Tiedeman v Tilse

Blore v Lang (1960) 104 CLR 124 Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 CASES CITED : Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19 Foley v Ellis [2008] NSWCA 288 Diver v Neal [2009] NSWCA 54

PARTIES : Cherie Ann Tiedeman (Plaintiff) Lisa Gaye Tilse (Defendant)

COUNSEL : Ms E. Cohen (Plaintiff) Mr J-J Loofs (Defendant)

SOLICITORS : Harris Wheeler (Plaintiff) Craddock Murray Neumann (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4317 of 2007 CHERIE ANN TIEDEMAN -v- LISA GAYE TILSE JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 31 August 2007 Cherie Ann Tiedeman claims an order for provision for her maintenance, education and advancement in life from the estate and/or the notional estate of her late father Ronald William Wrightson (to whom I shall refer as "the Deceased"). 3 The Deceased died on 3 July 2006, aged 74. He left a will dated 8 May 1998, probate whereof was on 9 August 2006 granted to Lisa Gaye Tilse, the executor named in such will (who is the Defendant to the present proceedings). 4 The inventory of property discloses the following assets, and the estimated values ascribed thereto: Real estate situate at and known as 127 Macquarie Street, Merewether $395,000 Greater Building Society savings account $552.83 Savings account $14,009.21 National Australia Bank savings account $5,522.09 Interest in mother-in-law's estate $111,000 1998 Toyota Corolla motor car $8,000 5 The house property at Merewether has been sold (for $395,000) and it appears that the net proceeds of sale, in an amount of $380,796, are currently held by the Defendant, as are the other asset's of the estate. 6 I shall later refer to the various calculations which have been provided by the Defendant concerning the present assets of the estate. For the present, however, suffice it to say that, according to the Defendant, the assets appear to have a present value in the order of $477,000. 7 In calculating the value of the estate available for distribution the costs of the present proceedings should be taken into consideration, since the Plaintiff, if successful in her claim, will normally be entitled to an order that her costs be paid out of the estate of the Deceased, whilst the Defendant, irrespective of the outcome of the proceeding, will normally be entitled to an order that her costs be paid out of the estate. It has been estimated on behalf of the Plaintiff that her costs will total $43,000, whilst it has been estimated on behalf of the Defendant that her costs will total about $61,708 (of which she has already paid a sum of $39,708). That is, the total costs of the proceedings are estimated to be in an amount of about $105,000. If the totality of those costs be payable out of the estate of the Deceased, the value of the estate available for distribution would be in the order of $372,000. 8 The Deceased, who was a widower at the time of his death (his wife, Mrs Barbara Wrightson, having died in 1988), was survived by his two children, Cherie Ann, the Plaintiff (who was born in 1961, and is now aged 47 years) and Lisa Gaye, the Defendant (who was born in 1963 and is now aged 44). 9 By his will the Deceased directed that the Merewether house property be sold and that the proceeds of sale be divided as to 75 percent to the Defendant and as to 25 percent equally between his two grandchildren, Amy Rose Laver and Eliott Jonas William Laver (who are the children of the Plaintiff). The residue of the estate was given to the Defendant. 10 Clause 5 of the will is as follows, AFTER very careful and lengthy consideration I have laid down the terms and conditions of this my last Will and Testament fully aware of my obligations, legal or moral to my daughter CHERIE ANN LAVER whether or not I have made any prior provision for her during my lifetime to the intent that this Will encompasses my full testamentary intentions and I DECLARE that in the event of any litigation arising out of any claims against my estate that these provisions will be taken into account by any and all Courts. 11 In addition, there were placed in evidence various handwritten statements signed jointly by the Deceased and by Mrs Barbara Wrightson and a further handwritten statement signed by Mrs Wrightson alone. Those documents concern the relationship between the Plaintiff and her parents. 