Murdocca v Murdocca - [2002] NSWSC 159

No judgment structure available for this case.

CITATION: Murdocca v Murdocca & Ors [2002] NSWSC 159

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3726/00

HEARING DATE(S): 5/3/02-6/3/02

JUDGMENT DATE: 27 March 2002

PARTIES :

Cosimo Murdocca (plaintiff)
Guiseppe Murdocca (1st defendant)
Antonio Murdocca (2nd defendant)
Guiseppina Murdocca (3rd defendant)

JUDGMENT OF: Campbell J

COUNSEL : C Harris (plaintiff)
M Willmott (1st defendant)
D Marks (2nd defendant)

SOLICITORS: Business Law Office (plaintiff)
Bond & Bond (1st defendant)
Roderick B Harris & Co (2nd defendant)
Mackintoshs (3rd defendant)

CATCHWORDS: SUCCESSION - wills probate and administration - construction and effect of testamentary dispositions - particular will construed - resolution of factual dispute about whether contract or estoppel existed that will not be administered according to its terms

LEGISLATION CITED: Wills Probate and Administration Act 1898

CASES CITED: Lloyd v Frape (1922) 23 SR (NSW) 11
Irvine v Sullivan (1869) 8 Eq 673
Watson v Foxman (1995) 49 NSWLR 315
Re: Clifford [1912] 1 Ch 29

DECISION: Will construed as in order 1 paragraph [74]. Inadequate proof of contract or estoppel to prevent will taking effect in accordance with its terms.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

27 March 2002

3726/00 COSIMO MURDOCCA v GUISEPPE MURDOCCA & ANOR

JUDGMENT

1 HIS HONOUR: Ernesto Murdocca died on 29 December 1993. His last will was made on 23 November 1992. It appointed his three sons, Guiseppe, Cosimo and Antonio as executors and trustees. Without intending any disrespect by adopting this course, I propose, in the rest of this judgment, to refer to these three gentlemen by their Christian names.

The Will, and the Windsor Road Property

2 One of the items of property in the deceased’s estate, was a parcel of land known as RMB 64 Windsor Road Baulkham Hills. That land had an area of about 1.4 hectares. It was shaped as a thin parallelogram, with the Windsor Road frontage being one of the short sides. Near the Windsor Road frontage a set of buildings stretched across practically the entirety of the width of the block. Moving from south to north, these consisted of a shed, a house which the testator had occupied, a house which Cosimo occupied, and finally a building which consisted of a workroom and store at the rear, and a shop at the front. That shop was used by Cosimo as a retail florist shop. Cosimo’s house and the deceased’s house were separated from each other by what has been described as a breezeway – an area which was completely roofed, with the side walls of the deceased’s house and Cosimo’s house forming its sides, and open at the two ends. This breezeway was somewhat more than the width of a motor vehicle in width. There was a substantial area of land behind this row of buildings, part of which was cultivated, and used for the growing of flowers intended for sale.

3 Cosimo had lived on this land since at least 1980. It was in about 1980 that he built his own house there, and also built the florist’s shop. He also paid for the extension to the house in which his parents lived.

4 The deceased dealt with this property in Clause 5 of his will as follows:

I GIVE AND BEQUEATH

COSIMO MURDOCCA

ANTONIO MURDOCCA

AND I DIRECT

ANTONIO MURDOCCA

COSIMO MURDOCCA

I DIRECT

COSIMO MURDOCCA

ANTONIO MURDOCCA

THEN I DIRECT

COSIMO MURDOCCA

ANTONIO MURDOCCA

COSIMO MURDOCCA

THEN I DIRECT

5 Another piece of real estate in which the deceased had an interest, and which was of somewhat lesser value than RMB 64 Windsor Road, had been given by the will “to my son GUISEPPE MURDOCCA and my daughter GUISEPPINA FRASCA in equal shares as tenants in common for their own use absolutely.” These were the only specific devises or legacies made by the will. The rest of the deceased’s property was dealt with by a residuary clause, which divided his remaining assets equally amongst his five children.

6 It is now common ground that subdivision of the land was not possible at the date of the deceased’s death, and did not become possible within five years from the date of his death.

7 It is also common ground that the opening words of Clause 5(c), “in the event that at the expiration of five (5) years from the date hereof …” should be construed as reading “in the event that at the expiration of five (5) years from the date of my death”. (That construction is in accordance with the ambulatory nature of a will, and s 21 Wills Probate and Administration Act 1898; see also Re: Clifford [1912] 1 Ch 29.) It is also agreed that the words in Clause 5(d) “as set out in sub-paragraph (d) hereof” contain a typographical error, and should read “as set out in sub-paragraph (c) hereof”.

The Relief Sought in the Proceedings

8 These proceedings are brought by Cosimo Murdocca against his two brothers. They seek performance of Clause 5 of the will, by transfer to Cosimo of the Windsor Road land, or alternatively damages.

