Hildebrandt v Soncini [2007] NSWSC 1227 | Case summary

11 Less than a year after the purchase of Oxford Street there were changes in the family's living arrangements. On 8 November 1966 Maria sold the property at George Street, Riverstone for $3,500. Maria gave her daughter Lidia and her husband the proceeds of the sale of Riverstone property. In addition on 7 January 1967 Maria transferred to Lidia the vacant land at Piccadilly Street, Riverstone. On 10 July 1970 Lidia sold the vacant land and retained the proceeds of $2,600. On 23 January 1967 the Oxford Street property was transferred from Alex and Lidia, to Maria for a consideration of $4,800. There was no suggestion that this sum was paid by Maria and it seems that there was a re-arrangement of the properties between Maria and her daughter Lidia. 12 Although the property has a different street address it was adjacent to the property, which the plaintiff and his wife subsequently owned. 13 In 1992 Alex, aged 54 years, accepted redundancy from the NSW Water Board and was paid between $50,000 and $60,000. He later was employed on a short-term basis at the Balmain Wharf and elsewhere for a number of years. 14 During the last years of her life Maria lived with a number of relatives. She lived with her daughter, Lidia, in the 1980. From 1995 to 1998 she lived with her granddaughter Luisa Soncini, Alessandro's sister, at Mortlake. In 1999 she lived with Lidia and her husband, Almerico, for about 10 months. In 2000 she lived with Alex for a few weeks in his house at Devitte Street, Blacktown. From 2000 to 2001 she returned to live with Luisa Soncini and the following year she lived again with Lidia and Almerico. 15 On 4 February 2002 the deceased made a will giving legacies to Alex and Lidia of $1,000 each and the remainder of her property to her grandson, Alessandro, the defendant, two other granddaughters and a great grandson. In that will Maria declared in respect of Alex as follows: "I have not provided for him any further in this my will as he has received monetary and other assistance from me during my lifetime and for other reasons which I have previously made known to him." 16 From 2002 to 2003 Maria lived with Luisa Soncini at Annandale for approximately one year. In 2003 she left to live for a few months with Alex at 35 Devitt Street, Blacktown. At about this time Maria made her last will. In late 2004 or early 2005 Maria moved back to her home at 28 Oxford Street, Blacktown where she lived for about a year. 17 On 17 May 2005 Maria transferred the Oxford Street property to Alessandro. She moved to live with Alessandro at his home at Belmore Street, Surry Hills where she remained until she died on 8 January 2006 aged 95 years. I will refer to the evidence surrounding these events later. I will refer in particular to the arrangements made for Alessandro and his wife to sell the house transferred by Maria to them and their own house which led to the purchase of a larger house which would be occupied by Alessandro, his family and the deceased. Due to the death of Maria this proposal was not finalised. 18 The summons was filed on 17 May 2006 and on 8 October 2007 the Oxford Street property was sold by Alessandro to his sister, Tania, and her husband for $280,000. That sale was to be completed a few days after the hearing before me and by agreement between the parties and in accordance with orders of the Court, the sum of $210,000 is to be paid into Court to await the result of these proceedings. Eligibility 19 The plaintiff, Alex, is an eligible person and there is no estate out of which his claim if successful can be met. There is no doubt that the transfer of the property to Alessandro for no consideration was a prescribed transaction within the meaning of s 22 of the Family Provision Act 1982 (NSW). Section 23 of the Act provides that if a Court is satisfied that an order for provision should be made on an application that in certain circumstances the Court may designate property as notional estate. The relevant terms of the section are as follows: 23 On an application in relation to a deceased person made by or on behalf of an eligible person, if the Court is satisfied: (a) that an order for provision ought to be made on the application, and (b) that, at any time before death, the deceased person entered into a prescribed transaction: (i) which took effect within the period of 3 years before death and was entered into with the intention, wholly or in part, of denying or limiting, wholly or in part, provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person's estate or otherwise, (ii) which took effect within the period of 1 year before death, and was entered into at a time when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education and advancement in life of that or any other eligible person which was substantially greater than any moral obligation of the deceased person to enter into the prescribed transaction, or (iii) which took effect or is to take effect on or after the death of the deceased person, the Court may, subject to sections 26, 27 and 28, make an order designating as notional estate of the deceased person such property as it may specify, being property which is held by, or on trust for the disponee or, where there is more than one disponee, any of the disponees, whether or not that property was the subject of the prescribed transaction." 