Galvin v Semkiw and Anor [2013] VSC 142

2 The plaintiff is the former wife of the deceased, Myron Baranowsky. She has filed an originating motion claiming provision under his will. She contends that she is a person for whom the deceased had responsibility to make adequate provision for proper maintenance and support, and that he has failed to do so.

3 The estate in question is worth about $450,000.[1] Mr Baranowsky's will makes provision as follows:

(a) 20% to each of his brother and sister in the Ukraine. However, each sibling is deceased and their share of the estate has passed to their children;

(b) 20% to the deceased's illegitimate daughter in the United States;

(c) 10% to the son of the plaintiff and the deceased, Marko;

(d) 15% each to the Association of Ukrainians in Victoria and to the trustees of St George Cathedral, Lviv, Ukraine.

4 No provision was made for the plaintiff or for the daughter of the plaintiff and the deceased, Tonia Galvin.

5 Mr Baranowsky died on 3 June 2007. His last will was made on 24 February 2006 and probate was granted to the defendants on 24 November 2011. The proceeding was commenced on 29 October 2012. Pursuant to s 99 of the Act, the time within which the proceeding should have been brought expired on 24 May 2012.

6 The fate of the plaintiff's claim therefore depends on the success of this application to extend the time within which her application for provision may be made.

7 The plaintiff has filed two affidavits in support of her application for an extension of time: an affidavit sworn on 6 December 2012 ('first affidavit') and a further affidavit sworn on 19 March 2013 ('further affidavit'). The plaintiff's solicitor, Ms Michel Margalit, has also made an affidavit dated 18 March 2013 setting out the course of events surrounding the taking of instructions from the plaintiff and her daughter, Tonia Galvin, and the commencement of this and the related proceeding. In short, she explains that the failure to commence the proceeding in time was due to an oversight by the plaintiff's legal advisers. The proceeding brought by Tonia Galvin was commenced in time.

8 One of the defendants, Ms Helen Majka, has sworn an affidavit dated 15 February 2013, which responds to the plaintiff's first affidavit and describes the position of the beneficiaries of the will. Importantly, Ms Majka's affidavit exhibits the agreement made by the plaintiff and the deceased on 18 April 1979 under s 87 of the Family Law Act 1975 (Cth) (the 'settlement agreement') dealing with the property settlement between the plaintiff and the deceased following the dissolution of their marriage on 19 September 1978.

9 The basis upon which the plaintiff seeks to bring a proceeding under Part IV of the Act is, in substance, that she entered into the settlement agreement under duress, and it does not reflect the respective financial contributions of the plaintiff and the deceased. She contends that she made a significant contribution to the family home in Footscray (the 'Footscray house') that was not recognised in the settlement agreement and that she would now be in a better financial position had the settlement agreement properly recognised her contribution. She says further that she financially supported the children of the marriage, who were aged 16 and 17 at the time the marriage ended, without any maintenance or financial assistance whatsoever from the deceased.

10 In her first and further affidavits, the plaintiff deposes to the following:

(a) She and the deceased were married in 1959. Their first child, Marko, was born in 1960 and their daughter, Tonia, was born in 1961.

(b) Before she had children, the plaintiff worked as a registered nurse. After the children were born, she went back to nursing full-time, doing afternoon and evening shifts.

(c) The Footscray house was initially bequeathed to her and her siblings by their mother, and she used approximately ₤800 that she inherited from her mother in order to purchase the property from her siblings.[2]

(d) In addition, during her marriage, she purchased a property at Phillip Island and, just before she and the deceased separated, she bought the bedsit on Exhibition Street in which she still lives.

11 The plaintiff deposes that the deceased was a gambler, that she managed the money that she earned very carefully, and that she and the children were able to get by in relation to basic necessities. When things were not going well for the deceased, he screamed, smashed things, and verbally abused her and hit her. She finally left the deceased in May 1977. He was aggressive towards her and stalked her after she left him. When they were divorced in October 1978, she accepted the property settlement, which provided for her to be paid $8,000 (being half the proceeds of sale of the Footscray house) because she was frightened of the deceased.

12 The plaintiff deposes that after the separation, Tonia went to live with her and the deceased did not provide her with any financial support for Tonia. Furthermore, although the son Marko remained with the deceased, he left home as soon as he could and the plaintiff paid for his accommodation for five years or so.

13 The relevant principles relating to an extension of time application have been usefully summarised by Dixon J in McCann v Ward:[3]

The Court has a wide discretion in exercising the jurisdiction to extend time. That discretion must be exercised fairly and properly upon relevant materials and in relation to relevant considerations.