9 Three valuations of the land have been obtained. One, from Mr Dupen, values the land at $950,000. Another, by D R Cornish & Associates, values the land at $900,000. A third, from McGees (Mr Bowen), values the land at $1.225 million. Each of these is a valuation as at the end of 1998. The parties have agreed that they can be treated as valuations of the type referred to in Clause 5(d) of the will, if Clause 5(d) requires the valuation to be carried out at the end of 1998. (The agreement is put this way because Antonio submits that the valuation should be carried out at the date of transfer of the land.) Cosimo accepts that, if he is entitled to have the land transferred to him, he is obliged to pay to Antonio one half of the average of these valuations. Half of that average is $512,500.

10 Antonio opposes the granting of that relief. He has two different types of ground upon which he bases that opposition. The first type he submits is that as a matter of construction of the will, Cosimo does not have the entitlement to have the land transferred to him upon payment of the average of the three valuations. The second type of ground he submits is that there was an agreement or arrangement between himself and Cosimo, the effect of which is to prevent Cosimo from now relying on the terms of the will.

11 Some of the legal arguments which Antonio advances, involved contending that some, or all, of paragraphs (a) to (d) inclusive of Clause 5 were void. This raised the prospect that, if they were void, the entire gift in Clause 5 would fail. For that reason Guiseppina Frasca, one of the testator’s daughters, was made a defendant to the suit, to represent the interests of the residuary beneficiaries. That daughter filed an appearance, but took no part in the argument in the case.

12 Antonio lodged a cross-claim. In it he seeks damages for breach of the agreement which he says he and Cosimo arrived at concerning the Windsor Road land, and the appointment of trustees for sale of that land, to divide the proceeds equally between himself and Cosimo. At the hearing it was accepted that, if I came to the view that the land was now held between Antonio and Cosimo as tenants in common, I should make a declaration to that effect, and give the parties the opportunity to decide how to deal with the situation thereby created, without immediately incurring the expense of appointment of trustees for sale. It was also submitted, on Cosimo’s behalf, that there might be some occasion for Cosimo, in that situation, to claim that he was entitled to a remedy relating to some improvements which he had effected on the land.

Construction of the Will

Precatory Obligations?

13 The first submission which was put was that paragraphs (a) to (d) of Clause 5 were merely precatory, and did not impose any imperative obligations. I do not accept that submission. The whole of paragraphs (a) to (d) are introduced by the words, “AND I DIRECT that my trustees shall”, which do not have the flavour of a non-binding request. While it is true that there is some tentativeness in paragraph (a) in that the direction to sub-divide there expressed is stated to arise only “as far as practical” I do not read that as showing that the clauses are merely precatory. When paragraphs (a) to (d) are read as a whole, they recognise that subdivision was not possible at the date of the will, and might not be possible within five years after the testator’s death. It was because of this obstacle to the immediate carrying out of a subdivision, that the obligation to sub-divide was expressed to arise only “as far as practical”. When paragraphs (a) to (d) are read as a whole, they provide a coherent scheme which recognises the possibility that subdivision might be possible within five years of the testator’s death (in which case the property is to be dealt with in one way), and also recognises the possibility that subdivision might not be possible within those five years (in which case the property is dealt with in another way).

14 It is submitted for Antonio that the testator has not made any provision for funds to carry out the directions, and that fact should assist the court to conclude that that direction is not intended to be binding. While it is true that no funds have been provided by the testator for carrying out the directions in Clause 5, there is a rule of law whereby the cost of transferring land specifically devised is not a testamentary expense, but is payable, in the absence of a direction in the will to the contrary, by the specific devisee, rather than by the residuary legatees (Lloyd v Frape (1922) 23 SR (NSW) 11.) Precisely who the specific devisee is, will depend upon how events turn out, about whether subdivision can occur within the five years.

15 Another submission made, was that if the land could not be subdivided within five years, and Cosimo were to fail to make the payment, the land would fall into residue. It was submitted that it was most unlikely that the testator intended that the land would fall into residue, and that I should use this possibility as an aid to reaching the conclusion that paragraphs (a) to (d) were not intended to be binding. While there is a possibility that Cosimo could refuse to accept the transfer of the land, and thereby cause the gift to fail, the effect of Cosimo so doing would be that, instead of receiving half the value of the land, he would receive (in his capacity of a residuary beneficiary) one fifth of the value of the land. The prospect that he would put himself into this situation is one which, it seems to me, should be regarded as so remote that it is not a useful aid to the construction of the will. Once Cosimo had accepted the transfer of the land, he would be under an enforceable obligation to make the appropriate payment for it.

Uncertainty?

16 It is submitted that paragraph (a) is too uncertain to enforce, and that the consequent failure of that condition brings down the whole scheme in paragraphs (a) to (d).

17 In my view, paragraph (a) is not too uncertain to be enforceable. While there might be room for choice about precisely which boundaries the Lots in the subdivision will follow, that is a matter which is left to the discretion of the trustees. When there is a mechanism provided by the will itself, to resolve any uncertainty in paragraph (a), it is not void for uncertainty.

18 Another submission which was put is, that paragraph (a) is void because, at the date of death, it was not possible to subdivide the land. In my view this submission should be rejected. Rather, paragraph (a) is part of an integrated scheme, of the kind I have earlier outlined. It would be wrong to consider paragraph (a) in isolation from the whole of that scheme.

Repugnancy?

19 Another category of legal argument which was put is that, when the first few lines of Clause 5 gave the land to Cosimo and Antonio “as tenants in common in equal shares for their own use absolutely” that was a fully effective gift to them, and the rest of the clause was repugnant to that gift, and therefore void.

