Re an application by Moody
[1996] QDC 335
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- Re an application by Moody[1996] QDC 335
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Re an application by Moody[1996] QDC 335
Re an application by Moody[1996] QDC 335
IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND | Application No. 28 of 1994 |
BETWEEN:
IN THE MATTER OF the Succession Act 1981-1983
-and-
IN THE MATTER OF the Will of PATRICIA BACON Deceased
-and-
IN THE MATTER OF an Application by JENNIFER MOODY and CHERYL ROSE SANGSTER
REASONS FOR JUDGMENT - ROBIN Q.C., D.C.J.
Reasons Published: 18 October 1995
Catchwords:
Testator's family maintenance - family provision - Succession Act s 41 - measuring of estate of the deceased - availability of realty - timely application by daughters - application followed lodgment of transmission of realty to testator's sole beneficiary - application heard recording of transmission supervened before hearing - Application of Easterbrook v Young (1977) 136 CLR 308 considered - Court of Appeal declaration of non-application in Queensland applied - (Holmes v Webb (OS 542/89))
Counsel: | G. Spender for Applicants |
| N. McGregor for Respondent/Executors |
| L. Bacon (Respondent/Beneficiary) in person |
Solicitors: | Greg Casey for Applicants |
| Paul Enders for Respondent/Executors |
Hearing Date: | 25.09.95 |
IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND | Application No. 28 of 1994 |
BETWEEN:
IN THE MATTER OF the Succession Act 1981-1983
-and-
IN THE MATTER OF the Will of PATRICIA BACON Deceased
-and-
IN THE MATTER OF an Application by JENNIFER MOODY and CHERYL ROSE SANGSTER
REASONS FOR JUDGMENT - ROBIN Q.C., D.C.J.
Delivered the 18th day of October 1995
This is an application by two daughters pursuant to s. 41(1) of the Succession Act 1981 (as amended) that provision be made for each of them out of the Estate of their late mother who died of cancer after an illness of some years duration on 1st July 1993. The application was filed on 25th February 1994 and was therefore in time for the purposes of sub-s.(8).
The testatrix's will was made on 24th November 1992. It nominated her brother-in-law and his wife as executors and trustees and left the entire estate, after payment of debts and expenses “to my son Larry Bacon in appreciation of his loving care and devotion towards me throughout my long illness”. The will went on:
“I direct and declare that I have made no provision under this my Will for the remainder of my children in view of their complete lack of affection and regard for me during the latter years of my life.”
Probate was granted of the will in the Supreme Court of Queensland on 29th October 1993 (Eccleastical File No. 1752 of 1993). I will say at the outset that the provision last quoted is an unjust calumny, at least so far as the applicants are concerned. They deserve some sympathy for having to suffer its presence on a public Court record, although this feature pays no part in my determination that their applications are entitled to succeed.
According to the Executors' affidavit the deceased's estate consisted of a residential property at 2 Abelia Crescent, Kippa Ring (estimated value $120,000), a bank account containing $11,553.56 at the date of probate and two rings of unknown value. The real property is now said to be worth $95,000 to $100,000 and the rings, a third of which has come to light, are said to be worth $539. The deceased's one half share of a motor vehicle is now acknowledged, and put in at $2,000. The vehicle was owned equally with the deceased's mother-in-law, Mrs Ada Bacon. Furniture and personal effects have been brought in at a value of $1,500 to $2,000. The money in the bank account has been depleted in consequence of administration costs and the costs of these proceedings and is down to $4,941.91.
The estate is a relatively modest one, which would not have gone far if divided equally among the testatrix's children, all six of whom survived her. Their names and ages at her death are:
Sharon Lee 35 years; Jennifer 34 years;
Michael Allan and Steven Tony (twins) 33 years;
Larry 28 years and Cheryl Rose 26 years.
I was assured that all of the children knew of the application. The material shows that although never divorced from him, the testatrix was separated from her husband (finally after a number of shorter separations connected with infidelity by him) some ten years ago, on consensual terms which left the testatrix with the house and the gentleman with his superannuation entitlements.
By the time of the separation, Mrs Ada Bacon, on the evidence before me, had already been living in the house for more than 20 years. Her loyalties appear to have been towards the testatrix rather than her son, and she remained. She is a remarkable woman, bright and confident, proud of her skills and achievements in songwriting and other creative fields; she gave evidence in a clear and spirited fashion, and was said by one witness to have been 88 years old while the testatrix was still alive. She described herself and the testatrix as inseparable, never doing anything without each other. There seems no doubt at all that the two women valued their mutual association highly. I think that the testatrix, at least, allowed this to override her relationships with others, including the six children. My impression is that Ada Bacon's ubiquity and demands meant that none of the children was able to have a “one to one” relationship with their mother. I think that Larry was correctly describing the history of all of them when he said that he really was raised by two mothers. I do not doubt that Ada Bacon was well meaning, but it is easy to see that the potential for conflict was there. Perhaps it was most clearly realized in the case of Cheryl Rose, who seems to have been the most rebellious.
All but one of the children married. In every case, Ada Bacon seems to have disapproved of the choice of spouse, and to have made this perfectly clear to all. It is astounding that the testatrix did not attend a single one of the weddings, although I have no doubt she was invited. This is established by the evidence in the case of the two applicants and of Larry. The explanations given strike me as rather sad. In the case of Cheryl Rose, for example, the testatrix supposedly stayed at home while a real estate agent showed a potential purchaser through the house, which was on the market at the time. The testatrix and Ada Bacon deigned to attend the reception in this case. Larry said that the problem in respect of his wedding was his desire that his father should be present and that in respect of Jennifer's, which took place in Sydney, there was some problem with the car en route. The testatrix's maternal instincts are revealed by other aspects of the evidence as well to have been somewhat muted. It is difficult to say to what extent Ada Bacon's influence was at work, but I think it was to some extent.
