Moffa v Starr - [2023] SASC 2

Supreme Court of South Australia
(Civil: Application)
MOFFA v STARR
[2023] SASC 2
Judgment of the Honourable Justice Blue
REAL PROPERTY - GENERAL PRINCIPLES - INCIDENTS OF ESTATES AND INTERESTS IN LAND
Application, in the course of an estate proceeding, for directions to the administrator pendente lite of the estate of Michele Moffa deceased to take steps to sell two properties at Norwood in which the estate holds a moiety (one half undivided) interest together with the second respondent.
In the estate proceeding, the issue is whether a will made by Michele on 25 November 2016 is valid or alternatively whether a will made by Michele on 24 November 2003 (the 2003 Will) is valid. Under the 2003 Will, the estate is effectively left in equal shares to Michele’s four daughters. Under the 2016 will, the estate is effectively left in equal shares to Michele’s five children (including the second respondent) and five sets of grandchildren.
Held:
1An order should be made directing the administrator to take steps to sell the Edward Street property (at [69]).
2An order should not be made directing the administrator to take steps to sell the Stephen Street property (at [79]).

Inheritance (Family Provision) Act 1972 (SA); Law of Property Act 1936 (SA) s 70, s 71, referred to.
Henderson v Executor Trustee Australia Ltd [2005] SASC 477, considered.

MOFFA v STARR
[2023] SASC 2
Civil

BLUE J: This is an application in the course of an estate proceeding for directions to the administrator pendente lite of the estate (the Estate) of Michele Moffa deceased (Michele) to take steps to sell two properties at Norwood in which the Estate holds a moiety (one half undivided) interest together with the second respondent Andrew Moffa (Andrew).
In the estate proceeding, which was instituted by claim in May 2018 (the action), the applicant Andrew Moffa in his capacity as the remaining person named as executor in the 2016 Will propounds a will made by Michele on 25 November 2016 (the 2016 Will) and seeks probate of it. By cross action filed in the proceeding (the cross action), the first respondent Rosa Starr (Rosa) and the fourth respondent Marina Wood (Marina) propound a will made by Michele on 24 November 2003 (the 2003 Will) and seek probate of it.
Michele died on 1 August 2017. He had five children: Andrew, Rosa, Marina, Lisa Walsh (Lisa) and Michelle Thomson (Michelle).
In August 2018 an order was made by consent in the proceeding appointing Alfio Macolino as administrator pendente lite.
In April and August 2022 the fifth respondent, Michelle, filed interlocutory applications seeking directions that Mr Macolino take steps to sell the two Norwood properties. The application is opposed by Andrew (in his capacity as a beneficiary rather than named executor under the 2016 Will). The application is supported by the third respondent, Lisa, and by the tenth and eleventh respondents, Kate Thomson…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Moffa v Starr

Details

AGLC: Moffa v Starr [2023] SASC 2
Case: [2023] SASC 2
Decision Date: 19 January 2023

CaseChat Overview and Summary

In the matter of Moffa v Starr, the dispute revolves around the sale of two properties in Norwood, jointly owned by Michele Moffa (deceased) and Andrew Moffa. Michelle Moffa, supported by other respondents, filed an interlocutory application seeking directions for the administrator, Mr Macolino, to sell these properties. Andrew opposed the application, arguing on behalf of the estate's beneficiaries. The central legal issues pertained to the appropriate timing for selling the properties, considering the fluctuating property market conditions and the impact of the Reserve Bank of Australia's interest rate increases.

The court examined the evidence provided by both parties, including affidavits from Michelle, Andrew, and a real estate agent, Christos Dimitrak. Dimitrak testified that the Adelaide property market had experienced a boom, but interest rates hikes since May 2022 had resulted in decreased buyer interest and lower property prices. He opined that selling the properties six months ago would have fetched a higher price and predicted further declines in property values. The court also considered reports from Domain and CoreLogic, which showed marginal increases in median house and unit prices, though these reports were explained as lagging indicators.

After weighing the evidence, the court concluded that selling the Stephen Street property was not advisable at this time, but the Edward Street property should be sold. The court issued orders directing the administrator to sell the Edward Street property, indemnify him, and permit him to use estate funds for related expenses and fees. Andrew was allowed to purchase the property if he wished, and the administrator was granted leave to file cross relief for the sale under the Law of Property Act 1936. The court also granted liberty to apply for further orders as needed.

