Stuart-Weedman v Weedman[2013] QDC 86

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   On 9 May 2008, Victor Frederick Weedman died. By his last Will and Testament dated 11 September 2006, he, in the circumstances applicable here, appointed his second wife, the respondent, as his sole executrix. They had been married on 19 October 2003. She was, having survived him for 30 days, the sole beneficiary: see Clause 2.

2. [2]
   The applicants are the children of the deceased, though from his first marriage. Although a Notice of Intention to make a claim pursuant to Part 4 of the Succession Act 1981 (“Act”) was made on behalf of the male applicant, through his solicitors’ letter dated 25 July 2008, no such application was instituted by either applicant within nine months after the death of the deceased.

3. [3]
   Both applicants now seek that the court exercise its discretionary power, pursuant to s 41(8) of the Act, to direct that the family provision application, pursuant to s 41(1) of the Act, be heard out of time.

4. [4]
   This Originating Application was filed on 22 March 2013, almost five years after the deceased’s death and just over four years after the limitation period expired. The executrix opposed the application for extension.

Background

5. [5]
   Both applicants sought advice from their respective solicitors within the limitation period. As already indicated, the male applicant caused a Notice to be given in late July 2008. The relevant solicitor was G R Brown. The basic advice given by that solicitor to the male applicant was contained in a letter dated 15 July 2008. Among other matters raised about the value of any action brought was the issue of “the size of the Estate” and the accompanying necessity to “ascertain the net value of the Estate”.

6. [6]
   The letter written by the then solicitors for the executrix, Rod Holloway & Co, dated 31 July 2008 to G R Brown, after referencing the relevant notification letter, advised that “on our client’s instructions there were no assets” of the deceased. Then, after making reference to other matters (including the existence of only a caravan), the letter stated that there were “no other assets of the Estate” but that if the male applicant was “curious” as to a “prospective action that the deceased had brought against his employer” for “asbestosis”, Murphy Schmidt Lawyers had conduct of that case. It then expressed the belief that “because the death certificate did not list asbestosis as the cause of death his action has been defeated” (emphasis added). The letter concluded by stating that it is “trust(ed)” that the response “answers your client’s concerns” (emphasis added).

7. [7]
   For the female applicant’s part, she received a letter from her then solicitors, Mackey & Wales, dated 25 July 2008 referring to the matters, besides eligibility, that would be taken into account. Amongst those were the “value of your father’s Estate” and the “competing claims on your father’s Estate”. The letter then advised that, unless the deceased then held “any other substantial assets in his name solely”, it was their “view” that the costs of making such an application would “far outweigh what is available to claim upon”.

8. [8]
   It could not be denied by the applicants that each knew that there was a relevant timeframe from the date of the deceased’s death to make any family provision application.

9. [9]
   As is obvious, neither applicant instituted such an application before 9 February 2009.

10. [10]
    For the male applicant, his explanation for the delay was that the advice, as he understood it from Mr Brown, was to the effect that, “in light of the size of the Estate” it was likely that, to pursue any claim, he would have to spend more in legal costs than any potential return and, “more importantly”, he could spend more than the value of the entire estate in legal costs. This had the consequence that, in accordance with such advice and in light of his own financial position at the time, he did not take the matter further. The stated background included the fact that Mr Brown did not advise him to make any further inquiries of Murphy Schmidt regarding the “compensation claim” which he believed “would not be pursued on behalf of the Estate”. There was no challenge to the honesty of that belief.

11. [11]
    For her part, the female applicant explained that her reasons for delay included, importantly, that, based on the advice of her own solicitors, based on information passed on by the male applicant from his solicitors, and based upon previous discussions with the executrix about the deceased’s assets, she formed the view that any further action “would involve significant costs in an estate that only consisted of an on site caravan”. That last conclusion was bolstered by a “trust” by her in what the executrix had told her, namely, that “there was not a lot of money in the deceased’s Estate”, a belief that she continued to hold up until (presumably) late January 2013. Again, this was unchallenged.

12. [12]
    It is clear from the executrix’s own affidavit that, at the date of the deceased’s death, the “only significant asset” of the estate was a caravan. Her belief, held after the death of the deceased, was that the estate was “not significant”. With respect to the “damages claim”, the executrix recalled a conversation that she had with the deceased before his death in which he told her that he had obtained “advice” from Murphy Schmidt that it would be “unsuccessful” because “the doctors could not prove that he suffered from mesothelioma”. She further stated that it was, therefore, her “understanding at this time and in the period” after the deceased died that “he would receive no compensation for his medical condition because it could not be proved that it was mesothelioma”. Additionally, she stated that: there was “no intention” on her part as executrix to pursue a compensation claim based upon the communication to her about the legal advice that the deceased had received; and this led her to the conclusion that she “did not believe that a claim could be pursued” and that she “continued to hold this belief until September 2011”.

