New South Wales Supreme Court CITATION : Kennard v Sheehan [2010] NSWSC 882 HEARING DATE(S) : 04/08/2010 JUDGMENT DATE : 9 August 2010 JURISDICTION : Equity Division JUDGMENT OF : Macready AsJ at 1 EX TEMPORE JUDGMENT DATE : 9 August 2010 DECISION : See paragraph 64 CATCHWORDS : Family Provision. Application by son who was left a small legacy. Consideration of relationship between parties and other beneficiaries. - Provision increased. PARTIES : Trace Robert Kennard v Sandra Ruth Sheehan FILE NUMBER(S) : SC 2009/00290296 COUNSEL : M Sneddon & C Alexander for plaintiff Mrs J Hill for defendant SOLICITORS : Bartier Perry for plaintiff Ritchie & Associates for defendant - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE MACREADY MONDAY 9 AUGUST 2010 2009/290296 TRACE ROBERT KENNARD v SANDRA RUTH SHEEHAN JUDGMENT 1 HIS HONOUR: This is the hearing of an application under the Family Provision Act 1982 in respect of the estate of the late Jill Cheryl Kennard who died on 8 October 2008 aged 59 years. The deceased was survived by her only child, the plaintiff. Last will of the deceased 2 The last will of the deceased was made on 13 June 2004 and she appointed her two sisters as executors. In her will she made different bequests in respect of the two major assets, namely, her home and her superannuation. The relevant clauses in the will are: "3. I give all my superannuation entitlements, money in savings and bank accounts, term deposits and managed funds to my Trustee upon trust to distribute as follows: (a) 15% to Trace Robert Kennard. (b) 10% to Sandra Ruth Sheehan. (c) 10% to Robert Shane Russell. (d) 10% to Sharon Lee Wilkinson. (e) 10% to Damien Laurence Cullen. (f) 10% to Katherine Dawn Cullen. (g) 10% to Joshua Darryl Schofield upon the attainment of twenty- five (25) years of age. (h) 10% to Luke Lee Schofields upon the attainment of twenty-five (25) years of age. (i) 10% to Ronald James Kennard. (j) 5% to Janice Newham. In the event the preceding trust of this my will fail, it shall form part of my residuary estate. 4. I give my real estate property at +3 Pyramid Avenue,+ Padstow to my Trustee upon trust for the proceeds of sale to be distributed in the following shares; (a) 10% to see University of Western Sydney Foundation for the 'Evelyn Cullen Nursing Prize.' (b) 22% to Katherine Dawn Cullen. (c) 19% to Damien Laurence Cullen. (d) 7% to Deanne Margaret Schofields. (e) 42% to Sandra Ruth Sheehan. In the event the preceding trust of this my will fail, it shall form part of my residuary estate. 5. I direct that funeral testamentary and other expenses of my estate are to be paid out of the proceeds of my superannuation entitlements, savings, term deposits and managed funds prior to distribution in accordance with clause 3 of this will. 6. I give the residue of my real and personal estate of whatsoever kind and nature and whatsoever situate to such of Sandra Ruth Sheehan and Sharon Lee Wilkinson as survives me if more than one in equal shares and as joint tenants." 3 In order to understand the relationship between the deceased and the beneficiaries the following should be noted: Evelyn Cullen (deceased) was the deceased's de facto partner of 25 years. Trace Kennard (the plaintiff) is the deceased's only biological child. Sandra Sheehan and Sharon Wilkinson (the defendants) are the deceased's sisters and executors. Ronald Kennard and Robert Russell are the deceased brothers. Patrick Sheehan, Connor Sheehan, Shane Russell, Kristie Russel, Kara Wilkinson and Caitlin Wilkinson are the deceased's biological nieces and nephews. Damien Cullen, Deanne Schofield and Katherine Cullen are Evelyn Cullen's children and the deceased's de facto stepchildren. Isabelle Cullen, Chelsea Cullen, Joshua Schofield, Luke Schofield, Ryan Schofield and Erika Schofield are Evelyn's grandchildren and the deceased's step grandchildren. Janice Newham is the deceased cousin. 4 The defendants have helpfully prepared a family tree, which I will attach to this judgment as it provides an understanding of the relationships. Assets in the estate 5 The deceased's home at Padstow has been sold and, after discharging the mortgage, the sum of $405,844.39 is held in trust. 6 The superannuation of $138,616.85 has been realised and, after deductions and expenses in accordance with clause 5 of the will, there remains some $116,214.32, the residue of which passes under clause 6 of the will and is in the sum of $12,180.97. 7 The plaintiff's costs are assessed at $55,000, and those of the defendant are a like amount. 