Ansett & Anor v Moss & Ors [2007] VSC 92

Supreme Court of Victoria|2007-04-04|Before: HARPER J

TESTATOR'S FAMILY MAINTENANCE - Application out of time by adult sons - Large estate partially distributed - testator's moral duty - varying concepts of - court's position when different but legitimate views might be held about extent of duty - Grey v Harrison [1997] 2 VR 359 considered - Administration and Probate Act 1958, Part IV.

"91. Power to Court to order adequate provision for proper maintenance and support of ... children of deceased out of his estate.

Notwithstanding anything in this Act to the contrary where after the commencement of the Administration and Probate (Family Provision) Act 1962 any person (hereafter in this Part called 'the deceased') dies, and the distribution of his estate effected by his will (if any) or by the operation of the provisions of Division 6 of Part I of this Act or both by his will and the operation of the said provisions is such as not to make adequate provision for the proper maintenance and support of the deceased's ... children the Court may, on application by or on behalf of the said ... children, order that such provision as the Court thinks fit shall be made out of the estate of the deceased for such ... children."

"95. Court to consider net estate and ... children's means.

In granting or refusing any ... application [of the kind referred to in s.91] and in fixing the amount of the provision to be made under this Part for the ... children or any of them the Court shall have regard (inter alia) to ―

(a) the net value only of the estate of the deceased as ascertained by deducting from the gross value thereof all debts testamentary and funeral expenses and all other lawful liabilities and charges to which the said estate is subject; and

(b) whether the ... children or any of them are entitled to independent means whether secured by any covenant settlement transfer gift or other provision made by the deceased during his or her life or derived from any other source whatsoever."

4 As the plaintiffs acknowledge in their written submissions, "[t]he Court cannot hear applications for family provision unless they are made within six months after the date of the granting of probate of the will." By originating motion filed on 18 January 2006, more than 24 years after their father's death, each of Sir Reginald's two sons - John Nichol Ansett and Robert Graham Ansett - seek an extension of time within which they may be permitted to commence an application for further provision out of the undistributed remainder of their father's estate. They rely upon s.99 of the Act, which is to be found in Part IV. Unlike ss. 91 and 95, it retains now the form in which it appeared 26 years ago.

5 Section 99 is another central provision in the scheme of Part IV. It reflects the principle that those charged with the administration of a deceased's estate have a duty to get on with the job as quickly as circumstances reasonably allow. Once probate has been granted, or letters of administration obtained, the estate must be dealt with in accordance with the will or, in the absence of a will, in accordance with the scheme of distribution laid down by statute. And, once a distribution has been properly made to a beneficiary, new interests - together with the rights which protect them - come into existence.

6 It is not generally appropriate to seek to interfere with such rights. By its very nature, however, a successful application under the testator's family maintenance provisions will result in an alteration to the distribution which would otherwise prevail. In order best to accommodate these divergent considerations, s.99 requires that an application under s.91 must be made within six months after the date of the grant of probate of the will or letters of administration (as the case may be).[3] But sometimes a deserving applicant fails to meet this deadline in circumstances where, if it were to be inflexibly applied, injustice would result. Parliament has sought to meet this situation by providing in the legislation that the time for making an application may in certain circumstances be extended by the court even though the application to extend is made after the six months have expired. In no case, however, may the application for an extension be made after the final distribution of the estate; and no distribution made before such an application shall be disturbed by reason of it.[4]

7 Sir Reginald was survived by his second wife (Joan McAuliffe Ansett), by the plaintiffs (his two children by his first marriage) and by his three daughters (Janet McAuliffe Richards, Jane Myles Ashhurst and Lillian McLean Baxter). His widow, Lady Ansett, died on 25 September 2003. She was one of his executors. Probate of his will and of the two extant codicils was on 17 May 1982 granted to his named executors and trustees. Apart from Lady Ansett, the individual executors are alive and, with Equity Trustees Ltd, are the defendants to this application.

