ZIRKLER v McKINNON

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2938/2000 ZOEE ASHWIN ZIRKLER AND WARREN ZIRKLER - BY THEIR TUTOR BARBARA JAN JONES v CAROL ANNE McKINNON - ESTATE OF FRANCES CHARLES ZIRKLER

JUDGMENT 1 MASTER: This is an application under the Family Provision Act 1982 in respect of the estate of the late Francis Charles Zirkler who died on 14 December 1996 aged in his sixties. The deceased was survived by his daughter, the defendant, a son Craig, and a daughter, Frances, all of whom are children of the deceased's former wife who also survived him. The two plaintiffs are his children from a de facto relationship the deceased had with Barbara Jan Jones who is their tutor in these proceedings. 2 By his will made 28 November 1989 the deceased left the whole of his estate to his daughter Carol Anne McKinnon and appointed her sole Executix. 3 The estate of the deceased for probate purposes was valued at a net figure of $195,726. The major asset in the estate was a small property at Tintinhull Road, Kootingal, north of Tamworth valued at $186,000. The property has been distributed to the defendant as a beneficiary by an application which was made in March 1998. The parties are agreed that the property has a present value of $180,000. 4 Both parties have incurred costs in this matter. The plaintiffs' costs are estimated at $17,892 and those of the defendant's at $18,000. These total $35,892. In order to understand the complications in this matter it is necessary to set out a little of the history of the family and of the steps taken in both these proceedings and other proceedings brought in the District Court by one of the deceased's sons, Craig. 5 The evidence does not disclose when the deceased was born nor any details of the marriage that he had with his former wife. The deceased and the plaintiffs' tutor, Barbara Jan Jones, commenced to live together in a de facto relationship in 1981. Their daughter, Zoee, was born on 18 November 1986 and their son, Warren, was born on 21 April 1989. The deceased was a shearer and was frequently away from home. According to the children's tutor the deceased was interested in his children. In September 1989 the deceased and Barbara Jan Jones separated. Barbara Jan Jones moved to the Australian Capital Territory and took the children Zoee and Warren with her. The deceased remained living on the property at Kootingal. 6 On 28 November 1989 the deceased signed his last will to which I have referred. On 1 July 1990 there was an order made in the Family Court relating to a property settlement between Barbara Jan Jones and the deceased. There was an order for child support in the sum of $200 per month to be paid by the deceased and the deceased agreed to pay the sum of $42,500 by way of settlement of their property affairs. This amount was paid by the deceased but he fell into arrears in making payments for child support. In 1992 there were discussions between the deceased and his daughter, Carol, the defendant in these proceedings. Carol and her husband were contemplating buying a property across the road from the deceased's property. According to the defendant the deceased told her that if they bought the property across the road he would leave his property to her in his will. The defendant and her husband went ahead and purchased the property across the road which is known as "Nymboida Downs". 7 On 22 May 1996 an agreement was reached between the deceased and Barbara Jan Jones about the arrears of child support payments. The deceased was ordered to pay $6,330.91 on the sale of his property or his death. This sum was paid by the defendant after the deceased's death on 14 December 1996. In early 1998 proceedings for provision out of the estate of the deceased, pursuant to the Family Provision Act were commenced in the District Court at Armidale. The proceedings No 29 of 1998 were brought by the deceased's son, Craig Zirkler, and the present defendant was the defendant in those proceedings. 8 In March 1998 there was an application by the defendant in these proceedings to have the property transferred to her by virtue of her entitlement as a beneficiary. This transfer was registered in due course. 9 Shortly after 7 October 1998 Barbara Jan Jones was served with notices under Pt 77 R 63 of the Supreme Court Rules in respect of the proceedings brought by Craig Zirkler in the District Court at Armidale. The notices, of which there were three, enclosed under cover of a letter from the former solicitors of the defendant were addressed to Barbara Jan Jones and each of the children. They followed the standard form of notice. Shortly before 21 October 1998 Barbara Jones sought and obtained advice from Mr J G O'Halloran, a solicitor. 10 On 21 October 1998 Mr O'Halloran wrote a four-page letter in which he dealt with the claim that might be brought either by Mrs Jones or by her two children. He advised that the claims were out of time by some three and a half months as there was a period of 18 months allowed to make an application. In this regard, he said: "If you decide to make a claim on behalf of yourself for your children it is therefore essential that you attempt to do so immediately and if the application is to have any prospect of success then you will need to give your reasons for being late in making the application." 11 He then went on to consider whether she was an eligible person and concluded, probably wrongly, that she was not. The plaintiff, of course, had received a property settlement and there are no circumstances which would suggest that she personally would have an appropriate claim. He then went on to deal with the claim of the children and summed it up in the following words:- "To sum up then, your children are eligible to make a claim (but must get over the hurdle of being late). Because of their age they would appear to have a much better claim than the present claimant Craig." 