CITATION : MACLENNAN & ORS -v- PERPETUAL TRUSTEES WA LTD as Executor of the estate of MARY FRASER MACLENNAN (DEC) & ORS [1999] WASC 261

MATTER : Section 7 of the Inheritance (Family and Dependants Provision) Act 1972

PERPETUAL TRUSTEES WA LTD as Executor of the estate of MARY FRASER MACLENNAN (DEC)

PERPETUAL TRUSTEES WA LTD as Executor of the estate of GORDON HUGH MACLENNAN (DEC)

Succession - Inheritance - Family maintenance - Claim by adult sons and daughter of testator - Not dependent on testator - Whether leave to file out of time should be granted - Estate distributed - Substantial delays

Inheritance (Family and Dependants Provision) Act 1972, s 6 and s 7

Amos v Amos [1966] VicRp 61; [1966] VR 442

Bearns v Bearns- Hayes, unreported; SCt of NSW; 7 May 1997

Beckmann v Sheldon, unreported; SCt of Vic; 28 April 1997

Bokhari v Robinson, unreported; SCt of WA; Library No 960142; 22 March 1996

Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457

Brown v Holt [1961] VicRp 69; [1961] VR 435

Browne v MacAulay & Ors [1999] WASC 208

Clayton v Aust (1993) 9 WAR 364

Corbey v Boonstra [1923] GLR 433

Donehue v Thornton, unreported; SCt of Vic; 2 July 1998

Grigoriouu v Nitsos [1999] WASCA 42

Hancock v Thomas [1998] VSC 143

Hart v O'Connor [1985] UKPC 1; [1985] 1 AC 1000

Jackamarra v Krakouer [1998] HCA 27

Knight v Baird, unreported; SCt of Vic; 18 March 1997

Milne v Cunningham [1917] NZLR 687

Nelson v Nelson, unreported; SCt of WA; Library No 990136; 8 April 1999

Pead v Perpetual Trustess WA Ltd, unreported; SCt of WA; Library No 980209; 24 April 1998

Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Re Barry (Dec) [1974] 9 SASR 439

Re Claverie [1970] 2 NSWR 380

Re Dun (dec) (1955) 56 SR (NSW) 181

Re Guskett (Dec) [1947] VicLawRp 28; [1947] VLR 212

Re King, unreported; SCt of WA; Library No 940103; 4 March 1994

Re Nassim (Dec) [1984] VicRp 5; [1984] VR 51

Re Newton (Dec) (1959) 76 WN (NSW) 479

Re Salmon [1981] Ch 170

Re Walker (Dec) [1967] VicRp 116; [1967] VR 890

Re Wherrett [1963] Tas SR 178

Simpson v Grattan, unreported; SCt of NSW; 14 October 1998

Sinclair v Griffiths [1999] NSWSC 491

Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201

Smith v Ruddle, unreported; SCt of Tas; 7 June 1996

1 By chamber summons filed on 22 January 1999 the plaintiffs seek leave pursuant to s 7(2) and (3) of the Inheritance (Family and Dependants Provision) Act 1972 ("the Act") to extend the time for bringing their originating summons with respect to the estate of Mary Fraser MacLennan ("the deceased"). It is common cause that the three plaintiffs fall within the class of person eligible to make an application pursuant to the Act.

2 The deceased is the mother of each of the plaintiffs. She died on 17 April 1992. At the date of her death her estate was valued at $201,741.97. The main asset was a house property at 98 Hamersley Road, Subiaco ("the property"). I have no evidence, or at least no reliable evidence, as to the value of the property currently.

3 Probate of the will of the deceased was granted on 27 May 1992. The sole beneficiaries of the estate were Gordon Hugh MacLennan and John Alexander MacLennan, both of whom are sons of the deceased. Each of the beneficiaries have subsequently died - the first on 4 August 1998 and the second on 19 or 20 February 1999.

4 The property was transferred to the beneficiaries on 6 August 1992 and the remainder of the assets of the estate were transferred to the beneficiaries on 18 September 1992. In the usual case the distribution of the estate would tend against the exercise of the discretion to extend time: Clayton v Aust (1993) 9 WAR 364 at 372. This case is somewhat unusual as both of the beneficiaries have died albeit their estates have not been distributed pending the outcome of this application. Given the estate was distributed some six years ago I nevertheless am of the view that its distribution would tend against granting leave notwithstanding the unusual circumstances of this case.

