In Maher v Maher [2019] VSCA 161, the Court of Appeal recently handed down a unanimous judgment upholding the earlier decision of the Supreme Court of Victoria, refusing to allow two adult sons to bring an application seeking further provision from the estate of their father who died in 1975.
This case note provides a broad overview of the Court’s decision, the time limits that apply to applications for further provision from a deceased estate and the factors that are considered where an extension of time is sought.
Family provision applications
Under Part IV of the Administration and Probate Act 1958 (specifically, section 91), an ‘eligible person’ (which includes a spouse, child, grandchild or member of the deceased’s household) may make a family provision application seeking a greater share from the deceased’s estate that they are bequeathed under the Will, or entitled to under statute in circumstances where the deceased died intestate (without a valid Will).
In order for the application to be successful, the person must demonstrate that the deceased had a moral obligation to provide for them and that the deceased failed to make adequate provision for them, having regard to various factors including the applicant’s financial needs and resources.
Under the Act, the family provision application must be brought within six months of the grant of representation (being the grant of probate or letters of administration). Where a person fails to issue proceedings within the six month time-frame, he or she can apply to the court for
an extension of time to bring his or her family provision application, provided that the estate has not yet been completely distributed. In determining whether to allow such an extension, the court will consider the strength of the person’s claim, the length of and reason for the delay, and any prejudice that granting an extension of time might cause to other parties or beneficiaries.
The Maher case
In Maher v Maher, the deceased, Thomas Maher, was a farmer who died in 1975. Mr Maher was survived by his widow (Mrs Brown) and their eleven children, who at the date of his death were aged between 12 and 31 years old.
During his lifetime, Mr Maher had established a farming partnership with four of his older sons (the Maher Brothers), which included the two applicants in the appeal (as well as a further son who made a claim in the Supreme Court but elected not to appeal that decision). Under his Will, livestock and farm machinery were left to these four sons and his widow, Mrs Brown. Mrs Brown also received a life interest in various farming properties of the estate, and the remainder interest in those properties was left to the other seven children (the remainder beneficiaries). Mrs Brown also owned other farming properties in her own right, separate to the estate.
Upon Mr Maher’s death, probate was granted in February 1976. Both State and Federal death duties were payable and these were allegedly paid by the Maher Brothers as a loan to the estate. The remainder beneficiaries and the administrator of the estate claimed that these funds had been repaid by the estate.
Mrs Brown died in 2014, almost 40 years later. During all of those years, the properties had been left in the name of the deceased (so the estate had not been finally distributed) and the Maher Brothers had continued to farm the land. The applicants claimed this was done without remuneration and largely for the benefit of their mother, Mrs Brown, and that they had also worked without remuneration for the benefit of their parents while Mr Maher was alive.
The remainder beneficiaries, on the other hand, alleged that the applicants had received the benefit of using the land to run their farming enterprise for some 40 years without having to pay rent to their mother, which had enabled them to amass substantial additional properties both in their own names and also as partners of the Maher Brothers. The applicants claimed that the funds to purchase these additional properties came from shearing sheep two months each year for third parties.
The applicants claimed that they had always been dissatisfied with their father’s Will, however their mother had promised them that if they did not contest it she would rectify matters by leaving them the land she held in her own name. Upon her death, Mrs Brown left some of her land to the applicants but not her largest land holding.
The applicants then sought an extension of time under section 99 of the Act to make a family provision application in respect of Mr Maher’s estate, seeking title to the farming properties which were to pass to the remainder beneficiaries under the terms of Mr Maher’s Will.
Decision of trial judge
Associate Justice Daly, in deciding the Maher matter at first instance, reviewed earlier case law including the 2007 decision of Ansett v Moss of the Court of Appeal, reviewing a decision of the Supreme Court of Victoria relating to the estate of aviation pioneer, Sir Reginald Ansett. Ansett died in 1981 leaving an estate of $8.2 million which was largely left to charities, with some bequests to his step children and a life interest in part of the estate to his second wife. Some 24 years later, after Ansett’s second wife died in 2003, the sons (who had received only a modest sum) then brought an application for an extension of time to seek further provision. The Supreme Court initially refused leave to extend the time limit to apply for provision, holding that Ansett owed no responsibility to either of the two sons and that they had failed to prove there was a reasonable excuse for delaying beyond the six month time limit. However, on appeal by one of the sons, the Court of Appeal stated that there were no rigid rules to confine the discretion of the court to be exercised under section 99 of the Act and that all relevant circumstances had to be taken into account. The decision was overturned and his application sent back to the trial division of the Court to be re-heard by a different Judge.
Associate Justice Daly identified the following issues for determination in the Maher case:
- At the date of the deceased’s death in 1975, the Court tended to construe s 91 as excluding self-supporting adult sons from successfully bringing a claim. The court had to determine whether the applicants’ had a ‘special claim’ so as to be exempt from this general rule regarding adult sons. It was found that they would have had a special claim if the application had been made within time.