The applicants' approach is that Ada Bacon poisoned the testatrix's mind against them, and influenced the dispositions in the last will, which was less favourable to the applicants than one other testamentary document I was told about. It is not possible to find that there was any improper influence by Ada Bacon in the making of the will. As she herself intimated, if her influence extended so far, she could have secured benefits for herself under the will. I think it was a slightly exaggerated reaction when Cheryl Rose deposed: “It always appeared to me that my mother allowed herself to be totally dominated in her thinking and actions by our grandmother.” One respect in which the testatrix resisted Ada Bacon was when she persisted in smoking, notwithstanding medical advice that she must not. I think that Cheryl's description of the situation in paragraph 5.2 of her affidavit filed 16th November 1994 is tolerably accurate:
“For as long as I can remember my mother would form one view on a matter and then act another way when she saw that my grandmother took an opposing view. When challenged about this my mother would say that she did not want to have an argument with our grandmother and she (my mother) had to live with her for the whole 24 hours and I did not.”
likewise history and impressions given in paragraph 24 of Jennifer Moody's affidavit filed on 1st March 1994:
“My mother had variously had differences with all of her children and their spouses including Larry. Throughout her married life and up until the time of her death my mother had firstly both of our father's parents residing with her and then after the death of our paternal grandfather our grandmother still remained. It appeared to me that this imposed a considerable strain on our family and certainly limited my mother's freedom of action. My grandmother appeared to me to be a very dominant personality in my mother's life even though it was my mother's house that my grandmother was residing in. I can recall many occasions when my grandmother was asserting her will I challenged my mother to stand up to her but she begged off not wishing to cause what she saw as difficulties with our grandmother.”
The case focussed to a considerable extent on the relevant contributions which were made by the applicants and Larry (who took up my suggestion that he represent himself, in case he wished to present anything to the Court beyond the case presented by Mr McGregor for the Executors - he has his own solicitors on the record, who filed affidavit material for him) in the care of the testatrix. Jennifer resided in Sydney until the very end of 1992, when she with her husband and three children moved to Brisbane, she says when she discovered just how ill the testatrix was. Even if there be some exaggeration in the applicants' respective descriptions of what they did for their mother, I find that they were ready, in each case, to do much more, if the testatrix had been disposed to permit them to. I suspect that Ada Bacon's animus against the two of them (perhaps illustrated by her insistence on how much she liked Cheryl Rose's two children) was a factor here. In addition, the circumstances of the applicants' lives were relatively busy, each was working, as well as having young children to look after.
The contrast with Larry is stark. He completed an apprenticeship as a wood turner after leaving school, but to the extent he has worked in a trade it has been in housepainting. He was a passenger in a bus which overturned while conveying him between Brisbane and Sydney in about 1988 and was injured, suffering back problems which have led to operative procedures twice, among other treatments, and which have still not resolved, he says. Larry has not had a job since 1990, apart from some brief periods of labouring work with the Education Department. His wife has not worked, except for some slight amount of deputizing for another woman on occasions when she was away. He commenced proceedings in this Court in respect of the bus accident in 1991, and received $35,000 in the hand. Thirteen thousand dollars of this sum he still has, in a term deposit in a bank. Otherwise, except for what he may take under the will, he has no significant assets, apart from a motor vehicle. Until he moved into the testatrix's residence, he and his family lived in a house rented from the Queensland Housing Commission. I am not persuaded that Larry cannot work. This is beside the point. It could clearly be completely just for the testatrix to favour him when deciding how to distribute her estate. As at the date of death, when these things have to be judged, he was a young married man with two children, like his spouse not working, with back problems and obvious prospects of recovering some damages. He owned no house. By contrast, each of the applicants was married to a fit husband in employment, and herself had the drive and energy to undertake employment for the support of the household, including children (two in one case, three in the other). Each couple owned a house, although subject to a considerable mortgage. Jennifer Moody and her husband, indeed, owned a second house in Sydney, being acquired under the Defence Services Homes Scheme.
I do not think that anything that has happened since the testatrix's death (such as Larry's receipt of his damages) has made any substantial difference to the situation. It is true that Mr Sangster lost his job, and has had to take less remunerative employment, which comes without the benefit he formerly enjoyed of a motor vehicle provided; however, Cheryl Rose Sangster has greatly increased her working hours, so that overall, the position of her household is similar. Jennifer Moody and her husband have invested $20,000 extending their house in Brisbane, and have suffered a decline in the rental obtained on their Sydney property from $150 per week to $130.
I accept Mrs Spender's submission that neither of the applicants can be said to be well off and that neither has the resources to deal with any expensive crisis, for example in the health of a child, that might arise. I think that the testatrix did have a moral obligation to provide something for each of them from her estate. I am quite unable, however, to go so far as Mrs Spender would wish, and order an equal three way division of the estate. The “need” of Larry is demonstrably greater and is not lessened by his and his spouse's failure to emulate the self-reliance and industry of the applicants and their spouses.
Further, the “moral claim” of Larry is superior. No doubt his relative idleness facilitated this, but he spent much more time with the testatrix; on a regular basis, he provided her with services on a scale outstripping the applicants by far, and I find did so willingly. He painted the testatrix's house, for example, and indeed, this led to him losing his last substantial employment as a painter working on a “contract” basis. He mowed the testatrix's lawn for her regularly, and though promised payment of $15 a time, rarely received it from her. I accept his evidence that the testatrix's recompensing him for expenses associated with his services, such as petrol costs, was sporadic only, and did not amount to anything resembling a commercial arrangement.
