Scammell v Colman [1999] VSC 111

Supreme Court of Victoria|1999-04-15|Before: Hansen J.

ADMINISTRATION AND PROBATE - Extension of time within which to commence an application under Part IV of Administration and Probate Act 1958.

In January 1997 a married couple, Helen Betty Scammell and Gordon William Scammell, died within two days of each other. They left wills dated 1 November 1996 and 2 August 1994 respectively. They were survived by their three children, Kaye Annette Colman who was born in 1956, Glen John Scammell who was born in 1959 and Stephen Ross Scammell who was born in 1961. The three children obtained a grant of probate of their mother's will on 20 June 1997. Glen and Stephen obtained a grant of probate of their father's will on 4 June 1997.

There is now before the Court for determination an application by Glen that in respect of each estate the time within which he may commence an application for provision under Part IV of the Administration and Probate Act 1958 be extended. The application is made by a separate originating motion in each estate dated 3 December 1998. Allowing for the period of six months after the grants of probate the period of the delay in bringing the applications is approximately 11 months.

Mr and Mrs Scammell had operated a 320 acre farm at Back Creek via Yackandandah. They purchased it from Mrs Scammell's mother in June 1966. Until 1970 it was operated as a dairy farm. It was then turned to beef. In addition Mrs Scammell owned a house in Wodonga which produced rental income. According to Glen the average net annual rental in the nine years to 30 June 1995 was $3,288. This rental was included in the farm income (conducted by Mr and Mrs Scammell in partnership) which averaged $7,733 annually in the 10 year period to 1995/1996 inclusive. Neither the farm nor the Wodonga property was subject to a mortgage.

The children were raised on the farm and, as members of a farming family, assisted in various tasks on it. Glen has described at some length the work which he performed both from his younger days as a school boy through to adulthood and to the death of his parents. He seeks to make a case that he has a claim for further provision on the basis that he had made a special contribution, over and above that of his sister and brother, to the maintenance and enhancement of the farm. In addition to the work which he has described in his affidavit he states that he expended $37,600 on the purchase of plant and equipment for the farm.

The affidavits of Kaye and Stephen emphasise that they too performed work, and they put in context the work which Glen performed so as to diminish if not destroy his case on the basis of a special contribution to the maintenance and enhancement of their parents' estates, including questioning the utility of items of plant and equipment which he purchased for the farm. There is also reference to differences of opinion between Glen and his father as to the usefulness of some of the items of plant and equipment which Glen purchased and as to methods of farming. These may represent no more than the differences of a type that can occur between generations in the conduct of a farming business and concerning the introduction of new methods or a different way of doing things.

No deponent was cross-examined upon his or her affidavit. I cannot make a determination of the issue concerning the extent of the work performed by Glen and whether it does constitute the basis of a special claim which might warrant an order for further provision. What is clear however is that Glen has deposed to facts which could be held to establish such a claim. I do not say that they do or venture any opinion as to a likelihood that at trial they will be held to constitute the basis of a special claim by Glen as an adult son. But it is arguable. For these reasons there is little to be gained in my view by a more extensive setting out of the facts and a discussion thereof let alone any prognostication of a likely result. The case throws up an issue of a type commonly encountered in such cases, and which is often the subject of dispute, namely whether a child's contribution does or does not constitute the basis of a claim under Part IV against his or her parents' estate.

Glen describes having commenced working in Albury/Wodonga in 1978. He lived at the farm until 1981. He paid rent. In November 1981 he moved to Wodonga to work. He says that he regularly returned at weekends and holidays and worked on the farm. He went overseas in 1985. Before doing so his parents said they would give him half the farm. He said that they wished to give him a start in farming and to thank him for his work for which he had not received recompense. He said that they also hoped that by transferring some of their assets they would become eligible for the pension in the future. Kaye and Stephen say that this latter point was in fact the reason for the transfer, which duly took place. Glen disputes this saying that although the transfer of half the farm was by way of gift it was genuinely made for the reasons first mentioned. He said that his parents told him that if he waited until he was financially settled they would transfer the farm to him. In the meantime he was to be a silent partner, taking no income from the farm. The one half share in the farm was transferred to Glen in 1986 and he continues to hold it unencumbered. He did not receive any income from the farm business or in respect of the use of his land by his parents.

