Foti v. Foti & Anor
[2008] QSC 284
•14 November 2008
SUPREME COURT OF QUEENSLAND
CITATION: Foti v Foti & Anor [2008] QSC 284 PARTIES: ANGELINA FOTI
(applicant)
v
SALVATORE FOTI as personal representative of the Estate of LEONARDO FOTI
(respondent)FILE NO/S: SC 809/2000 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court at Townsville DELIVERED ON: 14 November 2008 DELIVERED AT: Townsville HEARING DATE: 10 November 2008 JUDGES: Cullinane J ORDER:
- Further and better provision be made out of the estate of Leonardo Fot to the applicant by:
i. transfer to the applicant of the deceased’s half share as tenant in common of the land described as Lot 1 on RP 722504, County of Cardwell, Parish of Trebonne
ii. granting an interest for life in the remainder of the estate of the deceased
- Costs to be assessed on an indemnity basis and paid out of the estate
CATCHWORDS: SUCCESSION – FAMILY LAW PROVISION – CLAIM BY SPOUSE – INSUFFICENT PROVISION IN WILL – where the deceased left provision in will for the applicant - where provision provided that the applicant would receive $6,000 annually until the applicant remarried or their son attained the age of 18 – where deceased left applicant with a half interest in the matrimonial home – where applicant claims further and better provision out of the estate – whether further and better provision should be provided
CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 79 ALJR 1724 cited
COUNSEL: MA Drew for the applicant
CA White for the respondentsSOLICITORS: Roati & Firth Solicitors for the applicant
Spina Kyle Waldon Solicitors for the respondent
The applicant seeks further and better provision out of the estate of her late husband, Leonardo Foti who died on 29 July 2000.
The proceedings were initiated by application of 7 December 2000. There has thus been an inordinate delay in bringing the matter before the Court to be finalised.
The applicant was born on 11 January 1951. She is now 57.
She currently works as a carer receiving a fortnightly pay which varies between $937 and $1,253.
She and the deceased were married on 9 July 1991. There is one child of the marriage, Alfio, born on 2 September 1991.
Prior to her marriage to the deceased, the applicant had been previously married. In 1973, she married one Mario Cantoni and there were three children of the marriage born on 13 December 1973, 21 November 1975 and 9 July 1980 respectively.
Mr Cantoni died on 3 January 1983. He was a cane farmer, having a one-share interest in a cane farm.
The applicant received the proceeds of a life insurance policy on the life of the late Mr Cantoni in a sum of approximately $80,000. A sum of $18,000 was left in trust for the three children.
In February 1991, the applicant sold the one-third interest of the late Mr Cantoni in the cane farm for $180,000.
Her position following the sale of the cane farm was that she had a total of about $260,000.
She received a widow’s pension for approximately two years after the death of her first husband at which time she had three dependent children to care for.
She commenced working at a coffee lounge in Ingham and it was during this period that she met the decease, Leonardo Foti.
The deceased was a cane farmer, owning what has been described in evidence as a small cane farm. It has an area of some 48.56 hectares and the tonnes of cane produced for the years 2002-2006 appear in the valuation of a valuer which is exhibited to the affidavit of the executor, Salvatore Foti, filed on 14 February 2008.
By his Will the deceased appointed the applicant and his brother, Salvatore Foti, as executors. Upon the applicant’s renunciation, Salvatore Foti is the sole executor.
