Plaintiff v Defendants

2 The deceased died on 24 April 2007 and his last will dated 27 September 1999 and a codicil dated 18 April 2007 were proved by the defendants, being two of the three named executors. The grant of probate is dated 28 March 2008.

3 Section 99 of the Act provides:

No application shall be heard by the Court at the instance of a party claiming the benefit of this Part unless the application is made within six months after the date of the grant of probate of the will or of letters of administration (as the case may be) ...

This proceeding was commenced by originating motion between parties on 14 December 2009 and the application is, accordingly, some fourteen and a half months outside the time limited by s.99 of the Act. The Act provides that the time for making an application may be extended for a further period and that an application for extension of time can be made where the time for applying has already expired but must be made prior to the final distribution of the estate.

4 It is common ground that there has not been a final distribution of the estate.

5 The deceased is survived by his wife, Jill, three children from a former marriage being the defendants, Lynne Burgess and Helen Ward and a son Stephen Ward, and the deceased's stepchildren, the children of his wife Jill from a former marriage, being the plaintiff, Lisa McCann and her sister Giselle Wilkinson.

6 The inventory of assets and liabilities of the estate revealed:

• real estate at Goughs Bay with an estimated market value of $265,000.

• personal estate comprised of 274 ordinary shares in HSK Ward Pty Ltd, a fifth generation private family company conducting a business involved in the packaging and marketing of herbs and spices, valued at $30 million, and an amount of $173,631.94 invested in Perpetual Investment Management Ltd.

7 In summary, the will and codicil provided for a life interest in the shares in HSK Ward Pty Ltd in favour of Jill and thereafter those shares were divided between the deceased's children Lynne, Helen and Stephen. The shares in HSK Ward Pty Ltd pay an annual dividend of $600 per share. The property at Goughs Bay was left to Giselle and Lynne as tenants in common in equal shares. Of the Perpetual Investment fund, the sum of $100,000 was set aside for the repair and maintenance of the Goughs Bay property and the balance has been paid to the Victorian Jazz Archive Inc. I was informed from the Bar table that approximately half of the maintenance fund remained unspent.

8 The application proceeded on the basis of the following material:

(a) Affidavit of Lisa Louise McCann sworn 1 April 2010;

(b) Affidavit of Helen Margaret Ward sworn 7 May 2010;

(c) Affidavit in reply of Lisa Louise McCann sworn 7 June 2010.

Mrs McCann was cross-examined upon her affidavits. There was a further affidavit sworn by Demitrios Dandanis sworn 22 September 2010. This affidavit was the subject of objections upon which I did not, and need not now rule. Mr Phillips did not rely upon the material deposed to in that affidavit and I do not find it necessary to take that material into account for the purposes of ruling upon the application.

9 The deceased's wife, Jill, resides at the Darley House Aged Care Facility at Heidelberg Repatriation. She has Alzheimer's disease and no longer has testamentary capacity. As at May 2010, Jill's assets totalled approximately $7,240,000, and her income, drawn principally from the dividends paid on the shares in the Ward family company, rental income from a property at Noosaville in Queensland and bank interest, exceeds her expenses. Pursuant to her will, made after the death of the deceased, her estate is to be divided equally between Stephen, Lynne, Helen, Lisa and Giselle.

10 Under s.99 of the Act, the plaintiff bears the onus of proving that an extension of the time limited by the section ought to be granted in her favour.[1] The relevant principles applicable upon the application were not in dispute before me. They were recently considered by the Court of Appeal in Ansett v Moss & Ors,[2] and are usefully summarised in recent decisions in the trial division including Groser v Equity Trustees Ltd,[3] Sheppard v Heathcote (No.3),[4] and Re Trescowthick.[5] 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.

11 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;[6] Borg v Hawke.[7]

(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.[8]

(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.

