Kemlo v Kemlo [2010] NSWSC 1331

New South Wales Supreme Court

CITATION : Kemlo v Kemlo [2010] NSWSC 1331

HEARING DATE(S) : 27/10/2010 and 28/10/2010

JUDGMENT DATE : 22 November 2010

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

1. In addition to the provision for the plaintiff provided in the will of the deceased the plaintiff is to receive an additional legacy of $275,000. DECISION : 2.To the extent necessary to meet the provision of these orders I declare the assets of the Kemlo superannuation fund as notional estate. 3. The plaintiff's costs on an ordinary basis and the defendant's costs on an indemnity basis are to be paid or retained out of the estate of the deceased. 4. Interest is to run at the rate provided for under the Probate and Administration Act 1898 if the legacy is not paid within 3 months from today's date to commence from the expiration of the period of 3 months.

CATCHWORDS : Family provision. Application by son who was left inadequate legacy. Consideration of specail circumstances under s 28 (1) (b) to designate notional estate. Increased legacy ordered and orders for designation of notional estate.

PARTIES : Tod Warren Kemlo v Bunsom Kemlo (Estate of the Warren Frank Kemlo)

FILE NUMBER(S) : SC 2008/281681

COUNSEL : Mr A Lakeman for plaintiff Mr C Carter for defendant

SOLICITORS : Priest McCarron Lawyers for plaintiff McKenzie & Company Lawyers for defendant

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Associate Justice Macready

Monday 22 November 2010

2008/281681 TOD WARREN KEMLO v BUNSOM KEMLO (ESTATE OF THE LATE WARREN FRANK KEMLO)

JUDGMENT 1 His Honour: This is an application under the Family Provision Act 1987 ('the Act') in respect of the late Warren Frank Kemlo who died on 22 May 2007 aged 74 years. His first wife predeceased him and after her death he had a de facto relationship which lasted for some years. That partner has been given notice of the proceedings and she makes no claim. 2 The deceased met the defendant, Bunsom Kemlo, in Thailand in 1989. The defendant moved to Australia and she and the deceased were married on 3 November 1989. The plaintiff, Tod Kemlo, his son from his first marriage survived the deceased. Will of the deceased 3 By his will dated 23 March 2007 the deceased left a legacy of $10,000 to his son, Tod, $1,000 to his sister, Dawn Masters, and the rest of his estate to the defendant, his second wife. The estate had paid the legacies to Dawn Masters and Tod. Estate of the deceased 4 The two principle assets in the estate are the matrimonial home at Oxley Street, Swansea and the deceased's business premises at Union Street Wickham. The parties are agreed that at the time of the hearing the Union Street premises property was valued at $612,500. There is a dispute as to the value of the matrimonial home at Oxley. There was tendered in evidence without objection three valuations of the Oxley property. Mr SP Owens, a valuer, valued the property at $490,000 and Mr Harrison, a valuer, valued the property at $360,000. There was also a kerb side valuation by Mr Elms who valued the property between $460,000 to $470,000. 5 The Court did not have the benefit of any cross-examination of the valuers and it has been left to the parties' submissions to deal with the matter. In those circumstances and, as there is nothing to support the valuation of the Mr Elms, I will have no regard to his valuation. 6 Mr Harrison's valuation lists four comparable properties within a range of sale prices between $362,000 and $425,000. The most comparable he considered was a property at Pelican Street, Swansea which sold for $383,000 on 9 December 2009. He described the property as being in a superior condition to the subject property. In his observations on valuation he noted that the value of the subject property was reduced by unauthorised construction and other matters. 7 Mr Owens relied on three comparable properties, which were different from those of Mr Harrison's comparables and ranged from $380,000 to $442,500. Mr Owens did not refer to the unauthorised construction and he did not give reasons for his valuations. In these circumstances I prefer Mr Harrison's valuations and I determine the value of the Oxley Street property at $360,000. 8 In 1996 the Kemlo superannuation fund was established. Both the deceased and the defendant were members of the fund. The superannuation fund owns a property at Wickham Street, Wickham which is currently occupied on a month-to-month tenancy by Composites and Chemicals Pty Ltd. The Wickham Street property was the subject of valuation evidence before me. Mr Owens valued the property at $475,000 and Mr Harrison valued the property at $350,000. The was also a kerbside valuation by Mr Smith of between $540,000 and $580,000 but given that he gave no basis for his valuation I will have no regard to his valuation. 9 Mr Harrison's valuation had regard to four comparable sales which varied between $290,000 and $750,000. He did not give reasons for the basis of these valuations but he valued the Wickham Street property using forty local sales, details of which were not supplied. He valued the Wickham Street property on a per square metre basis and deducted 25 per cent for a reason he did not specify, although it could have been due to the uncertainty which he referred to in his market comments as part of the valuation. 10 In contrast Mr Owens determined the valuation by two comparable methods. One method was by a capitalisation of rental value and the other by comparable building summation method. On the first method he obtained $472,200 and the second $480,000. His valuation does not give a basis for his comparable building summation method but he does give a basis for the rental values. His calculations in respect of the capitalisation of rental value are based on a rental value of the site and includes outgoings for water, council, insurance and land tax. His comparable example that gives him the rental figures is also rent plus outgoings. The fact that the Kemlo superannuation fund is presently paying the outgoings is not relevant to this determination of value based on comparables. His methodology is therefore correct and it seems to me that his capitalisation method having regard to the rental value is appropriate. His conclusion on this basis that the property has a value of $472,200 is appropriate and I adopt his valuation. 11 The other assets in the Kemlo superannuation fund at the date of the hearing were shares valued at $103,000 and cash at bank of $83,000. 12 The plaintiff's costs, including the hearing and GST amount to $72,000 and the defendant's costs including administration costs amount to $55,000. History 13 The deceased was born in February 1933. He died on 22 May 2007 at the age of 74 years. His son, Tod, the plaintiff was born in February 1959 during the deceased's first marriage and he is 51 years old. His de facto partner Gaile Finch was born in February 1953.