The relevant considerations to which reference is commonly made upon applications of this sort are:

(a) Does the plaintiff have an arguable case? The merits of the plaintiff's case have relevance to the exercise of the Court's discretion as it is obviously futile to let a claim proceed which is flawed or hopeless. Valbe v Irlicht;[4] Borg v Hawke.[5]

(b) What is the period of the delay and any explanation for it? The Court will ordinarily take into account such matters although the discretion conferred by the section is not confined by any rigid rules and even this consideration may not be a requirement in every case. Ansett v Moss & Ors.[6]

(c) Is there any prejudice to the beneficiaries if time is extended? In this context the relevant inquiry is into the prejudice caused by the delay rather than any disappointment which might be anticipated consequent upon readjustment of the interests being transferred under the will in order to make provision for the applicant.

14 The defendants do not contend that there will be any prejudice to the beneficiaries if time is extended. This is largely because Tonia Galvin's application will proceed to trial in any event. The Court must therefore turn its attention to whether the plaintiff has provided a reasonable explanation for the delay and whether the plaintiff has an arguable case so as to warrant the grant of an extension of time.

15 An explanation for the delay is given in the affidavit of Michel Margalit and in the final paragraphs of the plaintiff's first affidavit. It is, in substance, that the legal representatives, having received instructions in conference on or about 15 March 2012 from both Tonia Galvin and the plaintiff to make claims under Part IV of the Act, failed to prepare and file an originating motion on behalf of the plaintiff even though they prepared and filed an originating motion on behalf of Tonia Galvin. This oversight came to the attention of the legal representatives on about 10 September 2012, whereupon they sought the defendants' consent to the late filing of proceedings. There was no immediate response to a request for consent and thereafter consent was refused. On 29 October 2012, the originating motion in the present proceeding was filed on behalf of the plaintiff.

16 The plaintiff deposes that she and Tonia attended a conference with counsel in March 2012 and that she gave instructions that she wished to make a claim under Part IV of the Act. She then left the matter in the hands of counsel and her solicitor and expected them to do whatever was necessary to advance her claim within six months of the date of the grant of probate.

17 I consider that the plaintiff's explanation for the delay is reasonable, particularly having regard to her advanced age. The most that could be said against the plaintiff is that she failed to follow up with her legal representatives to confirm that they had taken the steps that they were instructed to take and to put pressure upon them if it had not. However, I do not consider it unreasonable for the plaintiff to have left the matter in the hands of her legal representatives. In this case, it would be unjust to penalise the plaintiff for a delay that was caused by the oversight of her legal representatives.[7]

18 The central issue in this application for an extension of time is whether the plaintiff has an arguable case. The defendants submit that the plaintiff's claim is hopeless or has no reasonable prospects of success, largely because of the existence and effect of the settlement agreement. Although Part IV does not automatically exclude a claim by a divorced spouse (even one who has had a matrimonial property settlement approved by the Family Court), the defendants submit that the authorities require there to be something exceptional in the facts and circumstances to show that the deceased had, at the time of his death, a responsibility to provide for the plaintiff.

19 Based on the material before the Court, the circumstances surrounding the separation, divorce and entry into the settlement agreement are as follows:

(a) The plaintiff and the deceased separated on 7 May 1977 and were divorced in October 1978, some 29 years before the death of the deceased;

(b) On 25 May 1979, the Family Court approved the settlement agreement pursuant to s 87 of the Family Law Act 1975 (Cth);

(c) By the settlement agreement, the plaintiff agreed to transfer her right, title and interest in the Footscray house to the deceased in return for a payment of $8,000. The deceased agreed to make no claim on the plaintiff's property in Exhibition Street or the property on Phillip Island;

(d) More generally, the plaintiff and the deceased agreed to make no further claims against each other in the future for any other property settlement or for maintenance.

20 The settlement agreement was prepared by Slater & Gordon. Counsel for the defendants submitted, and nothing to the contrary was asserted by the plaintiff, that throughout the matrimonial proceeding, the plaintiff was represented by Slater & Gordon. It is therefore reasonable to infer that the plaintiff entered into the settlement agreement having received legal advice.

21 The defendants submit that the plaintiff and the deceased ended their marriage and financial relationship in 1978, and that, with the ending of their marriage, discharged any ongoing moral obligation or responsibility that either had to the other. They say that there is no evidence that the settlement agreement was other than fair and reasonable, as otherwise the Family Court would not have approved it. Some 29 years have elapsed since the settlement agreement was entered into, and the plaintiff and the deceased continued their lives without reference to each other. There was no ongoing or continuing financial or emotional dependency.

22 The defendants submit generally that there is a public policy reason for ensuring finality where a matrimonial property settlement has been approved or sanctioned by the Family Court and the divorced couple have finalised all financial matters between them, and have moved on and made new lives without the involvement of the other. Although public policy does not necessarily bring an end to a deceased former spouse's responsibility to make financial provision in his or her will, the fact that husband and wife have settled their financial affairs through the Family Court is a very significant factor to take into account, especially where both parties were legally represented and were at arm's length to each other in negotiating the settlement.

23 The defendants referred the Court to a number of authorities, including Dijkhujis (formerly Coney) v Barclay,[8] Burke v Public Trustee[9] and Armstrong v Sloan,[10] that emphasised the policy of the law to promote the finality of settlements of property disputes by orders made in the Family Court and the exceptional nature of an order made in favour of a former spouse for provision under family provision legislation where there has been such a settlement.

