Family Provision Application: weighing the factors & delay when exercising the limitation period

Frastika v Cosgrove as executor of the estate of Russell Walter O’Halloran (Deceased) [2016] QSC 312

Boddice J

The application concerned whether the applicant established that it is just and proper for the court to exercise its statutory discretion to extend time to bring an application for further provision out of an estate.

The applicant was the deceased’s wife and, after the deceased’s death, orders were made in the Federal Circuit Court for the applicant and the deceased’s sister to have parental responsibility for the deceased’s granddaughter.

The applicant received provisions out of the estate in 2014 and in August 2015 filed an application for further provision. That application was served on the respondent 12 months after the expiration of the limitation period on 21 June 2016.

Applicable principles

In deciding whether to extend the time for making an application, the following factors are relevant:

  1. Whether an adequate explanation for the delay exists;
  2. Whether there would be any prejudice to the beneficiaries;
  3. Whether there has been any unconscionable conduct on behalf of the applicant; and
  4. The strength of the applicant’s case.

Consideration

Declining to exercise the discretion, Boddice J held as follows:

[30] There is no doubt the applicant delayed in making the application. Her explanation that she lacked resources and had little understanding of her rights lacks cogency. She was able to avail herself of legal services shortly after expiry of the statutory time period. There is no satisfactory explanation of why she did not avail herself of legal advice within the statutory time period.

[31] The applicant also failed to prosecute the application diligently.  There has been substantial delay between the filing of the application and its service and the provision of affidavit material in support of the application. There is an explanation for that lack of prosecution of the application. Affidavit material filed on behalf of the applicant’s solicitors indicates that delay is predominantly due to factors unrelated to the applicant.

[32] In any event, there is substance in the applicant’s submission that the relevant delay to be explained by the applicant is the delay in filing the application. That delay was some 63 days. Whilst that delay was not inordinate or due to deliberately unreasonable conduct on the part of the applicant, the lack of cogency in her explanation for the delay is a factor to be considered in the exercise of the discretion to extend time.

As to whether there was any prejudice, his Honour stated:

[33] The estate is yet to be distributed by the respondent. To that extent, there is no prejudice to any beneficiary in granting the applicant an extension of time within which to bring the applicant. An extension of time would, however, prejudice the primary beneficiary, the deceased’s granddaughter. In practical terms, any further provision out of the estate will reduce the funds available for the special purpose trust established by the deceased’s Will for her benefit.

After finding no unconscionable conduct, Boddice J reasoned as to the prospects of success. Considering that the applicant had received a death benefit nomination of $150,000, his Honour held:

[35] A determination of a family provision claim involves a two stage process. The first stage requires a determination of whether the applicant has been left without adequate provision for her proper maintenance. The second stage requires the Court to decide, in that event, what provision ought to be made out of the deceased’s estate for the applicant.

[40] In the context of an overall net asset position of slightly more than $1 million, and a relationship of approximately 18 months duration with a marriage of approximately 8 months duration, the applicant would have difficulty in establishing that the limited provision made for her in the deceased’s Will was inadequate, having regard to the sizable provision made for her through the binding death benefit nomination.

[42] … there is a real risk the applicant would ultimately fail in satisfying the first stage of the two stage process should an extension of time be granted.  In that event, there would be significant legal costs incurred by the estate which the estate has little prospect of recovering from the applicant.

Accordingly, Boddice J declined to exercise the discretion to extend the limitation for the applicant to bring an application for further provision out of the estate.

David Cormack – Brisbane Barrister & Mediator

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