Temple v Cowell, Executor of Estate of Kevin James Rose Deceased - [2011] SASC 20

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
TEMPLE & ANOR v COWELL, EXECUTOR OF ESTATE OF KEVIN JAMES ROSE DECEASED & ANOR
[2011] SASC 20
Reasons of Judge Lunn a Master of the Supreme Court
22 February 2011
SUCCESSION - FAMILY PROVISION AND MAINTENANCE
Claims under Inheritance (Family Provision) Act 1972 by two adult children against their deceased father's estate - house in father's name was only significant asset - defendant as father's long term domestic partner entitled to a major interest in it under Domestic Partners Property Act 1996 if it had not been left to her under the Will - beneficial estate of father very small - plaintiffs had not seen or contacted their father in 12 and 10 years respectively before his death - defendant/domestic partner had nursed father through many years of ill-health - claims both dismissed.

TEMPLE & ANOR v COWELL, EXECUTOR OF ESTATE OF KEVIN JAMES ROSE DECEASED & ANOR
[2011] SASC 20
JUDGE LUNN:
Reasons on summary determination of claim under Inheritance (Family Provision) Act 1972 (“the Act”)
Background

(The persons involved will be referred to by their Christian names. This was generally the course adopted at the hearing. No disrespect is intended.)
This is a summary determination under 6R 312(12) and (12A) of the Supreme Court Civil Rules 2006. All the evidence in chief was by affidavit and there was cross-examination of all deponents except Mark Mitton. The plaintiff’s counsel sought to take objection to hearsay evidence in the affidavits of the defendant, but under 6R 312(12A)(c) it is admissible. Where I have regarded it as of importance, I have indicated what weight is attached to it.
Much of the evidence of the family history is of little or no relevance except as to general background.
The evidence of the plaintiffs and their mother was coloured by considerable antagonism towards the deceased. The plaintiffs were angry that he had not been a proper father to them. Trevor was upset because Kevin had a closer and more meaningful relationship with Barbara’s children and the foster children than he did with him. However, this is not a claim for damages against the deceased’s estate for loss arising out of any breach of parental duties.
Barbara’s evidence was likewise coloured by her being incensed that the plaintiffs were seeking to deprive her and her daughters of what had always been her home and in the light of what she considered to be the very substantial sacrifices which she had made in caring for Kevin. However, I prefer her evidence to that of the plaintiffs and their witnesses.
A good deal of evidence was addressed to how the plaintiffs found out about their father’s death almost a year after it had occurred and their dealings with Barbara after finding this out. However, it is of no relevance in determining a claim under the Act.
The deceased, Kevin Rose, was born in 1951. In 1974 he married Kathlene (whose surname is now Shipway). There were two children of that marriage, being the plaintiff Trevor Rose who was born on 12 August 1974 and the plaintiff Melanie Rose who was born on 7 March 1978. Kevin and Kathlene were divorced in 1980. Kathlene alleged a history of violence by Kevin. The Family Court granted her custody of Trevor and Melanie. They continued to live with her and until about 1982 had no further contact with Kevin. In 1980, Kathlene married Robert Temple. On a date not disclosed in the evidence she changed the surnames of Trevor and Melanie from Rose to Temple and they have both continued to use that latter surname. However, I accept the evidence of Barbara that neither she nor Kevin knew of this change of surname.
In 1975 the defendant, Barbara Cowell, with her then husband, bought a property at 25 Blueberry Road, Parafield Gardens (“the house”) and subsequently built a house on it in which Barbara has lived ever since. Barbara was subsequently divorced from her husband and obtained his interest in the house in a property settlement. It continued to be subject to a mortgage to the State Bank for monies borrowed for the purchase of the land and the building of the house.
In about mid-1979 Kevin met Barbara, who was then running a local delicatessen. They developed a relationship and by about mid-1980 they were living together in what then would have been described as a defacto relationship. In due course they became putative spouses within the meaning of the Family Relationships Act 1975.
In about 1981 or so Barbara initiated a resumption of contact by Kevin with Trevor and Melanie. There were some visits. On a few occasions Barbara and Kevin babysat the children and the children had sleepovers at the house. In about 1983 Barbara and Kevin assisted Kathlene and Robert in moving house, which suggests there was then quite a good relationship between the families. However, the prime participant in contact between the families was Barbara and not Kevin. Kevin did not take much interest in his children.
