Coates v Public Trustee [2007] NSWSC 647 | Case summary

JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Franz Maikowski, who died on 11 November 1990. The deceased was survived by his wife Ingeborg Maikowski, who is elderly and disabled. Notice has been given to her in respect of these proceedings but no proceedings have been taken by her. The plaintiff is the natural daughter of the deceased although she was adopted in circumstances which I will come to shortly. 2 The deceased died intestate and his estate presently stands in an amount of approximately $239,134. There are costs involved in the application which are fairly modest in accordance with the cooperative approach that has been followed in this matter. The defendant has carefully investigated all the financial circumstances of the plaintiff and it has found it not necessary to cross-examine the plaintiff. As I said, the deceased died in 1990. 3 The plaintiff was born on 17 January 1955 in Sydney and apparently was the only child of the deceased and his wife. They were married apparently in Germany on 9 December 1950 and migrated to Australia in 1952. The deceased had a difficult time, having been a prisoner of war from the Russian army and having been interned in a German concentration camp. They came to Australia at some stage before the birth of the plaintiff. The plaintiff's mother suffered from a mental illness apparently. Eventually in November 1959, when the plaintiff was five years old, she was removed from her father's care by the Child Welfare Department and placed in foster care. At that time they had been living in a caravan park in Sylvania. The plaintiff was never returned to the care of either of her natural parents and she never saw her father again. 4 In 1969 she was adopted and the adoption order was made. Thereafter she, I accept, wished to have contact with her father but could not do so. In due course, many many years later, in fact only recently, the plaintiff was able to have access to her file as a ward and then also, after having found out what was in that file, then found that her father had died some six years earlier. 5 The plaintiff brings the application as someone who was partly dependent upon the deceased and part of the deceased's household. It is plain that she was partly dependent and part of the household for the five years that she lived with the deceased and his wife. That situation is the only avenue for her to be an eligible person. I am satisfied that she is an eligible person. However, it is necessary under s 9(1) of the Family Provision Act that the Court should first determine whether there are factors warranting the making of the application. The courts have dealt with this on a number of occasions. In Re Fulop Deceased (1987) 8 NSWLR 679 at 681 McLelland J described that expression in the following terms: "Secondly, the subsection appears to be premised upon a distinction between 'factors which warrant the making of the application' on the one hand, and circumstances which would justify the making of an order granting the application, on the other; otherwise the subsection would be pointless. This means that in a particular case the Court might determine that there are 'factors which warrant the making of the application' within the meaning of the subsection, and yet go on to decide that the application should fail. Since the subsection applies only to certain classes of applicants, it suggests that those classes of applicants need to demonstrate some basis for their claims additional to that required of other classes. The difference between the two sets of classes of applicants, in broad terms, seems to be that the classes not affected by s 9(1) (lawful and de facto spouses and children) are as such generally regarded as natural objects of testamentary recognition by a deceased (of the Wills Probate and Administration Act 1898, s 61B), whereas the classes affected by s 9(1)(former spouses, and sometime dependent grandchildren all household members) are as such not generally so regarded. This suggests that the 'factors' referred to in the subsection are factors which when added to facts which render the applicant an 'eligible person' give him or her status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased. That the subsection is directed at a plaintiff's status as applicant in some such sense as this perhaps finds some support in the statutory direction to the Court, in the event that it determines the preliminary question adversely to the plaintiff, not to go on to determine the application, but 'refuse to proceed with the determination of the application'". 6 In Churton v Christian (1988) 13 NSWLR 241 the Court approved this statement. Priestley JA at p 252, after setting out and approving the statement, added: -- "To this I would add that although the classes affected by s 9(1) are not necessarily generally regarded as natural objects of testamentary recognition, in some cases members of those classes may, when the circumstances of their relationship with the deceased are set out, immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances, natural objects of testamentary recognition." 