13. [13]
    It is also clear from both the executrix’s affidavit and the affidavit of Kylie Deanne Shaw, a solicitor in the employ of the executrix’s solicitors, that no information (concerning any potential, or received, statutory compensation - or damages resulting from any claim made by the deceased against his employer or any relevant statutory or other insurer for any dust disease) had been notified by the executrix or her solicitors to either of the applicants, in any way, prior to early February 2013, much less that there was any merit in any such prospective statutory claim or cause of action. As deposed to by the executrix (also the sole beneficiary) for her own part, the reason for this embargo was “because (she) had received legal advice not to discuss the compensation case before it was resolved”- even though it was resolved many months before early 2013.

14. [14]
    Accordingly, it can be found that the representation made by the executrix’s then solicitors in late July 2008 that there were “no assets” other than the caravan had been allowed to remain uncorrected, through it had been premised on a known false basis for some considerable time from September 2011 until early February this year, a period of approximately 16 further months. It must be remarked at this stage that the “net proceeds” that were received from the claim “available to the estate” and actually made by the executrix, in an application for workers’ compensation “for the deceased’s condition of mesothelioma”, were $428,640.00, having been paid over on or about 4 September 2012. It is unnecessary, given the other factors discussed, to determine whether the respondent’s failure to correct the falsity does constitute relevant unconscionable conduct.

Substance of applicants’ claim for family provision

15. [15]
    Neither in the written Outline of Submissions made by the respondent nor in the respondent’s learned counsel’s oral submissions was there any contention that the applicants did not have a claim for family provision that would satisfy the requirement of the “probability” that the applicants would succeed to some extent: see Hills v Chalk,^[1] per Keane JA at 424-425 [31]-[35] and per Muir JA at 434 [75]-[77]. In any event, the contentions set out in paragraphs [40]-[49] of the applicants’ written Summary would have satisfied the Court of that probability had it been in contention.

Relevant authorities

16. [16]
    In Curran & Ors v McGrath & Anor,^[2] Muir JA, with whom McMurdo P and White JA agreed, referred to the earlier authorities of Bird v Bird^[3] and Hills v Chalk to the effect that:

• time limits in statutes exist for a good reason;
• this time limit is a substantive provision and not a mere procedural time limit imposed by rules of court (which would be treated with the indulgence appropriate to procedural rules);
• the burden on an applicant is no triviality, with the applicant required to make out a substantial case for it being just and proper for the court to extend its statutory discretion to extend the time;
• such a time limit as this has the obvious purpose of ensuring that an application for further provision from an estate does not unduly interfere with the estate’s prompt administration; and
• there is also the consideration that persons named as beneficiaries in the will should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against the estate;

: at [58]-[59].

17. [17]
    The relevant general principles are set out in a number of cases. As stated by Wilson J in Enoch v Public Trustee of Queensland,^[4] while the court has an “unfettered discretion” whether to extend the time for making an application such as this, the onus which is imposed on an applicant is to establish sufficient grounds for taking the case outside what is not merely a procedural time limit but a substantive one imposed by the Act, with four relevant factors being:

• whether there is an adequate explanation for the delay;
• whether there will be any prejudice to the beneficiaries;
• whether there has been any unconscionable conduct by the applicant; and
• what the strength of the applicant’s case is;

: at 145 [6]. See, also, Curran & Ors v McGrath,^[5] at first instance, at [3]. There would appear to be no reason why, in relevant circumstances, the unconscionable conduct of an executor might not also be relevant: see the reference to Massie v Laundy in Burton v Moss.^[6]

