Plaintiff v First Defendant

Supreme Court of Victoria|2008-07-25|Before: JUDD J

TESTATOR'S FAMILY MAINTENANCE - application for an extension of time to bring a claim for further provision out of the estate - exercise of discretion - Administration and Probate Act 1958 s. 99 -

2 The plaintiff supported his application by a claim that he was ignorant of his right to make such an application, until becoming aware in May 2005 that his step sisters, Jane Ashhurst and Janet Richards, had commenced a proceeding to extend the time within which to make such a claim against their fathers estate. The application by Jane Ashhurst was successful.[1]

3 The plaintiff's claim of ignorance was arresting because he is a lawyer and practiced as a solicitor following his graduation from the University of Melbourne in 1957. His application was initially rejected by a judge in the Trial Division who held that the plaintiff had not discharged the burden of establishing his ignorance of the right to claim relief under the Act. The plaintiff appealed. His appeal was allowed. Buchanan JA, with whom RedlichJA and Cavanough AJA agreed, said,

The trial judge held that the appellant had not discharged this burden. In my view, the discretion conferred by s 99 should not be confined by any rigid rules and accordingly, there is no requirement, in every case, that delay be satisfactorily explained.[2]

4 The trial judge also held that the plaintiff had no arguable case for relief under the Act. Buchanan JA said,

The strength of an applicant's claim for relief is a relevant factor to be considered, together with other factors, in an application to extend the time for applying for further provision to be made from the estate of a deceased person. The trial judge in this case, however, used this factor to determine the application. That required a high threshold to be met, namely, that the appellant's case was hopeless.

In my opinion, the appellant's prospects of success were far from negligible. At the date of the deceased's death, the appellant was in a somewhat parlous financial position. He was unemployed and had been unemployed for some time. He was qualified to work in the law and there was a prospect of gaining work in that field. Nevertheless, in my view, it was clearly arguable that a testator with a considerable estate, who had no competing claims upon his bounty which could serve to exclude the appellant, owed the appellant a moral duty to make provision for him in the event that a successful legal career did not materialise. His Honour had regard to the possibility that the deceased saw the appellant as having made a deliberate choice not to work and toyed with other possibilities, without identifying them, saying -

or it may be that for some other reason Sir Reginald saw it, with justification according to his lights, as not warranting a greater disposition in John's favour than the $50,000 given to him by Sir Reginald in his will.

The trial judge also referred to lack of evidence of the extent to which the appellant needed more than $50,000 left to him in the will. That is the language of a decision disposing of an application under the Act. It does not warrant the conclusion that the appellant had no prospects of success in such an application. In my view, it is at least arguable that a wise and just testator, with very large means at his disposal, was under a duty to make better provision for the vicissitudes of life facing a son currently without significant financial means. [case references omitted][3]

5 When remitting the matter to the Trial Division Buchanan JA said,

The appellant's claim of ignorance of his right is important, and that claim can only be determined by a judge of the Trial Division in accordance with law[4].

6 Following the judgment of the Court of Appeal, the defendants in this proceeding now accept that the plaintiff's prospects of success in an application for better provision out of the estate is at least arguable. They add, however, that while not hopeless, the plaintiff's case is attended by significant difficulty. To this qualification the defendants couple their primary submission - that the court should reject the plaintiff's evidence that he had no knowledge of his right to make a claim until May 2005 and refuse his application. This is the primary issue in this trial. The defendants submit that the plaintiff has failed to provide a credible excuse for his delay of about 24 years and that his claim of ignorance of his right at the relevant time should be disbelieved. It is no longer contended on behalf of the defendants that the plaintiff's delay in commencing this proceeding after he became aware of his step-sister's application in May 2005, should prejudice his application

