Kennedy v Jvancich

4910 of 2000 KIMM KENNEDY -v- AUGUSTINA ALCANTARA JVANCICH JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 7 December 2000 the Plaintiff Kimm Kennedy claims an order for provision for her maintenance and advancement in life out of the estate of her late father Kevin Norman Jvancich (to whom I shall refer as "the Deceased"). 3 It should here be observed that the Defendant named in that summons was Nadine Helen Van Komen. However, pursuant to an order made by the Registrar on 7 May 2002 the present Defendant, Augustina Alcantara Jvancich, was substituted as the Defendant to the proceedings. An amended summons (although entitled "summons"), reflecting that change in the identity of the Defendant, was at the outset of the hearing on 25 March 2003 filed by the Plaintiff, without objection by the present Defendant. 4 By that amended summons the Plaintiff also claims that provision be made for her education and advancement as well as for her maintenance, and that such provision be made out of the notional estate of the Deceased. By prayer 2 in the amended summons the Plaintiff identifies various assets which she seeks should be designated as notional estate of the Deceased. 5 The Deceased died on 7 June 1999, aged sixty-eight years (having been born on 31 May 1931). He left a will dated 15 May 1999. However, for reasons which will shortly emerge, that will has never been admitted to probate. By his will the Deceased appointed his wife Augustina Alcantara Jvancich and his son Vincent Muriti as executors. He gave a number of relatively small gifts (including a legacy of $5,000 to the Plaintiff) and gave the residue of his estate to his wife Augustina Alcantara Jvancich (who is now the Defendant to the present proceedings). 6 The Deceased had been married three times. There were born to the Deceased and his first wife Dorothy Joyce (née Hayes), whom he married in 1953, two children, being Kimm, the present Plaintiff (who was born on 21 May 1955 and is now aged forty-eight), and Nadine Helen (Mrs Van Komen) (who was born on 24 January 1964, after the divorce of the Deceased and Dorothy in about 1958, and is presently aged thirty-nine). 7 There were born to the Deceased and his second wife, Carmen Pasque Monopoli, whom he married in 1959, two children, being Brett Kennedy (who was born on 28 October 1961 and is presently aged forty-one) and Vincent Muriti (who was born on 28 December 1962 and is presently aged forty). The Deceased and Carmen divorced in about 1967. 8 The Deceased married Augustina Alcantara in the Philippines on 29 December 1976. No children were born of that marriage. The Defendant had been born in the Philippines on 28 August 1944 and is presently aged fifty-eight. 9 In 1990 the Deceased's father purchased for him a house in Wangee Road, Lakemba. That house property was sold by the Deceased in 1995 for $227,000. When the Deceased's father died in 1994 the Deceased under the terms of his will received one half of the residue of his father's estate, being in an amount of $282,743. With the proceeds of sale of the Wangee Road property and with his inheritance from his father's estate (benefits totalling almost $510,000) the Deceased purchased and sold a number of expensive motor vehicles and boats (one of the latter being purchased for $352,500 in 1995 and being sold for $280,000 in the following year). 10 As I understand the schedule prepared by the Defendant in respect to various purchases and sales made by the Deceased in the last five years of his life (Annexure F to the affidavit of the Defendant sworn 1 August 2002 and filed in proceedings 4859 of 2000), at least some of the items conjointly owned by the Deceased and the Defendant at the time of the death of the Deceased were purchased from the Deceased's inheritance from the estate of his late father in 1994, and from the proceeds of sale of the Wangee Road property in 1995. 11 In February 1995 the Defendant won $1,756,972.20 whilst playing Club Keno at the Lakemba Services Memorial Club. Later in 1995 the Deceased and the Defendant removed their residence from Sydney to Tuncurry on the North Coast of New South Wales. 12 At the time of his death the Deceased owned the following assets conjointly with the Defendant. He did not own any other assets. House property, 8 Palmway Crescent, Tuncurry (purchased in about 1996 for $210,000) House property, 32 Regency Circuit, Tuncurry (purchased in about 1997 for $165,000, subject to a mortgage of $80,000) Residential property, 4/56 Wharf Street, Tuncurry (purchased in about 1997 for $78,000) House property, 9 Palmway Crescent, Tuncurry (purchased in about 1995 for $395,000)