12 After referring to the possibility of engaging solicitors in Armidale the letter concluded as follows. "It is most important that you do not delay any further. It is particularly important now that you have had legal advice that you are out of time and the attempt to make the claim out of time should be made immediately you have been given that advice so that it can be seen by the court that you have not delayed once you have become aware of the legal position. If we can be of any further assistance please do not hesitate to contact us. We could for instance put in touch with solicitors in Armidale. Naturally they would need to examine the situation and give you their own advice before proceeding." 13 Barbara Jones immediately sought to consult a Legal Aid solicitor and eventually an appointment was arranged for her to see a Mr Frank Wilson in Queanbeyan in December 1998. Mr Wilson was shown a copy of Mr O'Halloran's letter and the notices of claim and advised Barbara Jones that it was not economic to pursue the children's claim because of the small size of the estate. 14 In August 1999 the District Court proceedings brought by Craig were settled. Under the terms of that settlement the defendant agreed to pay Craig a sum of $32,000. The defendant agreed to pay the costs of the proceedings. After this result Craig contacted Barbara Jones in order to speak to her children who were his nephews. In the course of that conversation he told Barbara Jones of the success of his application in Armidale. This conversation was the first contact that there had been between Craig and Barbara Jones since she had separated from the deceased many years before. 15 On 21 September 1999 Barbara Jones consulted her present solicitor Mr Michael Dennis. He wrote on 6 October 1999 to the solicitors for the defendant and foreshadowed a claim under the Family Provision Act on behalf of the two children. On 13 October 1999 the defendant's solicitors replied saying they were seeking instructions and on 14 December 1999 they indicated in a letter that they were seeking counsel's advice. They foreshadowed that there might be some delay and said that as a result they could understand if Mr Dennis' clients felt the need to institute proceedings immediately given the obvious fact that they were well out of time. They pointed out the fact already known to Mr Dennis that notices had been given in the earlier proceedings. Barbara Jones in January 2000 asked her solicitor to brief counsel and the summons was filed on 28 June 2000. 16 Because the application is out of time it is necessary for the court to consider section 16 of the Family Provision Act which allows 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 in several cases has dealt with the principles governing application to extend time under this Act. In Massie v Laundy (unreported NSWSC, 7 February 1986) he indicated that when looking at 'sufficient cause" under 16(3) of the Act 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 Apparently he also accepts a view which was expressed by his Honour Needham J in Fancett v Ware (unreported NSWSC 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 NSWSC 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 NSWSC 8 September 1989). 19 In De Winter v Johnstone, 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 applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief." 20 His Honour Mr Justice Sheller considered that it was only necessary to show that the application was not bound to fail. His Honour Mr Justice Cole seems to have adopted the parties' approach of looking at the strength of the plaintiff's case. 21 The case of De Winter v Johnstone is also useful in that Sheller J commented on the meaning of "unconscionable". He was dealing with an appeal from Master McLaughlin and he referred to the Master's comments to the following effect:- "Unconscionable conduct in this context of course relates to such matters as whether 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." 22 With regard to the Master's comments, His Honour observed: "…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 to be directed towards a deliberate holding off designed to lull beneficiaries into false sense of security. There is nothing to suggest anything of that sort in the present case." 23 It is apparent from the evidence given by Barbara Jones that until she saw Mr O'Halloran shortly before 21 October 1998 she did not know that there was a time limit of 18 months for making applications under the Family Provision Act. She received clear advice that she must proceed promptly and that if she did not Craig's claim would be determined and her claim on behalf of her two children would not be taken into account by the court. She had to wait until December 1998 to get further advice and that advice was not to proceed with the children's claim. It seems abundantly clear that she decided to accept that advice and the only reason why she decided to investigate the matter again was because of what was said to her by Craig after Craig had been successful in his claim against the estate. Thereafter I am satisfied that she promptly sought advice and gave appropriate instructions to her solicitor. There is no explanation however as to why it took from January 2000 until June 2000 to commence the present proceedings particularly as proceedings can be commenced by filing a summons without seeking an appointment for hearing. 