In this case it is difficult not to be influenced by the in a sum exceeding what remained in his clients' hands, as to establish that the items “distributed” were gone, and could not be retrieved (or an equivalent obtained) so as to produce a fund to cover the provisions ordered. It was not possible for him to show the estate was completely distributed. He relied very much on Re McPherson (1987) 2 Qd.R. 394, which followed Donkin, but did not exhibit the special feature of Donkin (and other cases such as Re Terlier (1959) QWN 5) of the applicant requiring the indulgence of an extension of time. In McPherson, Easterbrook v Young (1987) 136 C.L.R. 308 was distinguished, and Re Whitta (1984) 2 Qd.R. 356, in which the High Court decision had been followed, was disapproved. Mrs Spender asked me to say that Re Whitta is correct, and other things being equal I would feel constrained to do so. The issue is whether estate assets which have got into the hands of a beneficiary have got beyond reach of the Court. In Queensland, at least where the applicant required an extension of time, a well established rule had developed that provision could not be ordered out of such assets. The Queensland approach has been unusual in Australia: Anthony Dickey, Family Provision after Death (Law Book Company 1992) pages 48-52.
In Easterbrook, the High Court said at 315:
“Testator's family maintenance legislation throughout Australia is in relevant respects in common form, the New South Wales Act being a typical example, with the consequence that the decision in this case will determine the meaning and effect of comparable provisions elsewhere in Australia.
...
In approaching the Act, we do so with the knowledge that earlier decisions have taken the change in the capacity in which the personal representative holds the assets left by the testator as ending the capacity of the court to interfere with the dispositions of the will or the statutory trusts applicable in the case of intestacy. In arriving at this result, judges have applied in the construction of the Act doctrines relating to the powers of the personal representative and the nature of the interest of the beneficiaries in the assets dealt with by the will.
The fundamental question to be decided, then, is whether the change in the capacity of the executor or administrator, if indeed in the latter case there is any such change, in whose hands or name the property remains is relevant to the construction of the Act.”
At page 320 the Court said:
“The dominant purpose of this legislation is to enable the court, in a sense, to prevent the operation of the will according to its terms in an appropriate case. It is because the will is operating unduly or unjustly in relation to the testator's family that the court is empowered to order maintenance, its order operating as a codicil to change the terms of the will and have them operate in a way different to that expressed by the testator. In relation to the exercise of executorial powers, it may be conceded that upon completion of the executorial duties and with the assent of the executor, the property devolving by the grant of probate on the executor has ceased for those purposes to be the estate of the testator. It has become the property of those to whom it is destined by the will of the testator. But, in our opinion, the Act in using the expression ‘out of the estate of the testator’ is not concerned with these settled doctrines. The words are used to indicate both he financial limits to which the court may go in making provision for those having unsatisfied claims on the testator and the source from which any provision so make shall be satisfied. It is, as we have said, that which the testator had to dispose of which is relevantly his estate. The court's power to make an order operative as a codicil extends to all that property, notwithstanding that in the case of an application made within the statutory twelvemonth it had been physically handed over or transferred to the intended beneficiary or beneficiaries. Of course, whether a court should disturb a distribution rests in the court's discretion, influenced no doubt by all the circumstances of the particular case. As indicated, the situation is different in the case of an application made out of time.”
Their Honours dealt with Donkin at 322-23, comparing the Full Court's acceptance of propositions “not seriously circumstance that the testatrix's home has been transferred to Larry, who is now the registered proprietor. As will appear, I find myself compelled to the view that the property has been placed beyond the reach of the applicants. Even if that view were wrong, it would be undesirable in the circumstances to make an order requiring the transfer of the property back to the executors or a sale of it. A good deal of trouble and cost would be involved. In my view the justice of a disposition which would leave Larry with enjoyment of the house property is plain. He appears to me to be without resources to purchase it or an equivalent property in the market. On the other hand, he appears to me to have access to community funded resources which provide an income for himself and his dependants. There is no reason to think this will not continue. What might otherwise be the entitlements of the applicants to proper provision from the testatrix's estate must be cut back to acknowledge Larry's stronger claims. Putting the Court in the position of the testatrix, I am of the view that what she ought to have done was provide Larry with the house and the applicants with the balance of the estate, Cheryl Rose being slightly favoured over Jennifer, whose position is more comfortable. I think that provision of $4,500 ought to be made for Jennifer Moody, $5,500 for Cheryl Rose Sangster. This does not give them the entire estate over and above the house, but some allowance obviously must be made for expenses. It seems clear that what the executors still control will not suffice to cover the payments ordered. It is open to the Court to cover this situation by an appropriate order against Larry Bacon under s. 41(5):
“The Court may at any time fix a periodic payment or lump sum to be paid by any beneficiary in the estate, to represent, or in commutation of, such proportion of the sum ordered to be paid as falls upon the portion of the estate in which the beneficiary is interested, and exonerate such portion from further liability, and direct in what manner it shall be invested for the benefit of the person to whom the commuted payment was payable.”
I took Mrs Spender to concede, on the basis of what Gibbs J. said in Re Donkin deceased (1966) Qd.R. 96, 113 that the provision is available only in a case where the Court has already made an order for provision. His Honour said at 114:
“The section does not empower the Court to make an order that a payment be made by a beneficiary who has received the property given to him by the will and holds it is his own right and thus no remaining interest in the estate of the testator (see also Re Terlier (1959) QWN 5).
