor as soon as possible, so that the plaintiff’s claim might be considered.

12 In a letter dated 2 June 2011, the plaintiff’s solicitor sought further information about the estate. The letter concluded by stating that, if the plaintiff did not receive that information, then it would be necessary to institute proceedings under Part 4 before the expiry of the six month period from the grant of letters of administration, namely, before 14 July. The defendant’s solicitor responded to that by a letter dated 10 June, in which he stated that the defendant was taking steps to ascertain the value of the superannuation funds. The defendant’s solicitor noted that Osborn had provided a draft originating motion and affidavit in support of his claim (which was provided to the plaintiff). The defendant’s solicitor again sought details of the nature of the plaintiff’s claim against the deceased’s estate.

13 The six month period, prescribed by s 99 of the Act, expired on 14 July 2011. In a letter dated 19 July, the defendant’s solicitor informed the plaintiff’s solicitor that he was instructed to extend the period, in which any proceeding could be issued, to 14 October. He again asked for clarification as to the basis upon which the plaintiff intended to make a claim. By letter dated 22 July, the plaintiff’s solicitor acknowledged the defendant’s agreement to extend the period, in which proceedings could be issued, to 14 October next.

14 By letter dated 15 August 2011, the defendant’s solicitor stated that no further extension of time would be granted for the commencement of proceedings, and that if the plaintiff failed to issue proceedings before 14 October, without substantiating the grounds upon which such a claim might be brought, the defendant would seek to strike out any application.

15 In response, the plaintiff’s solicitor wrote a letter dated 25 August stating:

“At this time I am not instructed by my client to make a claim for provision from the estate, but note that my client reserves that right.”

16 On 25 November, the defendant’s solicitor wrote to the plaintiff’s solicitor, noting that the plaintiff still had not provided any material to support a claim pursuant to the Act, and that the plaintiff had not issued proceedings during the extension of time granted to him. Accordingly (the letter stated) any claim issued by the plaintiff out of time would be vigorously defended by the estate.

17 It is clear, from the foregoing summary of the correspondence between the parties, that, at least by May 2011, the plaintiff was aware of his right to make a claim against the estate of the deceased. It is also clear that the plaintiff, and his solicitors, were well aware of the requirement, under s 99, that any such claim be commenced before 14 July 2011, which was six months after the grant of letters of administration of the estate to the defendant. Notwithstanding that that period expired, the defendant, of its own motion, gave the plaintiff a further three month extension of time within which to issue any proceeding. By his solicitor’s letter dated 25 August, the plaintiff elected not to issue proceedings against the estate.

18 During the same period, the plaintiff’s solicitor consistently ignored requests by the defendant for information, which would substantiate a claim by the plaintiff for provision from the estate under Part 4 of the Act. In that way, in my view, the plaintiff, by his advisors, made a conscious decision not to proffer any claim on behalf of the plaintiff under Part 4 of the Act, whether by the issue of proceedings, or, at the least, by informing the administrator of the estate as to the nature of the claim, which the plaintiff now seeks to make.

19 With those matters in mind, it is necessary to examine the reason put forward on behalf of the plaintiff, explaining why he did not issue proceedings pursuant to Part 4 of the Act within the prescribed time, or within the time allowed to him by the defendant.

20 It would seem from the plaintiff’s affidavit that, for some time after the death of the deceased, the plaintiff had a concern about the circumstances in which the deceased had died. In paragraph 7 of his affidavit, the plaintiff stated that he had previously deferred instituting proceedings under Part 4 of the Act, in order not to exacerbate the costs to the estate of the deceased, in the expectation that the defendant, as the administrator of the estate, would not effect distribution of the estate, until the coroner determined whether or not to conduct an inquest into the death of the deceased. It appears to be inferred in the plaintiff’s affidavit that he had some concerns as to the conduct of Osborn relating to the death of the deceased. In a later part of his affidavit, the plaintiff states that he had been concerned to act responsibly by not issuing proceedings, in the expectation that the defendant, or the next of kin of the deceased, would contest the claim of Osborn. The affidavit noted that Osborn had, apparently, persuaded the administrator of one of the deceased’s superannuation funds that he had a bona fide de facto relationship with the deceased, which entitled him to the proceeds of the fund.

21 Thus, it would seem that the plaintiff’s decision not to issue proceedings under Part 4 of the Act was, in some way, connected with his concern that a coroner’s inquest be conducted, which, the plaintiff somehow understood, might avoid the necessity for the estate to incur costs of a claim against it by the plaintiff. Mr Baker, who appeared on behalf of the plaintiff, readily acknowledged that the reason for the delay, proffered by the plaintiff in his affidavit, is not logical. I wholly agree with that concession.

