In Queensland, under section 41 of the Succession Act 1981, a spouse, child or dependant of a deceased person has 6 months from the date of death to give notice of an intention to bring a claim against an estate if they believe they have been left without adequate provision. This type of claim is called a Family Provision Application (“FPA”). The FPA documents must then be filed in the court and notified to the executor within 9 months after the date of death.

Although the court has a discretion to extend the 9-month time frame, it is unwise to miss the deadline as the court may not extend the time or the estate may already have been distributed.

In considering an application to extend the time for filing an FPA, the court will consider a number of factors including the length of the delay, the reason for the delay, whether the estate has been distributed, and whether any party has engaged in any unconscionable conduct, and the strength of the applicant’s case.

In recent times the Supreme Court of Queensland and the Court of Appeal have considered a number of these applications. These have sharpened the focus of all wills and estate lawyers in understanding the current attitude of the court to these applications. A short summary of these cases follows.

MORTIMER V LUSINK [2016] QSC 119 (Decision delivered 2 June 2016)

The deceased’s daughter filed an FPA 9 days out of time. From a $1.2M estate, she received only $20,000, with the majority of the estate left to her brother.

The applicant thought the time limits ran from the date of probate, not the date of death. This error occasionally occurs because different time limits apply in different Australian states. It was acknowledged that this was the solicitor’s error, not the applicant’s.

Ultimately, however, the judge refused to extend the time for filing the FPA (but see the note below about the decision in the Court of Appeal reversing this decision). The judge found that the applicant:

• had not established that the deceased had erred in assuming her financial position,
• had little contact with the deceased for over 50 years,
• had no right to provision from the estate, and
• although living in modest financial circumstances, was not impoverished.

BUDULICA V BUDULICA [2016] QSC 184  (Decision delivered 19 August 2016)

In this case the deceased’s daughter sought to bring an FPA. Her brother was the executor. The estate comprised two properties totalling around $2M and was to be divided between the 2 children.  The applicant had seen a solicitor shortly after her mother’s death and was fully advised of her prospects of success and the time limits. She made a considered decision not to commence an FPA at that time. However, she later changed her mind after receiving correspondence from her brother’s solicitor. She took great offence to that letter with the Judge stating “she is consumed with bitterness and driven by long-standing enmity towards Stan.” She then sought to file an FPA almost 9 months late.

The executor objected to the extension, requiring the extension application to be heard by the court. At the hearing it was noted that the applicant was in her early 50s, divorced, in poor health, receiving Newstart allowance and receiving financial assistance from her mother in the year prior to her death.

After considering the applicant’s position in life, the judge found that she had some prospects of establishing that proper provision had not been made for her. However, ultimately she failed because the judge found that she had no reasonable prospect of obtaining an order for further provision. This was because the executor had offered her first choice of which estate property to take. The applicant had elected Property A, worth approximately $1M, but which would attract CGT on sale. The judge found the applicant could take Property B, worth approximately $1.2M but which would not attract CGT on sale. By selling Property B, the applicant would have sufficient funds for her “proper maintenance and support.” On this basis, she could not expect to achieve a better outcome in an FPA than she could by electing to take the more valuable property.

Therefore, the out-of-time application failed because the applicant had poor prospects of success in her FPA. This factor weighed heavily against an extension of time. The judge also considered that the applicant’s reason for not commencing the application in time did not favour an extension. This decision was upheld by the Court of Appeal on 28 July 2017.

FRASTIKA V COSGROVE [2016] QSC 312  (Decision delivered 23 December 2016)

The applicant was the deceased’s 24-year-old second wife of approximately 8 months (in a total relationship period of 18 months). From the estate of approximately $1M, she received $10,000 and 2 motor vehicles. She also received $150,000 from superannuation outside of the estate. The majority of the deceased’s estate was given to his disabled granddaughter.