In my view once an asset ceases to be an asset in the testator's estate, and the beneficiary to whom it is given has received it in his own right, there is no power to subject that asset to the incident of an order under the Acts, or to require the beneficiary to restore the asset to the estate or to make a payment in satisfaction of the order.
It was held by Hart J. in Re Lowe deceased (1964) QWN 37 that when the estate of a testator has been fully distributed there has ceased to be any estate out of which provision could be made in favour of an applicant under the provisions of The Testator's Family Maintenance Acts, and with respect I agree with that conclusion. I say nothing of course of the position that would arise if the distribution were made before six months had elapsed from the date of probate, or even afterwards with notice of an impending claim under the Acts.”
The present case, at least in respect of the house property and perhaps other items, is one of which his Honour was saying nothing.
Mr McGregor submits that the testatrix's estate is substantially distributed. He was not so much concerned to argue against making orders for provision for the applicants contested” unfavourably with an unreported New South Wales decision, Keys' case. Their conclusion, expressed at 324 was:
“It seems to us that in all the cases, except Keys' Case, insufficient attention has been given to the basic question of the construction of the words of the statute in the context in which they appear, including the evident purpose and policy of the statute. What is more, the cases do not contain any examination of the consequences which flow from an adoption of the views there expressed. We agree with the passage from Keys' Case to which we have referred. It is, in our opinion, incongruous to deny jurisdiction so soon as executorial duties are complete. To import into the construction of this legislation the technical considerations applicable to the determination of a personal representative's powers is, in our opinion, an unwarranted development because it involves a failure to give due weight to the purpose of the legislation and it results in a frustration, rather than a facilitation, of that purpose.”
If Easterbrook applies in Queensland, orders under s. 41 of the Succession Act for provision may be made by reference to the testatrix's estate as at the date of death. I think there is great force in Mrs Spender's argument that Easterbrook does determine the meaning of “the estate of the deceased person” in a sense radically different from what had been the Queensland understanding. In this context, and others, such as the Torrens System legislation, if I may respectfully say so, the Judges of the High Court appear to exhibit a disposition to construe broadly similar legislation found in most or all States to similar ultimate effect, where the Judges think that may appropriately be done, notwithstanding differences in terminology. If I had to tip what the High Court might do in the next case from Queensland, I would tip that the approach of Re Whitta will be vindicated. However, I am not in the position of having to chose between conflicting judgments of single judges of the Supreme Court. There is a Court of Appeal decision on the point, which clearly binds me. It is Steven Christopher Holmes v June Mavis Webb (O.S. No. 542 of 1980, judgment delivered 18th August 1992) in which the unreported reasons contain the following at pages 4-5:
“The appellant seemed to accept, and it cannot be doubted that final distribution to beneficiaries precludes the making of an order out of a deceased estate under Part IV of the Succession Act: See Re McPherson (1987) 2 Qd.R. 394. The position in other jurisdictions such as N.S.W., and the decision of Easterbrook v Young ... are to be distinguished on the basis of differences of relevant legislation.”
What follows is my reconstruction of the relevant legal history as shown in the Queensland cases. It may possibly be useful to assist someone to persuade the Court of Appeal to a different view. As I have noted already, the idea that distribution of the estate defeats a claim for provision arose in cases of applications made out of time. In O'Connor (1931) QWN 39, leave to proceed out of time was granted under s 3(8) of the Testators' Family Maintenance Act 1914 but the incidence of the provision made was limited to those beneficiaries who had not been paid. In Re Terlier (1959) QWN 5, again, application had not been made within the period of six months from the grant of probate; Townley J exercised his discretion against extending time, as no more than £70 remained of an estate of £37,000; for other reasons, too, the application was seen as facing difficulties. The six months period in Re Lowe (1964) QWN 37 expired on 12 May 1963. The applicant wrote to the administrator on 23 July 1963 inquiring about the estate and when she could expect to get her share. The operative answer of the informative response was “in the near future”, and a final distribution was made (the applicant's own third share of residue included) on 5 August 1963 exactly a month before the application was filed. On 16 September 1963 a Judge made an order extending time. Hart J refused to make any provision “because there is now no estate of the testator out of which it can be met”. His conclusion was preceded by these comments:
“...‘The Court may ... order that such provision as the Court thinks fit shall be made out of the estate of the testator...’. There is no provision in the Queensland Act corresponding to s. 3(1) of the English Inheritance Family Provisions Act of 1938 (L.R. Statutes 1952 p. 1375) which is as follows ‘Where an order is made under this Act then for all purposes ... shall have effect and shall be deemed to have had effect as from the deceased's death, subject ...’.
But I think the applicant's case breaks down in limine because the ‘estate of the testator’ in the Act means the estate as existing at the time of the proceedings, not any estate which might be created by the making of an order. In my view when an estate has been distributed there has ceased to be any estate of the testator out of which provision can be made. The fictitious persona is no longer regarded as the owner. The former estate of the testator has become the property of the beneficiaries. It may not however be true to say that there is no longer any jurisdiction to make an order because there is always the possibility that further property will fall into the estate.
If, when there were possible claimants, an estate were distributed within the six months' period or after an order extending the time had been made, different considerations might arise. In this judgment I have not been considering such a case. Even if the executor was a man of straw it may be the beneficiaries have a remedy. A court might say that property distributed in such a cae was not rightly received in the first instance and that such property still remained part of the estate of the testator for the purposes of the Act because it contemplates there shall be no such distribution.”