12 For the defendants, Ms McMillan SC, who appeared with Mr Pitt, first submitted that the plaintiff's evidence did not establish an arguable case for relief under s.91 of the Act. The plaintiff's case, it was submitted, is hopeless. Drawing attention to the fact that the plaintiff brings her claim as a stepdaughter of the deceased, Ms McMillan SC contended that the deceased did not have a responsibility to the plaintiff to provide for her proper maintenance and support. She contended that the provisions of the deceased's will and codicil demonstrated that he acted as a wise and just testator and not a foolish testator in that the deceased has considered and recognised that his wife and natural children have very strong claims on his bounty. The interests of his two stepchildren were appropriately considered, it was contended, by ensuring that his wife had a sizeable estate to leave upon her death. She further contended that the plaintiff and her husband were not reliant upon the deceased financially. Both of the plaintiff and her husband have been working, and continue to work, and the plaintiff produced no satisfactory evidence of her financial state as at the date of death of the deceased.

13 Second, it was submitted that the plaintiff's explanation for delay was unconvincing and insufficient.

14 Third, it was contended that there would be detriment to the beneficiaries of the deceased's will because there is no residuary estate available for distribution. The overwhelming majority of the value of the estate is locked up in the 274 shares in the family business HSK Ward Pty Ltd. This business started in 1852 and remains a Ward family enterprise. It was submitted that any award in favour of the plaintiff which affects the family shareholding would be detrimental to the fabric of a fifth generation family enterprise, abhorrent to the legacy left by the deceased and his ancestors, in stark contradistinction to his clearly stated wishes as set out in his will and would be difficult to enforce in the circumstances of the type of holding in the company.

15 Having considered the circumstances disclosed on the evidence before me, I consider that the plaintiff has discharged the onus of satisfying me that it would unjust to penalise her for being out of time.

16 First, the plaintiff's application is not hopeless. The plaintiff brings her claim as an adult stepchild of the deceased. While that relationship may give rise to particular considerations, such an applicant is entitled to apply (see for example McKenzie v Topp[9] and Robertson v Koska.[10]) Before me, counsel agreed that s.91(4) of the Act envisaged a three stage process to each application.

17 The first stage is to determine whether or not the deceased had a responsibility to make provision for the plaintiff. For the defendants, it was submitted that the nature of the relationship between stepparent and stepchild may be a relevant consideration and that, as the relationship between the plaintiff and the deceased was remote, not close, I should find that the deceased had no responsibility to make provision for the plaintiff. The plaintiff was not cross-examined about her relationship with the deceased in this respect. Her evidence was that their relationship was emotionally close, albeit separated by distance. She referred to assistance she had provided to the deceased and her mother and, more significantly, evidence that in the past financial assistance had been provided to the plaintiff and her husband when they faced financial difficulties. I do not make any finding in relation to these matters beyond stating that it is plainly arguable that upon a full and proper consideration of the application, a responsibility to the plaintiff to provide for her proper maintenance and support existed. It was put to me that I should place weight upon the circumstance that the estate of the plaintiff's mother will be comprised of assets provided by the deceased and that the plaintiff is an equal beneficiary of that estate. The responsibility of the plaintiff's mother in her testamentary duties is a different issue, I think, and I do not consider that this circumstance rendered it hopeless for the plaintiff to assert that the deceased had a responsibility to make provision for her, particularly where the deceased made specific provision for all children, both step and biological, except for the plaintiff. I am far from persuaded I can conclude at this stage that it is hopeless to assert that the deceased had a responsibility to make provision for the plaintiff.

18 The second stage of the inquiry is as to whether the distribution of the estate of the deceased makes adequate provision for the proper maintenance and support of the plaintiff. Here no provision has been made for the plaintiff.

19 The third stage of the inquiry is as to the amount of the provision which the Court might order. Ms McMillan SC submitted that the plaintiff had not made clear precisely what relief is sought by way of a provision from the estate. Mr Phillips indicated that the plaintiff will seek a pecuniary legacy. I do not consider that these matters go to the question of whether the application is arguable. They are clearly matters to be resolved following such argument.

