Anthony Taverniti and Steven Domenico Taverniti (as Executors of the Estate of Domenico Taverniti) v Taverniti
[2016] WADC 59
•20 APRIL 2016
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: ANTHONY TAVERNITI and STEVEN DOMENICO TAVERNITI (as Executors of the Estate of DOMENICO TAVERNITI) -v- TAVERNITI [2016] WADC 59
CORAM: GOETZE DCJ
HEARD: 8-9 MARCH 2016
DELIVERED : 20 APRIL 2016
FILE NO/S: CIV 1554 of 2014
BETWEEN: ANTHONY TAVERNITI and STEVEN DOMENICO TAVERNITI (as Executors of the Estate of DOMENICO TAVERNITI)
Plaintiffs
AND
ENZO TAVERNITI
Defendant
Catchwords:
Enduring power of attorney - Failure of donee to account for monies withdrawn from the grantor's bank account - Grantor now deceased
Legislation:
Inheritance (Family and Dependants Provision) Act 1972
Privacy Act 1988 (Cth)
Result:
Judgment for the plaintiffs in the sum of $45,000
Representation:
Counsel:
Plaintiffs: Mr P Monaco
Defendant: In person
Solicitors:
Plaintiffs: GV Lawyers
Defendant: In person
Case(s) referred to in judgment(s):
Crossingham v Crossingham [2012] NSWSC 95
Klotz v Neubauer (2001) 82 SASR 6
Watson v Watson [2002] NSWSC 919
GOETZE DCJ:
Introduction
Before Domenico Taverniti's death, his son the defendant Enzo Taverniti, was the donee of his enduring power of attorney.
The plaintiffs, Anthony Taverniti and Steven Taverniti, as executors of Domenico's last will and testament, allege that Enzo improperly withdrew money from Domenico's bank account for his own use.
The executors now seek to recover monies allegedly withdrawn from Domenico's bank account by Enzo.
Enzo claims that Domenico told him that by reason of not providing for Enzo in his will, Enzo could have the money in his bank account, so long as Enzo paid Domenico's medical and household expenses. The executors reject this claim. It is the issue to be determined in this action.
The uncontroverted evidence
Enzo's evidence was that in January 2003, he separated from his wife, Leonie. He was the black sheep of the family for having married an Australian. He was regarded with some angst within the family. Domenico was disgruntled with him because he left his wife for another woman. Domenico wanted Enzo to return to his wife
or else he would take me out of the will
and which will at that time, in the event of Domenico's wife pre‑deceasing him, provided for an equal division of Domenico's estate between his only two children, namely Mario and Enzo.
In fact, on 24 October 2003, Domenico did change his will thereby appointing his grandsons Anthony and Steven to be his executors and leaving his estate to his wife provided that she survive him but, if she did not do so, then to his three grandchildren, namely one‑half to Mario's two children Anthony and Bianca as tenants in common in equal shares and the other half to Enzo's only child Steven, absolutely.
It should be noted that, in March 2003, Mario predeceased Domenico. Later, in 2006, Domenico's wife also predeceased him.
In 2005, Enzo divorced Leonie. A property settlement was effected between them. Enzo said that, despite any disgruntlement between Domenico and himself, they retained a relevantly close father and son relationship.
On 19 December 2008, Domenico granted Enzo his enduring power of attorney. Such power prevented Enzo from selling any of Domenico's property. He could only operate Domenico's bank account. Enzo said that the limitation as to the operation of only the bank account was because Domenico was always worried about losing his assets.
Domenico was in nursing care or in a nursing home from in or about April 2009 until his death 21 June 2010. He had periods of illness and inability, during which, he was unable to properly manage his affairs.
Enzo made three withdrawals from Domenico's bank account totalling $80,768.16 as follows:
1.on 20 July 2009, the sum of $6,500;
2.on 14 October 2009, the sum of $73,504.45; and
3.on 29 December 2009, the sum of $763.71.
Enzo closed the account with this last withdrawal.
The executors requested Enzo to account for the above withdrawals, but he failed to comply. He also failed to return any money to the estate.