8 If only the defendant's costs are paid from the estate, they will fall on the superannuation under clause 5 and the plaintiff's share in the estate will amount to $9182. If all the amounts of the costs are paid from the estate, the plaintiff's share will amount to $932. Family History 9 The late Jill Cheryl Kennard was born in May 1949. She had a somewhat difficult upbringing as her mother was exposed to violence. As she described it, her mother was used as a punching bag, even when she was pregnant. 10 The deceased, when she was 16 years of age, gave birth to her son, the plaintiff Trace Robert Kennard, in March 1966. The plaintiff has never known who his father was. 11 After his birth, the upbringing of Trace was helped by assistance both from the plaintiff's mother and her aunt. 12 In 1972 the deceased, when the plaintiff was about six years old, decided she wanted to travel overseas without him, which she did. She left her son behind. He was looked after by various relatives while she was away. 13 On that trip, when she was in England, the deceased was driving a car with three of her nursing friends. A front tyre of the car blew out and there was an accident when she lost control as a result of the blowing of the tyre. Kerry, a very close friend of the deceased, died in the accident. This accident, it is apparent from the notes left behind, substantially affected the deceased and it haunted her for the rest of her life. 14 In 1973 the deceased return to Australia from England. At the time the plaintiff was around seven years old and living with his great grandmother. 15 In due course he lived with his mother at Cronulla. His mother met Evelyn Cullen in 1977 and commenced a relationship with her in 1978. The plaintiff and his mother moved in with Evelyn and her three daughters, who was then aged between nine and two years. The plaintiff was then aged about 12 years. It was the first time he had to live in a household of that size. 16 In 1980 there was an incident, to which I will return later, when the plaintiff left home. After spending a night on the Town Hall Station, he went to live with his grandmother and never returned to live with his mother. 17 He became engaged in June 1991 and married in 1992. Thereafter he had three children. 18 In 1985 the deceased and her partner, Evelyn, purchased the Padstow property with the assistance of a mortgage. Both were working at the time in well-paid employment. Evelyn Cullen died unexpectedly in 2003. 19 The house was transferred to the deceased on Evelyn's death as the det facto partner of Evelyn. The deceased also received Evelyn's superannuation of approximately $168,000. From that superannuation she paid out a mortgage of $95,500. Evelyn's children only received a small amount of approximately $15,000 each . Evelyn's children accepted the situation without dispute. 20 The deceased made her will on 30 June 2004. It is apparent she intended to benefit Evelyn's children, who had been part of her family for many years. 21 These proceedings were commenced within time on 28 August 2009. Eligibility 22 The plaintiff is an eligible person. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:- "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." 23 The plaintiff is 43 years of age, married with three children aged seven, 10 and 12 years. He recently lost his job which prompted him to sell one of his investment properties. He has regained employment and works 71 hours a week for a wage of $25 per hour. This is $1775 per week. He works long hours and only has a few days off after three weeks work. His wife earns a negligible amount from typing. They live in rented accommodation. Their weekly expenses total a sum of $1674. 24 They have sold an unencumbered investment property for $250,000 and have an investment unit at Minto worth between $250,000 and $275,000 which is subject to a mortgage of $173,231. They have to old cars, their home contents, and they have superannuation in the amount of $104,300. 25 A substantial amount of evidence has been led in respect to the relationship between the plaintiff and his mother. The plaintiff gave evidence of what he said was sexual abuse, and also physical abuse by his mother. The sexual abuse, he said, occurred when he was six years of age and consisted of his mother sharing a bed with him. He described the abuse as her being naked and touching him with her body and other like matters. This conduct did not continue when she commenced her relationship with her partner Evelyn. 