Co-authored by Jonathan O’Connor, Lawyer and Domenico Romeo, Vacation Clerk
In Drake v Bradshaw (2018) WASCA 78, a beneficiary of an estate unsuccessfully appealed a decision to dismiss his application for leave to bring a claim for further provision under the Family Provision Act 1972 (WA) (the Act) out of time. The decision is an important illustration of what will, and what will not, persuade a Court to exercise its discretion to extend the 6 month time limit for making a claim under the Act.
Factual Background and the Initial Decision
Mrs Drake passed away in September 2014 and was survived by her three adult children, Andrew Drake, Deborah Bradshaw and Loraine Dodd. The main asset in her estate was a house in Kewdale worth about $630,000.
Probate of Mrs Drake’s will was granted to Ms Bradshaw on 3 November 2014. The will provided for Ms Bradshaw to receive the Kewdale house, chattels in the house and the deceased’s car, with the rest of the estate to be distributed amongst the three children.
The distribution to the children occurred on 13 November 2014 and they each received about $18,000. Ms Bradshaw as executor, took legal advice and waited for the 6 month time limit on claims for further provision to pass, before she sold the Kewdale house and distributed the proceeds to herself, in July 2015. On receipt of the proceeds Ms Bradshaw used $300,000 to renovate her house, gifted the sum of $110,000 to her sister Ms Dodd and retained the balance of about $100,000.
On 16 February 2017, Mr Drake filed his application for leave to bring a claim for further provision, nearly 2 years after the 6 month time limit had expired.
In August 2017 leave was refused and his application was dismissed. The Master found that, although Mr Drake’s application for further provision was arguable, on balance, the interests of justice did not support a grant leave.
One very important factor was his finding that the estate had been fully distributed by Ms Bradshaw, who prudently took a cautious approach to distribution of the estate with the benefit of legal advice.
If Mr Drake was granted leave and his application was successful, the Court would need to utilise its power under s 65 of the Trustees Act 1962 (WA) (Trustees Act) to order a person who has received assets to pay them back, but only if they received it not in good faith and they had not altered their position in reliance of having undisputed ownership of the distribution. The Master was satisfied on the evidence that Ms Bradshaw’s distributions were in good faith, and she had altered her position in reliance on no application having been made within the time limit, in that she had spent $300,000 on renovations. In the Master’s view, this factor was decisive.
Mr Drake appealed to the full Court of Appeal on a number of grounds including the following:
- The Master failed to take into account, in the exercise of his discretion, the strength of Mr Drake’s substantive case.
- The Master incorrectly considered the application of the “tracing” power of the Court given by section 65 of the Trustees Act.
The Court of Appeal agreed that the Master should have given more weight to the strength of Mr Drake’s case, but held that this error was not fatal.
The Court of Appeal also found that the Master’s characterisation of the distribution of the estate as “decisive” should be taken to mean that the factor of distribution, tipped the balance in favour of a refusal of leave.
Helpfully, in addition to the finding that the Master did not make a material error of principle in exercising his discretion, the Court set out in its reasons that even if there was a material error, the exercise of discretion would have resulted in the same outcome. The Court said that the following matters were also relevant:
- On Mr Drake’s own evidence, he was unaware of the time limit for bringing his claim, as opposed to being unaware of his rights. The lack of awareness as to time limits is not of itself a sufficient reason to grant an extension of time.
- Mr Drake lived in his mother’s house for 6 months following her death, taking that benefit immediately but then making an application for further provision when it suited him.
- Ms Bradshaw has limited income and might have to borrow money to reimburse the estate if there was a finding in Mr Drake’s favour.
- There was unchallenged evidence that proceedings under the Act would cause Ms Bradshaw, who is suffering from medical conditions, distress.
- Mr Drake’s claim to the proceeds of the estate, being about $210,000, would likely be mostly consumed by legal costs and so the actual benefit to Mr Drake would be limited.
Kott Gunning recommends
If you think you have claim for further provision against an estate, do not delay, and seek legal advice promptly. Mr Drake’s experience demonstrates the difficult and, more often than not, insurmountable task you set for yourself if your claim is made out of time.
The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.