At the commencement of the trial, it was agreed between the parties that Enzo could account for expenditure of approximately $35,000 on behalf of Domenico but, $45,000 could not be accounted for. That fixed amount is then, the subject of this action.
Evidence of Enzo Taverniti
Enzo's pleaded defence is that he need not pay any money to the executors because Domenico
said to [Enzo] that as he was not being provided for in [Domenico's] will, he could have what was in the term deposit …, so long as [Enzo] paid [Domenico's] medical and household debts until [Domenico] passed away.
He claimed in evidence
my dad said that he wanted me to have that money after everything was paid out.
This, he claimed, was said to him before he
took the first amount out.
As already noted, Domenico first went into nursing care or into a home in or about April 2009. This necessarily incurred expenditure. Enzo said that Domenico asked how that expenditure was being met. Enzo replied that he had paid such expenditure himself and that then 'triggered' Domenico to tell Enzo to withdraw monies from his account. Enzo did not say when this discussion took place but, on 20 July 2009, Enzo withdrew the sum of $6,500.
Enzo gave evidence, that, when he went to the bank to make this withdrawal, he was told that he could only withdraw $6,500 without affecting any interest which the account was then attracting by reason of it being in a term deposit which was due to mature approximately three months later. He was told that he would then be able to withdraw the full amount. Enzo said that he explained this to Domenico, who said 'that's a fair call'. Domenico thereafter 'hounded' him to take the money out of the account.
Enzo said that on 14 October 2009, he went to the branch of the bank at which Mario's widow Lucy works and where Domenico held his account. Enzo withdrew $73,504.45 from Domenico's account whilst Domenico sat in Enzo's motor vehicle for about 20 minutes.
Enzo claimed that the reason for Domenico remaining in the motor vehicle was because Domenico did not wish to face Lucy, with whom he said Domenico had a problem. Enzo claimed there was always 'family argument amongst them'. On Enzo's evidence, Domenico was
pretty much disgruntled with Mario's side of the family.
It was put to Enzo that he could have taken Domenico into the bank to sign the withdrawal form but, he strenuously rejected this. Enzo also rejected the suggestion that he could have taken a withdrawal slip from the bank out to the car for Domenico to sign.
Enzo agreed however, that on 20 July 2009, he probably could have taken Domenico with him into the same bank to withdraw the initial $6,500. This was the first time he had not done so. On other occasions, Domenico had gone with him to withdraw money.
It was put to Enzo that he used the power of attorney, but kept the withdrawals a secret from Domenico. He denied this. It was further put to him, that, if Domenico found out about the withdrawals then, Lucy and Anthony would also find about the withdrawals very quickly. His answer to that was that Domenico wanted to keep the withdrawals secret from Lucy and Anthony.
Enzo claimed that Domenico was not interested in signing a document indicating that he wanted Enzo to have the money in the account notwithstanding that there were tensions within the family, including family members who would be watching over all events. Enzo acknowledged that Anthony and Lucy would
be watching [him] like a hawk,
which is why he kept the receipts that he did.
Enzo's evidence was that Anthony wanted Domenico to change his 2003 will so that his three grandchildren each received an equal one third share of his estate. Domenico was not prepared to do so and was greatly upset by Anthony seeking this.
Enzo said that on 9 November 2009, Anthony attended Domenico in hospital demanding that Domenico change his will in the manner just indicated. He said that after that meeting, Domenico was so upset and angry that this upset and anger ultimately caused Domenico to die some five months later on 21 June 2010.
Enzo was not present at this meeting on 9 November 2009. However, he said that later, Domenico
was adamant that he was never going to change this will, the way it was and he says I want you to take this money before anything else happens.
I've got … . As … . As long as I pay – his – his bills and there was nothing outstanding, whatever the balance there was, was to be mine, but we did not do a contract to a dying man that's – that – that was my fault …
The balance was to be kept by me. That was – that – that was his agreement to me.
Enzo's evidence was that, in earlier times, he had Domenico's $50,000 available to repay the executors and he offered to do so but, they wanted the whole $80,000 from the account and therefore he did not pay that $50,000 to them.