Orders

Orders of the court

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Background

Background to the litigation

In April and August 2022 the fifth respondent, Michelle, filed interlocutory applications seeking directions that Mr Macolino take steps to sell the two Norwood properties. The application is opposed by Andrew (in his capacity as a beneficiary rather than named executor under the 2016 Will). The application is supported by the third respondent, Lisa, and by the tenth and eleventh respondents, Kate Thomson (Kate) and Samuel Thomson (Samuel). The other respondent beneficiaries do not take a position in relation to the application.Background By the 2003 Will, Michele appointed Marina, and in default Lisa, as sole executor and trustee of the Will. He gave $1,000 to Andrew and the residue of his estate to his trustee on trust for his surviving daughters Rosa, Michelle, Lisa and Marina. By the 2016 Will, Michele appointed Andrew and Michele’s solicitor Nicola Minicozzi as executors and trustees of the Will with the determination of Mr Minicozzi to prevail in the event of disagreement. He gave the residue of his estate to his trustee on trust to divide into ten equal parts and:·give a one tenth part each to his children Rosa, Andrew, Lisa and Marina;·give a one tenth part each to the children of Rosa, Andrew, Lisa and Marina; ·hold a one tenth part upon a testamentary trust set out in clause 6 of the Will (Michelle’s Trust Fund); and·hold a one tenth part upon a testamentary trust set out in clause 7 of the Will (Michelle’s Children’s Trust Fund). The testamentary trust set out in clause 6 is a trust to pay during Michelle’s lifetime the whole or part of the income or capital of the fund for the benefit of Michelle or her children, their trusts or companies and ultimately for Michelle’s children who are or attain the age of 21 years after her death. The testamentary trust set out in clause 7 is a trust on commensurate terms for Michelle’s children. In August 2017 Michele died. Each of his children had children of their own. Andrew’s children Angela, Sophia and Isabella are the sixth to eighth respondents. Lisa’s child Riley is the ninth respondent. Michelle’s children Kate and Samuel are the tenth and eleventh respondents. Marina’s children Mitchell, Chad and Blake are the twelfth to fourteenth respondents. Rosa’s children Adam and Emma are the fifteenth and sixteenth respondents. At the date of his death, Michele owned an interest in five properties in metropolitan Adelaide. He owned his principal residence at Highbury; a property at Paradise; a half interest in another property at Paradise; a half interest in a property in Edward Street Norwood (jointly with Andrew); and a half interest in a property in Stephen Street Norwood (jointly with Andrew). The Edward Street property contains three dwellings (a main dwelling and two flats at the rear), separately rented to different tenants. It was purchased by Michele and Andrew in January 1983. The Stephen Street property is a vacant allotment. It was purchased by Michele and Andrew in February 1998.

