Van Eimeren v Thiemann

[2005] NSWSC 686

CITATION:	Van Eimeren v Thiemann [2005] NSWSC 686
HEARING DATE(S):	17 February and 14 April 2005
JUDGMENT DATE :	13 July 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Associate Justice McLaughlin at 1
DECISION:	(1). I order that the summons be dismissed. (2). I make no order in respect to costs, to the intent that each party will bear his own costs of the proceedings. (3). I order that the Defendant not be entitled to recoup his costs, or any part thereof, from the estate of the late Ruth Helena Thiemann ("the Deceased").

CATCHWORDS:	Succession. Family Provision. Claim by elderly de facto widower. Small estate, consisting of only a modest house property. Right of residence given to Plaintiff. Whether Plaintiff has been left without adequate provision for his proper maintenance. Competing claims of beneficiaries. Practical consequences if usual costs orders are made. House would need to be sold, and Plaintiff would be left without accommodation.
LEGISLATION CITED:	Family Provision Act 1982
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201
PARTIES:	Martin Johannes Van Eimeren (Plaintiff) Bernard Thiemann (Defendant)
FILE NUMBER(S):	SC 1674 of 2004
COUNSEL:	F. Donohoe (Plaintiff) J. Drummond (Defendant)
SOLICITORS:	Verekers (Plaintiff) Turnbull Hill (Defendant)

LOWER COURT JURISDICTION:

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Wednesday, 13 July 2005

1674/04 MARTIN JOHANNES VAN EIMEREN – v – BERNARD THIEMANN

JUDGMENT

1 ASSOCIATE JUDGE: These are proceedings under the Family Provision Act 1982.

2 The proceedings were originally instituted in the District Court of New South Wales at Sydney, and were subsequently transferred to the Supreme Court.

3 By summons filed on 5 March 2003 the Plaintiff, Martin Johannes Van Eimeren, claims and order for provision for his maintenance and advancement in life out of the estate of the late Ruth Helena Thiemann (to whom I shall refer as “the Deceased”), who was his de facto spouse. The Deceased died on 30 October 2001, aged 72. She left a will dated 21 October 1999, probate whereof was on 25 July 2002 granted to Bernard Thiemann, the executor named in such will (who is the Defendant to present proceedings).

4 The only significant asset in the estate of the Deceased was her house property situate at and known as 14 Bangaroo Avenue, Dapto (to which a value of $130,000 was ascribed). The only other assets were moneys, totalling $5,200, held in various bank accounts and in cash. Those moneys have been exhausted in meeting funeral and administration expenses of the Deceased. (The Plaintiff said that he contributed $1,000 towards the cost of the funeral.) It is estimated by the Defendant that the present value of the Bangaroo Avenue property is $135,000. However, the submissions on behalf of the Plaintiff proceeded upon the basis that the present value of the house property was $225,000. That higher figure was grounded upon the opinion expressed by a local real estate agent in December 2004 that a reasonable asking price would be in the range of $225,000 - $235,000.

5 In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into account. It has been estimated on behalf of the Plaintiff that his costs will total about $36,000, whilst it has been estimated on behalf of the Defendant that his costs will total about $60,400. Were it necessary for the Bangaroo Avenue property to be sold in order to meet the costs of at least the Defendant, then (adopting the figure of $225,000 relied upon by the Plaintiff) it is unlikely that the net balance then remaining in the estate would exceed $160,000 (after taking into account the costs and expenses associated with such sale). Regarding the Plaintiff’s costs there was evidence that the Plaintiff’s son-in-law and daughter, Mr. and Mrs. Vaughan, were funding the Plaintiff’s costs of the proceedings, by way of an advance which they had arranged with their bank to an amount of $60,000, secured by mortgage upon their residence.

6 By her will (in which she referred to the Plaintiff as “my de facto partner”) the Deceased gave to the Plaintiff a right of residence in the Bangaroo Avenue property for his life (or until he enter into a permanent de facto relationship), with provision for the sale of that property and the purchase of a substitutionary residence at the request of the Plaintiff, and certain other consequential provisions.