12 The Plaintiff left home to marry Peter James Laver in October 1982. Two children were born of that marriage, being Amy Rose (who was born in 1989, and is presently aged 19) and Eliott Jonas William (who was born in 1993, and is presently aged 15). The Plaintiff and Mr Laver separated in April 1996, and they subsequently divorced. 13 The Plaintiff in February 2005, married her present husband, Terry Tiedeman, with whom she had been living since December 2002. According to the Plaintiff, her relationship with both her parents had been a very good one until her marriage to Mr Laver had foundered in 1996. At about that time the Plaintiff's mother was diagnosed with bowel cancer. The Plaintiff said that the relationship with her parents deteriorated from the time of the breakdown of her marriage. Her parents, however, continued to maintain a good relationship with Mr Laver and with the Plaintiff's children. 14 From the time of the deterioration of her relationship with her parents, the Plaintiff suffered from depression, for which condition she was treated by a psychiatrist for more than three years. She was admitted to hospital on more than two occasions in 1996, on account of her psychiatric conditions (one of those occasions being after she had attempted suicide). 15 The extent and the nature of the contact from 1996 between the Plaintiff and her parents and (after her mother's death in April 1998) between the Plaintiff and the Deceased, was the subject of a considerable quantity of evidence. 16 There is no doubt that there was a significant degree of estrangement between the Plaintiff and her parents, although the Plaintiff asserted that there had been a reconciliation between them before her father's death. The written statements of the Deceased (which are admissible in evidence pursuant to section 30 of the Family Provision Act) support the existence of such an estrangement, and manifest a very strong animus against the Plaintiff on the part of the Deceased (who appears, quite irrationally, to have held the Plaintiff responsible for the death of her mother - who died from cancer). 17 The nature and extent of the Plaintiff's contact with the Deceased from 1996 until his death in 2006, are not, however, determinative of the Plaintiff's present claim. In exercising its discretion under section 7 of the Family Provision Act the Court must still look primarily to the needs of the Plaintiff. 18 The Plaintiff has tertiary qualifications, being an Associate Diploma in applied science (a chemistry certificate), which she acquired from TAFE in 1983. For some time she worked in various laboratories in the food, pharmaceuticals industries. At the time of the commencement of the proceedings the Plaintiff was employed on a full-time basis as a debtor co-ordinator (although she said that she did not have any specific training for that employment, other than on the job training). In that position she was receiving an annual salary of $54,000 gross. For the year ended 30 June 2008 her taxable income was $53,932. 19 The Plaintiff's husband is employed as a construction project manager. For the year ended 30 June 2008 his taxable income was $143,485. 20 In January 2008 Mr Tiedeman commenced working on a project for his employer, for which he receives a project bonus. According to the Plaintiff, that project requires him to work 12 hours a day for six days a week. It was expected that the project would conclude in late December 2008. When the project ends Mr Tiedeman, although retaining his employment, will receive a reduced income. The evidence did not disclose any details of the amount of the project bonus, or the amount of Mr Tiedeman's expected salary when that project bonus comes to an end. 21 The Plaintiff and her husband jointly own the following assets (to which the following respective estimated values were ascribed): House property situate at and known as 19 Flowerdale Avenue, Merewether Heights $450,000 Motor vehicle $22,000 Bank accounts, Greater Building Society $2,788 Household contents/goods (sale value) $10,000 Shares (owned solely by Plaintiff's husband) $15,000 Superannuation entitlements of Plaintiff $34,391 Superannuation entitlements of Plaintiff's husband $141,713