20 Alex's claim was based on the terms of s 23(b)(i) and 23(b)(ii). I turn to deal with the first matter. Was the transfer entered into by the deceased with the intention required by section 23(b)(i)? 21 Several witnesses gave evidence on this issue. The defendant recounted a conversation that occurred on 14 May 2005 when he called on the deceased and the deceased told him that she wanted to come to his house to live with him. Her explanation was in these terms; "No, there's no problem. I don't want to live here any more. I want to give you the house. I know that you will look after me I want to live with your family. Your uncle and I have had a fight. I told Alec I was going to live with you in Sydney and he told me he was going to put me in a nursing home. I told him I'm not going to the nursing home. I told him that I'm going to live with you if I want to. " 22 There was also evidence from Mrs Barber, the solicitor who acted on the transfer. In the course of their meeting the deceased said to Mrs Barber: "My son wants to put me in a nursing home and to give the house to his daughter. The house must go to my grandson Alex. Alex will look after me and he will buy a bigger house in which we can all live. I'm not going to let my son put me away in a nursing home " 23 Mrs Barber also gave evidence of further conversations with the deceased. It is apparent that the deceased was well aware that her daughter originally bought the house. She mentioned that Alex had not paid a cent. She also complained about Alex's treatment of her. She also mentioned the kindness shown to her by her grandson the defendant. 24 There was evidence given by a witness called by the plaintiff who had accompanied the deceased to the meeting with her solicitor and heard the conversation. She recounted the version of the first conversation that I have quoted in substantially similar terms. In respect of the other matters that occurred she said that she was the one who said that the house should go to Alessandro because Lydia had paid for the house. This witness did not remember a number of the other matters that were referred to by the solicitor. 25 These conversations show that deceased felt an obligation to transfer the property to her daughter's son because of the plaintiff's conduct towards her and the conduct of the person she intended to benefit. On the face of the evidence there is nothing to suggest that she was intended to deny a claim which might be brought by her son. She does not mention him wanting to make a claim or threatening to make a claim. 26 Although the solicitor had mentioned the possibility of someone making a claim against her estate the response of the deceased did not indicate that she wished to prevent someone from making a claim but more that she thought that a proper consideration of the obligations upon her required the property to go to the defendant. 27 As the evidence does not directly address the relevant intention the question is whether I should infer that the intention of the deceased was as is required by the section. In these circumstances Cross on Evidence neatly summarises the correct approach to drawing inferences in civil cases and criminal cases in these terms: " Where satisfaction of the civil state of depends upon inference, there must be something more than mere conjecture, guesswork or surmise. That is, there must be more than "conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture". If there is the test is as follows: "the difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. " 28 Having regard to these principles it seems to me that I could not infer that the deceased had the relevant intention. The conversation raises a more probable inference in favour of a desire to benefit the defendant rather than to exclude the plaintiff. Consideration of moral obligations referred to in 23(b)(ii) 29 The relevant sub-section is as follows: 23 On an application in relation to a deceased person made by or on behalf of an eligible person, if the Court is satisfied: (b) that, at any time before death, the deceased person entered into a prescribed transaction: …. (ii) which took effect within the period of 1 year before death, and was entered into at a time when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education and advancement in life of that or any other eligible person which was substantially greater than any moral obligation of the deceased person to enter into the prescribed transaction, or …." 30 This sub-section calls for a comparison between the moral obligation to make appropriate provision for the claimant or any other eligible person and the moral obligation to enter into the prescribed transaction. In respect of the words, "any other eligible person" one could well imagine a situation where a claim is made by an eligible person and the will already made provision for another eligible person. In such a case the comparison would be between the moral obligation to the applicant and the moral obligation to other person who is not an applicant in contrast to the moral obligation owed to enter into the prescribed transaction. 