20 It is a fundamental rule in will construction that the court should seek to ascertain the intention of the testator, as gathered from the will as a whole. In my view, the submission I am now dealing with would defeat the manifest intention of the testator. While the word “absolutely” in the opening lines of Clause 5 might suggest an unfettered or unlimited gift, even in the nineteenth century the use of such a word in a will was not able to defeat the clear intentions of a testator. In Irvine v Sullivan (1869) 8 Eq 673 the testator gave his residuary estate “to D absolutely, trusting that she will carry out my wishes with regard to the same, with which she is fully acquainted.” The court held that the gift was one which the donee took “absolutely, in the sense that she took beneficially, though not, …. absolutely with regard to the entire property, but subject to the wishes expressed to her, and as to which she had bound herself.” (at 680).

21 I read the introductory words of Clause 5 as saying that Cosimo and Antonio are initially to obtain a beneficial interest in the land in equal shares, but that their equal shares are absolute only to the extent that they are not affected by the carrying through of the scheme contained in paragraphs (a) to (d). That scheme is one which, however it might be carried out, if carried out properly will result in them receiving property of at least approximately equal value. If subdivision can occur within five years, the equality will be in land value; if subdivision cannot occur within five years, while Cosimo will receive the land in specie, he will have to pay half its value to Antonio. Thus the precise form of the gift which each of the brothers receives is dependant on a contingency. If subdivision is possible within five years, then Antonio will receive half the land; if subdivision is not possible within five years, Antonio will receive money. This does not amount to conferring on Cosimo any option to acquire Antonio’s interest (as had been submitted). Rather, the gift to Antonio is subject, firstly, to a condition expressed in paragraph (b), that if subdivision is not possible immediately upon death, then the gift to Antonio does not confer any right of occupancy of the land. Rather, that right of occupancy is conferred on Cosimo, subject to an equitable personal obligation that he pay Antonio a fair market rental. Further, that fair market rental is not a fair market rental for the entirety of the property – it is only for that (comparatively small) part of the property that comprises the testator’s home. Secondly, there is a condition of defeasance of the gift to Antonio, namely, that if subdivision is not possible within five years from death, Antonio’s rights in specie in the property will cease, Cosimo will become entitled to the whole of the property, but Cosimo will be subject to equitable personal obligation to pay to Antonio one half of the value of the property “at that date” (minus the value of any improvements which Cosimo has erected and paid for on the whole of the property).

22 This view is one which still allows scope for the initial part of the gift to Cosimo and Antonio “as tenants in common in equal shares for their own use absolutely”. Those words are ones which govern the situation when none of the conditions in paragraphs (a) to (d) apply. Thus, for example, if the land were to have been resumed shortly after the testator’s death, none of the conditions in paragraphs (a) to (d) could be performed, and in that circumstance the money which the resuming authority paid as compensation would be held by Cosimo and Antonio as tenants in common in equal shares.

23 The gift, by the opening few lines of Clause 5, to Cosimo and Antonio as tenants in common is not, it seems to me, the gift of a legal interest. Rather, when Clause 5 is read as whole, it is the trustees who are to hold the Windsor Road property on the trusts set out by Clause 5. It is only if the trustees continue to hold title to the land, that the trustees all be able to subdivide it, as Clause 5(a) contemplates. Likewise, it is only if the trustees hold title to the land that the trustees can exercise the power of postponement of subdivision which Clause 5(b) gives them. Likewise, it is only if the trustees continue to hold the title to the land that the trustees can transfer the property to Cosimo, in the way that Clause 5(c) contemplates.

24 It is of some relevance in construing the will, that the attestation clause shows that the testator was unable to read English fluently, and that the will was read over and translated to him in the Italian language. This fact provides, in my view, an extra reason to place emphasis on the concept or intention underlying the will, rather than decide its construction by minute verbal analysis.

25 In connection with these arguments of construction I was referred to a variety of cases. I have not referred to most of those cases in this judgment because they involve wills, the plan and wording of which is different from this will.

26 In my view, all of the attacks on the validity of paragraphs (a) to (d), or on any of those paragraphs, fail.

The Date of Assessment of Value of the Land, in Paragraph (c)

27 The reader will recall that paragraph (c) requires Cosimo to pay to Antonio one half of the value of the property “at that date”. This raised the question, “at what date?”. Counsel for Antonio submits that that expression should be construed as referring to the date of transfer. Counsel for Cosimo says that, rather, it should be construed as referring to the date which is the expiration of five years from the date of death. That construction has the benefit that “the expiration of five years from the date hereof” is the only expression identifying a time which is to be found in paragraph (c). A disadvantage of that expression being adopted as providing the meaning for “at that date” is that it is quite some distance away, within paragraph (c), from the expression “at that date”.

28 There is no difficulty, as a matter of conveyancing, in the amount which Cosimo is to pay to Antonio being determined as at the date of transfer. It is possible for the trustees to transfer the property to Cosimo, without knowing the amount that Cosimo is then required to pay to Antonio. It is not as though the amount that Cosimo is to pay to Antonio is required to be written in the transfer, in the way that a purchase price is written in the transfer. (See the precedent for a transfer to a devisee in Butterworths Conveyancing Service paragraph [20245].) Rather, by accepting the transfer of the property, Cosimo comes under an equitable personal obligation to pay to Antonio, “one half of the value of such property at that date”. There is nothing which requires Cosimo to make the payment at the very moment that the transfer is handed over.