5 The deceased was a widow at the date of her death, being survived by nine children whose names and ages at the date of her death were as follows:

Florence Marie (surname now Coyne) (68) - second defendant

John Alexander (known as "Ian") (66) - died 20.02.99 - third defendant

Ethel Jean (surname now Finlay) (64) - fourth defendant

6 All the children were, at their mother's death, quite mature and were making or had made their own way in life. There is evidence that some, at least of the children, were aware of the contents of their parents' wills and the deceased had informed them that the daughters were left out of the will and the sons were included in the will until they were married. The only two children which fell into the latter category at the date of death of the mother were Gordon and John.

7 As previously mentioned each of the plaintiffs are children of the deceased, the relevant details of each being as follows:

8 George was 58 at the date of his mother's death and was employed as a postman in charge of the Cottesloe Post Office earning approximately $30,000 a year.

9 Although it is far from clear from his affidavit, it appears he may have retired in 1993 when he received $50,000 in superannuation. He currently describes himself as a courier. At the date of his mother's death he jointly owned assets with his wife, the total value being approximately $204,000 which then equated approximately with the assets of his mother's estate. I am not told what his current position is, either by way of assets or income.

10 At the date of her mother's death she was 68 and had an income of approximately $8,765 per year and her husband had a similar income. She lived in a home owned by her husband which then was worth approximately $90,000 and her husband owned approximately $85,000 worth of shares. She owned approximately $21,500 worth of assets in her own right. Thus, at the date of death of her mother, the combined assets or her and her husband were approximately the same as the value of her mother's estate.

11 Her husband died on 28 November 1995 and left her the house and shares and presumably the furniture. I am not told what her current position is, either as regards to assets or income.

12 At the date of his mother's death Brian was aged 47 and earned approximately $38,000 as a laboratory technician which it would appear is an occupation he currently follows. He owned jointly with his wife property worth approximately $85,000.

13 At the date of their mother's death each of the plaintiffs were mature in age. One appears to have retired shortly after his mother's death and it would appear that another had already retired. The third plaintiff was younger and employed earning a respectable income.

14 From the evidence before me none of the plaintiffs had any significant debt and although not lavishly endowed with the material things of life, two had acquired assets jointly with their respective spouse to a value which was approximately the same as the value of the assets of their mother's estate, with the third having acquired significant assets and whose employment generated a reasonable income. None of them could be said to have been dependent upon their mother at the date of her death.

15 Section 7(2) of the Act reads:

"(2) No application under subsection (1) of this section shall be heard by the Court unless -

(a) the application is made within six months from the date on which the Administrator becomes entitled to administer the estate of the deceased in Western Australia; or

(b) the Court is satisfied that the justice of the case requires that the applicant be given leave to file out of time."

16 The date upon which the executor obtained the grant of probate was 27 May 1992 and thus the plaintiffs would have had to have brought their application by the end of November 1992 in order to fall within par (a). This clearly was not done. Indeed, some six years had elapsed before this application was brought.

17 Thus, in order for the plaintiffs to succeed with this application the court would need to be satisfied that the justice of the case requires that leave be given. The Act gives no guidance as to how this discretion is to be exercised.

18 The principles to be applied in the exercise of the discretion to extend time reflects the provisions of the Act, namely that the justice of the case requires that leave be granted. These principles are conveniently referred to in the judgment of Malcolm CJ in Girando v Girando, unreported; FCt SCt of WA; Library No 970525; 14 October 1997 at 14 which I include for completeness, as follows:

"In Clayton v Aust (1993) 9 WAR 364 at 367 I accepted that the first two points mentioned by Megarry VC were applicable under s 7(2) of the Act. The justice of the case could not require an extension of time unless the applicant had an arguable case on the merits. Clearly also the length of the delay and the reasons for the delay are relevant, as well as the question whether or not negotiations commenced within the time limit as contended or commenced after the time limit expired. It would also be relevant to see whether the beneficiary or beneficiaries had changed their position in reliance on the bequest, so that it might work an injustice on them to undo what had already been done in the belief that there could be no adverse claim. The final point was whether a refusal to extend time would leave the applicant without redress against anybody. It is also important to have in mind that these points were not exhaustive."

