[1999] HCA 9
Bellman v Peters [2020] VSCA 143
Bezjak v Wyatt [2018] NSWSC 199
Bourdales v Carroll
Estate of Diane Holbrook (2007) 1 ASTLR 202
[2007] NSWSC 1057
Brownell v Robinson [2017] TASFC 11
Challenge Bank Ltd v Mailman (1993) 17 BPR 33,679
Bernengo v Leaney [2019] NSWSC 1324
Estate Pamplin
Source
Original judgment source is linked above.
Catchwords
[1999] HCA 9
Bellman v Peters [2020] VSCA 143
Bezjak v Wyatt [2018] NSWSC 199
Bourdales v CarrollEstate of Diane Holbrook (2007) 1 ASTLR 202[2007] NSWSC 1057
Brownell v Robinson [2017] TASFC 11
Challenge Bank Ltd v Mailman (1993) 17 BPR 33,679Bernengo v Leaney [2019] NSWSC 1324
Estate PamplinIrwin v Pamplin [2017] NSWSC 1477
FO v HAF [2007] 2 Qd R 138[2006] QCA 555
Forster v Jododex Australia Pty Limited (1972) 127 CLR 421[2006] NSWCA 11
Kennon v Spry (2008) 238 CLR 366[2008] HCA 56
KQ v HAE [2007] 2 Qd R 32[1984] HCA 21
Moby v Schulter (2010) FLC ¶93-447[1999] HCA 9
Petersen v Gregory[2018] NSWSC 781
Re Estate Miruzzi, deceased [2018] NSWSC 1899
Re Estate Wilson, Deceased (2017) 93 NSWLR 119[1992] HCA 36
Stanford v Stanford (2012) 247 CLR 108[2012] HCA 52
Sullman v Sullman [2002] NSWSC 169
Taisha v Peng (2012) 296 FLR 350[2012] FamCA 385
Talga Ltd v MBC International Limited (1976) 133 CLR 622[1976] HCA 22
Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471
Wilson v Porada
Judgment (41 paragraphs)
[1]
ieser [2010] NSWSC 50
Dwyer v Kaljo (1992) 27 NSWLR 728
Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273
Estate of the late Shirley Joan Violet Gardner; Bernengo v Leaney [2019] NSWSC 1324
Estate Pamplin; Irwin v Pamplin [2017] NSWSC 1477
FO v HAF [2007] 2 Qd R 138; [2006] QCA 555
Forster v Jododex Australia Pty Limited (1972) 127 CLR 421; [1972] HCA 61
Hayes v Marquis [2008] NSWCA 10
In re Blériot Manufacturing Aircraft Company (Limited) (1916) 32 TLR 253
In the Goods of William Loveday [1900] P 154
In the Marriage of Rolfe (1977) 25 ALR 217; (1979) ¶FLC 90-629
In the matter of the Estate of Peter Douglas Sigg, deceased [2009] VSC 47
Indjic v Stojanovic [2020] NSWSC 470
Ingamells v Western Australian Trustees Ltd (Supreme Court (WA), 5 March 1993, unrep)
Kardos v Sarbutt (2006) 34 Fam LR 550; [2006] NSWCA 11
Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56
KQ v HAE [2007] 2 Qd R 32; [2006] QCA 489
Light v Anderson (Court of Appeal (NSW), Handley JA, 4 August 1992, unrep)
Lynam v Director General of Social Security (1983) 52 ALR 128
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Moby v Schulter (2010) FLC ¶93-447; [2010] FamCA 748
Na v Tiu (No 2) [2017] FamCAFC 269
Neeta (Epping) Pty Limited v Phillips (1974) 131 CLR 286
Paino v Paino (2008) 40 Fam LR 96; [2008] NSWCA 276
Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520
Permanent Trustee Company Limited (1999) 198 CLR 334; [1999] HCA 9
Petersen v Gregory; Estate Glen Alfred Petersen [2007] NSWSC 8
Piras v Egan [2008] NSWCA 59
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26
Ragland v Ballock [2020] FCCA 1685
Re Estate Jerrard, deceased (2018) 97 NSWLR 1106; [2018] NSWSC 781
Re Estate Miruzzi, deceased [2018] NSWSC 1899
Re Estate Wilson, Deceased (2017) 93 NSWLR 119; [2017] NSWSC 1
Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 3) [2020] NSWSC 740
Robson v Quijarro [2009] NSWCA 365
Russian Commercial and Industrial Bank v British Bank for Foreign Trade, Limited [1921] 2 AC 438
Sadiq v NSW Trustee & Guardian [2015] NSWSC 716
Sadiq v NSW Trustee and Guardian [2016] NSWCA 59
Schmidt v Malcolm [2016] WASC 209
Scragg v Scott [2006] NZFLR 1076
Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677
Smith v NSW Bar Association (1992) 176 CLR 256; [1992] HCA 36
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Sullman v Sullman [2002] NSWSC 169
Taisha v Peng (2012) 296 FLR 350; [2012] FamCA 385
Talga Ltd v MBC International Limited (1976) 133 CLR 622; [1976] HCA 22
Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471
Wilson v Porada; The Estate of Peter Wolfgang Porada, late of Pericoe [2017] NSWSC 818
Ye v Fung [2006] NSWSC 243
Yesilhat v Calokerinos [2015] NSWSC 1028
Zetting v Müller [2017] NSWSC 659
Texts Cited: G E Dal Pont and K F Mackie, Law of Succession (2nd ed, 2018, LexisNexis)
P W Young, Declaratory Orders (2nd ed, 1984 Butterworths)
Category: Principal judgment
Parties: Jacqueline Bailey (Plaintiff)
Gail Charlotte Palombo (Defendant)
Representation: Counsel:
D M Flaherty (Plaintiff)
R W Tregenza (Defendant)
[2]
Solicitors:
Caldwell Martin Cox (Plaintiff)
Bell Lawyers (Defendant)
File Number(s): 2019/00215421
[3]
Introduction
HIS HONOUR: In this case, the principal, although not the sole, issue for determination is whether Jacqueline Bailey, the Plaintiff, was the "spouse" of Brian Palombo (the deceased) as at 11 October 2018, the date of his death. If she was, it is then for the Court to determine how the deceased's estate is to be distributed, and also to whom administration of the deceased's intestate estate should be granted.
In this case, some of the persons involved share the same surname. As such, where it is necessary to do so, and without intending any disrespect, I shall refer to persons, other than the parties, by first name to avoid confusion.
By amended Summons filed on 20 May 2020, the Plaintiff sought the following relief:
"1. A Declaration that the Plaintiff was the 'spouse' of the late Brian Palombo deceased ('the Deceased') within the meaning of Sections 104 and 105 of the Succession Act 2006 ('the SA') immediately before the Deceased's death.
2. A Declaration that the Deceased died intestate on 11 October 2018.
3. A Declaration that the Plaintiff and Defendant are entitled to the whole of the Deceased's estate in equal shares pursuant to the provisions of s 123 and/or s 125 of the Succession Act 2006.
4. An order that the NSW Trustee and Guardian be appointed as administrator of the estate of the Deceased.
5. An Order that an administration bond be dispensed with.
6. An order that the matter be referred to the Registrar to complete the grant.
7. Costs."
The Defendant named in the amended Summons is Gail Charlotte Palombo. There is no dispute that she and the deceased were married to each other at the date of the deceased's death but that they had been separated, and living apart, from about July 2010.
There were three children of the marriage of the deceased and the Defendant to whom I shall refer later in these reasons. Each has given evidence in these proceedings.
By Cross-Summons filed on 20 August 2019, the Defendant sought the following relief:
"1. A declaration that Brian Palombo, late of St. Clair in the state of New South Wales, deceased died intestate on 11 October 2018.
2. An order that administration of the estate of the deceased be granted to the cross claimant.
3. An order that, in the event that the plaintiff/cross defendant was a spouse of the deceased at the time of his death (which is not otherwise admitted) that pursuant to section 126 of the Succession Act 2006 that a Distribution Order be made in relation to the estate of the deceased in relation to the defendant/cross claimant and the plaintiff/cross defendant
4. An order that the administration bond be dispensed with.
5. An order that the matter be referred to the Registrar to complete the grant.
6. Costs."
[4]
Post Hearing Development
Following the conclusion of the hearing, counsel for the Defendant, Mr R W Tregenza, sent an email dated 6 July 2020 to the Court (and to Mr D M Flaherty, counsel for the Plaintiff) in the following terms:
"I have informed counsel for the plaintiff, Mr Flaherty, that the defendant received a significant insurance payout consequent on the death of the deceased.
If convenient, could His Honour relist the matter on a day this week on or after Wednesday (allowing a day or so for the preparation of an affidavit by the defendant and for Mr Flaherty not being available tomorrow) raising the matter before the Court.
Mr. Flaherty consents to this course. I am endeavouring to copy Mr Flaherty into this email, but as I am doing so on my phone from Penrith, if I do not do so successfully then I will send him a copy."
Although it was not expressed as such, I assumed that the Defendant was seeking leave to re-open her case. Such an application may be made under the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), rr 2.1 and 29.5, which provide, respectively:
2.1 Directions and orders
The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient (whether or not inconsistent with these rules or any other rules of court) for the just, quick and cheap disposal of the proceedings.
…
29.5 Conduct of trials generally
The court may give directions as to the order of evidence and addresses and generally as to the conduct of the trial.
Any decision to grant leave to re-open is one that involves the exercise of discretion, and the question whether the interests of justice are better served by allowing, or rejecting, the application: Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478 (Clarke JA, Mahoney and Meagher JJA agreeing). The circumstances to be considered include: whether there is prejudice to the other party; the reasons why the evidence was not led in the first place; whether there had been a deliberate or tactical decision made not to call the evidence during the hearing; any delay in making the application; and the importance, relevance and probative value of the proposed new evidence to the issues in the case. See also Smith v NSW Bar Association (1992) 176 CLR 256 at 266-267; [1992] HCA 36 at [32] (Brennan, Dawson, Toohey and Gaudron JJ).
[5]
Issues for determination
Prior to the commencement of the hearing, the legal representatives agreed that there are a number of specific questions for the Court's determination. They are:
1. Was the Plaintiff the spouse of the deceased immediately before his death within the meaning of Ch 4 of the Act? In the events that have happened, this requires the Court to determine whether the Plaintiff and the deceased were in a de facto relationship that had been in existence for a continuous period of two years.
2. If the Plaintiff is a spouse of the deceased, should there be a distribution order made by the Court pursuant to s 126 of the Act?
3. If a distribution order is made, what is the just and equitable distribution of the estate of the deceased and should it include any conditions?
4. How should the costs of the proceedings be borne?
(As will be read, the last issue was resolved during the course of the hearing.)
[6]
Background facts that are not in dispute
I turn now to a more detailed consideration of the facts of the case.
The legal representatives of the parties provided to the Court a document that stated some of the agreed facts. I shall next set out these, and other, facts, which I consider are either undisputed, or which I am satisfied have been established on the evidence.
1. The deceased was born in March 1963 in Scotland, United Kingdom. He died, suddenly and unexpectedly, at the age of 55 years in October 2018.
2. The deceased did not leave any Will.
3. The deceased, at the date of his death, held property in New South Wales.
4. The Defendant was born in March 1962 and is now aged 58 years.
5. The Plaintiff was born in May 1965 and is now aged 55 years.
6. The deceased married the Defendant in March 1983 in Wishaw, Scotland. The marriage is a foreign marriage that is recognised as valid pursuant to Pt VA ("Recognition of foreign marriages") of the Marriage Act 1961 (Cth).
7. The deceased and the Defendant migrated to Australia in 1985. For a short period, after their arrival, they lived with the deceased's parents in the parents' home at Arundel Park Drive, St Clair (the St Clair property), a suburb of Sydney, about 39 kilometres west of the Sydney Central Business District.
8. In June 1986, the deceased and the Defendant purchased their own home, which was also located in St Clair.
9. The deceased and the Defendant had three children, being Ashleigh Anne Davis (née Palombo), who was born in January 1988; Emma Gail Schild (née Palombo), who was born in May 1989; and Kristy Nicole Palombo, who was born in September 1992.
10. The deceased and the Defendant separated in about July 2010. Immediately prior to separation, they had lived together in a property at Emu Plains, also a suburb of Sydney, about 58 kilometres west of the Sydney Central Business District.
11. At the date of the hearing, the Defendant continued to reside in the Emu Plains property.
12. Neither the deceased, nor the Defendant, following their separation, applied for a property declaration, or property alteration order, pursuant to s 78 or s 79, or entered into a Financial Agreement, under s 90C, of the Family Law Act 1975 (Cth).
13. The Defendant did not receive any correspondence from the deceased, or from any legal representative acting on his behalf, initiating proceedings, or even requesting that negotiations commence relating to a property settlement.
14. The Plaintiff has three children by a prior marriage, namely Adrian, who was born in June 1990; Danielle, who was born in July 1992; and Jasmin, who was born in October 1994. She and her husband separated in 2010 and a divorce order was made in 2013. (The names and dates of birth of the Plaintiff's children, and the year of separation from her husband, are taken from the chronology included in the submissions of counsel for the Plaintiff. They are not otherwise disclosed in the evidence. The facts have been included to complete a history of the parties.)
15. The Plaintiff and the deceased met in June 2011.
16. The deceased's mother died in September 2010, and his father died in July 2013.
17. The Plaintiff has remained living in the St Clair property, which is still registered in the name of the deceased. He had purchased the property, from his father's estate, in about May 2014.
18. In May 2019, steps were taken by Ashleigh to obtain a grant of Letters of Administration. Her application was rejected as she had no "interest" in the deceased's estate.
19. On 11 June 2019, the Plaintiff lodged a caveat requiring that "[n]o grant of Letters of Administration be made in the estate of [the deceased] … without prior notice to me". This is what is described as a general caveat. It has lapsed by effluxion of time, but the issue of administration has been overtaken by these proceedings.
[7]
The nature and value of the Estate
The Court made a direction on 13 May 2020 in the following terms:
"4. Directs the parties to provide to the Chambers of the Succession List Judge, in hard and soft copy, an agreed schedule that contains:
a. The assets and liabilities of the estate at the date of death;
b. The assets and liabilities of the estate at the date of the schedule;
c. The estimated costs and expenses of any property that is to be sold;
d. The estimated costs of each party calculated on the ordinary and indemnity basis inclusive of GST;
e. Any costs of any party that have been paid, and in relation to either party, whether those costs have been paid out of the estate of the deceased; and
f. Any matters otherwise relating to the estate upon which agreement has been reached
by 4:00 p.m. on 19 June 2020."
Although a document headed "Schedule of Assets and Liabilities as at 17 June 2020" was provided to the Court by the Defendant's solicitors, counsel for the Plaintiff, at the commencement of the hearing, stated that the contents were not agreed: Tcpt, 29 June 2020, p 3(36) - p 4(19). In the circumstances, it was returned to counsel for the Defendant and not included in the Court's papers.
The Court suggested that the parties, by their legal representatives, should endeavour to reach agreement on the assets and liabilities of the estate, and the value of those assets and liabilities, failing which it might be necessary to adjourn the proceedings. Indeed, an application to adjourn the proceedings was made by counsel for the Defendant on the second day, which application was refused: Tcpt, 30 June 2020, p 81(46) - p 82(01), p 87(32-50).
The complaint that had been made by the Plaintiff, throughout the proceedings, was that the Defendant had not disclosed the real value of the shares in private companies that the deceased held. The evidence revealed that there were, in fact, three companies, in which the deceased held shares, the value of two of which were the subject of dispute. The two companies, Kookaburra Sales & Services Pty Ltd and Kookaburra Plumbing & Electrical Pty Ltd, were used by the deceased to conduct his plumbing business. Kookaburra Plumbing & Electrical Pty Ltd had been registered on 23 December 2009. Kookaburra Sales & Services Pty Ltd had been registered on 15 March 1996.
In this regard, it is to be remembered that where an asset of a deceased's estate comprises shares in a company, in order to determine the value of the estate, the market value of the shares, rather than its nominal value, should be disclosed. This is because the nominal value will not, necessarily, reflect the financial worth of the asset, and, therefore, the financial benefit to which beneficiaries are entitled. In the case of shares held in a private company, there are well recognised methods of valuing those shares by suitably qualified professionals. Alternatively, it may be possible for the parties to agree on the company's accountants providing an estimate of the market value of the estate's shareholding: Bellman v Peters [2020] VSCA 143 at [74]-[75] (Tate, Kyrou and McLeish JJA). (As to the valuation of a proprietary company in the family law context, see the summary of the relevant principles in Ragland v Ballock [2020] FCCA 1685 at [24] (Judge WJ Neville).)
MISCELLANEOUS DEBTS
(a) Revenue NSW - Land Tax (2018 instalment and estimated liabilities for 2019 and 2020) $ 38,726
(b) Penrith City Council - xxx Severn Street, St Marys $ 2,080
(c) Penrith City Council - xxx Arundel Park Drive, St Clair $ 2,972
(d) Penrith City Council - xxx Christie Street, St Marys $ 8,295
(e) Shoalhaven Water - xxx Walmer Avenue, Sanctuary Point $ 1,015
(f) Shoalhaven Water - xxx Naval Parade, Erowal Bay $ 1,937
(g) Shoalhaven City Council - xxx Walmer Avenue, Sanctuary Point $ 2,855
(h) Shoalhaven City Council - xxx Naval Parade, Erowal Bay $ 2,981
(i) BGT Tree Services $ 4,950
(j) AK Buckley Building $ 14,409
(k) Australian Taxation Office - Taxation liability (2017) $ 45,997
(l) Australian Taxation Office - Taxation liability (2018) $ 35,486
(m) Australian Taxation Office - Taxation liability (2019) - estimated to be $ 12,000
TOTAL $ 1,591,782
Net Estate - $2,687,941
[9]
A slight arithmetical error in the above went unnoticed during the hearing. Although it is of little moment, for completeness, the total assets had an estimated, or known, value of $4,279,623 and, consequently, the value of the net estate was $2,687,841.
However, as earlier noted, Ex SAL1 included the liability of $650,000 that is properly described as a liability of the business secured on the property of the deceased. Accepting the estimate of the value of the shares, but removing the liability from the calculation, increases the value of the deceased's estate to $3,337,841.
Again, on the third day of the hearing, the parties provided an agreed document identifying the nature and value of the property owned by the deceased and the Defendant as joint tenants at the date of the deceased's death. That document was marked Ex SAL3.
There was no dispute that the property identified as jointly held would pass to the Defendant as the surviving joint tenant. There was also no dispute that depending upon the nature of the distribution order, she would have to pay the debts secured on the jointly held properties. (The Defendant did not provide evidence that each of these properties had been transmitted to her following the death of the deceased.)
There was some dispute about whether the debts secured on the jointly held property would become debts of the Defendant. Mr Tregenza submitted that there was a continuing liability for contribution on the estate to bear part of the burden of these debts (presumably as a liability of the estate): Tcpt, 30 June 2020, p 56. Mr Flaherty took the opposite position (Tcpt, 30 June 2020, p 140) referring to s 145 of the Conveyancing Act 1919 (NSW). He did so again on the third day of the hearing. However, neither made any detailed submissions on the topic and no part of the debts secured on jointly held property was included in Ex SAL1.
As will be read, these reasons include a reference not only to the agreed value of each jointly held property, but also a reference to the debts secured thereon. While there was some minor dispute over the values of the jointly held property, the legal representatives provided an amended version of Ex SAL3 that was in the following terms (as further amended to correct apparent mathematical errors):
Description Particulars of Other Joint Owner
[10]
Counsel agreed to the quantification set out above at the hearing: Tcpt, 1 July 2020, p 201(30-39).
Despite Ex SAL3 having been tendered, what use could be made of the evidence was the subject of dispute. Counsel for the Plaintiff submitted that the total net value of the properties, jointly held, which passed to the Defendant by survivorship, should be considered in determining the distribution order that would be just and equitable. Counsel for the Defendant submitted that it was irrelevant in the Court making that determination.