22 The Plaintiff and her husband have the following liabilities, Mortgage on house property $174,937 Credit card $15,114 Finance (furniture) $1,300 23 The Plaintiff gave evidence of the details of the current outgoings of herself and her husband, in amounts totalling $112,248 a year. In this regard I observe that that total amount includes mortgage payments of $20,892 and child support paid by the Plaintiff's husband (in respect to his children from a previous marriage) in an amount of $23,694. Further, it should be observed that at least one item ($9,000 for credit card payments) appears to have duplicated other items. 24 Since the breakdown of the Plaintiff's marriage to Mr Laver her daughter Amy has resided with the Plaintiff on a full-time basis. The Plaintiff receives no child support from Amy's father, but he has contributed towards her school fees. Amy, who completed year 12 in 2007, is currently attending the University at Newcastle, and the Plaintiff and her husband are supporting her during her studies. She has now completed the first year of a four year Early Childhood degree. Amy is not in employment and has no income of her own. 25 The Plaintiff's son Eliott resides chiefly with his father, although, according to the Plaintiff, he spends up to 36 nights a year at the Plaintiff's residence (which assertion was denied by Eliott's father). The Plaintiff said that she contributes towards his maintenance and upkeep by paying all his expenses when he is staying with her, and by providing and paying for annual family holidays. The Plaintiff's husband has two daughters, aged 17 and 13, who are both at school and who reside with their mother. Mr Tiedeman pays child support for his daughters, and also contributes to their care by paying all expenses when they stay with the Plaintiff and himself on an irregular basis, and by providing and paying for annual family holidays. 26 The Plaintiff gave evidence of her estimation of various major items of expenditure for which she considered that she and her husband would be responsible in the near future. Those items included various renovation and restoration work upon their house property (about $34,000), the updating of a six year old family car (in and estimated amount of $30,000), ongoing orthodontic/dental treatment for Amy (in an amount of $5000), and ongoing educational and general expenses for Amy, Eliott, and the two daughters of Mr Tiedeman (in amounts totalling $30,000). 27 The Plaintiff said that she and her husband would like to retire when she reaches the age of 60 and when Mr Tiedeman (who is presently aged 53) reaches the age of 65 - that is, in about twelve years' time. However, she was of the view that their financial situation would not enable them to be in a position to retire at that time, and that their projected retirement would need to be postponed. 28 In October 2008 the Plaintiff was made redundant from her employment as a debtor co-ordinator. At the time of the hearing the Plaintiff, despite having applied for various positions, had not been successful in securing permanent employment. She was, however, at the time of the hearing, employed in a temporary position for four days a week for a period of four weeks, receiving $27 an hour for working 30 hours a week. That position was to terminate on 18 December 2008, after which time she did not have any arrangements for further employment. 29 Regarding the Plaintiff's present financial position, it should be recognised that at the time of the hearing the difference between the joint assets of the Plaintiff and her husband and their joint liabilities was of the order of $470,000. That was an improvement of about $35,000 over their equivalent situation in October 2007. In that intervening period the Plaintiff had also been financially enabled to purchase a new motor vehicle (an Audi motor car, costing about $32,000), to effect a reduction in the mortgage debt by $10,000, and to increase the totality of the superannuation entitlements of her husband and herself by an amount of $22,000. 30 The Plaintiff gave evidence concerning the education prospects of Mr Tiedeman's daughters, and also concerning the renovation of two bathrooms in her residence. She expected the cost of that renovation to be about $25,000. She said that other repairs to the house would be required in the future, the costs of those repairs (otherwise unspecified) being estimated to be $5000. 