18. [18]
    Moving from those more general principles to specific questions raised in this application, McMeekin J, at first instance, in Curran considered the issue of relevant assumptions. As expressed by him, from the expiration of the time limit provided for by the Act, the executors were entitled to assume that no application was to be pursued: at [28]. That was in the context of the final view that he had formed that the assets of the estate had been largely dealt with, that the beneficial ownership was transferred, and that all that remained were assets which fell into the residuary estate “against which no order can be made beneficial to the applicants or that are too insignificant to justify any application”: at [32]. It was in that context that he then moved to make the obiter comments he did about discretionary matters: at [33].He concluded that his view was that there was no adequate explanation for the delay there, noting, not only that the applicants were legally represented within the nine month time limit and that no applicant had sworn that the applicant was unaware of the existence of the time limit, but also that an explanation advanced on behalf of the applicants was that they were advised that until certain proceedings earlier brought were finalised, then the family provision claims could not proceed because of the size of the deceased’s estate depended upon the outcome of those proceedings: at [36]-[38]. It was in such a context that McMeekin J then concluded that the case in question “should be determined on the basis that each applicant whilst well aware of the existence of the statutory time stood by, let it pass, and permitted the executors to operate under the assumption that no applications were to be brought”: at [36]. It should not be left unremarked that the further context in which McMeekin J stated that an assumption that the effect of their mother’s action might be to reduce the Estate to nil did not justify inaction on their part was made where he also stated that it “may have been a different matter if their certain belief was that the Estate was worthless”: at [40]. But he found that the highest that it could be put was “that they were uncertain of its value”, leading him to conclude that he was “doubtful” that “mere uncertainty can justify delay”: also at [40]. Finally, McMeekin J held that it was significant that the applicants were each aware that the executors were actively discharging their executorial duties throughout that long delay in that they were dealing with the litigation brought against the estate by the applicant’s mother, concluding that any executor would wish to know of the existence of outstanding claims against the estate in those circumstances and finding that the executors had deposed that the absence of such claims “encouraged them in their view of the best way to resolve the widow’s claims”: at [42].

19. [19]
    In the much earlier decision of Re Lauer, deceased,^[7] Young CJ reached the conclusion, in the circumstances of that case, that a deterioration in an applicant’s financial position cannot of itself be a ground for granting an extension of time and - more relevantly for the case here - that the fact that the value of a testator’s estate has been inflated beyond what might have been expected at the date of death equally cannot be a ground for granting an extension: at [185]-[186]. In so concluding, Young CJ noted that, in deciding whether an applicant has made out a case for provision, the Court is bound to consider the likely effect of inflation: also at [185]-[186]. The second of the two conclusions expressed above was rephrased, for the purposes of emphasis, as being “that a mere increase in the value of an estate or of a specific item of property in the estate cannot … provide a reason for excusing an applicant from the effect of non-compliance with the time limit laid down in the statute”: at [186] (emphasis added). The case was concerned with a known, but much lower valued, asset, as at the testator’s death some 18 years before. A case much closer to the present one is Fyffe and Anor v Fyffe^[8] where Bongiorno J found that, there, “(a)t all times until quite recently it was believed that the estate of the deceased was insolvent and that no application would yield any result”: at [16]. He referred to Re Lauer, deceased in circumstances where the extent of the estate “could not be known until the fate of the AXA Superannuation payment was known”: at [11]-[13].

20. [20]
    As understood by Macready M in Zirkler v McKinnon,^[9] Re Lauer was one of a number of cases “where a change of heart has not been held to be a sufficient reason” to extend the time limit. See, also, Burton v Moss at [53]-[58].

Nature and control of relevant discovered asset

21. [21]
    Although there are passing references to “damages” and “personal injury” in affidavits and correspondence, the only hard evidence strongly suggests that the only “claim” was the application for workers’ compensation originally made in 2007 to which the WorkCover Queensland letter of 7 November 2007 responded. The only person who has had control of the administration of the deceased’s estate is the executrix. Since the death of the deceased, it has been, thus, in the hands of the executrix to decide whether or not to pursue any estate-based claim for compensation under the relevant Workers’ Compensation legislation and to obtain information from retained solicitors of the deceased as to prospects of success at relevant times. Clearly, from the affidavit material filed here on behalf of the respondent, she never had any intention to pursue the compensation claim right up until 15 September 2011 when she received an email from a law firm (other than Murphy Schmidt) “in relation to a possible compensation claim available to the estate against compensation trust funds set up by American asbestos companies”. She did not retain Murphy Schmidt and did not even retain her existing solicitors until on or about 4 June 2012 to act on behalf of the estate in such a claim. It was only following that, on 28 August 2012, that WorkCover Queensland accepted the claim for compensation “because of (the deceased’s) condition of mesothelioma”.

Resolution

22. [22]
    As quite correctly conceded in the respondent’s Outline of Submissions, each case must be dealt with on its own facts.