By his Will the deceased made the following dispositions:
“I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever nature and wheresoever situate of or to which I may be seised possessed or entitled at the time of my decease UNTO AND TO the use of my Trustee TO HOLD the same (after payment thereout of my just debts funeral and testamentary expenses and the costs of the administration of my estate) UPON TRUST as follows:-
(a) To pay to my wife ANGELINA FOTI the sum of SIX THOUSAND DOLLARS ($6,000-00) for each year or part of a year from the date of my death until the Second day of September, 2009 or until her remarriage whichever shall first occur the first of such payments shall be made as soon as possible after the date of my death and thereafter on each anniversary of the date of my death AND I HEREBY CHARGE all that my canefarming property described as Lot 2 on RP 720370 in the County of Cardwell, Parish of Trebonne with the payment of this legacy;
(b) As to the rest residue and remainder of my estate subject to the charge in respect of my canefarming property described as Lot 2 on RP 720370 in the County of Cardwell, Parish of Trebonne mentioned in Clause 3 (a) of this my Will for the absolute use and benefit of such of them my children (including any born to me hereafter) as shall be alive at the time of my death and shall attain or shall have attained the age of eighteen (18) years and if more than one shall so survive as tenants in common in equal shares;”
Paragraph 4 gives to the trustees’ wide powers, including the power to carry on the business or to sell. Clause (4)(i) confers the following power:-
“(i) During the minority of any child or grandchild of mine who may be contingently entitled to any share or interest in my estate under any of the provisions of this my Will to apply the whole or such part as my Trustees may in their absolute discretion think fit of the income of the expectant share of such minor for or towards his or her maintenance education and advancement in life and if at any time such income should in the opinion of my Trustee be insufficient for the purposes aforesaid or any of them they may in their absolute discretion resort to the corpus of such expectant share with power to pay the same (whether income or capital) to any guardian or guardians or one of the guardians of such minor for the purposes aforesaid or any of them without seeing to the application thereof.”
Prior to their marriage, the applicant and the deceased decided to acquire a house at Blackrock near Ingham. This was purchased by them as tenants in common in equal shares. The funds provided came wholly from the applicant. The applicant and the deceased agreed that the deceased would repay her for his share at a later date. An indenture was prepared evidencing this. The applicant and the three children of her first marriage resided in the home and according to the applicant, she deferred payment by the deceased of interest in the monies owing.
This course was taken because the applicant provided the funds from monies she had received from her late husband’s estate and she and the deceased agreed these moneys would be kept separate and for the benefit of the applicant and her three children.
As the three children of the first marriage turned 20, the applicant gave the eldest two children $20,000 each and the youngest child, approximately $26,000. These amounts came from the monies which been left in trust for the three children and which had increased over the intervening years.
The applicant assisted one of the children from her first marriage to acquire his own home by advancing him $20,000.
At the time of their marriage the deceased, Leonardo Foti was according to the applicant, a healthy man capable of looking after the management of his cane farm. He had other relatives including the executor who were cane farmers. The deceased and his relatives helped each other with certain tasks particularly planting.
Whilst the deceased attended to the demands of the farm, the applicant attended to domestic activities. She would cook for the deceased and for the helpers during the planting period. She did the washing and ironing, mowed the yard and cared for the house and looked after the child of the marriage. According to the applicant the deceased was on good terms with the children of her first marriage and she deposes to the fact that she considered “he acted as a father to them. He would take them fishing, give them advice and was generally loving towards them”.
The applicant says that she did not expect the deceased to contribute to the support of her three children from her first marriage and she and the deceased agreed that the expenses would be shared during the time that her children from her first marriage resided with her. She supported them by paying one half of all household expenses from the monies that had been left to her.
Some renovations were made to the house prior to their moving in. These were in the order of about $20,000 and were paid half each by the applicant and the deceased each paid one-half.
The deceased suffered a good deal of ill health from about 1993 until his death. In 1993 he commenced to suffer from diabetes and had to have some toes amputated. There were complications and it was necessary for him to receive ongoing treatment. The Blue Nurses would come each day and dress his wounds and some of his care fell upon the applicant.
The deceased had major cardiac surgery in 1995 and it was necessary for the applicant to devote a good deal of time to care for him. He had to be driven to Townsville frequently for hospitalisation or specialist treatment.
In 1998 he suffered renal failure and required dialysis treatment every evening. The applicant would care for him in this regard by setting up the machine at home at about 8.30 p.m. and the deceased would stay on the machine for about ten hours. The applicant disconnected the machine and it was necessary for her to clean it and to clean the various attachments to it and to place an order any items for the machine which required attention.
The deceased’s declining health meant that he could not perform the physically demanding tasks on the farm and it became necessary for him to rely more and more upon friends and family. His brother (the executor, Salvatore) and the applicant’s children from the first marriage would help when required.
