Robson v Quijarro

[2009] NSWCA 365

New South Wales

Court of Appeal

CITATION:	ROBSON v QUIJARRO [2009] NSWCA 365
HEARING DATE(S):	26 June 2009
JUDGMENT DATE:	11 November 2009
JUDGMENT OF:	Ipp JA at 1; McColl JA at 2; Basten JA at 3
DECISION:	(1) Allow the appeal and set aside the order made in the Equity Division dismissing the appellant’s cross-claim. (2) Set aside the grant of letters of administration in favour of the respondents. (3) Remit the matter to the Registrar for a grant of letters of administration in favour of the appellant. (4) (a) Set aside the order made on 22 August 2008 that the defendant/cross-claimant pay the plaintiffs/cross-defendants’ costs in the Equity Division. (b) In lieu thereof, order that the plaintiffs/cross-defendants pay the costs of the defendant/cross-claimant in the Equity Division. (5) Order that the respondents pay the appellant’s costs in this Court. (6) Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW).
[	CATCHWORDS:	APPEAL – civil – appeal from final orders – nature of appeal – rehearing – combination of objective and oral evidence – significance of matters of credibility – de facto relationship – whether open to Court of Appeal to reassess factual findings - FAMILY LAW – de facto relationship – intestate death – grant of letters of administration – relationship of thirteen years duration – evidence of sexual relationship – evidence of business partnership – evidence of infidelity of deceased throughout duration of relationship – evidence of preliminary steps to reduce extent of financial inter-mingling – evidence of deceased’s intention to marry another woman in future – whether deceased and appellant in de facto relationship for period greater than two years at time of death - Probate and Administration Act 1898 (NSW), s 61B – Property (Relationships) Act 1984 (NSW), s 4 - WORDS AND PHRASES – “de facto spouse” – “live together as a couple” – “mutual commitment to shared life”
LEGISLATION CITED:	Family Provision Act 1982 (NSW), s 6 Probate and Administration Act 1898 (NSW), ss 32G, 61B Property (Relationships) Act 1984 (NSW), s 4
CATEGORY:	Principal judgment
CASES CITED:	Bourdales v Carroll [2007] NSWSC 1057 Branir v Owston Nominees (No 2) [2001] FCA 1833; 117 FCR 424 Cabal v United Mexican States [2001] FCA 427; 108 FCR 311 Costa v Public Trustee of NSW [2008] NSWCA 223 Roy v Sturgeon (1986) 11 NSWLR 454
PARTIES:	Merryl Kay Robson – Appellant Leidy Delpilar Quijarro – First Respondent Alexander Quijarro – Second Respondent
FILE NUMBER(S):	CA 40380/08
COUNSEL:	M S Willmott SC/E Elbourne – Appellant B R McClintock SC/M Lawson - Respondents
SOLICITORS:	Cropper Parkhill Solicitors – Appellant Bill Morland Solicitors - Respondents
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 115681/07
LOWER COURT JUDICIAL OFFICER:	Windeyer J
LOWER COURT DATE OF DECISION:	13 August 2008
LOWER COURT MEDIUM NEUTRAL CITATION:	Quijarro v Robson [2008] NSWSC 818

CA 40380/08
SC 115681/07

IPP JA
McCOLL JA
BASTEN JA

11 November 2009

Merryl Kay ROBSON v Leidy Delpilar QUIJARRO

Headnote

The late Luis Quijarro (“the deceased”) died intestate on 9 October 2006. His two adopted children (the respondents) brought proceedings in the Equity Division seeking a grant of letters of administration of his estate. The appellant, Merryl Kay Robson, also sought a grant of letters of administration as the de facto spouse of the deceased at the time of his death.

The appellant and the deceased had met in 1993 and immediately formed a sexual relationship. In 1996-97 the deceased and the appellant purchased a property in Redfern together, in 1998 they purchased a hotel together in Paddington and began living there whilst running the hotel, and in 2004 they moved into a flat in Zetland together, but continued to run the hotel in Paddington. The deceased and the appellant maintained a sexual relationship until the time of his death, however the deceased maintained multiple other relationships with women during this time, including a casual relationship with his ex-wife, with Winifred O’Brien from 1990 until a few months prior to his death, and with Marilyn Burton from early 2006 until his death.

In 2006 the deceased had taken steps to arrange for the transfer of the appellant’s share in the hotel in exchange for monetary consideration and ownership of the Redfern property, however no steps were taken to transfer the Redfern property, the monetary consideration was never paid, and the share transfer was not registered by the time of his death.

The issue for determination on appeal was whether at the time of his death, the deceased and the appellant had been living together as a couple for a period of at least two years.

The Court held, allowing the appeal:

(per Basten JA, Ipp and McColl JJA agreeing)

1. The dispute turned on an evaluative assessment of matters of objective fact, many of which were not in dispute. Although the trial judge had an opportunity to assess oral evidence, it was open to this Court to reassess the factual inferences: [7].

Cabal v United Mexican States [2001] FCA 427; 108 FCR 311; Branir v Owston Nominees (No 2) [2001] FCA 1833; 117 FCR 424; Costa v Public Trustee of NSW [2008] NSWCA 223, referred to.

2. The degree of mutual commitment to a shared life will be a sufficient factor in establishing the existence of the relationship. However, it is not a concept which is rigidly defined and may need to be applied with a degree of flexibility accommodating variation over time. The objective considerations in the present case were consistent with the deceased having a commitment to a shared life with the appellant despite having various sexual partners: [59]–[60], [63].

3. In assessing whether a de facto relationship has been terminated, it is necessary to distinguish between objective evidence of the circumstances at the time of death, and evidence as to future intentions. Whilst the deceased may have regarded the relationship with Ms Burton as serious and likely to lead to marriage, no concrete steps had been taken to achieve either that goal, or the necessary variation of his business and personal relationship with the appellant. The objective evidence did not establish that the relationship had been terminated: [72]–[75], [85].