Those single-judge decisions won general approval of Gibbs J in the Full Court in Re Donkin (1966) Qd.R. 97. An appeal was allowed against an order extending time some 9½ years after probate. The applicant's six months' delay after hearing of his rights was fatal in the view of Mack J, who said at 102:
“The Acts contemplate that all applications should be made ordinarily within six months from the grant of probate obviously so that the estate can be distributed and the various beneficiaries would know what were their rights and have the ability to deal with their interests”.
Hanger J. said, at 110:
“Jeffriess J. held, as I understand his judgment, that the executors had not completed their executorial duties and had therefore not begun to hold the residuary estate as trustees. He concluded, I assume that there was still existent an “estate” in respect of which an order might be made in favour of the respondent, and he exercised his discretion to allow her to make an application notwithstanding the long period which had elapsed since the grant of probate.”
His Honour's final paragraph, at 112 was:
“I think that there is now no estate in the hands of the executors as such against which any order can be made. That once the executors have distributed the estate, there is no estate in respect of which an order can be made, has been laid down by a number of cases, and the correctness of this ruling, it is now too late to question.”
The judgment of Gibbs J has been the most influential; it concluded at 123:
“I conclude therefore that at some time before the application was made in the present case the executors had been stripped of their title as executors and clothed with a title as trustees (to use the language of Eve J in Wise v. Whitburn (supra) at p. 468). The estate had ceased to be the estate of the testator and had become in equity the estate of the appellant subject to the charge in favour of the respondent. There is therefore no estate of the testator out of which an order under The Testator's Family Maintenance Acts can be made, and since for that reason an application under these Acts must fail the application for extension of time should be refused.”
Andrews J distinguished Easterbrook v Young in Re Postle OS 796/81, 4.12.81, unreported) on the ground that it depended on the inclusion in the New South Wales legislation under consideration of a provision giving “every provision made” the effect of a codicil made by the deceased immediately preceding death. His Honour's view was that this gave a court “wider powers...to make...provision notwithstanding the state of administration of the estate”. Terlier was followed. The application failed because the asset in question was real property devised directly to beneficiaries, there being no intermediary titleholder such as a personal representative or trustee. The outcome appears to me to owe much to the notion that because the realty passed directly to the devisee, it was at no material time part of the estate. By the time of this case, the provisions of the Testators Family Maintenance Act had been moved to the Succession Act 1867. The unavailability of directly devised realty to satisfy orders for provision came to an end when s. 45(11) of the Succession Act 1981 came into effect. It does not appear from the reasons whether the application in Postle was in time or not. I would assume it had been brought early enough so that no extension of time was needed.
Postle thus may appear to represent the first occasion when a timely application failed or may have failed because there remained no assets in the estate from which provision could be made. There had been such a case in New Zealand, Re Lerwill (1955) NZLR 859, which was noted by Gibbs J in Donkin as part of a group of cases (the others without the feature that the application was timely). It is not entirely clear whether Gibbs J's statement at 117 that “the New Zealand cases should be followed” applies to all of those cases or to the group which Barrowclough CJ followed in Lerwill. I consider that a more limited approval was being conferred, given the statement at 114 that nothing was being said of cases where a distribution occurred while the time for making of a TFM application was yet to run out.
Lerwill was an unusual case in that the parties had agreed, as Gibbs J noted, that the early distribution was justifiable. Barrowclough CJ seemed to harbour suspicions on the point, and took the opportunity to warn executors against early distribution; he thought the explanation might lie in the applicants themselves having been beneficiaries and encouragers of the early distribution.
Carter J distinguished Easterbrook v Young in Re Burgess (1984) 2 Qd R 379, allowing an appeal from a Master's order extending time; his Honour said (without more) that he agreed with Andrews J that the New South Wales legislation was significantly different; he did not dispute that devised realty could be made available as the source of provision, citing Re Hargraves (1955) St R Qd 601, a Full Court decision which shows that s 45(1) may not have been strictly necessary, although doubtless its existence makes recourse to devised realty appear an easier proposition. See (1955) St R Qd 601 at 607:
“If the only assets in an estate were an unproductive piece of land which had been devised to a stranger in blood, could not the court order it to be sold and the whole of the proceeds applied either as a lump sum or by periodical payments for the maintenance and support of the testator's widow?
Cases must occur in which the court can only do justice in the proper making of an order by depriving some devisee of realty as well as some legatee of money or other form of personal property. I cannot bring myself to think that the court was either intended to be or has been left powerless in cases involving realty. On the contrary, I think that the court was intended to have and has the power in a proper case to deprive a devisee of realty and bestow it on an applicant widow, husband, or child.
Nevertheless, I think this is a power which should be used with caution and with anxious care to avoid the ultimate enrichment of persons to whom the testator owed no moral duty and who are other than those selected by the testator as the object of his bounty.
I can see no difference in principle between depriving a legatee of £2,000 in cash and a devisee of a piece of land worth £2,000. But each case should be given the closest scrutiny to determine whether it is necessary entirely to oust the devisee or merely to postpone his enjoyment in favour of a life interest in the applicant.
(In Ellis v Leeder ([1951] 72 C.L.R. 645), the High Court of Australia found no reason for insisting on the principle that the court had no jurisdiction to deal with realty).
I am of opinion, therefore, that Matthews J. could have validly given Oliver the realty in the estate if circumstances as disclosed by the evidence warranted such an order.”
Townley J agreed with the judgment, as did Hanger J in this respect (617).
Carter J said he would refuse the application in Burgess solely on the ground of delay since the death of the deceased, on 24 December 1959. The applicable legislation would appear to be the 1914 Act. The Succession Act 1981 had come into effect but applies only where death follows its commencement.