For reasons to which I shall come, I am of the view that the net value of property which the Defendant will receive by survivorship is a matter that is relevant, although that value will not be used in determining the value of the deceased's estate from which a distribution order may be made.
It became apparent, during the closing submissions of counsel, that which of the deceased's properties remained encumbered would be relevant to the nature of any distribution order. I therefore directed at the conclusion of the final day of the hearing that:
"Directs the parties to forward to the Chambers of Hallen J by 4:00 p.m. on 2 July 2020 an agreed schedule disclosing the properties which are encumbered and the amount secured on each of them."
The solicitors for the Defendant duly provided that agreed schedule to my Chambers by email dated 2 July 2020. That schedule was in the following terms:
Westpac Loan No Amount outstanding Properties secured
#4509 $181,930 XX Arundel Park Dr St Clair NSW
XX Arundel Park Dr St Clair NSW
#9049 $367,836 XX Walmer Ave Sanctuary Point NSW
XX Naval Pde Erowal Bay NSW
#4810 $184,570 XX Walmer Ave Sanctuary Point NSW
Total liabilities $734,336
[11]
It will be observed that there are slight differences in the amounts above and those disclosed in Ex SAL1. Presumably they arise from the differences in the loan balances outstanding at the date of the Schedule as compared to 2 July 2020. Accordingly, the total has been taken into account in determining the net value of the deceased's estate.
[12]
Credibility of the Witnesses
Whether or not the parties were in a de facto relationship is determined on an objective, not a subjective, basis. Some assessment of the reliability of the parties', and their witnesses', evidence is required. Credit findings assume a greater significance in cases where one party to the asserted relationship is dead: see, for example, Indjic v Stojanovic [2020] NSWSC 470 at [90]-[97].
Because of the position of the parties and the witnesses, the Court is required to determine on the balance of probabilities, taking into account s 140(2) of the Evidence Act 1995 (NSW), which version of events is the more probable. It is also the case that a de facto relationship means a relationship which exists in fact and that is established by determining what the parties to the alleged relationship are doing.
No submissions were made about the credibility of any witness or the reliability of her, or his, evidence generally. Yet, the only truly independent witnesses are the witnesses called by the Plaintiff, namely, Christopher Palombo Snr, the oldest brother of the deceased, John Palombo, an older brother of the deceased, Christopher Palombo Jnr, a nephew of the deceased, Domenico Valenti, a labourer employed by the business conducted by the deceased, and Margaret Sutherland, a neighbour of the deceased. Each is truly independent as he, and she, does not have any direct, or indirect, interest in the estate or in the result of the proceedings. Each of the other witnesses is either a party, or in the case of the Defendant's witnesses, related by blood, or marriage, to her.
In relation to the Defendant and her witnesses (all family members), there is one matter that is pertinent in the assessment of her, and his, evidence respectively. It was not disputed that the deceased, intentionally, did not disclose to any of them that he was in a relationship with the Plaintiff. Indeed, despite encouragement from his nephew, and from Mrs Sutherland, he refused to do so, and each of them felt constrained to keep his confidence. It is clear that the Defendant, and her witnesses, only saw part of the picture.
The reasons for the deceased's non-disclosure, as expressed, appear to have been financial and emotional. He did not wish to have family law proceedings, principally by way of a claim for a property adjustment order, brought by the Defendant. In addition, he did not wish his children to know of his relationship with the Plaintiff.
[13]
The Statutory Framework - an intestate estate
Before turning to the other facts in the case, it is convenient to describe the statutory framework that applies in relation to an intestate estate in a claim such as this one. There is an absence of case law going to the scheme created by this part of the Act (although Lindsay J has written an extremely analytical, and learned, judgment in Re Estate Wilson, Deceased (2017) 93 NSWLR 119 at 121 [1]; [2017] NSWSC 1 at [1], which was "the first case of its kind to come before the Court … [involving] competing claims to administration, and beneficial ownership, of the intestate estate of a 56-year-old deceased Aboriginal man (adopted at birth into a non-Aboriginal family) …").
Consideration will be given to the relevant parts of Ch 4 of the Act (ss 101-140). The Chapter was inserted into the Act by the Succession Amendment (Intestacy) Act 2009 (NSW), which was assented to on 9 June 2009 and which came into operation on 1 March 2010 and it applies to persons dying intestate on, or after, that date: see Sch 1, Pt 4, cl 13 of the Act.
The long title to that Act stated that it was "to amend the Succession Act 2006 and the Probate and Administration Act 1898, to revise and re-state the rules for distribution on intestacy; and for other purposes".
Chapter 4 "must be read in the context of the Act as a whole, with an appreciation that the Act governs the making, alteration, revocation, revival and construction of wills (Chapter 2), applications for family provision relief (Chapter 3)", and to make provision for the distribution of intestate estates: Re Estate Jerrard, deceased (2018) 97 NSWLR 1106 at 1113 [33]; [2018] NSWSC 781 at [33] (Lindsay J).
In summary, Part 4.1 (entitled "Preliminary"), comprising ss 101-109A, contains foundational definitions. Part 4.2 (entitled "Spouse's entitlements") comprising ss 110-126, contains the entitlement of a surviving spouse. Division 3 of this Part, comprising ss 122-126, deals with the entitlement of multiple spouses where, for example, the intestate was married and also has one, or more, domestic partners, and the Court's power to make a distribution order, where an application is made for such an order.
Section 101 of the Act, relevantly, provides:
eligible relative means a relative of the intestate who is entitled to share in the distribution of the intestate estate under Part 4.3.
…
intestate estate means:
(a) in the case of an intestate who leaves a will - property that is not effectively disposed of by will, and
(b) in any other case - all the property left by the intestate.
[14]
The Plaintiff's Evidence
I accept the following evidence given by the Plaintiff.
She met the deceased in June 2011 and "commenced a romantic relationship with him soon after". She said they "commenced living together as man and wife although not married to each other on or about 25 April of 2012", that is to say that on 25 April 2012, "the Deceased and I commenced living together in the … [St Clair property] being my current residential address".
There was a sexual relationship between them and that they "shared the usual house hold duties, went on numerous holidays together and attended many social functions together as a couple".
She admitted that "I rarely if, ever, saw the Deceased's children and we did not engage in social events with them". She also wrote:
"12. I was (and still am) employed throughout my 6½ year relationship with the Deceased. I have lodged a tax return every year. My stated address on my tax returns in the 6 ½ years of living with the Deceased was never the same as that of the Deceased. I did that because the Deceased told me not to.
13. The Deceased and I would see each other every day during our relationship except when one or both of us were away for work commitments. As far as I am aware the Deceased did not see the Defendant very often after he separated from her in 2010.
14. The Deceased stated to me on a number of occasions, the last being whilst we were on holiday in Bali in September 2018, that due to the significant assets he had he didn't want to go through the hassle of a divorce with the Defendant. Also, the Deceased said that he did not want the Defendant or his children to know of his relationship with me as he didn't believe they would approve of it. Accordingly, I made sure that whenever the Deceased told me that one of his children was coming to visit him at the St Clair property, I put all of my clothes and belongings in cupboards where they could not be readily seen."
She said that she attended the deceased's funeral, as did her children. (The Defendant denied that the Plaintiff attended the funeral but since she had not met, or seen, the Plaintiff, she would not have known if the Plaintiff was there.)
The Plaintiff acknowledged that she "did not involve myself in his work activities". She knew that the deceased's daughter, Ashleigh, and, to some extent, the Defendant were employed in the deceased's business.
[15]
The Defendant's Evidence
The Defendant gave evidence that she and the deceased separated after 27 years together. She continued to live in the former matrimonial home at Emu Plains. Initially, they would see each other several times each week "for coffee and to discuss family arrangements". Over time, their meetings lessened although she and the deceased would often meet if the Defendant attended the Kookaburra Plumbing business premises.
The Defendant, despite the separation, continued to be in contact with the deceased's parents, visiting his mother at a nursing home in Penrith, where she would often see the deceased, who happened to be visiting at the same time. She continued to be in contact with the deceased's father, also.
The Defendant gave evidence that she and the deceased would attend weddings and family events, whilst the Plaintiff would not. She also referred to attending a nursing home at St Marys to visit the deceased's father. She also gave evidence that after the deceased's father died she would attend for dinner with the children, at the St Clair property, once a month. In giving this type of evidence, I did not form the view that she was endeavouring to paint a picture of their marital relationship continuing.
I shall not repeat all of the Defendant's evidence about her married life with the deceased or the contributions of each to the building up of their assets. She was not cross-examined upon her assertion that, during the marriage, she "undertook all the household duties. [The deceased] did not even mow the lawn. I brought up our three daughters without any significant assistance or support from [the deceased] other than financial support".
I have earlier referred to the property of the deceased at the date of the schedule and to the property that he jointly held with the Defendant.
The Defendant gave the following evidence of her financial circumstances:
"39. My only income which I received and from which I can draw personally is from my wage with New South Wales Health.
40. I am now the sole proprietor of six properties and as a tenant in common with the estate of Brian of one strata unit, the latter being that at XX Severn St, St Marys. I am not certain as to the current occupancy of the strata title unit XX Severn St, St. Marys. I believe that it is rented and encumbered with National Australia Bank.
41. I live at XX River Road, Emu Plains.
42. The property at XX Jody Place, St Clair was, when Brian died, was rented to tenants. The premises were then unoccupied whilst renovation work was undertaken and has, since about August 2019 been occupied by tenants who pay rent.
43. The property at XX Elizabeth Drive, Vincentia is not tenanted.
44. The property at XX Alec Avenue, Mermaid Waters, Queensland is occupied by tenants who pay rent but, as far as I am aware, the rent is applied in payment of the mortgage to National Australia Bank.
45. The strata unit title at XX Mistletoe Street, Claremont Meadows was purchased in 2000 in joint names."
[16]
Submissions regarding the relationship
I have been assisted by the submissions which counsel made both in their written outlines and orally during the hearing. Whilst I have had regard to each of the submissions made, I do not propose to repeat all of them. What follows, therefore, is merely by way of emphasis. I shall deal, at this point, particularly, with the submissions on the topic of the de facto relationship.
Mr Flaherty, for the Plaintiff, in his written outline submitted that the Plaintiff and the deceased entered into a de facto relationship upon the commencement of cohabitation. Therefore, he said that they had been in a de facto relationship for the six and one half years prior to the deceased's death.
Mr Flaherty pointed to the corroborating evidence of the witnesses called by the Plaintiff. He submitted, in my view correctly, that none of the corroborating witnesses had any financial interest in the outcome of the case.
Mr Flaherty discounted the relevance of the relationship having been kept secret from the Defendant and the deceased's daughters. The reasons behind that deception, he submitted, could only be a matter of speculation. Finally he submitted at par 1.9 of his written outline:
"But the fact that the Defendant and the Deceased's daughters were unaware of that relationship that the Deceased had with the Plaintiff does not mean that such relationship did not exist. The evidence is overwhelming that it did so exist."
In his oral submissions, Mr Flaherty reiterated that the Plaintiff's evidence of the relationship was corroborated by the witnesses called by her. He submitted that their evidence should be accepted.
As to the conflict between the evidence of the Plaintiff and her witnesses on the one side, and the Defendant and her witnesses on the other, Mr Flaherty submitted (Tcpt, 1 July 2020, p 170(06-12)):
"It's quite clear - and I think your Honour made this observation from the bench during the course of the hearing - this is not a case where you have to form a view that one person is lying, and another person is not lying. Because it's quite clear that both the plaintiff and the deceased went to great lengths to keep their relationship secret from the defendant, and in particular, the daughters. They didn't keep their relationship secret from anyone else that we know of."
[17]
Determination regarding the relationship
Naturally, that the deceased failed to disclose his relationship with the Plaintiff to his immediate family over a period of six and one half years, and that the Plaintiff participated in that silence, is a relevant and important matter. Furthermore, any statements by the deceased, apparently inconsistent with the existence of the relationship, are also important. However, whilst, perhaps, complicating the resolution of the issue, neither is determinative of the ultimate issue. Both matters have been taken into account as part of all the circumstances.
I accept that if no person, other than the Plaintiff, had been aware of the relationship, and if the statements said to have been made by the deceased were accepted, the Plaintiff's evidence may not have been entirely credible, and might have spoken, loudly, against the existence of the relationship as a couple. But this was not the case. Others, independent of the Plaintiff and the Defendant, gave evidence of his, and her, observations, all of which are consistent with the existence of a de facto relationship.
Furthermore, there is an explanation for the deceased not having revealed the existence of the relationship to members of his immediate family. The Plaintiff gave evidence about her discussions with the deceased, at par 14 of her affidavit affirmed 20 June 2019:
"The Deceased stated to me on a number of occasions, the last being whilst we were on holiday in Bali in September 2018, that due to the significant assets he had he didn't want to go through the hassle of a divorce with the Defendant. Also, the Deceased said that he did not want the Defendant or his children to know of his relationship with me as he didn't believe they would approve of it."
She also gave the following oral evidence, which I accept (Tcpt, 30 June 2020, p 68(06-09)):
"Q. Did you just press Brian at some stage, you've got to tell your daughters about me?
A. I didn't press him. I did ask if it would happen and he said one day it would but at this stage he didn't think they would accept me."
Both aspects of the Plaintiffs evidence were corroborated by others, to whom the deceased had given similar explanations: Affidavit, Christopher Palombo, 2 October 2019 at par 10; Affidavit, John Palombo, 3 October 2019 at par 9; Affidavit, Christopher Palombo, 15 June 2020 at par 11.
[18]
Evidence regarding what distribution is "just and equitable"
In considering what distribution in this case is "just and equitable" it is necessary to examine a range of circumstances as revealed in the evidence.
I have found it convenient to do so by examining the evidence under several headings or categories. In doing so, I am not suggesting that the matters the Court may consider under s 126 are confined to those factors. Those factors are merely those that have assumed a particular significance in the present case on the evidence before the Court and I have not ignored other factual matters referred to earlier.
[19]
Nature and Extent of the Deceased's Estate
I have already addressed above, in some detail, the nature and value of the deceased's estate. As stated above, the net value of the deceased's estate available to be distributed is $3,337,841.
It is, therefore, an estate of reasonably significant value.
[20]
Maintenance of Each Spouse
This is not a case where either spouse was being wholly maintained by the deceased during the periods of the respective relationships. The Plaintiff did not suggest otherwise although there was some financial support given to her.
The Plaintiff was employed throughout her relationship with the deceased. She deposed, in her affidavit affirmed 18 June 2020, that she receives a gross income of $51,202 per annum. It can be assumed, given that she has remained in the same position throughout her relationship with the deceased, that she received a reasonable income throughout the period of their relationship.
Although the Plaintiff had this income, and, presumably, met some of her own day-to-day living expenses, she deposed:
"[The deceased] also contributed financially to my living expenses such as paying the mortgage, bills, my tolls and sometimes taking my car and putting in fuel in it. He would also often buying [sic] me clothes, shoes and presents."
In addition to that contribution to her living expenses, the Plaintiff also resided in the St Clair property. As stated earlier, the evidence did not disclose that she paid any rent or occupation fee on account of that residence.
I am satisfied that the Plaintiff was partly maintained by the deceased throughout their relationship.
There may have been a period when the children were young that the Defendant did not work, but this is not entirely clear. In any event, it was many years before his death and their separation. The Defendant remains employed. Her evidence, in cross-examination, was that her position is currently part-time at three days per week. It was unclear whether that has always been the case or whether the position was once full-time.
The Defendant gave evidence, in her affidavit sworn 18 June 2020, that she and the deceased had not entered into any financial agreement pursuant to s 90C of the Family Law Act. She added, however, that the deceased continued to contribute to her living expenses even following their separation. She deposed in her affidavit sworn 21 August 2019 at par 18:
"Since the time of our separation Brian supported me financially. Brian met the mortgage payments on jointly owned property and paid the purchase price [of] a new vehicle for me, being a Volkswagen CC in February 2013. He paid all of my household bills and credit card bills, except for food."
[21]
Nature and Duration of Each Relationship
The Defendant and the deceased were married in March 1983 and separated in July 2010, after 27 years. As stated above, no divorce order was made. As at the date of the deceased's death, although separated, they had been married for over 35 years.
There was little evidence of the nature of the relationship between the Defendant and the deceased during the 27 years that they were together. The Defendant did give some evidence that she, through that time, attended to all the household duties and the raising of their daughters.
She gave further affidavit evidence, admitted over objection, that the deceased had been verbally abusive towards her and their children at times. It was her evidence that she initiated the separation.
That evidence was, the objection aside, unchallenged. It may be well so, although it is not necessary for me to make a finding to that effect. Suffice it to say, despite that evidence, it is plain that the relationship between the two of them irretrievably broke down with no suggestion that it might recommence.
The evidence from the Defendant, her daughters and the husband of each daughter, showed that the Defendant and the deceased continued to get along amicably at family events and on other social occasions. They also interacted on a frequent basis through the Kookaburra Plumbing business.
Even after the separation, the Defendant remained involved with the deceased's parents, and visited them when they were in nursing homes.
The deceased, too, showed a continued care for the Defendant. Kristy gave evidence that he surprised the Defendant with concert tickets: Affidavit, Kristy Nicole Palombo, 21 August 2019 at par 31.
I am satisfied that the deceased and the Defendant remained on reasonably good terms following their separation. That does not, however, detract from the fact that they were separated. Their relationship after 2010 must be viewed in that light.
The Plaintiff and the deceased met in June 2011 and commenced their relationship soon thereafter. By April 2012, they were living together, in the Plaintiff's words, "as man and wife".
I have already discussed, in some detail, the nature of the relationship between the Plaintiff and the deceased in coming to the conclusion that they were in a de facto relationship. Those matters are also relevant in determining a just and equitable distribution, although I will not repeat what has been written above.
[22]
Age and State of Health of Each Spouse
The Defendant is currently 58 years old. She did not give any evidence going to her state of health.
The Plaintiff is currently 55 years old. Similarly, she did not give any evidence going to her state of health.
[23]
Any Physical, Intellectual or Mental Disability of Either Spouse
Neither spouse disclosed any physical, intellectual or mental disability.
[24]
Nature and Extent of Obligations or Responsibilities Owed by the Deceased
Naturally, the deceased owed obligations to each of the parties, as a spouse. The nature of that obligation, however, varies.
The Defendant, on the one hand, was separated from the deceased. However, on the other, they remained married and the deceased continued to provide financial support to her up until his death.
Their relationship, even before separation, was of a considerable duration. That length strengthens the obligation and responsibility owed by the deceased to the Defendant.
In contrast, the relationship between the Plaintiff and the deceased was not of anything like that duration. Whilst six and one half years is not a very short relationship, it is substantially less than the length of the marriage of the Defendant and the deceased.
Nevertheless, the Plaintiff, too, was the deceased's spouse and, consequently, he owed an obligation and responsibility to her. Like he did the Defendant, the deceased partly financially supported the Plaintiff. It is also relevant that the relationship between the Plaintiff and the deceased persisted at the date of his death.
Although the Plaintiff and the Defendant are the parties to these proceedings and, ultimately, the deceased's estate will be distributed between them, they are not the only persons affected by any distribution order to be made. The deceased's children will be indirectly affected, even though none of them sought to make a family provision order.
As issue of the Defendant, a surviving spouse, the deceased's children have no entitlement under the rules of intestacy: s 123 of the Act. The learned authors of G E Dal Pont and K F Mackie, Law of Succession (2nd ed, 2018, LexisNexis) explained in respect of s 112 of the Act:
"If the intestate leaves a spouse but no issue, or leaves issue that are all also issue of the spouse, the spouse is entitled to the whole of the intestate estate. This represented a change from the previous law, which generally divided the estate as between the surviving spouse and the issue, driven in part by research revealing that only rarely did deceased persons bequeath their estate to be divided between their surviving spouse and their children. The children, it is assumed, will inherit from the surviving spouse."