7 At the time of his death, the deceased left a will dated 20 October 1980 with two codicils thereto dated 12 August and 23 November 1981 respectively. Probate of the will was granted on 17 May 1982 to Joan McAuliffe Ansett, wife of the deceased, Theodore Hertzle Moss, John Keith Simpson and Equity Trustees Ltd, then known as Equity Trustees Executors and Agency Co Ltd. Joan McAuliffe Ansett died on 25 September 2003 and the trustees of the estate are Theodore Hertzle Moss, John Keith Simpson and Equity Trustees Ltd, the defendants in this proceeding

8 The deceased was married twice in his lifetime. He was first married to Grace Doreen Nichol. They had two sons, Robert Graham Ansett born 8 August 1933 and the plaintiff born 2 February 1936. The plaintiff is presently 72 years of age. By his second marriage, the deceased and Joan McAuliffe Ansett had three daughters, Janet McAuliffe Richards born 26 December 1951, Jane Miles Ann Ashhurst born 22 June 1957 and Gillian MacLean Baxter born 18 January 1961.

9 The estate of the deceased at the date of his death had a value for probate in the sum of $8,266,556.69. The estate was comprised of a property known as "Gunyong Valley" at Mt Eliza and personal assets.

10 By his will and codicils, the deceased left legacies of $10,000 each to three nephews and a legacy of $50,000 each to his children. In respect of the legacy to each of his sons the will stated:

... I now record that each of my sons has in the past from time to time been given assistance by me including financial assistance in the establishment of his home and of his business or professional career.

11 The deceased left a legacy of $1,250,000 to his wife and directed his trustees to set aside in respect of each of his daughters the sum of $750,000 to be held on trust to pay to them the income until their deaths and then in equal shares to such of their children as survive them and on the death of any such child upon the trust in respect of the residue of the deceased's estate. He directed his trustees to pay from the income of his trust estate an annual sum of $20,000 to the Mornington Racing Club subject to the club providing annually at one of its regular race meetings a race with a stake of at least $25,000 such race to be named the "RM Ansett Stakes" or a similar name. The trustees of his estate were directed to erect a dwelling on Gunyong Valley for the benefit of his daughter Janet McAuliffe Richards, her husband and children. The deceased's wife was given a right to occupy Gunyong Valley. Until the death of his wife, the deceased directed the trustees of his trust estate to make payments from the residue and remainder to Toorak College and the Peninsular Church of England School and any other schools in Victoria not conducted for profit as the trustees may choose and after the death of his wife to hold the residue and remainder as a common fund to be known as the "RM Ansett Trust". He directed that his trustees pay the income to any one or more authorised charities that would assist children to take their place in life and to Peninsular Church of England School and Toorak College.

12 The plaintiff made four affidavits in support of his application. The first three were sworn in support of his application at the first trial and the fourth, to supplement his evidence following his successful appeal. The plaintiff deposed that he did not see a copy of his father's will nor was he aware of its contents until about 1989. In that year he obtained a copy of the will whilst researching the Ansett family history. Following the grant of probate of the will of his father, the plaintiff received $50,000, accepting the money in circumstances where, as he deposed, he was unaware of the contents of the will or any avenue open to him to challenge the will. He deposed that the executors did not inform him of the full contents of the will or any rights that he might have in relation to the estate.

13 The plaintiff deposed that when practising as a lawyer he practised predominantly in the area of insurance, personal injury and corporate law. He said that during his legal career he did not and still does not have any experience in the area of wills and estates. He deposed that he did not give any consideration to his father's will or to any further entitlement he may have had to his estate until he learned on 5 May 2005 of the proceedings brought against the executors by his step-sisters Jane Ashhurst and Janet Richards. Having become aware of the proceedings, he contacted the solicitor acting for his step-sister and requested copies of relevant court documents. He was not successful in obtaining documents until the end of July 2005 and contacted his present solicitor on 9 August 2005 to seek advice. In his fourth affidavit, the plaintiff deposed, in greater detail, to his lack of awareness of the right to challenge his father's will, his university career and employment history. He confirmed his earlier evidence, given in his second affidavit, that he was unaware of the contents of the will or of any avenue open to him to challenge the contents of the will in 1982. He went on to say:

I was not aware of the provisions of Part IV of the Administration and Probate Act, enabling me to bring a claim against the estate. I was also unaware that any such claim had to be made within six months of the date of the grant of probate, or that there was provision to make an application to apply for an extension of time within which to bring a claim. My state of knowledge remained the same until I became aware, on 5 May 2005, of the proceedings brought by my step-sisters Jane Ashhurst and Janet Richards.

