4950/97 ROBYN ANNE RICHARDSON v GLENN ANTHONY PEDLER (ESTATE OF THE LATE ROGER KEVIN PEDLER)
JUDGMENT
1 MASTER: This is an application under the Family Provision Act in respect of the late Roger Kevin Pedler who died on 25 August 1994 aged 60 years. He was survived by his only son, the defendant, in proceedings No 4950 of 1997 and his de facto wife who is the plaintiff in the same proceedings. He was also survived by his former wife who has been notified of the proceedings and makes no claim. There has also been heard with this proceedings matter No 3283 of 2000 which I will describe shortly.
2 The deceased left a will under which substantially the whole of his estate passed to his son, the defendant, who was appointed executor. The estate at the date of death included a property which is central to the present application being premises at 2 Woodward Road, Hunters Hill. It also included a property at Ashfield valued at $170,000 and some land at Bundaberg valued at $125,000. There was furniture and personal effects together with cash in the order of $65,000. There were debts at that stage of $185,000 which included a mortgage secured on the Hunters Hill property of $150,000.
3 At present the estate's main asset is the property at Hunters Hill which the parties are agreed has a value of $1,250,000. There are liabilities of $187,825 of which the most substantial is the amount due to the Colonial State Bank of $134,997.41. This is the balance of the original loan on the property which has apparently been refinanced and which, throughout the course of the last seven years, the defendant has been repaying. The other amounts due are mainly amounts which the defendant has advanced to the estate for loan repayments and legal fees. There is another asset which the estate has which is a claim against the Royal & Sun Alliance Insurance Company which arises out of matters with which I will deal shortly. That has been crystallised in the hearing of proceedings No. 3283 of 2000 and is an amount of $150,000. There are also costs orders against the plaintiff amounting to $13,724. There is also a contingent liability for possible land tax on the property at Hunters Hill.
4 Both parties have incurred costs in the present matter the plaintiff's being $124,620 on an indemnity basis and the defendant's being $82,075 on a similar basis.
5 In order to understand the matter it is necessary that I deal with some of the history in a reasonable amount of detail.
6 The deceased was born on 25 July 1934 and the plaintiff on 13 March 1953. The deceased's first marriage occurred on 4 November 1965 and his son, the defendant, was born on 18 October 1967. The deceased and his wife were divorced on 19 March 1974 and his wife remarried in 1978. It was in early 1991 that the plaintiff and the deceased commenced living together. The plaintiff and the deceased attempted to have children but that was unsuccessful. On 25 August 1994 the deceased died in a car accident when returning to Sydney from Queensland. At that stage the property at Hunters Hill was partly completed and was covered with builder's rubbish and other debris. There were only two or three rooms in the house that were habitable in which the plaintiff and the deceased were living. Apparently the deceased had been involved in litigation with the Hunters Hill Council from at least 1964 and the evidence indicated that he was a prolific litigant in this area and in other matters concerning his dismissal from positions of employment.
7 After the death of the deceased the plaintiff made an application for Letters of Administration. That was referred by the Registrar to the Court for a decision. The defendant also apparently made an application under the Family Provision Act.. Both those matters were settled on 5 July 1996 by a Deed of Arrangement pursuant to which the plaintiff was to apply for Letters of Administration in respect of the estate of the deceased. Under the deed the deceased's property was to be listed for sale and the proceeds of the estate were to be distributed. The first $10,000 was set aside for the care of two dogs and a cat, the next $5,000 passed to the defendant in these proceedings, the next $200,000 realised passed to the plaintiff in these proceedings and the next $200,000 passed to the defendant in these proceedings. Any balance was to be split evenly between the parties. Following the Deed of Settlement the Registrar granted Letters of Administration of the deceased's estate to the plaintiff in these proceedings.
