WILLIAM HENRY TESTER as Executor of the Estate of BARRY JOHN TESTER (Dec)

GRAHAM JOHN GOERKE and GREGORY ROBERT BOYLE as Executors of the Estate of PHYLLIS EDITH TESTER (Dec)

Succession ­ Application for extension of time to bring claim under Inheritance (Family and Dependants Provision) Act 1971 (WA) for provision from Estate of father ­ Father's Estate left to plaintiff's mother ­ Delay of 4.5 years in bringing application ­ Whether plaintiff has arguable case in respect of father's Estate ­ Relevance of delay ­ Mother since died ­ Plaintiff has possible claim against Estate of mother ­ Principles relevant to exercise of discretion to extend time ­ Turns on own facts

Inheritance (Family and Dependants Provision) Act 1971 (WA), s 6, s 7(2)

Beattie v Beattie [2005] WASC 85

Clayton v Aust (1993) 9 WAR 364

Re Salmon (Dec) [1981] Ch 170

Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201

Vigolo v Bostin [2005] HCA 11

Achard v Achard [2005] WASC 220

Bath v Perpetual Trustees WA Ltd [2000] WASC 232

Bock v Bock [2005] WASC 204

Brown v Holt [1961] VicRp 69; [1961] VR 435

Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494

Mansfield v Mansfield [2003] WASC 214

Marks v Marks (2003) WASCA 297

Pead v Perpetual Trustees WA Limited as Executor of the Estate of Hilda May Pead & Anor, unreported; SCt of WA; Library No 980209; 24 April 1998

Young v Kestel [2003] WASCA 190

1 MASTER NEWNES: This is an application by the plaintiff pursuant to s 7(2)(b) of the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the "Act") for an extension of time in which to make an application under s 6 of the Act for further provision out of the Will of his late father, Barry John Tester (the "testator").

2 Section 7(2) of the Act provides that an application under s 6 shall not be heard if it is made more than six months after the grant of probate, unless the Court is satisfied that the justice of the case requires that the applicant be given leave to file out of time. In this case the testator died on 22 May 2000. Probate of his Will was granted on 18 July 2000. This application was filed on 1 July 2005.

3 The principles applicable to an application for an extension of time were not in dispute between the parties. They were distilled by Malcolm CJ (with whom Rowland and Franklyn JJ agreed) in Clayton v Aust (1993) 9 WAR 364, by reference to the judgment of Megarry VC in Re Salmon (Dec) [1981] Ch 170, and are set out in the judgment of Master Sanderson in Beattie v Beattie [2005] WASC 85 as follows:

"1. The discretion to grant an extension of time is unfettered. No restrictions or requirements of any kind are laid down in the Act. The discretion is plainly one that is to be exercised judicially and in accordance with what is just and proper.

2. The onus is on the plaintiff to establish sufficient grounds for taking the case out of the general rule and depriving the respondents to the action of the protection offered by the statutory limitation on the time within which an action must be brought. The limitation is not a mere procedural time limit imposed by the rules of court. The applicant must make out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend time.

3. The whole of the circumstances must be looked at and not least the reasons for the delay and also the promptitude with which the letter before action or otherwise was issued.

4. It is material to know whether or not negotiations commenced within the time limit. If negotiations were commenced within time and ran out while discussions were taking place, this might encourage an extension of time being granted. If negotiations were initiated after the time had expired without the time limit point being taken, this too may aid the plaintiff.

5. It is relevant to consider whether or not the estate has been distributed as at the date of the application. The fact that the beneficiary has changed his or her position consequent upon the distribution of the estate is a factor weighing against the grant of an extension of time.

6. It is relevant to consider whether a refusal to extend the time would leave the plaintiff without redress against anybody."

4 The plaintiff was born on 2 October 1966. He was the only child of the relationship between the testator and Phyllis Edith Tester ("Phyllis"). The testator had two children from a previous marriage, Alan Lindsay Tester ("Alan") and Kevin Tester. Kevin Tester died in December 1982 and is survived by two sons, Neville Tester who is 38 years old and Grant Tester who is 36 years old.