The change in legislation thus arising may be significant indeed in the present context. It remains the position that provision is to be made “out of the estate” of the testator (now “of the deceased person”). The condition upon which provision may be made, however has changed. It used to be “if any person dies leaving a will and without making therein adequate provision”.
It has become : “if ... in terms of the will or as a result of intestacy adequate provision is not made from the estate”. The present provision postulates an estate which is to be identified at the date of death. It is difficult to understand why (without some other consideration intervening) that estate would be something different from the estate out of which provision may be ordered. The High Court's view in Easterbrook was that the purpose of the legislation (“throughout Australia ... in relevant respects in common form”) was “to place the assets of the deceased passing to the personal representative at the disposal of the Court”. I have yet to set out what the Court said at 317-8:
“The Act fixes a twelvemonth from the date of the grant of probate or letters of administration as at the time within which an application for an order of maintenance may be made. There is the possibility, unlikely though it may be, that application will be made, heard and decided within that twelvemonth. Another possibility is that the application may be duly made within the prescribed period but heard and decided long after the expiry of the twelvemonth. The making of an application does not stay the administration of the estate and, in some cases at least, administration must progress in order to expose the available value of the assets left by the deceased, whether by realisation of property or by resolution of disputed debts or claims. The power to make provision out of the state of the testator is referable to a state of affairs at the time the order is made. Therefore, between the date of application and the date of the court's order upon it, administration may well have been completed: and, in a testate estate, assent made. On the view taken in the decided cases, no order could be made though the application was made in due time.
Again, one can envisage the will of a testator who leaves no debts beyond funeral expenses and who, by reason of the exempt nature of the gift of his whole estate to charity, leaves an estate not subject to death or estate duties. In such a case, even within the twelvemonth of the grant of probate, the executor would have become a trustee for the charity. If we suppose that the testator has left a widow with considerable claims upon his bounty, on the interpretation which has so far been placed upon the words ‘out of the estate of the testator’ and the word ‘distribution’, no order could be made for the maintenance of the widow. Yet we should have thought that the Act was pre-eminently designed to cope with this very situation.
In our opinion, the expression ‘out of the estate of the testator’ refers to the assets of which the testator might at his death dispose and which have come or could come to the hands of the personal representative by reason of the grant of probate or letters of administration. When an application is made in time, it is out of these assets that provision may be made by an order operating as a codicil made by the deceased in his lifetime, even if, at the time the order is made, those assets have been distributed to the intended beneficiaries. In such a case, the limitation appearing in s. 5 (2A) is not operative. Section 11 denies operative effect to the distribution. But, of course, by reason of its terms, it is otherwise, and quite understandably so, when an extension of time is sought under that section. In that case, only a complete removal of the whole of the assets of the deceased from the hands or name of the personal representative will prevent the court extending the time for making an application for an order of maintenance. An order made in consequence of an extension of time shall not disturb an actual distribution made before the extension of time was applied for.”
The next reported Queensland case is Re Oakley (1986) 2 Qd R 269 which concerned the Succession Act 1981. Although the headnote records that Easterbrook was “distinguished”, Thomas J said no more than that he found it “difficult to apply directly the reasoning” (274). The applicant who was seeking an extension of time failed because he did not come within the definition of “stepchild”.
Re McPherson (1987) 2 Qd R 394 is the case which leads to present difficulty as to my following Easterbrook. The headnote this time is correct in stating that Connolly J distinguished it. The applicant was (barely) in time, but within weeks of the testator's death, the applicant's solicitors notified his intention (or possible intention) to apply. The application was not made for eight months, by which time transmission by death of the realty (the only significant asset) to the sole beneficiary had been lodged and registered in the Real Property Office. Those steps happened within three months and five months respectively of the death, and after the applicant had been notified in advance that they would occur. The respondent submitted there was no estate. His Honour said at 396:
“The realty having been transferred beneficially to the devisee, there would seem, prima facie, to be considerable force in this submission but my attention was directed to the decision of Shepherdson J. in Re Whitta in which it was held that where an application under s. 4(1) of the Succession Act is made in time an order under that provision may be made although the assets have passed to the beneficiaries in their own right. The learned judge felt constrained by the decision of the High Court in Easterbrook v Young to this conclusion. This makes it necessary for me to examine that decision as also the decision of the Full Court in Re Donkin Deceased; Riechelmann v Donkin”.
His Honour went on at 397-8:
“Easterbrook in fact turned on particular provisions of the Testator's Family Maintenance and Guardianship of Infants Act 1916 (N.S.W.) which have no counterpart in the Queensland legislation. The New South Wales Act provided (s. 4(1) and (2)) that an order should operate as a codicil or as a modification of the statutory trust on intestacy; and that, although the personal representative should not be liable for distribution after due notice (s. 11(2)) the court might nonetheless order provision out of the assets which had been distributed (s. 11 (3)). As to the first, the court observed, at 315:
‘Because the court's order has effect as a codicil, the property out of which provision may be ordered includes property which but for the order, would have beneficially owned either wholly or partly by donees under the will or next of kin under an intestacy.”
As to the second, at 316 it is said:
‘Again, an actual distribution of the deceased's property to persons beneficially entitled thereto shall not preclude the making of an order, even out of the distributed assets. Section 11(3) is explicable only on that footing. The Act in so providing assumes that the sub-section at least covers the case where executorial or administrative duties have already been fully performed before such distribution has taken place.’