24 Section 16 of the Family Provision Act is as follows: "16.Time for application for provision (1) In this section, "prescribed period" in respect of an application in relation to a deceased person, means: (a) where the Court has, in an order made under section 17, specified a period in relation to the application---that period, or (b) in any other case---the period of 18 months after the death of the deceased person. (2) An order under section 7 shall not be made unless the application for the order is made within the prescribed period in respect of that application or within such further period as the Court may, having regard to all the circumstances of the case but subject to subsection (3), by order, allow. (3) The Court may not make an order under subsection (2) allowing an application in relation to a deceased person to be made after the end of the prescribed period unless: (a)the parties to the proceedings concerned have consented to the application being made after the end of that period, or (b)sufficient cause is shown for the application not having been made within that period. (4) The Court may make an order under subsection (2) with respect to an application in relation to a deceased person whether or not: (a)the prescribed period in respect of the application in relation to the deceased person has expired, (b)the application for the order under that subsection was made before that period expired, or (c)the application in relation to the deceased person has been made. (5) Notwithstanding subsections (2) and (3), where administration has been granted in respect of a person whose date of death is so uncertain as to make it impossible to apply subsections (2) and (3) with respect to an application in relation to the person, the Court may, whether or not the application in relation to the person has been made, by order, allow the application in relation to the person to be made within such period as it thinks reasonable and such an order has effect according to its tenor." 25 In Lewis v Lewis [2001] NSWSC 321 Hodgson J commented on s 16 (3) and said at paragraph 83:- "The wording of that provision is a little curious. If read literally, it would appear to be a tautology: the application was not made within the prescribed period, so in some sense there must have been sufficient cause for this to happen. The expression "sufficient cause" must be taken to mean "sufficient explanation" or "sufficient justification or excuse". The question then is, sufficient for what? Again, it cannot be sufficient for the application not having been made, because again that would seem to give rise to a tautology. Rather, it must be something like "sufficient in all the circumstances to justify the granting of an extension of time"." 26 On its face section 16(3) only requires that sufficient cause be shown as to why the application was not made within the prescribed period rather than the period up to the filing of the summons. As was pointed out in Dare v Furness (1998) 44 NSWLR 493 at 501 it has always been necessary to consider what delays occurred after the prescribed period expired. It is important to look at the total period of delay and the reasons therefore in the exercise of the general discretion given to the Court under s 16(2). 27 In respect of the prescribed period I am satisfied that sufficient cause has been shown as the plaintiffs and their tutor had no knowledge of the relevant time limit. The defendant does not point to any particular matters during the prescribed period which are said to amount to unconscionable conduct and such prejudice which she seeks to establish relates more to the period after the prescribed period. Thus the pre-condition in s 16(3) has been satisfied. I thus have to consider "all the circumstances of the case" to determine whether I should exercise my discretion under s 16 (2) to extend time. 28 On that aspect of the matter the comments by Sholl J in Re Barrot [1953] VLR 308 are apposite. He was there dealing with s 147 of the Administration and Probate Act which prescribed a six months' time limit from the grant with a right to apply for an extension before final distribution. The discretion given was completely general. At 312 he said:- "The jurisdiction to extend the time is discretionary. But, while it can never be right for the Courts, when the Legislature has not done so, to attempt to specify grounds on which alone the discretion can be exercised in favour of an applicant, it is on the other hand obvious that the mere making of an application for an extension of time is not enough to constitute prima facie a ground for granting it. The legislation contemplates that the Court or Judge must be satisfied of some circumstances, which should induce it or him, acting judicially - i.e., fairly and properly, upon relevant materials and in relation to relevant considerations - to excuse the applicant from what would otherwise be the privative operation of the section as a result of the delay. That this is a wise and sensible provision is clear when one considers, first, that, if the extension is granted, no antecedent distribution is to be disturbed - which means that the rights of some beneficiaries may have become conclusively indefeasible and beyond the possibility of adjustment - and secondly, that once the six months' period has elapsed without an application, the rights of all beneficiaries have become prima facie indefeasible, and that they may have acted on that basis." 29 Relevant matters to be considered in my general discretion include the reasons for delay and the effect of infancy. That these were relevant on the general discretion was assumed by Cohen J in Dare v Furness (supra) when he said at p.500: "This problem was referred to in the Report on the Testator's Family Maintenance and Guardianship of Infants Act 1916, by the Law Reform Commission of New South Wales (LRC 28, 1977) pars 3.4-3.10. It was said at par 3.4 that the court treats with sympathy applications by persons under legal disability for extensions of time for the commencement of proceedings. The commission was unable to establish what it considered to be an appropriate resolution of this difficulty. Despite the reference to the general attitude of courts to applications for extension of time on behalf of infants, it is not easy to find any authorities which deal with that situation. The mere status of a plaintiff as an infant is obviously not itself a sufficient cause for an application not being made within the prescribed period. In my opinion it is a factor which must be taken into account when the court is considering the sufficiency of the reason for delay in the bringing of proceedings. In particular, where a parent or guardian of the child has caused or contributed to the delay, but there are some reasons to explain it, then the fact that the child was at all times dependent upon the acts of that parent or guardian will be a fact to add to the reasons in considering whether there has been a sufficient cause shown for the delay."