Enzo said, at first, that $50,000 had come from Domenico's account and had been put aside by him. It just sat in Enzo's account.
Later, Enzo said he paid that sum to his solicitors and accountants for a forensic report for this trial in respect of an audit of monies spent by him on Domenico's behalf. That audit has not been provided in this action.
Next, Enzo said that the $50,000 been used in his divorce proceedings.
Finally, Enzo said that the solicitors' and accountants' fees were paid from the sale of a vehicle.
Evidence of Steven Taverniti
Steven gave evidence contradicting Enzo's evidence that he, Steven, was present when Enzo and Domenico discussed Domenico's desire for Enzo to have the money in Domenico's account. Further, Steven also contradicted Enzo's evidence that he, Steven, knew the truth about the 9 November 2009 meeting. Steven did not have any admissible information about it.
Evidence of Anthony Taverniti
Anthony's evidence was that, at his 21st birthday, Domenico told him he was to be the co‑executor of Domenico's estate, together with Steven, his first cousin. He was advised of this in the presence of his paternal grandmother and his mother Lucy, who confirmed this evidence.
Anthony's evidence was that he and Steven were to be the executors of Domenico's estate by reason that Anthony's father Mario was deceased and Domenico sought to ensure that Steven got the share of Domenico's estate which previously would have passed to Enzo.
Anthony declined to be Domenico's power of attorney because he did not wish to deal with Enzo.
Anthony said that Domenico had not told him of any arrangement by which Enzo could access Domenico's account provided that Enzo pay for Domenico's medical and household expenses. He also said that Domenico told him that he did not know what had happened to Domenico's money.
Anthony's evidence relating to the meeting on 9 November 2009 was that Domenico wanted him to confront Enzo regarding the withdrawals by Enzo from Domenico's account. Anthony said that he would not do this, which angered Domenico. However, Anthony agreed to be present when Domenico pursued Enzo about it.
Anthony denied that, at this meeting, he requested Domenico to alter his will so as to provide for an equal three way division of his estate between himself, Bianca and Steven. Anthony said that all he knew was that previously, Domenico's estate was to have been divided equally between Mario and Enzo. However, Mario had already died, such that his share was to pass to his children.
Evidence of Lucilla (Lucy) Taverniti
Lucy is the widow of Mario and was, at all material times, a fulltime bank officer at that branch of the bank in which Domenico banked his money.
Lucy gave evidence that, in 2008, Domenico asked her to accept a grant of his enduring power of attorney. Enzo agreed with this. However, she declined by reason that she did not wish to deal with Enzo.
Lucy gave evidence that whenever she saw Domenico after he granted Enzo his power of attorney, Domenico always asked her what was happening to his money. She inferred that he probably did this because she worked in the same bank and branch as that in which Domenico banked his money. Lucy advised him that she was not able to access his account by reason of the Privacy Act 1988. This upset Domenico.
In due course, the bank manager contacted Domenico at Lucy's request and then wrote to him by letter dated 12 December 2009 confirming that at that stage, he held only $763.71 in his account. The letter recited that the bank was unable to give details of the account to Lucy as she was not a signatory to the account. The letter also detailed withdrawals from the account by Enzo pursuant to a power of attorney. Lucy delivered this letter to Domenico who, she said, was upset by reason of its contents. She said Domenico asked her to hold onto the letter in case she needed it. This letter was tendered during her evidence.
Subsequently, Lucy also confronted Enzo and said to him that Domenico had been asking her as to what had happened to the money in his account. Enzo did not reply. This occurred on more than one occasion. Enzo never indicated to Lucy that Domenico had given him permission to retain any money for his own purposes.
Enzo claimed in cross‑examination that the bank letter was a fabrication by Lucy. He disputed that Domenico had asked her to obtain information from the bank for him.
Later, after this present dispute had arisen, Enzo visited Lucy at her bank and told her to have Anthony desist from this litigation otherwise, he would tell the Italian community, the priest and 'whatever else' about it.