"In Brisbane [Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 70 ALJR 866] it was held that s 31(2) of the Limitation Act 1974 (Qld) confers on the court a discretion only to be exercised in an applicant's favour where, in all the circumstances, justice is best served by so doing. The burden of demonstrating this is on the applicant. I have already pointed out that a material factor in discharging that burden is establishing that an extension would not significantly prejudice the prospective defendant.

It was submitted that these developments call for a re-examination of the principles stated in Clayton v Aust. I am unable to accept that submission. In that case it was accepted in my judgment that the applicant had to 'make out a substantial case for it being just and proper for the court to exercise its statutory jurisdiction to extend the time' as stated by Megarry VC in Salmon (deceased), Re [1981] Ch at 175 - 175 [sic]. The guidelines there stated included the issue of prejudice, particularly where the beneficiaries had changed their position in reliance on the benefaction. While it is true that the recent High Court decisions have highlighted the issue of prejudice and the need for the applicant to show that there will be no prejudice to other parties, that does not represent the development of any new principle. Much depends on the particular facts of each case because the individual facts and circumstances may lead to one aspect being given more emphasis than another. I do not accept that a more rigorous test was applied in Warren v McKnight [1996] NSWSC 419; (1996) 40 NSWLR 390."

19 Accepting that these points are not exhaustive, I consider it is appropriate to deal with each.

20 As previously mentioned the delay which has elapsed in bringing this application has been some six years. This is a very significant period indeed. A period in which the estate had been distributed and one of the beneficiaries of the estate has died with the other having died within a month of the application being made and thus they have not been able to make any meaningful contribution to this application.

21 Further this application itself has not progressed with the speed one would have expected.

22 The reasons for delay are outlined in par 40 to par 47 of the affidavit of the first plaintiff sworn on 26 February 1999. The first plaintiff deposes to the fact that within a couple of weeks after his mother's death he called upon the first defendant and had a discussion with one of its officers. He claims that the officer told him he had "no claims whatsoever" on the estate and that once probate was granted there could be no challenge to his mother's will. The first defendant takes issue with this.

23 The first plaintiff deposes to the fact that he did not know that he had rights under the Act until August 1998. If one accepts that to be so that did not seem to dissuade the first plaintiff from contemplating taking any action in relation to his mothers estate, given what he deposes to at par 45 of his affidavit. Indeed, par 42 and par 45 of his affidavit appear to be in conflict. At par 42 he deposes to the fact that the statement of the representative of the first defendant was correct, whereas in par 45(6) he deposes to the fact they would most likely be correct.

24 On what is before me I am far from persuaded that a representative of the first defendant said what the first plaintiff alleges was said. In any event I am not persuaded that the reasons set out in par 45(5) and (6) were the primary reasons for the very lengthy delay. The significant reason was that the plaintiff did not wish to upset his brothers who were the sole beneficiaries of his mother's estate. I am also of that view in relation to the other plaintiffs. They certainly determined to consult a solicitor within a short period after Gordon's death even though John was still alive at the time. This is consistent with the written submission of the plaintiffs where it is submitted, "Had the said Gordon Hugh MacLennan died six years earlier an application would probably have been made by the plaintiffs within time."

25 The delay from the date of death of Gordon and the bringing of this application appears to be adequately explained. Whilst negotiations to come to some arrangement were attempted after the death of Gordon, none had been undertaken during the statutory period.

26 Both beneficiaries are now dead, one having survived the bringing of this application by one month. From what is before me, it would appear that both of them lived in the mother's home until her death and continued to live there until their respective deaths.

27 It would appear that the property was the main asset of the estate and it is apparent from the evidence of the plaintiffs that any claim on the estate had the potential to force the beneficiaries to leave the home - one being 66 years of age at the date of the death of his mother and the other being 61.