CA 40380/08
SC 115681/07

IPP JA
McCOLL JA
BASTEN JA

11 November 2009

Merryl Kay ROBSON v Leidy Delpilar QUIJARRO

Judgment

1 IPP JA: I agree with Basten JA.

2 McCOLL JA: I agree with Basten JA.

3 BASTEN JA: The late Luis Quijarro (“the deceased”) died intestate on 9 October 2006. The respondents in this Court (his two adopted children) brought proceedings in the Equity Division seeking a grant of letters of administration of his estate. The appellant, Merryl Kay Robson, also sought a grant of letters of administration as the de facto spouse of the deceased at the time of his death.

4 The sole issue in dispute is whether the appellant had indeed been the de facto spouse of the deceased at the time of his death; if she were so qualified, she would have the greatest interest in his estate and would be entitled to a grant of letters of administration: Bourdales v Carroll [2007] NSWSC 1057 at [5] (Young CJ in Eq). Otherwise, it was common ground that the deceased’s adopted children would be entitled to the grant.

5 The trial judge, Windeyer J, decided the matter in favour of the respondents: Quijarro v Robson [2008] NSWSC 818. The only substantive order made by his Honour in those proceedings was to dismiss a cross-claim brought by the appellant. The matter was referred to the Registrar so that other matters associated with a grant of letters of administration to the respondents could be addressed.

6 On 10 November 2008 a notice of appeal was filed which identified the decision under challenge as being:

“1. the finding that the Appellant was not the defacto spouse of [Luis] Quijarro at the time of his death on 9 October 2006;
2. the finding that the Appellant was not, therefore, entitled to share in the intestate estate of the said Luis Quijarro; and
3. the finding that the Respondents were entitled to a grant of letters of administration.”

Despite the fact that orders were sought setting aside an order of the primary judge granting letters of administration to the respondents, that order was not made by his Honour, but subsequently by a registrar. However, it was suggested that his Honour’s order constituted a direction that there should be a grant in favour of the respondents and hence constituted a final order. In any event, no complaint was raised that the appellant needed leave to appeal.

7 While it is true that the issue in dispute was largely a factual matter, the respondents were not correct to assert that it turned entirely on the credibility of witnesses. Rather, it turned on an evaluative assessment of matters of objective fact, many of which were not in dispute. To the extent that it turned upon the state of mind of the deceased, that was a matter to be inferred from the testimony of other witnesses (and a few documents) as to his conduct. Accordingly, whilst accepting the constraints flowing from the opportunity afforded the trial judge to assess the oral evidence, it was open to this Court to reassess the factual finding: see Cabal v United Mexican States [2001] FCA 427; 108 FCR 311 at [223]-[224] (Hill, Weinberg and Dowsett JJ); Branir v Owston Nominees (No 2) [2001] FCA 1833; 117 FCR 424 at [25] (Allsop J, Drummond and Mansfield JJ agreeing); Costa v Public Trustee of NSW [2008] NSWCA 223 at [14]-[19] (Hodgson JA); [48]-[50] (Ipp JA) and in my judgment at [88]-[96]. For the reasons which follow, the approach adopted by his Honour was erroneous and the appeal should be allowed.

8 A determination of entitlement to the estate of the deceased turns in the present case on s 61B(3B) of the Probate and Administration Act 1898 (NSW), which relevantly provides as follows:

“ 61B Succession to real and personal property on intestacy
…
(3B) Notwithstanding subsection (3), if the intestate leaves a de facto spouse and also leaves issue but no spouse, the whole or, as the case may be, such part of the estate of the intestate as would, if the intestate had left a spouse, be required to be held in trust for the spouse of the intestate shall be held in trust for:
(a) where the de facto spouse was the de facto spouse of the intestate for a continuous period of not less than 2 years prior to the death of the intestate—the de facto spouse, or
(b) in any other case:
(i) except as provided by subparagraph (ii)—the issue as if the intestate left no spouse, or
(ii) where the intestate leaves no issue being children of the intestate or where such of the issue as are children of the intestate are issue also of the de facto spouse—the de facto spouse.”

9 For practical purposes, the question was whether the appellant was a de facto spouse within the terms of paragraph (a) of sub-s (3B).

10 Section 61B falls within Pt 2 of the Act, as does s 32G which defines a number of relevant terms and provides as follows:

“ 32G Interpretation
(1) In this Part:
de facto relationship has the same meaning as in the Property (Relationships) Act 1984 .
de facto spouse , in relation to a person dying wholly or partly intestate, means someone who:
(a) was the sole partner in a de facto relationship with the person, and
(b) was not a partner in any other de facto relationship.
(2) Except where the contrary intention appears, a reference in this Part to the spouse of an intestate includes a reference to a person who, at the time of death of the intestate, was the de facto spouse of the intestate.”

11 It was not suggested that the appellant was in any other de facto relationship :the only question was that posed by paragraph (a) of the definition of de facto spouse, namely whether she was the sole partner in a de facto relationship with the deceased.

12 The term “sole partner” is potentially obscure. Clearly there must be two people in the relationship and paragraph (b) excludes the possibility of the de facto spouse being a partner in another de facto relationship. Logically paragraph (a) must either limit the relationship between the de facto spouse and the deceased to one involving two people, or exclude the situation where the deceased was in a de facto relationship with a third person as well as the claimant de facto spouse. The scope of paragraph (a), in this sense, does not need to be resolved in the present case, as the primary judge did not find that the deceased was in a de facto relationship with any third person.

13 The other relevant definitional provision is to be found in s 4 of the Property (Relationships) Act which defines the term “de facto relationship”, as picked up in s 32G(1) of the Probate and Administration Act. Section 4, so far as relevant, reads:

“ 4 De facto relationships
(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:
(a) who live together as a couple, and
(b) who are not married to one another or related by family.
(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:
(a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(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.
(3) No finding in respect of any of the matters mentioned in subsection (2)(a)–(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.”

14 Read in combination, these subsections do not give rise to any precise definition, even in relation to the identified criteria. However, with the exception of par (2)(f), referring to “mutual commitment to a shared life”, the identified criteria are matters which, for the most part, are objective circumstances, to be determined on whatever evidence may be available, noting that some involve public aspects of the relationship and some private aspects. To the extent that the commitment of the deceased to a shared life with the putative de facto partner depends on statements made by the deceased during his or her lifetime, there will be no direct test of that person’s credibility, but there may well be factors of a contextual nature which will make it difficult to assess the extent to which such statements truly reflected the deceased’s own perception of the relationship.

