Andrew Lacey
Managing Principal
Estate Planning, Litigation and Dispute Resolution
Lifestyles of the not so rich and famous – the Federal Court of Australia refuses Salim Mehajer’s bid to annul his bankruptcy
10 December, 2019
Last week the Supreme Court of New South Wales handed down judgment in an estate dispute where it applied the law of intestacy to a complex factual scenario involving a de facto partner who was in a secret relationship with the deceased: Estate of the late Shirley Joan Violet Gardner; Bernengo v Leaney [2019] NSWSC 1324. The decision affirms that any determination about the existence of a de facto relationship involves an empirical investigation of the facts and highlights the importance of the strength of the evidence substantiating those facts.
The factual background of the dispute
Shirley Joan Violet Gardner (the Deceased) died without a valid will in 2017. Her last known will dated 10 October 1989 was voided by a subsequent marriage in 1998 (and her husband from that marriage predeceased her).
The Deceased died with no surviving husband or children – her only daughter predeceased her by some 10 years.
The plaintiff (Mr Bernengo) commenced proceedings in 2018 seeking a grant of letters of administration and a declaration that he is the surviving de facto spouse of the Deceased and is entitled to the whole of her estate.
The defendant in the proceedings (Mr Leaney) was a nephew of the Deceased. Mr Leaney filed a cross-claim in the proceedings seeking letters of administration and a declaration that he and the other nineteen nieces and nephews (and grand-nieces and grand-nephews) of the Deceased are entitled to the whole estate.
Mr Bernengo’s evidence was that he and the Deceased had been in a de facto relationship for approximately 10 years up until the time of her death. However, Mr Bernengo acknowledged that he and the Deceased had kept the relationship largely secret from the outside world, and even denied the existence of the relationship to members of the Deceased’s family. Mr Bernengo’s evidence was corroborated by the Deceased’s step-daughter and the Deceased’s neighbour, who were both relatively close to the Deceased and gave evidence as to the nature and duration of the relationship.
Mr Bernengo also gave evidence that he split his time between two residences: the Deceased’s home in Cammeray and his own country property in Rylstone, NSW. However, he gave evidence that he spent more time staying at Cammeray with the Deceased than he did at his property in Rylstone.
Mr Leaney’s evidence was that, from his observations of the Deceased and Mr Bernengo at family events, they never displayed any affection to one another and there was nothing to suggest that they were anything more than friends. Furthermore, while Mr Leaney acknowledged that Mr Bernengo occasionally stayed at the Deceased’s residence in Sydney, it was his position that it was not as often as Mr Bernengo submitted. In support of this Mr Leaney relied on documentary evidence from hospitals where the Deceased stated she lived alone.
Mr Leaney also deposed to a conversation that he had with the Deceased in which she purportedly said that she “tolerated” Mr Bernengo – the inference being that this was a denial of the existence of a relationship between the Deceased and Mr Bernengo. Mr Leaney’s evidence was corroborated by a number of the other nieces and nephews, as well as other family relations and friends, who gave evidence to a similar effect to Mr Leaney.
Legal principles
The main issue in the case was whether Mr Bernengo was the spouse of the Deceased. If he was, he would be entitled to the whole of the Deceased’s estate (after payment of funeral and administration expenses) because the Deceased left no children.
In order for a de facto partner to be a spouse for the purpose of the law of intestacy, he or she must have been in “a relationship as a couple living together” at the time of the death and that relationship either:
- had been in existence for a period of at least 2 years; or
- had resulted in the birth of a child.
In this case, the Deceased and Mr Bernengo had not given birth to a child, so the relevant issue was whether they had been “a relationship as a couple living together” for at least 2 years at the time of the death.
Living together
It is well established that two people do not need to share the same residence all of the time in order to be considered to be “living together”.
The courts in Australia have made it clear that the concept of living together is more concerned with the nature of the relationship (and the extent to which there has been a “merger of two lives”) than the quantities of time that the couple spend together.
Relationship as a couple
The concept of a “relationship as a couple” connotes the existence of a romantic relationship.