[25]
Any Prior Agreement or Representation as to Division of Property
As has been repeated above, neither the deceased, nor the Defendant, made an application for any property adjustment order, pursuant to s 79 of the Family Law Act. It was a course that the deceased seemed determined to avoid. The Defendant was not asked why she did not make such an application. (Her evidence, in cross-examination, was that she did not want to get a divorce: Tcpt, 30 June 2020, p 113(06-17).)
There was no evidence given on the Plaintiff's part that suggested any kind of agreement had been reached by her, or representation had been made to her, in respect of the deceased's property.
[26]
Reasonable Held Expectations of Each Spouse
Neither the Plaintiff nor the Defendant gave evidence that they held any expectations as to what, if any, property they were to receive on the deceased's death.
[27]
Testamentary Intentions of the Deceased
In setting out the evidence of Christopher Palombo Jr above, I have already referred to the evidence available going to the deceased's testamentary intentions. He gave evidence of conversations with the deceased, in which the deceased signalled his intention that "the house" (which I take to mean the St Clair property) should pass to the Plaintiff: Affidavit, Christopher Palombo Jr, 15 June 2020 at par 18.
I accept that this was a more accurate reflection of the deceased's testamentary intention than what he communicated to Ashleigh, namely that he wanted the house to "stay in the family": Affidavit, Ashleigh Anne Davis, 19 June 2020 at pars 5-6, as it is consistent with his desire not to inform the Defendant and their children of the Plaintiff's existence.
There was no other evidence that went to the deceased's testamentary intentions.
[28]
Nature of any Jointly Held Property
As previously adverted to, the deceased held a significant amount of property jointly with the Defendant. In summary, the assets jointly held and the liabilities jointly owed comprised:
1. Six parcels of real estate with an agreed value of $4,412,820;
2. A bank account containing $115,352; and
3. A liability owed to the National Australia Bank secured by a mortgage totalling $1,021,060.
The net value of the jointly held property is, therefore, $3,507,112.
Because the jointly held property does not form part of the deceased's estate, it cannot be the subject of a distribution order under Pt 4.2 of the Act. It is not actual estate and Ch 4 contains no notional estate provisions of the kind found in Ch 3. This does not mean, however, it should not be considered in determining what is just and equitable.
Yet, it must be borne in mind that both the deceased and the Defendant chose to retain the jointly held property as such after their separation. It would have been a relatively simple matter, for either, or both, to sever the joint tenancy: see Real Property Act 1900 (NSW), s 97. Thus, it is important to respect circumstances that the deceased and the Defendant can be assumed to have considered, whether, or to what extent, there should be some different arrangement concerning their assets (whether held individually or in common) whilst their marriage subsisted and, in the present case, after their separation. Whatever express, or implicit, assumptions that each may have made to the effect that existing arrangements of marital property interests were sufficient, or appropriate, during the continuance of their marital relationship were not brought to an end with the cessation of that relationship.
Even so, the fact that jointly held property, passes by survivorship to the Defendant, provides a significant benefit, which the Defendant, and the Defendant alone, receives as a result of the death of the deceased.
In contrast, there was no evidence that the Plaintiff and the deceased held any property jointly.
[29]
Nature of any Property Otherwise Passing to Each Spouse
It was only after the conclusion of the hearing that the Court was informed that the Defendant had received a sizeable life insurance payment consequent upon the death of the deceased. In her affidavit sworn 13 July 2020, the Defendant made, for the first time, the following disclosure:
"I am the sole beneficiary of AMP insurance policies numbered XX and YY held, I believe by the deceased and paid for by the business of Kookaburra Plumbing and Electrical Pty Ltd out of the bank account of Kookaburra Sales & Service Pty Ltd in respect of the life of the deceased and from which I received payments totalling $4,243,505.97."
The Defendant annexed to that affidavit two letters from AMP confirming the finalisation of the claims on the respective policies. Both letters were dated 6 February 2019 and confirmed the deposit of $1,269,291.23 and $2,974,214.74 respectively into the Defendant's nominated bank account.
It should be observed that the full amount had, therefore, been received by the Defendant prior to the filing of the Summons that commenced these proceedings. There was no explanation for her failure to disclose the information in her affidavits earlier than she did.
Mr Flaherty submitted at par 1.17 of his supplementary written submissions:
"Secondly it is submitted that, given the failure of the defendant to make disclosure of such a significant payment in a timely fashion, inferences can and should be drawn as to the Defendant's credibility. What else has she failed to disclose? In such circumstances the Court is entitled to be bold."
Mr Flaherty also submitted at par 1.15 of his supplementary written submissions:
"The belated disclosure of by [sic] the Defendant of the receipt of this large sum raises a number of issues. Firstly it is clear that the submissions of the Plaintiff referred to above have to change. If not, and the Plaintiff's submissions (as they stand) were accepted, the Defendant would, as a result of the death of the Deceased receive [$7,533,968.97]."
I should note that the solicitors for the Plaintiff were not entirely unaware of the Defendant's receipt of the life insurance payment. I have had regard to a letter dated 23 May 2019 from Bell Lawyers (the solicitors for the Defendant) to Caldwell Martin Cox (the solicitors for the Plaintiff) which was annexure D to the Plaintiff's affidavit affirmed 20 June 2019.
[30]
Eligibility of Each Spouse to a Pension, Allowance or Benefit
There was no evidence that either the Plaintiff or the Defendant was in receipt of a pension, allowance, or benefit, from either a Government scheme or a superannuation fund.
Indeed, the agreed schedule of assets and liabilities (Ex SAL1) did not disclose that the deceased was the member of any superannuation fund.
[31]
Contributions to the Acquisition, Conservation and Improvement of the Deceased's Estate
I propose to separate the discussion of the contributions, respectively, of the Plaintiff and the Defendant to the deceased's estate from those contributions to the deceased's welfare. I do so only for convenience, and do not suggest that any primacy should be afforded to contributions to the deceased's estate.
Beginning with the contributions made by the Defendant, it will be apparent from the evidence above that the deceased acquired a number of properties throughout his marriage to the Defendant. The majority of these properties were held with the Defendant as joint tenants. Those properties (as found in Ex SAL3) were:
1. XX Elizabeth Drive, Vincentia, acquired in 1999;
2. XX Mistletoe St, Claremont Meadows, acquired in 2000;
3. XX Jody Place, St Clair, acquired at some point prior to 2001;
4. XX Severn Street, St Marys, acquired in 2001;
5. XX River Road, Emu Plains, acquired in 2001; and
6. XX Alec Avenue, Mermaid Waters, acquired in 2003.
The properties at Jody Place, St Clair and Emu Plains served, respectively, as the matrimonial home.
There was also evidence of a second property at Jody Place, St Clair, which had been purchased earlier by the Defendant and the deceased (but later sold). This property also served as the matrimonial home for a time.
The properties at Vincentia and Mermaid Waters served as holiday homes or, when not used for that purpose, were tenanted. There was also evidence from the Plaintiff that the Jody Place, St Clair property had been rented by her daughter since 2016. The rent was paid to the Plaintiff who passed it on to the deceased: Tcpt, 30 June 2020, p 59(20-42).
The property at XX Severn Street, St Marys was, from 2001, used as the factory premises for the Kookaburra Plumbing business.
It was unclear on the Defendant's evidence what, if any, use was made of the Claremont Meadows property.
In addition to the jointly held properties, the deceased acquired other properties in his sole name, or as tenants in common in equal shares with the Defendant, during their relationship. Those properties (as found in Ex SAL1) were:
1. YY Severn Street, St Marys, acquired in 1998; and
2. WW Severn Street, St Marys, acquired in 2007.
The property at YY Severn Street, St Marys was acquired by the deceased and the Defendant as tenants in common in equal shares. Whereas the property at WW Severn Street was acquired by the deceased in his sole name.
[32]
Contributions to the Deceased's Welfare and the Relationship
The process of determining such contributions, quintessentially, is not a mathematical exercise. They should be regarded as neither less valuable nor less important than other contributions.
Although there was not a great deal of specificity in the evidence as to the contributions made, I remember what Brereton J (as his Honour then was) (Basten JA and Hunt AJA agreeing) said in Kardos v Sarbutt (2006) 34 Fam LR 550 at 561 [36]; [2006] NSWCA 11 at [36], albeit in the context of the Property (Relationships) Act:
"Thirdly, in proceedings under s 20, the court is not required to undertake a reductionist process analogous to the taking of partnership accounts by examining every alleged 'contribution' of the kinds described in the section with a view to putting a monetary value on each in order to reach an accounting balance one way or the other, then to be eliminated by the requisite financial adjustment; rather, the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind: Davey v Lee (1990) 13 Fam LR 688; (1990) DFC 95-084 (McLelland J)."
Equally in an application for a distribution order, it would not, in my view, be appropriate to attempt to put a precise monetary value on the contributions made by each spouse to the deceased's welfare.
I have already referred to the evidence, limited though it is, as to the Defendant's contributions as a parent and a homemaker. She gave evidence that:
"During the 27 years when Brian and I lived together I undertook all the household duties. Brian did not even mow the lawn. I brought up our three daughters without any significant assistance or support from Brian other than financial support."
She also deposed at par 46 of her affidavit sworn 21 August 2019:
"I contributed non-financially as his wife, particularly by bringing up our daughters and undertaking household duties."
She was not challenged on that evidence during cross-examination.
In the case of the Defendant, it is clear that her non-financial contributions were significant throughout the marriage relationship. For the most part, those non-financial contributions ended once the two of them separated.
Even so, there was some evidence of continuing contribution even after this time. The Defendant continued to participate and maintain the family unit comprised of her, the deceased and their daughters. Undoubtedly, the continuation of that family dynamic would have been to the deceased's welfare.
[33]
Character and Conduct of Each Spouse and of Any Other Person
I have already referred to the conduct of the Plaintiff, the Defendant and the deceased's children above.
I am satisfied that each had a positive relationship with the deceased. This was not a case where, for example, there was a degree of estrangement between the deceased and a spouse or other family member.
To the extent that the character and conduct of any person reflects positively upon them, I have taken it into account as the contribution that she, respectively, made to the deceased's estate and welfare.
[34]
Financial Resources and Needs of Each Spouse
The Defendant did not give any evidence specifically going to her financial resources and needs. She did give evidence of her income from her employment at New South Wales Health. Albeit she clarified in cross-examination that the position is only part-time. Additionally, she gave evidence that three of the jointly held properties are tenanted, evidence that she confirmed in cross-examination. That is another income stream for the Defendant, although one the value of which was unclear on the evidence.
It is clear that she holds the property formerly held jointly with the deceased. That jointly held property has a total net value of $3,507,112. She has also received the death benefits of $4,243,505, to which reference has been made.
The Defendant gave evidence that one of the St Marys properties that forms part of the deceased's estate was purchased by the deceased and her in 1998 as tenants in common in equal shares: Affidavit, Gail Charlotte Palombo, 21 August 2019 at par 26. Presumably, although unclear on the evidence, she retains the one half share in the property (which, based on Ex SAL1, would be worth $200,000).
There was also evidence, annexed to the Defendant's affidavit sworn 21 August 2019, that she held one of the two ordinary shares in Kookaburra Sales & Services Pty Ltd (the other being held by the deceased). However, as discussed above, the value of the company was not disclosed on the evidence. Whatever its value, the Defendant is entitled to the shares.
Without evidence, it is difficult to form any view of the Defendant's financial needs. It provides a basis for the Court to infer that she has sufficient income and resources to meet her needs. Taken with the properties she now holds, or will come to solely own, by survivorship, and the amount she received from life insurance, it is easier to draw this inference.
Conversely, the Plaintiff did, albeit belatedly, affirm an affidavit going to her financial circumstances.
She receives gross income from her position as an area manager ($51,202 per annum), a tax-free travel allowance ($185 per week) and a net income from her investment property ($816 per annum).
Her assets include a property at Sanctuary Point ($400,000 - $500,000), a motor vehicle ($29,000) and superannuation ($173,400). Her only liability is a loan secured by a mortgage against her Sanctuary Point property ($259,140).
[35]
Commitments of Each Spouse
Neither spouse has any commitments to support any other person.
As the Plaintiff acknowledged, her three children are now adults and are not dependent upon her. She did not allude to any other person being dependent upon her.
Similarly, there was no evidence that the Defendant was liable to support any other person. All three of the deceased and her children are now adults and there is nothing in the evidence to suggest that they remain dependent upon the Defendant (or, indeed, the deceased).
[36]
If Either Spouse is Cohabiting with Another Person - The Financial Circumstances of the Other Person
Neither the Plaintiff nor the Defendant is cohabiting with any other person.
[37]
Any Other Person Liable to Support Either Spouse
On the evidence before the Court, it does not appear that there is any other person liable to support either spouse.
[38]
Effect of Any Proposed Order on the Earning Capacity of Each Spouse
It is unlikely that a distribution order would have any significant impact upon the earning capacity of the Plaintiff or of the Defendant. At its highest, it may slightly improve the earning capacity of each to the extent that a distribution allows each of them to pay down her respective debts.
[39]
Submissions regarding what distribution is "just and equitable"
Mr Flaherty, in his written outline, addressed what was to be understood by the use of the phrase "just and equitable" in s 126 of the Act. However, he did so under the heading "The Defendant's Cross - claim", apparently labouring under the apprehension that s 126 was not relevant to the Plaintiff's claim.
Mr Flaherty began with the observation that the phrase "in any way it considers just and equitable" invokes an exercise of the Court's discretion. He likened that discretion to the one found in s 79 of the Family Law Act (and, I observe, similarly in s 90SM of the Family Law Act).
He acknowledged that s 126 of the Act does not set out a list of factors to be taken into account. However, he submitted that, reading the section alongside other provisions to be found in Pt 4.2, there was a presumption of equality of division amongst the spouses. He submitted at par 3.6 of his written outline:
"Even so it is submitted that in order to make an order different from that contemplated by s124 and/or s125 (1) (c) and/or s125 (2) of the SA (equal division between spouses) there must be some basis for so doing in order to make any unequal division 'just and equitable'."
Mr Flaherty submitted that the Defendant had not led any evidence providing a basis for an unequal division of the deceased's estate in her favour. To this end he pointed to the lack of evidence adduced by the Defendant going to her financial circumstances. He concluded at par 3.9 of his written outline:
"This is not the Family Court of Australia. The Defendant cannot use these proceedings to argue those matters which may have been available to her in the Family Court any time after separating from the Deceased in 2010 and whilst he was still alive."
I am unable to accept either of these submissions as they fly in the face of s 126(4) which specifically states that if the Court considers it just and equitable to do so, it may allocate the whole of the property to one of the spouses to the exclusion of the other or others.
In his oral submissions, Mr Flaherty submitted that the discretion in s 126 was unfettered to the extent that the Court was required to take into account all of the circumstances and not just the period of each relationship: Tpct, 1 July 2020, p 178(14-22).
[40]
Determination
What is written below should be read as a continuation of what has been written above. In addition, I have had regard to all of the factual, and other, matters, so far as they are relevant, to my conclusions set out below. Merely because specific reference has not been made to facts previously identified, should not lead to the conclusion that they have not been fully considered. It is not necessary to repeat the factual matters which have led me to reach the conclusion set out below.
Importantly, I have considered the duration of each relationship, the length of the deceased's separation from the Defendant, all the contributions, both financial and non-financial of each of the parties to the acquisition, conservation and improvement of the assets of the deceased, as well as to the welfare of the deceased during cohabitation (respectively) and after separation (in the case of the Defendant). This has led me to weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of her respective cohabitation with the deceased. Naturally, in broad terms, I have analysed the nature, form, characteristics and origin of the property currently comprising the estate of the deceased and the existing property interests of each of the parties in the deceased's property and otherwise.
I have also considered the financial and material circumstances of each of them (so far as they are known) as well as the other factors to which I have referred above. They are of similar age and neither appear to have any health issues. The Defendant is still involved in the lives of the children and makes some contribution in that regard. The Plaintiff does not have to make any contribution to a child of the relationship. Neither is cohabiting with any other person nor has any responsibility to support any other person.
Remembering that the determination of what is just and equitable is not a mathematical calculation, and having considered the range of considerations, I am of the view that a distribution order which provides the Plaintiff with the St Clair property, unencumbered, and a lump sum of $500,000, would satisfy the requirement imposed on the Court in relation to the distribution order made. Such a distribution order would ensure that she is secure in accommodation, that she would have enough to repay the debt secured by the mortgage on her Sanctuary Point property, and still leave her with a lump sum of about $250,000 for exigencies of life.
[41]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 11 September 2020
In the event that there is more than one spouse, both the Plaintiff and the Defendant have, effectively, applied for a distribution order within the meaning of that term in the Succession Act 2006 (NSW) (the Act). Thus, each of the parties seeks not only declaratory orders but also other relief consequent upon the making of those orders.
Declaratory relief is addressed in s 75 of the Supreme Court Act 1970 (NSW). It provides a wide power to the Court to make a declaration.
As has recently been written by the Full Court of the Federal Court (Jagot, Kerr and Anderson JJ) in Clarence City Council v Commonwealth of Australia [2020] FCAFC 134 at [58], [67]:
"Broadly defined, a declaratory judgment is 'a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs': Lord Woolf and Woolf J, Zamir & Woolf's The Declaratory Judgment (Sweet & Maxwell, 4th ed, 2011) (Zamir & Woolf's The Declaratory Judgment) p 1. Such relief 'conclusively' establishes the situation it declares to exist between the parties: Parramatta City Council v Sandell [1973] 1 NSWLR 151 at 167 per Hutley JA.
…
An applicant for declaratory relief must also have standing (or locus standi), which is the metaphor adopted to describe the interest required to obtain relief: Allan v Transurban City Link Ltd [2001] HCA 58; 208 CLR 167 at [15] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ. Furthermore, even if a party has standing, there remains the residual question as to whether the Court ought award declaratory relief in the circumstances of the particular case."
As written, a declaratory order is a discretionary remedy. Before a declaration is made, the Court, ordinarily, needs to be satisfied of the factual, and legal, basis for the declaration sought. The majority of the High Court in Bass v Permanent Trustee Company Limited (1999) 198 CLR 334 at 359 [56]; [1999] HCA 9 at [56], stated:
"It is contrary to the judicial process and no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case."
In Crawford v Davidson-Crawford [2019] NSWSC 728, Ward CJ in Eq wrote, at [32]:
"In order to obtain a declaration, a party must satisfy the requirements articulated in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582; [1992] HCA 10 per Mason CJ, Dawson, Toohey and Gaudron JJ:, namely that: there be a controversy between the parties for determination and not abstract or hypothetical questions; the person seeking relief must have a 'real interest'; and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'. Their Honours also stated (at 583) that 'where a person's rights or liabilities will or might be affected by the exercise or non-exercise of a statutory power following upon an inquiry, that person is prima facie entitled to be accord natural justice in the conduct of the inquiry'."
The Court should, usually, be satisfied that there is a proper contradictor, being "someone presently existing who has a true interest to oppose the declaration sought": Russian Commercial and Industrial Bank v British Bank for Foreign Trade, Limited [1921] 2 AC 438 at 448 (Lord Dunedin), quoted with approval by Gibbs J (as his Honour then was) (McTiernan, Walsh, Stephen and Mason JJ agreeing on this issue) in Forster v Jododex Australia Pty Limited (1972) 127 CLR 421 at 437-438; [1972] HCA 61; P W Young, Declaratory Orders (2nd ed, 1984, Butterworths) at 15-16 [210].
