Plaintiff v Defendants

1 Despite having strong claims on the bounty of her late father George Younan, Mona Younan was left out of his will. The deceased left his valuable estate to his wife Shoneh (who predeceased him) and then to their two sons, Joseph and Akram. Although they had notice of their sister's intention to make application to this court for family provision under pt IV of the Administration and Probate Act 1958 (Vic), after obtaining probate the brothers (as executors) made an early distribution of the estate to themselves (as beneficiaries). Unfortunately, on the facts before me, Mona's then solicitors failed to make application for provision in a timely way. After obtaining the transferred file, her present solicitors made application as soon as they could. But, the executors contend, it was too late.

2 Those events have given rise to two proceedings now before the court. An associate judge has determined that Mona's application for provision was made one day outside the statutory six-month limitation period. Mona seeks leave to appeal out of time, and appeals, in respect of that decision. In that proceeding, Mona contends, and the executors dispute, that the associate judge erred in law in deciding that her application was late. If that proceeding fails, Mona seeks leave in the other proceeding to make application for family provision out of time. The executors contend that the court has no power to grant the extension as the estate has been finally distributed. Mona contends that the distribution was improper and therefore not final.

3 Under s 99 of the Administration and Probate Act,[1] the court cannot hear an application for provision unless it was made 'within six months after the grant of probate of the will'. In this case, probate of the will was granted on 13 October 2014. Six months after that was 13 April 2015. Mona made her application for provision on 14 April 2015. In response, her brothers made application to have it struck out, which Lansdowne AsJ granted.[2]

4 Rather than appeal from that decision, on legal advice Mona made application to this court under s 99 for extension of time in which to make application for family provision. Section 99 confers power upon the court to extend time 'for a further period', even where the specified time has 'already expired', but only 'before the final distribution of the estate'.

5 When the application for extension of time came on for hearing, it became clear in argument that there might be grounds for appealing against the decision of the associate justice. The hearing of the application for extension of time was adjourned to permit consideration of that course, which Mona adopted. Now both proceedings are before me.

6 Against the opposition of the executors, I would apply the discretionary principles[3] to grant Mona leave to appeal out of time. She has not sat on her hands. The grounds of appeal raise new issues but they are purely legal and arise naturally out of the other proceeding and underlying issues in dispute that are common to both proceedings, as this judgment will reveal. The reasons for commencing that proceeding rather than appealing are understandable and should not prejudice a final determination of all of the matters in issue. Final determination of all of the matters in issue is highly desirable and in the interests of justice, especially because, in consequence of that determination, a proceeding in negligence might be issued against Mona's former solicitors. However, with regret, I must dismiss the appeal.

7 Although it may be stated in different ways, the critical issue in the appeal is whether the provisions of s 99A of the Administration and Probate Act operate to extend, as it were, the six-month limitation period in s 99 in the circumstances of this case. For the consideration and determination of this issue, it is necessary for me to say something more about the facts.

8 Mona's father died on 15 August 2013. Her brothers as executors obtained probate on 13 October 2014. From that date, she had six months to make application for family provision, ie until 13 April 2015 (unless the time was extended). Mona is elderly and a resident of Queensland. She did not have a copy of the will and had little information about the estate. She engaged solicitors, but that took a little time. By a letter dated 16 February 2015, those solicitors sought from the executors' solicitors a copy of the will and other documents and also gave notice of her intention to make a claim for family provision. They also sought '[c]onfirmation that the estate will not be distributed until our client's claim has been finalised'. Three weeks later on 6 March 2015 came a curt reply saying that 'the estate has been distributed' and nothing else much useful and providing a copy of the will. Why that took three weeks is not clear, but the time ultimately ran to the executors' advantage and really mattered in the end.

9 In fact, the estate had not been distributed. It had only been partially distributed. A valuable property was not distributed until 20 March 2015. Despite having notice of Mona's intended application, the executors went ahead anyway. It is well established that executors who carry out early distribution of an estate, especially with notice of an intended application for family provision, are at risk of personal liability to a successful applicant.[4] The executors here simply ran that risk, perhaps feeling safe in the knowledge that, as beneficiaries, the estate would be in their hands anyway.

10 Protection against certain kinds of personal liability is conferred by s 99A. Sub-sections 99A(1) and (2) are not relevant. Sub-sections 99A(3) and (4) provide:

(3) No action shall lie against the personal representative by reason of his having distributed any part of the estate if the distribution was properly made by the personal representative after the expiration of six months after the grant of probate of the will or of letters of administration (as the case may be) and without notice of any application or intended application under this Part in respect of the estate.