15 The trial judge reminded himself at [36]:

“As in many of these matters the evidence adduced by either side, although it seems to some extent contradictory, is often generally truthful. It is just that people see things partly as they want to see them or as they think they should see them and partly in accordance with statements made to them by the persons involved in a relationship. It is usually not possible to reject the evidence of witnesses of one side and accept the evidence of witnesses of another in coming to a decision as to whether or not a de facto relationship has been established. It is also necessary to bear in mind [that] it is incorrect to think that perfection and harmony is [sic] a necessary requirement in de facto relationships but not in married relationships: Bar-Mordecai v Hillston [2004] NSWCA 65.”

16 Bar-Mordecai involved an appeal with respect to an application under the Family Provision Act 1982 (NSW), pursuant to s 6(1) of which the applicant had to be an “eligible person” namely, a person who was “living with the deceased person as her husband on a bona fide domestic basis” at the time of her death. The relevant criteria in that respect were identified in terms to similar effect as the list of criteria in s 4(2) of the Property (Relationships) Act. They were identified by Powell J in Roy v Sturgeon (1986) 11 NSWLR 454 at 459, referring to the New South Wales Law Reform Commission’s Report on De facto Relationships (LRC 36, 1983) at par 17.11, which in turn derived the criteria from case-law in the Administrative Appeals Tribunal with respect to social security cases. The passages which the trial judge in the present case had in mind in referring to the judgment in this Court in Bar-Mordecai may have included the following:

“120 The appellant was not entirely faithful to the deceased from a sexual point of view. Some marriages have a similar characteristic. It is, however relevant that the deceased ‘took him back’ after the short interlude in 1985. The secret dalliance with Ms Yakovleva that commenced a few months before the death of the deceased is not irrelevant to the ‘eligible person’ issue, but again it cannot be determinative. …
…
123 Whatever good intent may be present at the inception of a “normal” marriage, experience reveals that it more often than not turns out to be disadvantageous financially for one spouse rather than the other. Human nature is too complex to conclude from this that marriages are not genuine on this account. The financially ‘exploited’ partner may be content that it is happening or at least may see it as an acceptable part of the give and take of an ongoing commitment ‘for better or worse’.
124 Almost by definition, there will be one or more aspects of a de facto relationship that differ from the paradigmatic legal marriage. Even though a couple may have the legal capacity to wed, their choice to refrain from such a public and legal commitment is not in itself enough to preclude entry into a de facto relationship.
125 The concept of living ‘as … husband on a bona fide domestic basis ’ is not to be broken down into individual components …. The concept of ‘bona fide domestic’ relationship is not necessarily lost because there are bouts of selfishness or infidelity by one or both of the partners. The thrust of the descriptor ‘bona fide’ is to exclude sham relationships structured knowingly to present an outward appearance of marriage where its core elements are lacking. The unusual relationship between this couple did not suffer from any such lack of bona fides.”

17 The respondents noted, correctly, that the exercise undertaken by the primary judge involved an evaluative or “discretionary” judgment, but one which differed, from the point of appellate review, from a challenge to the exercise of a discretionary power: see Costa at [98]-[105].

18 Much of the evidence concerning the joint and separate lives of the deceased and the appellant was uncontroversial. They met in 1993 and, as described by the trial judge, “immediately formed a relationship including a sexual relationship”: at [7]. They did not immediately live together in the same house but they did spend nights at each other’s separate residences. At that stage, each had been married but had separated. His Honour continued the account of the early relationship in the following terms:

“The deceased changed houses, first to Camperdown and then later to Paddington and he and the [appellant] did live together in the Paddington house for six months in 1998. During this time I accept the evidence that they ate together, slept together and it seems lived as a couple would. It is accepted by the [respondents] that the deceased and the [appellant] were in a de facto relationship at some stage and it seems that they were then.”

19 In 1998, the deceased purchased an hotel with two business partners, whose shares he subsequently acquired, with, according to the appellant, a contribution from her of $25,000. Shortly after the hotel was purchased (in September 1998) the appellant moved in to the licensee’s accommodation on the first floor. The deceased moved to the hotel in 1999, after selling his property in Paddington.

20 During the period from early 2000 until April 2004, the appellant and the deceased lived in the hotel and nowhere else. They did not share a bedroom throughout that period, the appellant having moved from the main bedroom in the licensee’s accommodation to a small bedroom on the first floor and later to a bedroom on the third floor. She stated that she continued to use the bathroom on the first floor and kept her “belongings” there. The trial judge accepted that she continued to use that bathroom, but did not accept that she “kept all her belongings in the second bedroom there”: at [10].

21 It is not in dispute that, in April 2004, both the deceased and the appellant moved from the hotel to a two bedroom rented flat in Zetland. Both continued to live there, sleeping in separate bedrooms, until the death of the deceased in 2006.

(b) sexual relationship

22 As noted above, his Honour accepted that there had been a sexual relationship between the appellant and the deceased which commenced in 1993. The deceased undoubtedly had sexual relationships with other women in the course of the 13 years prior to his death. The deceased was married to Rita Quijarro from November 1980 until July 2006. Although they had separated by 1993, she stated that they had a “casual physical and sexual relationship until approximately February 2006”. She described the deceased as “a woman’s man”. The primary judge described him as “something of a philanderer”: at [6]. In such circumstances, it may be that the existence of a sexual relationship is of more limited significance that it might otherwise be, although, it may also mean that the absence of a sexual relationship would have greater significance than it might in other circumstances. Nevertheless, his Honour accepted that a sexual relationship with the appellant continued until the time of the deceased’s death.

23 In February 2006 the deceased met Marilyn Burton (known as “Buda”) at a restaurant in Murwillumbah. On Sunday, 8 October 2006, the deceased flew to the north coast to visit Ms Burton. He died the following day. The trial judge accepted that he had spent a romantic night with the appellant, before flying to the north coast. As his Honour described it at [46]:

“It is an extraordinary relationship where a man can share a bottle of champagne by candlelight in bed and have sexual relations with one woman on the morning of his trip north to visit another woman and yet will die the next day in bed with that other woman to whom he had proposed marriage and with whom he has discussed a marriage date to take place some months later.”