Section 21C(3) of the Interpretation Act 1987 (NSW) lists a number of factors that are relevant to the question of whether two people have a relationship as a couple, being:
- the duration of the relationship
- the nature and extent of their common residence
- whether a sexual relationship exists
- the degree of financial dependence or interdependence, and any arrangements for financial support, between them
- the ownership, use and acquisition of property
- the degree of mutual commitment to a shared life
- the care and support of children
- the performance of household duties
- the reputation and public aspects of the relationship.
However, none of these matters (or any combination thereof) is determinative of the question – they are merely factors that are relevant to the enquiry.
The judgment
Bell P (sitting as a trial judge in the Supreme Court of New South Wales) handed down judgment and reasons on 1 October 2019.
In addition to the evidence from the witnesses referred to above, Bell P had a wealth of documentary evidence before him, including:
- a video recording of the funeral;
- Mr Bernengo’s bank records and telephone records, which together painted an objective picture of how Mr Bernengo split his time between the Rylstone property and the Cammeray property;
- telephone records of Mr Bernengo and the Deceased, which demonstrated the frequency of communication between them;
- medical records of Mr Bernengo and the Deceased, which highlighted how they described their relationship (including that they listed each other as emergency contacts); and
- photographs of Mr Bernengo and the Deceased, including at family functions at which the Mr Leaney and the other witnesses for the defence were present.
His Honour found that Mr Bernengo presented as a credible witness and accepted his evidence, including his explanation for why he and the Deceased kept the relationship secret. His Honour specifically referred to the highly detailed nature of Mr Bernengo’s affidavits and found that this made them all the more believable. Similarly, His Honour accepted the evidence of the other witnesses for the plaintiff and held that their closeness with the Deceased and Mr Bernengo meant that they were well positioned to have insight into the true nature of the relationship between them.
On the other hand, Bell P found that the evidence of the defendant’s witnesses tended to be highly generalised and that it should be given little weight, especially given the relatively infrequent level of contact that they had with the Deceased and Mr Bernengo. His Honour further held that the evidence of the defendant’s witnesses actually corroborated the plaintiff’s evidence to the extent that it demonstrated that these witnesses suspected that there may have been more to the relationship between the Deceased and Mr Bernengo than the couple had let on.
Furthermore, Bell P held that the documentary evidence tended to corroborate the evidence of Mr Bernengo and the other witnesses for the plaintiff. Most persuasively, the objective data both demonstrated the high frequency of telephone conversations between the Deceased and Mr Bernengo. Mr Bernengo’s financial records showing the location of each transaction, and the telephone records together also allowed for an “accurate if not absolutely precise analysis” to be done as to where Mr Bernengo was staying on a given day. His Honour was able to conclude that the couple spent approximately 55% of their time living together at the Deceased’s residence in Cammeray.
In reaching his conclusion, Bell P had specific regard to each of the factors in s 21(c) of the Interpretation Act 1987 (NSW). His Honour noted that a number of these factors superficially pointed to a conclusion that the Deceased and Mr Bernengo had not been in a de facto relationship and said that it was a “borderline” case.
Despite this, His Honour held that there was “much evidence strongly supportive” of the conclusion that the Deceased and Mr Bernengo were in a de facto relationship for at least 2 years before her death.
Accordingly, His Honour made orders declaring that Mr Bernengo was the surviving spouse of the Deceased, such that he was entitled to the entirety of her estate, and granting him letters of administration.
Upshot
The decision demonstrates that the question of whether two persons are in a de facto relationship can involve a complex factual enquiry into all aspects of their lives. It also highlights the weight that the court will place on detailed affidavit evidence and objective forensic data (including telephone records and bank records) when assessing the nature and extent of the relationship.
Finally, the decision is a reminder of the importance of proper estate planning and having a current will that reflects your testamentary intentions.
McCabes acted for Mr Bernengo in the proceedings and has extensive experience in advising on and acting in will disputes, as well as drafting wills and estate planning. If you have a potential dispute concerning an estate or wish to update your estate plan, get in contact with us today.