1954 TF MG sports car (purchased in 1998 for $21,000)

Fixed term annuity policy (providing income of $1,900 a month) Joint account with St. George Bank (having a credit balance of $45,000). 13 The foregoing assets passed to the Defendant by survivorship. In consequence, it was not necessary for the will of the Deceased to be admitted to probate. 14 Notwithstanding the fact that the Deceased left no assets of his own, the Defendant has honoured the provisions of his will by paying from her own assets the legacies of $5,000 to each of the Plaintiff, Brett Kennedy and Vincent Muriti. At the time of the Deceased's death the TF MG sports car (which had been purchased by the Deceased in 1998 for $21,000) was in the process of being restored. For that restoration the Defendant paid $46,570. She then gave that motor vehicle to Vincent Muriti, in accordance with the terms of the will. 15 It will be appreciated that in order to attract the provisions of section 7 of the Family Provision Act ("…on an application in relation to a deceased person in respect to whom administration has been granted…"), it is necessary that there be a grant of administration in respect to the estate of the deceased person ("administration" being defined in section 6(1) to mean probate or letters of administration). 16 By summons 4859 of 2000 Nadine Helen Van Komen claimed an order for provision for her maintenance, education and advancement in life out of the estate of her late father, the Deceased. Those proceedings were resolved in accordance with short minutes of order filed on 20 September 2002. Those proceedings were sustained by the grant to Nadine Helen Van Komen on 17 September 2000 of letters of administration pursuant to section 41A of the Wills, Probate and Administration Act 1898. That grant is in the following terms, Administration of the estate of the abovenamed deceased is hereby granted to: Nadine Helen Van Komen of 9 Cisco Street, Binnaway, the daughter of the deceased, for the purposes only of an application being made under the Family Provision Act, 1982. 17 At the outset of the present proceedings the question was raised of whether the apparent limitation contained in the form of the foregoing grant of administration (which is Exhibit 1 in the present proceedings), referring to an application being made under the Family Provision Act by only Nadine Helen Van Komen, the Plaintiff in proceedings 4859 of 2000, affected the entitlement of the present Plaintiff to bring the present proceedings. 18 The wording of section 7 of the Family Provision Act ("…in relation to a deceased person in respect to whom administration has been granted…") seems to me to envisage only that some form of administration has been granted in respect to the estate. It does not appear to require a number of separate grants under section 41A to be made in respect to each applicant or each proposed applicant for an order for provision. (See the unreported judgment of myself in Doyle v Smith, 21 September 1995.) 19 I am of the view therefore that the present proceedings are properly constituted, to the extent that the requirement of section 7 that administration must have been granted in respect to the estate of the Deceased has been fulfilled sufficiently to enable the claim of the present Plaintiff to proceed. 20 The Plaintiff as a child of the Deceased in an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such she has standing to bring the present proceedings. It will be appreciated that the Defendant is also an eligible person (being such within paragraph (a) of the definition), that each of the other children of the Deceased, being Nadine, Brett and Vincent, is also an eligible person (within paragraph (b) of the definition) and that each of the former wives of the Deceased, being Dorothy and Carmen, is also an eligible person (within paragraph (c) of the definition). 21 In considering the nature and value of the assets of the estate which may be available to be designated as notional estate of the Deceased, in order to meet any order for provision which might be made in favour of the Plaintiff, the costs of the present proceedings are of relevance. It is estimated that the costs of the Plaintiff will total about $70,000, whilst those of the Defendant will total about $24,000. That is, the totality of the costs of the proceedings will be in the order of $94,000. 22 It has already been recorded that the Plaintiff was born on 21 May 1955; she is now aged forty-eight. Her parents divorced when she was aged six. After the Deceased left the matrimonial home the Plaintiff's maternal grandparents removed from Sydney to Brisbane (where, apparently, the Plaintiff, her mother and her sister Nadine were then residing) and lived next door to the Plaintiff and her family. The Plaintiff developed and maintained a close relationship with her maternal grandparents. 23 Apparently the Plaintiff had no contact with the Deceased until she was aged about nineteen. From then until she was aged twenty-five the Plaintiff lived with the Deceased in Sydney (where, apparently, he was then residing) on three or four occasions. 24 The Plaintiff attended Southport High School until 1970, when she left at the age of fifteen. The Plaintiff's schooling had been continually disrupted by illness (especially the condition of her back), by the peripatetic nature of her mother's household and domestic arrangements, and by the requirement that she act as babysitter to her sister and her half-sister. In consequence, the Plaintiff states that her literacy was poor, and remains so to the present time. She has great difficulty with spelling and grammar, although (as was apparent from her oral testimony at the hearing) she is capable of expressing herself. At the time when she left school the Plaintiff was suffering problems with her back and she needed to wear a back brace. She attended a rehabilitation centre and was in receipt of an invalid pension. At the rehabilitation centre she trained in leatherwork, and was employed in a leather workshop in Bundaberg for seven years. 