28 I am given no evidence as to the assets of either Gordon or John at the date of their mother's death, but it is apparent from the evidence before me that they had lived in that home with their parents and siblings since the time the home was purchased and given the reluctance of the plaintiffs to take any action during their lifetime for fear that they would be displaced from their home it would appear that the plaintiffs at least were of the view that Gordon and John were not in a position financially to have met the contributions which they thought they were entitled to without having to sell the home.

Will refusal of this application leave the plaintiffs without redress against anybody?

29 Much of the evidence supplied to the court relates to contributions which it is said the first and second plaintiffs made to the purchase and repair of the property and statements attributed to their parents to the effect that the parents would financially recognise them if they assisted the parents to purchase a house. There is a clear dispute between the surviving children of the deceased about the level of contributions made. Let us suppose that the version put forward by the plaintiffs is true, what does "financially recognise" mean? Can it be said that this was an indication that they would become beneficiaries of their parents estate? It seems to me to so argue would not be an easy task, notwithstanding the contentions of the plaintiffs.

30 In any event I would have thought this evidence goes more to a claim for some form of equitable interest in the property, rather than supporting a claim under the statute. It seems to me that, if the plaintiffs could sustain the argument they may be able to establish some equitable interest in the property and to that extent would not be without any remedy.

31 I accept that in some cases a special claim may be found to exist because the applicant has contributed to building up the testator's estate or have helped him in other ways: Nelson v Nelson, unreported; SCt of WA; Library No 990136; 8 April 1999. If one is to accept the evidence of George then it would appear that Gordon and John also made a contribution to the deposit for the purchase of the property. It is also of some significance that Gordon and John lived with their mother until her death and may well have helped her in other ways.

32 Given all of the circumstances of this case I am not persuaded that to the extent contributions were made by the plaintiffs they amount to a special claim.

33 On one view of the facts it could be argued that there can be no prejudice to the beneficiaries as they are now both dead. The position was, however, quite different at the death of their mother. They were living in the property. This was a property they appeared to have lived in since it was purchased by their parents.

34 I am not told what the financial position of the beneficiaries were at the date of death of their mother, nor at the date of their respective deaths. The plaintiffs were of the view that if they should take action within the statutory period it may "cause the sale of the Property and thereby force the Beneficiaries to leave their home". Without any other evidence to the contrary, that statement would seem to indicate that the beneficiaries could well have faced significant prejudice should the claim have been brought at least in the life time of Gordon.

35 Further, at least in the case of Gordon, he was not aware of any claim against him during his life time. If he had, it may well have had an impact on the way he wished to dispose of his assets at the date of his death. In truth, both of the beneficiaries have been denied the opportunity of defending their position in any application under the Act.

36 Given the circumstances of this case, the potential prejudice to the beneficiaries was real and they have been denied the opportunity of putting all of the appropriate evidence before the court.

37 I accept the submission of counsel for the fourth and fifth defendants that no plaintiff asserts nor provides any evidence that they had or indeed have any need of provision from the estate for their proper maintenance, support or advancement in life. This is perhaps not surprising given that at least two of them had jointly acquired with their respective spouse by the date of death of their mother assets of a similar value to that which she left. The assets of the third did not reach the value of those left by the mother but they were significant. He was 47 and in gainful employment.

38 Each of the plaintiffs were well established in life at the death of their mother and continue in that position. They were able-bodied and had demonstrated they were capable of supporting themselves: Bondelmonte v Blanckensee [1989] WAR 305 at 309.

39 Whether the mother failed to make proper provision must be determined having regard to the mother's means, to the means and deserts of the several claimants, and to the relative urgency of the various moral claims upon the estate. The provision which the court may properly make in default of testamentary provision is that which a just and wise mother would have through her moral duty to make had she been fully aware of all of the relevant circumstances: Bondelmonte v Blankensee, supra, at 309.

40 Given the value of the estate and the value of the assets the plaintiffs had acquired at the date of death of their mother, it would seem to me very difficult to argue that the provisions made in her will were not that which a just and wise mother would make having been aware of the circumstances of each of her children.

41 The plaintiffs bear the onus of making a substantial case for it being just and proper for the Court to exercise its discretion to extend time: Clayton v Aust, supra, at 366. In my view, they have failed to do so. I would therefore refuse to grant the leave sought.