24 The question of the deceased’s relationship with Ms Burton is relevant to whether he maintained a commitment to a shared life with the appellant at the time of his death. However, it is clear that he did maintain a common residence with the appellant and an on-going sexual relationship, until the time of his death.

(c) financial and property arrangements

25 Both the appellant and the deceased had, when they met in 1993, established lives with some financial resources of their own. In 1996 or 1997, they purchased a property in Redfern with another couple. The interests of the other couple were acquired in September 1997 and thereafter the property remained in the names of the deceased and the appellant as tenants in common, with 7/12th and 5/12th interests respectively.

26 In February 1998 the deceased established a company known as 3Weeds Hotel Pty Ltd of which he and the appellant were directors and shareholders. At the time of his death, he and a family company in his name held the bulk of the shares, with the remaining 12.5% being held by the appellant.

27 The third property in which they were involved was the flat at Zetland. Through arrangements made by the deceased, half the rental payments on the Zetland flat were debited to the company loan account in the name of the appellant.

28 These matters demonstrated an unequivocal financial and property inter-relationship. However, the significance of that inter-relationship, by the time of the deceased’s death, was complicated by a step which had been taken by him to obtain from the appellant her interest in the company which ran the hotel. On 25 July 2006 the deceased had arranged for the stamping of a share transfer form, signed by the appellant as transferor and by him as transferee, for her shareholding in the company at a consideration identified as $6.40 per share. That would have involved a payment to her of $400,000. The payment was not made, nor was the share transfer registered before his death. Further, his Honour accepted that the agreement between the deceased and the appellant was that the consideration for the share transfer included not only the cash component, but also the transfer to the appellant of the deceased’s interest in the Redfern property. There was no evidence that any steps had been taken to effectuate the property transfer, nor did the evidence demonstrate any current capability of the deceased in July 2006 to pay the cash component.

29 The significance of the financial arrangements was a matter of contention during the trial. The appellant gave evidence that the purpose of the transfer was to facilitate finance for the development of the hotel. She also stated that the appellant had been angry with her in respect of breaches of the licence arising from the presence of underage drinkers on the premises. There was evidence of a prosecution for two offences arising from an incident on 29 April 2006.

30 Although the deceased held the substantial majority shareholding in the company operating the hotel, it was jointly run by the deceased and the appellant, with both working long hours at the hotel. The evidence with respect to the share transfer was not accompanied by evidence suggesting that the managerial arrangements in respect of the business were likely to change. She was still running the hotel after the death of the deceased.

31 In summarising the various aspects of the relationship, his Honour stated at [38](h):

“There is no evidence of any intermixing of money or assets. Redfern was a business investment held in different shares; there is no evidence of joint bank accounts. Against this, however, it must be accepted that the parties, to a large extent, lived out of the hotel.”

32 With respect, the joint business arrangements and the sharing of an investment property demonstrated a degree of financial inter-dependence of a kind which is relevant to the existence of a de facto relationship. Together with the maintenance of a common residence and a sexual relationship, the existence of joint ownership of property and financial inter-dependence are significant factors in supporting the existence of a de facto relationship. No doubt the arrangement by the deceased for the execution by the appellant of a share transfer demonstrated an intention on his part to unwind their financial inter-dependence. However, in the absence of any evidence that he had taken steps to provide the agreed consideration for the transfer, the significance of the executed share transfer must remain equivocal.

(d) performance of household duties

33 The appellant and the deceased, during the period of their relationship, were not involved in raising a family. The appellant’s daughter gave evidence of meeting the deceased in March 2000. (It appears that she had left home before 1993.) The deceased’s children were younger, being born in 1983 and 1984 respectively. After their parents’ separation in 1990, they lived with their mother, Rita Quijarro.

34 So far as household duties were concerned, his Honour accepted that the deceased had a long-standing relationship with another woman, Mrs O’Brien, who did his laundry. His Honour made the following further findings at [38](i):

“The [appellant] did not perform household tasks to the extent she originally alleged. At least while the deceased’s children were at the hotel, she prepared only a few meals; she did not do the laundry as she originally alleged; she certainly did not look after the deceased’s bedroom at Zetland. Nevertheless I accept that the defendant did carry out the general cleaning in the licensee’s accommodation in the hotel.”

35 Curiously, there was no specific finding in relation to the household tasks undertaken by the deceased. To the extent that there was no evidence that the deceased undertook cleaning or other household duties, no inference appears to have been drawn that there was a lack of commitment to a shared family life. The failure of the female partner to demonstrate that she undertook the bulk of the household duties should not be treated as demonstrating that the parties did not “live together as a couple”, in the language of s 4(1)(a).

36 Where two people share both a domestic and a business or professional life, it may well be understandable if they (or one or other of them) seeks to present in the course of the work life, an appearance of distance which does not reflect their domestic relationship. In affidavit evidence, the appellant stated:

“Over the years, in discussions between myself and Luis, I said to him words to the effect: ‘I do not like being referred to as a de-facto. I would like to regard each other as business partners and life partners.’ Luis agreed and we would commonly refer to each other as ‘partners’. I was circumspect about our private relationship during business times, but Luis was sometimes less reticent.”

37 There was a degree of inconsistency, which may have reflected partiality, in the evidence of the witnesses. His Honour accepted the evidence of the respondents that they did not see their father demonstrate affection towards to the appellant, but treated the evidence as not being “of much significance”: at [15]. In respect of the evidence of Ms Leidy Quijarro, his Honour noted at [16]:

“After 2001 she said that she only saw her father about once every six months and never with any woman. She said that at the visit to Zetland after her father died the [appellant] said, ‘Luis and I were not a couple. We were only business partners.’ But in cross-examination she agreed that the [appellant] said as well ‘This was Luis’ and my home. No one else was allowed in. This was our private sanctuary away from the hotel.’”

38 Mr Mawhinney, an insurance broker, gave evidence of his knowledge of the appellant and the deceased, having been introduced to the appellant by the deceased in late 1997 or early 1998. Amongst other things he said:

“My relationship with Luis and Merryl was not only business and on numerous occasions I had the opportunity to dine with them at various restaurants. On these occasions they always appeared to be affectionate towards each other. I often heard Luis and Merryl referring to each other using words of affection such as ‘love’ or ‘darling’.”