30 His Honour's assumptions appear at p 501 and p 502 of the report. 31 In this case one of the reasons was the change of heart on the part of the tutor of the plaintiffs. It particularly applies to the period from December 1998 to September 1999. There are a number of cases where a change of heart has not been held to be a sufficient reason. In Re Lauer (1984) VR 180 it was held that the mere fact that the applicant's financial position had deteriorated cannot of itself be a ground for granting an extension of time under the Act nor could the mere fact that the value of the estate had been inflated beyond what might have been expected at the date of the testator's death be such a ground. 32 Re Lauer was followed by Young J in Bearns v Bearns-Hayes (unreported 6 May 1997). In that case for a period of two years until late 1994 the plaintiff had no intention of making a claim as she had assurances from her family that her position with her home was secure and she had sufficient income. In late 1994 arguments broke out in the family as a result of which the plaintiff felt abandoned by her family and that she could not rely on the loose arrangements previously in place. His Honour found that this was not a sufficient reason. 33 Relevant considerations in the present case include -

(a) The tutor in the factual circumstances of this case was the only person who could exercise the plaintiffs' rights which could be lost notwithstanding their infancy. See Dare v Furness at 500. (b) By December 1998 the tutor had full and complete knowledge of her children's legal rights including the need to proceed promptly for an extension of time under s 16. (c) On what was probably correct legal advice, given the size of the estate, she made a decision not to proceed. (d) The change in heart was simply because of later acquired knowledge that the son Craig, in proceedings commenced within time, managed to force a settlement out of the defendant. 34 Section 20 of the Family Provision Act is in the following terms:- '20. Court may disregard persons who have not applied for provision (1) On an application in relation to a deceased person, the Court may disregard the interests of any eligible persons who have not made an application in relation to the deceased person. (2) The Court shall not disregard the interests of an eligible person unless: (a) notice of the application before it and of the Court's power to disregard those interests has been served upon the eligible person in the manner and form prescribed by rules of court, or (b) the Court has determined that service of such a notice on that person is unnecessary, unreasonable or impracticable. (3) (Repealed) (4) The Court shall not revoke or alter an order for provision in favour of an eligible person to allow the making of a further order for provision in favour of another eligible person unless the other eligible person shows sufficient cause for not having applied for an order for provision in his or her favour before the first mentioned order was made.' 35 Section 20 (4) is directed to a situation where there is a further claim presumably under s 8 of the Act. The further claim can only be by someone who has already succeeded in persuading the court to accede to his claim either within time or with the benefit of an extension under s 16. Section 20 (2)(a) provides for service of notice on eligible persons with a warning that if an application is not made the court may disregard their interests. If it does disregard their interests there may be no estate left to satisfy subsequent claims. On the other hand if the estate is large there may be sufficient left to accommodate a late claim subject to any prejudice which might flow to the beneficiaries. One of the purposes of the section is to make all possible claimants come forward so that all claims can be dealt with at the same time. That effect is achieved in practice and results in a saving in costs. 36 The notices under s 20 which were served on the tutor and the plaintiffs in this case complied with the section and gave the appropriate warnings. The reasons advanced by the tutor indicate an acceptance of that warning but a later change of heart. The facts of this case raise the spectre of cases where one member of a family brings a claim while others hold off waiting to see if such a claim would be successful. Such a case would be unlikely to succeed under s 16. 