Budulica v Budulica[2017] QCA 161

SUPREME COURT OF QUEENSLAND

1. MORRISON JA:  I have read the reasons of Dalton J and agree with those reasons and the order her Honour proposes.
2. McMURDO JA:  I agree with Dalton J.
3. DALTON J:  This is an appeal from a discretionary decision not to allow the hearing of an application for further provision out of an estate in circumstances where the proceeding was not instituted within nine months after death – s 41(8) of the Succession Act 1981.  In order to succeed on such an appeal the appellant must demonstrate error of the type described in House v The King:

“It must appear that some error has been made in exercising the discretion.  If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.  It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.”^[1]

4. The application for family provision was made on 10 June 2015, just over 18 months after the death of the appellant’s mother.  The appellant was represented by counsel before the primary judge but appeared on her own behalf in this Court.
5. The appellant is one of two children.  Her mother, Katica, was married to Stanko in 1962.  Stanko died on 1 January 2001.  Katica made a will in December 2000.  It provided that the appellant and her brother, Stanislav (called Stan) were to share in the estate, in equal shares.

Appellant’s Decision not to make an Application within Time

6. One of the matters which weighed heavily in the discretion of the primary judge was that, within the nine months allowed by s 41(8), the appellant consulted solicitors and took advice from them, and from senior counsel retained on her behalf.  The primary judge concluded that the appellant acted on that advice and decided not to commence a proceeding.  The relevant part of the judgment below is as follows:

“Further provision claim contemplated

[9] Within months of Katica’s death, Sylvia had retained a solicitor, Ms Chatterton, the principal of SKC Lawyers, to advise her concerning her mother’s estate.

[10] In March 2014, Ms Chatterton told Sylvia that any family provision application needed to be filed within nine months of Katica’s death.

[11] On 28 March 2014, Ms Chatterton wrote to Stan, as executor of Katica’s estate, notifying Sylvia’s intention ‘if a settlement cannot be reached, to commence proceedings for an order for provision’ under the Act; asking for a copy of the will as well as for details of the assets and liabilities of the estate ‘to enable our client to assess their (sic) position prior to commencing proceedings’ for such further provision; and proposing that no distribution take place pending resolution of Sylvia’s claim.

[12] Stan retained Keith Mole and Associates as his solicitors.

[13] By letter dated 4 April 2014 to SKC Lawyers, Mr Mole provided a copy of the will; recorded Stan’s instructions concerning estate assets and their values; said that the major assets are two properties; and mentioned Stan’s proposal that Sylvia accept one of those properties as her share of the estate. One of the properties was at 76 Barton Road, Hawthorne; the other at 92 Stuart Street, Bulimba. Each had an estimated value of approximately $1M, according to Mr Mole’s letter. Other estate assets were said to be of relatively little value.

[14] Mr Mole’s letter asked Ms Chatterton to say why Sylvia claimed that ‘improper provision’ had been made for her by the will; what she was seeking; and the rationale for her claim.

[15] The letter sought a reply within a fortnight. There was to be no response for five months.

Advice of counsel

[16] In August 2014, Ms Chatterton told Sylvia that her prospects of success in litigation seeking further provision out of Katica’s estate were not good.

[17] A few weeks later, Sylvia met with Ms Chatterton and participated, by telephone, in a conference with senior and junior Counsel about those prospects. The barristers were not encouraging. Ms Chatterton’s letter to Sylvia two days after the conference confirms:

‘…that there are no grounds (either moral or legal) to make a claim…in the form of a Family Provision Claim…This is because there are two properties contained in your Mother’s Estate with an estimated value of $1,000,000 each and your brother, as Executor…has offered to transfer to you one of those properties.’

[18] The letter reveals that Sylvia had consulted SKC about litigating other claims against her brother. One related to property at 17 Jamieson Street, Bulimba. In late 1986, Stanko and Stan were registered as proprietors, as joint tenants, of that property. By right of survivorship, Stan became sole proprietor on Stanko’s death. Sylvia, however, would not accept that she has no interest in 17 Jamieson Street and wanted Stan to transfer a half share in it to her. Ms Chatterton’s letter records that:

‘… your father’s intention with respect to this property was that his share of the property would transfer to his wife, your mother…upon his death and that upon your mother’s passing, her share would be transferred to you so that each of yourself and your brother…held a one half share in this property.

This is the property which you wish to make a claim against Stanislav so that a one half share of same is transferred to yourself as was your father’s intent.’

[19] Ms Chatterton’s letter continued:

‘As discussed, our advices to you are as follows:-

● With respect to your mother’s estate, we advise you to accept the property situated at 76 Barton Road, Hawthorne as your one half share of the Estate.