7 These principles have been applied at first instance for many years. There has been in recent times further attention to this matter in the Court of Appeal in the case of Brown v Faggoter, a decision given on 13 November 1998, which is a decision of Sheller JA, Sheppard AJA and Fitzgerald AJA. Fitzgerald AJA, who seemed to suggest that an application might be warranted if the application has reasonable prospects of success gave the main judgment. This seems to be a somewhat different and perhaps easier test than that which the Court of Appeal approved in Churton v Christian. I will consider the matter on both bases, given that there may be some flux in the state of the law in this regard. 8 In the present circumstances there are a number of matters which suggest that factors warranting are made out. Of particular importance is that she is the natural daughter of the plaintiff and his wife and that she was forcibly removed from the care of the deceased and placed in foster care. The evidence also establishes that the placement in foster care was against the wishes of the deceased and was only because of inability to care for her due to his own mental illness. The subsequent adoption of the plaintiff was also effected against the wishes of the deceased who made many applications to the department to try and have access to his daughter again, and it is fair to say the deceased never accepted the removal of the plaintiff from his care or, in effect, the severance of the parental bond. In the circumstances I am satisfied that there are factors warranting the making of the application. 9 Because the application is out of time it is necessary for the Court to consider s16 of the Family Provision Act which allows an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased (1947)VLR 211 the following was said: "It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time." 10 Young J in several cases has dealt with the principles governing application to extend time under this Act. In Massie v Laundy (unreported NSWSC, 7 February 1986) he indicated that when looking at 'sufficient cause' under 16(3) of the Act the factors which one looks at include the following: -- (a) is the reason for making a late claim sufficient? (b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended? (c) has there been any unconscionable conduct on either side which would enter into the equation? 11 Apparently he also accepts a view which was expressed by Needham J in Fancett v Ware (unreported NSWSC 3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported NSWSC 31 March 1988) Powell J when considering the matter at the substantive hearing leant to the view that a plaintiff seeking an extension of time under the Testator's Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by Hodgson J in Basto v Basto (unreported NSWSC 8 September 1989). 12 In De Winter v Johnstone, a decision of the Court of Appeal on 23 August 1995 Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at p23: "In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief." 13 Sheller JA considered that it was only necessary to show that the application was not bound to fail. Cole JA seems to have adopted the parties' approach of looking at the strength of the plaintiff's case. 14 In the present case the plaintiff has made a number of applications, including applications to set aside her wardship, which seem to have been based upon advice which is probably not the most appropriate having regard to what the Court said to her on that application. 15 In due course, only shortly before these proceedings were commenced, the plaintiff saw a solicitor and for the first time found out about the right to bring an application under the Family Provision Act. In the circumstances I am satisfied that there has been an adequate explanation for the failure to make the application within time. There was no prejudice to any beneficiary because in this matter the estate passes to the Crown as bona vacantia. In fact one of the many proposed applications of the plaintiff was for an ex gratia payment to the Crown in respect of the bona vacantia and that lead to the Public Trustee actually making the application for judicial advice as to the estate and the fact that it passed to the Crown as bona vacantia. 16 I should refer to the plaintiff's application itself. The plaintiff lives in a modest two-bedroom, one bathroom townhouse at Yamba. She lives with her husband who is some years older than her and who has been suffering from a substantial number of medical difficulties. They are, in fact, living separately and apart and I am satisfied on that aspect but the plaintiff has to care for her husband because of his medical conditions. 17 The plaintiff's house, which is a two-bedroom duplex, is worth some $225,000. Her income, which is only the pension, is very modest and allows a very modest lifestyle. The plaintiff is 52 years of age and suffers a number of medical problems including degenerative disc disease, osteoarthritis and psoriatic spondylitis. She is also under medication in respect of her psychiatric condition. Plainly she is a person who is in modest circumstances and has little behind her. 18 The way she puts her claim for provision is that she would like to sell her house and purchase another house which will give herself and her husband more room and better bedroom facilities. It seems, having regard to the evidence, it is an appropriate requirement, particularly in this case there being no other competing claims in respect of the estate of the deceased. She will also need to replace her vehicle which will probably cost her from $25000-$30000. The cost of the upgrade of her dwelling would be in the order of $165,000. In the circumstances I am satisfied it would be appropriate to make an order, however, there is a situation which has to be dealt with and that is the question of s28. Section 28 includes further restriction of power of the Court to designate property. 