8 Much of the estate was distributed before May 2005. According to Hansen J, however, the following assets remain:

(a) a contingency fund of $150,000;

(b) a fund known to the executors as "the residence fund" of $300,000;

(c) a sum of $300,000 receivable on settlement of the sale of certain estate land to one of the daughters (Janet Richards) and her husband;

(d) the land described in Certificates of Title volume 10822 folios 931 and 932 and volume 10898 folio 556.[5]

9 These findings were made by his Honour in giving judgment on an application by the plaintiffs' step sister, Jane Ashhurst, for an extension of time within which to make an application under Part IV of the Act. I have no reason to think that these findings were unjustified. I therefore respectfully adopt them.

10 Pursuant to the will, each of the five children received a legacy of $50,000. That was the limit of Sir Reginald's testamentary generosity to his sons. The three daughters, however, received a more substantial testamentary benefit than that conferred upon their step-brothers. The trustees were directed to set aside three separate sums of $750,000 - one for each daughter - on trust to pay the income to the daughter concerned during her life and thereafter to her children.

11 There were, as one would expect, many other provisions in the will. They have, at best, peripheral relevance to the present applications. I need not, therefore, refer to them here. I merely note at this point that all parties accept that the applicants bear any applicable onus of proof. It is for them to explain not only the failure to apply within six months of the grant of probate, but also any further delay. It is also for them to satisfy the court, if they can, that their failure should be excused and that injustice would result were they to be penalised for being out of time. On the other hand, as the defendants acknowledge, "if the plaintiffs satisfy the court that, at all times prior to acting in the matter, they were ignorant of the existence of Part IV of the Administration and Probate Act 1958 and the rights it gives children (such as themselves) to claim further provision", then it would be unjust to penalise them for their delay in instituting these proceedings.[6]

12 Robert is the eldest child. He was born on 8 August 1933. John was born nearly three years later, on 2 February 1936. Both assert that their delay in bringing this proceeding arose out of an ignorance of the rights given by the legislation to children whose parents or either of them have failed to make adequate provision after death for the proper maintenance and support of their offspring.

13 John has a particularly difficult task in overcoming the burden upon him to prove on the balance of probabilities that, in his case, this assertion is true. He is a lawyer. As the holder of a Commonwealth scholarship, he completed his studies for the degree of Bachelor of Laws at The University of Melbourne in 1957. His articles of clerkship occupied him during the following year (1958), and after some 12 further months as an employee solicitor with the firm with whom he did articles, he joined another firm (Maurice Cohen & Co) in 1960. He became a partner in that firm the following year, leaving it in 1969. While with Maurice Cohen & Co he drew an indeterminate but small number of simple wills. He put the total as somewhere between five and ten. They were of the kind in which the testator leaves all his or her estate to the spouse, or to the children should the spouse be the first to die.

14 There is no evidence of John Ansett's employment or occupation, if any, during the next two or three years. This is significant, since the entirety of his employment history and earning capacity during his father's lifetime is relevant. That history, at least to the extent that a parent as aloof as Sir Reginald knew of it, bears upon the parent's testamentary duty.

15 For some six months or more in 1972, Mr Ansett was an investigating officer with the Law Institute of Victoria. In 1973, he joined the Gas and Fuel Corporation as a corporate lawyer. He held this position for several years, after which, between 1975 and 1977, he had "various labouring jobs in Queensland and Victoria".[7] In cross-examination, he agreed that he "took on those labouring jobs on [his] own free choice. It was, in part, 'a lifestyle change' ".[8]

16 In 1977, Mr Ansett joined the law firm of Lloyd P Goode & Co as a partner, and remained as such until he took up sole practice in 1979. This, however, was followed by a period beginning in 1980 and continuing until 1983 during which he was "mainly unemployed"[9] and during which his father died. He rejoined the ranks of practising lawyers in May 1983, when he became the corporate lawyer for the car-hire business operated by his brother under names which incorporated the word by which it was widely recognised: "Budget". He retained this position for the next seven years or so, and then took his last significant job: a six months contract with the Department of Social Security. As with Budget, he was engaged as a corporate lawyer.