39 The appellant’s daughter, an information technology consultant in Victoria, gave evidence of her observations of the deceased and the appellant together. She described the deceased as having “always treated” her mother as a “trusted and cared-for close personal friend and confidant” and as seeing her mother treat the deceased “with care and affection”. Mr Power, a real estate sales consultant, gave evidence of having known the deceased from approximately 1995 and having been introduced to the appellant in late 2004. Mr Power said the deceased described the appellant to him and his wife as the deceased’s “partner … in business with me”, and as having said, “I’m lucky, I’ve found the best woman”. Following several visits to the hotel over the period from 2005 to 2006 he stated:

“On my visits to the hotel I observed Luis and Merryl being affectionate to one another. This further supported my belief that they were a couple. Luis often referred to Merryl as ‘my partner’. I observed that Luis did not treat Merryl as an employee. I observed that Merryl also treated Luis with affection. I observed them speaking intimately together.”

40 Mr Ajbschitz, a fashion sales consultant, gave evidence of having known the deceased since early 1998 and, through him, having met the appellant when the deceased took over the hotel. He described the deceased introducing the appellant to him as “my wife Merryl” and as having told him in the middle of 2006, “she’s the best wife in the world and I couldn’t live without her”. In late 2005, he asked the deceased how long he had known the appellant and was told that “we have been together close to 12 years, she is the best thing that ever happened to me in my life”. He further stated:

“When Luis referred to Merryl he would call her ‘my dear’ or ‘darling’ or just ‘Merryl’. I observed the way that Luis treated Merryl and would describe it as the way one would treat a lover, that is he was outwardly affectionate to her, caring and consideration.”

41 Mr Rennie, a property valuer, gave evidence of having been introduced to the appellant by the deceased in early 2000. He stated:

“From the late 1990s up until Luis’ death in late 2006 I would often meet with Merryl at the hotel. …
I remember that while Merryl was not always at the hotel with Luis, as she had commitments outside the hotel, when Luis and I discussed how Merryl was he always spoke of her with affection.
I never asked personal questions of either Luis or Merryl …. Even before they lived together, I knew Luis would often stay at Merryl’s house because he would say words to the best of my memory …:
“I need to get away from the pub I’m staying with Merryl.’
From my observation Luis always appeared kind, respectful and affectionate to Merryl and Merryl was always very softly spoken and reserved with Luis.”

42 A property manager from Woollahra, Ms Chudyba, had worked at a bar in the hotel from July-September 2005. She described the deceased referring to the appellant as “his soul mate” and “as the love of his life”. She gave evidence of them displaying affection to each other whilst remaining professional and of the appellant being attentive to the deceased in a supportive way. She stated:

“At the hotel, I also saw that they often shared meals together. I also saw them hug one another and it appeared to me that they appeared very happy in each other’s company.
…
In my conversations with Luis when he would occasionally refer to his place of residence, when he did this he would use words such as ‘their home’. I interpreted this as meaning Merryl’s and his home where they lived together. If Merryl was not at the pub he would say ‘She’s at our home’ or ‘She’s at the University working’.”

43 On the other hand, there was evidence from Mr Bray, a real estate agent, Mr Sweetapple, a builder introduced to the deceased by Mr Bray and the deceased’s accountant, Mr Coulcher. They all gave evidence that the deceased was unhappy with the appellant’s role in his life and that they had never seen outward displays of affection between the two. Their evidence in this regard is set out in some detail by his Honour at [23]-[30]. In relation to these competing descriptions of the relationship, his Honour made the remarks at [36] set out at [15] above.

44 A number of the witnesses were cross-examined, but a number were not. In these circumstances, it was necessary for his Honour to make findings as to the “reputation” and the “public aspects” of the relationship. In that context, it may be important to distinguish between observations of the parties to the relationship in public, and statements made by one or other of the parties to friends, family members or acquaintances. The latter are more likely to be relevant to the degree of mutual commitment to a shared life, and will be discussed in that context below.

45 No doubt the deceased and the appellant did not always act consistently in public. In particular, they may have been more relaxed in some situations and with some people than in other circumstances. Nevertheless, there was a body of evidence which supported the appellant’s case that people who saw them in public either believed that they were married (as in the case of Mr Ajbschitz) or noted that they behaved as if they were a couple, by demonstrating affection or attentiveness to each other. In the end, such evidence may be of limited assistance because of the time at which it occurred, the limited opportunities for observation, or the possibility of misinterpretation. Nevertheless, conduct may speak at least as volubly as words to the nature of a relationship. It will generally be of some importance. Evidence should not be disregarded merely because the witnesses are not cross-examined.

46 The final factor which requires separate consideration is the extent to which the appellant and the deceased had a mutual commitment to a shared life at the time of the death of the deceased. To an extent, the objective circumstances relevant to this question have already be canvassed. The relevant evidence included:

(i) the conduct of each party in relation to the other;
(ii) statements made by the parties with respect to their relationship, and
(iii) conduct of the parties referable to the future.

47 In the first category, the objective circumstances demonstrated a continuation of common residence, a sexual relationship, a degree of financial inter-dependence, extending over some 12 years. In a relationship of that length, as his Honour recognised, there will be periods of disruption and disaffection and times of “perfection and harmony” are not expected to be uniform and unbroken.

48 In relation to the second category, the evidence revealed statements, particularly on the part of the deceased, which were inconsistent to a significant degree. These included statements of dependence and respect for the appellant, together with statements which were dismissive of her and expressed a desire that the relationship end.

49 As may be seen, the second category may readily overlap with the third category of evidence. Statements as to the future are likely to give colour and meaning to conduct which reveals plans for the future. On the other hand, conduct may itself provide a firmer basis for understanding future plans than mere words. An expressed intention to end a relationship may demonstrate a permanent absence of commitment to a shared life, a temporary loss of such commitment or merely a diminution of a continuing commitment.

50 The preparation of the share transfer was an important element in the assessment of a continuing commitment on the part of the deceased to a shared life with the appellant, in mid-2006. Significant attention was given in the judgment below to the appellant’s apparent reluctance in cross-examination to accept that, if the transfer of shares and the Redfern property were effected, their financial interests would be “completely unravelled” or “untangled”: Tcpt, 25/06/08, p 119. However, potentially more relevant than her understanding of the significance of the event was the inference which was to be derived as to the deceased’s intentions.