(In Zetting v Müller [2017] NSWSC 659, at [13], Parker J pointed out that there was "room for debate about whether [the requirement for a proper contradictor] is an essential requirement before a declaration can be made, or is merely a matter of discretion: Meagher, Gummow and Lehane's Equity Doctrines and Remedies at [19-115] to [19-125]", and that Zetting v Müller was referred to by Bell P, with apparent approval, in Church of the Foursquare Gospel (Australia) Ltd v New Hope Church Swansea Inc [2019] NSWSC 519 at [16].)
It is unnecessary to enter the debate, because, in this case, there is a proper contradictor in respect of the declarations sought by each party.
If the relationship of the Plaintiff and the deceased is established, the terms of the declaration sought by her will fit, satisfactorily, with the matters that are affecting the dispute between the parties: Challenge Bank Ltd v Mailman (1993) 17 BPR 33,679 at 33,689-33,690; [1993] NSWCA 54 at 11 (Mahoney JA); Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 3) [2020] NSWSC 740 at [28] (Cavanagh J). Such a declaration will constitute a conclusive, or final, decision, based on a concrete and established situation and will quell the controversy between the parties: Bass v Permanent Trustee Company Limited at [45]-[49] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
In addition, the declaration sought will be appropriate and it will have practical utility: see, for example, Neeta (Epping) Pty Limited v Phillips (1974) 131 CLR 286 at 307 (Barwick CJ and Jacobs J); [1974] HCA 18. As Kirby P (as his Honour then was) wrote in Challenge Bank Ltd v Mailman at 33,686; 7-8:
"The court should not hold back from resolving the contest between the parties which has been fully argued ... I am inclined to consider that there are good practical reasons for giving effect to that resolution in the form of an appropriately worded declaration. Courts, in cases of this kind, should assist parties and not frustrate them with procedural excuses."
There is evidence of the unsuccessful searches made to locate a Will of the deceased: Affidavit, Gail Charlotte Palombo, 21 August 2019 at par 49; Affidavit, Gail Charlotte Palombo, 25 June 2020 at pars 2-3. There is no controversy about the deceased having died intestate as the Plaintiff, the Defendant, and the deceased's children, all agree that he did. Thus, because there is no real question involved, and the declaratory relief must be directed to the determination of a legal controversy, any grant of administration will be upon the basis that the deceased died intestate, and there will be no need for a separate declaration.
There has been no grant of administration of the deceased's estate as the parties are in dispute about the identity of the person, or entity, to whom, or to which, it ought to be granted. The Court has power to "grant" administration on intestacy, under s 63 of the Probate and Administration Act 1898 (NSW). This section identifies the persons, not being minors, to whom administration may be granted, including "(a) the spouse of the deceased". However, s 63 continues:
… if there be no such person or no such person within the jurisdiction:
(i) who is, of the opinion of the Court, fit to be so trusted, or
(ii) who, upon being required in accordance with the rules, or as the Court may direct, to apply for administration, complies with the requirement or direction,
then to:
(d) any person, whether a creditor or not of the deceased, that the Court thinks fit.
Section 74 of the Probate and Administration Act provides that the Court may, in any case where a person dies intestate, and if it thinks it necessary or convenient, appoint some person to be the administrator of the estate of the deceased, or of any part thereof, upon the appointed person giving such security (if any) as the Court directs, and every such administration may be limited as the Court thinks fit.
The guiding principles that apply to such a grant are clear. When the Court is considering whether to grant administration of an estate, the appointment must be one which advances the real object of administration, that is, the due and proper administration of the estate in the interests of the persons beneficially entitled thereto: In the Goods of William Loveday [1900] P 154 at 156 (Jeune P); Bourdales v Carroll; Estate of Diane Holbrook (2007) 1 ASTLR 202 at 203 [4]; [2007] NSWSC 1057 at [4] (Young CJ in Eq); Alan Yazbek v Ghosn Yazbek (No 2) [2012] NSWSC 783 at [19] (Slattery J).
The Court may grant administration of any estate to the NSW Trustee and Guardian: see, for example, Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520 at [153]-[157] (Slattery J). Alternatively, s 23 of the NSW Trustee and Guardian Act 2009 (NSW), provides:
(1) The NSW Trustee is, on application, entitled as of right to a grant of administration of the estate of a person who died intestate leaving property in New South Wales if -
(a) letters of administration of the deceased person's estate have not been granted, or
(b) letters of administration of the estate granted to a person other than the NSW Trustee are revoked, or
(c) a person granted letters of administration of the estate dies without completing administration of the estate.
(2) The NSW Trustee is not required to provide, and the Supreme Court may not require the provision of, any citation or consent before administration of the estate of the deceased person is granted.
(3) However, if the NSW Trustee and any other person severally apply for the administration of the deceased person's estate, the Supreme Court may grant administration of the estate to the NSW Trustee or other person, as the Court thinks fit.
In a pre-trial directions hearing, conducted on 30 March 2020, I suggested that if the Plaintiff were successful, the parties should consider the appointment of an independent administrator, as it was clear a grant to one, or both, of them would be unlikely to suit either, and could lead to further disputes about the administration of the estate, which disputes would not be in their best interests. It seemed that there were likely to be strongly competing contentions between the parties as to the way the estate of the deceased should be administered, with the result that it might be cheaper, in the long run, to have an independent person administer the estate.
At the commencement of the hearing, when I raised the topic again, apparently, there had been a misunderstanding between the legal representatives prior to the hearing about this aspect. However, on the second day of the hearing, the parties agreed that Mr D Browne, a solicitor who is an accredited specialist in wills and estates, should be appointed if the Court found that there was more than one spouse and thought it necessary, or convenient, to appoint an independent administrator. Mr Browne has provided his written consent to being appointed: Ex SAL2.
On the third day of the hearing, during the course of submissions, both counsel requested that the Court should allow the parties the opportunity to consider whether it would be necessary to have an independent person appointed, if a distribution order were made, and when the nature of that order is known. In the circumstances, I shall abide this request.
Finally, by way of introduction, it is to be noted that neither party, nor any of the children of the deceased, has made a claim for a family provision order pursuant to s 59 of the Act.
As is clear, in this case, the application to re-open was made shortly after the hearing was concluded, but before the delivery of judgment.
Because it appeared that the Plaintiff was unlikely to oppose the application, as the evidence would not cause embarrassment, or prejudice, to her, my Associate, at my request, later on 6 July 2020, sent an email to both counsel, which was in the following terms:
"This email is sent on behalf of his Honour
Dear Mr Tregenza,
His Honour has read your email. Please prepare any affidavit upon which it is intended to rely and serve it upon the Plaintiff's legal representatives as soon as possible.
If there is no objection, the original affidavit can be electronically filed and the original made available to his Honour (to save time) and his Honour will include it as part of the affidavits read in the proceedings.
If there is any objection by the Plaintiff, a notice of motion and an affidavit in support will be required."
On 16 July 2020, following another email sent, at my request, to counsel, asking what was happening, an affidavit of the Defendant, sworn 13 July 2020, was received. This was followed by an email from counsel for the Plaintiff which was in the following terms:
"Dear Associate,
I note that today the Defendant has filed (electronically) an affidavit of the Defendant sworn 13 July 20 and seeks leave to re - open her case to enable that affidavit to be read in the proceedings.
Given the content of that affidavit, my instructions are not to oppose that course but to seek leave to make further submissions regarding its content and its effect on the overall proceedings.
Could you please advise as to whether His Honour is prepared to allow the affidavit to be read and for the parties to make further submissions?"
In the circumstances, I was satisfied that there was no opposition to the Defendant's application; there was no contest of fact upon the additional evidence that was sought to be relied upon; the evidence relied upon could affect the result of the case; and that it was in the interests of justice for the Court to exercise its discretion to permit the Defendant to re-open her case to allow the affidavit to be read. The request made by Mr Flaherty seemed appropriate in the event that leave was granted.
On 17 July 2020, I made the following orders, notations, and directions, in Chambers, which were then communicated to the legal representatives:
"1. Grants leave to the Defendant to re-open her case to read an affidavit of Gail Charlotte Palombo sworn 13 July 2020.
2. Notes that the Plaintiff consents to the affidavit being read and does not wish to cross-examine the Defendant on the contents of the affidavit.
3. Notes that the affidavit forms part of the Defendant's evidence in the proceedings.
4. Directs that each party deliver to the Chambers of Hallen J, in hard and soft copy, any further written submissions, by 4:00 p.m. on Monday, 27 July 2020."
I have read the Defendant's affidavit and the supplementary submissions provided by counsel. I shall refer to these later in these reasons.
Pausing there, I add some formal matters of fact that I consider are relevant under the Act, which are undisputed, or which I am satisfied have been established by the evidence:
1. All of the property, owned solely by the deceased, at the date of his death, forms part of the intestate estate of the deceased.
2. The Defendant is a spouse of the deceased as she was married to him immediately before his death and as there had been no divorce order made to dissolve their marriage.
3. The Plaintiff and the deceased were not married to one another or related by family.
4. There was no relationship between the deceased and the Plaintiff that was a registered relationship, or an interstate registered relationship, within the meaning of the Relationships Register Act 2010 (NSW).
5. Whatever the nature of the relationship between the Plaintiff and the deceased, it had not resulted in the birth of a child.
6. There was no evidence that the separation of the Plaintiff and the deceased was other than involuntary, having been caused by the death of the deceased.
7. There is no written distribution agreement reached between the Plaintiff and the Defendant in relation to the estate of the deceased.
8. There is an intestacy because the deceased did not leave a Will, rather than one where he left a Will that did not effectively dispose of his property.
Whilst I accept that the Plaintiff and the Court should know the value of the shares to which I shall refer, the undisputed evidence revealed that each company had been registered before the relationship of the Plaintiff and the deceased commenced, and, as will be read, that the Plaintiff had made virtually no contribution, directly, or indirectly, to the business that was conducted by the companies. Her contribution, was limited to assisting the deceased with painting the floor of a factory premises used by the business and cleaning the premises from time to time. In addition, on occasions, she would accompany the deceased on plumbing jobs when he was called at night: Affidavit, Christopher Palombo, 15 June 2020 at par 16.
Furthermore, whilst it was not entirely clear that Kookaburra Plumbing and Electrical Pty Ltd was a trustee company, there was some evidence to suggest that it was. There was an unsigned Trust Deed and an income tax return for the year ending 30 June 2016, relied upon. (Whilst BAS statements that were also tendered (Ex D2), show the existence of the trust, they do not show that Kookaburra Plumbing and Electrical Pty Ltd was a trustee.)
In addition, there was evidence that there was a liability of $650,000, which was, in fact, a debt of the company included as a debt of the estate. Ultimately, the amount of that debt has been ignored in calculating the liabilities of the estate of the deceased.
It was not until the third day of the hearing that the Court was provided with an agreed Schedule identifying the nature and value of the property owned by the deceased at the date of the schedule of assets and liabilities. That Schedule was marked as Ex SAL1 and was in the following terms (omitting a reference to cents which will explain any apparent mathematical errors and including the company debt of $650,000):
ASSETS
Description Estimated value
REAL ESTATE
(a) Property known as XX Naval Parade, Erowal Bay NSW being the whole of the land contained in Certificate of Title Folio Identifier YY $ 620,000
(b) Property known as XX Arundel Park Drive, St Clair being the whole of the land contained in Certificate of Title Folio Identifier YY $ 720,000
(c) Property known as XX Christie Street, St Marys being the whole of the land contained in Certificate of Title Folio Identifier YY $1,150,000
(d) Property known as XX Walmer Avenue, Sanctuary Point NSW being the whole of the land contained in Certificate of Title Folio Identifier YY $ 560,000
(e) Property known as XX Severn Street, St Marys NSW being the whole of the land contained in Certificate of Title Folio Identifier YY $ 400,000
(f) One half share of the property known as ZZ Severn Street, St Marys NSW being the whole of the property contained in Certificate of Title Folio Identifier WW $ 200,000
BANK ACCOUNTS
(a) Westpac - Savings account - xxx472 $ 80,078
(b) National Australia Bank - Classic account - xxx970 $ 108,300
(c) National Australia Bank - iSaver account - xxx543 $ 517
MOTOR VEHICLES
(a) Motor vehicles, motor bikes $ 380,000
Real Estate
(a) Property known as XX River Road, Emu Plains being the whole of the land contained in Certificate of Title Folio Identifier YY Gail Charlotte Palombo
(b) Property known as XX Jody Place, St Clair NSW being the whole of the land contained in Certificate of Title Folio Identifier YY Gail Charlotte Palombo
(c) Property known as XX Elizabeth Drive, Vincentia being the whole of the land contained in Certificate of Title Folio Identifier YY Gail Charlotte Palombo
(d) Property known as XX Alec Avenue, Mermaid Waters QLD being the whole of the land contained in Certificate of Title Folio Identifier Gail Charlotte Palombo
(e) Property known as XX Mistletoe Street, Claremont Meadows being the whole of the land contained in Certificate of Title Folio Identifier YY Gail Charlotte Palombo
(f) Property known as VV Severn St, St Marys being the whole of the land contained in Certificate of Title Folio Identifier UU Gail Charlotte Palombo
Agreed Total $4,412,820
Bank Accounts
(a) National Australia Bank - Account No xxx9970 Gail Charlotte Palombo $115,352
Agreed Total $4,528,172
Liabilities
(a) National Australia Bank - Account No xxx6697 Mortgage - $1,021,060
Net Value $3,507,112
One half of net value of jointly held property is $1,753,556 (which the Defendant receives by survivorship)
Ultimately, whilst there were some minor disputes of fact, I am satisfied that each of the witnesses was giving evidence to the best of her, and his, ability. To the credit of each counsel, neither suggested the contrary and there was no submission made that one, or other, of the witnesses should be disbelieved.
Section 102 of the Act provides that "[a]n intestate is a person who dies and either does not leave a will or leaves a will but does not dispose effectively by will of all or part of his or her property".
Section 103 provides that "[a] reference in this Chapter to an entitlement to the whole of the intestate estate is a reference to so much of the estate as remains after payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate". The expression is used in a number of sections in the Chapter including, so far as is relevant to this case, ss 101, 111, 112, 122, and 123.
Section 104 of the Act defines spouse of an intestate person to mean a person:
(a) who was married to the intestate immediately before the intestate's death, or
(b) who was a party to a domestic partnership with the intestate immediately before the intestate's death.
It follows that a person may be regarded as a spouse for the purposes of the rules of intestacy in either of the two ways set out in the section. Relevantly, where the deceased and the deceased's spouse are separated but still married immediately before the deceased's death, the spouse comes within the definition in paragraph (a).
Section 105 of the Act provides that:
A domestic partnership is a relationship between the intestate and another person that is a registered relationship, or interstate registered relationship, within the meaning of the Relationships Register Act 2010, or a de facto relationship that:
(a) has been in existence for a continuous period of 2 years, or
(b) has resulted in the birth of a child.
Both the existence of the domestic partnership between the applicant and the deceased, and that it was in existence immediately before the deceased's death, must be established.
In Sadiq v NSW Trustee & Guardian [2015] NSWSC 716, I concluded, at [2]-[4] and at [187]-[190], and Emmett AJA, hearing a notice of motion ancillary to the appeal, in Sadiq v NSW Trustee and Guardian [2016] NSWCA 59 at [3]-[4], accepted, that ss 104 and 105 require the existence of a de facto relationship for a continuous period of two years occurring immediately before the intestate's death because, only then would one be able to establish that the applicant was a party to a domestic partnership with the intestate "immediately before the intestate's death".
However, in Brownell v Robinson [2017] TASFC 11, Estcourt J (Pearce J and Marshall AJ agreeing), at [95], considered that the judgments in Sadiq v NSW Trustee and Guardian on this point were "clearly wrong". His Honour considered that there could be a de facto relationship where the relationship had existed at any time for a continuous period of two years even though it had been interrupted, and then resumed, provided it was in existence again immediately before the intestate's death.
In Estate of the late Shirley Joan Violet Gardner; Bernengo v Leaney [2019] NSWSC 1324, Bell P, at [18], stated that for the plaintiff to be a spouse of the deceased "… it is necessary to determine whether he was party to a domestic partnership with her immediately before her death, and this in turn requires him to establish that he was in a de facto relationship with the Deceased for a continuous period of at least two years prior to that time. This in turn depends upon him establishing that he and the Deceased had a 'relationship as a couple living together' in the relevant period".
A similar view appears to have been taken by Lindsay J in Re Estate Miruzzi, deceased [2018] NSWSC 1899 at [5]. His Honour said, albeit in obiter, of the task facing the second defendant in that case:
"… unless the second defendant (a former wife of the deceased) can establish (within the meaning of sections 104-105 of the Succession Act 2006, read with section 21C of the Interpretation Act 1987 (NSW) that, notwithstanding dissolution of her marriage to the deceased, she was in a de facto relationship with him for a continuous period of two years immediately before his death, as a consequence of which (pursuant to section 111 of the Succession Act) she is entitled to the whole of his estate."
To a similar effect, Slattery J said in Wilson v Porada; The Estate of Peter Wolfgang Porada, late of Pericoe [2017] NSWSC 818 at [4]: "But if Ms Wilson is able to establish that she was the deceased's de facto spouse for a period of two years continuously up until the time of his death then by the combined operation of Succession Act, ss 104, 105 and 111 she would be entitled to the whole of his estate".
With the greatest respect, I am unpersuaded that there is any error in the approach taken by me in Sadiq v NSW Trustee & Guardian. I have earlier referred to s 104(b) of the Act. However, it is unnecessary to determine whether the construction of the section favours one view, or the other, as, in this case, there was no real dispute that if the Plaintiff was party to a domestic partnership with the deceased immediately before his death, she had been in a de facto relationship with him for a continuous period of at least two years prior to that time.
There is no definition of "de facto relationship" in the Act. Nor is there a precise test identified in the Act for determining whether such a relationship exists. However, the phrase is defined in s 21C(2) of the Interpretation Act 1987 (NSW) which provides:
Meaning of 'de facto relationship'
For the purposes of any Act or instrument, a person is in a de facto relationship with another person if -
(a) they have a relationship as a couple living together, and
(b) they are not married to one another or related by family.
A de facto relationship can exist even if one of the persons is legally married to someone else or in a registered relationship or interstate registered relationship with someone else.
Importantly, the definition does not require an exclusive relationship and it can be established, even where one, or both, of the parties are legally married to someone else, or in a registered relationship, or interstate registered relationship, with someone else.
Section 21C avoids any reference to "husband and wife", which terminology could lead to an inappropriate search for analogies to the legal relationship of marriage.
The Oxford English Dictionary defines "couple" as a union of two. The word "couple" comes from the Latin word "copula" which is a bond, tie, or other connecting item.
Section 21C(3) of the Interpretation Act, provides:
Determination of 'relationship as a couple'
In determining whether 2 persons have a relationship as a couple for the purposes of subsection (2), all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case -
(a) the duration of the relationship,
(b) the nature and extent of their common residence,
(c) whether a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
(g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.
No particular finding in relation to any of those matters is necessary in determining whether 2 persons have a relationship as a couple.
It can be seen that the nine criteria referred to may be grouped into "private" ((c), (d), (e) and (f)) and "public" ((a), (b), (g), (h) and (i)) headings. None of the matters listed is of decisive significance or a mandatory relevant consideration. The criteria are inclusive but not exhaustive. They all, however, suggest a continuing course of conduct and behaviour, not an event at a fixed point of time: Bezjak v Wyatt [2018] NSWSC 199 at [48].
No matter how close the involvement in each other's emotional lives, a conclusion that two persons are a couple living together involves consideration of the circumstances in which they are living, including the places at which they are living. The test is not primarily locational, but it has a locational element: Dion v Rieser [2010] NSWSC 50 at [14] (Bryson AJ).