23. [23]
    Given that there has been no demonstrated prejudice to the sole beneficiary (the executrix), given that there is no issue of any moment raised by the respondent concerning the strength of the applicants’ cases, and given that there has not been any “unconscionable conduct” alleged against the applicants, the central issue to be determined is whether there is any adequate explanation for the delay. This is in circumstances where “prompt” administration has only now required an application for the granting of probate.

24. [24]
    It is difficult to see what other legal advice the applicants could have received, given all the information known (especially to the executrix) at the very time that the limitation expired in early February 2009, which would have been anything materially different from what they did, in fact, receive. The negative indication about the “defeat” of the compensation claim - now reinforced by WorkCover’s letter in late 2007 - and the non-existence of any material providing an evidentiary basis for inferring that a further inquiry of Murphy Schmidt might, even possibly, have been productive, led to the inevitable outcome of all relevant parties leaving the claim idle, if not dead. The Death Certificate does not refer to mesothelioma but, rather, to a condition not recognised as asbestos-related disease.

25. [25]
    All that then existed in the estate was the caravan. Given the estimated litigation costs – which no-one put in dispute – it is difficult, if not impossible, to see what conclusion could have been reached by any court, deciding such an application timeously, other than to dismiss such an application, if it would then have been brought. This is so particularly where, as here, it was always in contemplation, and put into effect, that the caravan was transferred to the applicants’ mother, Judith Faye Weedman, the deceased’s first wife, even though it was on the understanding that if she stopped living in it ownership would pass to the applicants themselves, in accordance with the deceased’s wishes. A Statutory Declaration to that effect was executed by the executrix on 29 May 2008.

26. [26]
    It must, further, be relevant to the consideration of delay, especially in the very particular circumstances of this case, that if the applicants had brought their applications within time, the likely resolution of those would have occurred prior to mid-September 2011. On all the information available to the Court, it is difficult to see - as just noted - that the resolution would be other than to dismiss such applications with costs against the applicants.

27. [27]
    Additionally, it is difficult to see how this prospective application for provision:

• could, in any way, unduly interfere with the estate’s “prompt administration” of something only recently appreciated, and realised materially – and for which a grant of probate has only now been sought;
• could relevantly disturb any organisation of the sole beneficiary’s affairs (given her own understandable ignorance of the facts);
• could merely have been the result of an “unexpected increase” in the “value” of the estate (where there was, in Curran’s terms, a “certain belief” by all sides – particularly by the executrix as illustrated by her solicitors’ letter of 6 February 2013 referring to “little property in the estate” – that the estate was, in practical terms, “worthless”); or
• could demonstrate that the applicants just “stood by” and “let (the time limit) pass” (when the value of any prospective application was, in truth, of no discernable merit), it not being simply a “change of heart” case.

28. [28]
    It must also be relevant to the determination of delay that there was never any clarification of the July 2008 representation made on behalf of the executrix concerning the insignificance of the assets of the estate right up until early February 2013. To simply rely upon a statement about curiosity, when even the only hard evidence led on behalf of the respondent contained a letter from WorkCover Queensland of 7 November 2007 stating that there was no compensable injury (in a letter written by it to Murphy Schmidt), cannot possibly justify criticism of the applicants that they made no further enquiries themselves of Murphy Schmidt (whom they had never retained) post-July 2008. This is particularly so where that letter of 31 July 2008, on behalf of the executrix, asserted a (presumably) genuine belief that the “action has been defeated”. It is not to the point that no enquiry was, in fact, made. What is to the point is that the only probable inference that can be drawn is that any enquiry that might have been made would have been to that same barren end.

29. [29]
    I reject the contention by the respondent that the “real explanation” is “the unexpected increase in the value of the deceased’s Estate”. Rather, the real explanation lies in the universally held belief, as at expiry of the time limitation period, that no reasonable cause of action or claim for statutory compensation of any kind had survived for the benefit of the estate and that, totally unexpectedly, information was much later received that the estate did have some asset of a kind the value of which would only then make an application worthwhile (where that information was not made available to the applicants until early February 2013). There is just no evidence that the executrix played any role in seeking that information.

30. [30]
    In the end, I conclude that the applicants have satisfied the Court that they have discharged the relevant onus and that this is a “just” case for the exercise of the discretion to extend the time for these applications for family provision to be brought: see Fraser JA in Hills v Chalk at 462 [220].

Costs and directions

31. [31]
    If the parties should agree to the appropriate order for future directions for and the costs of this interlocutory application then I will order in accordance with their wishes.