…

● In the event that you wish to proceed in an application with regard to property currently held by your brother, namely 17 Jamieson Street, Bulimba, then such Application can be funded by the sale proceeds from the property obtained by you from your mother’s estate. We confirm the advices provided to you by both this office and the barristers that such an Application will be complex and there is no guarantee whatsoever that your proposed Application will be successful.

As has been explained to you previously, your brother, as Executor of your mother’s Estate, is able to disburse the Estate pursuant to the terms of the last Will of your mother 9 months after her death which, by our calculations, will be the 9 September, 2014. Any Application under the Succession Act for a Family Provision Claim to prevent such disbursement will need to be made prior to this date. However, as advised above, it does not appear that in all of the circumstances with respect to your mother’s Estate that you have any grounds to make such an Application.

To move this matter forward please provide your signed instructions to accept 76 Barton Road, Hawthorne as your benefit from/share of your mother’s Estate and provide those written instructions to this office prior to 12 noon on Friday 5 September, 2014 to enable us to have sufficient time to then correspond with the Estate’s solicitors to advise that you are accepting their client’s offer of that property as set out in their letter of the 4 April, 2014.

As you are aware, due to the complexity of your proposed Application against your brother with respect to 17 Jamieson Street, Bulimba you will need to fund such Application as all barristers whom I have contacted have advised that they are not prepared to take the matter on a speculative basis as realistically such an Application could take some time (several years) to be resolved. We would suggest that once you have had 76 Barton Road, Hawthorne transferred to yourself that you could perhaps then sell that property to fund such proposed Application.’

[20] Sylvia gave her written instructions that she would accept the property at 76 Barton Road as representing ‘my one-half share of the net assets of the Estate…’. The next day, Ms Chatterton wrote to Mr Mole, conveying those instructions, asking that ‘the necessary transfer and acceptance documents’ be provided ‘as soon as possible’. This letter made no mention of a family provision claim.

Decision not to sue

[21] A few days later, the nine month limitation period imposed by s 41(8) expired without a family provision claim having been instituted.

[22] Sylvia had acted on the advice of her barristers and solicitor that such a claim would not succeed and decided not to commence such a proceeding.” (footnotes omitted)

7. The evidence outlined by the primary judge was plainly very relevant to the exercise of his discretion pursuant to s 41(8) of the Act.  It is also plain that almost all the evidence he relied on was contemporary: letters written by the appellant’s then solicitor, Ms Chatterton, and the appellant’s written instructions.
8. Paragraphs a, 4, 6, 8, 9, 10, 11, 13, 15 and 16 of the notice of appeal seek to attack the credit of Ms Chatterton and assert facts which are contrary to the contemporary correspondence relied upon by the primary judge.  They contain factual assertions not in evidence below; not the subject of sworn evidence in this Court, and not the subject of any application to adduce new or fresh evidence in this Court.  The most relevant of the assertions is that the appellant never determined not to bring a family provision claim, and always thought that Ms Chatterton was preparing such a claim.  As will be apparent from the extract from the judgment below, that is contrary to the contemporary correspondence, and there is no evidence, as opposed to assertion, of the matters which the appellant now seeks to agitate.  These grounds of appeal cannot succeed.

The Appellant’s Health

9. At the hearing below the appellant relied upon her poor health as a matter which bore on her prospects of success in the family provision application.  The primary judge accepted these matters were relevant.  He accepted that the appellant has had, and continues to have, poor health which is likely to cause her significant expense in the future.  He said:

“[59] Sylvia’s health was, it seems, poor before Katica died. It has not improved since. She deposes to suffering from many conditions, including: significant dental problems; sleep apnoea; depression; anxiety; osteoporosis; degenerative disease of the spine; spurs in her feet; irritable bowel syndrome; diverticulitis; tumours/cysts on the adrenal gland and kidney; lesions on the lungs; chronic fatigue; asthma; impaired hearing; high blood pressure; and borderline diabetes.

[60] She expects that her poor health means that she will never work again. There are other likely consequences, such as:

● Loss of the disability support pension would mean that Sylvia would need to purchase private health insurance;

● The cost of the extensive treatment for her teeth is estimated at $60,000‑$90,000;

● There will be significant ongoing outlays even if Sylvia is able to secure private health insurance;

● In the longer term, she may require private nursing care or domestic assistance for tasks such as cleaning and gardening. Although she intends to live independently for as long as possible, she does not have a support network and anticipates that eventually she may be forced into aged care. Currently, aged facility accommodation bonds range between $200,000 - $400,000.” (footnotes omitted)

10. The appellant raised her poor health at paragraphs 7, 22, 25, 27, 28, 32 and 33 of the notice of appeal.  Her assertions are consistent with the evidence before the primary judge, and indeed consistent with his findings.  Ms Budulica asserts that these matters were not taken into consideration below – paragraph 28 of the notice of appeal.  But quite plainly they were taken into account by the primary judge.  Interpreting her appeal as asserting that insufficient weight was given to those factors, that assertion must fail.  Having reviewed the matters relating to the appellant’s health the primary judge said:

“[64] Those factors do offer some support for a case that Katica might have been expected to have left Sylvia more than she gave Stan.