37 The difference in the present case is that there was not a deliberate holding off but an informed and well considered decision not to proceed. In my view there is little difference and this is not a sufficient reason. Apart from other matters it would defeat the provisions of the Act which are designed to lead to finality in respect of possible claims under the Act. 38 Once Craig's proceedings were commenced the defendant had no option but to deal with them and cope with the delay those proceedings caused. Once they were settled in September 1999 she could reasonably expect her rights to have become prima facie indefeasible. There is no explanation for the delay from January 2000 when instructions were given to proceed and June 2000 when the summons was filed. One has a period from September 1999 when Craig's proceedings were settled until June 2000 before the present proceedings were commenced. An invitation to crystallise the situation from the defendant's solicitor was ignored. That period of delay is excessive. 39 I will consider whether the beneficiaries will be unacceptably prejudiced if the time were extended or whether there is any unconscionable conduct both of which I regard as proper considerations in the exercise of my general discretion. There is evidence by the defendant that she and her husband have postponed doing the work on the estate property and their own adjoining property until Craig's claim, and later the present claim, were resolved. It seems that the two properties might be commercially viable if run together but this is has not been able to be achieved because of the uncertainty and anxiety caused as a result of the present and the former litigation. Effectively the defendant has worked full-time as a nurse and supported her husband who worked on the property where they raised cattle. The defendant in her affidavit said the following. "The inability of being able to deal with the principal estate asset, being "Tintinhull Station" has had a great emotional and financial burden on my family and me. …….. If it had been possible to anticipate these claims, it would have been my intention, with my husband, to have sold "Tintinhull Station" and "Nymboida Downs" much sooner rather than now being in the position where we have been unable to effectively develop either or both of those properties with the consequent damage to our relationship and future." 40 On 7 February 2002 the defendant was forced to leave her matrimonial home and move into a flat in town with her daughter. This was the result of a separation between her and her husband. If anything this highlights the emotional and financial burden referred to by the defendant. However, the defendant could always have decided to sell the properties if the burden was too great. Instead she has chosen to wait in the hope that the plaintiffs' claim will fail. It is not as though she has taken some positive steps which now cannot be undone. Her evidence does not address in any way the effect of the delay from September 1999 (when Craig's claim which had been commenced within time settled) to late 1999 when her solicitors first heard of this claim. 41 I have earlier referred to the comments of His Honour Mr Justice Sheller when he indicated that any such unconscionable conduct must have been designed to lull the plaintiff into a belief of a false sense of security. Clearly in the present case there has been no such conduct because Barbara Jones made her informed decision not to proceed and did not know of the success of proceedings brought by Craig until after he rang her and told her the result. 42 Having regard to all the matters to which I have referred I am not satisfied that I should extend time to allow the plaintiff to bring this claim. However, notwithstanding this I will deal with the substance of the claim in case others should take a different view on this aspect. 43 In applications under the Family Provision Act the High Court has set out the two stage approach that a Court must take in Singer v Berghouse (1994) 181 CLR 201. 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."

