The Cost of Extensions of Time for Applications made under a Deceased Estate – Lessons from Mortimer v Lusink & Ors

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Pursuant to section 41(8) of the Succession Act 1981 (Qld) (“the Act”) a person who desires to contest a will must bring this application within 9 months after the death of the will maker. This application is generally filed when a beneficiary is unhappy with his or her provision under the Will, or perhaps if a person has been left out of a Will and believes they should have been provided for as a beneficiary. What happens, however, when this applicant misses this 9 month statutory deadline?  Mortimer v Lusink & Ors [2016] QSC 119 is a recent Queensland Supreme Court case that explores the answer to this question about deceased estate time extensions, and provides instruction on when a court is likely to exercise its discretion to grant an extension for an application in these circumstances.

Brief Facts of the Case

Loma Green (“the Deceased”) died on 2 July 2015. Her daughter, Ms Mortimer (“the Applicant”), unsatisfied with the provision made for her under Loma’s will, filed an application that further provision be made for her. This application order sought direction for ancillary orders as well.

This application, however, was made nine days outside of the statutory time limit of within 9 months from the death of the will maker.

Issue Before the Court

The issue before the court was, pursuant to section 41(8) of the Act, could Ms Mortimer be granted an extension of time for making her application?

Finding of the Court

The Court refused to grant Ms Mortimer an extension because her case was not likely to succeed in court.  In coming to this conclusion, Martin J considered a number of things.

The Importance of Statutory Time Limit

In citing Muir JA, Martin J stated that the statutory time limit is strict for good reason. This includes to prevent an application which would unduly interfere with “the estate’s prompt administration” and to meet the demands of justice expected by society. Therefore, in order for the court to exercise its discretion to allow an application for extension of time, the applicant needs to make out a substantial and not trivial case. Ms Mortimer failed to satisfy four factors laid out in Warren v McKnight.[1]

The Four Factors that need to be Considered

In determining whether the court should exercise its discretion in granting an extension of time, the Court needs to consider:

  • the sufficiency of the explanation of delay in making the claim;
  • whether there would be any prejudice to the beneficiary/ies;
  • whether there has been any unconscionable conduct by the applicant; and
  • the strength of the applicant’s case.

 

  1. The Sufficiency of the explanation of delay in making the claim

Martin J was satisfied that there was a sufficient explanation as to the delay in time of the application. In coming to this conclusion, His Honour cited Warren J’s dicta in Leahy v Trescowthick [1999] VSC 409 that there are a number of relevant factors to consider when deciding this.  These include:

  1. Was the missing of the statutory deadline the fault of the solicitor or the applicant?
  2. Were there bona fide negotiations to settle the applicant’s claim which extended beyond the time limit?
  3. Was the delay in bringing the application short?
  4. Did the applicant know of the time limit?

Martin J was satisfied as to the delay in Mortimer as, firstly, the solicitor for Ms Mortimer had misinterpreted the statutory limit as 9 months from the date of probate, where as the actual limit was 9 months from the death of the will maker. Additionally, Ms Mortimer had not ‘sat on her hands’ in pursuing the application and that there was correspondence between the parties (to not distribute the estate until the statutory period had ended) which proved this. It was therefore the fault of Ms Mortimer’s solicitor, and not Ms Mortimer, that caused the delay.

What’s more, Ms Mortimer’s solicitor also only missed the cut off date by nine days and a court is more likely to overlook the delay when the time period is short.

  1. Whether there would be any Prejudice to the Beneficiary/ies;

This factor was not considered in Mortimer. However, this factor generally pertains to the underlying principle that an application should not unduly interfere with the administration of the estate.

In the successful 2006 case of Enoch v Public Trustee of Queensland  in deciding to grant an extension to the applicant, the Queensland Supreme Court held that there would be no prejudice in extending an application for the applicant’s further provision under his father’s will because the estate had not yet been distributed.

  1. Whether there has been any Unconscionable Conduct by the Applicant

This factor was not considered in Mortimer. In De Winter v Johnstone BC9505226, however, the Supreme Court of New South Wales discussed the meaning of “unconscionable conduct”. Here it was stated,

“No doubt it depends on the circumstances. However the concept of unconscionable conduct is here directed towards a deliberate holding off designed to lull the beneficiaries into a false sense of security.”

  1. The Strength of the Applicant’s Case

Martin J held that Ms Mortimer’s case failed on this factor.

The application of this factor involves a two-step process laid out in Singer v Berghouse.[2] The first step requires an objective determination of whether the applicant has been “left without adequate provision for proper maintenance, education and advancement in life”. The second step is invoked if the first stage is successful. In the second stage the determination becomes: “what provision ought to be made out of the deceased’s estate for the applicant.”

 In making an assessment, the court considers:

  1. The applicant’s financial position;
  2. The size of the deceased’s estate;
  3. The relationship between the applicant and the deceased; and
  4. The relationship between the deceased and other persons with legitimate claims.

Here the court considered that Ms Mortimer and her husband were elderly, owned an unencumbered house worth between $500 000 and $525 000; had no debts; had a combined income of $40 000 a year; had a superannuation fund worth $29 000 a year and a car worth $30 000. What’s more, the deceased had specified in her will that she was only giving Ms Mortimer a gift of $20 000 as she considered Ms Mortimer to have sufficient financial means by her father (the deceased’s former husband).

Ms Mortimer was also estranged from her mother and had not contacted her in 50 years.

In contrast, in Enoch v Public Trustee of Queensland the court granted an extension for an application because the applicant was 37, had two children aged 5 and 9, on a small income and unable to save for a mortgage and was the sole surviving child of the Deceased, whom the applicant had a close relationship with. The court was therefore satisfied that the applicant had strong prospects of convincing a court that an order for the provision of $50 000 should be made. As such, the missing of the statutory limit of a few days was excused and the court ordered that the application be heard.

Lessons

The takeaway message from Mortimer v Lusink & Ors (as well as its comparison to Enoch v Public Trustee of Queensland) is that missing the statutory deadline for estate litigation will result in the applicant having to prove a substantial case before the court as to why the application should be allowed to proceed. This is even before the actual case is heard. The cost of such is an extra added expense which can be taken directly from the deceased estate, lessening the amount left to beneficiaries.

For this reason it is essential to apply within the 9 month statutory limit under section 41(8) of the Act or to engage a competent solicitor who will ensure that you do so.

For more information regarding Deceased Estate Time Extensions

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[1] [2002] QSC 202 at [22].

[2] (1994) 181 CLR 201.