These criteria are no more than reminders, or indicators, of matters that might possibly be relevant in deciding the question whether the parties lived in a de facto relationship: Piras v Egan [2008] NSWCA 59 at [146] (Campbell JA, Giles and Tobias JJA agreeing). The last paragraph of the section makes clear that they are not to be weighed against each other and given individual weightings of importance. Ultimately, the criteria are used to assist in determining whether the parties were in "a relationship as a couple". They should not overshadow that central concept. In other words, whether the Plaintiff and the deceased were a couple living together, and whether the relationship had been in existence for a continuous period of two years, is to be addressed by considering the facts in the light of the statutory test which is intended to be flexible enough to recognise the existence of the diversity of relationships within modern society. For this reason, each case must be assessed on its own facts and circumstances.
Furthermore, the consideration of the factors does not relieve the Court of its obligation to consider "all the circumstances of the relationship".
One might argue that the inclusion of the term "living together" would require physical cohabitation for at least two years. Section 21C(3) makes it clear that a common residence is not the only element of the relationship that the Court must consider, and is not necessarily an essential element to prove. To recognise that acknowledges that, sometimes, couples choose to conduct a shared life without living together. Whilst the Queensland Court of Appeal has recognised that it will be an "exceptional" case where persons who have not lived in a common residence can be considered to be "a couple living together": FO v HAF [2007] 2 Qd R 138 at 149-150 [26]; [2006] QCA 555 at [26] (Keane JA, McMurdo P and White J agreeing); KQ v HAE [2007] 2 Qd R 32 at 38 [20]; [2006] QCA 489 at [20] (The Court), there may well be circumstances where such persons still satisfy the statutory test: Yesilhat v Calokerinos [2015] NSWSC 1028 at [34]-[41] (White J).
There is, in fact, nothing in s 21C of the Interpretation Act that requires a couple who are living together to share the same household full time, or to live in one house. The concept of "living together" does not import any concept of proportion of time. Section 21C(3)(c) assumes a common residence, but does not assume any length of time. Rather, it invites an examination of its nature and duration. Furthermore, because one, or both, members of the couple may also be legally married, or in another de facto relationship at the same time as they are in the subject relationship, it is feasible that the subject relationship might involve the parties living together for only part of the relationship: Moby v Schulter (2010) FLC ¶93-447 at 85,063 [140]-[141]; [2010] FamCA 748 at [140]-[141] (Mushin J). What is important is the nature of the relationship (as a couple) rather than how it manifests itself in quantities of joint time.
As was pointed out in In the matter of the Estate of Peter Douglas Sigg (deceased) [2009] VSC 47 at [7] by Pagone J (as his Honour then was):
"In the case of Dow v Hoskins, Cummins J said that the determination of whether a person was living with the deceased should not be construed on narrow, formal, pedantic or merely geographical criteria, but should be considered taking into account the human reality of the personal, emotional and cultural complex. In that case his Honour took the view that he should approach the matter in that broader context. I agree with those observations and would add that it would be wrong to assume that the test of whether people are living in a genuine domestic relationship is to be judged against a model of a couple living together full-time, sharing fully domestic, financial and other responsibilities. That would place people claiming under these provisions at the very disadvantage which the provision is designed to remove. That would be so because people who are legally married live in married relationships in circumstances which vary dramatically from one couple to another, and it would be quite wrong to require that a couple seeking to invoke the provisions of s 51 should be judged by reference to a static model which may not bear a sufficient relationship to the reality of life and the diversity of arrangements existing between legally married couples." (citations omitted)
As was also written by Bell P in Estate of the late Shirley Joan Violet Gardner; Bernengo v Leaney at [41]:
"In the present case, of course, the concept of 'living together' is to be understood in the context of the extended phrase 'living together as a couple'. The expression 'as a couple' adds an important element to the notion of simply 'living together'."
The circumstances listed in s 21C(3) of the Interpretation Act do not state what has been described as the "essence" of a de facto relationship, which is to be found in the phrase "as a couple". Thus, once the physical, or factual, aspects, of the relationship have been examined, whether a mental ingredient also existed should be considered. That ingredient involves some commitment, by each of the parties, to their relationship. It need not necessarily be a commitment intended to last forever, or indefinitely. Nor need it be a commitment to a long-term relationship. But it should, at least, be a mutual commitment for the foreseeable future. The search is for such a relationship, as it existed at the date of death, and which had manifested such characteristics for at least two years prior thereto. If two people do not "live together as a couple" they do not satisfy the definition of being in a de facto relationship, regardless of what might be the situation concerning the various matters listed.
As Barrett J (as his Honour then was) wrote in Petersen v Gregory; Estate Glen Alfred Petersen [2007] NSWSC 8 at [11], when considering the phrase living "as a couple":
"The central concept is one of personal commitment that is mutually acknowledged and of an emotional kind transcending the mere fact of the shared residential setting. It is that which causes two persons residing under the same roof to be living 'together as a couple'."
In Piras v Egan, Campbell JA wrote at [146] that:
"It should be recalled that the list of 'circumstances' in section 4(2) [of the Property (Relationships) Act 1984 (NSW)] are reminders of matters that possibly might be relevant in deciding whether two people are in a de facto relationship, but do not state its essence. The essence is to be found in the definition in section 4(1) [of the Property (Relationships) Act 1984 (NSW)]. If two people do not 'live together as a couple' they do not satisfy the definition of being in a de facto relationship, regardless of what might be the situation concerning the various 'circumstances' listed in section 4(2)." (emphasis in original)
In Estate Pamplin; Irwin v Pamplin [2017] NSWSC 1477, Lindsay J observed at [33]:
"The expression 'living together', no less than the rest of section 21C(2)(a), must be read in context. It suggests a degree of proximity or commitment, of one sort or another, which points towards the existence of 'a relationship as a couple' in the nature of a marriage-like, family relationship: a 'marriage' relationship, a union between two people involving a merger of lives, de facto not de jure." (emphasis in original)
A de facto relationship can, and should, be distinguished from the relationship of two people, who live apart, but who have a sexual relationship, and who sleep over at one another's house; and also from the relationship of two people, who share a house, but who do not have a romantic commitment to each other and who have other sexual partners. The fact that one provides the other, on occasions, with financial, or other, assistance, such as accommodation, to alleviate hardship does not mean that they are in a de facto relationship. In this way, a de facto relationship is different from friendship, or courtship, which has not matured into the commitment where there is a merging of lives so that there is a mutual commitment to a shared life. It is also different from simple companionship.
In s 21C(3)(a) of the Interpretation Act, "the relationship" referred to cannot mean "the de facto relationship". As has been written by Campbell J (as his Honour then was) in Sullman v Sullman [2002] NSWSC 169 at [194], although he was speaking of s 4(2)(a) of the Property (Relationships) Act 1984 (NSW):
"The structure of section 4(2) is that one is required to take into account such of the matters listed in paragraphs (a) to (i) inclusive as might be relevant in the particular case, for the purpose of determining whether a de facto relationship exists. If 'the duration of the relationship' is a factor to be taken into account in determining whether a de facto relationship exists, that means one must be able to tell what is 'the duration of the relationship' before one has decided whether or not there is a de facto relationship. Thus 'the relationship' in section 4(2)(a) must have a different meaning to 'the de facto relationship'. It seems to me that it involves a looser notion, under which the Court should take into account the duration of what is asserted to be the relationship, though also taking into account how the other factors listed in paragraphs (b) to (i) of section 4(2) might have changed during the course of that asserted duration of relationship." (emphasis in original)
Thus, the determination of the existence of a de facto relationship is essentially impressionistic. Such a relationship only exists because of the factual circumstances of the parties, unlike marriage, where there is a legal status immediately created at the time of the public ceremony and registration. Ultimately, it is the parties, by their conduct, who define the nature of their relationship. Yet, the ultimate decision as to whether there was a de facto relationship is a decision for the court and not for the surviving party or the witnesses. Thus, her or his perception as to the nature of the relationship, whilst relevant, cannot be determinative.
The Court, whilst keeping the statutory definition firmly in mind at all times, is often required to assess multiple pieces of circumstantial evidence. If there are sufficient pieces of evidence, when viewed cumulatively, and with common sense and proper reasoning, which satisfy the finder of fact that the relationship is a de facto relationship then the statutory test is met: Scragg v Scott [2006] NZFLR 1076 at 1095 [64] (Gendall and Ellen France JJ). Ultimately, the conclusion as to the existence, or otherwise, of such a relationship will turn on an evaluative assessment of matters of objective fact.
In Ingamells v Western Australian Trustees Ltd (Supreme Court (WA), 5 March 1993, unrep) at 5, the Full Court (Malcolm CJ, Rowland and Ipp JJ) quoted, with apparent approval, the following passage from the judgment of Fitzgerald J in Lynam v Director General of Social Security (1983) 52 ALR 128 at 131:
"Financial arrangements cannot be taken in isolation and considered of particular importance in determining the nature of relationship. Their materiality, like each of the other elements of the relationship, stems from the impact which they have as part of an overall situation. Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test."
Although those cases were decided many years ago (as evidenced by the reference to "the opposite sex" in the passage quoted), the general principle stated applies equally now as it did then.
Other cases make it clear that the term "de facto relationship" constitutes a single composite expression of a comprehensive notion or concept. It must be approached by considering the expression as a whole and not in several parts: Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677 at 685 (Kearney J); Light v Anderson (Court of Appeal (NSW), Handley JA, 4 August 1992, unrep) at 4; Bar-Mordecai v Hillston [2004] NSWCA 65 at [86], [125] (The Court); Hayes v Marquis [2008] NSWCA 10 at [73]-[74] (McColl JA).
It can be seen from the above, that the concept of a de facto relationship is complex and diverse. The court should consider the way in which the parties themselves conducted their relationship. Because it is "a domestic relationship" one would expect there to be "activities of running a household or shared households. That is, something must be seen to be related to domesticity which refers to home conditions and arrangements. For example, it could be indicated by people coming and going as if entitled to use and share the home's facilities which is quite distinct from a boarding house or backpacking hostel where individuality reigns": Taisha v Peng (2012) 296 FLR 350 at 353 [20]; [2012] FamCA 385 at [20] (Cronin J).
The point was well made by Sanderson M in Schmidt v Malcolm [2016] WASC 209 at [9] that:
"No standard objective [test] exists against which a purported de facto relationship can be compared to a marriage relationship. De facto relationships are as diverse as marriages."
The concept of a de facto relationship was discussed by Gzell J in Ye v Fung [2006] NSWSC 243, at [64]-[65] of the judgment:
"A de facto relationship requires more than adult persons living together. They must live together as a couple. When one thinks of persons as a couple, one thinks of two people in a romantic relationship. That is the first meaning given in the Macquarie Dictionary (4th ed) with reference to people as a couple. The Oxford English Dictionary in defining the word in the sense of the union of two, or a pair, gives as its first meaning with reference to two people: 'A man and woman united by love or marriage; a wedded or engaged pair.'
In my view the word in the Property (Relationships) Act 1984, s 4(1)(a), in the context of the extension of relief under the Act to persons in a domestic relationship, connotes two adult unmarried persons living together, united by love, or living together in a romantic relationship. The effect of such a construction is that de facto relationships are confined to heterosexual and homosexual romantic relationships."
More recently, Thackray J (Kent and Watts JJ agreeing) said in Na v Tiu (No 2) [2017] FamCAFC 269 at [43]-[44]:
"In making that finding, the Court is required to have regard to all the circumstances of the relationship, including any or all of the circumstances set out in s 4AA(2) of the Act. The use of glosses such as 'merged lives', 'coupledom', or in this case '…imbued with the bilateral dedication of the deeply emotional and financial kind intrinsic to de facto relationships' are unhelpful because they tend to create a distraction from the basic task required by the statute (see Jonah & White (2012) FLC 93-522; Sinclair & Whittaker (2013) FLC 93-551; Cadman & Hallett (2014) FLC 93-603; Onslow & Onslow [2016] FamCAFC 7; Fleming & Schmidt [2017] FamCAFC 12; Sha & Cham [2017] FamCAFC 161; Cuan & Kostelac (2017) FLC 93-801).
As was observed by this Court in Sinclair & Whittaker (supra) at [94] in relation to such an 'impermissible gloss' by a trial judge:
Comments made in the course of discussing facts are not to be elevated to the status of the provisions of the statute or substituted for the statutory test. This is because, taken on their own, they either add nothing to the statutory test or, if they do, they are adding an impermissible gloss. Thus it is not appropriate to consider the facts other than in the light of the statutory test."
In assessing the nature of the relationship, it is not essential to find that there was entire harmony, entire fidelity, entire satisfaction with the relationship, or entire commitment; the degree of commitment may be high even though there are qualifications. Dissatisfactions, infidelities, expressed complaints, grievances, and less than entire commitment are often found in personal relationships, including marriages, and are not inconsistent with a relationship of two parties having a relationship as a couple living together, but not married to one another. The significance of qualifications of these kinds appears from passages in the leading judgment of Basten JA (Ipp and McColl JJA agreeing) in Robson v Quijarro [2009] NSWCA 365 at [14]-[16], and from passages which his Honour cited from Bar-Mordecai v Hillston at [120]-[124] (The Court).
Bell P confirmed in Estate of the Late Shirley Joan Violet Gardner; Bernengo v Leaney, that a de facto relationship is not required to be perfect, writing at [43]:
"Barrett J in Petersen v Gregory [2007] NSWSC 8 (Petersen) considered (at [11]) that a diminution of the initial 'romantic characteristic[s] to which Gzell J referred [in Ye v Fung]' will not of itself mark the end of two persons living together as a couple. Similarly, White J in Vaughan, again in the context of s 4 of the Property (Relationships) Act, held (at [49]) that '[f]or two people to live together as a couple means that they live together and that, at least initially, they be united by love or be living together in a romantic relationship'. White J continued (at [49]), '[a]t least if the partners remained living together, the fading of love or romance need not spell the end of a de facto relationship.'"
The Court should be aware of the concept of the diversity of relationships that exist between couples within our society and must not be lulled into social stereotyping. Thus, although said in another context, I agree with Bender FM (as her Honour then was) in Dakin v Sansbury [2010] FMCAfam 628 at [13], that:
"the nature of the relationship cannot be determined by looking at external societal views of what constitutes a de facto relationship, nor is it determined by what the parties themselves thought their relationship to be."
Usually, the relationship will involve contributions by each party to the welfare of the other. In this regard, it should not be assumed that, in the ordinary course, the benefits from one side will be greater than those from the other. Nor should there be any assumptions based on gender inequality. It would be wrong to approach the case upon the basis that the contributions are inherently lop-sided and that the contributions of one are inherently greater than that of the other. Stereotypes are not relevant: Dwyer v Kaljo (1992) 27 NSWLR 728 at 732-734 (Mahoney JA, albeit in dissent).
Common sense also dictates that a relationship may change, or develop, over time. Thus, its character at one point may not represent its character at another.
After a consideration of all of the above, in the event that the Plaintiff is found to be a spouse of the deceased, s 123 of the Act provides that "[i]f an intestate leaves more than one spouse and issue who are all issue of one or more of the surviving spouses, the spouses are entitled to the whole of the intestate estate in shares determined in accordance with this Division".
Alternatively, in the event that the Plaintiff is not the spouse of the deceased, s 112 of the Act provides that since he left a spouse (the Defendant) and issue (the three children), and all of the issue are also issue of the spouse, the Defendant is entitled to the whole of the intestate estate.
Section 125 of the Act, relevantly, provides:
(1) If property is to be shared between spouses under this Division, the property is to be shared:
(a) in accordance with a written agreement between the spouses
(a distribution agreement), or
(b) in accordance with an order of the Court (a distribution order), or
(c) if the conditions prescribed by subsection (2) are satisfied - in equal shares.
(There was no suggestion that the conditions prescribed by subsection (2) are satisfied in the present case.)
Section 126 of the Act, relevantly, provides:
(1) An intestate's spouse … may apply to the Court for a distribution order.
…
(3) On an application under this section, the Court may order that the property be distributed between the spouses in any way it considers just and equitable.
(4) If the Court considers it just and equitable to do so, it may allocate the whole of the property to one of the spouses to the exclusion of the other or others.
(5) A distribution order may include conditions.
Thus, s 126 grants a specific power to the Court to adjust interests in the deceased's property. The Court may order that the property be distributed between the spouses in any way it considers is just and equitable; allocate the whole of the property to one of the spouses to the exclusion of the other; and include conditions in the order. The effect of a distribution order may be to vary the operation of the general rules (found in Pts 4.2 and 4.3 of the Act) governing distribution of an intestate estate. There is no statutory presumption of equality between the spouses.
Section 126 does not prescribe the matters to which the Court must, or may, have regard in determining whether to make, and formulating, a distribution order (unlike Pt 4.4 of the Act which deals with an application for a distribution order in the estate of an Indigenous intestate). The Court is left to the terms of s 126 which state that the Court may order that the property be distributed between the spouses "in any way it considers just and equitable". That is a commonly used legislative phrase. It is also a single composite phrase conveying one idea. It would be useless, and might well be misleading, to seek to split it up into component parts. It does not admit of an exhaustive definition.
It is clear that s 126 confers on the court a very broad discretion and one that requires evaluation of a broadly expressed criterion, namely "just and equitable". That term, like "equity, good conscience and the substantial merits of the case" is not one of legal art: Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 at 30 (Gleeson CJ and Handley JA).
The court is given broad, statutory jurisdiction, equitable in character, to enforce not only what is legal but also what is fair. The exercise of that discretion is fact specific.
Even so, making a distribution order must not be exercised according to an unguided judicial discretion or upon some idiosyncratic view of the claims being made. As Stephen, Mason and Jacobs JJ wrote in Talga Ltd v MBC International Limited (1976) 133 CLR 622 at 634; [1976] HCA 22:
"The court will have before it an existing transaction replete with all its surrounding facts and circumstances and in their light will determine what is just and equitable. In doing so it will certainly be exercising a wide discretion but this is a commonplace of the curial process; the court will be bound to act judicially, exercising its discretion by reference only to such considerations affecting the transaction as, on an examination of the legislation, may be seen to be material to the decision which it is called on to make. Irrelevant matters … which have no rational connexion with the policy of the regulations but would be expressive only of the personal predilections of the Court, cannot be allowed by it to play any part in its decision."
In Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 at [45]-[49], Barrett J helpfully surveyed the authorities considering the meaning of "just and equitable". His Honour wrote at [45]:
"A court directed by statute to proceed according to what is 'just and equitable' is given a wide discretion. There is, as Owen J observed in Thomas v MacKay Investments Pty Ltd (1996) 22 ACSR 294 at p.302, 'no necessary limit on the generality of the words'. They are 'to be applied in their ordinary meaning as calling for the exercise of judgment in the conventional way.'"
His Honour referred to In re Blériot Manufacturing Aircraft Company (Limited) (1916) 32 TLR 253 at 255 (Neville J) in which it had been said that "[t]he words 'just and equitable' are words of the widest significance, and do not limit the jurisdiction of the Court to any case. It is a question of fact, and each case must depend on its own circumstances".
In Kennon v Spry (2008) 238 CLR 366 at 399 [95]; [2008] HCA 56 at [95], Gummow and Hayne JJ said of the origin of the phrase:
"The phrase 'just and equitable' appears to have its origins in the principles of equity which were developed with respect to the dissolution of partnerships, where they remained general words which were not to be reduced to the sum of particular instances." (citations omitted)
In Stanford v Stanford (2012) 247 CLR 108 at 120 [36]; [2012] HCA 52 at [36], the plurality (French CJ, Hayne, Kiefel and Bell JJ) of the High Court, in dealing with s 79(2) of the Family Law Act which provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order", noted:
"The expression 'just and equitable' is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds …" (citations omitted)
(Although in Stanford v Stanford, the High Court was dealing with an application between spouses for property settlement pursuant to Pt VIII of the Family Law Act, the principles quoted apply equally to applications for a distribution order.)