14 The plaintiff and his brother lived in Australia with their parents until their marriage broke down and his mother remarried an American citizen. The plaintiff, his brother and mother moved to the United States to join her new husband and they settled in California. The plaintiff returned to Australia in 1950 and has lived here ever since. His brother Robert returned to Australia in 1965. On his return to Australia, the plaintiff lived with his father and his father's new wife at Gunyong Valley and initially attended Wesley College in St Kilda Road, Melbourne. The plaintiff changed schools in 1951 and matriculated from Brighton Grammar School at the end of 1953. He then attended the University of Melbourne where he studied law, graduating in 1957. The plaintiff married his first wife, Cynthia, in 1958 but their marriage broke down in 1975.

15 In relation to his university career, the plaintiff exhibited his academic record disclosing that in 1957 he completed a subject described as The Law Relating to Executors and Trustees, in which he obtained second class honours. He said that he had no recollection of having completed the subject or of anything which he may have been taught in that class. That was his final year of university. During that year, he suffered depression and was hospitalised. He continued his treatment for depression for about two years. He attributes his depression to the attempted suicide of his girlfriend who was later to become his wife. He married in February 1958 against the wishes of his father.

16 The plaintiff's work history was most unusual. It was punctuated by marital problems, heavy drinking and erratic behaviour. He frequently changed employment. He left and re entered the law. He experienced periods of unemployment and a nomadic existence. He often moved his family home. It is by no means an ordinary history of a professional man. In 1958 the plaintiff commenced employment as an articled clerk in the firm of Alfred L Abrahams & Co. Following his articles he was employed by the firm Morris Cohen & Co and in 1961 became a partner in that firm. He remained a partner until 1969 when he resigned and moved to Cairns. At that time the plaintiff was experiencing problems in his marriage to Cynthia. He was unable to find suitable employment in Cairns and returned to Melbourne towards the end of 1970 but was still unable to find employment until 1972 when he was employed for a short time as an investigating officer for the Law Institute of Victoria.

17 From 1973 to 1975 the plaintiff was employed by the Gas and Fuel Corporation. During that period his marriage was in crisis and he was drinking heavily. He was advised by his employer to look elsewhere for employment. He describes his behaviour at the time as erratic. In 1975 the plaintiff's first marriage ended and he appears to have commenced to lead a nomadic life in Queensland and Victoria until 1977, occasionally employed as a labourer. He was in receipt of unemployment benefits for some of that period. When in Melbourne the plaintiff lived with friends or in boarding houses.

18 In 1977 the plaintiff remarried and once again obtained his practicing certificate and returned to the law as a partner in the firm Lloyd P Goode & Co, Lonsdale Street, Melbourne. He remained in that position for two years but was asked to leave due to his heavy drinking and unsatisfactory work performance. In 1979 the plaintiff commenced a sole practice in Peel Street, North Melbourne, although it lasted for only a few months. Later that year the plaintiff left his second wife for a short time. They reconciled, but from 1980 to 1983 the plaintiff was mainly unemployed and in receipt of unemployment benefits. It was during this period that the plaintiff's father died. It was also during this period that the plaintiff and his second wife moved out of their home in order to provide some income. They moved into a bungalow at the rear of the home of the parents of his second wife. In May 1983 the plaintiff, with the assistance of his brother, commenced employment with Budget Transport Industries at Peel Street, North Melbourne. That position came to an end with the collapse of Budget in about January 1990.

