Michele Firriolo v Bruno Firriolo & Anor

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4055/1998 MICHELE FIRRIOLO v BRUNO FIRRIOLO & MARINA CASULA

1 These proceedings originally involved a claim for an order that Rosa Saffioti (Mrs Saffioti) be appointed trustee of the trusts of the Will of the late Antonio Firriolo (the deceased) in place of Bruno Firriolo (Bruno). A second order was also sought that the land contained in Certificate of Title Vol. 10778 Folio 226 and known as 10 McElhone Place, Surry Hills, New South Wales (the property), and all assets then the subject of the trusts, vest in Mrs Saffioti. 2 Bryson J made those orders on 12 October 1998 and reserved further consideration of the remaining claims with liberty to apply on five days notice. The parties made application before me on 27 October 2000 when the matter was expedited and was heard by me on 6 November 2000. The remaining claims are contained in paragraphs 3 and 4 of the Summons and are as follows: 3. A determination of a question arising under the Will of the late Antonio Firriolo dated the 30th September 1982, probate of which was granted on 27th September, 1983. Whether on the true construction of the said Will and in the events which have happened, the gift contained in Clause 3(b) of the Testator's Will to allow Bruno Firriolo to reside in the Testator's house for life is:- (a) A right to reside only and therefore capable of abandonment; or (b) A life estate. 4. If the answer to 3(a) above is in the affirmative:- (a) Then has such right to reside been abandoned by the said Bruno Firriolo; and (b) Is the Trustee of the estate of the late Antonio Firriolo at liberty to distribute the estate in accordance with Clause 3(c) of the Will? 3 Omitting formal parts, the deceased's Will provides as follows: 1 I REVOKE all former wills. 2 I APPOINT my son BRUNO FIRRIOLO of 115 Campbell Street, Surry Hills as executor and trustee but if he predeceases me or is unwilling or unable to so act I APPOINT my son MICHELE FIRRIOLO of Via del Ricordo No 2 Milan, Italy and MARINA CASUAL of 259 Oxford Street, Paddington to be my executors and trustees. 3 I GIVE the house and its contents in which I reside at the date of my death to my trustee on the following trusts: (a) to allow my wife NUNZIATA FIRRIOLO to reside therein so long as she shall live provided she pays all outgoings in connection with the house including insurance premiums on an insurance policy acceptable to my trustee; (b) on the death of my said wife to allow my son BRUNO FIRRIOLO to reside therein for his life providing he pays all outgoings in connection with the house including insurance premiums on an insurance policy acceptable to my trustee; (c) on the death of my son BRUNO FIRRIOLO I give the said house and contents to my son MICHELE FIRRIOLO absolutely. 4 IN THE EVENT of my son MICHELE FIRRIOLO predeceasing me or dying before the end of the life estate of BRUNO FIRRIOLO then the share that he would have taken under this will shall be divided equally among his children ANTONIO FIRRIOLO , CARLO FIRRIOLO and NUNZIATA FIRRIOLO who shall survive him on attaining the age of 18 years. 5 I GIVE the rest and residue of my estate to my said wife but if she predeceases me then I give the rest and residue of my estate to be divided equally among my sons BRUNO FIRRIOLO and MICHELE FIRRIOLO as joint tenants. 6 MY TRUSTEE shall have the following powers: (a) in respect of all the property vested in him the powers of a trustee for sale; (b) to invest and change investments freely as if he were beneficially entitled and this power includes the right to invest in unsecured loans and interest free loans or other non-income-producing property and assets including property for the use and occupation of a beneficiary; (c) to invest in the following securities in addition to those authorsed (sic) by law: (i) land of any tenure; (ii) unit trusts; (iii) mutual funds; (iv) loans secured or unsecured in Australia; (d) to lease sell exchange or otherwise dispose of assets in my estate on such terms as he considers expedient as though he were beneficial owner; (e) to invest on contributory mortgages of real estate and in this regard my trustee is specifically empowered to do so without the obligation on his part to take title to the mortgage either wholly or partially in his name; (f) to pay all expenses and outgoings incurred and incidental to the exercise of the powers herein contained; (g) to raise any part or parts of the presumptive share of any beneficiary being a minor and apply same for his her or their maintenance education and advancement in life. 7 ANY OF MY executors who practices a profession shall be entitled to be paid fees for work done by her or her firm on the same basis as if she were not one of my executors but employed to act on behalf of my executors. 