In Re Estate Wilson, Deceased, Lindsay J wrote at [136]:
"The expression 'just and equitable' is well-known to lawyers, appearing as it does in a variety of legislative contexts, and depending as it does on the context in which it is used and the particular facts of each case in which it is stated as a criterion for action. Coupled with a direction that 'all the circumstances' of a case are to be taken into account, it is a classic means of invoking jurisdiction essentially equitable in character."
There is no presumption that the applicant for a distribution order has the right to have the property of the deceased divided between spouses. There needs to be a principled basis in existence demonstrating why it is just and equitable to make a distribution order that would alter the interests in the deceased's property.
It should also be recognised, as was written in relation to the Property (Relationships) Act, that "human relationships are infinitely various and that the statute does not require judges to apply predetermined formulae" in assessing what is just and equitable: Paino v Paino (2008) 40 Fam LR 96 at 120 [122]; [2008] NSWCA 276 at [122] (Young CJ in Eq).
The court is entitled to have regard to any relevant circumstances. Regard may be had to any consideration insofar as it bears upon the justice or equity of a particular order. Some considerations might tend to overlap and should not be approached in isolation as independent, air-tight categories. Care should be taken not to elevate particular circumstances unduly beyond their factual setting: Re Estate Jerrard, deceased at [116] (Lindsay J). Fiscal micrology and microscopic analysis by way of an accounting exercise or audit should also be avoided. The exercise is an holistic one in which there is the superimposition of equitable considerations.
The consideration of "all the circumstances" in determining what is just and equitable would also include a consideration of any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable. That requirement is one that permeates the entire process in coming to the conclusion that a distribution order should be made.
It can be seen, from the above, that the expression "just and equitable" does not admit of exhaustive definition. Nor is it possible to catalogue the "range of potentially competing considerations" that may be taken into account in determining whether it is just and equitable to make an order. Whilst it would not be possible to define the range of circumstances to be considered, typically, some of the matters to which the court might have regard in formulating a distribution order seem, to me, to include:
1. the nature and extent of the deceased's estate, and of any liabilities, or charges, to which the estate is subject, in existence when the application is being considered;
2. whether each spouse was being maintained, either wholly or partly, by the deceased before the deceased person's death and, if the Court considers it relevant, the extent to, and the basis on, which, the deceased did so;
3. whether any property was acquired by the deceased when one of the spouses was living separately and apart from him or her, or when the other spouse was living with the deceased in the de facto relationship;
4. the nature, and the duration, of the relationship of each spouse with the deceased;
5. the age and state of health of each spouse when the application is being considered;
6. the nature and extent of any obligations or responsibilities owed by the deceased to each spouse, or to any other person affected, or who may be affected, by the order;
7. any prior agreement, or representation, made with, or by, the deceased to one, or other, of the spouses and whether a division of their then-existing property was effected at the time of separation;
8. the nature of any jointly held property that passes by survivorship to one spouse, or to the other, and of any liabilities, or charges, secured on the jointly held property. In this regard how the deceased and his, or her, spouse considered property interests should be arranged during the continuance of their marriage or the de facto relationship may be relevant;
9. the nature of any other property that passes to one spouse, or to the other, as a result of the death of the deceased; for example, being proceeds of superannuation, an insurance policy, or as a result of the exercise of a discretion by a trustee of a fund. In this regard, how the deceased considered his, or her, interests should be arranged after separation from his, or her, spouse may be considered;
10. the financial resources (including earning capacity) and financial needs, both present and future, of each spouse;
11. the eligibility of each spouse to a pension, allowance or benefit under (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party;
12. whether any other person is liable to support either spouse;
13. if either spouse is cohabiting with another person - the financial circumstances of the other person;
14. any physical, intellectual, or mental, disability of either spouse and its effect on the earning capacity of that spouse;
15. the commitments of each spouse that are necessary to enable the spouse to support (i) herself or himself; (ii) a child or any other person that the spouse has a duty to maintain; and (iii) the responsibilities of each spouse to support any other person;
16. any contribution (whether financial or otherwise) by each spouse to the acquisition, conservation and improvement of the estate of the deceased or to the welfare of the deceased or the deceased's family, whether made before, or after, the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received;
17. any contribution whether financial, or otherwise, to welfare, made by the deceased to each spouse, during the deceased's lifetime;
18. any evidence of the testamentary intentions of the deceased, including evidence of statements made by him or her;
19. the reasonably held expectations of each spouse;
20. the character and conduct of each spouse before, and after, the death of the deceased;
21. the conduct of any other person before, and after, the death of the deceased;
22. any provision made for either spouse by the deceased, either during the deceased's lifetime or made from the deceased's estate; and
23. any other fact or circumstance that the Court considers relevant, including matters in existence at the time of the deceased's death, or at the time the application for a distribution order is being considered which, in the opinion of the court, the justice of the case requires to be taken into account.
(I have omitted any reference to Aboriginal or Torres Strait Islander customary law because, if that were relevant, it would be an application under Pt 4.4 of the Act.)
As I have stated, I do not intend what I have described above to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction should be unduly confined, or that the discretion be constrained, by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Nor in suggesting some factors, do I wish to put any fetters on the discretionary power, which is left largely unfettered. I do not intend what is provided as a guide to be turned into a tyrant.
I respectfully adopt what was written by Gibbs CJ in Mallet v Mallet (1984) 156 CLR 605 at 609; [1984] HCA 21, in the context of s 79 of the Family Law Act, but, in my view, equally applicable here:
"Decisions in particular cases … can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case."
Before leaving Mallet v Mallet, I should also mention that Gibbs CJ (at 609), Mason J (at 623) and Wilson J (at 636) adopted the language of the Full Court of the Family Court in In the Marriage of Rolfe (1977) 25 ALR 217 at 219; (1979) ¶FLC 90-629 at 78,273 (Evatt CJ, Asche and Gun JJ agreeing), that contributions to home and family "should be recognised not in a token but in a substantial way". That consideration will be relevant to the case advanced by each of the parties.
Although stated in a different context (a company winding up on the just and equitable ground), I also agree with what was said by Chao Hick Tin JA (as his Honour then was), delivering the judgment of the Court of Appeal of Singapore in Chow Kwok Chuen v Chow Kwok Chi [2008] SGCA 37 at [17] that "[t]he concept of 'just and equitable' is a dynamic one and we should not circumscribe its scope by reference to case law when the cases themselves do not seek to do more than just apply the concept of 'just and equitable' to the circumstances of each case".
Finally, there is no indication in the Act going to how the costs of an application for a distribution order should be borne. There is no suggestion in the Civil Procedure Act 2005 (NSW) or in the UCPR, that it, respectively, does not apply to proceedings brought under the Act, although, as will be read, there is what may be regarded, in certain circumstances, as a practice of the Courts, in regard to Probate matters.
Mercifully, it will not be necessary for the Court to determine how the costs of the proceedings should be determined as sensibly, and practically, the legal practitioners discussed the issue and agreed that the costs and disbursements of each party, calculated on the ordinary basis, were not dissimilar and that in circumstances where, as will be read, the conduct of the deceased played a part in causing the litigation, the costs of each party should be paid out of the estate. They agreed that when orders are made, the order for costs should be that each party be paid a specified gross sum of $100,000, instead of assessed costs, out of the estate of the deceased: Civil Procedure Act, s 98(4)(c).
I am satisfied that the costs order agreed to by the parties should be made as there were reasonable grounds for the litigation and the litigation was conducted bona fide.
She admitted that she did not attend the weddings of the deceased's daughters, one in January 2013 and the other in October 2016 or attend the wedding of any one of the deceased's friends if the Defendant or any of their children were going. She also stated that "if the Deceased was aware that either the Defendant or any of his children was coming to our house at … St Clair … I would leave and go and visit my friend across the road or one of my own children".
The Plaintiff gave evidence that if the Defendant was, or any of the children were, coming over for dinner, it was she "who did most of the cooking as the Deceased asked me to. After I had prepared the meal I would leave the house and only return after the guests had left to assist the Deceased to clean up".
The Plaintiff also assisted the deceased in looking after the deceased's father, whilst the deceased's brother, Christopher, with whom their father lived, could go out or on holidays. (Christopher Palombo Snr corroborated the Plaintiff's evidence in this regard.) She attended, with the deceased, on one occasion when the deceased's father had been admitted to Nepean Hospital after visiting hours in July 2013. She did not, however, attend the funeral of the deceased's father. She asserted that she did not do so in order to keep the deceased and her relationship a secret.
The Plaintiff gave evidence that "[t]he Deceased did (through his business) contribute financially to the living expenses of the Defendant. He also contributed financially to my living expenses such as paying the mortgage, bills, my tolls and sometimes taking my car and putting fuel in it. He would also often buying [sic] me clothes, shoes and presents".
The Plaintiff also gave the following evidence:
"7. On 11 November 2017, the day Jennifer Gradidge got married, I was staying at the Vincentia property located at XX Elizabeth Drive with my sister Mary Bailey. I had travelled there with my sister to continue the renovations of the property at XX Navel [sic] Parade, Erowal Bay. Whilst we were renovating the property the Deceased called me numerous times and sent me photos of Jennifer, the bride. Early the next morning the Deceased drove down to meet me [at] Erowal Bay. I took photos of the house and the state of the renovations at that time and in one of the photos, his car is seen parked behind mine. Annexed hereto and marked "B" are copies of photos.
…
18. After the purchase of the factory was settled and it was being used by the business I would often meet the Deceased after work hours and help him tidy his office, clean the kitchen and clean out the fridge. Annexed and marked "C" is a photo of my phone showing text messages between the Deceased and myself about cleaning the office.
19. Also, the Deceased stored many of the vehicles from his personal collection in the factory and we would often start a couple of the vehicles to keep the batteries charged.
20. I also did work on the Vincentia property with the Deceased. That is, the Deceased and I would travel down there on weekends and helped build the ensuite, verandah and kitchen as well as improving the gardens. I also organised the furnishing of that property from 2014 onwards. The Deceased and I would often spend our weekends at that property.
…
30. I went on three (3) or four (4) occasions with the Deceased to the house purchased by Kristy at XX Greenhaven Drive, Emu Heights and helped him (the Deceased) with the painting.
…
34. I was the one who sourced the two (2) sheep for the Deceased to purchase. The Deceased had asked me to find a sheep for his grandchildren which I did. I admit that I did not travel down with the Deceased and Kristy to purchase them as I was at work. Annexed hereto and marked "D" are copies of text messages where I organised the pick-up of the sheep with the owner and messages with the Deceased before and after."
The Plaintiff gave evidence about one occasion when Ashleigh saw her in the bedroom at the St Clair property:
"36. Towards the end of 2012 (I cannot recall the precise date but it was after the Deceased and I commenced living together) I was asleep in the bed I shared with the Deceased in the Arundel Park Drive property when Ashleigh dropped Brian off. I quickly hid at the side of the bed when she came in to use the ensuite and saw me. She said to the Deceased whilst pointing at me words to the effect of: -
"What is that?"
37. Ashleigh then ran out of the house screaming before the Deceased had a chance to speak to her. The Deceased followed her out of the house as she sped off with her husband, Shaun."
It was not suggested to the Plaintiff, in cross-examination, that the deceased exhibited any ambivalence about the relationship, and overall, save for the failure to tell the Defendant, or any of his children, about the relationship, a matter to which I shall return, I am satisfied that there was no such ambivalence.
Overall, I found the Plaintiff to be a sincere, genuine, and truthful witness.
Christopher Palombo Snr, the oldest brother of the deceased, affirmed an affidavit on 2 October 2019. He, like the deceased, worked in the building industry after arriving in Australia, one year before the deceased and the Defendant. He gave evidence that he and the deceased would speak "almost daily and would meet at least once a week at either the Deceased's office or at local coffee shops".
He gave evidence in his affidavit, that he met the Plaintiff, he believed at the St Clair property, and thereafter, he "would speak with or see her at least once a month". He would socialise with the deceased and the Plaintiff, going to dinner, and "I would pop into their home" at St Clair.
He also gave the following evidence:
"7. I was aware that the Plaintiff and the Deceased were living together at the Arundel Park property because of the number of times over the years that I had visited that property and the Plaintiff was there. Those occasions included occasions when I took my late father (also named Christopher Palombo) over to the Arundel Park property.
8. My late father commenced living with my wife and I when we resided in our previous home at Silverdale at approximately 2011 and moved with us to our home at Luddenham in 2012. He remained living with us until shortly before he passed away on 26 July 2013. There were occasions in 2012 and 2013 when my wife and I went on holidays or to social functions. On those occasions I used to take my elderly father over to the Arundel Park property and requested the Deceased and the Plaintiff to look after my elderly father whilst my wife and I were away or at a social function. Invariably the Plaintiff was there and I observed her interact with my late father helping the Deceased to look after him (my late father).
9. The Deceased and I also enjoyed a shared interest in classic motor vehicles. The Deceased had a jaguar convertible as did I. The Deceased, the Plaintiff, my wife and I would often go on a drive together and socialise (such as have lunch or dinner). We all would go to the car show at the King's School at Parramatta which is held annually.
10. On many occasions that I had conversations with the Deceased about the Defendant after the Plaintiff had appeared to me to have moved into the Arundel Drive property with the Deceased, the Deceased said to me (words to the effect of):-
'I need to keep this quiet from Gail. It would cost me too much to get divorced and the girls (whom I took to mean his daughters) would never accept it'.
11. After those conversations I respected the Deceased's wishes. That is, I did not mention the Deceased's relationship with the Plaintiff to the Defendant or any of their children. I also noticed that when I visited the Arundel Drive property the Plaintiff always had her car parked across the road and the inside of the house did not appear to display any personal items of the Plaintiff (such as photographs or clothing)."
In cross-examination, he stated that he had a close relationship with the deceased and although it was put to him, and he agreed, that he and the deceased had a falling out in 2011, when he was asked for how long he did not speak to the deceased after that, he responded "[a]t least an hour". He then denied that had been "any considerable period, of weeks, months, or days, where, on [his] part, [he] declined to contact the deceased to converse with him": Tcpt, 29 June 2020, p 32(41) - p 33(02).
He also responded, in cross-examination, that he had been invited to the St Clair property many times; that he had a habit of calling in unexpectedly, usually on the weekend, although, on occasions, he would telephone first; and that the Plaintiff was there "on many occasions, not every occasion", at the St Clair property: Tcpt, 29 June 2020, p 33(04) - p 34(01).
Although he gave evidence that he was aware that the deceased and the Plaintiff were living together, from his observation of the Plaintiff having been at the St Clair property when he attended, in re-examination he added that his observations included: her to be cooking when he visited; there would not be any occasion when he visited that she did not offer him coffee; she attended with the deceased when they all visited car shows; when they went to Bundanoon in the Southern Highlands, where there was an annual highland gathering (a couple of times); and when they visited him at his home where they participated in social activities "and an odd beer": Tcpt, 29 June 2020, p 34(03-35).
There is no reason to not accept his evidence.
John Palombo affirmed an affidavit on 3 October 2019. As stated, he is the brother of the deceased and he deposed that he maintained a close relationship with the deceased. They would speak on the telephone regularly and "would discuss everything from work through to our partners to our lives in general". In addition, when he was in Sydney with work commitments, he would stay at the St Clair property. When there, he observed that the Plaintiff and the deceased shared the same bedroom and they shared meals together.
He stated:
"7. … I do not recall the Defendant or any of the Deceased's daughters coming to the Arundel Drive property whenever I was there.
8. I am also aware that the Deceased and the Plaintiff went on a number of holidays overseas together. I know they had been on holidays together to places such as Vanuatu, the United States as well as to my home in Queensland. When they came to Queensland .
9. On a number of occasions I had a conversation with the Deceased to the following effect:-
The Deceased: - 'Gail does not know about Jacqui and I don't want her to know'.
Me: - 'Why not?'
The Deceased: - 'Because it would cost me and my business big time. I also don't want the girls (which I took to mean his daughters) to know either as they work in the business and would tell Gail'
…
10. After having those conversations I did not disclose to the Defendant or any of her daughters my knowledge of the relationship that the Deceased had with the Plaintiff. I found that difficult to do when I met the Defendant and/or any of the Deceased's daughters at the Deceased's business premises or factory (which occurred occasionally) but I was determined to honour my brother's wishes.
11. I last saw the Deceased in Sydney about 2 weeks prior to his death. That is, in or about late September 2018. I stayed with him and the Plaintiff at the Arundel Drive property."
He gave further oral evidence (Tcpt, 30 June 2020, p 80(46-50)):
"Q. Would you observe your brother and Ms Bailey do anything else together?
A. I think they did virtually everything together, because I had been with them to a couple of markets and things like that. They - they used to like going to car shows. Just oddball things. I - for example..(not transcribable)..they enjoyed it. They enjoyed each other's company."
There is no reason to not accept his evidence.
Christopher Palombo Jnr, the nephew of the deceased (the son of Christopher Palombo Snr, to whom reference has already been made), affirmed an affidavit on 15 June 2020. He had an extremely close relationship with the deceased, saying "[w]e were raised like brothers" (as there was an eight year age difference). They would talk to each other by telephone daily and would "see each other almost every day, or every second day, except when he went down the South Coast with Jacqui".
He gave evidence as follows:
"7. A few months after Brian moved to South Penrith, he told me about Jacqueline Bailey (Jacqui) and I met her some months later when she and Brian were living at XX Arundel Park Drive, St Clair (the St Clair property). I had spoken to her on a number of occasions prior to this, as Brian would often call me on speakerphone whilst Jacqui was in the car and I would speak to her and Brian at the same time. This would occur about every fortnight at least.
8. After first meeting Jacqui I continued to see her and Brian about every six weeks, which would usually occur at the St Clair property.
9. … If I had made arrangements to attend Brian and Jacqui's home at St Clair, Brian was regularly late and so it was Jacqui that would open the door and let me in, where we would then talk whilst waiting for Brian.
10. During my regular conversations with Brian I was aware that he and Jacqui were in an intimate, physical relationship and they shared the same bed … I had always noticed that Brian's office and car were cluttered, yet his home was very well presented and I could clearly see that there was a woman living there as it looked like a display home inside. Brian was known for his messiness and we often joked about it, it was just another one of his traits.
11. I had many conversations with Brian about telling Gail and his daughters (the girls) about Jacqui and this would occur about every three months. Sometimes I would bring up the subject and sometimes Brian would. During these conversations, Brian said words to the effect of 'I know the girls will be upset if I tell them about Jacqui, I don't want there to be any negative consequences. I don't want the girls to think less of me.' I remember telling Brian that they were older now, and they would understand and see how happy he was and they would get over it. He was really worried about any of the girls not speaking to him. He knew how much that would hurt him. He also told me that they would be told, he was waiting for the 'right' time.
12. There were many times that we would have a conversation about telling his daughters and when arrangements would be made for this to occur, something would then happen in the family which would result in him saying 'the timing is not right to tell them now'. Examples of this were when Gail's sister passed away and also the wedding of one of his daughters, Emma.
…
15. I was very close to Brian and Jacqui. They holidayed overseas together often. I remember dropping them off and picking them up at the airport from an international holiday to USA. I've seen many photos of them together, arm-in-arm and I saw them as a happy couple … Brian would call me from overseas and tell me about the day he had and what Jacqui and him got up to or what they had seen that day.
…
20. A day after he passed away, I attended the factory where Kookaburra Plumbing operates and told his daughter, Ashleigh, that her father had been in a long term relationship with Jacqui. I cannot recall what she said, but she appeared to be devastated at the news. I then said to her 'do you want me to tell the other girls?' and she replied 'no, I'll tell them'.
21. Either the next day or day after I was invited to attend Emma's home to answer some questions the girls had since hearing the news of Jacqui. On arrival, all three of Brian's daughters were present, together with Josh. I received a lot of questions from them about Jacqui which I answered honestly but they appeared to be upset with the answers. These questions all centred around Jacqui and their father. I remember Ashleigh or Emma saying that Jacqui is a 'gold-digger' and 'she has to get out of the house'."