Glen met his wife while overseas. On his return he completed a degree in agricultural science, graduating in 1988. He paid for his studies with the assistance of an Austudy allowance. He is employed as a research agronomist earning $38,000. In 1989 he and his wife purchased a house in Wodonga, which it seems he still owns, and which was valued approximately two years ago at between $115,000 and $120,000.

As I have mentioned, Glen said he continued to assist his parents until their deaths. Between 1991 and 1995 he leased some land at Rutherglen, on which he ran stock, which he says he used to augment the farm and which thereby benefited his parents. He also said that on occasions he moved on to the farm to assist.

Unfortunately, in 1994 Glen's marriage broke down and his wife returned home to Denmark with their two children. He pays $4,000 annually as maintenance except in the years when he travels to visit them, which he has done in July 1995 and July 1998.

Mrs Scammell's will was somewhat complicated. By cl.3 she devised the Wodonga property to Stephen. By cl.4(a) she gave her farm machinery and equipment to Glen. By cl.4(b) she devised her interest in the farm property to Glen but excluded from that gift the "house property and curtilage thereon". By cl.5 she left the residue of her estate to Kaye and in this gift included a direction and declaration that her interest in the said house property and curtilage "shall fall into and form part of my said residuary estate". By cl.8 she gave her trustee a discretionary power of sale over her estate. In cl.10 she stated that the term "curtilage" is used in the same meaning as defined in a certain 1995 Social Security Handbook, namely, "land around the house used for private purposes not exceeding 2 hectares". Presumably that means two hectares in total area and not by radius, but it is unnecessary to consider this point. It was unnecessary for counsel to refer me to the Handbook and they did not do so.

The will went on to provide in cl.9 that cll.3, 4 and 5 are conditional upon Glen transferring his interest in the "house property and curtilage" (which interest he had acquired on the 1986 transfer) to Kaye simultaneously with the transfer to her of the said house property and curtilage pursuant to cl.5 of the will. That was subject to a proviso that should Glen not satisfy this express condition cll.3, 4 and 5 of the will "shall be of no effect and the following shall apply instead" and then followed certain substitutionary provisions. By those provisions the estate was left on trust to be divided into two equal parts and held as to the first such part for her three children equally and as to the second such part to be held for Kaye and Stephen equally.

The gifts contained in cll.3 and 4(a) of the will are simple enough. The difficulty that has occurred is a result of the fact that Mrs Scammell died before her husband and on her death her husband acquired her interest in the farm by survivorship. Accordingly the gifts in cll.4(b) and 5 by which she devised her interest in the farm to Glen and directed that the house property and curtilage be part of the residue could not operate. This of course meant that Glen did not become the sole owner of the farm property. It also meant that while Glen could transfer the interest which he had in "the house property and curtilage" he could not and nor could the trustee of Mrs Scammell's estate effect such a transfer of the other one half interest in that part of the property. In these circumstances the view has been taken that the condition in cl.9 could not be satisfied and that cll.3, 4 and 5 were therefore of no effect and that the substitutionary provision applied. That is the position taken between the parties.

By his will Mr Scammell left his entire estate to his wife should she survive him by one month (which she did not) and then on trust to be divided into two equal parts and held as to one half for his three children in equal shares and as to the other half for Kaye and Stephen in equal shares. This matched the substitutionary provisions in his wife's will.

In summary the financial position of the estates is as follows. Mrs Scammell's estate is comprised of the house in Wodonga valued at $115,000, money on hand of $102,640.45 and five Pivot shares. In round figures therefore the estate is worth $217,640.45 or so. Mr Scammell's estate is comprised of the one half interest in the farm the total value of the property apparently being $373,000 to $435,000; cash on hand of $122,029 or so; plant and equipment which Stephen says has been written down to $5,664 and is insured for $30,000; stock; and household furniture and personal effects estimated at about $30,000 to $40,000.

The farm has been leased. On a valuation of $373,000 Glen's one half interest is $186,500.

It was submitted by counsel for Kaye and Stephen that on the figures they would each receive $219,000 under their parents' estates and that Glen would receive $87,000. It is obvious that there is a disharmony here which counsel sought to meet by bringing into the calculation, as he submitted should be done, the value of Glen's share of the farm property. On that basis Glen has a benefit of $274,000 which is $55,000 more than his siblings will receive.