8 IN REGARD to my daughter ROSA SAFFIOTI I declare that on her marriage she obtained an advancement under this my will by provision by me of a dowry and a monetary fund, but nevertheless I give to her $100. 4 After the deceased's death his widow, Nunziata Firriolo, resided in the property until her death in April 1997. Bruno did not move into the property until 1993 at about the time that his mother became ill. In July 1995 Bruno suffered a stroke. His sister, Mrs Saffioti, gave evidence that soon after Bruno suffered his stroke in 1995 she commenced looking after him and he became worse over time. After their mother's death, Mrs Saffioti saw Bruno every day and would cook meals, wash and generally look after Bruno. 5 By June 1997 Mrs Saffioti was finding it increasingly more difficult to take care of Bruno and to her observations he was becoming progressively worse. By this time she was cooking all his meals, doing all his shopping, doing his washing, ironing, cleaning and looking after "all his needs". 6 Mrs Saffioti consulted with an attending medical practitioner, Dr David Baker, and was advised that Bruno needed to "go to a hospital to be looked after". On 1 August 1997 Bruno was admitted to the Ritz Nursing Home in Leura where he currently resides. On 15 June 1999 the Protective Commissioner was appointed manager of Bruno's affairs. After Bruno went into the nursing home the property was rented for about 8 months and was sold in February this year. The proceeds from the sale, currently $235,000, are invested in an IBD. 7 Mr A Todd of counsel appeared for the plaintiff. Mr J Wilson of counsel appeared for the Protective Commissioner as tutor for Bruno and Mr A.L. Hill of counsel appeared for the trustee, Mrs Saffioti. 8 The plaintiff, Michele Firriolo, is Bruno's brother and has lived in Italy since 1971. He apparently has no intention of returning to Australia (Ex. 2. p 23). 9 At the trial the plaintiff did not call any evidence on the basis that the chronology contained in Exhibit 1 was conceded. Consistently with the outline of submissions that had been filed, Mr Todd submitted that Bruno had failed to meet the conditions of the proviso in clause 3(b) of the Will and in any event had abandoned the premises when he moved into the nursing home in Leura in 1997. 10 Mr Wilson submitted that there could be no abandonment as Bruno did not have the requisite degree of understanding for him to make a properly informed decision in the circumstances. It was submitted that by reason of such incapacity the plaintiff was unable to rely upon a claim of abandonment. 11 As a result of this submission I allowed oral evidence to be called. Mrs Saffioti gave evidence that prior to the time that Bruno was admitted into the nursing home, the outgoings and insurance on the property were paid from Bruno's pension. After Bruno moved into the nursing home the outgoings and insurance premiums were paid from the rental received from the property until it was sold. Mrs Saffioti said that Bruno was very depressed prior to moving into the nursing home. She could talk to him about the house and his needs but claimed he suffered from a "mental illness" (tr. 4). 12 Mr Todd called Mr Costantino Liverizzi, a friend of the family but more particularly a friend of the plaintiff. The purpose of Mr Liverizzi's evidence was to establish that Bruno well understood what was occurring around him and was of sound mind at the time that he moved into the nursing home. Mr Liverizzi's evidence was that he visited Bruno no more than about two or three times a year. 13 Although Bruno could speak English he could not read or write English. During the visits with Bruno, Mr Liverizzi would translate the letters that Bruno had received, attend to answering some of the letters and discuss matters generally with him. He discussed Bruno's health with him and in particular his dietary habits, which discussion apparently had no impact upon Bruno. 14 Mr Todd read an affidavit of Mr Liverizzi sworn on 7 October 1998. That affidavit contained a number of annexures including a letter dated 19 December 1997 from Dr David Creighton-Kelly to a firm of solicitors. That letter stated: Re Bruno Firriolo DOB 6.4.1935 The Ritz Nursing Home Leura 2780 The above patient Bruno Firriolo has been and continues to be under my general practice care while resident in The Ritz Nursing Home Leura. I consider that by virtue of his medical condition he is not of sound mind and not capable of carrying out his executorial duties in relation to his father's will. I consider that his mental incapacity is permanent.