7 The will then went on to provide that when the Plaintiff ceased to be entitled to live permanently in the Bangaroo Avenue residence (or in any substitutionary residence), the house and contents should be sold, and from the net proceeds the Plaintiff, if alive, receive the sum of $20,000, and the balance be divided equally between the two sons of the Deceased, being Bernard Thiemann (the Defendant) and Peter Thiemann. The will also provided that the residue of the estate, after payment of debts and expenses, should be divided equally between the children of the Deceased. As I have already observed, the residue has been totally exhausted in meeting funeral and administration expenses.

8 The Plaintiff was born on 7 May 1924 in the Netherlands, and is presently aged 81. He came to Australia in about 1955. He entered into a relationship with the Deceased in the early 1980s. At that time the Plaintiff was a widower, his second wife having died in January 1982. (His first marriage had ended in divorce.) The Plaintiff has six children, all, apparently, born of his first marriage. The Deceased had also been previously married, her husband having died in 1978. She had two children, being Bernard, the Defendant (who was born on 4 September 1949, and is presently aged 55) and Peter (who was born on 19 November 1960, and is presently aged 44).

9 At the time when he met the Deceased the Plaintiff was residing in a house property owned by him, which was situate at and known as 16 Park Street, Port Kembla, whilst the Deceased was residing in the Bangaroo Avenue property. It was the evidence of the Plaintiff that for some time after he and the Deceased entered into a relationship it was their practice to spend several nights of each week at the house of one of them and the other nights at the residence of the other. The Plaintiff sold the Park Street property in 1987. It was his evidence that for a period of about one to one and half years before that sale he had been residing on a full time basis in the Bangaroo Avenue property, the Park Street residence being empty throughout that period.

10 Throughout his working life the Plaintiff had followed a variety of occupations. His most recent employment was as a grass cutter with the Wollongong City Council. As a result of an injury to his back the Plaintiff retired from that employment in 1984. He subsequently received a compensation payment of $35,000 on account of that injury. The Plaintiff has not been in paid employment since he ceased working for the Wollongong City Council.

11 The Plaintiff gave evidence concerning the financial and domestic arrangements of himself and the Deceased during the period of their relationship.

12 It was the Plaintiff’s evidence that he had purchased the Park Street residence in 1978 for about $21,000, in the names of himself and Joanne Robb (who had been the second wife of the Plaintiff and who died in 1982). From the sale of that residence in 1987 (by which time it was unencumbered and was registered solely in the name of the Plaintiff) the Plaintiff received about $40,000, of which he said that he invested about $20,000 in an interest bearing deposit in February 1987. The evidence did not disclose what ultimately happened to the proceeds of that interest bearing deposit.

13 Throughout the period of their relationship the Plaintiff and the Deceased maintained separate bank accounts. It was, however, the evidence of the Plaintiff that from the moneys which he received from the sale of the Park Street residence, various items of furniture and furnishings were purchased for the Bangaroo Avenue residence. Those items included a refrigerator and freezer, a box freezer, a washing machine, a dryer, an oven, a bedroom suite and a new carpet. In addition, the Plaintiff said that he had painted and wallpapered the house and that from time to time he bought for the Deceased gifts of jewellery and clothes. It was the Plaintiff’s evidence that most of the outgoings on the Bangaroo Avenue residence were paid for by him, including electricity, telephone, heating, oil and food, and that in addition he gave to the Deceased cash payments of $120 a week. He said that those cash amounts were used by the Deceased to pay municipal rates and the housing loan on her residence (which the Plaintiff said was in an amount of about $50 a month). According to the Plaintiff, that housing loan was fully paid off a couple of months before the death of the Deceased.

14 From the amount of $35,000 which the Plaintiff received by way of workers’ compensation in consequence of his injury at work in 1984 the Plaintiff purchased a Nissan Patrol vehicle for $25,000, and paid all expenses relating to that vehicle (although he said that on occasion he did not have sufficient funds to meet registration and insurance, and his daughter, Mary-Ann Hansen (now Mrs. Vaughan), assisted him in that regard).

15 The Deceased did not own a motor vehicle; neither did she hold a driver’s licence. Accordingly, the Plaintiff drove her in his vehicle on holidays, to all social occasions and to medical appointments.

