Family Provision Application: no compelling explanation for the delay & prejudice

Kay & Another v Kreis [2017] QSC 151

Holmes CJ

The applicants sought the Courts’ discretion to permit the applicants to commence a family provision application out of time. The applicants father died on 4 December 2006 and the application for provision was filed on 17 November 2016.

Legislation

Section 41(8) of the Succession Act 1981 (Qld) provides:

Unless the court otherwise directs, no application shall be heard by the court at the instance of a party claiming the benefit of this part unless the proceedings for such application be instituted within 9 months after the death of the deceased; but the court may at its discretion hear and determine an application under this part although a grant has not been made.

Consideration

As stated by the Chief Justice:

[2] Among considerations relevant to the exercise of discretion under s 41(8) are: the sufficiency of the explanation of delay in making a claim; any prejudice to the beneficiaries; any unconscionable conduct by the applicant; and the strength of the applicant’s case.

As to the strength of the applicant’s case, the Chief Justice stated:

[30] The evidence is limited as to Mr Devivo’s need for provision in 2007, and neither applicant has provided any documentation for that period. Nonetheless, Mrs Kreis accepts, for the purposes of the application, that the applicants have an arguable case for provision. I consider that an appropriate concession and will proceed on that basis.

In relation to any prejudice subjected to the respondent, the Chief Justice stated:

[31] This is not a case in which any prejudice arises by reason of distribution of the estate’s assets, because nothing has been done in the administration of the estate until very recently. But there is a general prejudice which arises from the lapse of time since the relevant events, with the difficulties of fading recollection and loss of records which occur with the passage of years. The applicants’ counsel suggested that it was they who would be disadvantaged by any loss of records, particularly bank records, since they had to prove their case for provision. That is not really an answer. Mrs Kreis might well want to adduce evidence about her own financial needs as bearing on what provision the testator should have made, and to counter assertions made by the applicants about their relationships with the testator and their financial circumstances at the time of his death.

As to the applicant’s conduct and the explanation for delay, the Chief Justice stated as follows:

[33] Both Mrs Kay and Mr Devivo say they were not in a financial position to commence proceedings in 2007. Mr Devivo’s sole income was a pension. Mrs Kay says that her drawings from the restaurant business were only enough to meet interest payments and basic living expenses. In addition, in 2008, she was distracted by her daughter’s marriage breakdown. She had also hoped that the Italian funds could be shared amongst her father’s children according to Italian law.

[34] Counsel for both applicants argued that while neither was in a position to fund a proceeding, they had taken steps which were reasonable for a lay person in filing the caveats, the notices supporting which referred to family provision proceedings. Their confusion was apparent. While they knew that there was a nine month time limit in which they were required to commence any family provision application, they did not understand what it was necessary to do for that purpose. It was reasonable for Mr Devivo to suppose that the caveats would bring the proceedings before the court…

[35] I do not find the attempted equation of Mrs Kreis’ delay with the applicants’ delay compelling. Firstly, she is not seeking any indulgence from the court. Secondly, she says that she did not seek to have the caveats removed because she did not have the financial means to seek legal advice about the status of the Italian assets, did not have the details of the account held there and did not think she would be able to recover those funds. That was a reasonable decision, given that she was the only beneficiary of what would without those funds have been a very small estate, and (with the possible exception of whomever was owed the funeral expenses shown as an estate liability) was the only person whose interests were affected.

[36] The applicants offer, in essence, two explanations for their delay: that they did not have the means to proceed and that they were under the impression they had taken appropriate steps to seek family provision … I do not accept either explanation as a matter of fact.

The Chief Justice found that there was no reason that the applicants could have raised the required funds to make the application, given the existence of an unencumbered house property. The Chief Justice went on to conclude:

[40] It seems to me far more likely that the applicants did not proceed with any application because they did not think it worthwhile. They were content to thwart Mrs Kreis’ attempt to obtain probate, thus preventing her from getting access to the limited part of the estate comprised by the accounts held in Australia, while being under the impression that they would ultimately share in the far more substantial assets held in Italy. Mrs Kay said explicitly that it was her hope that the funds would, under Italian law, be shared amongst her father’s children; Mr Devivo conveyed that expectation in his correspondence with Mrs Kreis’ solicitors. What triggered their current action was the realisation firstly, that the funds were at risk of forfeiture and secondly, that they may form part of the Australian estate.

[42] Both applicants knew of their rights to apply for family provision as early as February 2007 and of the relevant time limits. There is no compelling explanation of why they could not have found the means to make the application (as they have now done) within time. They have not satisfied me that they have a reasonable explanation for their delay of almost a decade in making their application, and I consider that the delay has occasioned some prejudice to Mrs Kreis should she now have to defend the application. Contrary to the applicants’ submission, I do not consider that justice would be done by extending time.

The application for an extension of time to commence a family provision application was refused.

 

David Cormack – Brisbane Barrister & Mediator

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