In cross-examination, Christopher was asked about conversations he had with the deceased regarding the St Clair property. The following exchange occurred (Tcpt, 30 June 2020, p 73(12-26)):
"Q. Now, you had a conversation with the deceased very shortly before he passed away and the deceased said to you, 'I want Jackie to have the house and I've told her, 'Don't worry Chris will look after you', is that what you recall him saying.
A. Correct, I do.
Q. Did you tell Ashleigh that words to the effect, 'Your father did not want Jacqui to be homeless, he wanted her to have the house for as long as she needs it'?
A. Correct.
Q. Does that accurately reflect what the deceased informed you?
A. I don't know whether it accurately describes what the deceased informed me but what I've said there in relation to he doesn't want Jacqui to be homeless, that's -"
There is no reason to not accept his evidence.
(I note that Ashleigh gave evidence that the deceased would refer to the St Clair property as "Gran and Papa's house" and that she says that he told her that "Papa built this house. I want it to stay in the family". However, she does not give evidence about when these conversations occurred. In any event, I am satisfied that the conversation stated by Christopher occurred and that its terms reveal the deceased's testamentary intentions at that time.)
Another witness called by the Plaintiff was Domenico Valenti. He was employed by the deceased in the business he called "Kookaburra Plumbing" from August 2012 until shortly after the deceased's death in October 2018. He lived in a property that was "diagonally opposite" the St Clair property.
He gave evidence in his affidavit affirmed 1 October 2019:
"4. When I first moved into number XX I had a conversation with the Deceased to the following effect: -
He said to me:- 'I am going to tell you something, don't say anything'
I said: 'yeah'
He said: 'I have a partner but I don't want anyone to know about it'
I said: 'that's OK by me. It's your private business not mine'.
5. Sometime after that the Deceased introduced me to the Plaintiff. I would often see her over the years go in and out of number YY and see her park her car in the house next to where I lived. I formed the view that the Plaintiff was also living at number YY with the Deceased.
6. Whilst working for Kookaburra Plumbing I drove a motor vehicle supplied to me by my employer. Occasionally, I would collect the Deceased from number YY and drive him to the factory or a job site. I sometimes gave him a lift back to number YY. On some of those occasions I would also see the Plaintiff outside the front area of number YY.
7. On a weekly basis I would drop in for a beer with the Deceased and the Plaintiff was usually there or coming home from work.
8. The Plaintiff was often cooking and the Deceased would give me a plate of food.
9. The Deceased and Plaintiff would often drop in to my home with my Wife and Family at XX Arundel Park Drive St Clair for drinks or dinner.
10. The Deceased had asked me on occasion to pick up the Plaintiff to pick her up and drop her off at Hyundai whilst getting her car serviced if the Deceased was busy with work."
There is no reason to not accept his evidence.
The final witness of the Plaintiff was Margaret Sutherland who lived across the road from the St Clair Property. Mrs Sutherland knew, first, the deceased's parents when they lived in the St Clair property and later met the deceased and the Defendant when they immigrated to Australia. She gave evidence of having first noticed the Plaintiff leaving the St Clair property in or around 2012. She enquired of the deceased who the Plaintiff was, to which he replied "I've got a partner who lives with me".
Mrs Sutherland gave additional evidence in her affidavit affirmed 8 July 2019:
"6. Soon after being told about the Plaintiff my husband and I were invited over to the deceased's home and were introduced to her, with the deceased saying 'this is my girlfriend'.
…
8. I knew the deceased's ex-wife, Gail, and his children and I understand that Brian did not wish for them to know about the Plaintiff. I do not why this is the case.
9. I would see the deceased and the Plaintiff regularly including in the street where we would have conversations. We would also regularly go out for drinks, have barbecues or events at either of our homes and would go out for dinner together. On each occasion the Plaintiff was always there with the deceased and I understood them as living as man and wife.
…
11. On one occasion, the date of which I cannot recall, the deceased and the Plaintiff also brought the deceased's grandchildren, Archie and Mila, over to my home.
12. When the Plaintiff began living with the deceased in about 2011-2012 she would initially park her car in the street. However I understood there was a complaint about this by a neighbour. As a result, the Plaintiff would park her car in my driveway and my husband and I held a spare key in case we had to move it. This continued to occur until the deceased's death.
13. I am aware the deceased and the Plaintiff would often go on holidays together and in my view they had a close and loving relationship as a couple. To the best of my knowledge and belief they remained in that relationship up until the deceased's death on 11 October 2018.
14. I used to say to the deceased on occasions 'you need to do something, you need to let the girls know about Jacqui as too many people know to keep it quiet'. My reference to 'the girls' was about his daughters. The deceased would often reply with words to the effect of 'I know, I'm getting to it'."
Mrs Sutherland gave evidence of the Plaintiff having her mail sent to Mrs Sutherland's address. The reason for this, as she said, was that the deceased did not want his daughters to know of his relationship with the Plaintiff: Tcpt, 30 June 2020, p 90(11-26).
There is no reason to not accept her evidence.
Ashleigh Anne Davis gave evidence about her involvement in Kookaburra Plumbing and Electrical Pty Limited. She said that since about 2008, she had been employed as the office manager.
She stated that prior to the death of the deceased, she had not heard of the Plaintiff; and that the deceased had not told her that he was "engaged in a personal relationship with a woman" despite them seeing each other daily and usually frequently during the day and otherwise. Nor did she see anything at the St Clair property that suggested that anyone other than the deceased lived there. She corroborated the Defendant's evidence that the deceased attended family events without the Plaintiff, and without making any mention of her.
Ashleigh's husband, Shaun Patrick Davis, who started working with the deceased in 2006, and who continued working with him until his death, gave evidence of visits to the St Clair house after work and at other "random times". They would also go on fishing trips together.
He gave evidence, consistent with the evidence of the Defendant, and the deceased's children, that he had not been told about the deceased's relationship with the Plaintiff, and that he had never met her, or even seen her, at the St Clair property. He also confirmed the deceased's attendance, alone, at family functions such as birthdays and dinners. His evidence is hardly surprising bearing in mind the deceased's desire to keep his relationship with the Plaintiff from the Defendant and their three children.
Kristy Nicole Palombo gave evidence consistent with the evidence given by the Defendant and her siblings about her never having been told by the deceased about the Plaintiff and never having seen the Plaintiff on any occasion at the St Clair property or otherwise. She gave evidence of family and other events at which the deceased attended alone.
Although she gives evidence of two occasions, one in July 2015, and one in June 2018, when the family, including the deceased, stayed at Vincentia, and where she stated that he and the Defendant stayed in the same room, that evidence was not given by the Defendant herself.
She gave evidence that she had asked him about being "interested in finding another partner", to which he had replied "no". The question, which she said was asked on more than one occasion after the separation of her parents, is equivocal, at least after 2011, by which date the deceased had already met the Plaintiff. Prior to that time, it is quite likely that it was an answer that was accurate, but for a different reason.
On some matters, however, the evidence of Kristy and the Plaintiff conflicted.
Kristy gave evidence that she would attend the St Clair property each year on Father's Day, Christmas and Easter. The Plaintiff admitted that Kristy, and other members of the deceased's family, would attend the property on Father's Day and Christmas. However, she denied that Kristy regularly came to the property at around Easter. Both maintained, in cross-examination, that she spent every Easter Sunday with the deceased. It is unnecessary to determine the conflict of evidence.
Emma Schild gave evidence consistent with that given by the Defendant and her siblings. She repeated that the deceased had not told her about the Plaintiff and that she had not seen the Plaintiff whenever she and her husband visited the St Clair property. As with the other witnesses called by the Defendant, Emma confirmed that the deceased attended family functions alone.
Emma also gave evidence of a conversation that she had with the deceased shortly after the death of her maternal aunt in July 2017. The conversation, which was not challenged, related to the apparent quickness of her uncle commencing a new relationship and was in the following terms:
"Me: 'I think Uncle was trying to hide the fact that he had moved on. I think that is cowardly. You need to be honest and open about these things. There is no reason to lie to people. Are you seeing anyone?'
Dad: 'No. I don't have a partner. What would I do that for?'"
Joshua Schild, Emma's husband, gave evidence that he had a good relationship with the deceased, and that they spoke on the telephone approximately once per week. He said, that on the occasions that he and Emma went to the St Clair property, he did not see the Plaintiff or see any sign of any person, other than the deceased, living there. Joshua confirmed that the deceased would attend family events alone, and at no time did he mention the Plaintiff.
The evidence of the Defendant and the children, as well as of the husband of each of two of the children, all align and are consistent with the deceased not having informed any of them of his relationship with the Plaintiff. As stated, the Plaintiff did not dispute that fundamental fact that the deceased had kept her relationship with him clandestine, at least so far as the Defendant and the children were concerned.
Mr Flaherty, as a final point, returned to the meaning which might be taken from the non-disclosure of the relationship to the Defendant and the deceased's daughters. He submitted, in response to a question from the Bench (Tcpt, 1 July 2020, p 177(18-30)):
"HIS HONOUR: But what I was troubled about was what was the effect, what relevance did the silence have? On one view it might be said that the silence is not consistent with a relationship as a couple. On the other hand the silence may have reflected the strength of the relationship as a couple because he didn't want to tell his wife and children for the reasons that we've discussed.
FLAHERTY: Yes. We would say the latter obviously, your Honour, for this reason: in loving relationships people usually do what the other partner requires of them, and if there wasn't such a loving relationship one would normally expect one person to say, 'Well, I'm not going to do this any more. I'm not going to go through this sort of hiding my clothes, disappearing whenever your children arrive et cetera,' unless there was evidence of it, we would submit a very relationship. For such a long period of time."
Mr Flaherty then emphasised aspects of the evidence which might be described as a welfare contribution by the Plaintiff to the deceased, or to the relationship (Tcpt, 1 July 2020, p 175(17-37)):
"FLAHERTY: There was evidence about how she assisted the deceased in the business, and I pointed out in a minimal way sometimes going out with him on late night calls, and/or going to clean the factory, or get the factory ready, and so on. You might recall that evidence, your Honour, which usually is indicative of mutual support. There's no evidence she was paid for that in the sense of like a paid employee.
HIS HONOUR: I think she says she did all the household duties.
FLAHERTY: She did. She also - not only that, she also deposes how she cooked for occasions when the members of the defendant's family were coming over. She did the cooking, and then she left, and came back and helped clean up. She gave that evidence. She also gave evidence how she was that composed the speech at the wedding for one of the deceased's daughters.
HIS HONOUR: Yes, I saw that.
FLAHERTY: So those sort of matters are extremely relevant, we would say, in determining whether - which assists, I would submit to your Honour, in fleshing out the nature of the relationship."
Mr Tregenza, for the Defendant, referred me to the definition of "de facto relationship" contained in s 21C of the Interpretation Act (although he, by error, referred to s 23C in his written outline).
Mr Tregenza submitted, at par 7 of his written outline:
"There is no objective evidence to show the circumstances in which the plaintiff and deceased lived as a couple, although there is evidence to show that the plaintiff spent considerable time at the deceased's home."
Mr Tregenza relied on the Plaintiff's admission that she did not use the St Clair property as the address on her income tax returns. He submitted that it was difficult to see what would prompt the deceased to make such a request of the Plaintiff. He then raised several aspects of the evidence that, in his submission, negatived the existence of a de facto relationship:
1. The evidence of the deceased's daughters of them having never seen the Plaintiff when they visited the St Clair property;
2. The Plaintiff's own evidence of having met Ashleigh and Kristy, but on each occasion having not been introduced as the partner of the deceased; and
3. The lack of any items on display in the St Clair property that demonstrated the existence of a relationship between the Plaintiff and the deceased.
Mr Tregenza returned to s 21C of the Interpretation Act and submitted that there was no suggestion of any financial dependence (barring the Plaintiff residing in the St Clair property), common ownership of assets, or any degree of commitment to a shared life.
Mr Tregenza accepted that there was some evidence that the Plaintiff and the deceased presented as a couple, through their attendance at social functions. However, he submitted at par 18 of his written outline:
"They did not engage at all with the deceased's daughters, with whom the evidence suggests he was very close. When the deceased had a public presence in relation to his business it was with the defendant/cross claimant and their daughters."
Finally, Mr Tregenza admitted that the observations from the witnesses called by the Plaintiff supported her claim. However, he submitted that once the entire factual matrix was examined, especially the evidence of the deceased's daughters, it was evident that the Plaintiff and the deceased did not live together as a couple.
In his oral submissions, Mr Tregenza sought to expand upon what he had put in his written outline.
Mr Tregenza began by responding to what I had put, first to Mr Flaherty, and then to him, regarding what inferences could be drawn from the deceased's efforts to keep the relationship secret from the Defendant and his daughters. Mr Tregenza submitted that the non-disclosure tended to weigh against there being a significant degree of commitment to a shared life. That is, that there was insufficient commitment to a shared life to even risk a temporary falling out with his daughters.
Mr Tregenza also submitted that, while the Plaintiff accompanied the deceased to some social events, the Defendant accompanied the deceased to most social events for Kookaburra Plumbing. At those events, he submitted, the Defendant was introduced as the deceased's wife. As such, he submitted (Tcpt, 1 July 2020, p 192(31-37)):
"TREGENZA: If they knew the people to whom she was being introduced, an introduction as my wife would not be necessary. It may well be, 'Do you remember Gail,' but in my submission, the evidence is that she was being introduced to strangers as his wife, and yes, that was in conformity with the Marriage Act 1966, but it's not what - it's not a presentation you would willingly make if you're estranged and you were in a permanent committed relationship with another person."
I also accept the Plaintiff's explanation for her failure to disclose the St Clair address on her income tax returns, this, seemingly, being a somewhat illogical request made by the deceased to her.
Having heard all of the evidence, and remembering that some of that evidence was given by independent witnesses, I am satisfied that the non-disclosure of their relationship to deceased's immediate family, is explained, not by any persisting ambivalence, diffidence, or coyness, by the deceased, about that relationship, but rather, first, by the desire to not lose part of his assets in any application for a property adjustment order brought by the Defendant in family law proceedings and secondly, because he did not wish to risk a change to the relationship with any of his children, which he considered was likely, as he thought they would not take the existence of the relationship well and that might have prompted highly judgemental reactions.
By remaining silent about the relationship, the deceased protected the Plaintiff from any adverse reaction and from having to deal with members of his immediate family who might not "accept" her. Had the relationship been less significant, it is unlikely that he would have gone to the trouble that he did in keeping it a secret. This, perhaps, suggests the depth of his relationship with her.
The fact that all of the witnesses called on behalf of the Plaintiff, gave evidence of observing the Plaintiff and the deceased together, over the period of their relationship, is some indication of the Plaintiff's prominence in the deceased's life.
Naturally, and understandably, the deceased's failure to tell the Defendant and his children, would have created, and did create, predictable confusion for all of them following his death. However, maintaining the dispute about the existence of the relationship, as each of the Defendant and her children did, in the face of the independent evidence, may suggest that his concerns were justified.
Having closely considered all of the evidence, I am satisfied that the Plaintiff was a party to a domestic partnership with the deceased immediately before his death. They were in a de facto relationship that had been in existence for more than a continuous period of two years before his death. They had lived together in the St Clair property, where they had shared a bedroom. They had a sexual, apparently, monogamous, relationship. The Plaintiff did not pay any rent, or occupation fee, and the deceased did not expect her to. The Plaintiff was partly financially dependent upon the deceased and there was mutual consensus as to this financial support in the relationship. Even though the deceased was the sole registered proprietor of the St Clair property, the Plaintiff treated it as her home and she had unrestricted access to it (except when the Defendant or the deceased's children came over). They shared household duties. They showed mutual commitment to a shared life, which was demonstrated by the time they spent together, including going on holidays together, the common interests which they shared, their apparent enjoyment of each other's company, and the joint public nature of their relationship (at least with persons other than the Defendant and the deceased's children). They attended social functions and visited friends together as a couple. There was no suggestion that at the time of his death, or otherwise, the deceased contemplated separation from the Plaintiff.
Although the evidence was not very detailed, there was some evidence that the deceased was integrated into the Plaintiff's family. The Plaintiff and the deceased would meet regularly with her three children and enjoy many social occasions with them.
I am satisfied that the Plaintiff and the deceased had a stable, de facto relationship. During the six and one half year relationship, they were only separated by countervailing circumstances, such as the occasions when the deceased was in direct contact with his immediate family, or his, or the Plaintiff's, work requirements.
Also, whilst there was not a lot of evidence on the topic, there is the conversation the deceased had with his nephew, Christopher, about the deceased's testamentary intentions. The deceased told Christopher that he wanted the Plaintiff to have the St Clair property. Bearing in mind that it had been the home of his parents, this is very significant in the context of the case. It also constitutes an implicit acknowledgement, by the deceased, that the Plaintiff did not reside anywhere else in New South Wales. (There is no evidence that the Plaintiff knew of this conversation.)
Whilst relevant, I do not find the lack of information about the relationship with the Plaintiff given to the Defendant and the children, by the deceased, persuasive in coming to a contrary conclusion for the reasons I have already stated.
The Plaintiff did not assert that there were any joint bank accounts or joint pooling of funds. Other than purchasing furnishings for the St Clair property, and saying that she "organised" furnishings for the Vincentia property, it appears that they did not buy any property together.
In my evaluation of all of the evidence before the Court, taken as a whole, I am satisfied that for about six and one half years before his death the Plaintiff and the deceased lived in a de facto relationship. That relationship involved them living together "as a couple" (not married nor related by family) within the meaning of s 21C(2) of the Interpretation Act. It was a relationship which was "in existence for a continuous period of 2 years" before the death of the deceased within the meaning of s 105(a) of the Act and one in existence "immediately before" the death of the deceased, so as to satisfy s 104(b) of the Act. It follows that the Plaintiff is a spouse of the deceased at the date of his death.
It follows, as the Defendant is also his spouse, being his de jure wife at the date of his death, the deceased left more than one spouse and issue who are all issue of one of the surviving spouses. The spouses are entitled to the whole of the deceased's estate in shares determined by the Court.
There was no dispute that the deceased continued to partially support the Defendant. (The Plaintiff's evidence confirmed that the deceased contributed to the Defendant's living expenses post-separation.) The Defendant continued to reside in the Emu Plains property, of which she was the joint owner. Whilst she received her own income which was, at least after a time, deposited into her own bank account, she did receive financial support from the deceased.
I am satisfied that the Defendant was partly maintained by the deceased despite their separation.
Both the Plaintiff and the Defendant therefore occupied similar positions. Each was supported financially to some extent by the deceased and had her living expenses contributed to by him.
I note that the deceased had an obligation to maintain the Defendant as his de jure spouse, subject to the provisions of s 72 of the Family Law Act. There was no equivalent obligation to maintain the Plaintiff whilst the de facto relationship continued: Family Law Act, s 90SE(1).
Their relationship was only concluded by the death of the deceased. There was no suggestion that either of the Plaintiff or the deceased had been contemplating separation around the time of his death.
Naturally, it is not possible to speculate as to how long the relationship between the two of them may have lasted had the deceased not died unexpectedly.
In the present case, there was no evidence of the terms of the Defendant's Will, if any. Even if it is assumed that, bearing in mind the apparent closeness of their relationship, that the three children will benefit, in some way, on the death of the Defendant, if not before, the Defendant's financial circumstances will be, to the extent of the distribution order, impacted. (None of the children gave evidence of her financial resources. Of course, there was no obligation on each to do so.)
It does not appear that any of the children were financially dependent upon the deceased as at the date of his death. There was some evidence of the deceased making small gifts to each of his children. For example, Kristy deposed to her sisters and her (and their mother) having each received $1,000 on a family trip to Bali (which the deceased did not attend): Affidavit, Kristy Nicole Palombo, 21 August 2019 at par 14. Gifts of that nature are consistent with a loving relationship between father and daughters.