31 The Plaintiff also gave evidence concerning various health problems. She is required to have regular colonoscopies. She requires dental work which will cost about $7000. In September 2008 the Plaintiff had a malignant melanoma removed from her right leg. She is required to have skin checks every six months. The Plaintiff has recently be diagnosed with tri-gemena neuralgia, which she said was a nerve inflammation and which was extremely painful. She is required to take epilepsy medication to manage the symptoms of this condition. The cost of that medication is about $150 a month. 32 In addition, the Plaintiff has had polyps removed during a colonoscopy. She requires surgery on account of varicose veins in her legs, which give her considerable pain and discomfort. Mr Tiedeman, although in generally quite good health, requires to have his wisdom teeth removed in the near future. Amy has had surgery to her left ear, and may require ongoing surgery, in consequence of a bone infection resulting from the initial procedure. Amy also has ongoing orthodontic expenses. One of Mr Tiedeman's daughters also requires orthodontic work to her teeth, in consequence of a recent motor accident. 33 Mr Tiedeman suffers from moderate degenerative changes over the right hip joint. A medical report stated that "in the future he may require a hip joint replacement operation". 34 Evidence was also given concerning the medical condition of the various children of the Plaintiff and of her husband. 35 According to the Plaintiff, her son Eliott requires orthodontic work and suffers from asthma that requires monitoring and medication. Eliott was diagnosed with ADHD and Oppositional Defiance Disorder when he was five years old, and that he had been under medical care for those conditions since the age of five. Although he attended a special education unit catering for children who do not fit into mainstream education, nevertheless he left school before completing year 9. The Plaintiff said that Eliott is now working at Bay Barge Construction, and is seeking an apprenticeship. 36 The net proceeds of sale of the Merewether property were in an amount of $380,796. The effect of the provisions of the will is that that sum should be distributed as follows: Defendant - 75 percent, $285,597 Amy Rose Laver - 12.5 percent, $47,599 Eliott Jonas William Laver - 12.5 percent, $47,599 37 The residue of the estate, to which the Defendant is entitled under the terms of the will, consisted of: Cash in hand $4318 Cash from deceased mother-in-law's estate $81,000 75 percent share of interest on maturity of term deposit $2,782 38 The Defendant gave evidence as to the manner in which she had disbursed the foregoing funds which came to her from the estate of the Deceased. It should here be observed that only on the last day of the hearing, 11 December 2008, and consequent upon my request in that regard, there was prepared and filed an affidavit of the Defendant setting forth details of that disbursement and of the current position of the assets of the estate of the Deceased. 39 So far as I was able to gather from that affidavit, there has been a very considerable commingling of the assets of the estate with what might be described as the Defendant's own personal funds. That might well be explained by the fact that the Defendant is the chief beneficiary under the will, and is entitled to the entirety of the estate, apart from 25 percent of the proceeds of sale of the Merewether house property. It would appear that that 25 percent has not yet been distributed. Whilst the Defendant may be justified in not presently distributing to Eliott the 12.5 percent (being about $47,600) to which he is entitled, since he is only 16 years of age, there appears to be no justification for the failure of the Defendant to distribute an equivalent amount to Amy, who is now an adult. 40 In the foregoing affidavit the Defendant states that the assets of the estate presently comprise: a) The sum of $292,000 deposited in the Defendant's Viridian account (transferred from the estate account) on 22 December 2006, less legal fees of $18,804.