26 He also gave evidence of when he was beaten by his mother and Evelyn. This happened on two occasions, according to his evidence. On the second occasion he gave evidence of his bruises being observed by a teacher at school. 27 The events which led to him leaving was, according to him, another beating he received. He told a teacher about this and reported that fact to his mother which, according to him, led to some more violence. The next day Evelyn took an overdose and he was accused of being the cause of her distress. He then left the household. 28 Strangely, none of these events were reported on by the other children living in the house and, of course, neither Evelyn nor the deceased can give their versions. 29 Unfortunately the deceased had been through some difficulties of her own by this stage. As I have mentioned, in her childhood she had seen her mother bashed by an aggressive husband. 30 She also chronicles some of the problems in a eulogy which she wrote for her own funeral. She described one of these being the car accident in these terms: "I have never talked to any of you about this except mum. When I was in England I had a terrible car accident on the motorway outside London. There were four of us in the car, Gail, Kerry, Sue and myself. I met the three of them on the ship to England. They were all registered nurses from S A. They were on a working holiday like me, we were all 23 years old. We used to hire a car every weekend and drive to Wales, Scotland etc. We would take turns in driving. I was driving when the accident happened. The front tyre just blew. I was doing 90 mph on the motorway and I lost control of the car. Kerry died in the accident. It haunted me every day and I carried that guilt with me to my grave. The accident changed me for ever. When I returned to Australia, I couldn't talk about it. I started to drink very heavily and drive really fast. I was always in a hurry. I didn't deliberately drive fast to have an accident. But I didn't care if I had an accident and died. I believe I should have died in England because I was driving at the time. I was drowning in my guilt. I found I had to keep myself busy working as much as I could, that's why I had three jobs at once (only for six months) so I didn't have time to think. One night when I was driving to Engadine in my Mini, Trace said to me, he was about seven or eight, "mum, you are driving really fast". I had been drinking quite a bit, he looked at me and said "don't worry if we die we will be angels in heaven together." He was so calm. I got such a shock, because I realised I could of killed you." 31 I do accept that there were occasions when the plaintiff was hit by the deceased and Evelyn but I hesitate to accept the causes and attributed blame for those events. It is not necessary to do so because it is apparent from the evidence of the plaintiff's first fiancee, Megan Elliott, things resolved between 1984 and 1986 when the plaintiff and his fiancee frequently visited the deceased and stayed over at her place for the night. 32 In the evidence of the plaintiff's second fiancee, and now his wife, we see in 1991 the deceased came to their engagement party but did not come to the wedding in 1992 due to a dispute about a guest at the wedding. In 1993 there were three visits, in 1994 there was one. 33 The plaintiff describes the fall off this relationship in these terms: "(h) My mother and I stayed in contact until I was 30. She attended my eldest daughters baptism in 1997. (i) As an adult, I wanted to talk with my mother about our past but she didn't want to talk and her relationship with me soured over time. Our relationship didn't improve and I realised at the age of 30 that we would never have a normal mother - child relationship. (j) My mother wanted to have a normal relationship with my children, but I could not accept this when she did not want to have a normal relationship with me. I was concerned that she would try to buy the affection of my children with lavish presents and that she would attempt to undermine the authority of my wife and I over our children by criticising us, and our Christian faith, and our friends. (k) We were unable to have a normal relationship during my thirties. I last saw my mother approximately 5 years ago when my grandmother was gravely ill in hospital. On that occasion my mother publicly humiliated me by yelling abuse at me in the hospital." 