29 However, it is a more strained grammatical construction to treat “at that date” as referring to the date of transfer. This is because, while the word “transfer” occurs much closer, in Clause 5(c) to the expression “at that date” than does “at the expiration of five years from the date hereof”, the word “transfer” appears only as a verb, not as a noun.

30 It might be possible to adopt that more strained grammatical constructions if doing so enabled the testator’s purposes, as gathered from the will as a whole, to be better achieved. The difference between the two constructions which are advanced is one which will matter only if there is a time gap of any size between the expiration of five years from the date of death, and the date of transfer of the property. There are all sorts of reasons why there might possibly be a time gap between the expiration of five years from the date of death, and the date of the transfer of the property. Some of these might be the fault of one or other of the brothers, some of them might be the fault of someone else, and some of them might be the fault of nobody. If there is a time gap, it seems to me that it is not inconsistent with the scheme of the will that Antonio should receive the value of the land as at five years from the date of death, and if the delay in effecting the transfer is the fault of someone other than himself, he should be able to seek redress from that person. Likewise it is not inconsistent with the scheme of the will that if the delay is his own fault, then he should bear the consequences.

31 In my view, considering how these two alternatives of the constructions of the expression “at that date” work in practice, in the light of the overall objectives of the testator gathered from the will, provides no reason to depart from the more natural grammatical reading of the expression. The correct construction is that “at that date” means “at the expiration of five years from the date of death.”

The Alleged Arrangement not to Enforce the Will

32 The grant of probate of the deceased’s will was made on 22 March 1994. Antonio gives evidence that following the grant of probate he and his wife Roselina met Cosimo at Cosimo’s home. He and Cosimo had not been close and they had, in the past, had many arguments. He says that the following conversation took place between himself and Cosimo:

COSIMO: “I’ve seen the light and I don’t want any bad feelings between us. What’s done is done! About the Will, what’s yours is yours and what’s mine is mine. 50/50 down the middle. I’ll wait until a subdivision comes through and then we’ll split it or we will share in the profits when we sell it to a developer. What are you going to do with the house?”

ANTONIO: “I really don’t know.”

COSIMO: “Give it to me. I’ll pay you $5,000.00 a year; $2,000.00 in cheque and $3,000.00 in cash and I’ll pay all the outgoing costs including all rates.”

ANTONIO: “That sounds good to me.”

33 Antonio says that at the time it was his view that the current market rental of the property was about $300 per week. Thus, accepting $5,000 per year was, he thought, accepting less than the current market rental.

34 Cosimo gives evidence that he cannot recall that conversation, but he recalls a different conversation soon after the testator’s death. That conversation occurred at his house in about late January or early February 1994. His evidence is:

ANTONIO: “We’ve got to sort out what is going to happen with the land. We should either hold it and develop it ourselves or sell it.”

COSIMO: “I want to keep things as simple as we can. We’ll go along with the terms of the will, but if rezoning occurs within the time, we’ll then have to make a decision on what we do with the land. At this time, I do not want to rush into making any decision. However because of the shop and my business I’m not really interested in selling. If the land is released, then I’d be happy to keep the Windsor Road end because of my business. Otherwise I intend to go along with the terms of the will.”

ANTONIO: “Well, that’s OK but you know that under the will you have to pay rent.”

COSIMO: “I know that but I need to stay because of the business.”

ANTONIO: “I suggest that you pay $2,000 by cheque and the balance in cash.”

COSIMO: “No – I want to pay the whole lot by cheque as I get a tax deduction for it.”

ANTONIO: “No I want part cash and cheque.”

COSIMO: “Well OK but I want something in writing.”

35 On 9 April 1994 Cosimo and Antonio both signed a typed document in the following terms:

“This agreement is made between Tony Murdocca and Cosimo Murdocca dated 10th day of April 1994.

This agreement is to state that Tony Murdocca is the beneficiary of the residential house of the late Ernesto Murdocca. Tony Murdocca gives full consent to Cosimo Murdocca to occupy wholly the said house under the following conditions:

1. That Cosimo will pay rent to the sum of $50.00 per week plus all outgoing and maintenance costs of the property and the building for a period of five (5) years.

2. All property which is made to improve the premises shall remain the property of Cosimo Murdocca.”

36 This agreement is one which Cosimo had caused to be typed up. It will be seen that it made provision for a rent of $50.00 per week plus outgoing and maintenance costs. That was, as they both knew, not the real arrangement between them. The document took the form it did because there had been some discussion between them about the income tax advantages of part of the rental being paid in cash. (They both give evidence that, notwithstanding that there had been some discussion between them about the advantage of not declaring cash for income tax purposes, their own treatment of the rental payments for tax purposes was completely regular and proper).

37 In May 1994, Antonio endorsed a note on this document that he had received $5,000 and signed it. He made similar acknowledgments on the document in 1995, and 1998.