(4) For the purposes of this section notice to a personal representative of intention to make any application under this Part shall be in writing signed by the applicant or his legal practitioner and shall lapse and be incapable of being renewed, and the personal representative may act as if he had not received the notice, unless, before the expiration of three months after the day on which he first receives notice of intention to make the application, the personal representative receives notice in writing that the application has been made to the Court:

Provided that nothing in this subsection shall prevent the subsequent making of an application within any other period allowed by this Act.

11 As can be seen, s 99A(3) gives protection where (as relevant here) the distribution was properly made 'after the expiration of six months after the grant of probate' (emphasis added) and without notice of an intended application. Section 99A(4) specifies how such notice is to be given and regarded. When given as prescribed, it lapses after three months and may be ignored unless the person giving notice gives another notice 'that the application has been made to the Court'.

12 In the present case, the letter sent on Mona's behalf by her former solicitors to the executors' solicitors on 16 February 2015 satisfied the requirements of s 99A(4). If we treat the letter as notice under that provision, the three-month limitation period therein specified expired on 16 May 2015. That is one month or so after the six-month limitation period specified in s 99, which expired on 13 April 2015. If Mona gave notice under s 99A(4) and notice under s 99A(3) and (4) operates in practical terms to extend the limitation period in s 99, Mona's application for provision on 14 April 2015 was made within that extended time. She so contends.

13 Sections 99 and 99A have analogues in the other Australian jurisdictions and in New Zealand. But the provisions vary in terms and cannot usefully be compared. The provisions have received very little judicial attention and nothing determinative. With respect to our provisions, there is no authority on point. Nothing in the legislative history or parliamentary materials assists with their interpretation.

14 Counsel for Mona advanced strong arguments for connecting s 99 with s 99A. Perhaps the strongest was that the application of which s 99A(3) and (4) speak includes an application for family provision under s 91, which must be made within the time specified in s 99. It was submitted that, to bring s 99 into harmony with s 99A(3) and (4), the provisions must be interpreted together such that, when notice is duly given under s 99A(3) and (4), the applicant has the three months therein specified to make application even where (as here) this goes beyond the six-month limitation period specified in s 99. With great regret, I cannot accept this or the related submissions made on Mona's behalf.

15 In relation to distributions made 'after the expiration of six months after the grant of probate', (emphasis again added) there is a substantial foundation for interpreting ss 99 and 99A(3) and (4) such that, where the executor has received unelapsed notice under s 99A(4), application can be made in respect of the executor's personal liability even though the six-month limitation period in s 99 has expired. This arises by implication from the provisions of ss 99 and 99A(3).

16 The implication appears to follow through into s 99A(4). In a case arising under s 99A(3), s 99A(4) only applies where the distribution was made after the expiration of six months after the grant of probate, ie outside the six-month limitation period in s 99. This is why I have added emphasis to the word 'after'. Yet s 99A(4) contemplates application being made within three months of giving notice, which is even further outside that period. Under these unamended provisions,[5] it may well be that, in cases where s 99A(3) and (4) apply, application may be made in respect of the personal liability of executors despite the expiry of the limitation period in s 99.

17 The difficulty for Mona is that her sibling executors made the distribution within, not after, the six-month period after the grant of probate. On the facts, the estate was finally distributed by 20 March 2015. The six-month limitation period ended on 13 April 2015. Sub-sections 99A(3) and (4) only apply to distributions (in my view, partial or final) made after the expiration of six months after the grant of probate. However interpreted, these provisions do not assist in Mona's case.

18 In summary, no provision other than s 99 governs Mona's circumstances. In those circumstances, s 99A(3) and (4) do not assist in relation to the interpretation of s 99. Sub-sections 99A(3) and (4) do not open up a separate gateway for Mona (even if in other cases they do). In terms of s 99, her application was one day out of time. The associate justice did not err in law in so deciding.

20 I have dismissed Mona's appeal. Her application for family provision was made one day out of time. She cannot make application unless the time is extended. She seeks an order from the court extending that time. Also with great regret, for the following reasons, it cannot be granted.

21 The power of the court to extend the time for making an application is to be found in s 99 of the Administration and Probate Act. The court has no other power of extension. As I have set out, that provision allows the court to grant a 'further period' within which to make an application, even where 'the time for applying has already expired', but the application for extension must be made 'before the final distribution of the estate' (emphasis added).