5 Phyllis had five children from a previous marriage, being Isobel Poulton and Thomas, Bruce, Robert and Graeme Smylie. Graeme Smylie died in December 1992 without having had any children.

6 As I have mentioned, the testator died on 22 May 2000. The principal asset of the testator's Estate was his house in Bayswater (the "residence") which by his Will was left to Phyllis.

7 Phyllis died on 26 January 2005 and probate of her Will was granted on 12 April 2005. The residence formed the principal asset of Phyllis's Estate. In her Will, Phyllis left the residence to one of her sons by her former marriage, Thomas Smylie.

8 The plaintiff seeks leave to bring an application under s 6 of the Act in respect of the Estate of the testator. He has not brought and, at this stage at least, does not intend to bring, an application against the Estate of Phyllis. An application has, however, been brought against Phyllis's Estate by Isobel Poulton.

9 In his affidavit in support of this application, the plaintiff says that he always had a good relationship with both his parents and, being 12 years younger than his next half sibling, was more or less treated like an only child. He often went with his father to his father's prospecting lease in Kalgoorlie, sometimes camping there for periods of about a fortnight, and he went on other outings with his parents to other locations.

10 The plaintiff left school at 14 years of age and, after a brief period of employment elsewhere, moved to Cervantes to work at a deckhand on a crayfishing boat owned by his half-brother, Alan. The plaintiff says that sometimes during the off-season he would stay with his parents. At other times he would stay in Cervantes or, from about the age of 18, he would live in a caravan with his girlfriend. He says that he regularly called at his parents' house to help with tasks about the house. When he was about 23 years of age the plaintiff purchased a house near his parents' house and his parents visited him there for social gatherings.

11 The plaintiff married in November 1989 and was employed in a boat business in Perth, during which time he says he continued to help with chores at his parents' house. In about January 1991 the marriage failed and the plaintiff returned to work on Alan's crayfishing boat. From that time until about 1993 his parents visited him on about four occasions, once staying for some six or seven weeks and otherwise staying on each occasion for a week or two. After 1993 the testator's health caused him to find the trip too uncomfortable. The plaintiff says that he continued to visit his parents regularly at their home in Perth.

12 In late 1995, the plaintiff met his current wife, Felicity, who had three children from a previous relationship. On 21 October 1996, Felicity gave birth to their daughter, Courtney-Jade. The plaintiff says that whenever he and Felicity travelled to Perth they would visit his parents and he would help with tasks around the house. The plaintiff and Felicity were married on 31 October 1999. In December 1999, the plaintiff and Felicity purchased a surf shop in Cervantes and moved into a house in Cervantes which they had built.

13 At the time of the testator's death in May 2000 the plaintiff was 33 years of age. The plaintiff says that at that time he and Felicity owned a house worth approximately $185,000, on which an amount of approximately $105,000 was owing. They owned a retail clothing/surf business worth approximately $35,000, in respect of which there was owing a business loan of approximately $60,000 as well as an overdraft of approximately $20,000. The business was conducted from leased premises. They had bank accounts with nominal balances, and a credit card debt of approximately $25,000 as a result of their wedding expenses. Their assets also comprised a 1998 LandCruiser which had just been purchased for $50,000 on hire purchase with payments of approximately $1200 per month, and a 1998 Commodore sedan which had just been purchased for $33,000 and on which an amount of $550 per month was payable. Their furniture and personal effects were "substantially less" than the insured amount of $25,000. The plaintiff says that he and Felicity had net assets of approximately $10,000 to $15,000.

14 The plaintiff says that in the financial year ended 30 June 2001 he earned approximately $72,000, before tax, from fishing and Felicity worked in the clothing/surf shop and did not draw a wage. He says that that was a peak year for the crayfishing industry and in other years around that time he had earned about $50,000 to $60,000. The shop made a loss, or only broke even. The plaintiff says that in the two years they owned the business he estimates that he contributed an amount of about $40,000 from his own income to maintain it.

