Verzar v Verzar

The application to extend time 23The decision to extend time under s 58 is a discretionary one. Accordingly, the principles for appellate review are those enunciated in House v The King [1936] HCA 40; 55 CLR 499 at 504-505; Durham v Durham [2011] NSWCA 62; 80 NSWLR 335 at [71]-[72] (per Campbell JA). The primary judge must be shown to have acted upon a wrong principle, taken into account extraneous or irrelevant matters, failed to take into account a relevant consideration or mistaken some material fact; or it must be shown that the primary judge's decision was so unreasonable or plainly unjust as to justify an inference that there has been a failure properly to exercise the discretion, although the error in doing so is not discoverable. 24Section 58(2) requires that the application for a family provision order be made within 12 months after the death of the deceased person in respect of whose estate the application is made, unless the Court otherwise orders "on sufficient cause" being shown. The sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time. 25It was not controversial that when determining whether there was "sufficient cause" the matters to be considered included the strength of the respondent's case for the making of a family provision order, her explanation for why the application was not made within time, whether any beneficiaries whose interests would or might be affected by the making of an order would be prejudiced because of the delay and whether there had been conduct of the applicant or the beneficiaries whose interests might be affected that having regard to its consequences, might justify the grant or refusal of the application to extend time. In Re Dun (Deceased) (1956) 56 SR (NSW) 181, Myers J (at 183) suggested that such conduct by an applicant might include electing to be bound by the will or, knowing of his or her rights, delaying for a long period to make an application or lulling the beneficiaries into a false sense of security so that they order their affairs on the basis that their legacies will not be disturbed, or refrain from requiring a speedy distribution of the estate. A particular prejudice which may have to be considered is that which flows from allowing an out of time application to proceed, if that would or may have the effect of improving the applicant's position, from that which would have existed if it had been made in a timely way: Durham v Durham at [37], [56], [87] (Tobias JA; Campbell and Young JJA agreeing). 26The primary judge noted that the matters to which I have referred were ones to which regard is usually had: [102], [105]. He also noted that the appellant's opposition to the grant of an extension was based on criticism of the respondent's explanation for her delay and that the appellant had not pointed to "any material prejudice to him or to the existence of any unconscionable conduct" on the part of the respondent: [107]. 27In relation to the respondent's explanation for her delay his Honour made the following findings: that in August 2010, which was after the 12 month period had expired, the respondent first learned that her right to make an application was subject to a time limitation: [108]; that prior to that time she had believed that she was entitled to the rent from the McEvoy Street property until it was transferred to the appellant: [110]; that the respondent did not further pursue a claim at that time because of her apprehension about the likely cost and doubt as to whether she was emotionally strong enough to engage in litigation: [109]; that in October 2010, and after the appellant's solicitors had pressed for the transfer of the McEvoy Street property, the respondent sought and received advice in conference from counsel; that advice was that she was adequately provided for by the testator's will: [111], [112]; that the respondent's fragile emotional state explained her delay after October 2010 in resolving the administration of the estate and in seeking another opinion about her prospects of obtaining a family provision order; that the commencement of proceedings for the administration of the estate by the appellant in late March 2011 brought the matter to a head; and that thereafter there was no further delay in the respondent taking advice and making her application: [113]-[116]. Taking account of his assessment that the respondent had a "meritorious" claim for relief under s 59 and that the appellant had not suffered any material prejudice by her delay, the primary judge concluded that there was sufficient cause to permit that claim to be determined on its merits: [117]. 28The appellant submits that the primary judge erred in the exercise of his discretion in two respects. First, it is said that he gave no or no adequate consideration to factors to be weighed against the granting of an extension, namely the length of the delay in commencing proceedings, the fact that the respondent had received advice that she was adequately provided for and the reasons which eventually motivated her to commence the proceedings for provision (ground 2). Secondly, it is said that the primary judge did not have any or any proper regard to the lack of merit of the respondent's application assessed as at March 2010 when the time for bringing it lapsed (ground 3). 29As to the first argument, the appellant does not challenge the findings of the primary judge as to the sequence of events between July 2010 and March 2011 referred to above. Nor does the appellant challenge the findings of the primary judge as to the fact of the respondent's emotional state and inability to come to grips with Stephen's death and the reality of her responsibility as a mature-aged sole parent. The essence of the appellant's argument, as it was developed orally, was that the primary judge erred in giving his finding as to the respondent's emotional state any significance in explaining and justifying her delay between October 2010 and March 2011. 30The appellant points out that the respondent received advice in October 2010 that she was adequately provided for and did not seek a second opinion until March 2011, which was after he had commenced proceedings to remove her as executrix. He submits that in these circumstances the correct inference to draw was that she accepted the correctness of the legal advice she had received and only brought her application as a "defensive" response to his application, aware, because she had been told, that it had no realistic prospects of success. This argument challenged the primary judge's conclusion at [113] that the respondent's fragile emotional state explained her delay during this period. 