These points were obviously critical for the decision of the High Court. There is nothing to this effect in the Queensland statute and the statement at 315 that the legislation of the States is, in relevant respects, in common form, so that the decision would determine the meaning and effect of the relevant legislation in all States, must be regarded not only as obiter but as based on a misconception. This view has been taken in a number of decisions in this court, notably Re Postle and Re Burgess. It follows, in my respectful opinion, that the contrary view expressed in Re Whitta would be open to question even if that had been a case in which the assets were still held by the personal representatives, albeit as trustees rather than executors or administrators.
The actual decision in Easterbrook was that the court had jurisdiction to extend time where realty, which was the principal asset, remained in the hands of the personal representative, albeit as trustee for those entitled upon the intestacy of the deceased. The reason is shortly given at 316-7:
‘The contrast of s. 11(3) read with s. 3 and s. 5 (2A) is, to us, eloquent of the policy of placing within the power of the court under s. 3 all that passed to the personal representative on the grant of probate or letters of administration. Bearing in mind the nature and purposes of such legislation, it is our opinion that the disabling circumstance in s. 5(2A) is the actual distribution of the estate, its removal from the hands or name of the personal representative and its placement in the hands or name of the testamentary or statutory beneficiary.’
It may be seen that strictly speaking neither Easterbrook nor Donkin governs the case before me. In neither was it doubted for a moment that actual final distribution to the beneficiaries precluded the making of an order. In Donkin this was for the reasons already set out from the judgment of Gibbs J. In Easterbrook it was because s. 5(2A)(a) expressly so provided. It follows that an order for extension of time could not properly be made in this situation, there being no longer “an estate of the deceased person” for the court's order to operate on in terms of s. 41(1).”
With respect to his Honour I have more difficulty in setting at nought the High Court's deliberate injunction that its determination of the meaning of “out of the estate” should apply Australia-wide. Their Honours (at least Barwick CJ and Mason J, who sat in Boyce v Humphreys (1974) 48 ALJR 228 may be taken to have had some familiarity with the Queensland legislation as it then existed); further they most deliberately disapproved the reasoning and conclusions in Donkin of Gibbs J, who was by then a senior colleague of theirs.
In McPherson Connolly J blamed the trustee for the situation, for having “distributed” before the time for bringing of an application under s. 41 of the Succession Act elapsed, notwithstanding that a notice of intention to apply had been given and lapsed. His Honour clearly contemplated that the executor was at risk of proceedings for distributing early, at the same time indicating factors which may provide a defence. Similar features may apply here, although the executors did not act before the time indicated in s 44(3); here there is the added feature that a caveat against registration of the transmission was lodged, then withdrawn, to permit registration, the circumstances being much too obscure for me to assess the significance of it all - in any event, no claim against the present executors is before me.
My reading of Easterbrook is that the meaning assigned to references to the “estate” did not depend upon the presence in the New South Wales legislation of the special provisions which have no counterpart locally. The central provisions in New South Wales were described by the High Court at 312 as follows:
“By s. 3(1) of the Act, where a person disposes of his property by will in such a manner that his widow, husband or children ‘are left without adequate provision for their proper maintenance, education, or advancement in life’ the court may ‘order that such provision for such maintenance, education, and advancement as the court thinks fit shall be made out of the estate of the testator for such wife, husband, or children, or any or all of them’.
By s. 3(1A), the court is given similar power to make orders out of the estate of a person who dies intestate and has left his widow, children or any or all of them without adequate provision for their maintenance, education or advancement in life.”
In argument, this case was presented to me as involving a choice between Re McPherson and Re Whitta which more closely reflects my understanding of Easterbrook. In my respectful view it was a strong thing to throw out in lumine the claim a daughter made in time because the estate had been prematurely distributed. As the Full Court contemplated in Hargraves, likewise Hart J in Re Lowe and perhaps the High Court in Easterbrook at 320-321, means are doubtless available for divesting beneficiaries of distributions made to them where that is just. In respect of “Donkin” distributions completed by the executor becoming trustee, such a step was taken by Judge Nase when faced with a problem similar to mine in Re William Henry Corneal (Application 3/94, Rockhampton, 13 October, 1994, unreported). Shepherdson J was asked his advice under s. 178 of the Public Trustee Act 1978 whether the trustee should appeal; the trustee was advised not to (as well as being denied an order for costs out of the estate): Re WH Corneal (OS 884/94, 4 November 1994, unreported). His Honour said “This is not the case in which to try to persuade the Court of Appeal that a decision of the High Court of Australia can be distinguished”.
Presumably unknown to Shepherdson J. and Nase DCJ, the Court of Appeal already had distinguished Easterbrook in Steven Christopher Holmes v June Mavis Webb (OS 542/89, 18.8.92, unreported, affirming Byrne J's decision of 26.11.91, unreported). Again, a timely application failed on the ground that the estate had been distributed. The question of the authority of Easterbrook was relevant in a minor respect, and perhaps as an alternative ground for the decisions at first instance and on appeal.
The dispute was really about whether certain substantial assets were part of a partnership business so as to become part of the estate, or whether (as was found) they were truly held in joint tenancy by the testator and his widow and so went to her by survivorship, never forming part of the estate. Any notion that the lady could have been holding assets trust for herself was rejected. Byrne J had this to say:
“In addition to denying (i) any relevant partnership and (ii) that jointly owned assets were purchased with partnership funds, the executrix alternatively contends that any relevant interest which did not pass to her by right of survivorship has, since the death, become her own separate property. Put shortly, this alternative case is that any right the testator had to a prospective share of the surplus after realisation of the assets and the discharge of the liabilities of any partnership (see F.C.T. v. Everett (1980) 143 C.L.R. 440, 446-447) has, by her conduct as executrix, devolved on her as sole beneficiary and therefore is not available to satisfy the applicant's claim: see Re McPherson [1987] 2 Qd.R. 394; Re Oakley [1986] 2 Qd.R. 269, 273-274.”