Evidence

Evidence Before The Court

In October 2022 the mediation was unsuccessful and the argument was relisted, ultimately for 19 December 2022.Evidence Michelle tendered three affidavits affirmed by Ms McEwin on 8 April 2022, 23 June 2022 and 8 November 2022. Those affidavits largely exhibited documents, most of which are referred to above. In the third affidavit, Ms McEwin also deposed to a conversation with Christos Dimitrak, a licensed land agent. Michelle tendered an affidavit sworn by Mr Macolino on 22 November 2022 which exhibited two media articles that referred to a Domain report entitled “House Price Report – September 2022” (the Domain Report) and a CoreLogic report entitled “RP Data Daily Home Value Index: Monthly Values” dated 31 October 2022 respectively (each of which were also exhibited). Andrew tendered an affidavit sworn by him on 5 August 2022, excluding paragraph 32. He also tendered two affidavits sworn by his solicitor David Starke on 12 August 2022 and 17 November 2022 that exhibited a letter from Mr Macolino’s solicitors dated 11 August 2022 and an email from Mr Macolino’s solicitors dated 1 November 2021 respectively. Michelle called Mr Dimitrak to give oral evidence. His real estate office is located in the eastern suburbs of Adelaide. He tends to specialise in the sale and development of residential properties. He gave evidence that the Adelaide property market experienced a boom at the beginning of this decade due to extremely low interest rates fixed by the Reserve Bank of Australia. In May 2022 the Reserve Bank started to increase interest rates and it has now made eight successive monthly increases in interest rates. Mr Dimitrak gave evidence that these increases in interest rates resulted in lowered buyer interest in properties, reflected in lower attendances at auctions and making property more difficult to sell. He expressed the opinion that property prices have generally fallen in Adelaide since May/June 2022. He expressed the opinion that the price for which the Edward Street and Stephen Street properties would have sold if sold six months ago would have been up to five per cent higher than if sold today. Mr Dimitrak expressed the opinion that property prices in Adelaide will continue to fall in the future. He expressed the opinion that the price for which the Edward Street and Stephen Street properties would be likely to sell if sold in six months time would be approximately seven per cent lower than if sold today. The Domain Report (exhibited to Mr Macolino’s affidavit sworn on 22 November 2022) was put to Mr Dimitrak in cross-examination. That report shows that the median house price in the Adelaide metropolitan area for the quarter ended September 2022 was $795,093 compared to that for the June 2022 quarter of $790,100, entailing an increase of 0.6 per cent. It showed median unit prices in the Adelaide metropolitan area for those quarters entailing an increase of 2.5 per cent. Mr Dimitrak explained that the source data for such reports is Lands Titles Office data, which is derived from documents lodged at settlement of a contract of sale. He said that such settlements are often three months after entry into the contract and hence there is a natural lag between price movements in the market and their showing up in such data. He said that the sales data for the September quarter in the report may well have emanated from contracts entered into in May or June. Accordingly, he expressed the opinion that this data is not inconsistent with his evidence that prices in the market began to fall in mid 2022.

Decision

Reasons for decision

Weighing up the relevant considerations, an order should not be made that the Administrator take steps to sell the Stephen Street property.Conclusion An order should be made that the Administrator take steps to sell the Edward Street property but not the Stephen Street property. The orders sought by Michelle in respect of the Edward Street property are (leaving aside costs) as follows:1 The administrator pendente lite Alfio Macolino (“the administrator”) of the estate of Michele Moffa deceased (“the estate”) is directed to:(a) take steps on behalf of the estate to sell the whole of the land comprised in Certificate of Title Register Book Volume 5106 Folio 124 being the property situate at 42 Edward Street, Norwood 5067 (“the Edward Street property”) in which the estate holds one undivided second part and the second respondent Andrew Moffa holds the other undivided second part.(b) if the second respondent declines or refuses to join in the sale of the Edward Street property, institute and prosecute on behalf of the estate a further proceeding (or further application) in this Court for an order under section 70 of the Law of Property Act 1936 that the property be sold on such terms and conditions as the Court considers appropriate.2 The administrator be indemnified by the estate in undertaking the actions set out in paragraph 1 and further: (a) the administrator is permitted to pay any disbursements arising under paragraph 1 from the funds of the estate (including, but not limited to, court fees, counsel fees and real estate agent fees);(b) the administrator is permitted to use the funds of the estate to pay his legal costs arising under paragraph 1 as and when incurred;(c) to the extent that any adverse costs order is made in the proceeding referred to in paragraph 1(b), the administrator is permitted to use the funds of the estate to meet any such costs liability;(d) the administrator shall be permitted to charge his standard hourly rate for work undertaking the actions set out in paragraph 1 and shall be permitted to retain O’Loughlins Lawyers as his solicitors at their standard hourly rates for advice and representation for their work in undertaking the actions set out in paragraph 1.3Subject to any further or other order made by this Court in the proceeding (or application) set out in paragraph 1(b), the second respondent shall be permitted to purchase the Edward Street property, notwithstanding that he is named as an executor under a will (which is the subject of a dispute in this proceeding) made by Michele Moffa dated 25 November 2016.4The Administrator be granted leave to file cross relief in the foreshadowed application for sale of the Edward Street property under Section 70 of the Law of Property Act 1936 by way of interlocutory application in the within Probate action (“the Cross action”). 5The Cross action be dealt with by the Trial Judge in the substantive action.6 Liberty to apply for further orders, advice or direction.

Ratio Decidendi

Legal Principle Established

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