Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581

New South Wales Supreme Court

CITATION : Joseph Saliba & Anor v Thomas Tarmo [2009] NSWSC 581

HEARING DATE(S) : 06.04.09, 07.04.09

JUDGMENT DATE : 23 June 2009

JUDGMENT OF : Nicholas J

DECISION : Par 56

CATCHWORDS : EQUITY - constructive trust - services provided on representations of beneficial interest in deceased's estate - whether parties shared necessary common intention - whether plaintiffs changed positions to their detriment - general principles considered - ESTOPPEL - equitable estoppel - whether plaintiffs acted to their detriment on reliance of deceased's representations - whether unconscionable for deceased's executor to deny that assumption

CATEGORY : Principal judgment

Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 Gillett v Holt [2001] Ch 210 Grant v Edwards [1986] Ch 638 CASES CITED : Green v Green (1989) 17 NSWLR 343 Jennings v Rice [2003] 1 P&CR 8 Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 Vukic v Luca Grbin & Ors: Estate of Zvonko Grbin [2006] NSWSC 41

Joseph Saliba – first plaintiff PARTIES : Mona Saliba – second plaintiff Thomas Tarmo - defendant

FILE NUMBER(S) : SC 4351/07

COUNSEL : I M Khan/C Wilson - plaintiffs D Liebhold - defendant

SOLICITORS : Gerard Malouf & Partners - plaintiffs Thomas Tarmo & Co - defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Nicholas J

23 June 2009

4351/07 Joseph Saliba & Anor v Thomas Tarmo JUDGMENT 1 His Honour : These proceedings concern the estate of the late Maria Stelmach (the deceased) who died on 3 February 2007, aged 83 years. She left a will dated 20 October 2005 by which she appointed the defendant sole executor. Probate was granted on 5 April 2007. 2 The plaintiffs claim that the defendant holds one half of the deceased's estate under a constructive trust, alternatively by way of estoppel arising from their detrimental reliance on representations made to them by the deceased to the effect that upon her death they would inherit a one half interest in her estate. For convenience, where appropriate, I shall refer to the plaintiffs by their first names. 3 The deceased's husband died in about 1989. There were no children. 4 On 9 November 2001 the deceased made a will in the office of her solicitor. The plaintiffs and their son, Michael, accompanied her on that occasion when, in their presence, the deceased instructed the solicitor on the terms of her will. The will she made that day appointed Michael executor and trustee. She directed her property be converted into money, and left the net proceeds of her estate as follows: "(a) As to one-half (1/2) for MARIA MAHAR absolutely but if she should predecease me then for such of her children MELISSA MAHAR , EMILY MAHAR , CHRISTOPHER MAHER and LAUREN MAHAR as survive me and if more than one in equal shares absolutely. (b) As to one-half (1/2) for such of JOSEPH SALIBA and MONA SALIBA as survive me and if more than one in equal shares absolutely but should they both predecease me then for such of their children TONY SALIBA , SAM SALIBA , ROBERT SALIBA and MICHAEL SALIBA as survive me and if more than one in equal shares absolutely." 5 The plaintiffs claim that on numerous occasions before 9 November 2001 the deceased spoke to Mona words to the effect that as she and her husband had been so good to her, she would leave half her house to them, then being her property at Bankstown (the property). They claim that they were induced by the deceased's representation made on 9 November 2001 to continue and intensify the voluntary services by way of assistance, care and maintenance they were then providing to the deceased, and that thereafter they continued to provide such services. 6 The deceased made a new, and last, will on 20 October 2005 by which she left legacies of $10,000 to each of Mona and two other persons, and the balance of her estate to be divided equally between her two nieces residing in America, namely Maria Mahar and Katharina Nilan. No other provision was made for either plaintiff. 7 The plaintiffs claim that, in the circumstances, the estate is subject to a constructive trust as to a one half share, alternatively the deceased was estopped from denying their entitlement to such share. 8 The defendant denies the existence of the trust claimed, or that the circumstances gave rise to any estoppel. 9 I set out below the material facts as I have found them to be, noting that much of the evidence was undisputed. In my assessment, each of the witnesses who gave evidence endeavoured to give it truthfully, and to the extent that recollection allowed. I reject the defendant's submission that Mona was an unreliable witness whose evidence should not be accepted unless corroborated. I found the plaintiffs appeared to be unsophisticated people in their late sixties or early seventies. In giving evidence they required the assistance of an interpreter. On occasions, the answers by Mona to questions without such assistance were unclear, and inconsistent with other answers. Mona's recollection of details such as the year in which an event happened was often imperfect. To the extent her evidence was doubtful, it related only to peripheral matters. Taken overall, I am satisfied Mona's evidence on matters relevant to the substance of the claims was generally reliable, and honestly given. I accept it. Furthermore, I am aware of the usual requirement that courts should closely scrutinise a claim against an estate in circumstances where the only person who can contest the issues is deceased. Accordingly, I have adopted a cautious approach in assessing the evidence of both plaintiffs. In accepting their evidence as generally reliable, I have kept in mind the unchallenged evidence of Adel Fida which supports the plaintiffs' accounts of the care given to the deceased, and of Pamela Bailey which supports Mona's account of visits to the deceased at the Bankstown Aged Care Facility, and the close relationship between them. 10 During the mid 1980s the plaintiffs and their four children came to live in Gordon Street, Bankstown and became friends with their near neighbours, the deceased and her late husband. Mona had retired from work in a factory in 1988 and Joseph was then working as a factory hand. When her husband died in 1989, the deceased was 66 years old and alone. Thereafter a close and continuing relationship between her and the plaintiffs developed. 11 Mona visited the deceased almost daily, and took her shopping every week. She attended to the deceased's needs for personal care, banking, housework including cleaning and maintenance, and generally met her needs including cooking and visits to doctors, on request. Joseph regularly assisted in these activities. They frequently visited each other's houses. The plaintiffs were motivated by friendship to provide these services, and received no payment for them. 12 On 12 March 1998 the deceased underwent a hip replacement operation. The plaintiffs continued to provide care. On numerous occasions before and after that event, the deceased spoke to the plaintiffs to the following effect: "You are both so good to me. I am going to leave you half of this house in my will." 13 On 9 November 2001 at the deceased's request, the plaintiffs and Michael accompanied her to the office of her solicitor, Mr Tim Oliffe, in Bankstown. In their presence, the deceased said to Mr Oliffe words to the effect: "I want you to make my will, and I want to leave half my property to Mona and Joe."