44 The plaintiffs are two children presently aged 15 and 12 years. They live with their mother Barbara Jan Jones in Canberra and attend the local public high school. They are in good health and occasionally Zoee earns some income from babysitting. Warren has been diagnosed with attention deficit hyperactivity disorder. He is currently on medication and suffers some behavioural problems at school. He takes part in a number of remedial programs. He is very keen on football and basketball at which he apparently excels. The only support for the plaintiffs comes from their mother and, accordingly, it is necessary to look at her situation. 45 Barbara Jones is in receipt of a pension. She receives a pension and family payment which at the time she swore her affidavit on 5 June 2000 was a total of $673.40 per fortnight. She concedes that it has increased slightly since then. She uses the whole of this amount to support herself and the children. She lives in rented accommodation and occasionally she is able to get some part-time work as a receptionist or bookkeeper. Although she trained as a teacher she has not been able to follow that vocation mainly as a result of matters which occurred after separation from the deceased. 46 It is necessary to consider the relationship of the plaintiffs with the deceased. There is nothing to suggest that during the time they were with their father that the relationship was other than normal. The evidence does not disclose visits by the deceased or contact after separation between the deceased and their mother. Given the age of the children there is nothing that they could do about this. The children have not been able to contribute to the estate of the deceased. 47 It is necessary to consider how the children say they have been left without adequate and proper provision for their maintenance, education and advancement in life. The Court has had a range of evidence on this aspect. So far as Warren is concerned it is suggested that he has the following requirements. He apparently needs a new bed, a chest of drawers and a wardrobe which are estimated to cost some $3,000. He needs some help with his football clothing as apparently he is fairly successful representing the Australian Capital Territory in a competition for children last year. This cost is estimated at $1,000 to $1,500 per year. As he has a problem with his feet he will need to spend $300 a year on plastic moulds for inside his shoes until he is 17 years of age. There is also the ordinary cost which one incurs when a child is in the public system for schooling, health, clothing and other associated matters. These are set out in the schedule to Mrs Jones' affidavit but her affidavit does not identify how much the tutor will not be able to meet from her income. The absence of such evidence makes it impossible to simply accept the totals claimed as the tutor is obviously paying some of these amounts at the present time. Clearly these are generally genuine needs but some of them are a little problematical. I would have thought that a legacy of $20,000 would meet these requirements absent any other competing claims. 48 Zoee's needs are also set out in the schedule to Mrs Jones' affidavit. These include a proposal for her to go on an exchange programme to the United States to further her interest in the hospitality industry. If she does go on the exchange programme she will live with a family. Those costs were estimated at $14,000. Having regard to the cross-examination it would seem to me that this figure is excessive in that the matter has not been fully investigated. Zoee needs orthodontic work and there is a cost quoted of $4,695 and this is certainly necessary. Likewise there is the ongoing cost of her education, health and clothing which are presently being met by her mother from her own pension. A legacy for her of $15,000 on the same basis would meet these requirements. 49 It is also necessary to consider the situation of others who have a claim on the bounty of the testator. In this case the defendant has to be considered by the Court. I have already mentioned that the defendant has separated from her husband. She is presently living with her six year-old daughter in a flat in Tamworth for which she pays rent of $160 per week. She has worked from when she left home aged 17 years to be trained as a nurse. She has worked full-time for most of the last 23 years with the exception of a period of 12 months for maternity leave. So far she has paid $55,540.60 in relation to various matters concerning the estate. These include the sum of $32,000 paid to her brother. She has not yet paid costs due to her former solicitors of $11,070. 50 The defendant and her husband own the property "Nymboida Downs" valued at between $290,000 and $300,000. They have a holiday home at Red Rock near Coffs Harbour worth $100,000 and they have two cars each worth $3,000, farm machinery, tools and household effects estimated at $110,000. They owe the bank $74,000 and have other debts amounting to $3,833. I have mentioned that she separated from her husband on 7 February 2002. 51 As the estate has been distributed it is necessary to consider whether the property can be designated as notional estate. Section 27 of the Family Provision Act is in the following terms:

"(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered:

(a) the importance of not interfering with reasonable expectations in relation to property;

(b) the substantial justice and merits involved in making or refusing to make the order; and

(c) any other matter which it considers relevant in the circumstances.

(2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to:

(a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person;

(b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration;

(c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be;

(d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and

any other matter which it considers relevant in the circumstances." 52 There are a number of matters which are appropriate to consider under section 27. The first was the promise made to the defendant and her husband that they would be left the property if they purchased the adjoining one which they eventually did. Although an expectation may have been created it would not be reasonable for the defendant to believe it should prevail over other valid claims on the estate. Another area that falls for consideration is the defendant's difficult situation in having to continue to run the properties without either selling or developing them as a result of the present litigation. As I have pointed out there is no specific incident which the defendant can point to which occurred in the period between the settlement of Craig's action and the commencement of proceedings by the present plaintiffs in June 2000. 53 In particular the justice and merits of the matter include the recognition of the fact that the effect of both proceedings should not intrude into the defendant and her husband's assets apart from the property that has been distributed which is valued at $180,000. In this regard the defendant has the following expenses and costs:-

(a) Settlement of Craig's claim $ 32,000 (b) Past costs 23,548.60 (c) Costs unpaid 11,700 (d) Defendant's costs of proceedings 18,000 (c) Plaintiffs' costs of proceedings 17,892 TOTAL 103,132.60 54 The plaintiffs' claims could thus be accommodated within the proceeds of sale of the former estate property. As there are no other matters to consider under s 27 of the Act it is thus necessary to consider s 28 of the Act. 55 Section 28 includes further restrictions on the power of the Court to designate property as notional estate. Section 28(5) provides as follows: "On an application in relation to a deceased person, being an application: ( a) made pursuant to an order under section 16 allowing the application to be made; or (b) for an order under section 8 for additional provision, the court shall not make an order designating property as notional estate of the deceased person by reason of a prescribed transaction or a distribution unless it is satisfied: (c) that: (i) the property was the subject of the prescribed transaction or distribution; (ii) the person by whom it is held holds the property as a result of the prescribed transaction or distribution as trustee only; and (iii) the property is not vested in interest in any beneficiary under the trust; or (d) that there are other special circumstances (including, in the case of an application made as referred to in paragraph (a), the incapacity during any relevant period, of the person by or on whose behalf the application is made) which justify the making of an order so designating the property." 56 In relation to this case the relevant section is s 28(5)(d). Apart from stating incapacity as a special circumstance the sub-section gives no other indication of what constitutes such special circumstance. However it is clear that s 27 applies when a claim is made both before and after the time limited by s 16. Section 28(5), in a case where an extension is to be allowed, may thus be thought to impose either a further requirement over and above the matters, which a court will consider under s 27 or merely a requirement that a circumstance be "special". In s 28(5)(d) the word "other" is used in describing "special circumstances". That I think is grammatically a reference to the matter appearing in s 28(5)(c). It may be that the matter in s 28(5)(c), namely a discretionary trust, was thought to be a special circumstance. 