Evidence of Leonie Taverniti
Leonie is the former wife of Enzo. She gave evidence that she attended Domenico on 9 November 2009 when Domenico said that Anthony had just left but, he had been trying to get Domenico to change his will, so that there would be an equal division of Domenico's estate between the three grandchildren, rather than an equal share between Anthony and Bianca on the one hand and Steven on the other hand. This hearsay evidence was not objected to.
The law
Once an enduring power of attorney has been granted, the donee of that power is in a fiduciary position in relation to the donor in circumstances where the donor may be elderly and prone to periods when he or she is not competent to manage his or her own affairs: Klotz v Neubauer (2001) 82 SASR 6 [33] and Crossingham v Crossingham [2012] NSWSC 95 [14], [18].
The donee has the burden of proving that money expended by the donee has been properly incurred: Klotz [35].
When a donee of a power of attorney benefits from the donor's estate, the court may order that the donee repay such benefit to the estate, together with interest: Crossingham [31]; Watson v Watson [2002] NSWSC 919.
Findings
Being the donee of a grant of an enduring power of attorney placed a heavy onus on Enzo to be honest, straightforward and able to account for the expenditure of Domenico's money, subject to Enzo's claim that Domenico gave his money to Enzo provided that Enzo meet his household and medical expenses.
Enzo's evidence must be carefully scrutinized. Domenico is not available to give his version of the facts.
The evidence is far from persuasive that Domenico told Enzo that he could have the money in his account, subject to the proviso just mentioned. The reasons for this are:
1.Enzo said there was tension within the family and at least some of that tension was centred upon Enzo.
2.Lucy did not wish to accept the grant of Domenico's enduring power of attorney by reason that she would need to deal with Enzo. Anthony also did not wish to accept the grant for the same reason. There was tension between Enzo and Lucy and it would seem, Enzo and Anthony.
3.Enzo's evidence that Domenico was disgruntled with Mario's side of the family is not borne out by the undisputed evidence conceded by Enzo that Domenico asked Lucy to be his power of attorney. I accept that he also asked Anthony. Further, Anthony is one of the executors of his estate.
4.Given the tensions within the family, Enzo well knew the scrutiny he would come under with respect to any improper withdrawals of money from Domenico's account. As Enzo acknowledged, Anthony and Lucy would be
watching [him] like a hawk.
5.Indeed, Lucy did ask Enzo about Domenico's money but, Enzo did not respond to her. I accept her evidence about this as being both plausible and consistent with Domenico's request to her to obtain information about his account from the bank, including that he asked her to hold onto the bank letter. She produced it in her evidence. I accept it as genuine.
6.Enzo gave evidence that Domenico wanted the withdrawals to be kept secret from Lucy and Anthony. That is implausible because there would be no need to keep secret any legitimate withdrawals in respect of Domenico's medical and household expenses. Further, Anthony was to be one of the executors of Domenico's last will. He would therefore come to learn of any withdrawals in due course.
7.Enzo's evidence was that he did not obtain a written direction from Domenico regarding the disposal of money in the bank account because he was concerned about his father's health and because it was not the Italian way to record such things. This is implausible given the scrutiny he knew he would face. Indeed, that scrutiny provided an incentive for Enzo to obtain such a written direction.
8.In the circumstances outlined at [16] – [21] above, it would have been easy for Enzo to have Domenico execute all three bank withdrawals, including in respect of $6,500, as to which Enzo agreed he probably could have taken Domenico into the bank.
9.Enzo's explanation for leaving Domenico in the car when he withdrew $73,504.45, being a possible face to face meeting with Lucy, contradicts his evidence that he probably could have had Domenico execute the bank withdrawal for $6,500. Enzo's explanation must be rejected.
10.However, even accepting this explanation, there is no reason why in, all the circumstances including family tensions, Enzo could not have gone into the bank, obtained a withdrawal form for $73,504.45, taken it back out to the car, have Domenico sign it, then return with it to the bank and complete the withdrawal. He could also have done this in respect of the final withdrawal of $763.71. If that had been done then, this litigation would not have been necessary.