19 The plaintiff appears to have suffered from a significant drinking problem since about 1973. This problem caused or contributed to the loss of his employment with the Gas and Fuel Corporation and Lloyd P Goode & Co. He continued drinking heavily after leaving that firm. The plaintiff has also suffered from depression since his university days. From 1979 until April 1983 the plaintiff was mainly unemployed, drinking heavily and working as an unskilled labourer and at one time a drink waiter. When in early 1983 the plaintiff's brother, Robert, offered him work at Budget, he did so on condition that he moderate his drinking. With the help of family and friends he was able to control his drinking for a time but following the collapse of Budget, the plaintiff once again commenced to drink heavily and did not work again until he obtained employment with the Department of Social Security in 1991. Although retaining his practicing certificate for a short time the plaintiff did not thereafter practice law. He was declared bankrupt in about 1992. From 1992 until the time he commenced this proceeding the plaintiff has been mostly unemployed with short periods of work as a taxi driver. He is currently living with his wife and is in receipt of an aged pension.

20 The Court of Appeal expressed doubt that there was an onus upon an applicant for an extension of time to prove ignorance of an ability to claim upon the estate of a deceased. It was said to be a relevant factor, the weight of which will vary according to all the circumstances.[5] The plaintiff's claim to ignorance is elevated in importance in this case because the plaintiff is a trained lawyer and puts forward that claim as an explanation for his not having commenced a proceeding under the Act within the prescribed time.

21 The plaintiff was vigorously cross-examined as to his credit. In my view the attack upon his credit did not succeed in shaking the plaintiff's unusual but credible account of ignorance of the right to make a claim against his father's estate. The initial thrust of the defendants' cross-examination was to establish that the plaintiff must have a recollection of the content of the university course, The Law Relating to Executors and Trustees, which he studied in 1957 and that his claim to have no such recollection was false. As the plaintiff's cross-examination advanced I became increasingly satisfied with the credibility of his claim to ignorance during the relevant period. Under cross examination the plaintiff maintained his evidence that such wills as he did prepare were simple wills made by a husband and wife. He presented as a credible witness who was willing to acknowledge and correct errors in his testimony when they were pointed out but otherwise remained firm and consistent in his evidence. He said he had no recollection whatsoever of the content of the university subject. That answer was not in the least surprising. He attended those classes more than 50 years ago. He was cross-examined about his general knowledge of limitation periods. In the end, the cross-examination of the plaintiff came down to this,

Counsel: But you must have been aware, must you not, that there would have been a time in which to bring the application?

Counsel: So you took the view that you could make an application in your late father's estate at any time at all?

Plaintiff: I wasn't aware that I could make an application.

22 The defendants submit that I should adopt the observation of the trial judge in the plaintiff's first trial, found at paragraph 17 of his Reasons for Judgment, to the effect that if the plaintiff did not know of the relevant provisions of the Act then he was negligent in his ignorance.[6] The difficulty with this submission is that this is a new trial. There is new evidence and I must reach my own conclusions about the facts and the credit of the plaintiff. I note the observation by Buchanan JA in the Court of Appeal[7] that "there is no requirement, in every case, that delay be satisfactorily explained". I am prepared, however, to accept that if I were to reject the plaintiff's claim of ignorance it would be a significant matter in the exercise of discretion to extend time. This is because the claim of ignorance lies at the heart of the plaintiff's explanation for his delay and to reject his claim of ignorance would be to reject an important ground upon which the plaintiff relies to persuade the court that his failure to apply within the time should be excused. I accept that in the case of an ordinary functioning legal practitioner who denied knowledge of his right to make a claim against his father's estate an attack on his credibility may have had resonance. But, the plaintiff was no ordinary functioning legal practitioner. His life was deeply troubled, he was depressed, he had a serious drinking problem and was quite obviously not functioning properly as a lawyer or as a husband or father as he readily concedes.

23 I accept the plaintiff's claim that he was unaware of his right to make a claim against the estate of his late father following the death of his father until May 2005. It is possible that he may have been aware of the right during his university studies and for some time afterwards. That is not the point. What is important to his credibility is his state of knowledge during the relevant period. Knowledge, or the ability to apply knowledge once acquired, can be lost.