31 In the present circumstances the will does not provide for any other eligible person to take a benefit and although there is another eligible person, namely, the plaintiff's sister. She has brought no claim and is content for the will to operate in favour of her son who was also the beneficiary under the prescribed transaction. 32 In these circumstances it would seem to me that the relevant comparison of moral obligation is between the plaintiff and the defendant. An important matter which should be noticed about the sub-section is that the comparison is whether one obligation "was substantially greater than" the other moral obligation. The situation of the plaintiff 33 The plaintiff is 69 years of age. He is single with no dependents. His home at Blacktown has an estimated value of $300,000. He also owns furniture worth $4,000, a car worth $1,000 and has no mortgage. He lives on a pension of $530 per fortnight which is consumed by his living expenses. Over the last 18 months he has sold some of his shares to help pay for his expenses. He says that his pension is not sufficient because his expenses are estimated at $18,960 per annum which is $729 per fortnight. He says that he owes $10,000 to his sister-in-law, Gail, because he borrowed money from her to meet his living expenses and his wife's funeral. 34 The plaintiff says that he has several pressing needs. He needs to replace his car at a cost of $34,000, carry out maintenance and repairs to this home at a cost of $81,340, erect a garage for his car for $29,600, take an overseas trip for $16,000 and purchase new whitegoods for $3,500. 35 If the plaintiff's evidence is accepted he needs a lump sum to supplement his income. No evidence was presented to identify what sum might be appropriate for his present shortfall. 36 It would be appropriate for the plaintiff to have a new car. Whether a car which costs $34,000 is warranted is a matter which requires consideration. His current age and the use to which he might put a car suggests that a car of a lesser value, namely, $25,000 would be appropriate. The plaintiff provided very little evidence on the maintenance and repairs for his home. No doubt some of the repairs such as painting are necessary. The garage for the car and the overseas trip could both be described as a wish list. 37 It is apparent that the needs of the plaintiff have to be assessed in the light of the relationship between the plaintiff and the deceased as well as the provisions made for him by the deceased during her lifetime. 38 The deceased relied upon the plaintiff to cash her pension cheques. At times he also provided for her. 39 Evidence was given by Luisa Soncini, the plaintiff's niece, that between 1995 and 1999 the deceased lived with her and she paid all the deceased's living expenses including food and medicine. Each fortnight the plaintiff would visit her home and give his mother a pension cheque which she signed in Luisa's presence. The plaintiff would then leave the home with the cheque which he had collected from the deceased's post office box to which he had a key. She never saw him give the money to the deceased. 40 There were times when the deceased complained to Luisa about Alex taking her money and putting it in poker machines. On one occasion Luisa heard the deceased ask Alex to bring her some food. The deceased said that Louisa was always providing the food. As a result of the deceased's complaints Alex bought his mother a packet of biscuits. 41 In 2002 Luisa again looked after the deceased. She arranged for the cheques to be redirected to her home so that the money could be available to the deceased. Although the plaintiff denied this evidence, having regard to the way Luisa gave her evidence in cross-examination, I prefer Luisa's evidence. In my view, for many years the plaintiff received money from the deceased by way of pension cheques although at times he may have provided some food to her. No doubt this was a substantial benefit to him. There was a suggestion that the deceased paid off a car loan and made some of his mortgage repayments. However, I would not conclude this occurred because of the lack of evidence. 42 It is clear that the plaintiff assisted the deceased from time to time but the extent of his care was somewhat less than he suggested. The factual situation which I have set out earlier in the family history indicates that the deceased was looked after by many of her relations as well as the plaintiff. 43 I turn to consider the moral obligation owed by the deceased to the defendant, Alessandro Soncini to whom she transferred her property. Alessandro is married and has two children aged 4 years and 2 years who are both in good health. He is a structural engineer who has not worked as an engineer since 1996 when he began operating his own manufacturing business retailing women's fashion and bridal wear. Alessandro and his wife have assets comprising of their Belmore Street residence worth $800,000 and a unit at Crows Nest unit worth $175,000 and Oxford Street, Blacktown estimated at $300,000. They have a car, a small amount of superannuation and household contents in all totalling $1,318,962. Their liabilities total $981,000 which include mortgages on their home of $565,000 and $197,000 on the unit. 44 Their income situation is difficult because their expenses are estimated at $10,855 per month. The income from the unit and child allowance received by Alessandro's wife totals $1,331 per month. Alessandro has not earned income because of the gradual failure of his business. He is hoping to be re-employed as an engineer on a salary between $75,000 and $85,000. When this happens no doubt they will be able to balance their expenses against their liabilities. 