17 As this recitation reveals, for eleven years or so, Mr Ansett practised, in partnership, as a solicitor - predominately in the area of insurance, personal injury and corporate law. I am prepared to accept that, in all his experience as a legal practitioner, Mr Ansett had little to do with wills, or with probate law. Nevertheless, he had some. He drew wills, between five and ten in number. I am prepared to accept that all were "the simple form of husband leaving all to wife, and wife leaving all to husband, and if one predeceases, it went to the children equally."[10] Making this allowance, it remains true that if in these circumstances he did not know of the testator's family maintenance provisions of the Administration and Probate Act, then he was negligent in his ignorance. This is no obscure or arcane interstice of the law. It is everyday, run-of-the-mill, law - the kind of law that touches all strata of society, and affects very large numbers of citizens. It is law the existence of which every law graduate might be expected to know - if not on graduation, then very shortly after joining a small to medium size firm, such as Maurice Cohen & Co, that acts for individual clients across the broad spectrum of legal concerns which such clients are likely to encounter at some point in their lives. Certainly, any practitioner who draws any will should, before doing so, ensure that he or she knows the law that directly relates to that task. Part IV of the Administration and Probate Act is such law.

18 I cannot in these circumstances accept that Mr Ansett has discharged the burden which, in this application, is upon him: the burden to prove on the balance of probabilities that he was ignorant of the rights which are to be found in Part IV of the Administration and Probate Act. My conclusion is strengthened by the circumstance that Mr Ansett never, in any of the affidavits sworn by him in this proceeding, directly states that he did not know about Part IV. The nearest he comes to making such a statement is in paragraph 8 of his affidavit of 13 February 2006. He there deposes merely that he "did not give consideration to my father's will or to any further entitlement I might have had to his estate until ... 5 May 2005".

19 Given that he bears the burden of proof, the wording of the affidavit has a significance that is not removed by evidence given in cross-examination, when Mr Ansett denied that he, "as a competent legal practitioner, ... would have known well before 1989 that [he] had rights to pursue."[11] It is likewise significant that Mr Ansett has not satisfactorily explained the seven months' delay between his discovery on 5 May 2005 that his step sisters, Jane Ashhurst and Janet Richards, had instituted their applications, and his institution of his own in January 2006.

20 For these reasons, I cannot accept the excuse relied upon by Mr Ansett. In other words, I cannot on the balance of probabilities accept that ignorance of the law was the reason why Mr Ansett delayed for such a very long time before instituting this application. The question of whether in 1981 his father owed him a testamentary duty to make adequate provision for his proper maintenance and support is therefore one that I need not answer. As Young CJ said in Re Lauer, deceased,[12] an applicant must show an arguable case for relief, but "the mere fact that an applicant had an arguable case for relief cannot, without more, provide a reason for granting an extension of time." Mr Ansett's application for leave to bring this proceeding out of time therefore fails.

21 Even were the relevant burden of proof discharged, I do not think that the application should succeed. In Bosch v Perpetual Trustee Co Ltd[13] the Privy Council established the principles which ever since have guided judicial consideration of this area of the law. In that case, their Lordships said that they:

"... agree that in every case the court must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father. This no doubt is what the learned judge meant by a just, but not a loving, husband or father. As was truly said by Salmond J in Re Allen, Allen v Manchester ... :

'The Act is ... designed to enforce the moral obligation of a testator to use his testamentary powers for the purpose of making proper and adequate provision after his death for the support of his wife and children, having regard to his means, to the means and desserts of the several claimants, and to the relative urgency of the various moral claims upon his bounty. The provision which the court may properly take in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances'."

22 After referring to this passage, Callaway JA in Grey v Harrison[14] noted that "[t]he touchstone of what a wise and just testator would have thought his or her moral duty ... supplies the norm that the legislature has left unexpressed."[15] His Honour continued:

"It also reflects the view that there is no legislative justification to abridge freedom of testation unless the testator has breached a moral duty, or alternatively that there is no judicial reason to exercise the statutory discretion except for the purpose of remedying such a breach." (Emphasis as in the original).

23 It remains important to recognise the breadth of a testator's right to do what he or she thinks best with his or her estate. After making the point that "it is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit", Callaway JA continued[16]:

"Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused [the right of a person to dispose of his or her property as he or she thinks fit]. To do so is to assume a power to take property from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the wide terms found in s.91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent."