51 The evidence of the deceased’s accountant, Mr Coulcher, was that the deceased had on more than one occasion expressed his dissatisfaction with his relationship with the appellant. He gave evidence that in about July 2004 he had commenced to make arrangements to renovate the upstairs area of the hotel and build serviced apartments. At about that time he had told Mr Coulcher that he wanted to “get away from Merryl”. Mr Coulcher continued:

“In a subsequent conversation with Luis, but prior to him moving out of the hotel to Zetland, in or around mid to late 2004, I had a conversation with Luis wherein he said words to the effect:

Luis: I wanted to get away from Merryl, but I would have to pay her out. If I got rid of her I would have to buy her shares in 3Weeds. I don’t have the money to do that just now. Merryl said that she has nowhere to go while the renovations are being done. I told her that she can move into one of the bedrooms at the Zetland apartment as long as she pays half the rent.”

52 Mr Coulcher gave further evidence of a conversation in July 2006 to the following effect:

“Merryl has agreed to sell her shares in the hotel to me for $400,000 plus my half share in the Holden Street, Redfern property. I want to get rid of her out of my life.”

53 Mr Coulcher’s evidence of consistent dissatisfaction on the part of the deceased in relation to the appellant, between 1998 and 2004, did not fit well with the evidence of other witnesses. Mr Coulcher also agreed that he had lodged the share transfer form with the Australian Securities and Investments Commission, after the death of the deceased, despite knowing that no consideration had been provided for the transfer.

54 The real significance of the share transfer, signed in July 2006, seems to derive from the contemporaneous establishment of a relationship between the deceased and Ms Burton. It will be necessary to refer to that matter further. However, it is convenient first to put that relationship into the context of the relationship between the deceased and other women and to explain the manner in which the trial judge approached these relationships.

55 His Honour structured his judgment so as to treat separately the situation up to the end of 2005, and thereafter. The reason for taking that approach is not entirely clear, as his Honour accepted that the question to be answered was whether the relationship was extant at the date of the deceased’s death. By taking that approach, his Honour made a finding disregarding the relationship with Ms Burton, but also disregarding evidence of a continuing relationship with the appellant, during 2006. Nevertheless, adopting that approach, his Honour stated at [38](k):

“The relationships of the deceased with other women indicate a lack of commitment by him to the defendant. His activities lead to an almost inevitable conclusion that he felt free to do as he wished.”

56 His Honour also referred to the fact that the deceased had apparently slept with his wife in the main bedroom in the hotel, without the knowledge of the appellant: [38](m).

57 The main person with whom the deceased had a relationship of a significant nature, during the period of his relationship with the appellant, was Mrs Winifred O’Brien. She met the deceased in 1990, when she was approximately 50 years of age, being some 12 years older than the deceased. A sexual relationship arose at that time and apparently continued, with an interlude in 2002-2003, until about 10 weeks before his death. Her relationship with the deceased therefore pre-dated the relationship between the appellant and the deceased. Mrs O’Brien also said that she washed the deceased’s clothes and ironed them: at [18]. She had not met the appellant prior to the death of the deceased and did not know that the deceased was married.

58 If, as his Honour appears to have accepted, the appellant and the deceased were in a de facto relationship in and around 1998, that relationship must have co-existed with the period during which the deceased was sexually involved with Mrs O’Brien and with his wife. It does not necessarily follow that he did not have a degree of commitment to a shared life with the appellant.

59 Although, in accordance with s 4(3), a degree of mutual commitment to a shared life is not an essential element of a de facto, it is difficult to envisage two persons living together as a couple without some degree of mutual commitment to a shared life. Thus, in most cases, satisfaction of that criterion, at least to some degree, will be a significant factor in the overall assessment of the relationship. However, the concept of a commitment to a shared life is not one which is rigidly defined and clearly may need to be applied with a degree of flexibility, depending on the circumstances. Similarly, the concept of “mutual” commitment is one which can accommodate a degree of flexibility and variation over time and having regard to the relevant circumstances.

60 The objective considerations in relation to the present case are consistent with the deceased having a commitment to a shared life despite having various sexual partners.

61 As noted above, his Honour approached the matter at first by asking whether “at least up to the end of 2005” the evidence demonstrated that the appellant and the deceased were in a de facto relationship: at [38]. His Honour set out in a table the circumstances which favoured such a finding, but in fact did not answer the specific question as to the situation up to the end of 2005. Rather, his Honour reached the negative conclusion, namely that “there was no de facto relationship at the end of 2005 or thereafter”: at [44].

62 It was only after setting out, at [38] the circumstances which supported or were inconsistent with the existence of a de facto relationship that his Honour turned to the statutory context of s 4 of the Property (Relationships) Act. His Honour then continued at [41]:

“I have set out the facts which I consider important under the s 4(2) heads, bearing in mind that it is the whole not the particular part which is important, that the list is not exclusive, and that the purpose of taking matters in the list into account is to determine whether the deceased and the [appellant] lived together as a couple, which in general persons considered as united as one or united in the same way as if married. It is, however, different from marriage which is a status brought about by contract which can only be dissolved by death or court order. A de facto relationship on the other hand can end at any time by agreement or by action of one party. Thus commitment to a shared life is a fact of considerable significance to be taken into account.”

63 The comparison with marriage is not illegitimate, but may carry with it unarticulated assumptions. Further, because it is the substance and not the legal form of the relationship which is important, emphasis on the means of dissolution can be misleading. Finally, although it is correct to say that commitment to a shared life is a criterion of considerable significance, as already noted, that criterion should not be dismissed as unsatisfied because a person considers himself (or herself) free to have involvements of a sexual nature with other persons.

64 In reasoning towards the conclusion that there was no de facto relationship at the end of 2005, his Honour stated at [43]:

“The strongest evidence of there being a de facto relationship at the time of the move to Zetland is that the parties both moved there, although the relationship with Mrs O’Brien and Mrs Quijarro continued as before. But against that is the evidence, which I accept, that the deceased instructed his accountant that the rent at Zetland be debited in equal shares to his loan account and to the [appellant’s] loan account.”