8 In August 1996 the plaintiff first met David Edward Gill who was a person who suggested to her that he had building skills. They married on 23 December 1996. Pursuant to the Deed of Arrangement and, indeed prior to it, there were a number of payments by the plaintiff to herself in the course of her administration of the estate. There was a payment of $5,000 on 18 June 1996, $10,000 on 18 October 1996 and $200,000 on 11 November 1996. In respect of this latter amount on 24 January 1997 the plaintiff gave $100,000 to her new husband, Mr Gill, she says, on the understanding that he would invest it prior to it being used for renovations of the Hunters Hill property. The marriage between the plaintiff and Mr Gill only lasted three months. The plaintiff made an application to the Family Court seeking repayment from Mr Gill of $165,000 most of which was no doubt the estate funds. These proceedings were then transferred to this Court and were dealt with by His Honour Mr Justice Young when he gave a judgment in her favour. He also heard proceedings which were brought in matter 1860 of 1997 by the defendant in the present proceedings against the plaintiff in these proceedings. Those proceedings sought to set aside the grant of Letters of Administration to the plaintiff in these proceedings on the basis that the grant was obtained by her fraud she having destroyed a duly executed will which left the whole of the estate to the defendant in the present proceedings. His Honour's judgment in that matter was given on 16 October 1997 and in that judgment at pages 3 and 4 he describes the conversation in which the plaintiff in these proceedings was alleged to have confessed to shredding the executed will. That conversation was with Mr Gill who no doubt passed on the relevant information after the break up of his marriage which allowed the proceedings to be commenced. At page 19 of the judgment His Honour had the following to say:-
"Applying the Briginshaw test to the evidence in the present case, I am comfortably satisfied, despite the criminality of the act, that there was a will left by the deceased which the defendant destroyed after his death. What were the terms of that will I will come to presently. It is easier to make this finding in the present case than perhaps some other cases because the conduct of both the defendant and of Mr Gill show almost a complete lack of commercial morality. The objection that ordinary citizens would not contemplate destroying a will has a much weakened force when applied to this defendant."
9 So far as the Deed of Arrangement between the parties was concerned His Honour found that there was fraud on the present plaintiff's part which had an operative effect on the present defendant's mind when he executed the deed. Accordingly, His Honour set aside the Deed as well as the Grant of Letters of Administration.
10 The plaintiff in the present proceedings appealed against His Honour, Mr Justice Young's decision. Ultimately, however, when the appeal came on for hearing she filed a notice of discontinuance. There are a number of other proceedings concerning the matter. One of them was matter No 111752 of 1999 in which the plaintiff sought to propound a will dated 5 December 1993 alleged to have been signed but not witnessed by the deceased. These proceedings resulted in a judgment by His Honour Mr Justice Windeyer in which he dismissed the plaintiff's proceedings.
11 In the original proceedings for the Grant of Administration to the plaintiff as a result of the Deed of Arrangement she was required to give an Administration Bond. That Administration Bond was given by the Sun Alliance Royal Insurance Australia Limited on 6 March 1995. The defendant in the present proceedings as a result of the plaintiff's administration of the estate brought proceedings against Royal Sun Alliance Insurance Australia Ltd which are proceedings No 3283 of 2000. I have heard these proceedings at the same time as the Family Provision Act application of the plaintiff.
12 In the proceedings on the bond the defendant, Royal Sun Alliance Insurance Australia Ltd, filed a cross claim against the plaintiff, Mrs Richardson, seeking to recover any amount which was recovered against them by the defendant in the present proceedings. The action between the defendant in the present proceedings and Royal Sun Alliance Insurance Australia Ltd was settled at the commencement of the hearing before me. I made the following orders as a result of the settlement.
"1.Verdict for the plaintiff in the sum of $160,000.00.
2. Order the defendant to pay the plaintiff's party/party costs agreed in the sum of $25,000.00
3. Judgment for the plaintiff in the sum of $185,000.00"
13 There was then an application for summary judgment on the cross claim brought by the insurance company against Mrs Richardson. Eventually that summary judgment application, which was based upon the indemnity which she had given the insurance company, was not resisted and I gave judgment against the plaintiff for $185,000 together with costs of some $38,912.50.
14 In proceedings 4950 of 1997 the plaintiff relies upon an amended Summons which was filed before me on 19 March 2001. That included a claim for provision, a claim for an extension of time and sought an order designating the Hunters Hill property as notional estate. The latter application was unnecessary because the evidence before me showed that the property had been transmitted into the defendant's name merely as administrator and not as a beneficiary. In these circumstances there has been no distribution. The defendant has in my view correctly conducted the case on the basis that the Hunters Hill property is part of the estate of the deceased and that there is no need, if an order is to be made, for the court to be concerned with questions of notional estate.
15 In these proceedings the defendant also brought a cross claim against the plaintiff seeking possession of the Hunters Hill property and mesne profits. Initially there was a dispute between the parties about many items of personalty which were alleged to have been misappropriated by the plaintiff. Apparently in the interests of speedy finalisation of the matter those matters were not pursued and do not concern me.
16 I turn to the application for extension of time. The date of death of the deceased was 25 August 1994 and time for the making of the application expired on 24 February 1996. These proceedings were commenced in December 1997. The court under section 16 of the Family Provision Act may allow an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211 the following was said:
"It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is 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."