It is obvious that Salvatore Foti did a good deal of the work on the farm during this time.
The applicant loaned the deceased $25,000 in 1995 to purchase an automatic tractor to enable him to manage the work more readily with his disability.
During this time, Victor, a son of the applicant from her first marriage, bought a vehicle from the deceased but did not have sufficient money to pay for it. The applicant agreed to reduce the amount which the deceased owed her from the purchase of the tractor and at about this time the deceased commenced paying her interest on the total of the monies which he owed her.
By 1998 although the deceased managed to perform some work on the farm, the work was done primarily by others.
Salvatore Foti says and I accept that he and the deceased had an arrangement whereby the interest which it was anticipated the deceased would take in his mother’s estate, would be transferred to Salvatore Foti to compensate him for the work that he had done on the deceased’s farm. In the result the deceased predeceased his mother, who is still alive. Salvatore Foti now seeks to advance a claim for the value of the work which he says he performed during this time.
The applicant says that she became aware that the deceased had made a Will and on one occasion found it and read it. She became concerned about it and spoke to the deceased telling him that $6,000 per year was not enough to pay the bills and that she would not be able to live on it. He assured her “the farm will pay all of the bills for you, you will have the $6,000 to live on”.
She says that she and the deceased had discussed matters and that they had agreed that she would leave the money that she had invested from her first marriage and her half-share in the house to the three children from the first marriage. The deceased told her that he would provide for the son, Alfio and she says that she understood this to mean that adequate provision would be made in his Will for herself and Alfio, since he was at that time only a child.
One of the documents constituting exhibit 2C shows the assets and liabilities of the estate of the deceased as at the date of his death and as the time of trial.
Assets & Liabilities of Estate of Leonardo Foti as at 29 July 2000
ASSETS
18 Black Rock Rd. – house – 1/2 interest with Applicant $ 40,000.00
Orient Rd – farm $459,500.00
Hawkins Creek farms & house Taylors Beach 1/8 interest &
Subject to life interest of R Foti $ 56,250.00
Vehicles $ 21,000.00
Farming plant
Boat $ 5,000.00
Shares
Shares – 1/8 interest & subject to life interest of R Foti
TOTAL ASSETS $581,750.00
LIABILITIES
NAB $ 25,000.00
Loan from Applicant $ 47,000.00
Outstanding Accounts $ 29,300.46
S Foti $ 73,612.58
TOTAL LIABILITIES $174,913.04
NET ESTATE $406,836.96
Assets & Liabilities of Estate of Leonardo Foti as at 5 November 2008
ASSETS
18 Black Rock Rd. – house – 1/2 interest with Applicant $ 87,500.00
Orient Rd – farm $440,000.00
Hawkins Creek farms & house Taylors Beach 1/8 interest &
subject to life interest of R Foti $130,000.00
Farming plant $125,833.34
Shares $ 22,111.20
Shares – 1/8 interest & subject to life interest of R Foti $ 1,612.26
TOTAL ASSETS $807,056.80
LIABILITIES
ATO $ 2,540.90
ANZ $ 10,501.19
Debt to Applicant including interest $ 25,731.53
Future annuities to Applicant $ 12,000.00
S Foti $111,000.00
TOTAL LIABILITIES $161,773.62
NET ESTATE $645,283.18
It is common ground that there are some errors in what is shown in this assessment.
The deceased had an interest in a house at Taylor’s Beach pursuant to the Will of his late father. It is brought into the above summary in the amount of $28,000 whereas it should be $56,000.
The executor has made a claim in respect of work performed for the deceased prior to his death and for work performed and plant and equipment hired on and in respect of the farm since the date of the deceased’s death.
The evidence suggests that he has devoted a good deal of his time to the farm since the date of the deceased’s death and indeed it seems that the farm was in a somewhat run down position following the death of the deceased and that the executor has restored it to its current satisfactory condition. It is not suggested that he is not entitled to claim for his services.