25 Since the time when she left school the Plaintiff has suffered from scoliosis, (curvature of the spine). She was in receipt of an invalid pension throughout the entire period of her first marriage. One of the consequences of her physical condition is that the Plaintiff suffers pain and discomfort if required to stand for protracted periods. It is for that reason that the Plaintiff had to give up her work as a bar assistant. The Defendant did not seek to challenge the evidence of Dr Francis Tomlinson, neurosurgeon, concerning the Plaintiff's medical condition. Dr Tomlinson expressed the conclusion that, I believe that Ms Kennedy will require ongoing treatment for her condition. Mrs Kennedy has a 10 percent whole body permanent partial disability relating to her cervical spine condition. She has a 40 percent whole body permanent partial disability relating to her thoraco-lumbar condition. 26 In addition to her back problem the Plaintiff also suffers from asthma. 27 The Plaintiff has been married three times. In 1973, at the age of eighteen, the Plaintiff married for the first time. That marriage lasted for seven years. Subsequently, in 1980, the Plaintiff married for the second time. In 1995 the Plaintiff married for the third time. She is presently unmarried. The Plaintiff's three children (twin daughters aged twenty-two and a son aged nineteen) were born of the Plaintiff's second marriage. 28 The Plaintiff maintained a degree of contact with the Deceased, sending him cards for his birthday and for Father's Day and Christmas, and speaking by telephone perhaps once or twice a year. On one occasion the Deceased lent the Plaintiff $600 towards the purchase of a motorcar. In 1983 or 1984, whilst the Plaintiff was residing in Mackay, the Deceased paid the airfares for the Plaintiff and her three children to come to Sydney to visit him at Christmas. 29 Again, in December 1996 the Deceased paid for the airfares of the Plaintiff and her children to come to Sydney for the Christmas holidays. Apparently there was an altercation on the Boxing Day concerning a boat owned by the Deceased. In consequence, the Plaintiff did not speak with the Deceased again until shortly before his death, some two and a half years later. 30 Until December 2001 the Plaintiff was employed as a bar assistant at the Moreton Bay Boat Club, earning between $150 and $200 a week. The Plaintiff gave up that employment on account of problems with her back. She was then in receipt of a Newstart allowance of $460 a fortnight until mid-October 2002. 31 At the time of the death of the Deceased the Plaintiff was employed as a Mr Rake in a capacity described by her as a "girl Friday". Mr Rake was an elderly retired accountant for whom the Plaintiff worked for more than ten years. At the time of Mr Rake's death he was paying the Plaintiff $400 gross a week. At that time the Plaintiff was residing in Brisbane in a home unit which she owned at Arana Hills. She owed about $120,000 on that unit. The Plaintiff's three children resided with her and she was supporting them. Apart from the home unit the Plaintiff's only assets at that time were a motorbike and some furniture. 32 The home unit was sold in March 2000 for $135,000, the Plaintiff giving as the reason for the sale of that home unit the fact that she could no longer service the mortgage (which by then was in an amount of about $115,000). The Plaintiff then purchased a house at Scarborough for $69,000, that purchase being funded by the net proceeds of $10,000 which she received from the sale of the Arana Hills unit, and a mortgage loan in an amount of about $60,000. 33 When Mr Rake died in January 2002 the Plaintiff found herself unemployed. She could not afford to meet the mortgage repayments on the Scarborough house, which she then sold. She received $40,000 from the net proceeds of sale. Of that amount she spend $10,000 (or $11,000) in paying off a motor vehicle, and has used most of the balance for living expenses. She presently has about $6,000 remaining of that amount. The Plaintiff's only significant assets are her motorbike, to which she attributes a value of $20,000, and a motor car, which she estimates to be worth about $13,000. The motor bike is a Harley Davidson Superglider, which she purchased earlier this year for $20,000, having sold her previous motorbike for $19,000. 34 The Plaintiff had been in part-time employment as a cook at a rural location about three hours' drive from Longreach in July-August 2002. She is presently working in Longreach as a relief driver on an end loader (a tractor), clearing dams. She works a maximum of four hours a day, receiving $20 gross an hour. The Plaintiff estimated that her current living expenses total about $30,400 a year. 35 Evidence was given by the Plaintiff concerning various other types of work in which she had been employed in recent times and concerning application which she has made for employment. She has completed a course in property management and has applied for many positions in that field, thus far without success. 36 Whilst employed as a tractor driver the Plaintiff resides on the properties where the work (cleaning out dams) is performed. The Plaintiff's employer provides her with all expenses, other than her food and fuel for travelling to and from work. The Plaintiff said that at the time of the hearing there was no work available for the cleaning out of dams, on account of the current drought. In consequence, the Plaintiff has been residing in a hotel near Longreach. She said that she prefers to live in the country, rather than in the city; however she does not want to continue in the work of cleaning out dams. 37 When asked about occupations and work which she would like to perform the Plaintiff said that she had inquired about running a motel and that she would love to do that work. 38 I have already set forth details of the various assets which were jointly owned by the Deceased and his wife at the time of his death. Those details were brought up to date by the Defendant at the hearing. 39 In early 2002 the Defendant sold the house property at 8 Palmway Crescent, Tuncurry for $265,000. After the death of the Deceased the Defendant in 2001 purchased for $165,000 a property at 14 Palmway Crescent, which she sold in September 2002 for the same price to the purchaser of 8 Palmway Crescent. It appears that the Jaguar motor car has been sold for $100,000. 40 Later in 2002 the Defendant sold the Wharf Road property for $135,000. She said that she sold the foregoing properties in order to meet legal costs and the settlement moneys in respect of the claim brought by Nadine Van Komen (which was settled for $50,000). 41 The Defendant stated that at the present time she has the following assets: House property at 9 Palmway Crescent, Tuncurry (to which a value of $750,000 is ascribed)