[65] But there are countervailing considerations.

[66] When Katica died, Sylvia owned her own home, unencumbered, valued at about $500,000.

[67] Under the will, Sylvia could have been expected to receive at least $750,000.

[68] Immediate health care and insurance needs could have amounted to $100,000. Ongoing health-related expenditure might be $16,000 or so annually. Ordinary living expenses may be as low as $7,000 annually.

[69] Assuming a life expectancy of 37.40 years, and adopting a multiplier of 5% for 37 years, $22,861 yields a present value of $392,871.24. On that approach, advanced for Stan, an inheritance of $750,000 more than suffices to repay the $75,000 loan, satisfy immediate expenses of about $100,000, and meet all future living costs and health care expenses.

[70] For Sylvia, another approach is suggested: if she has a life expectancy of 34.45 years, to fund an income of $40,500 per year for the rest of her life would require a capital sum of $622,500. On this approach, in view of her immediate need to discharge the mortgage on her home and pay for health care needed now, more than $750,000 is required.

[71] No concluded view on what might be awarded can be formed at this time. For one thing, not all the evidence that would likely be adduced at a hearing is available now. In particular, as Sylvia attaches so much significance to her health, no doubt a judge who heard the application would be favoured with evidence from medical practitioners concerning her conditions, their prognoses, their likely impact on life expectancy, as well as information on the predictable expenses of treatment and care, at home or in an aged care facility.

…

Assessing prospects

[74] Sylvia has prospects of establishing that ‘adequate provision…’ was not made for her by Katica’s will, satisfying the jurisdictional first stage inquiry.

[75] Even so, she has no reasonable prospect of obtaining an order for further provision.

[76] Sylvia can still take the Stuart Street property. In November 2014, it was valued at $1.2M. It will not attract CGT on realisation if sold for the value of the property at Katica’s death. On this basis, as her share of the estate, Sylvia would, it seems, receive appreciably more than $1M after sale expenses are satisfied, which is more than ample for her ‘proper maintenance and support’.

[77] In those circumstances, a discretion to order further provision out of the estate is most unlikely to be exercised in her favour.” (footnotes omitted)

11. The learned primary judge did appropriately weigh all the considerations relevant to the appellant’s health and its likely influence on her prospects of success in any family provision application she might be allowed to bring.  There is no error demonstrated.

Estate Matters

12. When the proceeding began before the primary judge, he was seized of both the application to extend time to bring the family provision application, and also an application by the appellant to remove her brother as executor of her mother’s estate.
13. Paragraphs b, c, 2, 3, 8, 12, 13, 23, 34, 35 and 36 of the notice of appeal are complaints that the application to remove the executor ought to have been heard at the same time as the claim for family provision, and otherwise involve argumentative complaints about the administration of the estate.
14. As to the former, on the second day of the hearing below, the primary judge directed that the application to remove the executor be heard separately.  Indeed it was heard by Mullins J in January 2017.^[2]  The appellant is bound by the conduct of both this matter, and the estate matter below.
15. As to the latter, these complaints are irrelevant to the family provision application with one exception: delay in the administration of the estate.  Paragraphs b and 2 of the notice of appeal are complaints associated with the length of time it has taken the respondent to administer the estate.  Insofar as the estate is not yet finally administered, there is lack of prejudice to the administration of the estate as a result of allowing a late family provision application.  The primary judge was aware of this issue.  He said:

“Consequences of delay

[78] The delay in commencing the family provision application has not materially adversely impacted on the administration of the estate or yet occasioned Stan any significant prejudice. But if the application proceeded to a hearing, there would be expenses for the estate and, depending on progress with the sale of the two estate properties, some delay in distribution to Stan of his share.”

16. The primary judge understood the issues; accepted the delay in administering the estate was a matter in favour of the appellant, but discounted this consideration having regard to the effect of a family provision application on the continuing administration of the estate.  While he found the consideration relevant, it was not determinative.  The appellant has not shown that this reasoning was erroneous.

Hostility to the Executor

17. Associated with the points the appellant made about the administration of the estate, some paragraphs of the notice of appeal are devoted to attacking the character of the appellant’s brother: 5, 14, 15, 23, 24 and 27.
18. The primary judge was well aware of this hostility, and recognised it as the cause of the estate not being finalised in or around September 2014 – see paragraphs [20] and [23]‑[27] of the judgment below.  He set out the main recriminations the appellant has against her brother at paragraph [28] of the judgment.  It cannot therefore be said that the learned primary judge did not take these matters into account, although it must be acknowledged that they were not directly relevant to any of the major considerations proper to a determination of the appellant’s application for an extension of time pursuant to s 41(8).  The appellant has not demonstrated any error on the part of the primary judge in relation to this evidence.