57 A question which arises is whether a circumstance which may be taken into account under s 16 can also be taken into account as a special circumstance under s 28(5)(d). In Dare v Furness Cohen J decided that infancy was a factor which could be considered, though not determinative, under s 16. It could also, he held, be considered under s 28(5)(d) as a special circumstance. In the present case the plaintiff suggests infancy as a special circumstance. The extent to which one may take into account infancy as a special circumstance was dealt with by his Honour in these terms at P 503:- "Accordingly, if the plaintiff comes within the terms of par (d) then the Court is not prevented from making an order in respect of notional property, although it still has to consider all of the facts for the purpose of exercising its discretion. The terms of par (d) indicate that a special circumstance is the incapacity during the relevant period of the applicant. I have had submissions made to me as to what this means. It was submitted for the first defendant that it could only mean physical or mental incapacity. This was supported by counsel for the second and third defendants, the children of the deceased. It was said that if by incapacity it was intended to refer to a disabled person, that is somebody who is an infant or lacks mental capacity, then that phrase would have been used. I do not follow, nor was it explained, what is said to be meant by physical incapacity during any relevant period. It can hardly mean an inability to walk to a solicitor's office or to file a document. Similarly any other form of physical disability does not seem to be adequately explained. If incapacity includes mental as well as physical disability, then that could equally have been more accurately stated. I see no reason why the word incapacity cannot be given its normal meaning, namely legal incapacity. In Jowitt's Dictionary of English Law, 2nd ed (1977) Sweet & Maxwell, London, it is said that incapacity is the opposite of "capacity" and therefore is equivalent to disability. In turn, disability is said to be the absence of legal ability to do certain acts or to enjoy certain benefits, such as the disability to sue or to enter into contracts. Examples of general disability occur in the case of mental patients and infants who cannot as a rule enter into contracts or alienate property. I see no reason why the Act meant anything else than this. If it could be successfully argued that the wording of s 28(5) is ambiguous, assistance can be obtained from the Law Reform Commission Report, referred to above. The draft Bill of the commission, in s 14(5), provided that an application for extension of time for bringing proceedings and a subsequent hearing should not affect any property which was distributed before the application. There was no clause equivalent to s 24 of the present Act, and notional estate was dealt with in a different manner. In its report at par 2.14.11, the commission considered that the law was zealous to protect persons under legal disability and that the proposed s 14(7) was another example of that zeal. That subsection provided that s 14(5) should not apply where the applicant for extension had not attained eighteen years or, owing to mental illness, was incapable of managing his affairs. It seems that s 28(5) of the present Act was intended to reflect that view, albeit in a differently drafted form. Accordingly, the plaintiff is in this case not prevented from having an order made in her favour by virtue of the fact that she requires the leave of the Court to bring the proceedings out of time. This seems to have some relevance to the issue of whether leave should be granted to extend time. Obviously, some prejudice will always be suffered by the beneficiaries on the granting of an extension of time, if it would mean that a claim could be made against them in respect of moneys already distributed. In the case of a claim by an infant, this fact alone would not seem to be a matter which the court should take into account because s 28(5) assumes that an extension of time has been granted and further assumes that it may be possible for the infant claimant to recover distributed assets as notional estate. It therefore appears that the question of prejudice is more to be considered on the issue of whether there should be a declaration as to notional estate. Put another way, it must have been anticipated that an infant could be successful in an application to extend time notwithstanding that there may have been a total distribution of the assets and a beneficiary who is required to repay will to that extent be prejudiced. Otherwise, most applications would fail because of the special circumstances which entitle an infant to make a claim for distributed assets."

58 Thus it would appear that the plaintiffs' infancy are special circumstances. I have already considered the prejudice to the beneficiary. His Honour's comments in the last paragraph do not cause me to change my view on the s 27 factors. Thus were it not for the fact that the application for an extension of time fails the plaintiffs would have been entitled to the legacies to which I have referred. 59 Accordingly I order that: - 1. The summons is dismissed. 2. The plaintiffs are to pay the defendant's costs of the proceedings. **********

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