15 In an affidavit, sworn on 29 June 2005, in support of this application the plaintiff says that he and his wife live in a rented house in Jurien Bay for which they pay $210 per week in rent. They own a vacant block in Jurien Bay which was purchased on 16 March 2005 for approximately $116,000. They intend to build a house on the land. They obtained a loan for the purchase of the land and the construction of the house. The estimated cost of the house is some $214,000. The current balance of the loan is $180,000 and the amount of $1161.50 per month is payable on it. The plaintiff says that once the house has been constructed (and completion was estimated at that stage for December 2005) he estimates that it will have a value of approximately $330,000. The plaintiff and his wife intend to live in it.

16 Apart from that land, the plaintiff and his wife also own a vacant block of land in Geraldton which they purchased in October 2004 for approximately $62,000 and on which they intend to build a house which it is estimated will cost $172,000. They again obtained a loan for the purchase of the land and the construction of the house on it. The balance of the loan at the time of the affidavit was $195,000 and an amount of $1296 per month was payable on it. The plaintiff believes that a further $30,000 will have to be drawn down on the loan to complete the house, which, once completed, he estimates will have a value of approximately $285,000.

17 The plaintiff and his wife also own a motor vehicle which was purchased in June 2004 for $60,000 and which the plaintiff estimates is currently valued at $45,000. The current balance of the loan obtained to purchase the vehicle exceeds that amount and payments of $959 per month are due on it. The plaintiff and his wife have various other small assets and debts and the plaintiff estimates that their total assets, after the two houses are completed, will be approximately $676,000 and their total liabilities will be approximately $480,500. That will leave net assets of approximately $195,500.

18 In the financial year ended 30 June 2003 the plaintiff says he earned approximately $56,000 "gross" and for the period from 15 November 2004 to 30 April 2005 he earned approximately the same amount. Felicity earns $14,326 per annum working part-time at the Department of Education and Training. I should interpose that if, as appears to be the case, the figure of $56,000 is before income tax is deducted, it is not easy to see how the plaintiff and Felicity manage to make housing loans and car payments totalling some $41,000 per annum and pay the day to day living expenses of a family of four on that combined income.

19 The plaintiff works on a sub-contractor basis for a company controlled by Alan and his wife. Under the arrangement between them, the plaintiff receives a percentage of the catch, but must contribute a percentage of the bait and fuel expenses. He does not have the benefit of employer superannuation contributions or any of the other entitlements of an employee. He says he has no other employment skills and little education so that if his employment in the crayfishing industry ceased he believes he would find it difficult to obtain work. As Jurien Bay has limited employment opportunities he believes that in such circumstances he and his family would have to relocate to Perth.

20 The plaintiff and Felicity currently support a child from Felicity's previous relationship, Matthew, who was born on 18 September 1990, and their daughter Courtney-Jade. The plaintiff says that the local school does not offer schooling for years 11 and 12 and so it would be necessary for Matthew and Courtney-Jade to board in Geraldton or Perth for schooling in those years.

21 The plaintiff says that after he left home he did not receive any financial assistance from his parents but he says that the testator often said to him that one day the residence would be his. He says that after the testator's death Phyllis had told him that the residence would be left to him as it had been his father's.

22 The net value of the testator's Estate was $332,219. Apart from bank accounts to a total value of $24,683, and a motor vehicle to the value of $1000, the only asset of the Estate of any significant value was the residence which was valued at $310,000. By the terms of his Will the testator left all of this property to Phyllis apart, from some firearms which he left equally to the plaintiff and Alan. The residence was transferred to Phyllis, in accordance with the testator's Will, on 27 July 2000.

23 The Estate of Phyllis at her death on 26 January 2005 consisted of the residence, two bank accounts in the total sum of $11,144 and furniture and personal effects to a total value of approximately $1000. By her Will, Phyllis left the residence to Thomas Smylie and made bequests of $1000 each to Isobel Poulton, Bruce Smylie and Robert Smylie, with the residue of her Estate to be divided equally between the plaintiff and Thomas Smylie.

24 The plaintiff says that at the time of the testator's death, he was not aware that he could "contest" the testator's Will and, in any event, it never occurred to him to do so as he thought Phyllis would carry out the testator's wishes and leave the home to him. He discovered that Phyllis had left the home to Thomas when he received a letter from the executors dated 7 February 2005. He says he was told by three of his half-siblings that they intended to contest Phyllis's Will. The plaintiff says he spoke to a solicitor in February 2005 and for the first time realised that he may be able to bring an application for greater provision from the testator's Estate. These proceedings were instituted on 1 July 2005.