On a date which is unclear, but which could have been in about 1983, Kathlene requested Kevin to consent to Trevor and Melanie being adopted by Robert. Kevin refused. It is unclear whether his reasons were that he still wanted to be the father of Trevor and Melanie or, as was later shown to be the case, Robert was not a suitable person to become their father. Kathlene was upset by this refusal and retaliated by discontinuing the contact between her children and Kevin and Barbara. Later she separated from Robert and divorced him.
Kevin had little education and no special work skills. He had employment from time to time and periods of unemployment. He also had periods of illness when he was unable to work. At about 1986 he worked for about two years for Bridgestone Tyres, but gave it up because he found the work too heavy. He did not apparently have any subsequent paid employment. Barbara was continuously employed in this period, or was running her own businesses. It would appear that she earned more than Kevin and paid the mortgage instalments on the house. There was no suggestion that Kevin ever had any savings or assets of his own other than his car and his collection of birds.
In 1988 Barbara bought a bakery business. She borrowed $48,000 for this purpose from the Commonwealth Bank and secured the loan by a second mortgage over the house. Kevin was not officially employed in the business and apparently was then receiving some form of Social Security benefits. However, he was often present at the bakery and performed various tasks to assist Barbara. In some documents he described himself as a baker, but he did not hold any qualifications as such. On a few occasions between about 1988 and 1990 Trevor and Melanie visited Barbara and Kevin at the bakery. They were cordially received. There was some contact between Kathlene and Barbara, but it ended in about 1991 over a dispute between them concerning some bakery products.
In about early 1991 Kevin suffered a major heart attack. Severe ischaemic heart disease was diagnosed, from which he suffered for the rest of his life. After some time in hospital he recuperated at the house and was nursed by Barbara. The medical reports of Dr Arstall stated that his heart condition could not be treated by surgery, that he suffered angina on exertion and that at least in 1994 and 2001 he had major depression.
In 1991 Kathlene left the home where she had lived with the children for some years and moved with them to Angle Vale, but she did not inform Kevin or Barbara of their new address. There was then no contact between Kevin and his children until 1996 and 1998, as will be related later. He did not attempt to find them and they did not contact him.
By about mid-1991 Barbara’s bakery business was in serious financial trouble. This in part, although not wholly, resulted from her having to employ additional staff while she nursed Kevin after his heart attack. She sold the business, and apparently gave possession of it to the purchaser, but the purchaser failed to settle on the sale. Barbara was then left with substantial debts and little means to pay them.
On about 21 August 1991 Barbara executed a transfer of the house to Kevin for a price of $89,000. I find this was part of a stratagem to prevent her creditors taking the house. She arranged for Kevin to borrow $77,000 from BankSA secured on a mortgage over the house, which paid off her previous mortgages on the house to the State Bank and the Commonwealth Bank. Although the transfer document referred to the purchase price having been paid, Kevin did not pay the difference between the $89,000 purchase price and the $77,000 used to discharge the previous mortgages. He did not have such money.
On 21 January 1992 Kevin executed his last Will by which he left his whole estate, including the house, to Barbara. I accept Barbara’s evidence that this Will was made as part of the arrangement under which the house had been transferred to Kevin.
After the house was transferred to Kevin, he and Barbara continued to live in it in the same manner as previously. Barbara was working at three jobs in an effort to earn enough money to pay off her creditors from the bakery. She also used her earnings to pay the instalments due by Kevin to BankSA under the mortgage and for general household expenses. Kevin’s only income was his Social Security benefits which he used principally to pay for his 50 cigarettes a day, his car and his hobby of keeping an extensive aviary.
By 1993 Barbara had broken down from working excessive hours and from looking after Kevin in his continued ill-health. She then had herself declared bankrupt. Neither her trustee in bankruptcy nor any creditor sought to attack her transfer of the house to Kevin. She was discharged from her bankruptcy in 1996.
In 1998 Barbara began to take foster children into her home as a means of earning additional income. She was the foster carer, although Kevin as an occupant of the house had some involvement with these children.
In 1996 Trevor and his then fiancée (and now his wife) visited Kevin and Barbara at the house. He introduced his fiancée to Kevin and said he wanted Kevin to come to his wedding. It is unclear whether any date for the wedding was then mentioned. Trevor never saw Kevin again.