38 In about April 1994 Cosimo let the testator’s house on the property to a photographer, who paid him $200 per week as rent. That photographer stayed two years but ceased paying rent for the last six months of her occupancy. The house was then vacant for six or eight months before a sign writer moved in. Initially the sign writer paid rent of $280 per week but that rental was increased, until at the end of the time the sign writer was paying $350 per week. The sign writer moved out of the house in about June 2001. He also proved an unsatisfactory tenant, not paying rent for the last few months of his occupancy. The house has been vacant since the sign writer moved out.

39 On 6 April 1995 Baulkham Hills Shire Council wrote to Cosimo, expressing its view that the existing operations on the Windsor Road property were unauthorised, as they did not comply with the conditions of consent issued for the property.

40 In 1997, Cosimo lodged a development application for a shed on the property. The Council wrote to him on 3 October 1997, referring to its letter of 6 April 1995, and continuing:

“You are further advised that Council on 12 August 1997, resolved the following:-

“Council serve notice to all landowners in Stage 2 that no action be taken against unauthorised land use activities until that land is capable of being developed for residential purposes. Once the land is serviced all unauthorised activity will be required to cease within 12 months. No extensions will be permitted.”

With respect to the unauthorised activities being carried out from the subject property, you may wish to continue current operation in accordance with the above resolution. Alternatively, you may wish to demonstrate to Council that all uses on-site are authorised or lodge a development application to Council to formalise all existing uses on-site.

Given the proposed shed is ancillary to/used in conjunction with the unauthorised flower shop, you are advised that Council is not in a position to approve the shed.”

41 In March 1998, a time when Antonio had noticed that the area around the Windsor Road property was starting to develop for housing, Cosimo told him that he wanted to knock the house down and turn it into a carpark. He said he wanted to keep a block fronting Windsor Road, which had all the buildings on it, and that Antonio could have a bigger back block. On 20 March 1998 Antonio received from Gates Moffitt, the solicitors for the estate, a re-draft of a deed between Guiseppe, Cosimo and Antonio. That draft recited the grant of probate, the provisions of Clause 5 of the will, and continued:

“Cosimo and Tony have now agreed that in stead of subdividing land as provided in subparagraph 5(a) of the will of the said Ernesto Murdocca they will jointly seek planning approval as soon as possible to subdivide the property in a manner shown in the plan annexed hereto and marked “A” and upon obtaining such planning approval to cause to be transferred to Cosimo the parcel of land shown as Lot 1 on such plan containing approximately 6,736 square metres and having a frontage to Windsor Road and caused to be transferred to Tony the remaining parcel shown as Lot 2 on such plan comprising 736 square metres.”

42 The draft deed went on to provide:

1. “The parties hereto agree that in lieu of performing the provisions of the will of Ernesto Murdocca in the manner provided in paragraph 5 thereof as herein before recited, they will as soon as practical cause a subdivision application to be made to Baulkham Hills Shire Council for approval to subdivide the property in the manner shown in the plan annexed hereto and marked with the letter “A”, and upon obtaining approval of such plan cause the plan to be registered at The Land Titles Office and upon registration transfer to Cosimo the parcel of land shown as Lot 1 on the said plan and having an area of 6736 square metres with frontage to Windsor Road and transfer to Tony the residue as shown on the said plan as Lot 2 of 7,036 square metres. Pending obtaining the approval to the subdivision, registration of the plan of subdivision at The Land Titles Office and the transfer of the parcels to Cosimo and to Tony as provided in paragraph 1 hereof, Cosimo shall be entitled to continue to occupy the whole of the property as provided in paragraph 5(b) of the will of Ernesto Murdocca and Cosimo shall continue to pay to Tony a fair market rent for that part of the property as comprised the deceased former home.

2. Cosimo will be entitled to pull and alter and remove any of the improvements on the parcel of land to be transferred to him except those improvements as comprised the former home of the late Ernesto Murdocca only with the approval of Tony, such approval not be unreasonably withheld.

3. In the event that approval to a subdivision application and registration of a subdivision plan cannot be obtained within five (5) years of the date hereof then the provisions of paragraph 5(c) relating to the transfer by Tony of his interest in the property to Cosimo shall apply on the same conditions as provided in paragraphs 5(c) and 5(d) of the said will of the late Ernesto Murdocca.”

43 Antonio says that soon after he received that letter, Cosimo telephoned him and the following conversation ensued:

COSIMO: “I’ve been advised by my Solicitor to exercise the Will and not go along with the proposed subdivision.”

ANTONIO: “But you promised me half of the property when the land could be developed.”

COSIMO: “No. How about we exercise the Will and I’ll give you 50% of the current value.”

ANTONIO: “That’s really not fair. That property will be worth a lot more when it can be developed.”

COSIMO: “Let’s get some valuers in to see what it’s worth.”

ANTONIO: “No. But you promised me.”

COSIMO: “No that’s it. End of story.”

44 Cosimo denies that conversation. Cosimo says that at all times he relied on advice from Mr Curran (solicitor of Gates Moffitt) who always advised him that he should insist on strict compliance with the terms of the will.