24 The problem is that testators sometimes take a view of their moral duty that differs from the view of others, including that of the court. It is then the court's difficult task to deal appropriately with such difference. Ultimately, of course, it is the responsibility of the court to determine the issue. But that responsibility must be discharged with due diffidence. There may be more than one legitimate view of a particular testator's moral duty to those whom that testator must consider when deciding whether adequate provision should be made by that testator for that person's proper maintenance and support. The fact that a wise and just judge would not have made the same testamentary provision as did the testator in a particular case does not necessarily mean that, within the proper limits of the right of which Callaway JA spoke, the testator was unwise and unjust.

25 This case may serve to illustrate the point. It is not unreasonable to assume that Sir Reginald Ansett saw the scope of his moral duty towards his sons as properly having a dimension that others might, with justification, think was meanly narrow. It seems (though it is not my purpose or my responsibility to decide the point) that Sir Reginald saw himself as being entirely self-made, and all the better for it. He therefore saw virtue in his sons having similarly to make their own way, with minimal assistance from him. We do not have to agree with views of this kind to recognise that they may be sincerely held by others, who would be grossly affronted to be told (as much if not more by a judge as anybody else) that they had abused their acknowledged right to dispose of their property as they thought fit.

26 The key, I think, is the word "abuse". A right is abused if its exercise cannot reasonably be reconciled with a moral duty to which the holder of that right is subject.

27 It seems to me to be very difficult, if not impossible, to hold that Sir Reginald Ansett abused his moral duty to either of his sons. I accept that he was never a warm and welcoming father; rather, the reverse. I also accept that the declaration, made in his will, that "each of my sons has in the past from time to time been given assistance by me including financial assistance in the establishment of his home and of his business or professional career" was at best disingenuous. Although each may, technically, have received something, it was of such little importance, especially given Sir Reginald's wealth, as to be insignificant; and in Robert's case it was in part at least offset by the damage Sir Reginald did to his son's business through the competition of a rival car hire company.

28 Nevertheless, John in 1981, the year of his father's death, was a 45-year-old lawyer with 20 years of practice behind him, most of these as a partner in a respectable firm. He had another seven years to come as a corporate lawyer in his brother's business, although his father could not have been aware of this. He was unemployed in December 1981, and had been so for several years. Whether his father knew this is uncertain; there had been no contact between father and son since some time before John's second marriage, which I take it occurred in about 1979. Even if the father had known of his son's unemployment, he may not have known the reason for it.

29 It is therefore not open to conclude that this was a circumstance that should have brought into play any testamentary duty owed to John by his father. In evidence given, under objection, in re-examination, John attributed his being out of work at the relevant time to heavy drinking and his "somewhat ... depressed state".[17] Apart from the fact that this is out of step with his earlier evidence about the adoption of a different lifestyle,[18] Mr Ansett does not say that the drinking amounted to a medical condition such as alcoholism, or that his depression amounted to a mental illness. Then there is the unexplained gap in the employment history between 1969 and 1972. In this state of the evidence, the possibility cannot be discounted that Sir Reginald regarded his son's situation in 1981 as it was in 1970 and thereabouts: a deliberately made lifestyle choice, or as the necessary consequence of such a choice. Or it may be that for some other reason Sir Reginald saw it, with justification according to his lights, as not warranting a greater disposition in John's favour that the $50,000 (or more than three years' annual average male wage) given him by Sir Reginald's will. If the latter were the case, it could not be said that, in coming to that conclusion, Sir Reginald abused his moral duty to his son.

30 My conclusion may be expressed another way. There is no evidence showing the extent, if any, by which John Ansett's proper maintenance and support required more than the $50,000 given to him. Moreover, there is in December 1981 a history of many years' employment as a partner in private legal practice, with prospects of further such employment in the future. In these circumstances, it cannot be said that Mr Ansett had in 1981 an arguable case for relief. The fact that he has since been declared bankrupt, has no assets, and has no income other than the aged pension of about $13,000 per annum, evokes sympathy. For the purposes of this application, however, it is irrelevant. The question whether the testator has made adequate provision for the beneficiaries' proper maintenance and support must be answered by reference to the state of things at the time of death, although the court may take into account matters which the testator would have been likely to anticipate had the issue been given proper consideration. It is only if an abuse of moral duty has been found that the court will determine, on the basis of things as they then are, what adequate provision requires.