Trevor’s wedding was set for 19 September 1998. On 12 September 1998 Melanie visited Kevin and Barbara at the house. She gave Kevin an invitation to the wedding ceremony. It was not a formal printed invitation, as was likely to have been given to the other wedding and reception guests, but was a card hand-written by Melanie. She did that without first telling Trevor. She believed Trevor wanted his father to come to the wedding. There was some discussion between Melanie and Kevin about whether he was also invited to the reception, but she suggested that might be awkward as Kathlene would be at the reception. While Kevin led Melanie to believe he would attend the wedding, he ultimately did not do so, because he was not also invited to the reception. On the day before the wedding Melanie told Trevor what she had done and that she expected Kevin to attend the ceremony. Trevor was very disappointed when Kevin did not attend. Melanie had no further contact with Kevin.
In 2001 one of the foster girls living in the house made complaints of sexual molestation of her by Kevin. Kevin and Barbara strenuously denied the allegations. It was never proved that Kevin had committed any criminal offence against the girl. However, while the complaint was investigated, all the foster children were taken from Barbara. She then undertook the care of five handicapped adults by arrangement with Disability SA and they lived in the house with her and Kevin. Three of the five still remain and the house has become their home.
Kevin died on 30 August 2008. His estate consisted of the house and a Commodore car which he had bought in 2005. Barbara paid his funeral expenses. At about the date of his death there was a balance of $18,767 owing on the mortgage over the house to BankSA, which Barbara subsequently paid. On 23 July 2009 Barbara was granted probate over Kevin’s Will. The plaintiffs instituted this action on 20 January 2010 seeking provision for themselves under the Act. As at 2 September 2010 the house was valued at $275,000.
Situation of Trevor Temple
Trevor has two children, born in 2000 and 2005. His wife works part-time. They jointly own a house with a Valuer-General’s valuation of $245,000, but subject to a mortgage of $205,000. They have a car worth $15,500 and Visa card debts of $9,000.
Trevor has suffered a number of work-related injuries. In 2008 he was found in the Worker’s Compensation Tribunal to have permanent residual disabilities of 20 per cent of his right arm above the elbow, 20 per cent of his lower back and lumbar spine and 3 per cent disfigurement for which he received a payout of compensation of $34,935 which he has since spent on living expenses. He now has no savings. On 25 August 2010 he was involved in a motor vehicle accident in which he suffered injuries to his back and elbow and has been unable to work since. He has made a claim for damages against the insurer of the other vehicle involved, but his prospects of recovering damages are unclear. Immediately prior to that accident he was employed as a casual forklift driver working an average of 35 to 45 hours per week at an hourly rate of $18 per hour.
In addition to the injuries and disabilities mentioned above, Trevor has also been diagnosed as having a chronic pain and adjustment disorder with anxious and depressed moods. He is still undergoing treatment for his injuries and disabilities.
At present Trevor has no income and his family is existing on his wife’s wages and Family Assistance of $526 per week, but with a deficit of $312 after expenses of $839. He is seeking an interim damages payment from his vehicle accident claim.
The needs of the plaintiffs for provision is to be determined upon the circumstances existing at Kevin’s death, including circumstances which could be reasonably foreseen at that time, but in making any order the Court acts on the circumstances existing at the date of that order.[1] Here most of the evidence about Trevor addressed the latter position, but not the former. On the former, the evidence was that in the financial year ending 30 June 2008 Trevor’s gross taxable income was $46,828 with a net taxable income of $46,372. There was some uncertainty in his evidence about whether the WorkCover redemption of $34,935 was included in this sum. However, his tax return shows almost all of the amount being received from a single employer, which suggests that it does not include the WorkCover redemption amounts. Hence, at the date of Kevin’s death it appears that Trevor was earning a modest income.
[1] Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494 at 509.
The situation of Melanie Temple
Melanie has worked since 1997 for a bank, but is now only on contract as a Customer Services Manager. Restructuring within the bank makes her future employment uncertain. At present she earns about $970 per week.
Melanie suffers from sinus tachycardia, irritable bowel syndrome, caustic reflux and an ulcerated oesophagus for which she requires significant treatment and medication. She is engaged to be married, but has postponed her wedding until next year because of her medical conditions. She shares rented accommodation with her fiancé and both contribute towards the rent and expenses. Her weekly income is sufficient to cover her usual expenses. She has $42,000 in a bank account and other assets. Her net assets are about $71,000 after deducting liabilities on credit cards and the like.