b) The sum of $4,000 deposited in the Defendant's Streamline e-access account on 22 December 2006 (transferred from the estate account).

c) The sum of $180,006, held in a term deposit, with the Newcastle Permanent Building Society, maturing in January 2009.

d) Two paintings worth about $20,000 purchased by the estate from the Defendant's uncle (which paintings, as I understand it, had been accepted by the estate in discharge of the loan of $30,000).

e) Toyota Corolla motor car, valued at $4,000. 41 It would appear that the Defendant had allowed the Toyota Corolla motor car to be used by Eliott's father, Mr Laver, to provide transport for Elliot. The Defendant said that in late 2006 she had been told by Mr Laver that the motor vehicle had been sold. It is somewhat unclear whether the vehicle, an asset of the estate, had been given by the Defendant to Mr Laver, in which case it would appear no longer to be an asset in the estate; or whether the Defendant merely allowed Mr Laver to use that motor vehicle, in which case I do not understand how he could have been entitled to sell it, without the executor's authority. In the event that Mr Laver sold it without the authority of the executor, it is unclear whether Mr Laver retained the proceeds of that sale, or whether he has been required by the executor to account for those proceeds. 42 The Defendant said that, excluding the paintings and the motor car, the value of the estate is presently $457,201. As I have already observed, neither Amy nor Eliott has yet received any distribution of their respective entitlements under the will of the Deceased. 43 The Defendant said that before his death the Deceased had agreed to lend to his brother-in-law the sum of $30,000, to assist in the purchase of a residence. That loan was subsequently made by the Defendant from the residue of the estate, and was discharged in December 2006. 44 The claim of the Plaintiff must be approached in the light of the entitlements of the beneficiaries named in the will of the Deceased and of the situation of any other persons who may have a claim upon the testamentary bounty of the Deceased. (Apart from the Plaintiff and the beneficiaries there are no such other persons.) I have already referred, at least in summary, to the financial and material circumstances of the Plaintiff's two children, each of whom is entitled to 12.5 percent of the proceeds of sale of the Merewether house property. 45 I turn now to the financial circumstances of the Defendant, who was the chief chosen object of the testamentary beneficence of the Deceased. The Defendant is a self employed graphic designer, conducting her own business. She has worked as a graphic designer since graduating from university in 1985. She receives little by way of income from that work. Her taxable income for the year ended 30 June 2008 was $11,773. The Defendant's husband is employed bythe Swisshotel. His taxable income for the year ended 30 June 2008 was $20,976. The Defendant and her husband receive a family tax benefit payment. 46 The Defendant and her husband have the following assets, to which the following estimated values were attributed: House property situate at and known as 41 Garling Street, Lane Cove West $795,000 Motor vehicle $6,000 Bank accounts $110,000 Household contents/goods $10,000 Shares $1,061 Superannuation entitlement of Defendant $38,291 Superannuation entitlement of Mr Tilse $41,202

47 The Defendant and her husband, so far as I could gather from the evidence, had until November 2006 a mortgage upon their residence at Lane Cove West. At that time the mortgage debt was in an amount of $296,000. However, by paying that sum into her line of credit mortgage in November 2006, the Defendant reduced that mortgage indebtedness to nil. The source of that payment appears to have been the assets of the estate of the Deceased, in particular the proceeds of sale of the Merewether house property. 48 The other liabilities of the Defendant and her husband are: Credit cards $4,521 Estate moneys used for living expenses $44,000 49 The current financial circumstances of the Defendant and her husband have been affected by their desire to have a family. From 1996 to 2004 they spent about $100,000 on fertility treatments in their efforts to have a child. Ultimately they adopted a daughter Roxy in November 2004. The adoption process cost them about $35,000. 50 The practical family circumstances which have resulted from the adoption of their daughter have placed a very considerable limitation upon the earning capacity of the Defendant and of her husband. This situation has largely resulted from the fact that Roxy suffers from a severe to very severe separation anxiety disorder, in consequence of which (at least until recently) she can rarely be out of physical (or at least visual) contact with at least one (if not both) of her parents. 51 The Defendant gave evidence concerning the family outgoings of herself and her husband, in a total amount of about $70,000 a year. That amount included interest only repayments of $25,500 on their $300,000 mortgage debt. It would appear that the Defendant and her husband have been enabled to pay those outgoings only by resorting to the assets of the estate, to which the Defendant is under the terms of the will entitled (other than about $95,200, to which the Plaintiff's two children are entitled). 52 The Defendant gave evidence of various renovations and repairs required to their house property, the estimated cost of which is about $15,500. The Defendant also stated that a second motor car was required, at a cost of $30,000, as were general household expenses totalling $6,000. 53 According to the Defendant, ongoing medical and psychological treatment for their adopted daughter Roxy (who is now aged about five) was $4,525 for the period from October 2007 to January 2008. The Defendant asserted that the cost of raising and educating Roxy over a period of 20 years would be in an amount of $260,000. The Defendant also stated in her affidavit evidence that an amount of $48,000 would need to be expended by herself, her husband and Roxy, on four family visits to China (the land of Roxy's birth) over the next fourteen years. The Defendant gave evidence concerning her own health conditions, including gynaecological problems, and the need for check ups and colonoscopies on an annual basis. 54 The Defendant's husband is aged 48. Although generally in good health, he requires dental work, at an estimated cost of $3000. 55 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. 56 I have had the benefit of receiving a written outline of submissions from the respective parties. Those documents will be retained in the Court file. 57 The Plaintiff, as a daughter of the Deceased, is 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 the standing to bring the present proceedings. 58 It should be recognised that the Defendant is also an eligible person, within the same paragraph of the foregoing definition. The Plaintiff and the Defendant are the only eligible persons in relation to the Deceased. It is not suggested that either of the children of the Plaintiff is an eligible person. (However, regarding those children, it should be recorded that it was stated on behalf of the Plaintiff that she did not desire that the benefits given by the will to her two children should be disturbed in consequence of her present claim. That is, it was the wish of the Plaintiff that, in the event that any order for provision might be made for her out of the estate of the Deceased, that order for provision should, in practical terms, come out of that part of the estate to which the Defendant is entitled under the will). 59 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 - 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his or her proper maintenance.

