Why you need to explain exactly how and why you received a gift under a Power of Attorney

Domenico Taverniti was a man who cared deeply for his family. He had some strong views about marriage and culture also, and so, for a while he was estranged from his son Enzo, because Enzo had married an Australian girl called Leonie. For this reason, Enzo was considered to be the black sheep of the family.

However, the drama continued when, in January 2003, Enzo separated from his Australian wife, Leonie as he had left her to be with another woman. Domenico was beside himself and told Enzo that if he did not return to his wife, he would cut him out of the Will. Enzo did not oblige his father, and Domenico was so infuriated by this, that, on the 24^th of October 2003 he changed his Will and appointed his grandsons, Anthony and Steven to be his Co-Executors and left his Estate to his wife, provided that she survive him, but, if she did not do so, then to his three grandchildren, namely one-half to his deceased son Mario’s two children, Anthony and Bianca as tenants in common in equal shares, and the other half to Enzo’s only son, Steven, absolutely.

A Family Tree may be useful at this stage…

Enzo maintained that despite earlier disgruntlement, he still retained a relatively close father and son relationship with Domenico. On 19 December 2008 Domenico granted Enzo his Enduring Power of Attorney (“EPOA”). Under the EPOA Enzo could not sell any of Domenico’s property, he could only operate Domenico’s bank account.

Then in around April 2009, Domenico went into nursing care and he stayed there until his death in 21 June 2010. During this time, he had periods of illness and inability where he was unable to properly manage his affairs. His son, Enzo, made 3 withdrawals from Domenico’s bank account totaling $80,768.16.

The Dispute

The Executors asked Enzo to account for the withdrawals but he failed to comply. He also failed to return any money to the Estate. At the commencement of the Hearing, Enzo could account for expenditure of approximately $35,000 on behalf of Domenico but he could not account for the remaining $45,000. This was the dispute to be determined in the case Anthony Taverniti And Steven Domenico Taverniti (As Executors Of The Estate Of Domenico Taverniti) -V- Taverniti [2016] WADC 59 (20 April 2016).

The Evidence

Enzo’s evidence during the Hearing was that Domenico said to him that because Enzo had been cut out from Domenico’s will, he could have what was in Domenico’s Term Deposit as long as Enzo paid for his medical and household debts until Domenico passed away. However, Enzo gave conflicting evidence such as:

• That in earlier times, he had $50,000 of Domenico’s money available to repay the Executors and he offered to do so, but they wanted the full $80,000 from the account and he therefore refused to pay them the $50,000.
• That, he paid the sum of $50,000 to his solicitors and accountants for a forensic report for the trial for an audit of monies spent by him. That audit was not provided in the Hearing.
• That, the $50,000 had been used in Enzo’s divorce proceedings.
• Finally, he then said that the Solicitor’s and Accountant’s fees were paid from the sale of a vehicle.

In a twist of events, Lucy, who is Mario’s widow, was a fulltime bank officer at all material times, at the bank in which Domenico banked his money. Lucy gave evidence that:

• In 2008 Domenico asked her to accept a Grant of his Enduring Power of Attorney but she declined as she did not want to deal with Enzo.
• Whenever she saw Domenico after he granted Enzo his Enduring Power of Attorney, Domenico always asked her what was happening to his money. However, Lucy could not access his bank account due to the Privacy Act 1988. Lucy said Domenico was upset by this.
• The Bank Manager, at Lucy’s request, contacted Domenico by way of letter dated 12 December 2009 and confirmed that he only had $763.71 in his account and that there were withdrawals made by Enzo. Lucy said that Domenico was upset by the letter.
• At around the same time, Lucy confronted Enzo about the withdrawals and he did not say to her that Domenico had given him permission to make the withdrawals.

The Court’s Determination

The Court considered the evidence that was put before it during the Hearing and found that the evidence was far from persuasive that Domenico told Enzo that he could have the money in his bank account.

The Court found that it is significant that the terms of the Enduring Power of Attorney did not enable Enzo to sell any of Domenico’s property. It is also significant that, in light of the family tension, Domenico did not tell anyone, particularly his nominated Co-Executors, that he authorized Enzo to use money in his account. The Court also found that in all the circumstances it would have been easy for Enzo to have Domenico execute all three bank withdrawals particularly in circumstances where for two of the withdrawals, Enzo had Domenico wait in the car outside the bank.

The Court made it clear that Attorneys and specifically Donees under a Grant of Enduring Power of Attorney are under a heavy onus to be honest, straightforward and able to account for the expenditure of the Principal’s money.

For these reasons, the Court ordered judgement in favour of the Plaintiffs against the Defendant in the sum of $45,000.

Written by Jamal Bakalian

After studying a double degree in Law and International & Global Studies at Sydney University, Jamal completed her GDLP at the College of Law. She is currently undertaking her Masters of Law (majoring in Commercial Litigation). Jamal has been practicing Law for 5 years. With a passion for resolving disputes, Jamal is a valuable member of the Commercial Litigation team at Streeterlaw.

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