Her financial position was given as at December 2010. There was no suggestion it differed materially from that which existed at August 2008. Melanie’s irritable bowel syndrome was only diagnosed after Kevin’s death and there was no evidence she had any prior symptoms of it.
The only financial needs established by Melanie were if she loses her employment and cannot obtain equivalent employment, or, if her health and possible maternity leave after her marriage, significantly diminish her income. Her fiancé earns in the vicinity of $100,000 per annum and should be in a position financially to support her. While there is some possibility she may have a need of support from Kevin’s estate, it is fairly remote.
Situation of Barbara
In early 2008 Barbara was diagnosed with lung cancer and after treatment it went into remission. During this period Kevin had to undertake greater household responsibilities than he had previously. As at October 2010 she was suffering from carcinoma of her right lung, peripheral vascular disease, deep vein thrombosis, hypothyroidism, carpal tunnel syndrome in her wrists and arthritis for which she was taking substantial medication. She is still living in the house and caring for three handicapped people. She continues to pay all of the outgoings in relation to the house. She wishes to live there for as long as she can, but, if her health requires her to go into a nursing home or the like, she wants to be able to pay for it by realisation of the house. She wants the three handicapped people to continue to live in the house for as long as possible, as it has become their home. She has left the house in her Will to one of her daughter’s on condition that that daughter will reside in the house and care for these handicapped people for up to five years.
Since her bout of cancer, her income has been only a pension and monies paid by Public Trustee for the upkeep of the three handicapped adults. She has a Commodore car, which I presume is the one inherited from Kevin, some furniture and $2,000 in the bank, but a credit card liability of about $6,500. She has been advised that the house needs to be electrically re-wired, which will cost approximately $16,800.
Size of Kevin’s Estate
While Kevin had the legal estate in the house, any order under the Act can only operate on the extent of his beneficial interest in it. The only other asset of Kevin worth speaking about was his Commodore car valued at $2,000. I infer it is the car which Barbara now has. It is to be offset against the funeral expenses which she paid out of her own monies.
I accept Barbara’s evidence that part of the arrangement in 1981 for a transfer of the house to Kevin was that he would make the Will devising it to her if he predeceased her. This is what occurred. While this cannot override the operation of the Act, it is not to be ignored in this application. If Kevin had not made such a Will, Barbara could have claimed the house against his estate. The plaintiffs pleaded that any such claim by her would have been barred by s 26 of the Law of Property Act as the promise was not recorded in writing. I need not pursue this issue as the claims under the Act can be determined in Barbara’s favour on other grounds.
If the domestic partnership between Kevin and Barbara had broken down shortly before his death the Courts could have made an order for the division between them of their respective assets, including the house, under ss 9 and 10 of the Domestic Partners Property Act 1996 (the “DPP Act”). The Court would have taken into account, as I find to be the case on the evidence before me, that Kevin had never paid out of his own monies anything for the acquisition, upkeep or maintenance of the house or any outgoings in respect of it. All of these had been paid by Barbara out of her assets and earnings. Kevin had had rent free accommodation and board in the house. The un-contradicted evidence was that his pension income was applied principally for his cigarettes, birds and cars. There was no evidence that Barbara had any other car and so presumably she utilised the services of Kevin’s car. The plaintiff submitted that Barbara had indirectly benefited from Kevin’s unpaid services in the bakery business from 1988 until his heart attack in 1991 which indirectly would have made some money available to Barbara to be applied by her towards the house. However, in the whole context of their relationship this would have been a fairly minor indirect contribution to the house. If there had been a division of property under the DPP Act close to Kevin’s death, it is highly likely at least a 80-90% interest in the house would have been given to Barbara. This would have left Kevin with a very small estate which could be subject to any order under the Act.

I accept the submission of Barbara’s counsel that in considering Kevin’s moral claim to provide for Barbara for the purpose of exercising any discretion under the Act the Court should not in other than unusual circumstances deprive Barbara of what she would have received as her proper share of Kevin’s property under the DPP Act. The matters which would be taken into account by the Court under s 11 of the DPP Act encompass those which are relevant under the Act,[2] but the relevant factors under the Act are wider. The upshot of this is that Kevin would have had a very small estate, of a present value of only somewhere between about $28,000 to $45,000, to satisfy by his Will any legitimate moral claim for provision out of his estate by Barbara on the one hand,[3] and any of the plaintiffs on the other hand. The Courts are reluctant to make orders under the Act in such very small estates.[4]
[2] Arnold v Dalton (2002) 84 SASR 482.