16 In 1993 the Plaintiff and the Deceased separated for a period of about seven months, during which time the Plaintiff lived at his daughter’s residence. However, after discussions the Plaintiff resumed cohabitation with the Deceased at the Bangaroo Avenue residence. According to the Plaintiff, the financial arrangements thereafter were that he and the Deceased shared equally all household outgoings, with the exception of electricity and telephone bills, which were paid entirely by the Plaintiff. In addition, he contributed the sum of $60 a week towards household expenses. It was the Plaintiff’s evidence that he maintained the garden, did significant work by way of household cleaning and maintenance, performed all the culinary activities, and cared for the Deceased during her declining years. The Deceased suffered from emphysema. For a period of about ten to twelve years before her death she required an oxygen machine to assist in her breathing, and in the last few years before her death she used that machine constantly, both by day and by night. It was the evidence of the Plaintiff that he became, in effect, her full-time carer throughout the last few years of her life.

17 It was the Plaintiff’s evidence that it was necessary for him to assist the Deceased with bathing, toileting and washing her hair. He said that at times the Deceased was incontinent. However, that evidence was disputed by the Defendant.

18 The extent of the services performed by the Plaintiff for the Deceased (and, by the same token, the services performed by her two sons for the Deceased, and the frequency of their respective visits to their mother) were in issue between the parties.

19 The Plaintiff gave evidence of discussions between himself and the Deceased regarding proposed marriage between them, and the purchase by the Plaintiff of a ring for the Deceased and the purchase by the Deceased herself of a wedding dress and associated items of raiment. However, ultimately, the Plaintiff and the Deceased did not marry. It would seem that the Deceased’s sons did not favour such a marriage, and also that the Deceased was concerned that if she married she might lose her German pension (which she received in consequence of her deceased husband having served in the German military forces). Nevertheless, at her request the Deceased was buried in the wedding dress which she had purchased.

20 The Plaintiff said that he contributed $1,000 towards the cost of the Deceased’s funeral, the balance of which was paid from her bank account. The Defendant, however, asserted that the Plaintiff’s contribution had its ultimate source in cash moneys held by the Deceased at the time of her death.

21 At the present time the Plaintiff’s assets consist of the Nissan Patrol motor vehicle (to which he ascribes a value of $8,000), together with moneys in a bank account (which at the commencement of the proceedings totalled about $5,400). The Plaintiff’s only income is the age pension of about $427 a fortnight. He set forth details of his outgoings, which include, so long as he is in residence in the Bangaroo Avenue property, the totality of the outgoings in respect to that residence.

22 The Plaintiff suffers from gout and from diabetes (for which conditions he takes medication) and from a continuing problem with his back. He gave evidence of renovations which he said would be required to the bathroom in the Bangaroo Avenue residence, and that the cost of those renovations would be about $5,000.

23 I did not regard the Plaintiff as an entirely reliable witness. Certain inconsistencies in his evidence, and his inability to recall matters upon which he was cross-examined may, of course, have resulted from his advancing years, although at times during his cross-examination I rather gained the impression that the Plaintiff remembered what he chose to remember.

24 I have already observed that there was considerable dispute between the parties concerning the extent of the services of a domestic and household nature performed by the Plaintiff for the Deceased.

25 Nevertheless, I am satisfied that the Plaintiff was a devoted full-time carer to the Deceased during her declining years, throughout which period she was suffering from significant problems with her health, and required full-time care and attention, which was provided to her by the Plaintiff. That conclusion is supported by the report from the Deceased’s regular medical attendant, Dr. Leon R. Wright, dated 17 October 2002.

26 It should be appreciated, however, that an order for provision is not made as a reward for good conduct by an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of an applicant.

27 Evidence was given by each beneficiary concerning his financial and material circumstances.

28 The Defendant is a qualified boilermaker/welder, who was employed as such for 26 years, until 1993, when he was made redundant. Since that time he has worked in a voluntary capacity as a Lifeline Counsellor and in the Palliative Care Unit at Port Kembla Hospital. He is presently unemployed, and receives a Newstart Allowance of $421 a fortnight. The Defendant’s son, who is presently aged 18 and who is dependent upon him, resides with the Defendant. The Defendant suffers health problems, including hypertension and chronic anxiety panic disorder.

29 The Defendant referred to essential and urgent repairs which were necessary to his residence and to his motor vehicle, but which he could not presently afford. He also stated that with the money which he expected to receive from the estate of the Deceased he would like to open his own healing centre.

