April 2019

Changes to the Succession Act 2006 (NSW) make life easier for late claimants

Of the various amendments to the Succession Act 2006 (NSW) last year, perhaps the most significant was at subsection 58(2), which permits extensions of time to make family provision claims if all parties consent. This forces defendants to analyse the law and exercise discretion which was previously exercised by the Court alone.

The amendments are likely to increase the number of late family provision claims brought by eligible claimants. This, in turn, will likely place pressure on defendants to consent to applications made out of time. They will need to be across the relevant law in order to properly advise their clients.

Extensions of time under the Family Provision Act 1982 (NSW)

The Succession Act replaced the Family Provision Act 1982 (NSW), which allowed a Court to make an order to extend time if:

  • the parties to the proceedings consented to the application being made, or

  • “sufficient cause” was shown for the application not having been made within the prescribed time (18 months under the former Act).

The Family Provision Act still applies to deaths before 1 March 2009.

One feature of the Succession Act was the removal of this provision. It stated:

An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown.

In other words, even if the parties consented to an extension of time, the Court was still required to assess whether “sufficient cause” was shown.

From 2 July 2018, the new subsection 58(2) has applied. More on that shortly.

“Sufficient cause”?

Whilst the earlier Succession Act did not define “sufficient cause”, it was nonetheless interpreted as a “mandatory” requirement before an out of time claim could be granted.[1]

In Lewis v Lewis, Justice Hodgson said ‘[t]he expression “sufficient cause” must be taken to mean “sufficient explanation” or “sufficient justification or excuse”.[2]

The Court was required to look at:

  • the sufficiency of explanation of delay in making the claim

  • whether there would be any prejudice to beneficiaries if the period were extended

  • whether there had been any unconscionable conduct by the plaintiff

  • the strength of the plaintiff’s case.[3]

Even if sufficient cause was shown, the Court still retained discretion regarding an extension of time.

Even if parties agreed to settle a matter, the Court needed to order an extension of time for the settlement to be effective. This placed the parties, particularly the plaintiff, at the mercy of the Court.

Amendment to section 58(2) and its likely effects

As stated earlier, section 58(2) now allows parties to consent to an application being made out of time. This eliminates the need for Court intervention.

This will reduce administrative burden and costs on the Court and the parties involved in family provision matters brought out of time. This will be favourable in proceedings commenced by plaintiffs that clearly warrant an extension of time.

The positive impact is less obvious in borderline cases. There the burden will fall on the defendant’s legal representative to be across the law.

There may be cost implications for defendants who refuse to consent to an extension of time, particularly if the Court sees the refusal as unreasonable.


Authors: Danielle Verde and Gerard Basha

 

[1] Taylor v Farrugia [2009] NSWSC 801.

[2] [2001] NSWSC 321 at [83].

[3] Gersbach v Blake [2011] NSWSC 368.