A further letter from Dr Creighton-Kelly of 16 June 1998 refers to Bruno's admission to the nursing home on 1 August 1997, his cognitive impairment and his inability to care for himself. 15 Mr Liverizzi's evidence both in his affidavit of 7 October 1998 and a further affidavit of 27 May 1999 in other proceedings which became an exhibit (Ex. 2) refers to discussions between Mr Liverizzi and Bruno in September 1998 and May 1999 respectively. The tenor of the conversations could give one the impression that Bruno may not fit within the medical diagnosis provided by Dr Creighton-Kelly in his letter of December 1997. The conversations deposed to by Mr Liverizzi suggest that Bruno was responsive, cognitive and able to understand the detail of the pleadings and affidavits. This is somewhat curious as on both occasions Mr Liverizzi was serving documents on Bruno, firstly to remove him as trustee and secondly for the appointment of the Protective Commissioner. 16 There is a further medical opinion in the material annexed to the affidavit which is Exhibit 2. That is the medical opinion of Dr Satwant Singh Nijher in April 1999. That opinion refers to mood disorders characterised by violent outbursts and depression. Dr Nijher expresses the opinion that due to bad general health and cognitive impairment Bruno was unable to manage his financial affairs. Dr Nijher's opinion is expressed about one month before Mr Liverizzi deposes to having a discussion with Bruno at the nursing home. 17 It may be that when Mr Liverizzi had his visitations and discussions, Bruno was less unwell than when the medical practitioners saw him. However the medical evidence of Dr Creighton-Kelly and Dr Nijher together with Mrs Saffioti's evidence and the opinion expressed by Dr Baker to Mrs Saffioti persuade me that it is probable that Bruno suffered from cognitive impairment in July 1997. I am satisfied that it is more probable than not that Bruno did not have the appropriate capacity to make an informed decision about the possible consequences of vacating the property. I am therefore satisfied that he did not abandon the property. However by reason of the conclusion I have reached on the construction of the Will this matter is not relevant.

The Law 18 The object of a construction suit is to ascertain the intention of a testator as expressed in his will when it is read as a whole: Perrin & Ors v Morgan & Ors [1943] AC 399 at 406; Lutheran Church of Australia South Australia District Incorporated v Farmers' Cooperative Executors and Trustees Ltd & Ors (1970) 121 CLR 628 at 646. The Court must be careful in so construing the testator's intention not to embark upon the making of a new will for the testator: Scale v Rawlinds; Barrett v Hyder [1892] AC 342; Re Bailey; Barrett v Hyder [1951] Ch 407 at 421. 19 Prima facie the words used in the Will are given their "strict, plain, common meaning" unless, upon an examination of the provisions of the whole Will, the testator used the words in a different sense from their ordinary meaning or a secondary meaning makes sense when the ordinary meaning does not: Gorringe v Mahlstedt & Ors [1907] AC 225 at 227; Re Cook (deceased); Beck v Grant [1948] 1 Ch 212 at 216; Re Smalley; Smalley v Scotton [1929] 2 Ch 112. 20 Of particular relevance to this case is the principle that legal expressions or words used as a term of art are given their ordinary meaning. In construing the term "personal estate" in Re Cook (deceased); Beck v Grant [1948] 1 Ch 212 Harman J said at 214: Testators can make black mean white if they make the dictionary sufficiently clear…In the absence of something to show that the phrase ought not be so construed, I must suppose that she used the term "personal estate" in its ordinary meaning as a term of art.