45 When considering the moral obligation the deceased owed to Alessandro it is to be noted that the arrangement she made with him was for Alessandro to look after her in his home. He did this from May 2005 until her death on January 2006. I accept the evidence that Alessandro and his wife also undertook to sell their own home and purchase a larger house to enable the combined family to be accommodated more comfortably. I accept that Alessandro made arrangements to sell his house and that he was actively looking to buy a larger house. However, when the deceased died he did not proceed further with this arrangement. 46 It was submitted on behalf of the defendant, Alessandro, that the deceased owed a moral obligation to transfer the property to the family of her daughter, Lidia. She paid for the house and for its decoration and furnishings. She also paid the legal costs of the plaintiff's defence, the appeals and deportation proceedings all of which related to his attempted hijacking of an aircraft. 47 There are problems with this submission because the section refers to the moral obligation owed to the person to whom the house was transferred. Lidia was not involved in that process. 48 There is another difficulty with this submission. It is that although Lidia paid for the house and its decoration and furnishings the house was effectively exchanged for another house in circumstances to which I have earlier referred. That exchange may also have had some part in balancing the expenses which Lidia had paid for the plaintiff's legal expenses. There is evidence from Lidia that the total of the legal fees she paid, the purchase price of the Blacktown property and monies she lent to Alex was less than the total proceeds from the sale of the George Street and Piccadilly Street properties. The extent to which Lidia's expenditure was said to be less than the amount she gained from the proceeds of sale was not substantiated. In these circumstances I cannot conclude that there was any substantial amount provided. Nevertheless any amount contributed by Lidia was not provided by the person who had the benefit of the transaction. In my view, it is not relevant. 49 There is no way to value the promises made by Alessandro to the deceased which were to look after her for the rest of her life and to purchase a larger house for his family and the deceased. His promise to look after the deceased, given her life expectancy, would have been for about four years. 50 With regard to the moral obligation in favour of the plaintiff it seems clear that the deceased had fallen out with him because of his suggestion that she should move into a nursing home. However, little weight should be given to any such arguments at that time given the age and state of mind of the deceased. She was constantly moving to live with one family member or another. The deceased provided substantial assistance to the plaintiff by providing him with funds from her pension. 51 The plaintiff has need for support. This relates to a sum to meet his future expenses. Due to the lack of evidence this is not a precise figure but is described as necessary repairs to his home. 52 Whether the moral duty owed to the plaintiff is greater than the moral duty owed to the defendant must take account of the other relationships. The plaintiff, Alex, was the son of the deceased and the defendant, Alessandro, was in fact the grandson of the deceased. In the circumstances it seems to me that the moral duty owed to the plaintiff was greater than that owed to the defendant. The question in section 23(b)(ii) however is whether the moral obligation to make adequate provision for the plaintiff was substantially greater than the moral obligation to the defendant. 53 The effect of the transaction was to transfer $300,000 worth of property to Alessandro. 54 In my view a consideration of the extent of the benefit created indicates that the moral duty owed to Alex was substantially greater than that owed to Alessandro. 55 In these circumstances the Court can make an order in accordance with section 23. I have already mentioned the situation of the persons to whom the deceased owed a moral duty and the difficulties with the claim made by the plaintiff. Alessandro, the grandchild of the deceased, needs funds to reduce his mortgages. However, he is still at an early stage in his life. The plaintiff needs to something to supplement his income and to carry out the repairs to his home. In the circumstances, it seems to me that an appropriate order is that the plaintiff should have a legacy in the sum of $100,000. 56 The orders I make are as follows:

Hildebrandt v Soncini

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