60 The High Court in Singer v Berghouse (at 209 - 210) said that the determination of the first stage calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. 61 I have already observed that the extent and nature of the relationship and of the contact between the Plaintiff and her parents was the subject of a considerable quantity of evidence, both by way of affidavit evidence and by cross-examination. The Plaintiff's evidence also dealt with what she asserted to have been the nature of the relationship between her parents and the Defendant. In regard to that evidence concerning those relationships, it is appropriate that the following salutary admonition of Windeyer J, in the High Court of Australia, in Blore v Lang (1960) 104 CLR 124 at 137, should be borne in mind, The jurisdiction under the Testator's Family Maintenance Act [the statutory predecessor to the Family Provision Act ] is to provide for deserving persons according to their requirements, not to reward past services. This is sometimes overlooked and evidence concerning the present and probable future requirements of the applicant is subordinated to or submerged in evidence of past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasized at the expense of evidence directed to the central issues in the case. 62 It should also here be emphasised that an order for provision is not made as a reward for services and good conduct on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of the applicant. 63 It has been submitted on behalf of the Plaintiff that her present needs are for a fund to meet contingencies, and also to effect reduction in her mortgage and to pay for future medical expenses for herself and her family, due to her loss of secure employment. 64 To the extent that the first stage in the foregoing two-stage process identified by the High Court of Australia in Singer v Berghouse requires a consideration of the competing claim of the Defendant (see Foley v Ellis [2008] NSWCA 288; Diver v Neal [2009] NSWCA 54), it is quite apparent that the Plaintiff is in far better financial and material circumstances than is the Defendant. 65 Although it was said by the Plaintiff that the relatively high income of her husband at the present time was not expected to continue, it should be observed that no evidence was given by the Plaintiff's husband himself. Further, I was not very favourably impressed by the Plaintiff's evidence concerning her responsibilities and expenses for her son Eliott. It clearly emerged from the evidence of Eliott's father that Eliott has little contact with his mother, and that her contributions and expenditure towards his upkeep are minimal. 66 I am not satisfied that the Plaintiff has established that, in consequence of the absence of any provision being made for her by the will of the Deceased, she has been left without adequate provision for her proper maintenance. 67 That conclusion is of itself determinative of the Plaintiff's claim. 68 However, even if (contrary to the conclusion which I have just expressed) the Plaintiff were to establish that she had been left without adequate provision for her proper maintenance, I consider that the competing claim of the Defendant is such as would have the effect of extinguishing any order for provision an entitlement to which the Plaintiff might otherwise have established. 69 It follows, therefore, that the claim of the Plaintiff will be dismissed. 70 Accordingly, I make the following orders: 1. I order that the summons be dismissed.

2. I order that the Plaintiff pay the costs of the Defendant, such costs to be on the party and party basis.

3. I order that the Plaintiff be entitled to recoup from the estate of the late Ronald William Wrightson ("the Deceased") the difference between the foregoing costs which she may recover from the Plaintiff and the costs of the Defendant on the indemnity basis.

4. The exhibits may be returned. **********

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