45 Nothing further happened until January 1999. On 22 January 1999 Gates Moffitt wrote a letter in identical terms to Antonio and Guiseppe. That letter referred to the grant of probate, set out Clause 5 of the will, and continued:

“We were informed by Mr Cosimo Murdocca that no planning approval for the subdivision of the property has been obtained or is likely to be obtained in the near future and that he requires the property to be transferred to him in accordance with the provisions of subparagraph (c).

Please advise if you and your brothers are able to agree on a value of the property, excluding the value of improvements erected and paid for by Mr Cosimo Murdocca. In the event that no agreement can be reached, whether you wish us to obtain the valuations as set out in paragraph (d).”

46 Antonio gives evidence that on receipt of the Gates Moffitt letter of 22 January 1999 he telephoned Cosimo, and the following conversation ensured:

ANTONIO: “Gates Moffitt have told me you are going to exercise the Will.”

COSIMO: “Yes.”

ANTONIO: “But you gave me your word that you wouldn’t exercise the Will because of our agreement, which is that we would wait until a subdivision comes through and we would sell to a developer.”

COSIMO: “That’s not true. I never said that. You go and do what you’ve got to do and I’ll do what I’ve got to do.”

47 Cosimo says that a conversation occurred which started in the way Antonio says, but that Cosimo’s response was:

“I never agreed with you that I would not exercise the will. What I said was that I would always comply with the terms of the will. If the land was released then we would split it; if not, then I would pay you for your interest in the properties.”

48 By 25 January 1999 Cosimo had new solicitors acting for him, The Business Law Office. Those solicitors wrote to Gates Moffitt on 25 January requesting the transfer of the property by the executors. They wrote to Gates Moffitt again on 28 January 1999 saying:

“Our client has since been contacted by Mr Antonio Murdocca who has indicated to our client that he opposes the transfer and intends to refuse to cooperate or to sign any transfer to our client. Agreement therefore has not been able to be reached as to the value of the subject property.”

49 The letter requested that the valuers be instructed, and continued:

“Upon receipt of the valuations and determination of the amount to be paid to Antonio Murdocca, we will submit a draft transfer for approval and execution.

Our client has asked that this matter be pursued promptly.”

50 On 14 April 1999 Business Law Office wrote to Gates Moffitt, tendering a draft of a transfer by the executors. That letter also enclosed a valuation dated 22 February 1999 by D R Cornish & Associates (Mr Ellis) which valued the land at $900,000. This valuation was passed on by Gates Moffitt to Antonio.

51 On 19 April 1999 Business Law Office wrote to Gates Moffitt saying:

“Our client instructs us that Mr Antonio Murdocca is very angry with our client for exercising his rights under the deceased’s will and is now refusing to discuss the matter with out client. Antonio Murdocca has also indicated to our client that he will not sign any documents transferring the property to our client. Our client considers it unlikely that Antonio will agree to anything at all in relation to the valuation or transfer.

In these circumstances we are instructed by our client to request that:-

1. unless Messrs Antonio Murdocca and Guiseppe Murdocca agree to the D.R. Cornish & Associates Pty Ltd valuation of 22/2/99 within, say 14 days, of being informed thereof then two further valuations be ordered as provided by clause 5(d) of the deceased’s will; and

2. the trustees other than our client be informed that if they or either of them refuse or fail to duly carry out their obligations as trustee of the property then proceedings will be commenced in the Supreme Court in Equity for appropriate orders including an order that the defaulting trustee(s) pay the costs thereof on an indemnity basis.

It is not our client’s desire to be on bad terms with his brothers. However, it should be understood by all concerned that our client fully intends to exercise his legitimate rights as beneficiary under his late father’s will.”

52 On 7 June 1999 Business Law Office wrote to Antonio direct. After referring to the provisions of Clause 5 of the will, the letter continued:

“As you are aware, Cosimo obtained a valuation from D R Cornish who valued the property at $900,000. In order to comply with your father’s directions, we have been corresponding with Mr Curran (the estate’s solicitor) regularly over the past few months in an attempt to have the executors appoint valuers pursuant to their obligations under the will. Mr Curran advises that he has no instructions from the (other) executors to arrange for the valuation to be undertaken.

Hence we are now writing to you direct on the basis that you have not instructed Mr Curran to arrange for the valuation as required, even though the cost of those valuations should be borne by the estate.

We now require you to forth nominate two valuers to have the Windsor Road property valued as at 29 December 1998 within the next fourteen days. If this is not done, then our client is left with little alternative but to approach the Court for orders requiring the other executors co-operate in obtaining the valuations and carrying out the provisions of the will, and in which event, costs orders will be sought against the other executors personally.

If you wish to propose an alternative method of resolving the impasse, then advise us immediately. However if we do not hear from you by 9am 22 June 1999, an application will be made without further warning.”

53 A letter in like terms was sent by Business Law Office to Guiseppe.

54 On 21 June 1999 Gates Moffitt wrote to Business Law Office saying:

“We acknowledge receipt of your letter of 7th June 1999. We therein receive instructions from Mr Antonio Murdocca that he does not accept the valuation from D.R. Cornish & Associates Pty Ltd of the property RMB 64 Windsor Road, Baulkham Hills. Our client considers having regard to comparative to sales of land of having the same development potential the value of the above property is greater than that determined in such valuation.