30 The Defendant’s assets consist of:

House property situate at and known as 4 Mailey Place, Warilla (having an estimated value of $200,000)

1990 Mazda sedan motor car, having an estimated value of $5,500

Commonwealth Bank Account, having a credit of $2,642

Term deposit of $8,043

Property and furniture (having an estimated value of $5,000)

Superannuation entitlement of $84,000.

31 The Defendant has no current debts. He estimates that his living expenses total about $13,550 a year (that figure being in excess of what he receives by way of the Newstart Allowance).

32 The other beneficiary, Peter Thiemann, is presently aged 44 years. He is married. He has a daughter from a previous relationship, who is presently aged 16. His wife has two daughters from a previous relationship, who are presently aged 20 and 21 and who presently reside with Peter Thiemann and his wife, as well as the infant son of one of those daughters. Those daughters, when they can afford to do so, contribute $50 a week by way of rent.

33 Peter Thiemann is employed as a bus operator by State Transit, for which he has worked for the past 23 years. His wife, who until recent times worked as a part-time warehouse assistant, is now employed as a rail marshalling assistant.

34 By working on a Sunday shift, Peter Thiemann receives a net fortnightly income of $1,100 (after payment of tax, superannuation and child support payments of $248 a fortnight). Peter Thiemann also works for another employer in a part-time casual capacity, for which he receives a net amount which averages about $100 a month. His wife in her former employment received a net wage of $260 one week and $183 the next week. Her present income varies each month, depending upon the number of shifts she works. Their combined income was (until his wife changed employment) about $1,543 a fortnight. Their income is entirely expended in household outgoings and repayment of the mortgage on their residence and the amount owing on their motor vehicle.

35 The assets of Peter Thiemann and their wife are as follows;

House property situate at and known as 17 Coral Fern Way, Gwandalan (having an estimated value of $320,000)

1997 Hyundai motor car (having an estimated value of $6,000)

1991 BMW motor car (having an estimated value of $13,000)

Bank account, with a credit balance of $1,200

Personal property (having an estimated value of $12,000)

36 The liabilities of Peter Thiemann and his wife are;

Mortgage loan - $216,000

Visa Card - $1,200

37 That each of her sons had a close and loving relationship with the Deceased was recognised by the testamentary provisions which she made in their favour.

38 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff.

39 I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties. Those documents will be retained in the Court file.

40 The Plaintiff as the de facto spouse of the Deceased at the time of her death is an eligible person within paragraph (a) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such he has the standing to bring the present proceedings.

41 The only other eligible persons in relation to the Deceased are the two sons of the Deceased, who are, of course, significant beneficiaries under her will. Each of them is an eligible person within paragraph (b) of the foregoing definition.

42 It was submitted on behalf of the Plaintiff that in circumstances where (as here) the estate is small, the assets consisting, for all practical purposes, only of the house property, the Plaintiff should receive the entire estate. However, on behalf of the Defendant it was submitted that, having regard to the present age of the Plaintiff, the practical consequence of his receiving the entire estate is that his own children will, within a reasonable period of time, have the benefit of that estate, whilst the children of the Deceased herself will be entirely deprived of any benefit in the estate.

43 The Court is required by the provisions of section 7 of the Family Provision Act to look to the circumstances as they exist at the present time. It is abundantly obvious that the Plaintiff must have somewhere to live. If he does not live in the Bangaroo Avenue property (or in some substitutionary residence, to be acquired for the Plaintiff in accordance with the provisions of the Deceased’s will), then he is dependent upon the charity of one or more of his own children or upon the welfare of the state.

44 Although the Plaintiff has expressed a preference to remain in the Bangaroo Avenue property for as long as possible, he recognised that his advancing years and indifferent health might require that he should at some stage remove into a retirement village. Evidence was placed before the Court concerning the cost of such retirement village accommodation. The Plaintiff’s preference in this regard was for a one-bedroom villa at The Figtrees at Figtree, which would require a capital outlay of $115,000.