The amount claimed in respect of the period prior to the death of the deceased is more problematical. I have referred to what the executor says was the arrangement. The money claim he advances is claimed upon the basis of the failure of the arrangement and is presumably something in the nature of a quantum of meruit. It would on its face be statute barred but as Salvatore is also the executor it is claimed that he has the right to and has in fact acknowledged it on behalf of the estate.
In the result it is not necessary for me to reach any concluded view about this. This claim can be left to be resolved as and when it is pursued.
The applicant’s financial position at the date of the death of the deceased is set out in her first affidavit of 7 November 2000.
Her present position is set out in her affidavit filed on 7 November 2008 in paragraph 24:
A one-half (1/2) share in the house and land at 18 Blackrock Road, Blackrock via Ingham (as per valuation report from Collins & Eales, Valuers & property Consultants)
$87,500.00 Suncorp Everyday Options Account Number 024452836 as at 5th November 2008 $1,559.04 Suncorp Everyday Options Sub-Account Number 20017339 as at 5th November 2008 $76,330.17 Suncorp Account Number 206526527 as at 15th October 2008 $5,233.55 Suncorp Term Deposit (Fixed) $42,000.00 276 Commonwealth Bank Shares at approximate value of $40.66/share as at 5th November 2008 $11,222.16 2004 Mazda 3 Sedan Current Value E$14,500.00 Colonial Mutual Whole of Life Policy No. 00061737 (Cash in benefit as at 30th June 2008) $6,416.00 Total Assets E$244,760.92
Living expenses (food and fuel etc.) E$16,900.00 Westpac Altitude Credit Card Account Number 4564717020624093 as at 5th November 2008 $2,167.06 Colonial Life Insurance Policy No. 2311780(7) Annual Premium $140.09 Motor Vehicle registration (Annual Fee) based on 2008 charge $418.75 RACQ Membership (Annual fee) $66.00 Car Insurance with CGU (Annual premium) $620.82 Motor vehicle services (Annual charges) E$500.00 Household & Contents Insurance (Annual Premium) one-half (1/2) share $273.15 A one-half (1/2) share of the rates for the property situated at 18 Blackrock Road, Blackrock via Ingham (based on 2008 rates and charges) $820.34 MBF Membership Number 21468120 – Advantage Hospital & MBF Essential Extras – Sole Parent (Annual Premium) $2,445.72 Ergon Electricity Account (Annual charges) E$1,230.00 Telstra – Home telephone and internet (Annual charges) E$1,440.00 Telstra pre-paid mobile charges E$720.00 Tax Invoice from Cavallaro Leonardi & Associates dated the 30th June 2007 $850.00 Total Liabilities/Expenses E$28,591.93
It is accepted she has superannuation benefits of $84,000 but she says and I accept that she understands that entitlements in this regard (which are shown as 30 June 2008) would now be somewhat less.
Sunsuper Member No. 9000 36489 as at 30th June 2008 $18,221.72 Suncorp Easy Super Reference Number P68794/7062565 at 30th June 2008 $65,824.51 Total Superannuation $84,046.23
What is not included in the statement of her assets is a sum of $52,000 owed by the estate to her representing the balance of a debt and unpaid interest.
The primary asset held by the applicant is a one half interest in the former matrimonial home. This represents a little under one third of her total assets.
It is not in a good state of repair as some of the photographs which have been tendered reveal.
There was some contention as to a sum of $5,000 which represents the proceeds of the sale of a vessel owned by the estate. I am satisfied from the evidence of the executor that this has been accounted for.
Relations between the executor and the applicant are not good. There was a conversation shortly after the death of the deceased in which the applicant expressed her concerns about the position she had been left in and asked for an increase in the amount to be received by her. This was refused by the executor. There was some dispute as to the precise terms of the exchange between them. The executor said that as a result of what the applicant had said to him, which he regarded as being in somewhat abusive terms, he did not wish to be exposed to any repetition of this and communications ceased. It seems that communication takes place with the executor’s sister acting as a go-between.
The executor has pursuant to the power granted to him under the Will paid for the child’s school fees and some other expenses. The applicant has in other respects provided for the child.
As at the date of the deceased’s death, the child was eight, almost nine.