31In my view the appellant has not shown that finding to have involved error. The respondent's evidence, which the primary judge accepted, as to what happened when she received counsel's advice was: that counsel's advice given in October 2010 that a claim was likely to fail was expressed to be qualified to the extent that he "didn't have all the information"; that in the period after October 2010 time was spent gaining an understanding of how much was owed from the estate and how much had been spent; that was an exercise which the respondent regarded as "emotional"; her decision whether or not to commence proceedings was based in part upon how much money she might have to pay from the estate to the appellant; and that the reason she commenced proceedings when she did was that she "came to the realisation of my material situation" (Black 54-56). That evidence justifies the primary judge's conclusion that after October 2010 the respondent sought to clarify her financial position and resolve the administration of the estate and was slow in doing so because of her emotional state. When that exercise was completed, which was at about the time that the appellant commenced his proceedings, she sought further advice and acted on it. 32The appellant's second argument is that the primary judge did not, but should have, considered the prospects of the respondent's application viewed in March 2010 when the 12 month period expired. It is said that assessed at that time those prospects of success were poor because of the appellant's parlous financial position, which did not improve until his mother's death in January 2012. In support of this submission reference was made to the observations of Tobias JA in Durham v Durham at [37]. 33There are at least two respects in which the strength of the application sought to be made out of time may be relevant to whether there is "sufficient cause" to extend the time for making it. The first is whether the application as made has sufficient prospects of success to justify an extension. That assessment should be of the application viewed at the time it is or is likely to be heard because of the provisions of s 59(1)(c) and (2). The primary judge addressed that question and considered, taking account of the properties left to the appellant on his mother's death, that the claim was a "meritorious" one: [118]. The appellant does not, as I understand his argument, contend that the primary judge erred in approaching this question in that way; although he takes issue with the conclusion that the claim so assessed was one that should have succeeded. 34The second respect in which the strength of the application may be relevant is if allowing the out of time application to proceed would or may have the effect of improving the applicant's position from that which would have obtained had the application been made in a timely manner. That is the consideration referred to by Tobias JA in Durham v Durham at [24], [37] when confirming the correctness of the approach adopted by the judge in that case and by Bryson J in Davison v Staley (unreported, Supreme Court of NSW, 21 August 1996). The appellant says that is the position in this case because, considered as at March 2010, he had no assets of any value whereas by the time of the hearing, and following his mother's death, he had assets, excluding the McCauley Street property, with a combined value of $1,355,000. The primary judge considered this argument but did not regard it as "decisive": [105], [106]. In my view he is not shown to have erred in so concluding. 35Because the assessment of adequacy of provision for proper maintenance, education and advancement in life is to be made at the time the Court is hearing the application (ss 59(1)(c) and (2)), when addressing this question it is necessary first to consider when the application would have been likely to have been heard if made in a timely manner and then to compare the position in that event with the position in fact, namely that the application has been made out of time. Ordinarily, this analysis would assume, as is usually the case and as happened in this proceeding, that the application for an extension of time and the application for substantive relief are made in one proceeding and dealt with in a single hearing. (That was not the case with applications for extensions of time made under the Testator's Family Maintenance and Guardianship of Infants Act 1916: see De Winter v Johnstone [1995] NSWCA 120 at p 17 per Powell JA). 36When that exercise is undertaken in this case it does not show that the respondent's position was relevantly improved because of her delay. The application was made in April 2011 and heard over two years later, in September 2013. Had the application been made in March 2010 and a similar period elapsed, the hearing would still have occurred after the appellant's mother died in January 2012. Furthermore, even if the hearing was likely to have occurred before she died, the prospect that the appellant would, as her only child, inherit a significant part of her estate was something which may have been explored forensically and, in my view, was properly to be taken into account when assessing the financial needs of the appellant as part of an assessment of the strength of the respondent's claim. As things turned out there was no need for that forensic inquiry to be made. 37The appellant also submitted that the primary judge erred in not taking into account as a relevant factor the respondent's delay in administering the estate and accounting to the appellant for the rental income to which he was entitled. That the primary judge did not do so did not involve error. Any prejudice that resulted to the appellant from that conduct was not occasioned by the respondent's delay in making her claim or of the kind to which Myers J refers in Re Dun. 38The primary judge is not shown to have erred in any relevant respect in his decision to extend the time for the making of the respondent's claim.