20 Next, there is an acceptable explanation for the delay. As I have already noted the period of delay in making the application has been approximately fourteen and a half months. The defendants contended that I should also have regard to the period between the death of the deceased and the date of probate. I do not agree that I need analyse that period of time for an explanation of delay. In any event what is contended is that it was inconceivable that the plaintiff would not have discussed the content of the deceased's will with her mother in the period of time immediately after his death, and that I should find the plaintiff knew and understood the contents of the will from about May 2007.

21 I reject that submission for the following reasons.

(a) I accept the plaintiff's rejection of the contention when it was put to her in cross-examination.

(b) Helen Ward deposes in her affidavit to the fact that her stepmother was experiencing periods of anxiety during the last five months of her husband's life. There are suggestions in the material before me that in the period following his death, this anxiety was exacerbated and quite possibly confused with, or interrelated with, the early stages of the dementia she now suffers. On balance I do not consider it inconceivable that the plaintiff would not discuss the terms of the deceased's will at such a time and I accept her evidence that she did not do so.

(c) That the plaintiff was aware the Goughs Bay property had been left to Lynne and Giselle and that her mother was receiving a financial provision does not establish that the plaintiff was aware of all of the terms of the deceased's will. The plaintiff admitted she knew of these aspects of the will but stated that she first saw the will and the codicil in about November 2009. She said that in November 2009 the Albert Street property was put on the market, her mother having moved to Darley House. This prompted inquiries about the will. She read the will and the codicil when she obtained a copy from her husband via her brother in law. She was then put in touch with her present solicitors. Her evidence was that only upon receiving advice from her solicitors, did she learn she could challenge the will and the codicil to seek a provision from the estate for herself. In cross-examination the plaintiff was challenged as to when she became aware of the terms of the will and the codicil. However, she was not challenged as to when she became aware of her right to apply to the Court for a provision out of the estate of the deceased. Nor was she challenged as to why she did not make any earlier inquiry, for example of a solicitor or a family member, as to what her rights might be based on her knowledge of the distribution of the estate.

22 I accept the evidence of the plaintiff and I find that she was unaware until late November 2009 of her right to apply under Part IV for a provision from the estate. Upon becoming aware of her rights she promptly instructed her solicitors to issue proceedings and this was done.

23 Ignorance of rights has long been recognised as conduct which will excuse a failure to commence proceedings within the time limited.[11]

24 The third matter put by Ms McMillan SC was the detriment to the beneficiaries if time was extended. I do not consider that there is any relevant prejudice disclosed on the evidence. There is no evidence of any detriment or prejudice arising during, or referable to, that period of fourteen and a half months which might be said to be occasioned by the plaintiff's delay. Further, having regard to the extant life interest granted in favour of the deceased's wife Jill, it is hardly surprising that there is no evidence of detriment or prejudice caused by the delay. Rather, I consider that the factors which were put on behalf of the defendants concerning the impact of the application upon the family shareholding are not matters of relevant prejudice. They may be matters which ought to be considered upon the final determination of the application for a provision out of the estate and I say nothing further about them at this stage.

25 I consider that the other matters which were put to me on behalf of the defendants in oral and written submissions are properly matters to be considered upon the trial of the substantive application.

26 For these reasons I propose to order that pursuant to s.99 of the Administration and Probate Act 1958 the time within which the plaintiff may bring an application for provision to be made for her out of the estate of Harold David Fellows Ward, deceased, be extended to 14 December 2009. I will hear counsel as to the form of the orders, in respect of the costs of this application, and as to further directions for the disposition of the proceeding.

[1] In Re Guskett, deceased [1947] VicLawRp 28; [1947] VLR 212.

[2] [2007] VSCA 161.

[3] [2007] VSC 27; (2007) 16 VR 101.

[4] [2010] VSC 190.

[5] [1999] VSC 409.

[6] [2001] VSC 53.

[7] [2004] VSC 279.

[8] [2007] VSCA 161.

[9] [2004] VSC 90.

[10] [2010] VSC 134.

[11] Re Barrot, deceased [1953] VicLawRp 45; [1953] VLR 308; Brown v Holt [1961] VicRp 69; [1961] VR 435; Re McPhail, deceased [1971] VicRp 65; [1971] VR 534.