Investment property at 22 Regency Circuit, Tuncurry (to which a value of $300,000 is ascribed)

House property in the Philippines (to which a value of $50,000 is ascribed)

Honda Civic 2000 motor car (having an estimated value of $15,000)

Furniture and personal effects (having an estimated value of $30,000)

ANZ Savings Account ($700) 42 The present liabilities of the Defendant are as follows, Mortgage to CityBank secured by 32 Regency Circuit, Tuncurry ($20,089)

The proceeds of sale of the Wharf Street property and the property at 8 Palmway Crescent total $400,000. It was not at all clear from the evidence how that amount (or the proceeds of sale of the Jaguar motor car) had been disbursed by the Defendant, or what had happened to the fixed term annuity policy (in an amount unspecified) which, according to the Defendant, at the time of the Deceased's death was providing an income of $1,900 a month. It is observed, however, that the mortgage on 32 Regency Circuit has been reduced from $80,000 to $60,000, that the credit in the St. George cheque account has diminished from $45,000 to $7,000, and that the Defendant now has an ANZ Term Deposit of $30,527. 43 It is difficult to resist the conclusion, as submitted on behalf of the Plaintiff, that, even upon the most generous approach, the Defendant has not accounted for assets in excess of $250,000. 44 In March 2003 the Defendant underwent key-hole surgery to remove a tumor from her left lung and that she has been on continuous medication since that operation. She was to commence treatment on 1 April 2003 by an oncologist.