[3] That is taking into account only relevant consideration under the Act which that had not already been taken into account notionally under ss 10 and 11 of the DPP Act.
[4] De Groot Family Provision Australia (2^nd ed.) para. 2.30.
Barbara clearly has a very strong moral claim against Kevin for adequate provision out of his estate. They had a long domestic relationship and she had cared for him during his extensive ill-health after 1991. At the time of Kevin’s death she herself was also in deteriorating health and did not have an assured future income or accommodation other than the house which was in his name.
In his final address, counsel for the plaintiffs did not suggest that any order should be made under the Act to deprive Barbara of her occupation of the house during her lifetime. He conceded that any order should be confined to one which only benefited the plaintiffs after Barbara’s death. While this was a realistic concession, it still requires that the plaintiffs should show that some provision should be made for them under the Act. Barbara’s children and grandchildren were well-known to Kevin and in a real sense, particularly in the later part of his life, they had become his extended family in lieu of the plaintiffs. Similarly, Kevin apparently had a good relationship with the three handicapped boarders and would have shared Barbara’s concern that after their respective deaths, an extended period should be provided for them to find other suitable homes. The primary issue is not simply whether Barbara’s children and grandchildren should take priority over the plaintiffs in obtaining the ultimate benefit of the house, but whether the plaintiffs have established the necessary threshold for a claim under the Act.[5]
[5] In her deteriorating health there is also the possibility that Barbara may need to sell the house in the future to pay for her own ongoing care and medical expenses.
Moral Claims of the Plaintiffs
I am satisfied that after 1996 Trevor decided to reject Kevin as his father and took no steps in the twelve years thereafter until Kevin’s death to make any sort of contact with him. In the 1996, and last visit, the foundation had been laid for Kevin to come to the wedding. It is highly likely that there were formal invitations for the guests for both the wedding and the reception, but it was not explained why Trevor did not send one to Kevin. Trevor must have been a party to some decision not to invite him. Melanie’s attempt in the week before the wedding to have Kevin attend only the ceremony was well meant, but it is understandable why Kevin ultimately rejected it. Kevin’s failure to attend the wedding in these circumstances was not a proper ground for Trevor to think that he had been rejected by Kevin. Trevor knew where Kevin lived and on a number of occasions he was in the vicinity. He chose not to make contact. He knew Kevin was a sick man although he may not have known how sick he was. While it was also possible for Kevin to have sought out Trevor, his failure to do so probably meant that he acquiesced in their mutual rejection of each other and that each had moved into different family circles.
Even if Trevor’s rejection of Kevin in the last twelve years of his life is not sufficient for denying his claim, his moral claim at the time of Kevin’s death was in the light of his then circumstances very weak and could not prevail against the competing moral claim of Barbara in what was a very small estate.[6]
[6] De Groot above, para. 2.39.
Melanie likewise rejected Kevin after he did not attend Trevor’s wedding. In cross-examination she denied that she had written him off, but conceded she did not thereafter “pursue him proactively”.[7] It really amounts to the same thing, although expressed more politely.
[7] T35.
Again, even if this is not sufficient to dispose of Melanie’s claim, any moral claim which she had in her circumstances at the date of Kevin’s death was so weak that it could not prevail against Barbara’s claim in such a small estate. Financially Melanie was considerably better off that Trevor. Her only needs were contingent, as mentioned above, and Kevin’s estate would not have been of much significance in the context of her overall circumstances.
Accordingly, I find in respect of the claims of both Trevor and Melanie that Kevin, as a wise and just testator, in respect of their circumstances as they existed at the date of his death, was not morally obliged to make any provision for the maintenance and advancement of either of them.[8] Neither plaintiff has passed the threshold under the Act for establishing a claim upon Kevin’s bounty.[9]
[8] Bosch v Perpetual Trustee Co ( Ltd) [1938] AC 463 at 478-9.
[9] Singer v Berghouse (No.2) (1994) 181 CLR 201 at 210.
I envisage there may well be an argument about the appropriate costs order to be made. I will publish these reasons, but not at this stage make the order dismissing both claims. I will make that order when I make the costs order so that any appeal time against the dismissal and the costs order will run together.
I have today made the following orders:
1.
Reasons published.

2.Adjourned to Friday 4 March 2011 at 12.15pm to consider the question of costs.