34 The correspondence at that time in 1997 is very revealing and illustrates the deep rift between mother and son. In 1997 the plaintiff wrote in these terms to the deceased: "Dear Jill. This is a letter to thank you for the stuff for Ellie Jayne, it was nice thought to buy those bits and pieces for our daughter. And both of us wish to lay some firmer ground rules for your relationship with Ellie. It seems unavoidable that you will have some contact and so we want to spell out the conditions very plainly. We promise, if you do not comply with the wishes, there will be no more contact at all (this is how strongly we feel). This is not an idle threat but a promise. Firstly: You may give or send Ellie a present on her birthday and Christmas and it is to be no more than $25 -- I will not be in competition for my daughter with you, not now nor in the future. Secondly: No prolonged or unsupervised sessions with Ellie at any time. Thirdly: no running down of our faith or Barney or us in front of her. Fourthly: Leave all moral and ethical development to us. Please know that this will be the basis of any relationship you have with our daughter. We are both sorry that it is this way but we think this is for the best. I feel as well that you can be called Grandma and Evelyn, Mrs Cullen. It is fitting and right. One last thing, you can not skip over the affections of your own and love the next generation and expect it to be 'okey-dokey'. Signed" 35 Plainly, if he could have avoided it, the plaintiff would have nothing to do with his mother. 36 His mother acknowledged the correspondence and said she would not contact him. However, there was in fact further contact with them, not all of which is seen in evidence. However, that further contact resulted in the following letter, which was written by the deceased to the plaintiff on 6 October 1998. "Dear Trace, I received your letter on 22 September 1998. I went to my solicitor Deborah Vardy of Marsden's Attorneys today, who advised me to write to you regarding your correspondence. Firstly I have a heart problem of which you are aware of. I have been hospitalised twice since my open heart surgery, not that you care. I do not want any more correspondence from you, not now -- not ever as it detrimental to my health. Secondly I love my mother dearly and we are speaking. I will not have you put any pressure on her, as she has a bad heart. I will not have you treat my mother the way you have treated me over the years. If you still continue to write to me, my solicitor suggested I fax your superior your letters, I will also fax my replies, as I have kept copies of everything. Hoping this is an end to any correspondence from you. Sincerely yours. Ms J C Kennard." 37 In 2002 there was an invitation from the deceased to Trace and his family to go and visit before Christmas. This was politely declined. 38 Plainly there was a serious break in the relationship in 1997 which continued until the deceased's death. I think it was as a result of fault on both sides. The deceased was a volatile woman, and the plaintiff was acutely protective of his family and just did not want to bother with his mother. 39 In Foley v Ellis [2008] NSWCA 288 the Court of Appeal referred to this kind of problem in these terms: "101. The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of the testator or testatrix to provide for the claimant. In Palmer v Dolman Ipp JA , after a review of the cases, observed (at [110]) that: '…the mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act.' See also Wheatley v Wheatley [2006] NSWCA 262 at [22] - [23] per Bryson JA (with whom Santow and McColl JJA agreed), addressing the second stage of the process required by Singer v Berghouse . 102 The authorities indicate that where the claimant has been estranged from the testator or testatrix, the application of section 7 of the Family Provision Act requires that the estrangement be appraised and its causes considered: Wentworth v Wentworth, estate of G M Wentworth (Bryson J) quoted in Wheatley v Wheatley at [22]. In addition, section 9 (3) (b) expressly requires the character and conduct of the eligible person to be taken into account at the second stage of the process. Care should be taken, however, not to over simplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context the raw emotions experienced at the time. The ' wise and just' testator or testatrix ( Bosch v perpetual Trustee Co Ltd [1938] AC 463 at 478-479 per Lord Romer) must be taken to understand this." 40 The plaintiff's conduct in my opinion is not such as to disentitle the plaintiff from relief but it reduces the extent of his moral claim on her bounty. 