What the Court of Appeal had to say is set out at page 14 above. The reasons do not suggest that any particular attention was paid to Whitta or Hargraves, or the point of view opposed to McPherson which I have endeavoured to canvass above. Indeed, the Court of Appeal indicated there was no argument at all. Be that as it may, in my view certainty of the law in Queensland requires that I apply the Court of Appeal's view. Easterbrook is a higher authority, but the proposition I believe I find asserted there that what was said applies in Queensland has been superseded for my purposes by the different view now declared by the Court of Appeal, a view I am bound to apply. I understand the Court of Appeal to say that an application under s. 41 made in time will fail if the estate has been distributed (however prematurely) by the time the application is made and perhaps even by the time it is heard. This places a premium on those intending or considering applying taking steps to prevent distribution as soon after death as possible.
I reach my conclusion with some regret. The executors knew from the end of August 1993 that the applicants were likely to bring their application, although their solicitor's letter received by the executors' solicitor on that date probably does not amount to notice of an application. Before the application was filed, documents were lodged in the Titles Office which would be effective on registration to transfer the house property to Larry. I know that a caveat was lodged to prevent registration, and that for some reason the caveat (about which I know nothing) was withdrawn to permit registration of transmission by death on 9th December 1994, while the application was on foot. I do not think that withdrawal of the caveat, assuming it to have been the applicants' caveat, could be taken in the circumstances as consent by the applicants to the transmission being registered.
Mr McGregor submitted that after lodgment of the documents in the Titles Office, nothing could have been done to prevent registration. I found it difficult to accept that the documents could not have been withdrawn and invited submissions from the parties on the subject. Since then the following submission from Mrs Spender has been forthcoming:
“1. Within the period 12 January 1994 (when the Transmission Application was lodged on behalf of the beneficiary, LARRY BACON) and 24 April 1994 (when the “Land Title Act 1994” came into effect), it is submitted that withdrawal of the Transmission Application was permitted pursuant to the following provisions of the ‘Real Property Act 1861 - 1988’ and the ‘Real Property Act 1877 - 1988’:
- (i)Section 32(2)(b) of the ‘Real Property Act 1877 - 1988’ provides that an application for Transmission by Death may be made by a person beneficially entitled to an interest in land by virtue of a devise to that person contained in the will of the registered proprietor of that land.
- (ii)Section 33 of the ‘Real Property Act 1877 - 1988’ provides that the several provisions of the Principal Act respecting applications to bring land under the provisions thereof shall, so far as the same are applicable, extend and apply to all applications made under s. 32(2) of the 1977 Act.
- (iii)Section 29 of the Principal Act, the “Real Property Act 1861 - 1988”, provides for the withdrawal of applications to bring land under the provisions of that Act.
- (iv)Section 113(1) of the “Real Property Act 1861 - 1988” provides generally for the withdrawal of instruments or documents lodged for registration in the office of the Registrar of Titles.
- Within the period 24 April 1994 and 9 December 1994 (when the devised land was registered in the name of LARRY BACON), withdrawal of the Transmission Application was permitted pursuant to Sections 30(2) and 159(1) of the “Land Title Act 1994”.
I accept that submission as establishing that it was open to the executors and/or to Larry Bacon to impede the progress to registration of the transmission documents.
The placing of the house property and its value beyond the applicants' reach, on the basis of the non-applicability of Easterbrook in Queensland, seems to me to have been an inappropriate course of action, having regard to numerous authorities including Re Simson deceased, Simson v National Provincial Bank Limited (1950) 1 Ch. 38, 42, discussed in Re Whitta at 364-5; in this connection see also Lerwill and McPherson. As Mr McGregor says, however, if the executors have done wrong, that is not of any concern in these proceedings, and will have to be explored, if ever, in other proceedings in which the effect of s. 44 of the Succession Act will fall to be considered. That s. 44 may provide a defence does not, in my view, establish that the executors acted properly. The executors' solicitor swears that it was not until 12th January 1994 some hours after lodgment of the transmission documents, that he received advice (by telephone) that the application would be made.
I propose, by way of provision pursuant to s. 41(1) of the Succession Act, to order that the executors pay from the estate of the testatrix (to the extent it is still in their hands) $4,500 to Jennifer Moody and $5,500 to Cheryl Rose Sangster, each sum to be reduced by the same proportion if the estate assets are insufficient. I indicate my willingness to make an order under s. 41 (5) to the extent of the value of chattels which the executors may still hold. So far as costs are concerned, I will hear the parties, but say that my inclination is to try to achieve what I see as the interests of justice by declining to follow the common course of ordering the costs of all parties out of the estate, which here would simply serve to destroy the provision ordered for the applicants. In my view, subject to submissions, the just order is that the costs of all other parties be taxed and paid by Larry Bacon, who has been the beneficiary of what seemed to me unjust actions on the part of the testatrix and the executors. In my view he ought to have recognized the validity of the applicants' case, without forcing them to litigation. His primary submission before me was that the testatrix's wishes (which I have found inappropriate ones) should be carried into effect.
It is the case that I have located and considered a good deal of material that was not mentioned by anyone at the hearing. In the circumstances, I am willing for any of the parties to make further submissions, which would include submissions calculated to show that the outcome as presently foreshadowed in these reasons ought to be different.