- No Distribution For Third Child
- No Parental Relationship Prior To Death
- Money Withdrawn From SMSFs To Pay A Successful Claim
A recent NSW Supreme Court case involves the Hemmes family which for many years was well known for a dress shop in Pitt St in Sydney’s CBD.
Sometime in the late 1980s or early 1990s they redeveloped part of the dress shop into a pub and from that adventure caught the publican bug. Over the last 15 to 20 years the family has purchased and redeveloped many pubs in Sydney.
The case involves a distribution from two SMSFs which John Hemmes was a member before his death in March 2015.
He was married for about 60 years to the same woman and they have two children currently aged in their mid 40s and 50s.
His last will was made in January 2015. In the will he noted that as he and his wife were joint tenants of their home, worth more than $30m, and on death his share would revert automatically to her. He also left his wife all his house contents and personal possessions. He also elected to bequeath $2m to his former personal assistant Kerrie Boylett and divided the rest of his estate between their two children if they survived him.
The net value of his deceased estate was just under $300,000 in the red.
No Distribution For Third Child
He left no distribution to Edward Cameron, born in 1990 and currently aged in his late 20s, who claimed to be John Hemmes’ son. Mr Cameron’s mother is Fiona Cameron with whom John Hemmes had “an extra marital relationship between 1983 and 1989”. Based on this information it would appear that Mr Cameron was born after this relationship had ceased.
For some reason, John Hemmes never accepted that Mr Cameron was his child however under a Family Court order he had paid Ms Cameron about $300,000 in child maintenance. This proceeding had determined paternity via a DNA test.
There was no personal contact between John Hemmes and Edward Cameron before Hemmes died even after Cameron had tried to interact saying he would like to know his father. Via Kerrie Boylett, Hemmes had said that he would acknowledge Cameron as his son if he agreed to additional DNA testing. In September 2010 Mr Cameron agreed to additional testing but did not actually submit to the tests.
The defendants in this case – John Hemme’s executor and others – argued that Cameron did not deserve any distribution from the estate because:
- The deceased had made adequate provision for him during his life via child support payments
- The deceased had had no relationship with Cameron “beyond bare paternity”
- Cameron is a healthy adult male who should be left to make his own way in life.
The defendants accepted that under relevant NSW statute Hemmes was “irrebuttably presumed to be” Cameron’s father.
No Parental Relationship Prior To Death
The defendant argued that he had tried to have a relationship with his father but had always been rebuffed. The Court said that this case “does not fit the mould of an ordinary application by an adult male for family provisions relief”. He is a young man who has not established himself and has had to make his way in the world “without any love, support or encouragement ordinarily associated with a paternal relationship. He has had to labour, on the contrary, with rejection at the hands of a father whose wealth and prominence magnified the pain of parental rejection”.
Edward Cameron initially asked for $4.1m – in a moment we will see where this amount came from – and then reduced it to $3m (this being the approximate amount of money to purchase a home where he currently lives).
The defendants argued that if the Court elected to award Cameron any money then it should be more than $1m.
Ultimately the Court elected to grant a legacy of $1.75m.
Given that at the time of his death Hemmes had died with debts that were worth more than his assets where did this money come from?
Money Withdrawn From SMSFs To Pay A Successful Claim
Before this Court case began the parties had agreed that the corporate trustees of the two SMSFs that Hemmes had been a member of would deposit $4.1m into a “controlled moneys account in the name of the defendants’ solicitors”. As part of this process the defendants agreed that they would ask for no further money from any defendant or from his step-brother and sister.
From the written judgement we do not know the total net value of these SMSFs and how the $4.1m was determined and agreed upon.
The important point about this case is that the NSW family provisions legislation has been applied against the assets held in SMSFs against a deceased that technically died in a state of indebtedness.
It is unclear if he the deceased had sought to hide some of his wealth in his SMSFs from his third child. Only time will tell.
The Court still has to hear from the parties about the payment of legal costs.
Estate Hemmes; Cameron v Mead  NSWSC 85
(9 February 2018)Read case