41 It is necessary to consider the situation in life of others having a claim on the bounty of the deceased. In this case it is the other beneficiaries. University of Western Sydney 42 This bequest by percentage of the real estate was to the University which had a special place in the life of the deceased. After the death of her partner, Evelyn, she donated $10,000 to create a prize for nursing students. There was an annual prize named in memory of Evelyn Cullen. Correspondence, which is in evidence, demonstrates a substantial commitment of the deceased to this benefaction. It also discloses her interest in it, and attendance at ceremonies where prizes were awarded. Plainly it was something dear to the deceased's heart as it represented her doing something for the benefit of what was her only soul mate in life. Katherine Cullen 43 Katherine was one of Evelyn's daughters. Katherine is 33 years of age and in a de facto relationship, with two children aged five and three. She and her partner have a home worth $400,000 with a mortgage of $89,197. She has superannuation of $35,249 and a few other assets. She works part-time and is otherwise supported by her partner. 44 She had a very close relationship with the deceased and she treated the deceased as a parent. The deceased played a substantial role in her life in this regard. They had a very good relationship. Katherine has not contributed to the assets in the estate and she takes 22% of the realty and 10% of what is left in the superannuation. Damien Laurence Cullen 45 Damien is one of Evelyn's children. Damien is 40 years of age, single, and provides child support for his two children aged five and three years. His only major asset is his superannuation of $70,000 and he works as a production operator. He also had a good relationship with the deceased. However, he was older when the relationship started. He made no contribution to the estate and takes 19% of the home. Deanne Margaret Schofield 46 Deanne was also a child of Jill's partner, Evelyn. She is 38 years of age, married with two children aged 10 and seven years. Her husband is an accounts manager. They have a home worth $380,000 with a mortgage of $171,500. They have an investment unit worth $420,000 with a mortgage of $485,000. She has superannuation of $143,158, cars and other jointly owned property. She is employed herself as an IT manager earning $101,507 per annum. 47 She likewise had a good relationship and the deceased would often help her babysitting with the children and matters of that nature. She made no contribution to the estate and she takes 7% of the house and her sons each receive 10% of the superannuation. Ronald Kennard 48 Ronald is a brother of the deceased and is aged 59 years. He is single with no dependents and lives with his mother on a disability support pension. He has no assets of substance and he spent five years with the deceased. They had a good relationship. 49 The deceased helped him from time to time, taking him to medical appointments as Ronald has always had problems. He takes 10% of the superannuation. Robert Russell 50 Robert is a brother of the deceased and is 45 years of age, divorced, and his children are aged 18 and 19 years. One of them is out of a job. He is an earth works foreman and he has a house worth $565,000 with a mortgage of $203,836. He has other minor assets and superannuation of $500,000. He also had a good relationship with the deceased and takes up 10% of the superannuation. 51 There is no information on Janice Newham, a cousin of the deceased and, accordingly, the Court can conclude she does not wish either her financial affairs or her circumstances to be placed before the court. Her interest was only in the superannuation and this is of no great moment. Sandra Sheehan 52 Sandra is a sister of the deceased, is 45 years of age, married with two children aged 16 and 12 years. She and her husband have a home, two investment properties and other assets worth $1,186,246 and superannuation of $200,000. They have liabilities of $239,322. She is employed as a school administration officer in the public education system. 53 She and her husband, unlike other beneficiaries, are in a good and solid financial situation. 54 She also had a good relationship with the deceased, who was part of her family's life. She discussed the provisions the deceased was going to make for her and indicated she had no need for it. They agreed she would distribute Sandra's 42% of the house with her nieces and nephews. 