22 In some cases, it may well be sufficient for a plaintiff to proffer an excuse, notwithstanding that the excuse, on later analysis, is not well founded or is misconceived. However, in this case, the excuse, put forward by the plaintiff, is hardly an excuse at all. The plaintiff was well aware of his rights, and well aware of the requirement that he exercise those rights within the time specified by the Act, or within the time permitted to him by the defendant. The plaintiff elected not to exercise those rights. The fact that he expected that a coroner’s inquest might be held into the death of the deceased had nothing to do with the question whether the plaintiff ought to have issued his proceedings to make a claim for provision from the estate of the deceased.

23 The discretion, conferred by s 99 of the Act, is not confined by rigid rules. Thus, it is not a requirement, in every case, that the applicant’s delay be satisfactorily explained.[2] Nevertheless, ordinarily, it would be expected that, on an application such as this, a plaintiff, who is seeking an indulgence, should be able to demonstrate a reason, or reasons, why he or she did not apply within the time specified by the Act.[3] In this case, the absence of any reasonable explanation for the delay is particularly pertinent, as the plaintiff had been placed on clear notice by the defendant of the need for him to issue a claim, under Part 4, within the permitted time.

The plaintiff’s claim

24 The next question is whether the plaintiff, on the materials before me, has demonstrated that he has an arguable claim, or, at the very least, a claim which is not groundless or hopeless. As Dixon J stated in McCann v Ward [4], the merits of the plaintiff’s potential claim have some relevance to applications of this nature, because it would be futile to permit a claim to proceed, which is hopeless or destined for failure.

25 As I stated, the plaintiff lived with the deceased for a period of ten years “as man and wife” until September 2007. Their relationship ended without rancour, and the plaintiff continued to visit the deceased regularly to assist her in the care and maintenance of her home, and to care for her. The plaintiff, in his affidavit, stated that, during their relationship, he assisted the deceased in many ways, “both practically and financially”. However, in his affidavit, he did not provide any details, as to the nature and extent of that assistance. Thus, the affidavit material is particularly sparse in terms of any claim by the plaintiff against the estate based on his moral desserts.

26 In his affidavit, the plaintiff has set out briefly his current financial position. He is unemployed, and he receives an aged pension of $748.80 per fortnight, which he supplements with casual work from time to time. He owns his home in Craigieburn, the municipal capital improved value of which is $272,000. That property is not encumbered by any mortgage debt. The plaintiff also has approximately $45,000 in savings and securities, and various assets such as a motor vehicle.

27 In order to succeed in a claim under Part 4 of the Act, the plaintiff would need to establish, under s 91(1), that the deceased had a “responsibility” to make provision for him from her estate for his proper maintenance and support. In such a claim, the question would be whether the deceased, as a wise and just testatrix, would have considered it her moral duty to make provision in favour of the plaintiff.[5]

28 In support of such a claim, Mr Baker relied, principally, on the fact that the plaintiff had lived, as de facto husband and wife, with the deceased for a period of ten years, until three years before her death. He submitted that that fact, combined with the fact that the plaintiff and the defendant continued to enjoy amicable relations, was sufficient to provide an arguable foundation for a claim by the plaintiff, for provision out of the deceased’s estate, under Part 4 of the Act.

29 In my view, the existence of such a relationship, of its own, would not necessarily be sufficient to provide an arguable foundation for such a claim. However, there are other facts, briefly referred to in the affidavit material, which would have some relevance, if the plaintiff were permitted to make a claim in the case. The plaintiff did make some financial and practical contribution to the estate of the deceased, albeit that the detail of any such contribution is particularly exiguous in the affidavit material. It would seem, from that material, that the plaintiff had continued to provide some non-financial assistance and support to the deceased, after their relationship ceased. In addition, there is evidence that, during her lifetime, the deceased had stated both to the plaintiff, and to another person, that she intended that the plaintiff be a beneficiary to her superannuation fund. In that way, it is arguable that the deceased acknowledged that the plaintiff did have some claim upon her bounty.

30 Based on those matters, I would not characterise a claim, by the plaintiff, under Part 4 of the Act, to be hopeless. However, at the same time, the prospects of such a claim could hardly be characterised as strong. Indeed, on the materials which were placed before me, I would not be sanguine at all that the plaintiff would succeed in any such claim. The deceased’s estate is not large. The plaintiff’s assets and means are modest, but he is by no means indigent. The material, which I have described as sparse, indicates the possibility of the existence of a moral claim based on desserts. However, on the matters contained in the affidavits, it could not be stated, at this stage, that such a claim has good prospects of success.

31 Thus, while the plaintiff’s potential claim under Part 4 could not be properly characterised as untenable or hopeless, nevertheless, on the materials which have been put forward in support of this application, I would consider that the plaintiff’s prospects of success are quite weak.