It appears that he wishes to undertake a law degree at James Cook University when he finishes his secondary studies at the end of 2008.
The costs associated with this are set out in the applicant’s most recent affidavit.
The deceased had a duty to both the applicant and to his infant son as at the date of his death.
In my view a legacy of $6,000 a year from the date of his death until 2 September 2009 (when the child turns eighteen) cannot be regarded as satisfying his obligation to the applicant.
It must have been apparent to the deceased at the date of his death that for a considerable number of years into the future, the deceased would have the care of the child and that this might persist beyond his adulthood if he was to undertake tertiary education. In the events that have happened the matter has not come before the Court until the greater part of the child’s minority has passed.
The estate is not a large one but it is not a small one.
There is a lack of liquidity in the estate with some of the assets being held in fractional interests in the estate of the deceased’s father. These would not be readily realisable.
The primary asset is a cane farm. The gross proceeds of the farm from 1998 to 2008 appears in one of the documents constituting exhibit 2C as does the nett profit or loss in each year.
The fluctuating fortunes of the sugar industry of recent years, indeed decades, is a matter of notoriety.
For the last few years the farm has returned a profit. In some of those years there was a small profit and in others, a significant profit. In the years 1999, 2001 and 2002, the farm ran at a loss.
I have been informed that the total cost to the parties comes to a little more than $100,000 and it is not easy to see how such a sum will be able to be discharged from the estate unless the farm is considerably more profitable than it has been in most of the recent years or some of the deceased’s entitlements in the estate of his late father are able to be sold.
It seems to me that in discharging his duty to the applicant, the deceased ought as a starting point to have ensured that she had the security of ownership of the former matrimonial home. At present, as I have said, she has a one-half interest as tenant in common.
In addition the deceased ought to have ensured by provision in his Will that the applicant would have some income during her lifetime which exceeded the small annuity for the limited period which was made.
The applicant has some means but a significant proportion of these is represented by her interest in the matrimonial home.
She has monies which have come to her from her first husband but she sees herself, in my view reasonably enough as having obligations to her children by her first marriage.
She works as a part-time carer and receives the income I have already referred to from this.
She is now however 57 and cannot be expected to work in such a position indefinitely.
The deceased had an understandable wish that his son succeed to the estate, and in particular that he receive the cane farm. There is some dispute as between the applicant and the executor as to the attitude which the son has expressed about the farm. It is conceivable that he has told each of them what he might expect each would want to hear. Perhaps his attitude has been different at different times.
Whether it is possible for the farming operations to continue will be determined by the level of its profitability which of course will be determined by the state of the sugar industry and also will be determined by its capacity to meet the debts payable by the estate.
In my view the appropriate order (in addition to the transfer of the deceased’s interest in the house) to be made in the applicant’s favour is to grant the applicant a life interest in the estate. This would result in the son in due course succeeding to the farm, if in the interim, it remains possible for farming operations to be carried on given the factors that I have already referred to.
Once Alfio attains his majority it is in the power of the applicant and her son to require the transfer of the property to them. See CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 79 ALJR 1724.
I order that further and better provision be made out of the estate of the deceased of Leonardo Foti for the applicant Angelina Foti by:
1. transfer to the applicant of the deceased’s half share as tenant in common of the land described as Lot 1 on Registered Plan 722504, County of Cardwell, Parish of Trebonne;
2. granting an interest for life in the remainder of the estate of the deceased
To give effect to this order Clause 3 will now read:
3 (a)
1) I devise my interest as tenant in common I the land described as Lot 1 on RP 722504 County of Cardwell, Parish of Trebonne to my wife Angelina Foti;
2) I grant to my wife Angelina Foti a life interest in the remainder of my estate
(b) Subject to the dispositions in Clause 3(a) I leave the whole of my estate for the absolute use and benefit of such of them my children (including any born to me hereafter) as shall be alive at the time of my death and shall attain or shall have attained the age of eighteen (18) years and if more than one shall so survive as tenants in common in equal shares
I order that the costs of the parties be assessed on an indemnity basis and paid out of the estate.
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