22 Contrary to the submissions of the executors, in my view Mona's situation satisfies the discretionary principles[6] for the grant of an extension of time. She has a strong case for an order for family provision. The delay is but one day. On the facts before me, the fault was not her own but that of her former solicitors in failing to make application in a timely way. The only real prejudice to the executors is having to defend the application and suffer the risk of personal liability being established. This is no barrier to granting an extension, especially where, as here, the executors have prematurely distributed the estate to themselves to their own personal advantage as beneficiaries. The facts are clear and have not been affected by the delay. All of these considerations point in the direction of an extension being granted.

23 However, s 99 requires any application for an extension to be made 'before the final distribution of the estate' (emphasis again added). It is well established that, unless this condition is satisfied, the court does not have jurisdiction under s 99 to grant an extension.[7] In the present case, the estate was finally distributed by 20 March 2015 in the relevant sense of going 'beyond the reach of the court's power to order maintenance'.[8] But, Mona submits, this was a premature final distribution made with notice of her intended application and therefore improper. Being improper, it was not a final distribution for the purposes of s 99.

24 In support of this submission, counsel for Mona called in aid the many statements of distinguished judges decrying the practice of making early distributions, especially in the face of a pending or impending application for family provision.[9] While I too would decry this practice, and add a wish that courts be given power to do more about it, under the present law there is no absolute prohibition on such distributions.[10] It has not been held that a premature final distribution, by which I mean one made before six months after the grant of probate and in the face of a pending or impending application for family provision, is to be regarded as improper and therefore not a 'final distribution' within s 99, and I am not at liberty so to hold. True, executors are at risk of personal liability where a successful application is subsequently made.[11] But, under the current law, where an extension of time to make an application is required, as it often will, and is here, the fact of the final distribution represents a jurisdictional bar.

25 Setting limitation periods and the qualifying conditions involves balancing competing interests. But I would add my voice to those who have argued that six months is too short a limitation period within which to make an application for family provision, especially where final distribution is a bar to the court's power to extend the period. It disadvantages the very categories of people who might be entitled to make application, as the facts of the present case amply demonstrate. But six months it presently is.

26 So there we have it: the present law specifies a relatively short limitation period within which application for family provision can be made and during which executors can finally distribute the estate, including (as here) to themselves as beneficiaries; then it treats the fact of that distribution as a jurisdictional bar in respect of applications for extension of time by prospective applicants for provision, including (as here) those who may be elderly, do not have a copy of the will, have little knowledge of the estate and live out of the jurisdiction. This really does need attention.

27 In Re Jones; Noonan v Jones,[12] McInerney J said:

In my view the executor is not at liberty to make a final distribution before the expiration of six months after probate. If he does purport to make such a distribution, it cannot defeat the power of the court to make an order that provision be made for the applicant out of the estate which the executor has purported to distribute. In so far as Dunn J, held to the contrary Re McClelland (9 April 1976 unreported) that decision is in my view inconsistent with the general policy of the legislation that an applicant has six months from the date or [sic] probate within which to make a grant.[13]

This general statement does not establish that a premature final distribution of the kind under consideration here is not a final distribution for the purposes of s 99. It needs to be read in the context of the matter that was in issue in the proceeding. The case was one where the application for family provision was made within the six-month limitation period but after the distribution. In reliance upon the proviso in s 99, the executors contended that an application could not be made within the six-month period after final distribution. His Honour rejected this proposition. With respect, the correctness of this judgment cannot be doubted. If Mona had made her application within time, it would have supported her case. But the present case is to be distinguished. Mona's application was made out of time and she needs an extension. Her application for that extension runs into the jurisdictional objection that there has been a final distribution.

28 It was also submitted for Mona that the expression 'final distribution' in s 99 should be read with the expression 'properly made' in s 99A(3). So read, a distribution that has not been 'properly made' under s 99A(3) is not a 'final distribution' within s 99. In the present case, the executors made a premature final distribution with notice of Mona's intention to make application; that was not proper and therefore not final for the purposes of s 99.

29 This submission is a tribute to counsel's ingenuity and was attractively developed. But it must be rejected. Among other reasons, we have seen more than once that s 99A(3) applies to distributions made 'after the expiration of six months after the grant of probate'. I have described the purpose and operation of s 99A(3) and (4): providing and regulating the personal liability of executors. I cannot extract from s 99A(3) and (4) a warrant for evaluating a 'final distribution' under s 99 against the standard of whether it was 'properly made'. As an amendment of the legislation to deal with the problem here under consideration, I think it has a lot to commend it. But it is not the law as it stands.

