ACT Supreme Court 2018 Year in Review - Estates, Probate and Family Provision

 

This year did not see a great deal of activity in the ACT Supreme Court with regard to Estates, Probate and Family Provision.

There were three ex-parte applications before the ACT Supreme Court (each before Associate Justice McWilliam) concerning section 11A Wills (“informal Wills”). The cases of In the Estate of Kay Maureen Leighton[1], In the Estate of Socrates Paschalidis[2] and In the Estate of Peter Ronald Wiseman[3] coincidentally each had very similar facts. Each case involved an informal Will that had not been correctly executed. Each “Will” had been signed by only one witness or no witnesses at all.

There was one “extension of time” Application which was considered in the case of Buckman v Lindbeck[4]. This case involved an Application made by the child of the deceased to extend the time to file with the Court a Family Provision Application to receive greater provision from his father’s estate. In the ACT, the time limit within which a Family Provision Application must be made is 6 months of the Grant of Probate being made by the Court.

In this particular case, Probate was granted on 7 December 2016 which would have meant the Family Provision Application was required to be filed on or before 7 June 2017. The Family Provision Application was filed on 28 August 2018, almost 1 year and 3 months out of time.

The Deceased’s Will gave his two sons Paul (the Applicant in this case) and Anthony the sum of $25,000 with the residue of the estate being divided between the deceased’s three other children, who were also the executors and defendants in this case. Each residuary beneficiary received at least $220,000 from the division.

The Deceased acknowledged in his Will that the reason for the differing gifts between his children was due to the “lack of support [I] received from, and contact I have had with, either son over a significant period of time”.

On the same date the Application for the extension of time was filed with the Court, the executors made an interim distribution to themselves following the sale of a major asset in the estate. Despite probably not having been served with the Application on the date it was filed, the executors had notice of the Applicant’s intended Family Provision Application due to correspondence between both parties’ solicitors prior to the Application being filed.

In deciding whether an extension of time was warranted, the Court (Associate Justice McWilliam) was guided by the case of Smith v Public Trustee of the Australian Capital Territory[5] and had regard to three considerations which must be considered in an “Extension of time application”

  • explanation for the delay;
  • the strength of the Applicants case if an extension of time was granted;
  • the prejudice to other beneficiaries that might arise; and
  • a forth category was added in the case of Warren v McKnight[6] – whether there has been any unconscionable conduct by the Applicant.

The relevance of the above factors to the present case was as follows:

  1. The prejudice to other beneficiaries that might arise – the executors argued that the prejudice to them in granting an extension of time was significant as the majority of the estate had been already distribution. The Court however held that the prejudice was of the executors own making, having made a distribution with notice of an impending Application, and not having filed a Notice of Intended Distribution.
  2. Explanation for the delay – the Applicant’s explanation for the delay was that he was never given a copy of the Will by the executors and did not know Probate was granted. The Court recognised there had been some delay on part of the Applicant from the time he received a copy of the Grant of Probate until formally filing his Application, but ultimately held significant delay arose due to the executors failing to give the Applicant a copy of the Will.
  3. The strength of the Applicants case if an extension of time was granted – the Court recognised that the Applicant was in a dire financial position. He was a truck driver with no real property and significant debts. His partner was unemployed and the Court therefore held the Applicant hat reasonable prospects of a successful claim if an extension of time was granted.
  4. Unconscionable conduct by the Applicant –the Court found no evidence of unconscionable conduct by the Applicant.

The Court granted the extension of time. At the date of this article, there has been no reported judgement on the Family Provision Application by the Applicant in the present case (and there may not be a reported judgment if the case is ultimately settled between the parties). All parties, including the executors and the other interested beneficiary (Anthony) will of course need to be party to any Family Provision proceedings filed by the applicant and subsequent “out of Court” settlement  (if any).

Other notable matters to be aware of in the “Estate space” that do affect us in the ACT include:

  • The replacement of the Superannuation Complaints Tribunal with the new Australian Financial Complaints Authority (AFCA) from 1 November 2018;
  • The NSW Law Reform Commission is in the process of examining and reporting to the NSW Attorney General on laws that affect access to a person’s social media accounts and other digital assets in the event of death or incapacity. The report by the Commission will provide some useful guidance to practitioners in the ACT (and Australia wide) when advising their clients on their digital assets; and
  • The changes announce in the 2018 Federal Budget with regard to Testamentary Trusts, Estates and Elder Abuse.

Written by Golnar Nekoee, Director, Wills and Estate Planning

 

[1] [2018] ACTSC 75

[2] [2018] ACTSC 122

[3] [2018] ACTSC 292

[4] [2018] ACTSC 313

[5] [2012] ACTSC 4

[6] (1960) 40 NSWLR 390