I accept that each of Ashleigh, Kristy and Emma had a very close relationship with the deceased.
There is ordinarily a moral obligation of a parent to provide for his or her children. In the present case, that obligation can only have been strengthened by the closeness of the relationships.
It is, therefore, relevant to the nature of any distribution order that the deceased's children would only benefit as a result of provision made for each of them by the Defendant. Any obligation of the deceased to provide for them is met only out of the Defendant's share, if any, of the distribution order and any other assets that she receives as a result of the death of the deceased, if she chooses to provide for them.
The Defendant's solicitors confirmed:
"We are instructed that Gail Palombo was the beneficiary of a policy of life insurance, which does not form part of the estate. Would you kindly advise whether your client was also a recipient of a benefit from a life insurance policy for the deceased."
The letter did not disclose the amount which the Defendant had received.
Whilst the Plaintiff was, undoubtedly, taken by surprise at the significant amount the Defendant had received, it is not correct to say that she had received no notice of the presence of a life insurance policy.
Mr Tregenza submitted, on behalf of the Defendant, that the proceeds of the life insurance policy had no relevance to the consideration of what was just and equitable in all the circumstances. He submitted at par 2 of his supplementary written submissions:
"In the case of section 126, there is no express legislative criteria by which just and equitable is to be determined. In relation to life insurance policies in which the deceased nominated the defendant as beneficiary, the deceased made known his intentions by nominating the defendant as beneficiary. It does not follow from such nomination that, where the deceased did not nominate by testamentary instrument how his estate was to be distributed, that the just and equitable apportionment of the estate should be to counter-balance the benefit received from the policy by apportioning a greater share to the other spouse or, on the other hand, to follow that nomination in apportioning a greater share of the estate to the nominee of the policy or policies. To apportion a greater share of the estate to the spouse who was not the beneficiary of a policy of insurance would not be consistent with the expressed intentions of the deceased."
The balance of his submissions can be summarised as follows:
1. The intention of the deceased, including in his choice of beneficiary of a life insurance policy, is relevant to the exercise of the Court's discretion under s 126.
2. Section 126 also permits regard to be had to the needs claimed by a spouse. He submitted that the Plaintiff's need for accommodation could be easily met out of the deceased's estate.
3. The Defendant did not raise her needs at trial, "nor was she obliged to put before the Court her full financial position".
4. What is just and equitable in the circumstances should take into account the "degrees of voluntary participation in the life of the deceased" over the period of each spouse's respective relationship with the deceased. If the proportion of the estate that falls to a spouse is sufficient to meet her moral entitlement to the deceased's bounty, then the proceeds of the life insurance policy have no relevance in the apportionment of the estate.
The property at YY Severn Street, at one time, was used as the factory premises for Kookaburra Plumbing. Its present status is unclear. The Defendant gave contradictory evidence as to whether it was currently rented. She deposed at par 26 of her affidavit sworn 21 August 2019:
"I do not know the financial arrangements concerning the payment of rent for these premises. These premises are not currently rented out."
She deposed in the same affidavit at par 40:
"I am not certain as to the current occupancy of the strata title unit YY Severn Street, St Marys. I believe that it is rented and encumbered with National Australia Bank."
Ultimately, not much turns on the current use of the property.
The use of WW Severn Street was also unclear on the Defendant's evidence. Although given its proximity to the other properties on Severn Street, one expects that it is a factory premises and was either used by the Kookaburra Plumbing business or was tenanted.
It is clear that a significant part of the deceased's estate, including all of the jointly held property, was acquired during the relationship between the Defendant and the deceased. That is unsurprising given the length of the marriage and relationship.
What, if any, financial contributions the Defendant made to the acquisition of the properties is unclear. However, the evidence suggests that this was a marital relationship of the kind described by Deane J in Mallet v Mallet at 640-610 as one that involved "a practical union of both lives and property". As I have already stated above, contributions to home and family should be recognised, not in a token, but in a substantial, way. To that end, the Defendant's non-financial contributions to the marriage must be kept firmly in mind when considering the properties acquired during that marriage.
The marriage does not seem to have been one like the one described by Bryant CJ, Faulks DCJ and Murphy J in Dickons v Dickons (2012) 50 Fam LR 244 at 250 [21]; [2012] FamCAFC 154 at [21], as "a union where parties lived very separate domestic and financial lives".
The Defendant gave evidence of financial contributions to the Kookaburra Plumbing business and otherwise to the relationship and their family:
"I contributed to that business directly and indirectly. I contributed directly by being a director and secretary, by undertaking the work in the businesses … as well as contributing my wages from my employment such that they were available to Brian and, after I established my own bank account into which they were paid, by applying my wages for the benefit of our family."
A company extract dated 15 November 2018 showed that the Defendant was the secretary of Kookaburra Sales & Services Pty Ltd. An extract of the same date showed, however, that she was not an officeholder in Kookaburra Plumbing & Electrical Pty Ltd (the deceased being the sole director and secretary).
A more recent extract, dated 16 April 2019, which formed part of Ex P1, showed that the Defendant was both a director and the secretary of Kookaburra Plumbing & Electrical Pty Ltd. (Ashleigh was named as the other director.)
Although Mr Flaherty spent some time cross-examining the Defendant and Ashleigh on the circumstances in which they became directors of the company, ultimately, little turns on the issue: Tcpt, 30 June 2020, p 96(11) - p 98(20), p 120(24) - p 123(07).
What also must be considered is the Defendant's contributions, financial and otherwise to the business. Her contribution, at least in the early years, was quite significant. She gave evidence that:
"I answered the telephone, took bookings, organised for Brian to attend at jobs and prepared and posted the invoices for the work done.
… After Kookaburra Plumbing Pty Ltd occupied the factory premises at Mount Druitt, I took telephone calls for the company, arranged bookings and sent invoices. I was not directly paid for this work by the company but despite this, Brian's accountants prepared his, my and the company tax returns and I recall that in my income tax returns lodged during this period included statements, to the effect, that I received income [from] Kookaburra Plumbing Pty Ltd."
As time went on, her role in the business diminished, presumably as the business employed more staff. However, her role in the business continued, even after her separation from the deceased. She deposed:
"I had ceased answering the telephones for Kookaburra Sales and Service Pty Ltd but was preparing invoices for it the Companies [sic], amongst attending to other matters, up until the time of the death of Brian. Since his death I, together with Ashleigh, have undertaken a direct decision making and administrative role in the conduct of the business of the Companies."
The above would, on its face, suggest that the Defendant continues to take a role in the operation of the business. However, in cross-examination, that impression was dispelled. The following exchange occurred (Tcpt, 30 June 2020, p 94(04-16)):
"Q. What do you do when you - for the company?
A. I - when the business started, I - I established the business along with my husband. And I used to basically do reception duties, invoicing, basic - putting jobs in.
Q. What about now since he - since he passed away? What do you do?
A. Yeah. Well, I've rearranged my work schedule a bit to try and help my daughter because she's got four children under five. So mostly I'm - I go to the - in to the office Thursday's and Friday's. And mostly now all I'm doing is help her with the children while she runs the business.
Q. So nowadays you are more of a childminder in a sense. Is that right?
A. In a sense but I still answer phone calls when the office is busy."
Later, in her evidence, the Defendant clarified that she had not, in fact, done the invoicing for the business for a number of years. Her evidence orally was that she had performed that role for the first 12 years of the business. The last time, therefore, that she had done the invoicing was 15 or 16 years ago: Tcpt, 30 June 2020, p 103(31-41).
It became clear in cross-examination that the Defendant did not have an intimate knowledge of the financial, or operational, affairs of the business. She gave evidence that the deceased largely took care of the finances and that, after his death, that responsibility fell to Ashleigh: Tcpt, 30 June 2020, p 98(45) - p 99(31).
The Plaintiff, on the other hand, made no financial contribution to the deceased's estate or to the Kookaburra Plumbing business. I shall return below to the non-financial contributions that she made.
It is true that, after his separation from the Defendant, the deceased acquired four properties:
1. XX Naval Parade, Erowal Bay;
2. XX Walmer Avenue, Sanctuary Point;
3. XX Arundel Park Drive, St Clair, acquired in 2014; and
4. XX Christie Street, St Marys, acquired in 2015.
It was unclear on the evidence whether the Erowal Bay property and the Sanctuary Point property were acquired during the course of the deceased's de facto relationship with the Plaintiff.
The St Clair property and the Christie Street, St Marys property, were acquired during the relationship.
The Plaintiff did not give any evidence that she had made a financial contribution to the purchase of any of those four properties. There was some suggestion that she had purchased, at least, some of the furniture in the St Clair property: Tcpt, 30 June 2020, p 60(41-47), p 69(11-22). In a sense, that constituted an improvement to the St Clair property.
The Plaintiff also deposed to helping the deceased in renovating the Vincentia property, one of the properties he held jointly with the Defendant. The Plaintiff deposed at par 20 of her affidavit affirmed 2 October 2019:
"I also did work on the Vincentia property with the Deceased. That is, the Deceased and I would travel down there on weekends and helped build the ensuite, verandah and kitchen as well as improving the gardens. I also organised the furnishing of that property from 2014 onwards. The Deceased and I would often spend our weekends at that property."
Much of the attention in these proceedings has centred, rightly, on the real property owned by the deceased. It should not, however, be forgotten that the deceased owned motor vehicles and motorbikes to the value of $380,000: Ex SAL1. The evidence of his brother, Christopher Palombo Snr, shows that these motor vehicles were something of a passion for the deceased: Affidavit, Christopher Palombo, 2 October 2019 at par 9; Tcpt, 29 June 2020, p 33(29-38).
The Plaintiff made a small contribution to the maintenance of these vehicles. She gave evidence that:
"the Deceased stored many of the vehicles from his personal collection in the factory and we would often start a couple of the vehicles to keep the batteries charged."
As I have previously stated, the Plaintiff had very little to do with the Kookaburra Plumbing business. She frankly acknowledged in her evidence, that she did not involve herself in the deceased's work activities: Affidavit, Jacqueline Bailey, 23 March 2020 at par 12.
The Plaintiff did make some very small contribution by assisting the deceased with the preparation and maintenance of the factory premises at St Marys (by which I take her to mean the property at Christie St, St Marys). She gave evidence that:
"By 2015 the Deceased and I had been living together for approximately three (3) years. I knew about the purchase of the factory premises at St. Marys. The Deceased was able to obtain access to the premises prior to settlement of the purchase and so I attended those premises with the Deceased and helped him get it ready for his business. That is, I helped the Deceased paint the floor between the two premises.
After the purchase of the factory was settled and it was being used by the business I would often meet the Deceased after work hours and help him tidy his office, clean the kitchen and clean out the fridge."
There was also the evidence that the Plaintiff would attend with the deceased on late night plumbing calls to help keep him awake. However, this is better viewed as a contribution to his welfare and the relationship, rather than to the business.
This was, however, the extent of the Plaintiff's contribution to the business.
As stated, there were no children of the relationship of the Plaintiff and the deceased. It follows that she made no parenting contribution.
On the Plaintiff's part, her contributions to the deceased's welfare were quite substantial. They represent the bulk of her contributions to the deceased and to their relationship.
Much of that evidence has already been canvassed above in determining that they were in a de facto relationship. That evidence is also of relevance here.
The usual concomitants of a de facto relationship were present and were contributions to the deceased's welfare. As the Plaintiff deposed at par 8 of her affidavit affirmed 20 June 2019:
"Whilst living together, the Deceased and I engaged in regular sexual activity with each other, shared the usual household duties, went on numerous holidays together and attended many social functions together as a couple."
There was plentiful evidence of the Plaintiff and the deceased attending social events together. Domenico Valenti gave evidence that the "[t]he Deceased and Plaintiff would often drop in to my home with my Wife and Family … for drinks or dinner". Similarly, Margaret Sutherland deposed that "[w]e would also regularly go out for drinks, have barbecues or events at either of our homes and would go out for dinner together".
The Plaintiff joined the deceased on outings with his brothers and their families. Christopher Palombo Snr gave evidence that:
"The Deceased, the Plaintiff, my wife and I would often go on a drive together and socialise (such as have lunch or dinner). We all would go to the car show at the King's School at Parramatta which is held annually."
There were other contributions that the Plaintiff made as homemaker, including much of the cooking. The evidence of the Plaintiff on this point was corroborated by Domenico Valenti who deposed that "[t]he Plaintiff was often cooking and the Deceased would give me a plate of food". In the words of Christopher Palombo Snr "[i]t would not be uncommon for Jackie to be cooking. There would not be one occasion where you visited without Jackie offering coffee": Tcpt, 29 June 2020, p 34(36-45).
The Plaintiff also helped the deceased looked after his father when Christopher Palombo Snr was unable to do so. She accompanied the deceased on some occasions to Nepean Hospital after his father was admitted there in 2013. Similarly to the Defendant, the Plaintiff accompanied the deceased to his parents' graves, albeit when the Defendant and his daughters were not present.
In my view, a significant contribution made by the Plaintiff, at the request of the deceased, was keeping their relationship a secret from his immediate family. The evidence recounted above shows the lengths to which the Plaintiff went, including hiding herself and her belongings whenever the deceased's daughters visited. As she stated, in my opinion honestly, in cross-examination (Tcpt, 30 June 2020, p 62(05-11)):
"Q. Your evidence is that this arrangement of avoiding his daughters continued for six and a half years?
A. Correct.
Q. Was that satisfactory?
A. It wouldn't have been what I would have loved, but it was what Brian requested."
It was not to the Plaintiff's benefit to keep her relationship with the deceased a secret. The effort expended in so doing was solely for the benefit of the deceased. In my view, the fact that the Plaintiff persisted in this manner for nearly six and one half years demonstrates a significant contribution to the deceased's welfare and one which was detrimental to her. The behaviour of the deceased, in this regard, would be likely to have made her contribution to the relationship more arduous.
Her financial situation is not, therefore, parlous. However, it is comparatively substantially weaker than the Defendant's financial position.
The Plaintiff did not give evidence of any specific need apart from, presumably, the repayment of the loan secured against the Sanctuary Point property. It may be said that she requires a capital sum for the exigencies of life as she does not have any savings.
As to what was the just and equitable order in all the circumstances of this case, Mr Flaherty submitted early on the third day that the Plaintiff should receive the Erowal Bay property, the St Clair property and the Walmer Ave, Sanctuary Point property: Tcpt, 1 July 2020, p 152(35) - p 153(04). He agreed that, once the liabilities secured on those properties were taken into account, the net value of such provision was approximately $1,167,000: Tcpt, 1 July 2020, p 154(33-39). Following discussion, and an accounting for further debts, the amount became approximately $1,136,000: Tcpt, 1 July 2020, p 158(18-39).
In supporting that submission, Mr Flaherty emphasised that the Defendant had not made any significant contribution to the properties of the deceased that were acquired after separation. He seemed to accept, however, that the Plaintiff did not contribute, at least financially, to the acquisition of those properties either.
However, he sought to draw a parallel to the entitlement of a spouse on intestacy where there is not another, competing, spouse. He submitted that in such circumstances the spouse is entitled to the property in which he or she resides and the statutory legacy. Although he accepted that such an entitlement was less than the three properties which he said the Plaintiff should receive: Tcpt, 1 July 2020, p 181(10-20).
Following the conclusion of the hearing, Mr Flaherty revised his submissions in light of the Defendant's additional disclosure of the amount she had received from the life insurance policy payable upon the death of the deceased. His submission remained that the Plaintiff ought to receive the Erowal Bay property, the St Clair property and the Walmer Ave, Sanctuary Point property, but now, he submitted, the Plaintiff should receive those properties unencumbered.
His alternative submission was that the Plaintiff should receive the St Clair property and a lump sum equal to approximately $1,060,876.
Mr Tregenza, in his written outline, began by submitting that a distribution order should only not be made if there was some particular reason for so doing, such as being contrary to public policy. He submitted that there was nothing suggesting any such reason in the present case.
He examined the history of s 126 of the Act and observed, correctly, that the language of "just and equitable" was taken from the equivalent s 36(7) of the Succession Act 1981 (Qld). He was, as was Mr Flaherty, unable to find any decisions that had considered either s 36(7) of the Queensland Act or s 126 of the Act. Similarly, I have been unable to find any authority on this topic.
In the absence of any authorities directly on point, Mr Tregenza pointed to the decision of Lindsay J in Re Estate Wilson, Deceased and the High Court decision in Stanford v Stanford, to which I have already made reference above.
Mr Tregenza reiterated an oft-quoted adage that, despite the width of the phrase "just and equitable", it did not permit the Court to engage in "palm tree justice".
The above solely focussed on the contributions made by the Defendant throughout the relationship. Mr Tregenza placed heavy emphasis on those contributions as, in his submission, the consideration of each spouse's financial position was not relevant to the exercise of the Court's discretion. He submitted at par 31:
"The consideration of the asset position of either spouse is not, in itself, relevant to the exercise of the evaluative process in the determination of what is "just and equitable". To this extent, equity is not equality. If there are needs of one or both spouse which are reasonably necessary to be met, then that may be relevant in the circumstances where needs are demonstrated. The allocation of the estate should primarily look to factors in connection with the relationship and contribution such as those set out in the preceding two paragraphs."
Accordingly, he submitted that the appropriate distribution order was:
"It would be appropriate for the plaintiff to receive between 20% and 25% of the estate together with costs out of the estate. An alternative practical approach is for the plaintiff to be allocated the house at XX Arundel Park Drive, St. Clair as a specific gift to, inclusive of costs. The latter proposal avoids any engagement between the plaintiff and the defendant apart from the transfer of the house and reflects the deceased's testamentary intentions as stated in the late served affidavit of his brother, Christopher Palombo made 15 June 2020 at paragraph 18."
In his oral submissions, Mr Tregenza submitted that the children were "[o]f the utmost importance" in determining what was just and equitable in the circumstances. He pointed, in particular, to the position of children ordinarily under the rules of intestacy.
He maintained the submission he had advanced in his written outline that the financial position of a spouse, outside the deceased's estate, is irrelevant unless it relates in some way to financial need: Tcpt, 1 July 2020, p 199(09-17).
At the conclusion of the submissions, I formed the view that, ultimately, it was accepted that it would be just and equitable to make some form of distribution order.
I note that the St Clair property is security for two of the Westpac loans that are liabilities of the deceased's estate. It will be necessary for arrangements to be made to ensure that the St Clair property is released from that obligation.
To make such a distribution order would leave the Defendant with approximately $2,117,841 out of the estate. The precise composition of the remaining estate will depend upon what assets are required to be sold in order to meet the distribution order for the Plaintiff. In addition, the Defendant would retain the death benefits that she has received. On any view, the Defendant will receive property of substantial value.
In view of the events that occurred after the conclusion of the hearing, some modest allowance for additional costs for the Plaintiff should be added to the amount of agreed costs. In view of the agreement reached on costs at the hearing, I am optimistic that agreement should be reached on this aspect.
In answer to the issues identified by the parties:
1. Was the Plaintiff the spouse of the deceased immediately before his death within the meaning of Ch 4 of the Act? Yes. The Plaintiff and the deceased were in a de facto relationship that had been in existence for a continuous period of more than two years.
2. If the Plaintiff is a spouse of the deceased, should there be a distribution order made by the Court pursuant to s 126 of the Act? Yes.
3. If a distribution order is made, what is the just and equitable distribution of the estate of the deceased and should it include any conditions? See Paragraphs [402] and [403] above.
4. How should the costs of the proceedings be borne? As agreed between the parties.
In view of these conclusions, I shall allow the parties to discuss the way forward in relation to the administration of the estate and the form of orders. I shall allow 14 days for them to see if agreement can be reached. I adjourn the proceedings to the date being 14 days from the date of the delivery of these reasons.