We have been instructed by Mr Antonio Murdocca to obtain further valuations in accordance with Provisions of 5(d) of the Deceased’s Will and which should be in hand shortly. As soon as the valuation is received, we will advise you accordingly.

We have also been instructed by Mr Antonio Murdocca to ask the valuer to indicate at the same time as providing the valuation to the Real Estate a fair market rent for that part of the property as comprised the Deceased home referred to in paragraph 5(b) of the Deceased’s Will. Mr Antonio Murdocca states he has not received a fair market rental from your client during the five years period following the Deceased’s death and will require an adjustment in respect to this at the time of any transfer of the property and any outstanding rent to be brought into account.”

55 This letter was the first indication which Cosimo received that Antonio was asserting he had not received a fair market rental during the five year period following the deceased’s death, and that an adjustment would be required.

56 Bond & Bond, solicitors for Guiseppe, wrote to Business Law Office in September 1999 asserting that Guiseppe had not been requested to join in an application to the Council for subdivision, had not been provided with any evidence that it was not possible to obtain planning approval for the subdivision, and had not been requested to agree upon three registered valuers. They also said that the trustees were not holding any money from which to pay the costs of carrying out directions contained in the will. They proposed that enquiries be made to find out whether subdivision was possible as at 29 December 1998, that if the enquiries revealed it was possible, subdivision should occur with the costs paid by Antonio and Cosimo, and that if enquiries revealed that subdivision was not possible at that time, then the trustees should agree on three valuers, retain them (at the expense of Cosimo and Antonio) and that the property be transferred to Cosimo, with Antonio being paid one half of the value of the property so determined, and, any expenses associated with this procedure being met by Cosimo and Antonio in equal shares.

57 By September 1999 Cosimo had commenced proceedings against Guiseppe and Antonio, seeking to enforce his rights under Clause 5 of the will.

58 By January 2000, Antonio had consulted Robert Barnes and John Wenden, solicitors, about the matter. For reasons not explored in evidence, they did little to advance its resolution.

59 On 7 January 2000 Baulkham Hills Council wrote to Business Law Office stating that it was only from January 2000 that Council was in a position to consider subdivision applications for the land at Windsor Road. Business Law Office sent a copy of that letter from the Council to Messrs Barnes and Wenden. They said that in light of the letter, it appeared that Cosimo was entitled to exercise the right conferred upon him by the will to acquire the entire property. They made an offer concerning the valuation to be put on the property, and asked Messrs Barnes and Wenden either to accept the offer within 14 days, or else proceed to defend the summons which had been issued by Cosimo.

60 On 11 January 2000 Business Law Office sent a copy of the same correspondence to the solicitors for Guiseppe.

61 By 17 March 2000 Antonio had sought advice from Mr Roderick Harris, solicitor. Mr Harris wrote to Business Law Office on 20 March 2000. He stated that Antonio had not agreed on any valuation figure, and that he, ”wishes to obtain a valuation at what we consider is the correct date (30th December 1998)”. He requested an extension of time to take the next steps in the litigation. It was following this letter that the valuation from McGees, of $1.225 million was obtained.

62 I am told by counsel that, at some stage, the proceedings which Cosimo had begun were dismissed when there was no appearance at court. The present proceedings were begun by summons filed on 25 August 2000.

63 In March 2001 Guiseppe’s solicitors wrote to Business Law Office stating (correctly) that the valuations which had been obtained were not in accordance with Clause 5(d) of the will because all three trustees had not joined in obtaining those valuations. They also said that if Cosimo and Antonio agreed that the three valuations which had been obtained could be treated as ones pursuant to Clause 5(d) of the will, and the costs of those valuations were borne by Cosimo and/or Antonio, then Guiseppe would be prepared to agree that those valuations were the ones required by Clause 5(d) of the deceased’s will.

64 It was in the course of the present hearing that agreement was reached that the three valuations could be treated as valuations for the purposes of Clause 5(d), subject to the qualification which I have earlier mentioned. (See paragraph 9 above)

65 Antonio asserts that the conversation of April 1994 to which he has deposed, amounts to an agreement between himself and Cosimo, or alternatively gives rise to an estoppel which prevents Cosimo from enforcing the terms of the will.

66 I am not satisfied that a contract of the type alleged was made, or that an estoppel of the type alleged arises.

67 The conversation of which Antonio gives evidence, is at a date which is nearly eight years ago now. It is a date which was about six and one half years prior to the date at which he swore the affidavit in which he first deposed to it. There is no contemporaneous record. The factors which McLelland CJ in Eq referred to in Watson v Foxman (1995) 49 NSWLR 315, at 319 apply, and pose difficulties in accepting the evidence.

68 Counsel for Cosimo submits that there are many occasions when one would expect that Antonio would have spoken up, or in some other way placed on record, this agreement, if it had been made. He points to the written agreement which was made on 9 April 1994, the subsequent occasions when Antonio endorsed that written agreement, and the fact that, when Antonio had no fewer than three different solicitors acting for him, none of them asserted that the agreement had been made. I do not accept that submission entirely – the written agreement of 9 April 1994 was one designed to mask the truth of what had been agreed, rather than reveal it – but there remains some substance in the submission.