45 The terms of the will of the Deceased give to the Plaintiff a right of residence in the house property, he being required to meet the outgoings, with provision, at his request, for that property to be sold and another residence be purchased for him to which the same provisions shall apply. Consequential provisions are made by clause 4 of the will concerning the benefit which the Plaintiff should be entitled to receive from any balance then remaining after the purchase of such a substitutionary residence. Clause 3(f) provides that when the Plaintiff ceases to live permanently in the house property or in any substitutionary residence, then the house and contents shall be sold and from the net proceeds the sum of $20,000 shall be paid to the Plaintiff provided that he be then alive, and the balance of such proceeds divided between the two sons of the Deceased.

46 In performing the first stage in the two-stage process recognised by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208-210, the Court must first decide whether the provision made for the Plaintiff is adequate for his proper maintenance. In the instant case, I am satisfied that that provision was adequate. Within the constraints imposed by the nature of her limited and meagre assets (consisting, for all practical purposes, of a house property of very modest value) the Deceased, conscious of her responsibilities to and of the claims upon her and upon her estate by her de facto partner and by her two sons, made adequate provision for the proper maintenance of the Plaintiff.

47 It is therefore unnecessary for me to proceed to the second stage in the two-stage process recognised by the High Court of Australia. Neither is it necessary for me to consider the competing claims of the other two beneficiaries. Were it necessary for me to consider those competing claims, however, I would not be satisfied that the financial and material circumstances of either of the other beneficiaries (although those circumstances are by no means affluent) are such as would have the effect of reducing, let alone extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise have established. But, as I have already observed, it is not necessary for me to consider those competing claims, since I am not satisfied that the Plaintiff has by the terms of the will of the Deceased been left without adequate provision for his proper maintenance.

48 However, a problem of a practical nature arises regarding the costs of the present proceedings. It is usual, indeed, almost universal, that a defendant executor, in upholding the terms of the will of a testator, should be entitled to have his costs out of the estate of the testator. Further, normally costs follow the event and in a claim under the Family Provision Act it is usual (other than in exceptional circumstances) for an unsuccessful plaintiff to pay the costs of the successful executor (usually with the qualification that, to the extent that the successful executor does not recover such costs from the unsuccessful plaintiff, the successful executor be entitled to recoup those costs from the assets of the estate).

49 In the instant case, if I were to make an order that the executor should receive part or all of his costs out of the estate, the inevitable consequence would be that the house property must be sold. If that were to happen then, of course, the Plaintiff would be left without a residence, and the very situation to which I have earlier adverted, the need of the Plaintiff for accommodation, would arise. (It is likely, however, that the net proceeds of sale would be sufficient for the estate to purchase for the Plaintiff a one-bedroom villa at The Figtrees, as a substitutionary residence.)

50 That is, if the Defendant executor looks to the estate for the payment of his costs of the present proceedings - which he would normally be entitled to do – then, by that very fact, the Plaintiff will be deprived of his present accommodation, with the consequence that he will have been left without adequate provision for his maintenance, and the Plaintiff will thus be entitled to succeed in the present proceedings.

51 It seems to me, therefore, that the appropriate (indeed, the only practical) course, in the light of my foregoing conclusions, is that the Court should make an order dismissing the claim, but upon the basis that the Defendant not attempt to recoup from the estate any part of his costs. For if the Defendant were entitled to receive his costs (or to recoup at least part of his costs) out of the estate, the practical consequence would be that, contrary to the present wishes of the Plaintiff and contrary to his rights under the will, the house property must be sold (unless the Plaintiff can otherwise raise funds to meet the costs of the Defendant) in order to pay the costs of the Defendant, and the Plaintiff would then be deprived of his accommodation.

52 I am prepared to entertain submissions concerning costs, on the basis, however, that I will not order that the costs of the successful Defendant executor be paid out of the estate. It may be that the Defendant will succeed in obtaining an order that the Plaintiff personally pay the Defendant’s costs, although I express no concluded view in this regard. If the Defendant wishes to make an application in respect to costs, but upon the basis that he will not be entitled to look to the estate for payment of any of his costs, he will have an opportunity to do so.

53 Accordingly, unless within seven days of the date hereof, either party arranges with my Associate to have the matter listed for argument as to costs, I make the following orders:

(1). I order that the summons be dismissed.

(2). I make no order in respect to costs, to the intent that each party will bear his own costs of the proceedings.

(3). I order that the Defendant not be entitled to recoup his costs, or any part thereof, from the estate of the late Ruth Helena Thiemann (“the Deceased”).

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