65 This paragraph is puzzling. First, it is not entirely clear why the evidence of continuing relationships with other women supported the existence of a de facto relationship with the appellant, unless it was because the deceased and the appellant were in a de facto relationship prior to the move. On the other hand, the fact that the deceased sought to have the appellant account for her share of the rent at Zetland was not necessarily an indication that the relationship had ended. It could be suggestive of a continuing relationship in the sense that there was an expectation of common residence. There may have been various explanations for that arrangement which were not inconsistent with a commitment to an ongoing de facto relationship.

66 Taking into account the evidence set out above (accepted by his Honour), and the inference as to the continuation of a de facto relationship from some time around 1998 until the move to Zetland in April 2004, it is difficult to see any basis for concluding that the relationship ended between April 2004 and December 2005.

67 Further, the suggestion at [44] that there was no de facto relationship “at the end of 2005 or thereafter” was based on an absence of consideration of the evidence as to what occurred thereafter. Once the artificiality of the timeline adopted by his Honour is identified, and the existence of a de facto relationship up until December 2005 is accepted, it is necessary to consider whether the events thereafter demonstrated that the relationship had ended. His Honour addressed that question, against the possibility that he was wrong in his earlier conclusion.

68 That assessment required consideration of the relationship with Ms Burton and the agreement for transfer of shares and the interest in the Redfern property: at [45].

69 In making that assessment, his Honour rejected the evidence of the appellant that she was unaware, prior to the death of the deceased, that Buda was a women and not “some sort of male spiritual guru”. However, his Honour also accepted that her understanding of that relationship was not critical, as it was open to the deceased to end the de facto relationship unilaterally. His Honour continued:

“Thus the question has to be decided whether the relationship of the deceased with Ms Burton was just a dalliance within a de facto relationship or whether it was more and ended the relationship of living as a couple.”

70 After the passage set out at [23] above, describing the conduct of the deceased in the days before his death as “extraordinary”, his Honour continued:

“Strange as it is I am of the opinion that whatever commitment there was to a joint life as a couple by the [appellant], there was no such feeling or interest by the deceased at the time he died, who by then used the [appellant] as he wished and did as he wished.”

71 The appellant challenged the proposition that one party could terminate a de facto relationship unilaterally, without any form of communication with the other party. That proposition, in substance, elevated the existence of a mutual commitment to a shared life to a necessary precondition for an on-going de facto relationship. To that extent it was erroneous: see s 4(3).

72 However, it was necessary for the appellant also to challenge the following reasoning, namely that a conclusion that the relationship had ended was “supported by the evidence as to sale of the shares and proposed transfer of the interest in Redfern”: at [47]. That, his Honour noted, would have completely separated the financial interests of the parties. His Honour also saw a proposal for the appellant to become the licensee of the hotel as supporting the view that the relationship would change to that of “an ordinary business arrangement”: at [47].

73 So far as the share transfer was concerned, the trial judge rejected the appellant’s evidence that a reason for the transfer of shares was to make it easier for the deceased to borrow money for the development of the hotel. His Honour commented that the explanation “does not make sense”: at [47]. Accepting that to be so, not much about the arrangement did make sense. It seems most unlikely that the deceased would have had any capacity to buy out the appellant’s interest in the hotel and finance the proposed development. There was no evidence that he took any steps to raise the relevant consideration, nor to transfer his interest in the Redfern property to her. The most plausible explanations of the share transfer are that it was a gesture, ill thought through, which was likely to have little practical consequence for the relationship between the deceased and the appellant in the immediate future.

74 So far as the transfer of the hotel licence into the appellant’s name was concerned, that must, whatever its business purpose, have tended to cement the inter-relationship of the financial affairs of the parties. The immediate cause of the transfer was probably the fact that the deceased would have been at risk with respect to the licence, following two breaches involving under-age drinking.

75 Finally, his Honour placed some weight on the evidence of the appellant that “she made no complaint of the visits to Ms Burton as in exchange for that [sic] she had an opportunity on the other weeks when the deceased was working in the hotel to visit her own children”: at [47]. That was said to be “almost an acknowledgment by her that the relationship had fallen apart”.

76 The evidence from the appellant as to her knowledge of the deceased’s relationship with Ms Burton, in contrast to other parts of her evidence, was clear and precise. She said that, until June 2006, she thought that “Buda” was a male. She learned the truth from the deceased’s wife, Rita, who rang her to tell her that Buda was actually another woman. She said she did not confront him over the relationship but then knew that the deceased was travelling north to see another woman every second week. The “acknowledgement” to which his Honour appeared to have referred was to be divined from the following evidence (Tcpt, pp 103-104):

“Q. You knew at that stage, in any event, that Luis was travelling north to see another woman?
A. Yes.
Q. You knew at that stage that he was travelling north to see this other woman every second weekend?
A. Not weekend, no, during the week.
Q. I’m sorry, during the week?
A. I also wanted to travel. If I needed to travel to see my family, and there was a new grandchild that I desperately wanted to see, therefore, I had to let him travel too.
Q. You knew he was going off to see another woman; correct?
A. I thought it was part of a group. I didn’t realise that it was only her.
…
Q. [Rita] warned you that Luis and Buda had developed a relationship?
A. Yes, she did.
Q. Didn’t she?
A. Yes.
Q. You believed her?
A. Yes, I did.
Q. And you knew that Luis was continuing to go and see Buda, among other people at least, every second week didn’t you?
A. I did.
Q. So you were aware at that stage of the existence of this relationship?
A. Yes. And it was rocky with us at that time. There were all those other things that were happening, but I thought when they got settled he would be – he would continue with me.
Q. You didn’t confront him about it?
A. No.
…
Q. Can I suggest therefore that that attitude, namely I’m talking about the time you had it, using Luis’ infidelity and his travels to justify your trips away was consistent with you having no or minimal feelings towards Luis at that time, what do you say in response to that?
A. That certainly wasn’t true. For all his faults he was – he also made me happy.”

77 Whether or not the appellant was being overly optimistic about the continuation of the relationship at that time, this evidence was inconsistent with her having concluded that her relationship with the deceased was at an end. There was no such express “acknowledgment”.