Competing Claims 21 The plaintiff submitted that the construction of the words "to reside therein for his life" in clause 3(b) as a literal construction creates a mere right of residency as opposed to a life estate. In Re Potter (deceased) (1970) VR 352 Menhennitt J at p. 354 construed the phrase "..that my son James Athol Potter may reside in the said house as long as he so desires" as follows: The right so given to the son is a right to reside personally in the house. Such a right, which has been commonly recognised in the decided cases, is often referred to as a personal right of residence. This expression means, I think, that the right is personal to the person given it and does not carry with it the right to let or to rents and profits. It is so used in contradistinction to a life estate. 22 The plaintiff submitted that Bruno elected to abandon his right of residence and by reason of the sale of the property, which occurred in February 2000, there was no availability to resume such right in any event. 23 Mr Wilson submitted that in each of clauses 3(a) and (b) the deceased adopted language indicating that both his widow, and after her death his son Bruno, receive a right of residence in the testator's residence subject to the conditions relating to the payment of the outgoing. Whatever interest the widow and Bruno received pursuant to the terms of the Will, that interest was to continue for the life of the widow and after her death for the life of Bruno. 24 Clause 3(c) of the Will provides that the plaintiff receives the house and contents absolutely on Bruno's death. The language of clause 3(c) is quite clear in identifying the time at which the absolute interest in the property vests in the plaintiff. It was submitted that if the deceased intended that his widow and Bruno were to receive only rights of residence, and not a life estate, there would be no reason to defer or delay the vesting of the gift in the plaintiff's favour. On the other hand it was submitted that if the intention was for the widow and Bruno to enjoy life interests, the delay or deferral of the vesting of the absolute interest can be better understood. 25 It is submitted that the term "the life estate of Bruno Firriolo" in Clause 4 evinces an intention of the deceased that Bruno have a life estate and not a mere right of residence. In support of this submission Mr Wilson highlighted the powers that were given to the trustee in clause 6. He submitted that if the gifts in clauses 3(a) and (b) were only rights of residence and not life interests, it is difficult to explain why the trustee would require powers of the type set out in clauses 6(a), (b) and (d). It was submitted that Bruno is entitled to the benefit of the income earnt from the investment of the proceeds of the sale of the property. 26 Mr Hill, whose client's position is neutral, submitted that the deceased's intention is unclear. He referred to authority in support of the proposition that where words in a Will imply that a "personal right only" is given the gift must be confined to that: Re Keenan; Ford v Keenan (1914) 30 WN (NSW) 214. This much is uncontroversial. What is the issue is whether other words, in particular, the provisions of Clause 4 lead to a construction that the deceased intended to confer more than a "personal right only". 27 Certainly the deceased used a "term of art" in Clause 4 of the Will in referring to Bruno's "life estate". If that term had not been used Clause 3(b) may more easily have been construed to mean that Bruno only had a right to reside personally in the house subject to the proviso. 28 I am satisfied that the use of the term "life estate" in Clause 4 provides a sufficiently clear indication of what the deceased intended in the provision he made for Bruno in Clause 3(b). The deceased could have made the grant to the plaintiff immediately upon his death subject to Bruno's right of residence if that is all he intended. That this was not done, and that such grant was delayed until Bruno's death, is in my view supportive of a finding that the deceased intended to grant a life estate to Bruno. I am also satisfied that to a lesser extent further support for such a construction is provided by the presence of the trustee's powers in Clause 6(a)(b) and (d). 29 I answer "yes" to question 3(b) in the Summons. In the circumstances an answer to question 4 is not required. 30 I order that the trustee's costs on an indemnity basis and the costs of the Plaintiff and of the First Defendant on a party/party basis be paid out of the estate. ***************

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