Counsel for Kaye and Stephen proceeded from that point to submit that Glen neither had a claim on the basis of his work to assist his parents nor on the basis of a financial need. It was submitted that he had long since been independent of his parents, that he was an adult son who had made his way in the world and who received a reasonable income, that the gift of half the farm is more than adequate compensation for his contributions, and that neither his interest in the farm nor (it would appear) his house is subject to a mortgage. To balance this it must be said, as his counsel submitted, that Glen has never received any monies from the farm. Further, Glen's case is that his contribution to the farm was greater, and appreciably greater, than that of Kaye and Stephen, and that he significantly contributed to the maintenance and enhancement of his parents' farm operation. As I have made clear, it would be an issue for trial whether in fact that is so. At present all that can be said is that there is an arguable case which Glen desires to put.

Kaye left the farm about six to eight months after completing her HSC in 1974. She, like her brothers, was not paid for the work which she performed on the farm. She describes the work which she performed while she was there, just as Stephen does. As I have said she, and Stephen, dispute that Glen spent as much time working at the farm as he states that he did. As I say, this is an issue. She also talks about return visits to the farm and I should say in that respect that this is not a case in which it is alleged that one or other sibling did the wrong thing by, or that he or she fell out with, his or her parents. Regrettably the situation is that they have been unable to agree on how the estates should be divided. It is regrettable because it is likely that litigation will tend to injure their mutual relations and cause the loss of much money in associated costs and expenses.

Kaye married in 1980 and was overseas with work until 1986. She and her husband live in Geelong. They had a house which according to Mrs Scammell was sold for $170,000. Glen says that Kaye told him that she and her husband bought two blocks of land in Geelong for about $79,000 to $81,000. Kaye does not deny these matters. She and her husband have built a 35 square house on the land. Glen also stated that his mother had told him that Kaye's husband earned more than $100,000 per year; Kaye did not deny this, or that her husband has the use of a car. However Kaye's only significant asset is her joint interest with her husband in their matrimonial home. They have three children born in 1984, 1987 and 1995. The eldest has spina bifida with no use of his legs below the knees. He will require on going support. They lost an infant child in 1992.

Kaye states that it was her parents' wish that she receive an additional asset for herself.

In 1980, after completing Year 12, Stephen left home to study metallurgy at Bendigo. He (like Glen) played a lot of sport and he returned home at weekends more regularly in summer than in winter. He had summer vacation jobs. He said that in 1985 his mother offered to transfer half the farm to him by way of gift, but that he refused because he would be interstate. As mentioned, his (and Kaye's) view is that his parents transferred half the farm to Glen so as to reduce their assets to aid in obtaining the pension. He said that in the three years that he was studying he performed work on the farm. He then graduated and moved to Queensland where he now lives.

Stephen is in employment in Brisbane as a Senior Account Manager. Glen states that similar jobs pay about $60,000 per year, and that Stephen has a company car. Stephen did not deny this.

Stephen married in 1994. His wife worked as a speech pathologist but now does so only on a part-time basis due to her mother's state of health. They have no children. They own their own home in Brisbane which Glen's mother thought had been bought for about $200,000. Stephen did not deny this. He did however refer to the expense of carers for his wife's mother and to the need to undertake alterations to their house to allow for wheelchair use in relation to which monies from the deceaseds' estates would assist.

I have already mentioned how the wills operate in the circumstance that Mrs Scammell died before Mr Scammell. Mrs Scammell's will manifested an intention to benefit, or further benefit, Glen. That intention was defeated by the law of survivorship, and the absence of a matching provision in Mr Scammell's will. In the result Glen is entitled to two-twelfths while his sister and brother are entitled to the balance of the estates equally.

The submission on behalf of Glen is that having regard to the contribution which he made to his parents farming operation and thereby to their estates, and to the relative size of those estates, and the relative claims of the children, his parents, as wise and just testators should have made provision for him beyond a two-twelfths share. Glen's case is that the half interest in the farm was, and should be understood as having been, transferred to him in consideration of his contribution on the farm. His case is that he made further significant contributions after that transfer.