Prior to the death of his first wife, the deceased and his first wife had sole parental responsibility for their granddaughter who required full-time care. Following the deceased’s death, the applicant and the deceased’s sister were granted full parental responsibility and the granddaughter moved into the sister’s home. In time, the granddaughter was placed in foster care.

The application was filed 63 days out of time but was not formally served on the respondent for a further 12 months and the supporting affidavit was served later still. The applicant argued that the delay was caused by:

• her shock following the deceased’s death,
• being forced to leave the family home,
• concern about the risk of deportation,
• her limited understanding of the legal requirements,
• her lack of financial resources, and
• her need to move interstate to obtain new employment.

The out-of-time application failed on the basis of delay, prejudice to the granddaughter, and the applicant’s prospects of success. The judge considered that the applicant’s argument of not understanding her legal rights lacked cogency and there was no satisfactory explanation of why she did not obtain legal advice within the statutory time period. Her failure to prosecute the application diligently was also noted.

The judge concluded that the deceased’s granddaughter would be prejudiced as it would reduce the funds available for her special purpose trust established by the will, by both legal costs and any further provision for the applicant. Further, if the applicant was not successful there would be limited chance of recovery of costs from her.

The judge considered that the deceased had specific regard to the applicant’s needs for further education and set-up costs in Australia. Weighing the overall net asset position of the estate against the provision made under the will for the applicant and the length of the relationship, the judge concluded that the applicant would ultimately fail to establish that she had been left without adequate provision. The judge considered that this was reinforced by considering the granddaughter’s competing claim.

Balancing all factors, the applicant failed to establish a substantial case for the court to exercise its discretion in her favour to extend time to bring her FPA.

MORTIMER V LUSINK [2017] QCA 1  (Decision delivered 31 January 2017)

The Court of Appeal found that:

• the minimal delay was not attributable to the applicant,
• the delay had not caused significant prejudice to the other beneficiaries,
• the financial resources of the appellant (originally the applicant) were insufficient to meet her needs,
• the gift to the appellant was inadequate having regard to her financial resources, and
• the appellant had an arguable claim against the estate, not a claim that was clearly unlikely to succeed.

The executor was ordered to pay the appellant’s costs of the appeal. Justice Jackson remarked that the executor had no justifiable basis for resisting the out-of-time application on the basis that the application had reasonable prospects of success.

These comments serve as a warning to executors to carefully consider the risks of taking a hard-line approach to an out of time FPA where the delay is short and there are reasonable prospects of success. Doing so may result in a costs order against the estate or against the executor personally.

Therefore, on appeal, the applicant was ultimately successful in being granted leave to bring her FPA out of time. However, her success came at great expense to the estate. The legal fees for these 2 applications would have significantly decreased the value available to meet her claim and any benefits for the other beneficiaries.

So Where Does That Leave Us In Considering Out-Of-Time Applications?

Having an out-of-time application as a precursor to the actual FPA adds significant cost and delay for all involved.  Persuading the court to exercise its discretion to extend a statutory time limit is difficult. The simple solution is to ensure the FPA is filed within the 9-month statutory time limit.

The following lessons can be extracted from the cases set out above:

• It is best practice to file the FPA and serve it within time.
• All parties need to carefully consider the factors the court will take into account.
• If you are out of time, do not delay any further. Ongoing delay may weigh heavily against you.
• Even if parties are negotiating and resolution is anticipated, still file the application in time. The court filing fee is much cheaper than a contested application for the right to proceed out of time.
• As an executor, confirm in writing that ongoing negotiations should not be regarded as implicit consent to an FPA proceeding out of time and that timeframes will be strictly observed.
• Executors should also consider the cost implications and risks of resisting an out-of-time application where the delay is minimal and the applicant’s prospects of success are good.

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Ryan Murdoch O’Regan Lawyers represent clients in deceased estate litigation (will disputes) on a “no win, no fee” basis in approved cases. Our expert lawyers will advise and represent you in all court proceedings, mediations and negotiations regarding deceased estates. Our entire Wills & Estates Team consists of lawyers who are experts in their field of law.

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This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.