Jamieson Street

19. Further paragraphs of the notice of appeal relate to a property which the appellant contends ought to be part of her mother’s estate: 17 Jamieson Street.  The registered title to this property showed its owners to be the appellant’s father and brother as joint tenants.  On her father’s death it passed to her brother.  The appellant contends that the property belonged to her parents as joint tenants in equity and therefore, that on her father’s death the equity in the property passed to her mother rather than her brother.  Paragraphs 5, 23, 29, 34 and 35 of the notice of appeal concern, or partly concern, this claim.
20. The primary judge recognised the appellant’s claim in relation to 17 Jamieson Street, and he acknowledged that there was at least some evidence that she had received advice that she had reasonable prospects of establishing the claim.  However, as he rightly concluded, if 17 Jamieson Street truly forms part of the estate, the appellant’s share of the estate is correspondingly worth more and, as the learned trial judge put it, “… that increased inheritance could tell against the notion that [her mother’s] will did not make ‘adequate provision …’ for her.” – [73].  That is, this matter is of limited relevance to the appellant’s case, and to the extent that it is relevant, it tells against her.

Complaints about Solicitors and Lack of Funds

21. Paragraphs 17-21 of the notice of appeal deal with factual matters concerning a second, and then third, firm of solicitors retained by the appellant after the first firm of solicitors acting for her obtained her agreement, on advice, not to make a family provision application.  It is unclear what point is sought to be made.  It is not said that there was any advice from either of the new firms of solicitors as to prospects, or as to the time limit for bringing the application.  There is an assertion that the appellant did not have sufficient funds to proceed.  This assertion is unsworn and is contrary to the finding of the primary judge on the evidence before him – see [46] of the judgment below.
22. In oral submissions before the Court the appellant reiterated that she did not have money to start proceedings.  Again, no evidence was offered.  The appellant asserted claims on her finances including her health; the need for her to have dental work; the need to purchase a new car; the need to finance a trip to Europe to deal with her affairs there, and her continuing obligation to make mortgage payments – tt 1-19-21 of the appeal transcript.  At other times in her oral submissions she talked about having sold jewellery in order to make ends meet.  As the primary judge found, there is no evidence that the appellant lacked the funds to have an originating application prepared, filed and served; indeed from her oral submissions, it seems that she had different priorities.

Other Complaints

23. Other paragraphs of the notice of appeal are only explanatory or querulous, complaining of injustice in very general terms: d, 1, 26, 29, 30 and 31.  These paragraphs do not show error by the primary judge.

The Appellant’s Outlines of Argument

24. The appellant’s outline of argument filed 26 September 2016 is largely based on the notice of appeal, and in fact repeats many of the paragraphs from it.  Much of the additional material in this outline is concerned, not with the issues relating to the family provision application, but with issues which would relate to estate litigation and claims about the ownership of 17 Jamieson Street.  Much of it concerns the appellant’s negative feelings towards her brother.  There is nothing in it which shows error by the primary judge.
25. An amended outline was filed on 23 January 2017, apparently with some legal assistance.  In this outline the appellant objects that documents relevant to establishing her claims in relation to 17 Jamieson Street are not included in the Appeal Book.  These documents were not tendered before the primary judge.  As explained above, their relevance to matters the subject of this appeal is limited, and against the appellant.
26. As well, this amended outline of argument includes paragraphs making allegations of conduct on the part of the appellant’s brother in the nature of undue influence: paragraphs 4, 7, 8, 9, 10, 11, 16, 17, 18, 20 and 21.  Other paragraphs make complaints about the conduct of solicitors who have acted for the appellant in the past.  While these matters might have some relevance to the estate litigation, or litigation concerning the Jamieson St property (if it is ever brought), I cannot see that they are relevant to this appeal.
27. At paragraph 6 of this amended outline the appellant asserts that she was unaware that she had nine months to “make a provisional claim”.  This is an unsworn assertion, and quite clearly contrary to the contemporary documents relied upon by the primary judge.  This Court cannot rely on it.
28. Lastly, on 15 February 2017 another outline was filed on behalf of the appellant.  It complains at paragraph 1 that some of the evidence which the appellant believes ought to be in the Appeal Book is missing.  As explained, there were two proceedings in the trial division which had been ordered to be heard together.  One related to the estate, and the other to extending the time in which to bring a family provision application.  On the second day of the hearing the estate matter was severed and ordered to be heard separately.  The records which the appellant complains are missing are records which relate to the estate matter.
29. Otherwise this last outline of argument consists of pages of handwritten commentary on various of the factual matters in the Appeal Book.  They do not add anything to the arguments already reviewed.
30. I would dismiss the appeal, with costs.