25 It was submitted on behalf of the plaintiff that the delay has not prejudiced any beneficiaries of the testator's Will nor given rise to any injustice. No beneficiary has changed his or her affairs or lifestyle in reliance on the testator's Will and the main asset, the residence, remains intact as an asset of Phyllis's Estate. On the other hand, if leave is refused then Phyllis will have gained a benefit at the expense of the plaintiff in circumstances where she had promised the plaintiff she would carry out the testator's wishes and leave the residence to the plaintiff. That assurance was only, and could only, be proved false upon her death.

26 It was accepted by counsel for the plaintiff that the plaintiff has a potential claim against Phyllis's Estate, but submitted that his prospects in such a claim were substantially less than in the claim against the testator's Estate. There were only three beneficiaries of the testator's Estate, the plaintiff, Phyllis and the plaintiff's half brother, Alan. Alan is described as wealthy and has taken no part in the proceedings.

27 On the other hand, there are five beneficiaries of Phyllis's Estate, the plaintiff, Isobel Poulton, Robert Smylie, Thomas Smylie and Bruce Smylie. Isobel Poulton and Bruce Smylie have substantially less assets than the plaintiff and whilst Thomas Smylie has net assets of about the same magnitude, his expenses substantially exceed his income.

28 It was submitted that at the time of the testator's death in May 2000, the plaintiff and his wife had effectively no net assets and, although the plaintiff had earned approximately $72,000 from crayfishing in that financial year, that was an exceptional year. It was also necessary for the plaintiff to subsidise the surf shop from that income.

29 It was submitted that at the time this application was made, the plaintiff and his wife had relatively modest net assets of approximately $195,500, with substantial debt repayment obligations and total expenses exceeding their income. The plaintiff was responsible for three dependants, his wife, Matthew and Courtney-Jade. If Matthew and Courtney-Jade were to complete high school they would have to attend a boarding school at considerable expense to the plaintiff. Moreover, the plaintiff's financial position was affected by his precarious position in the crayfishing industry, together with his lack of other employment skills and his basic education.

30 From the testator's Estate of approximately $332,219, the plaintiff had received only firearms to the value of approximately $337.50. The plaintiff had received no financial support from the testator from the time the plaintiff was 14 years of age, although he had enjoyed a close relationship with his parents and the plaintiff had visited the testator regularly and helped with various tasks.

31 It was submitted that it was also a relevant factor that the deceased and the plaintiff's mother had both said that the residence would be left to the plaintiff. Such promises are matters properly to be taken into account in the valuation of a claim under the Act: Vigolo v Bostin [2005] HCA 11 (at [6] and [113] - [121]).

32 The executors opposed the application. It was submitted on behalf of the executors that there was no reasonable excuse for the delay in commencing proceedings. It was not a case where the plaintiff was unaware of the true size of the testator's Estate or unaware of, or under a misapprehension as to, the extent of his interest under the testator's Will. While the plaintiff contended that he was unaware of the possibility of bringing an application until February 2005, it is most unlikely that, had he been aware, the plaintiff would have brought such an application within time as he contends he thought Phyllis would leave the house to him. Counsel also referred to the affidavit evidence of Isobel Poulton in which Mrs Poulton takes issue with the plaintiff's contentions as to the promises made to him. It was submitted that, in any event, the plaintiff was not entitled simply to ignore the possibility that his mother's intention may change.

33 It was also submitted that the plaintiff did not have an arguable claim for relief under s 6 of the Act in respect of the testator's Estate. The evidence as to the plaintiff's financial position as at the date of the testator's death was unsatisfactory but it was clear, at the least, that he was earning a substantial income and owned a house and two motor vehicles in respect of which he was able to meet the loan repayments. On the other hand, as appeared from the evidence of Mrs Poulton, at the time of the testator's death on 22 May 2000 Phyllis had no assets other than whatever balance remained from the amount of $48,000 she had inherited when Graham Tester died in 1995.