24 In Dijkhujis, Kirby P said that there was no doubt that, in most cases, the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other.[11] However, the public policy in finality of financial dealings by property settlements ordered by the Family Court must also be read in conjunction with the competing public policy expressed by the Parliament in the family provision legislation.[12]

25 In Armstrong, Harper J found that the former wife freely entered into an agreement with her then husband that was designed and intended, as far as practicable, to finally determine their relationship. This meant that it was intended - as far as practicable - to remove each as a claimant on the other's testamentary bounty. It was a bargain, and the law sought to avoid the reproach that is the destroyer of bargains.[13]

26 Particular reliance was placed on the statements of Bryson J in Mulcahy v Weldon,[14] in which his Honour observed that according to general community standards, a former spouse who has been accorded all rights under a property settlement and does not have any continuing entitlement to maintenance, is not generally regarded as a natural object of testamentary recognition. Although such testamentary recognition does occur, it is regarded as altogether exceptional and remarkable when it occurs.[15]

27 On the facts before him, Bryson J concluded that whatever claim relating to property which the plaintiff had in accordance with the Family Law Act or any other law against her husband at the time of the terms of settlement was met by the terms of settlement. There was no reason for thinking otherwise. The plaintiff had not put forward any circumstances which might be supposed to show that the settlement she received was not just and adequate or that for any reason it was possible that the Family Court might have re-opened its consideration and ordered any other property settlement.[16]

28 In this case, so the defendant submits, the plaintiff has not put forward any circumstances which might show that the settlement agreement was not just and adequate or that for any reason it was possible that the Family Court might have re-opened its consideration and ordered any other property settlement. The plaintiff received the lion's share of the properties referred to in the settlement agreement, in that she retained two of the three properties in question and received a half share of the third. She entered into the property settlement having received legal advice.

29 I do not accept this submission. The plaintiff has deposed that she entered into the settlement agreement under duress because she was frightened of the deceased and that the settlement did not reflect her contribution to the matrimonial property. Whether or not her evidence ultimately stands up at trial, the plaintiff has put forward circumstances capable of establishing that the settlement she received was not just and adequate. Had the Family Court been made aware of the circumstances that she alleges, it might have ordered a different settlement. Having regard to the nature of the allegations that the plaintiff now makes concerning the conduct of the deceased towards her, the fact that the plaintiff was represented during the family law proceedings and the settlement agreement was prepared by the plaintiff's solicitors, does not deprive her of an arguable claim.

30 The plaintiff contends that the circumstances that she alleges are exceptional and that the existence of the property settlement should not prevent her from seeking provision in the deceased's will. I accept this submission.

31 I do not wish to say anything about the merits of the plaintiff's application for provision under the deceased's will, other than that I am satisfied that the plaintiff has an arguable case based upon the matters that she raises. She has put forward circumstances that, if accepted by the Court, could cause the settlement agreement to be regarded as unjust and inequitable, even though it was apparently entered into at arm's length on the basis of legal advice and approved by the Family Court.

32 Furthermore, plaintiff deposes to the fact that she had the continuing care and financial responsibility for the teenage children of the marriage following the separation and that she received no maintenance or other support from the deceased in this regard. This might also entitle her to some provision from the deceased's will.

33 The period of delay is relatively short and was not due to any fault on the part of the plaintiff, the plaintiff has an arguable case for relief, and the beneficiaries will not be prejudiced if an extension of time is granted.

34 Having regard to all relevant matters and to the requirements of justice as the guiding factor, the Court will order that the plaintiff be relieved from the usual consequence that an application outside the six month limitation period is not permitted.

35 I will hear from the parties on the form of orders that should be made.

[1] The Court was informed that the primary asset of the estate is a unit in Glenroy Road, Glenroy, which is worth about $225,000 and there is cash of about $220,000.

[2] In the first affidavit, the plaintiff deposes that when her grandmother died, she received an inheritance of ₤880 that was used that to pay off the mortgage of the Footscray property. In the further affidavit, the plaintiff deposes that she used the amount of approximately ₤800 that she inherited from her mother's estate as the deposit to purchase from her siblings their shares in the Footscray property.

[3] [2010] VSC 452, [10]-[11].

[4] [2001] VSC 53.

[5] [2004] VSC 279.

[6] [2007] VSCA 161.

[7] Brown v Holt [1961] VicRp 69; [1961] VR 435, 437.

[8] (1988) 13 NSWLR 639 ('Dijkhujis').

[9] [1997] SASC 6423.

[10] [2002] VSC 229 ('Armstrong').

[11] (1988) 13 NSWLR 651.

[13] [2002] VSC 229, [50], referring to Hillas v Arcos Ltd [1932] UKHL 2; [1932] All ER Rep 494 at 499 per Lord Tomlin.

[14] [2001] NSWSC 474.