Defendants Oppose Claim for Family Provision by Plaintiff

Re Haddow; Haddow v Haddow [2021] VSC 553 (6 September 2021)

The defendants applied for summary judgment.  The plaintiffs filed an originating motion before time limit for claim but did not serve the same on the defendants.  The Court, in adjudicating whether or not the defendants had notice of claim, based its decision on the Civil Procedure Act 2010 (Vic).

Facts:

The plaintiff and the first defendant are the only children of their late mother, Evelyn Haddow (‘the deceased’).  Her husband, who was the father of the plaintiff and first defendant, predeceased the deceased.  On 24 February 2016, the deceased made her last will which appointed the first defendant and his wife, the second defendant, as her executors and effectively left her estate to the first defendant (‘the Will’).  On 21 June 2017, the plaintiff applied to the Victorian Civil and Administrative Tribunal (‘the VCAT’) for orders seeking, inter alia, the revocation of a power of attorney granted by the deceased to the first defendant and the investigation of a series of transactions which resulted in a substantial reduction in the deceased’s personal assets. 

On 14 January 2020, probate of the Will was granted to the defendants.  On 6 July 2020, the plaintiff issued his originating motion seeking provision from the estate of the deceased under pt IV of the Act, seven days prior to the expiration of the time limit.  On 9 July 2020, the plaintiff’s solicitors wrote to the defendants’ solicitors (‘Plaintiff’s First Letter’) informing them that they had commenced a claim.  On 20 July 2020, the defendants’ solicitors replied to the Plaintiff’s First Letter by confirming that they did act for the defendants as executors of the deceased’s estate and enclosing a notice pursuant to s 30 of the Act (‘Section 30 Notice’), which required the plaintiff to “take (within three months from the date of receiving this notice) all proceedings proper to enforce or establish any claims that you may have against the estate of the Deceased and to duly prosecute those claims”.

The defendants filed an application for summary judgment in relation to a claim for family provision made by the plaintiff under pt IV of the Administration and Probate Act 1958 (Vic) (‘the Act’).  The plaintiff issued an originating motion within the relevant time limit to commence such a claim, but did not serve the same on the defendants until after that time limit had expired.  Instead, the plaintiff’s solicitors exchanged written communication with the defendants’ solicitors.  The net estate, as valued by the probate inventory, is extremely modest at $210,966.33 (due to some relatively significant liabilities, totalling $266,823.57).

It included a residential property located in regional Victoria, valued at $193,000.00.  The defendants distributed the Property to the first defendant, as sole beneficiary of the estate, after expiration of the time limit to commence a claim for family provision under the Act and prior to service of the originating motion.  The remaining balance of the estate is presently a mere $65.81.

Issue:

Whether or not the plaintiff's solicitors exchanged written communication constitutes a notice. 

Whether or not the distribution of the Property is protected from the claim. 

Applicable law:

Civil Procedure Act 2010 (Vic) ss 62, 63(2)(b) and 64 - where summary judgment is available where a claim has no real prospect of success.

Administration and Probate Act 1958(Vic) ss 99 and 99A - provides for ‘pre-conditions’  that the personal representative is protected from claims in respect to distributed estate. 

Administration and Probate Act 1958(Vic) s 93 - requires ‘notice’ of an application for a family provision order be served on a personal representative. 

Administration and Probate Act 1958(Vic) s 30 - provides that a personal representative, having notice, whether under the provisions of section thirty-three of the Trustee Act 1958 or otherwise, that any claim has been or may be made against the estate of which he is the personal representative, may serve upon any person making or possibly entitled to make such claim a notice requiring such person to take within a period of three months from the date of receiving such notice all proceedings proper to enforce or to establish such claim and to duly prosecute the same.

Interpretation of Legislation Act 1984(Vic s 35(a) - requires that in interpreting the Act, a construction that promotes its purpose or underlying object must be preferred. 

Younan v Younan [2015] VSC 258 [20]-[22] - provides for the expiration of time limit which is six calendar months after the date of the grant of probate of the Will under s 99 of the Act.

Re Fitzgerald; Voss-Lassetter v Piancun [2020] VSC 784 - provides that if the claim continues, such that there will be no estate left for further provision for the plaintiff, or even for his legal costs, the defendants will also incur further costs.

Easterbrook v Young [1977] HCA 16; (1977) 13 ALR 351, 359 - provides that if a personal representative distributes part or all of an estate where a claim has been properly made within time, the claim survives and may be prosecuted against the personal representative.

Walters v Person (No 3)[2019] VSC 733 - distributing the estate before the six month period to bring a family provision claim has expired does not defeat the power of the Court to order provision for the plaintiff.

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 [69]-[71] - where it was argued that s 99A(4)(b) and s 99A(3)(b) were ‘conflicting provisions’, and that therefore, the protection given by s 99A(3)(b) gives way to the characteristics of a notice of intention as set out in s 99A(4).

Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[2013] VSCA 158; (2013) 42 VR 27, 40 [35] - provides that it is enough that the plaintiff has a realistic prospect of success in his arguments, as the power to summarily dismiss must be exercised with very real caution.

Analysis:

The defendants submits that the Plaintiff’s First Letter was not notice of an application for family provision order within the meaning of s 99A(3)(a) of the Act. Rather, the Plaintiff’s First Letter was notice of an intention to make an application for a family provision order. The plaintiff submits that if a personal representative distributes part or all of an estate where a claim has been properly made within time, the claim survives and may be prosecuted against the personal representative. However, the fact that the Plaintiff’s First Letter also contains ‘notice’ not to distribute the estate until the claim is dealt with does not convert it into notice that a claim has actually been commenced. 

Family provision legislation is remedial in character. Its ‘evident purpose’ is to place the assets of the deceased at the ‘disposal of the court’ to provide for ‘the nominated dependents of the deceased’. Generally such legislation provides protection for a personal representative making interim distributions within the time limit for family provision claims to dependent partners and children. Balanced against that is the recognition that where a claim is made and proper notice of the claim provided, distribution of an estate should await the finalisation of the claim, except for maintenance of dependents and appropriate interim distributions.

Conclusion: 

The Court found the Plaintiff’s First Letter is not a notice of the making of an application, and thus it need not determine whether or not it needed to be ‘served’ within the meaning of s 93 in order to strip the defendants of the protection of s 99A(3). There is no real prospect that at trial it will be found that action lies against the defendants for having distributed the Property. The Court ordered that the proceeding be summarily dismissed. The parties are to prepare draft orders giving effect to these reasons and send them to Chambers.