17 His Honour Young J has in several cases dealt with the principles governing application to extend time under this Act. In Massie v Laundy (unreported 7 February 1986) he indicated that the factors which one looks at include the following:-
(a) is the reason for making a late claim sufficient?
(b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended?
(c) has there been any unconscionable conduct on either side which would enter into the equation?
18 He also accepts a view which was expressed by his Honour Needham J in Fancett v Ware (3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported 31 March 1988) Powell J when considering the matter at the substantive hearing leant to the view that a plaintiff seeking an extension of time under the Testators Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (unreported 8 September 1989).
19 In De Winter v Johnston, a decision of the Court of Appeal on 23 August 1995 his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23:
"In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the application for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."
20 It is also useful to note in the context of this case the comments of Sheller JA in that case when he said at page 11 of the judgment the following:-
"In the present case the Master found that there was no prejudice to the other beneficiaries on account of delay and that finding is not seriously challenged. The Master referred to unconscionable conduct and said:
'Unconscionable conduct in this context, of course, relates to such matters as where the plaintiff has made an informed decision not to make a claim against the estate, and has then decided after the limitation period has expired to make such a claim on account of some change in her financial and material circumstances which has occurred after the expiry of the limitation period.
With all respect, I would not have thought this to have been unconscionable conduct. No doubt it depends on the circumstances. However, the concept of unconscionable conduct is there directed towards a deliberate holding off designed to lull the beneficiaries into a false sense of security. There is nothing to suggest anything of that sort in the present case."
21 The plaintiff dealt with her application for extension of time in her affidavit of 27 November 1997. She refers to discussions with her solicitor which she had at the time of making an application for Letters of Administration which ultimately was compromised. She says that she discussed the possibility with Mr Carver of making a Family Provision Act application should the application for administration not be successful.
22 In paragraph 6 of her affidavit she submitted that there was sufficient cause to grant the present application. She said she was under the impression that the matter had been settled by negotiation with the defendant and his advisers. The negotiations to which she was referring were the ones which resulted in the Deed of Arrangement. However, that deed was procured by her own fraud in suppressing the destruction of the executed will of the deceased. That conduct was extremely reprehensible. Under 135 of the Crimes Act it carries a penalty of seven years imprisonment. Clearly it was because of her deliberate fraud that there has been a delay in bringing these proceedings. She had the option when she knew of the prior existence of the executed will of allowing it to be proved and bringing proceedings under the Act within time. She knew of the availability of those proceedings well within time. Instead she chose to persist with her fraud until found out. This was the reason for the delay.
23 As a result of her actions there have now been a multitude of proceedings in which there have been many costs orders made against her. She has only one asset of any substance and that is an amount of $175,000 to which she is entitled from the estate of her mother. Her solicitor has a charge over that to secure his costs and of other solicitors who have acted for the plaintiff over the years. The total costs secured appear to be some $235,270. She also owes a substantial sum to the defendant as a result of the previous litigation and her receipt of monies during the administration of the estate to which she was not entitled. So far as costs are concerned there are orders against her in favour of the defendant for $70,905.52. She has to refund the $215,000 being funds which she obtained during her administration of the estate. There is also interest on these amounts of $94,839.39. These amounts total $616,014.91 and offset against this is the $150,000 which will be received from the insurance company by the defendant. This leaves an amount of $466.014.91 owing by the plaintiff to the defendant. She will also have to pay the judgment obtained against her by the defendant of $185,000 plus $38,912.50. The plaintiff thus has debts of $689,927.41 and assets of some $175,000. Clearly it is very likely that she will be made bankrupt and the defendant will not be able to recover any significant amount from the plaintiff. Accordingly he will be substantially out of pocket as a result of the actions of the plaintiff.
24 However, the relevant prejudice is that which will result from the extension of time if granted. If the extension is granted there may be an order in the plaintiff's favour together with costs all of which would come out of the estate. The estate will thus be diminished. As will be demonstrated later on in this judgment the estate is of a sufficient size that it can accommodate both the plaintiff'' claim, any amounts that are due to the defendant for funds advanced by him to the estate and the defendant's costs of the proceedings. Thus the only effect on the defendant will be that the share which he is to receive from the estate will be reduced. There is nothing that the defendant has done since he obtained a Grant of Administration which was predicated upon the plaintiff not bringing these proceedings. Therefore there is no relevant prejudice.
25 I am satisfied, however, because of the unconscionable conduct of the plaintiff, that there is no adequate or proper explanation for the delay in bringing proceedings and thus I should refuse her application for an extension of time.
26 Although it is not necessary for me to do so I will deal with a number of other aspects in respect of the substantive application in case a different view might be taken on appeal.
27 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:-
"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."