32 In thus characterising the plaintiff’s claim, I am conscious that there are, of necessity, limitations in forming an assessment of the strength of the claim of the plaintiff at this preliminary stage. However, this is clearly not a case, in which the plaintiff’s claim is sufficiently strong, that to deny the plaintiff an extension of time could amount to an injustice.[6]

Prejudice

33 Mr Boaden submitted that if I were to grant the plaintiff’s application for an extension of time, the estate would suffer prejudice, consisting of the costs which would be incurred in opposing the claim of the plaintiff. In this case the defendant, repeatedly, requested that the plaintiff provide information about the basis of his claim, and allowed the plaintiff an extension of time within which to make such a claim. Thus, the defendant had done all which it could to protect the estate, which is modest in size.

34 In the course of his submissions, Mr Boaden properly acknowledged that, in this context, normally the relevant “prejudice” is where a part of the estate has been distributed, so that the burden of a late claim, under Part 4, may unfairly fall on only some of the beneficiaries.[7] It is well established that prejudice does not include the possibility that further provision may be made under Part 4 of the Act.[8] Further, the distribution of the estate of the deceased will, clearly, be deferred pending the determination or resolution of the claim by Osborn. Thus, the distribution of the estate is not likely to be subject to any additional delay, if I were to grant the plaintiff’s application.

35 Thus, the matters relied on by Mr Boaden, in my view, could not be properly described as “prejudice”, in the sense in which it is understood in applications of this type.

Conclusions

36 The question, ultimately, is whether, in the exercise of my discretion, I should grant the plaintiff an extension of time within which to issue proceedings under Part 4 of the Act.

37 The guiding factor is the justice of the application, which itself is informed by the considerations to which I have already referred.[9] In this case, the delay by the plaintiff is relatively short. However, the plaintiff made a conscious decision not to issue proceedings within the time specified by the Act, and within the extended period allowed to him by the defendant. The plaintiff was well aware of his entitlement to make a claim, and he was also (through his solicitor) well aware of the specified time limit, and of the period of extension allowed to him. The plaintiff’s failure to issue a proceeding within that time was not due to some oversight, or some other such factor. Rather, according to his solicitor’s letter, he made a conscious decision not to commence those proceedings. The reason why he chose not to issue those proceedings is not altogether clear, but, on the most generous view of it, it does not constitute a factor which would, in any way, contribute to an argument that it would be unjust to refuse the plaintiff’s application. Although I have found, on the materials filed in this proceeding, that a claim by the plaintiff under Part 4 of the Act would not be hopeless, or condemned to failure, nevertheless, based on those materials, it would have weak prospects of success.

38 The onus is on the plaintiff to establish circumstances, which would justify the grant to him of the indulgence sought in his application. Although, as I have noted, the size of the estate, and the fact that the grant of the plaintiff’s application would expose it to incurring costs, are not issues of prejudice, nevertheless they are not, I consider, irrelevant. If the plaintiff’s application were granted, the estate would incur additional costs, which are disproportionate to the size of the estate. The plaintiff’s claim is weak. The plaintiff has not, on the materials before me, produced any sufficient basis upon which an indulgence should be granted in his favour. In those circumstances, in the exercise of my discretion, I consider that the justice of the case requires that I refuse the application by the plaintiff for an extension of time within which to bring an application under Part 4 of the Administration and Probate Act.

^[1] See for example, Sheppard v Heathcote (No 3) [2010] VSC 190, [15], [16], [23] (Robson J); McCann v Ward [2010] VSC 452, [10]-[11] (Dixon J); Day & Anor v Raudino & Anor [2009] VSC 463 [5].

^[2] Ansett v Moss [2007] VSCA 161, [6] (Buchanan JA), [18] (Redlich JA).

^[3] In Re Guskett deceased [1947] VicLawRp 28; [1947] VLR 212, 214, 215 (Herring CJ).

^[4] Footnote above [11].

^[5] Blair v Blair [2004] VSCA 149; (2004) 10 VR 69, 75 [13] (Chernov JA), 84 [39]-[41] (Nettle JA); Lee v Hern (2006) 11 VR 258.

^[6] Groser v Equity Trustees Ltd [2007] VSC 27; [2007] 16 VR 101, 107 [38] (Gillard J).

^[7] See Menzies v Marriott [2009] VSC 345, [52] (Hollingworth J).

^[8] Sheppard v Heathcoate (No 2) (above) [22] (Robson J).

^[9] Groser v Equity Trustees Ltd [2007] VSC 27; (2007) 16 VR 101, 107 [38] (Gillard J).

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Stanley v State Trustees Limited [2012] VSC 24 (8 February 2012)

Stanley v State Trustees Limited [2012] VSC 24 (8 February 2012)

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