11.On one version of Enzo's evidence, the sum of $6,500 was withdrawn upon Domenico's request, but only after expenditure already incurred by Enzo on account of Domenico then 'triggered' Domenico to tell Enzo to withdraw funds from his account. On Enzo's evidence, he went to the bank and found out that he could only withdraw $6,500 without affecting interest on the term deposit. Only then did Domenico allegedly 'hound' him to take money out of the account.
12.However, it is illogical to claim that Enzo in fact paid Domenico's expenses from his own pocket up to 6 June 2009, and that he only reimbursed himself at Domenico's prompting after being 'triggered'. Surely the point of the enduring power of attorney was to enable Enzo to withdraw such sums of money as were required from time to time in order to meet Domenico's medical and household expenses. There was no need for Domenico to instruct Enzo to take money from his account for that purpose.
13.Further, it is unlikely that the amount of $6,500 to be reimbursed to Enzo just happened to coincide with the maximum $6,500 that could be withdrawn without affecting interest on the term deposit.
14.Enzo's evidence that, after the 9 November 2009 meeting with Anthony, Domenico told Enzo that he wanted Enzo to have the money in his account
before anything else happens
is inconsistent with the fact that, by then, Enzo had withdrawn all bar $763.71 from the account.
15.If Domenico did say this then, clearly by 9 November 2009, Enzo had not told Domenico that he had already withdrawn either or both the sums of $6,500 and $73,504.45 from the account. Enzo did not give any evidence that he had told Domenico of this. If Enzo had not told Domenico then, the rhetorical question must be asked, why not?
16.Further, if Domenico had been told by Enzo that he had withdrawn the money then, whenever Anthony allegedly asked for money and to change his will. Domenico simply could have said he had given that money to Enzo and that would have been the end of the matter, rather than allowing Anthony to annoy Domenico about it.
17.Enzo's evidence was contradicted by:
(a)Steven denying that he was present when Domenico allegedly discussed his desire for Enzo to have the money in his account; and
(b)Anthony denying that Domenico had told him of the arrangement for Enzo to access Domenico's account for personal use.
There is no reason to not accept Anthony's and Steven's evidence.
18.Enzo claimed that he did not return to the executors the balance of money held by him after Domenico's death, being approximately $50,000, by reason that the executors wanted the full amount of approximately $80,000 from the three withdrawals. That is illogical. If Enzo had retained $50,000 from Domenico's estate then, he could simply have repaid that amount and accounted for the other money spent by him on Domenico's behalf, as he has now done to the extent of $35,000, to the executors' satisfaction.
19.It is more probable that Enzo spent $50,000 in his claim against Domenico's estate under the Inheritance Act (Family and Dependants Provision) Act 1972 in the Supreme Court in an endeavour to show the need for Enzo to obtain a provision from Domenico's estate. He also said he spent this money on his divorce proceedings and then he said that fees of $50,000 were paid from the sale of a motor vehicle. Enzo's variation of evidence as to the expenditure of $50,000 above at [27] ‑ [31] was not satisfactory.
20.It is significant that the terms of the power of attorney did not enable Enzo to sell any of Domenico's property. It is also significant that, in circumstances of family tension, Domenico did not tell anyone, particularly his nominated executors, that he had authorised Enzo to use money in his account, provided that Enzo paid his medical and household expenses.
21.It is also not inconceivable that the cash from the bank account may have been exhausted before Domenico's death, yet Enzo could not sell Domenico's property to meet Domenico's financial needs. It could be said that because of this, and by reason of Enzo's prior history giving rise to the terms of Domenico's last will excluding Enzo as a beneficiary, that giving his bank account proceeds to Enzo, subject to the proviso of paying his debts, is unlikely.
22.Enzo's explanations cannot be accepted for reasons expressed above. Even if Leonie's hearsay evidence of the 9 November 2009 meeting contradicting Anthony's evidence of what was discussed on 9 November 2009 were to be accepted, it will not assist Enzo in light of the other evidence is not necessary for present purposes by reason that, even if Anthony did seek to have Domenico's will changed and Domenico decided then that Enzo could have his money 'before anything else happens', the fact is that Enzo had already taken Domenico's money, bar $763.71.
Conclusion
There will be judgment for the plaintiffs against the defendant in the sum of $45,000.
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