19 In Dare v Furness (1998) 44 NSWLR 493, Cohen J decided that infancy was a factor which could be considered, though not determinative, under s16. It could also, he held, be considered under s 28(5)(d) as a special circumstance. 20 In Lewis v Lewis [2001] NSWSC 321 Hodgson J considered the section and said at para 85: "The requirement of ' special circumstances' has been considered a more difficult hurdle than s16 see: Bearns. Section 28 itself gives some indication of the types of circumstances that may count as special circumstances, circumstances involving such things as property not finally vesting in the interests, and lack of capacity in the plaintiff. It was submitted for the plaintiff that his mental disability would provide special circumstances, however, as submitted by the defendants, that was not put forward at the hearing as a matter constituting special circumstances, and I do not think any significant weight can be given to it. However, I do not think that special circumstances are limited to the types of circumstances suggested by s28 itself or circumstances closely analogous to them: for example, in my opinion, a very significant change of circumstances, from circumstances where there was little point in a Family Provision Act application to circumstances where the plaintiff has extreme need and consequently a strong case, could amount to'special circumstances'".

21 My attention has also been drawn to a decision of Campbell J in Cetojevic v Cetojevic [2006] NSWSC 431. At para 77 he had the following comments to make: "… a discretion to relax the requirement of general rules should not itself become entangled in a web of rules spun out of the court's discretionary decisions. The tendency in some of the decisions we have discussed to regard a particular factor considered previously, in the light of other circumstances, as requiring the same effect to be given to it in the different situation before a court on a later occasion is a temptation which a court should resist. Decisions are not authorities upon the facts but upon principles; the facts must be regarded as unique to the particular case"(per Lockhart, Sheppard and Burchett JJ, Jess v Scott (1986) 12 FCR 187 at 196)." 22 In the present case there are a number of circumstances and factors which I think are special. There is the infancy of the plaintiff, in her younger years more importantly is the circumstances of this case where there was an unfortunate and forced separation as a result of what was then government policy in respect of adoptions. Plainly the plaintiff kept her bond with her father and the parents and also the deceased wished to have further contact with the daughter. The plaintiff seems to have made a number of attempts as a result of not having the necessary appropriate advice and unfortunately she could not do anything until she finally had access to the wardship file which eventually gave her the information that she needed. When she finally had that information she found that the deceased had, in fact, died some six years before. 23 In my view, having regard to the overall circumstances in this case I think that there are special circumstances and I think it is appropriate to make an order. 24 The property has been distributed and in the ordinary course it would be necessary to make an order designating property as notional estate. Under the matters to be considered under s 27 there are no expectations or other matters which are present in this case which would prevent the making of an order designating notional estate. I have some doubts having regard to the fact the estate is now held by the Crown as to whether or not it may be appropriate to make such an order. In the circumstances I merely indicate that there are no factors which would normally, in an ordinary case, refuse the Court to make an order declaring property as notional estate. 25 In those circumstances it seems to me that I should make an order but reserve liberty to apply in case there are any difficulties in respect of the payments being made to the plaintiff. Accordingly, I make the following orders: 1. I extend the time for making of the application up to the date of filing of the summons herein; 2. I order that the plaintiff received a legacy out of the estate of the deceased in the sum of $200,000 3. I order the plaintiff's costs on a party and party basis and the defendant's on an indemnity basis be paid or retained out of the estate of the deceased. 3. I reserve liberty to apply in respect of any question of notional estate. 4. Exhibits may be returned. **********

Coates v Public Trustee

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Cases Cited (6)