69 Antonio’s response in cross-examination to this attack was, “If you can’t trust your brother who can you trust.” That response has some force, but Cosimo was a brother with whom, prior to the deceased’s death, Antonio had not got on well with. As well, Antonio says that he did mention the matter to Mr Curran (the solicitor at Gates Moffitt whom he dealt with) and that it was Mr Curran’s decision that another valuation should be obtained, rather than seeking to enforce that agreement. He says he told Messrs Barnes and Wenden about the agreement, and also that he told his current solicitor, Mr Harris about it. He says that Mr Harris advised him that, as a verbal agreement, it really wouldn’t stand up in court.

70 Counsel for Cosimo also points to the way that the draft deed, prepared in March 1998, gave a recital of relevant facts, but did not mention any agreement which had been reached between Cosimo and Antonio in April 1994, which was being replaced by the agreement in that deed. There is some force in that submission. As well, the draft deed, in Clause 3, made provision for a time limit for the obtaining of subdivision which that deed contemplated (namely, five years from the date of that deed) whereas the agreement which Antonio asserts is completely open ended in time. I do not think that this factor is of much weight. Counsel for Cosimo also submits that Antonio’s conduct in obtaining, and paying for, valuations to the land, is inconsistent with his believing that he had an agreement with Cosimo to divide the land whenever subdivision became possible. I accept that submission, and note that Antonio took that course after obtaining legal advice.

71 Further, there is some inherent implausibility in the agreement. So far as the evidence discloses, it was not until 1995 that Cosimo found out that the Council regarded his operations on the land as unauthorised. It seems to me that there is considerable implausibility in Cosimo agreeing, in a single conversation, to giving up both his home, and his business, for the sake of making a profit from a subdivision. He does not strike me as being so rash that he would agree to such a proposal without at least first finding out what profits might be made from the subdivision. I recognise that Antonio’s evidence was that the agreement was that one of two alternatives would be adopted – that when a subdivision came through then either the land would be divided in specie, or profits would be split when the entirety of the land was sold to a developer. I regard it as unlikely that Cosimo would have agreed, then and there, to an arrangement which had as one of two possible outcomes, that he might lose his home and business. I note that the agreement, as deposed to by Antonio, had no provision for deciding which of these alternatives would be adopted.

72 I recognise that the fact that Antonio agreed to accept less than what he thought was a fair market rental for the property is a factor which calls for some explanation. However, I do not find that that factor is one which overcomes my overall lack of persuasion that an agreement of the type Antonio deposes to was made.

73 Mrs Roselina Murdocca gave evidence which was confirmatory of that of her husband. Her cross-examination included two painfully long pauses as she sought to deal with questions which were put to her. I am not prepared to treat her evidence as in itself sufficient to make out Antonio’s case, nor as providing adequate corroboration of the evidence of Antonio.

74 In these circumstances, the basis of both the alleged contract, and the alleged estoppel, fails.

1. Declare that the plaintiff is entitled to have the whole of the land comprised in Lot 17 of deposited plan 621849 known as RMB 64 Windsor Road Castle Hill New South Wales transferred to him by the first and second defendants, subject to an obligation for the plaintiff to pay to the second defendant the sum of $512,500, and subject to an obligation for the plaintiff to pay the reasonable costs and expenses of the defendants of effecting that transfer.

2. Order that the first and second defendants do such things and execute such documents as may be required to transfer the said property to the plaintiff.

75 The question of costs remains to be dealt with. A further hearing date will be allocated to deal with that question.

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Last Modified: 03/28/2002

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Citations

Murdocca v Murdocca [2002] NSWSC 159

Most Recent Citation

Murdocca v Murdocca (No 2) [2002] NSWSC 505

Cases Citing This Decision

1

Murdocca v Murdocca (No 2) [2002] NSWSC 505

Cases Cited

2

Statutory Material Cited

1

Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810

Watson v Foxman [1995] NSWCA 497

CITATION:	Murdocca v Murdocca & Ors [2002] NSWSC 159
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 3726/00
HEARING DATE(S):	5/3/02-6/3/02
JUDGMENT DATE:	27 March 2002
PARTIES :	Cosimo Murdocca (plaintiff) Guiseppe Murdocca (1st defendant) Antonio Murdocca (2nd defendant) Guiseppina Murdocca (3rd defendant)
JUDGMENT OF:	Campbell J

COUNSEL :	C Harris (plaintiff) M Willmott (1st defendant) D Marks (2nd defendant)
SOLICITORS:	Business Law Office (plaintiff) Bond & Bond (1st defendant) Roderick B Harris & Co (2nd defendant) Mackintoshs (3rd defendant)
CATCHWORDS:	SUCCESSION - wills probate and administration - construction and effect of testamentary dispositions - particular will construed - resolution of factual dispute about whether contract or estoppel existed that will not be administered according to its terms
LEGISLATION CITED:	Wills Probate and Administration Act 1898
CASES CITED:	Lloyd v Frape (1922) 23 SR (NSW) 11 Irvine v Sullivan (1869) 8 Eq 673 Watson v Foxman (1995) 49 NSWLR 315 Re: Clifford [1912] 1 Ch 29
DECISION:	Will construed as in order 1 paragraph [74]. Inadequate proof of contract or estoppel to prevent will taking effect in accordance with its terms.