55 She has executed a statutory declaration in these terms: "I intend to distribute the 42% of the proceeds from the sale of my sister's property ( 3 Pyramid Ave Padstow ) bequeathed to me in the will of Jill Cheryl Kennard dated June 30 th 2004 in the following manner. To the three children of Trace Robert Leslie Kennard, the sum of $50 per year until they have attained the age of 25 years. The remainder of the proceeds in equal shares to the nieces and nephews of Jill Cheryl Kennard Shane Robert Russell DOB 19/3/90 Kristie Lyn Russell DOB 19/4/91 Patrick Mark Sheehan DOB 26/9/93 Connor James Sheehan DOB 5/3/97 Kara Louise Wilkinson DOB Caitlin Wilkinson DOB Ryan David Schofield DOB 25/5/05 Erika Katherine Schofield DOB 13/6/07 Isabella Shayne Cullen DOB 28/9/05 Chelsea Olivia Cullen DOB 17/10/07 As per Jill Cheryl Kennard's express instructions all money to be left to minors will be held in trust until they reach the age of 25 years." 56 It is plain from this that the deceased accepted the plaintiff's demands that she spend no more than $50 a year on presents for each of his children. Discussion 57 It is necessary to see how the plaintiff says he has been left without adequate and proper provision for his maintenance, education and advancement in life. He says he would like to address the following matters: A. Daughters dentist $17,500 Daughters physiotherapy bills $2000 B. Discharge the mortgage on the Minto unit and increase his capital base. C. Two new cars, including a people mover $59,490 D. Purchase a home in the local area $480,000 E. Have a holiday at a cost of $7500. 58 He presently has realisable assets of about $345,000 and thus could realise them to put towards the purchase of a home with a modest mortgage. He quantifies his claim as being half of Sandra's 42% share, which is a sum of $85,227. 59 The deceased carefully thought through the plan for her will. About a half of her assets were to go to her long time partner's children, which was appropriate given the source of such assets. She did not want to give the plaintiff anything but, on the advice from a lawyer, left him 15% of the superannuation. 60 The deceased allowed her hurt feelings to overcome her responsibility to him. He has a young family which will need help with education over the coming years. He is 43 years of age and has a good working life ahead of him. Fortunately at this stage he has superannuation of $104,340 which is a good start. Over the next 22 years it will no doubt increase. 61 I think the plaintiff has been left without adequate and proper provision for his maintenance, education and advancement in life as he needs funds in the medium to short-term to provide for his family. 62 I propose to give him, in lieu of the provision in the will (which can pass to the other beneficiaries of the superannuation), a legacy of $75,000. The burden of this should fall on Sandra's 42% share of the home and that provision can be in lieu of the provision for his children in a private trust set up by Sandra. 63 Unless there are any submissions, I will order the plaintiffs costs on the ordinary basis and the defendants on an indemnity basis be paid out of the estate and that they be born as provided for in clause 5 of the will. (Counsel and solicitor addressed on costs) 64 The orders which I propose to make in this matter are: 1. In lieu of the provisions in clause 3 of the will in favour of the plaintiff, he will receive a legacy of $75,000. 2. The plaintiff's provision in clause 3 of the will is to pass rateably to the other beneficiaries under clause 5. 3. The burden of the provision is to be borne by the share of Sandra Sheehan in clause 4 of the will and that part of the private trust created by Sandra Sheehan in favour of the plaintiff's children. 4. The plaintiff's costs on an ordinary basis and the defendant's costs on an indemnity basis be paid out of the estate of the deceased and be borne by the property referred to in clause 5 of the deceased will. 5. Interest on the legacy is to accrue if the legacy is not paid within 30 days of today's date and there and after that date at the rate provided for under the Probate and Administration Act . 65 The parties have indicated they wish to address on the question of where the burden of the provision of costs will occur. Accordingly, I will make the following orders at this stage: 6. I direct the defendant to lodge submissions with my Associate within 14 days and the plaintiff to reply within seven days thereafter. 7. I direct the exhibits be returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.