78 That view of the relationship must be placed in the context of the deceased’s conduct, as recounted by Ms Burton. She said that their relationship involved “an instant connection” and that she fell in love with him “the night that I met him”. The day after they met at a restaurant, she gave the deceased and his wife a massage at the “bed and breakfast” at which they were staying. Some two weeks later, on a further trip north, the deceased was met by Ms Burton at Coolangatta airport and gave her a necklace, saying that they were “now spiritually married” and that they would “make it legal as soon as possible”. The affidavit continued:

“I was very happy when Luis gave me the necklace. I was very surprised that our relationship was developing so quickly, but I was very content for it to move ahead so quickly.”

79 The sexual relationship developed “during” that visit, but apparently after the deceased had declared them to be “spiritually married”. Ms Burton said that the deceased had told her about the appellant and that “he had had a previous relationship with her” but that “we are not involved any more”. She also claimed that the deceased said:

“I don’t want her around, but she won’t go.”

80 Ms Burton was aware that the deceased was married and suggested that he needed to organise a divorce. She stated that he had agreed and would “attend to that straight away”. In fact, the evidence of Ms Rita Quijarro was that they had been planning a divorce since the previous year.

81 Much of the rest of Ms Burton’s evidence concerned marriage plans and her understanding as to their future living arrangements. In her oral evidence she expanded upon the proposed business arrangements, which had an air of romantic improbability about them. However, in her affidavit, she gave the following account of the marriage arrangements:

“In the last week before Luis death, and after his mother died on 1 October 2006, Luis and I had a conversation wherein we were finally about to set a wedding date. Luis and I had a telephone conversation wherein we said words to the following effect:
Luis: ‘Now that Mum has died we don’t have to go to Ecuador to get married.’
Me: ‘We will get married on 8 February next year, that will be the anniversary of us meeting.’
Luis: ‘How about March.’
Me: ‘It should be as close to the 8 ^th as possible.’
Luis: ‘The Saturday is the 10 ^th how about that?’
Me: ‘That’s great. We will get married on the 10 ^th March next year.’
Luis: ‘I will call my sisters Ines and Monica and tell them that we are getting married in Sydney. We will get Ines out to Australia and she can live with us.’”

82 Although Ms Burton described the deceased as appearing to be tired when he arrived for his final visit, she did not appear to be aware of his general state of poor health. Mrs O’Brien had stated in her evidence, after referring to two heart attacks suffered by the deceased:

“From about 2000 I noticed that Luis began to become breathless and lethargic on occasion. I particularly noticed that Luis was becoming breathless after sex: …. My sexual relation with Luis ceased ten (10) weeks before his death only after I noticed him grabbing at his neck during sexual intercourse. On that occasion I observed him to become very short of breath and swoon backwards. … I realised that these symptoms were related to his heart condition.”

83 In considering the statements made by the deceased to other persons, his Honour noted that caution was required because only one party to the conversation was able to give evidence. His Honour continued at [42]:

“For instance, evidence of statements of the deceased that his relationship (whatever it was) with the [appellant] was over could not be accepted as true if the evidence of the [appellant] is accepted that the deceased was regularly in bed with her engaging in sexual intercourse. Generally speaking I accept that part of her evidence.”

84 It is clear that the deceased was less than frank with Ms Burton. It is also clear that she had little or no idea as to his business affairs or the inter-relationship of his financial interests with those of the appellant. She had no idea that Mrs O’Brien and the deceased had a long-standing sexual relationship, which continued during more than half of the period during which Ms Burton was involved with the deceased. In her affidavit, Ms Burton referred to a card that she “gave to Luis” for his birthday. She implied that there may have been other cards which she sent to Luis which were disposed of after his death. In a brief, but revealing passage of cross-examination, she agreed that she had not given him the birthday card at all, but had merely written it out before he died: Tcpt, p 46.

Conclusion

85 It may be acknowledged that, as at the date of his death, the deceased did not see his relationship with Ms Burton as a mere “dalliance”. He probably expected it to lead to marriage. However, he had taken no concrete steps to effect that purpose, beyond a verbal agreement with Ms Burton as to the date of the marriage and how it should occur. Even if Ms Burton did not then know it, the deceased would have had to undertake a variation of his arrangements with the appellant, including their business relationships in respect of the hotel, their living relationship at Zetland and possibly (although that might not have been part of his plan) their sexual relationship. These were all things which would, if they occurred, have occurred in the future. The evidence may have supported, on one view, the likelihood of their occurrence. Nevertheless they had not occurred and the relationship with the appellant, while no doubt realistically described by the appellant as “rocky” in 2006, had not been terminated.

86 His Honour’s conclusion to the contrary does not readily stand with his realistic caution in respect of statements made by the deceased generally. What had actually occurred, in 2006, prior to the deceased’s death, did not demonstrate an actual termination of the relationship on the basis, accepted above, that it continued beyond the end of 2005.

87 His Honour’s conclusion to the contrary appears to have been significantly influenced by his general unease with a relationship in which the deceased appeared to do as he wished in relation to the appellant and treat himself as free of any commitment to abjure sexual relations with other women. There had been, nevertheless, more than a decade of shared life and satisfaction in varying degrees of many of the criteria set out in s 4(2). Accepting his Honour’s view that the appellant had exaggerated in various respects the strength and commitment of her relationship with the deceased, many of the objective criteria did not depend ultimately on her view of it. The evidence which his Honour did accept, or in some respects, did not reject, demonstrated a de facto relationship continuing up until the death of the deceased.

88 It follows that the appeal should be allowed and the grant of letters of administration to the respondents, which has now occurred, should be set aside. The matter may be referred to the Registrar in Equity to formalise arrangements for a grant of letters of administration to the appellant.

89 I would propose the following orders:

(1) Allow the appeal and set aside the order made in the Equity Division dismissing the appellant’s cross-claim.

(2) Set aside the grant of letters of administration in favour of the respondents.

(3) Remit the matter to the Registrar for a grant of letters of administration in favour of the appellant.

(4) (a) Set aside the order made on 22 August 2008 that the defendant/cross-claimant pay the plaintiffs/cross-defendants’ costs in the Equity Division.

(b) In lieu thereof, order that the plaintiffs/cross-defendants pay the costs of the defendant/cross-claimant in the Equity Division.


(5) Order that the respondents pay the appellant’s costs in this Court.

(6) Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW).

**********