30 In summary, although the executors finally distributed the estate prior to the expiration of six months after the grant of probate, under s 99 Mona had that six months within which to make an application. If Mona had made the application within that time, s 99A(3) and (4) would not have provided the executors with protection from personal liability because they made the distributions early. They would have been exposed to that liability in the (very likely) event of Mona's application being successful. But, as the early distributions amounted to a final distribution of the estate, missing the six-month time limit was fatal. The case was not covered by s 99A(3) and (4); therefore no separate gateway was opened up (even if such existed under the pre-amended legislation). The time limit in s 99 was unextendable because the estate had been finally distributed; therefore that gateway was closed.

31 The application for extension of time will therefore be dismissed.

32 The court has considerable sympathy for Mona's position. Her deceased father left a will that was not recent. It nominated her two brothers as executors and sole beneficiaries. Under pt IV of the Administration and Probate Act, she had a strong claim against the estate for an order for family provision. With knowledge of Mona's intended application to this court for that provision, her brothers finally distributed the estate to themselves as beneficiaries.

33 In respect of applications for provision, the limitation period is only six months. Final distribution of the estate, which is not presently prohibited or regulated within that period, represents a jurisdictional bar to granting any extension of time. Mona is elderly and lives out of the jurisdiction. She engaged solicitors, but it took time. On the facts before me, they then failed to make application for provision in a timely way. Her present solicitors obtained the file and made application.

34 Mona now has two related proceedings in this court. She appeals against the decision of an associate justice that the application was made one day outside the six-month limitation period. If that appeal fails, she applies for an extension of time. Unfortunately, both proceedings must be dismissed. The associate justice made no error in deciding that Mona's application was made out of time. The court has no power to grant an extension of time because the estate has been finally distributed. The remedy for this appalling state of affairs must rest elsewhere.

[1] It was common ground in these proceedings that the Administration and Probate Act applied without the amendments made by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (Vic).

[2] Younan v Younan [2015] VSC 258 (3 June 2015).

[3] The principles were concisely stated in Giurina v Owners Corporation [2013] VSC 39 (18 February 2013) [16]-[17] (McMillan J).

[4] In re Simson, Deceased; Simson v National Provisional Bank Ld [1950] 1 Ch 38, 43 (Vaisey J) ('Simson'); Blunden v Blunden [2008] SASC 286 (27 October 2008) [24] (Bleeby J) ('Blunden'); Curran v McGrath [2010] QCA 308 (5 November 2010) [48] (Muir JA, McMurdo P and White JA agreeing) ('Curran').

[5] By virtue of s 9(3) of the Justice Legislation Amendment (Succession and Surrogacy) Act, a s 99A(5) of the Administration and Probate Act now provides: 'Nothing in this section - (a) extends the period within which a person can make an application for a family provision order without a court order;...'

[6] The principles were summarised in In the Matter of the Will of Ivor Withall Trescowthick [1999] VSC 409 (22 October 1999) [18] (Warren J).

[7] Brown v Holt [1961] VicRp 69; [1961] VR 435, 438 (Pape J); Easterbrook v Young [1977] HCA 16; (1977) 136 CLR 308, 316-7 (Barwick CJ, Mason and Murphy JJ) ('Easterbrook'); Re Lago [1984] VicRp 62; [1984] VR 706, 708 (Brooking J).

[8] Easterbrook [1977] HCA 16; (1977) 136 CLR 308, 316 (Barwick CJ, Mason and Murphy JJ).

[9] See eg Simson [1950] 1 Ch 38, 42-3 (Vaisey J); In re Gimblett; Gimblett v Gimblett [1960] NZLR 664, 666 (McGregor J); In the Estate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559, 566 (Zelling J).

[10] Blunden [2008] SASC 286 (27 October 2008) [23] ff (Bleeby J) (discussing the authorities); Curran [2010] QCA 308 (5 November 2010) [48] (Muir JA, McMurdo P and White JA agreeing) (approving Blunden and other authorities).

[11] Simson [1950] 1 Ch 38, 43 (Vaisey J); Blunden [2008] SASC 286 (27 October 2008) [24] (Bleeby J); Curran [2010] QCA 308 (5 November 2010) [48] (Muir JA, McMurdo P and White JA agreeing).

[12] [1978] VicRp 28; [1978] VR 272.