It is submitted by counsel for the defendant that even if Glen could establish a claim on his parents' estates based on his claimed contributions to the farm, he could not establish that he has any special need and therefore he would fail in an application under Part IV. It is not necessary to repeat what I have said as to the financial circumstances of Glen or Kaye and Stephen. I do not think that it can be said that Glen could not establish a case of need, in all of the circumstances. I do not say that he would succeed in doing so, but his income is not large, and while his children are overseas he is obliged to provide maintenance, and some greater amount than $87,000 could be argued as being what a wise and just testator would have provided for. The submission of counsel for Glen is that given the size of the estate, it is arguable that he was, at least, entitled to be treated equally under the wills. Even if that submission fails it is arguable that he should have received some amount greater than that which he would receive under the wills.

The estates have not been distributed. Accordingly, the applications are not to be refused because an asset has been distributed or dealt with by the executors and any resulting prejudice.

What, then, is the reason for the delay in making the application? The evidence discloses that after their parents' funeral the siblings discussed how to sort things out. They had a common solicitor. For a time they did not appreciate that the gift of realty in Mrs Scammell's will was not effective. The solicitors advised as to this and sought instructions in June 1997. Glen states that from then until September 1997 he, Kaye and Stephen agreed that their mother's will be treated as operative in relation to the realty. There was apparently a draft deed of family arrangement drawn by the solicitors. In November 1997 Kaye told Glen she had arranged for valuations, which he understood to be for capital gains tax purposes.

Glen says that it was not until 19 January 1998, by which time the six months period had elapsed, that Kaye told him that his half interest in the farm should be brought into the calculations under their mother's will. That is, that in working out the division of the estates Glen should allow against himself the value of the one half share of the farm property which his parents had given him in 1986. Kaye also said that she wanted more land around the farmhouse than the curtilage provided for in the will. The land she wanted had the sheds and machinery on it. Glen would not agree to Kaye's request. This was the start of their differences. I should note that Stephen says that the differences commenced from about December, perhaps January.

Then there is correspondence between the parties but by the end of March 1998 it was apparent that they could not resolve their differences as to the division of the estates.

On 29 April 1998 Glen spoke to the solicitors, who were still acting for the three siblings, because he felt that negotiations had broken down. By letter dated 5 May 1998 the solicitors advised him to obtain independent legal advice. He did that but he was not in a position to proceed immediately because he was overseas visiting his children between 19 June and 20 July 1998. And, of course, new solicitors had to be properly instructed.

There is correspondence between solicitors in July, September and October 1998 leading up to the filing of the present applications on 3 December. It was clear to both sides that litigation was in the offing and on 3 September the solicitors for Kaye and Stephen sought expedition in the making of a claim under Part IV. On 7 September Glen's solicitors advised that he would make an application and that the documents were being drafted. It is apparent that this task took until the end of November.

In my view, regarding the matter overall, there is an explanation for the delay. The explanation is found in the fact of a common solicitor, that the parties were in agreement (it would seem) until the six month period had expired, and that it was only after the parties could not settle their differences that Glen went to the solicitor who then told him to obtain independent advice. That brings one to May 1998. The explanation, and the conduct of the parties, is not unexpected or unreasonable. Then there is a period of delay but it is one in which Glen had to retain a new solicitor and obtain advice, then get the case together and that time period was punctuated by one month overseas which might be expected to have slowed things down. In the meantime, what has happened in the sense of bringing this application was readily to be anticipated and in my view was anticipated on Kaye and Stephen's side. Nothing has been done in the administration of the estates that would prejudice Kaye or Stephen as beneficiaries or executors if an order was made under Part IV. In the circumstances the period of time that passed from April 1998 to 3 December was not such, regarded overall, as should be held to require refusal of the applications on account of delay. Further, regarding the matter overall, I consider that the delay is either reasonable or excusable or a combination of the two, and not such as to lead me to the view that the application should be refused.

In each estate I extend the time in which the plaintiff may make an application under Part IV to 4.00 p.m. on 7 May 1999. I will also order that the requirements of Rules 5.03(1) and 8.02 be dispensed with, and that the defendants' costs of the applications including reserved costs be paid out of the estate.

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