Goldberg v Landerer; Kennedy v Landerer

Background matters 10 The testator, whilst married to his first wife, Alice, had been successful in a handbag business and had been able to purchase business premises in Double Bay using a corporate vehicle, Kennedy Holdings and Property Management Pty Limited. He embarked upon some other ventures, none of which were successful and as a result of the failure of which his company was compelled to sell half of its interest in the Double Bay premises to an unrelated corporate third party. He then established a company to sell jewellery and watches, LK Jewellery Investments (Wholesale) Pty Limited ("LK Jewellery"), which at the outset or soon after its establishment involved Martha.

11 The testator divorced Alice in 1973 and married Martha in 1976. Before the marriage, Martha commenced working in the jewellery business, and she was heavily involved in it when the testator was seriously injured in a motor accident in 1978. It appeared that the testator might not survive the accident, but he survived, albeit with some further medical complications. 12 In 1997, the testator was confined to a wheelchair, and for the last 11 years of his life, he required an increasing level of care and assistance. Martha provided him with assistance and managed the care provided to him by others. There is no dispute that she concerned herself with his welfare in an appropriate way until his death. She deposed to having assisted her husband with washing and toileting in his later years: see paragraph 14 of Martha's first affidavit. 13 It is clear from the evidence that Martha, whose family had been involved in retail sales and who herself had some experience in that before her marriage to the testator, has been able to manage the jewellery business with considerable ability and has achieved success. The business now employs between 25 and 28 people, and Martha does all of the buying and setting of selling prices: see T203. The testator used his share in the Double Bay property to obtain finance for stock at the commencement of the business (see T224-225), but it is apparent that since 1978, Martha has played an important role in the business, and it would seem that since 1998 (at least) she has been in control of the business. 14 In addition to the two companies, the testator also established a trust known as the Louis Kennedy Trust ("the Trust"). The Trust is a discretionary trust, and the prospective beneficiaries of the Trust are the testator, Martha, and their children and grandchildren: see Exhibit F. Martha is the trustee and has absolute discretion to remove other beneficiaries as objects of the Trust, although she has given evidence that she does not intend to do so: see T245.35-36. It is agreed that the Trust has assets of approximately $4.5 million. 15 Martha draws considerable monies (in excess of $600,000) on an annual basis from LK Jewellery and appears to have a luxurious lifestyle. She also has superannuation entitlements worth approximately $700,000, which have arisen out of Martha's work for the jewellery business. Judy 16 Judy matriculated, but has no tertiary education. She has two adult sons, Daniel and Alexander, and an adult daughter, Vanessa. Alexander, the youngest child, is 31 years old. Judy is employed as a sales assistant on a part-time basis at a store in Bondi Junction. She has some serious medical problems, which have required hospitalisation, and she requires medication. She was made bankrupt on her own application in 2006 and discharged from bankruptcy in September 2009. She lives in rented accommodation in Bondi Junction. She has been a named beneficiary under two other wills. Her uncle, Mr George Rappaport, named her as such, but the evidence is that she will receive nothing out of that estate: see the affidavit of her solicitor, Mr David Austin, sworn 12 October 2010. She is also a named beneficiary under the will of Alice Kennedy, who died last year. Judy, who managed her late mother's affairs, says that there are no assets in Alice's estate, and for that reason, she understood that there was no necessity for her to obtain probate of the will (I infer that she was the executor named in Alice's will). 17 Alice was confined to a nursing home in the few years before her death, and Judy deposed to having contributed money to her mother's upkeep. 18 It seems to be uncontested that three months before his death, the testator gave Judy a cheque for $9,000. On Judy's evidence, the gift was initiated by the testator and followed her having been treated for cancer: see paragraph 9(f) of Judy's affidavit sworn 11 June 2009. Judy said that she bought a plasma television, shoes, things for her bedroom, and other items of this nature for herself: see T61.17-20. When she received that money and also when she received the $50,000 from the estate, she was an undischarged bankrupt. It is accepted on her behalf that she has a legal obligation to repay the total of $59,000 to her former trustee in bankruptcy. 19 Judy drives a motor vehicle which is leased for her by her sons. 20 Judy received $7,400 from her uncle, George Rappaport, prior to the testator's death. She thought that this was organised by her father, and it seemed not to be in dispute that it was. 21 Judy seeks an amount of approximately $800,000 for a two-bedroom unit in Bondi Junction and a lump sum of $400,000: see T269.5-9, where in closing submissions Mr Gray specified the amounts. 22 Judy ran a retail giftware business for many years, but it closed with her owing money to the Commonwealth Bank. In her evidence, she said that the debt was approximately $20,000, but it seems that it was closer to $50,000, and it is that debt upon which she made herself bankrupt. 23 Judy gave evidence of her need for (and cost of) dental treatment in an amount of $40,000.