31 It is in the light of these considerations that I turn to the application made by Mr Robert Ansett. It is out of no disrespect to him that I observe that the relevant facts can be stated shortly. In my opinion, Mr Robert Ansett has as much claim to sympathy as, but less claim to further provision than, his brother. He too was the son of a father who seemed to think that sharing his fortune with his adult children was something to be regarded as unnecessary, if not misguided.

32 In 1981 Robert Ansett was at the top of Melbourne's commercial life. On his own evidence, he was earning about $70,000 per annum, and had a net worth of about $2,000,000.[19] It is true that his business had borrowed heavily, and he had guaranteed those borrowings. But these were then merely contingent liabilities. The expectation was that Mr Ansett, already among the financial and business elite, would continue to increase in prosperity. This, of course, would not have disqualified him from the testamentary bounty of a parent of a different caste of mind than that of Sir Reginald. That, however, is not the point. I am concerned not with one's ordinary human affection for one's offspring, but with the provisions of a statutory scheme. Here one looks across a different landscape.

33 The position from this vantage point is, I think, clear. On no basis could it be said that, in December 1981, Mr Ansett was a person to whom his father owed a duty, pursuant to Part IV of the Administration and Probate Act, to ensure that adequate testamentary provision was made for his proper maintenance and support.

34 As fate would have it, the then contingent liabilities became debts that Mr Ansett - caught in a share market collapse and a pilots' strike - could not pay. Financially, he has never recovered. But that is something his father could not have foreseen in 1981.

35 Both applications for leave to bring, out of time, proceedings under Part IV of the Administration and Probate Act must for these reasons be dismissed. In coming to this conclusion, I have been mindful of the fact that, in August last year, Hansen J granted an extension of time to the plaintiffs' step-sister, Jane Ashhurst. She is almost 24 years younger than Robert Ansett, and more than 21 years younger than John. She was 24 years old, had been married for less than a year, and (as Hansen J put it in his judgment in her case (at [112]) was "without a career as such" when her father died. Until her sister, Janet Richards, commenced proceedings on 23 April 2004 seeking an extension of time in which to make a claim under Part IV, she was ignorant of her right to do so. But she was then suffering severely from the ill-health which is now, in her, a chronic problem. The result was that she did not speak to her solicitor until late 2004 at the earliest. In these circumstances, his Honour held that she should be excused the delay in making her application. Moreover, her financial position was and is such as to leave her with what, in his Honour's opinion, is an arguable case to take to trial. Her position can therefore be distinguished from that of her step-brothers.

[1] W. Vamplew (ed). Australians: Historical Statistics published by Fairfax Syme & Weldon (1987).

[2] Australian Bureau of Statistics.

[3] Administration and Probate Act 1958, s.99. This section remains in substantially the same terms as it was in 1982.

[4] Ibid.

[5] Ashhurst v Moss & Ors (unreported) [2006] VSC 287 at [99] and [100].

[6] Defendants' written outline of submission, para.[4].

[7] Affidavit of John Ansett sworn 12 January 2006, para. [27a].

[8] Transcript, p.48.

[9] Affidavit of John Ansett sworn 12 January 2006, para. [27d].

[10] Transcript, p.46-47.

[11] Transcript, p.63.

[12] [1984] VicRp 14; [1984] VR 180 at 186.

[13] [1938] AC 463 at 478-9.

[14] [1997] 2 VR 359.

[15] Ibid, at 365.

[16] Ibid, at 366.

[17] Transcript, p.66.

[18] See above, para. 15.

[19] Plaintiffs' written outline of submissions, 6 February 2007, para.[27].

At a glance

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Judgment (41 paragraphs)

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Legislation Cited (8)