- The reasons for delay. It was found that the plaintiffs chose not to challenge the Will by reason of reliance upon their mother’s promise, rather than any ignorance of their rights. They understood it was possible to contest Wills.
- The length of the delay. The extreme length of delay did not preclude the plaintiffs from obtaining relief but was a factor weighing against it.
- The prejudice to the other beneficiaries. It was found that there was real but not extreme prejudice to remainder beneficiaries. The effluxion of time caused difficulties including a lack of evidence as to the administration of the estate and the payment of probate duties, that Mrs Brown was no longer available to give evidence and would have been a material witness and that it was difficult to assess the financial position of the plaintiffs at the time of Mr Maher’s death, which was a critical issue in determining whether he had breached his moral duty to his sons. Further, the remainder beneficiaries had presumed to receive the land after Mr Maher’s death and “may have organised their affairs accordingly” and this was further considered to amount to prejudice to the remainder beneficiaries.
- The merits of the claim. Merits of a potential claim are not determinative except in hopeless cases. In this case, it was found that the claims were not hopeless but “not strong”, “very slim”, but “would have had limited prospects of success” as the “most probable outcome… would have been a finding that the testator had discharged his moral duty to the plaintiffs”.
- The justice of the case generally.
Associate Justice Daly considered that the plaintiffs did not have sufficient prospects of success to warrant an order for an extension of time, having regard to the length of the delay, the reasons for the delay and the prejudice to the remainder beneficiaries as referred to above. It was also relevant that the plaintiffs may have an alternative claim against their mother’s estate. It was noted that the payment of probate duties was not of great relevance, particularly given the question of whether any loan remains unpaid was not capable of resolution in the proceedings and the plaintiffs may have received some benefit from having access to the whole of the deceased’s land. She further noted that “if the plaintiffs had their way, their seven siblings would receive nothing whatsoever from the deceased’s estate”.
Decision on appeal
Two of the plaintiffs made an application to the Court of Appeal seeking to overturn the decision of Associate Justice Daly. The grounds of appeal included that:
- Her Honour, in deciding whether to grant an extension of time, was required not to embark on a detailed analysis of the applicant’s potential family provision claim, but that she had in fact undertaken such an analysis and in effect had heard the family provision application;
- Her Honour gave weight or too much weight to various factors including the length of the delay and the prejudice to the remainder beneficiaries; and
- Her Honour did not give weight or sufficient weight to various factors including the work the applicants had performed on the farm and that a ‘wise and just testator’ would have realised there would be substantial death duties payable on his estate.
The applicants submitted that they had a very good case to seek further provision, that they had preserved and built up the estate (by paying the probate duties and working the farm over the decades) and that the delay in making the application could be explained by their reliance on the promise made by their mother that she would leave them her land on her death.
The Appeal Court found that the case involved “extraordinary delay” and that it was inevitable that the delay would prejudice the fair hearing of the potential claims due to the loss of records and unavailability of Mrs Brown to give evidence. The length of delay was “such as to give rise to untold prejudice, being the prejudice involved in the loss of evidence of unknown nature and extent”. It was relevant that the applicants were prepared to accept their mother’s promise of different land instead of Mr Maher’s land and that they had been left the livestock and plant of their father’s estate to enable them to continue their farming operations. The current financial position of the remainder beneficiaries, being comparatively poor, was also relevant to the assessment of the merits. Overall, the Appeal Court found that the applicant’s prospects of success were low and real prejudice has ensued from the delay.
The Court of Appeal further held that:
- “Ordinarily the Court does not embark on a detailed analysis of the claim. But each case will be different in that regard.”
- Associate Justice Daly did not purport to decide the claims or to treat the application as if it had been a final hearing, but formed a necessarily provisional view of the merits based on the material before her.
- The prospects of success was only one of the factors bearing on the trial judge’s discretion and was not determinative.
- There is no rule or principle that an arguable case must be allowed to proceed.
- All relevant matters were considered by the trial judge and no irrelevant considerations were taken into account. There was no mistake of fact in reaching her findings. It is not sufficient for an appeal to succeed that too much weight has been given to a relevant consideration or that insufficient weight has been given to a relevant matter (relying on an earlier decision of House v The King).
- The decision was not “so unreasonable or plainly unjust that the discretion must not have been properly exercised” and if specific error had been identified, the Appeal Court would have made the same decision in the fresh exercise of discretion.
The Court considered the decision of the trial judge to refuse an extension of time to be correct. The application for leave to appeal was allowed, but the appeal was dismissed.
More information
For more information about the case and Court’s decision, please contact Lauren Buckley, Senior Associate, on (03) 8600 8891 or lbuckley@kcllaw.com.au.
Note: Lauren Buckley of KCL Law acted for the court appointed administrator and appeared as counsel in both the four day hearing in the Supreme Court of Victoria and the subsequent hearing in the Court of Appeal.
This update is a guide only and is not intended to constitute legal advice.