45 The Defendant stated that her only income is from the rent which she receives from the investment property at 22 Regency Circuit, Tuncurry. Her Income Tax return for the year ended 30 June 2002 discloses a net income from rental of the Wharf Street property of $3,007 (although the gross rental income is shown as $25,142). It is difficult to reconcile those figures with the Defendant's assets and expenses and lifestyle. The Defendant estimates that her regular weekly outgoings total somewhat in excess of $500. 46 In January 1996 the Defendant underwent surgery for breast cancer. Since that time she has been on continuous medication and requires regular checkups by a surgeon. The Defendant also suffers from arthritis in her hand, for which she receives regular treatment from a rheumatologist. In addition, she has as a kidney problem, which requires regular checkups from a renal specialist in Port Macquarie. 47 In March 2003 the Defendant underwent key-hole surgery to remove a tumor from her left lung and she has been on continuous medication since that operation. She was to commence treatment by an oncologist on 1 April 2003. 48 Since the death of the Deceased the Defendant has visited her family in the Philippines on five occasions, and has been for a three week trip to Europe in 2000 and again for a trip of three or four weeks to Europe in 2001. 49 It is in the context of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. That claim must be approached in the light of competing claims upon the testamentary bounty of the Deceased. The only such competing claim is that of his widow, the Defendant. 50 I have had the benefit of receiving written outlines of submissions and chronologies from Counsel for the respective parties. Those documents will be retained in the Court file. 51 The relationship between the Plaintiff and the Deceased was not a particularly close one. That fact, however, was essentially caused by the Deceased himself. He largely abdicated all responsibilities towards the Plaintiff during his lifetime. The Plaintiff cannot be in any way blamed for the lack of closeness of her relationship with her father. She attempted to retain contact with him once she had reached adulthood, and did so by telephone, by cards on appropriate occasions, and by visits. 52 The Plaintiff was denied a proper education, the provision of which is a basic parental responsibility. She thus has been greatly limited in the fields of employment open to her. When she left school (at a time when her physical condition required her to wear a back brace) she received no assistance whatsoever from her father towards making her way in life. 53 The Plaintiff is a hardworking and determined woman. It is greatly to her credit that, despite her physical disabilities, she chooses to remain in employment, especially in a field traditionally occupied by males, rather than to go onto unemployment benefits. 54 In carrying out the first stage in the two stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208f it is necessary for the Court to determine whether in consequence of the provision (if any) made for her by the Deceased the Plaintiff has been left without adequate provision for her proper maintenance. In carrying out that first stage of the two stage process the Court must also have regard to the situation of other persons who have legitimate claims upon the testamentary bounty of the Deceased. In the circumstances of the instant case the only other such person whose claim must be considered is the Defendant. It will be appreciated that she was the chosen object of the Deceased's testamentary beneficence (even though it has not been necessary for those testamentary provisions to be called into operation). Even if at the time of his death the Deceased had held any assets sufficient to meet the legacy of $5,000 given to the Plaintiff by his will, I consider that that legacy did not constitute adequate provision for the Plaintiff's proper maintenance. In those circumstances the Court must proceed to the second stage in the two stage process, and must consider what provision should be made for the Plaintiff's maintenance. 55 The Plaintiff's essential need is for security of accommodation and also for a fund to meet contingencies, especially the contingency that, on account of her health problems it may be necessary for her to give up employment completely. The Plaintiff said under cross-examination that she desires to live anywhere where she can get a permanent job or a permanent dwelling. She gave evidence of inquiries which she had made of house prices in Brisbane, before May 2002 (in the range $230,000 to $250,000), and in Longreach in recent months (in the range between $115,000 and $400,000, a median price being, apparently, $230,000). 56 It is not usual for an adult child to establish an entitlement to receive from the estate of a deceased parent the purchase price of a residence. Nevertheless, in the instant case the Plaintiff's medical condition, which severely curtails her earning capacity, as well as the fact that throughout his lifetime the Deceased failed to provide the Plaintiff with those advantages which would normally be expected to be provided by a parent, are such that in my conclusion the Plaintiff has established an entitlement to receive an amount sufficient to enable her to purchase a residence in the Longreach district, and to have a fund to meet contingencies. I consider that an appropriate amount for a residence should be somewhat less than the median price given by the Plaintiff for a house in Longreach, (since the upper limit of the range appears somewhat high, compared to Brisbane prices). In my conclusion the component for a residence should be $200,000, and the component for the fund to meet contingencies should be $50,000. That is, the Plaintiff should receive a total amount of $250,000. 57 The assets of the Defendant, who is the only other person who has a competing claim upon the testamentary bounty on the testamentary bounty of the Deceased are such that I do not consider that an order for provision in the foregoing amount of $250,000 should be reduced, let alone extinguished, by reason of the competing claim of the Defendant. 58 I recognise that by far the largest part of the assets which were held conjointly by the Deceased and the Defendant at the time of his death were acquired in consequence of the gambling win of the Defendant in 1995. Nevertheless, those jointly owned assets also reflected an inheritance by the Deceased from the estate of his late father and the sale by the Deceased of a house property given to him by his late father (those benefits having a total value of almost $510,000), the proceeds of which assets subsequently came to be held in the joint names of the Deceased and the Defendants. 59 I have already observed that there are no assets in the actual estate of the Deceased. In consequence, the Plaintiff can receive a benefit in the foregoing sum of $250,000 (or, indeed, in any sum) only if one or more of the assets held by the Defendant be designated as notional estate of the Deceased. 60 In respect to each of the jointly owned pieces of real estate the Deceased at any time up to the date of his death was entitled to sever the joint tenancy between himself and the Defendant. I consider that his failure to do so constitutes a prescribed transaction of the nature referred to in section 22 of the Family Provision Act. 61 By section 27(1) of the Act the Court is enjoined not to make an order designating property as notional estate unless it has considered:

(a) the importance of not interfering with reasonable expectations in relation to property,

(b) the substantial justice and merits involved in making or refusing to make the order, and

(c) any other matter which it considers relevant in the circumstances. 62 The Defendant was the loving a dutiful wife to the Deceased for more than twenty-two years. In normal circumstances she would have expected to be reliant upon the assets of the Deceased for her maintenance after his death. The terms of the will of the Deceased reflected such an intention on his part. Nevertheless, the totally unexpected windfall of $1.75 million resulting from the Defendant's gambling win in February 1995 completely altered the reliance of the Defendant upon the assets of the Deceased and her expectations in regard thereto. The Defendant's assets after that win were considerably greater than those previously owned by the Deceased. The totality of their respective assets were then put into the joint names of the Deceased and the Defendant. 63 In my conclusion the substantial justice and merits of the claim of the Plaintiff, viewed in the context of the responsibilities of the Deceased towards his wife of more than twenty years, require that an order for provision for the maintenance and advancement in life of the Plaintiff along the lines that I have already indicated should be made. 64 I propose, therefore, that the Court should designate as notional estate of the Deceased one or more of the pieces of real property which were held by the Deceased and the Defendant conjointly before his death and which, upon the death of the Deceased, devolved upon the Defendant by survivorship. The most appropriate such piece of real property would in my view be the investment property at 22 Regency Circuit, Tuncurry. Nevertheless, the Defendant should have an opportunity of indicating whether she has any preference as to which of the formerly jointly owned assets should be designated as notional property of the Deceased. It is also probable that the Regency Circuit property (having a present estimated value of $300,000 and being subject to a mortgage of $20,000) may not be sufficient to meet both the legacy and the Plaintiff's costs. In consequence, it is likely that some other asset may also need to be designated notional property of the Deceased. Accordingly, I propose to stand the matter over to enable the parties to bring in short minutes of order to reflect my foregoing conclusions, which I summarise as follows. 65 I consider that the Plaintiff has established an entitlement to receive out of the notional estate of the Deceased a legacy in the sum of $250,000, and that such legacy should not bear interest if paid within three months. 66 The costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis should be paid out of the notional estate of the Deceased. The exhibits should be returned. 67 I stand the matter over to a date to be fixed, for the bringing in of short minutes to reflect my foregoing conclusions. **********

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