24 Having regard to the issues raised between the parties in this trial and accepting, as I do, the plaintiff's explanation for the delay in making application for further provision from his father's estate, I may be justified in granting his application for an extension of time on that basis alone. I do not, however, accept that such an approach is appropriate. This is a new trial.

25 I adopt, with respect, what was said by Hansen J in Ashhurst v Moss,[8]

Section 99 does not specify any criteria to be considered in determining on the exercise of the discretion, save for the proviso that the estate has not been finally distributed and that no distribution made shall be disturbed. Apart from the proviso the section provides that the time for applying "may be extended", thereby conferring a discretion which, like all judicial discretions, is to be exercised with regard to the relevant circumstances. In Re Guskett, deceased Herring CJ said that an applicant "has 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.[9]

26 Notwithstanding the judgment of the Court of Appeal that the plaintiff has an arguable case, a matter conceded by the defendants, they submit that, while not hopeless, the case is attended by significant difficulty because "the adverse circumstances prevailing at the time of the deceased's death and relied upon by the plaintiff, were, to a significant extent, the result of lifestyle choices made by the plaintiff himself". I reject that submission.

27 In the period immediately preceding his father's death the plaintiff was mainly unemployed, apart from occasional labouring jobs. He was drinking heavily. He and his wife moved from the family home to provide some rental income. In my view it does an injustice to the evidence to describe the plaintiff's circumstances as a lifestyle choice. I reject that description and find that at the time of his father's death and for approximately two years prior the plaintiff was unemployed, apart from occasional labouring jobs, drinking heavily and experiencing significant adverse financial and domestic circumstances.

28 On behalf of the plaintiff it was submitted that the size of the estate is a relevant consideration. The plaintiff sought to argue that the estate was much more substantial than was accepted in Ashhurst v Moss. The defendant conceded for the purpose of this application that the estate should be regarded as substantial and that there was no need to give further consideration to that matter. I agree. While I accept that the size of the estate is relevant and that an insubstantial estate may militate against the exercise of discretion because a claim may be valueless, that is not this case.

29 In my opinion, the plaintiff has shown reasons why his failure to apply within the time allowed should be excused. While his position is quite different to that of Jane Ashhurst by reason of his training and the fact that he received a copy of the will in about 1989, I accept his evidence that he was not aware at the relevant time of his right to make a claim against the estate under the Act. In all of the circumstances, I am satisfied that it would be unjust for the plaintiff to be prevented from making such a claim on his father's estate. The injustice would be compounded, in my view, if the plaintiff is denied the opportunity while his step-sister, Jane Ashhurst, is permitted to proceed with her claim. That additional injustice does not arise merely because one sibling has already persuaded the court to exercise its discretion to extend time within which to make such an application. But it seems to me that the merit of the plaintiff's claim when compared with the position of his step-sister makes it all the more compelling that he be permitted to have his claim adjudicated by the court.

30 It is inevitable that to extend time within which the plaintiff may make his application will, in a sense, prejudice other beneficiaries under the will. Such prejudice does not, in my view, stand in the way of the plaintiff's application for an extension of time. In that regard, I adopt what Hansen J said in Ashhurst v Moss,[10]

But to grant leave does not in itself mean that the interest of a beneficiary is otherwise affected. Furthermore, I bear in mind the size of the residuary estate as to which a substantial doubt exists because of the uncertainty over the value of Gunyong Valley. The value may be such as to render any possible diminution in value of the residuary estate by reason of an order in favour of the plaintiff so relatively slight as to warrant the conclusion that there was no relevant prejudice.

31 I propose to order that the time within which the plaintiff may make an application pursuant to s 99 of the Act be extended. I will hear counsel on the orders I should make.

[1] Ashhurst v Moss and Ors [2006] VSC 287; (2006) 14 VR 291.

[7] Ansett v Moss [2007] VSCA 161 at [6].

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