34 Phyllis had at all times prior to the testator's retirement from the work force been financially dependant upon him. Both the testator and Phyllis were in receipt of aged pensions at the time of the testator's death and thereafter Phyllis's only source of income was a widow's pension. Phyllis and the testator had had a close relationship for approximately 40 years and the house had been Phyllis's home for almost 40 years. At the date of the testator's death Phyllis was 70 years of age. On the other hand, the plaintiff was young and able-bodied, and earning a substantial income which enabled him and his family to live relatively comfortably. It was also submitted that in fact the income figures provided by the plaintiff appeared inconsistent with the level of expenditure referred to and, in the absence of any financial records, the income figures should be regarded with some scepticism.

35 It was submitted that in the circumstances there was no reasonable prospect that an application by the plaintiff under s 6 of the Act in respect of the testator's Estate would have succeeded and, indeed, it would have been remarkable if the deceased had not left the balance of his Estate, including the house in which they lived together for 40 years, to his 70-year-old widow.

36 Counsel for the executors argued that it appeared the plaintiff's real expectation was that the testator would leave the house to Phyllis and then Phyllis would leave the house to him. Based on that expectation, any claim the plaintiff considers he may have in relation to the house is a claim against the Estate of Phyllis, not the Estate of the testator. It was also contrary to public policy that, where a testator leaves the whole or a substantial part of the Estate to a surviving spouse, that a child of the testator should not bring a timely application for provision but simply wait to see whether the surviving parent subsequently makes provision that is considered to be satisfactory and, if not, then seek to make an application in respect of the testator's Estate.

37 It was further submitted that the plaintiff will not be left without redress if the application to extend time is refused as the plaintiff has the opportunity to seek redress in the current proceedings brought by Isobel Poulton under s 6 of the Act against Phyllis's Estate. The fact that that application may be less advantageous to him because there were more potential claimants was not a relevant or proper consideration.

38 In the circumstances, I do not consider that the plaintiff has made out a case for the grant of leave to make a claim against the Estate of the testator.

39 A relevant consideration on an application of this nature is whether the plaintiff has an arguable case on the merits. In my view, on the material which has been put before me, the plaintiff does not.

40 On an application under s 6 of the Act, the Court is required to carry out the two-stage process described by the High Court in Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 (at 208 - 210). The first stage calls for a determination of whether the plaintiff has been left without adequate provision for his proper maintenance, education and advancement in life. The second stage, which only arises if that determination is made in favour of the plaintiff, requires the Court to decide what provision ought to be made out of the testator's Estate for the plaintiff.

41 The determination of the first stage calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance, education and advancement in life appropriate for the plaintiff having regard, amongst other things, to the plaintiff's financial position, the size and nature of the testator's Estate, the totality of the relationship between the plaintiff and the testator and other persons who have legitimate claims upon his bounty.

42 The determination of the second stage 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 plaintiff. There may, however, be some circumstances in which a Court could refuse to make an order notwithstanding that the plaintiff is found to have been left without adequate provision for proper maintenance.

43 At the time of the testator's death, the plaintiff was 33 years of age and in good health. The plaintiff was working in the crayfishing industry in which he had been engaged for some years and, given his relatively young age and apparent good health, there was no reason to expect that he would not continue to do so for some years to come. He was earning a relatively substantial income. The plaintiff earned $72,000 in the financial year ended 30 June 2000. While that may have been an unusually good year in the crayfishing industry, the plaintiff says he had been in receipt of an income of $50,000 to $60,000 in other years. In addition, the plaintiff and Felicity had purchased a local business which, although not then profitable, was presumably expected to become profitable.

44 At the time, the plaintiff and Felicity owned their own home in which they had equity of some $80,000. They also had two near new, not inexpensive, motor vehicles which they were paying off. They had furniture and personal effects of a value "substantially less than ... $25,000".

45 According to the plaintiff, a total of $80,000 was owing in respect of the clothing/surf business they had purchased in December 1999, although how it came about that in May 2000 the borrowings for the business amounted to some $80,000, for a business that five months or so after it was purchased was said to be worth approximately $35,000, was not explained. Nor is it entirely clear how, on a pre-tax income of $70,000 (much less one of $50,000 to $60,000), the plaintiff managed to meet the car repayments (some $21,000 per annum), the mortgage repayments, contribute to the business expenses, service the loan commitments, and meet the day to day household and living expenses of the family. No income tax returns or other financial records were put in evidence and there was no detailed breakdown of the plaintiff's income and expenditure.

46 In any event, there can be no doubt that the position of Phyllis at that stage was far more precarious. Phyllis was 70 years of age. The residence had been her home for some 40 years. Her only source of income was a widow's pension. Phyllis had no significant assets apart from the balance of the inheritance of $48,000 she had received some five years earlier. The amount of that balance was not disclosed in the evidence but at Phyllis's death in 2005 she had a total of only $11,144 in bank accounts.

47 In my opinion, Phyllis's call on the testator's bounty was overwhelming. I accept the defendants' submission that, having regard to the size and nature of his Estate, it would have been remarkable if the testator had not left the residence to Phyllis. Even putting aside the question of whether his financial position has been fully disclosed, on the evidence the plaintiff, in contrast, was a fit young man in regular, well paid employment with his own home and able to afford an apparently reasonably comfortable lifestyle. In the circumstances, I do not consider there is any prospect that the plaintiff would establish that the testator had made inadequate provision for the plaintiff's maintenance.

48 It is also the case that the delay in bringing this application is substantial. The plaintiff waited some five years before he foreshadowed any claim in respect of the testator's Estate. The plaintiff was aware in 2000 that the residence had been left to Phyllis. It seems that he expected that Phyllis would in turn leave it to him. There is no suggestion that the plaintiff made any inquiry as to his rights to make a claim in respect of the residence following the death of the testator and the plaintiff's discovery that the testator had left the residence to Phyllis. Given Phyllis's circumstances, it might be thought that the absence of such inquiry is hardly surprising.

49 It appears in fact that the plaintiff's real complaint is not that the testator did not leave the residence to him, but that, despite the promises he said she made to him or that were made by the testator in her presence, Phyllis did not leave the residence to him.

50 It was submitted on behalf of the plaintiff that matters of delay are relevant only to the question of prejudice and in this case, as the residence was still available and there was no evidence that anyone had changed their position on the basis of the testator's Will, there was no prejudice to anyone.

51 I do not consider that the position is that simple. The Act imposes a time limit to ensure that claims of this nature are brought promptly. The onus is on the plaintiff to establish good reason why that statutory time limit should be extended. In Re Salmon (Dec) (supra) (at 175), Megarry VC said:

"The time limit is a substantive provision laid down by the Act itself and it is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules. The burden on the applicant is thus, I think, no triviality: the applicant must make out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend time."

52 That passage was cited with approval in Clayton v Aust (supra) (at 366).

53 In my view, it is not the case that the question of delay is irrelevant unless someone can demonstrate that they would be prejudiced if time were extended. Moreover, prejudice cannot necessarily be measured simply by whether or not the assets are available and whether or not there is evidence that anyone has changed their position. The plaintiff seeks, in effect, to set aside the winding up of the testator's Estate and to do so more than four years after all those who might ultimately be affected (directly or indirectly) by the disposition of the testator's Estate were entitled to assume that the testator's affairs had been finalised. Where there is delay of the magnitude that has occurred in this case there is prejudice inherent simply in delay. Accordingly, while the factors referred to by the plaintiff's counsel are matters of considerable weight, they are not decisive on the issue of delay.

54 In the present case it is also a relevant factor that the plaintiff is not without a remedy if leave is refused. He is able to join as an applicant in the claim currently made under the Act by Isobel Poulton against the Estate of Phyllis. The fact that such a claim may be less attractive to the plaintiff than a claim against the testator's Estate, because there are more, and possibly stronger, claimants to the Estate of Phyllis, does not seem to me to weigh heavily in favour of the plaintiff in the present circumstances.

55 Having regard to all of the circumstances, I do not consider that the plaintiff has established sufficient grounds to justify a grant of leave to bring a claim against the testator's Estate.