Kovac v Chanak

On 22 June 2012, Jovan Kovac (“Jovan”) was buried in plot 033-J-COE (“plot 33”) at Mona Vale Cemetery (the “Cemetery”). At the time, the Cemetery was under the control of what was then known as Pittwater Council.

Jovan’s burial in plot 33 took place with the consent of the defendant, George Chanak, Jovan’s first cousin. Without disrespect, I shall refer to the various family members involved in these proceedings by their given names.

George holds the burial licence for two adjacent plots: plot 33 and plot 34 (the “Licence”). Jovan’s father, Milan, is buried in plot 32. Putting matters neutrally, there is no doubt that George offered to facilitate Jovan’s wish to be buried next to his father by offering to allow Jovan to be buried in plot 33. The dispute between the parties is whether, shortly before Jovan’s death, George offered to transfer plot 33 and plot 34 to the plaintiff, Ljubica Kovac (“Libby”), so that one day Jovan’s wife, Nada, could be buried in plot 34 next to Jovan. Libby is Jovan and Nada’s daughter and the executrix of Jovan’s estate.

There was no real dispute between the parties about the applicable law. The rights created by the Licence are contractual rather than proprietary: Beard v Baulkham Hills Shire Council (1986) 7 NSWLR 273. Otherwise the law in relation to burial licenses and estoppel has recently been exhaustively considered in the factually similar decision of the Court of Appeal in Arfaras v Vosnakis [2016] NSWCA 65 (per Ward JA; Beazley P and Simpson JA agreeing), upholding the decision of Robb J in Vosnakis v Arfaras [2015] NSWSC 625. The parties accepted that this case would primarily fall to be determined on the facts.

The parties’ versions of events were diametrically opposed and each side denied the other’s version of the critical conversations. No one departed from their evidence under cross-examination. Libby and four other members of the Kovac family gave evidence that George had represented to Libby that he was giving her plots 33 and 34. On the other hand, George, supported by his daughter, Rebecca, said that all he had done was to grant Jovan’s dying wish to allow Jovan to be buried next to his (Jovan’s) father.

There was only one independent witness, Mr Christopher Lee, the funeral director, who was called in Libby’s case. However, he was not present when any of the critical conversations took place.

For the reasons which are set out in paragraphs [46] to [68] below, I have come to a firm view that the evidence of Libby’s witnesses is to be preferred over that of George and Rebecca. The Court is satisfied that in the days prior to Jovan’s death in June 2012, George represented to Libby that he would give the two plots to Libby. In reliance on that representation Libby arranged for Jovan to be buried in plot 33.

George has refused to transfer the Licence, but has consented to George being exhumed if that is Libby’s wish. By reason of the application of the principles of equitable estoppel the Court will order George to transfer the Licence to Libby.

Mr G McGrath of Counsel appeared for Libby. Mr S F Hughes of Counsel appeared for George. The Court is indebted to them for the efficient way in which they conducted the proceedings and presented the arguments, including by helpful and extensive written submissions. Those submissions, in particular, have enabled the Court to deal with the matter immediately by these ex tempore reasons.

In addition to Libby, five witnesses gave evidence in Libby’s case:

The witnesses in George’s case were himself and his adult daughter Rebecca.

George was living alone at his market garden in Warriewood. This was only a short drive from the Kovac family home in Mona Vale. All of the Kovac family were living in the family home except for Radomir, who had moved to the Central Coast. With the exception of the visit to George’s property referred to in paragraph [19] below, all of the relevant events took place at the Kovac family home.

In the 1960s, George’s brother John Chanak bought some plots at the Cemetery. He gave plots 33 and 34 to George. At the time of the hearing, the plots contained the following family members: plot 32 — Milan Kovac (Jovan’s father); plot 33 — Jovan; plot 34 — empty; plot 35 - Milica — George’s sister; plots 36 and 37 — George’s father and mother; plots 38 and 39 — John Chanak and his first wife.

Under the regulations governing the Cemetery, more than one person can be buried in each plot.

In October 2006, Libby purchased four plots in the Cemetery, a few rows away from those that had been bought by John Chanak.

George and Jovan had had a very close relationship, including while Jovan’s children had been growing up. However, by George’s own admission, at the time of the relevant events he and Jovan had been estranged for a number of years.

In December 2011, Jovan became unwell.

In March 2012, Jovan was diagnosed with lung cancer and given a very short time to live.

Shortly after the diagnosis, Libby visited George at his Warriewood property and told him of Jovan’s illness. George almost immediately began to visit Jovan at the Kovac family home, if not daily then certainly quite regularly.

On 17 June 2012, Jovan collapsed at home, was taken to Mona Vale Hospital and died that same day.

On 19 June 2012, Mr Lee attended the Kovac family home in relation to Jovan’s funeral arrangements. The Court’s further discussion and findings in relation to that visit are set out in paragraphs [40] to [45] and [53] below.

Jovan was buried in plot 33 on 22 June 2012.

In November 2012, Libby provided George with a form of transfer for plots 33 and 34. The form included an Australian Tax Office form headed “Statement by a Supplier”.

George ultimately refused to transfer the Licence but has consented to Jovan being exhumed.

In May 2013 (notwithstanding the letter is dated February 2013), Pittwater Council wrote to George (emphasis in original):

Libby’s affidavit evidence was:

In these reasons I shall refer to the Burial Instructions as the “Instructions”.

In evidence in chief (to which she adhered in cross-examination) Libby also gave this evidence:

Radomir returned to the Kovac family home on being told of his father’s terminal illness. Radomir’s affidavit evidence was:

Danica deposed in her affidavit:

Nada’s evidence was:

Nada also gave this evidence in chief, from which she did not depart in cross-examination:

Kristina’s affidavit evdence was:

Kristina also gave evidence that when she heard the conversations set out in her affidavit, she was inside the house with Jovan but was able to overhear the conversations that took place on the balcony.

Mr Lee deposed in an affidavit sworn on 15 August 2016:

The form annexed to the affidavit was the Instructions. Mr Lee was not required for cross-examination.

George’s evidence was:

Rebecca’s evidence was:

In a later affidavit she said:

Unsurprisingly, no one had any contemporaneous notes of the relevant conversations. There were, however, two documents which can be characterised as the only contemporary, independent documents in the proceedings. The first of these is the Instructions, a copy of which is Schedule 1 to these reasons.

The evidence of Mr Lee and the other witnesses in Libby’s case was that the Instructions was signed by George on 19 June 2012 at the Kovac family home. George steadfastly maintained that he had signed it at the family home on the morning of Jovan’s burial.

In the course of the hearing another document was produced: a booking confirmation form (the “Confirmation”), also dated 19 June 2012 and signed by George. A copy of the Confirmation is Schedule 2 to these reasons. It bears facsimile headers which the Court finds demonstrate that it was faxed bearing George’s signature from Peninsula Funerals on 19 June 2012 to Pittwater Council and from Pittwater Council (signed by its cemetery supervisor) to Peninsula Funerals on 20 June 2012.

It was not in dispute that insofar as it appears that George’s signature on both those documents was witnessed by Mr Lee’s daughter and office manager, Ms Rachael Lee, she was not present. However, that does not undermine the evidentiary value of the documents. As I discuss further in paragraph [53] below, in my view the conclusion is irresistible that George signed them as Mr Lee and Libby’s other witnesses testified on 19 June 2012 at the Kovac family home.

In the face of these documents George asserted with increasing vehemence that his version of events was correct. His evidence under cross-examination in relation to the Confirmation included:

In answer to questions from the bench about the Instructions, George went on to suggest some kind of conspiracy between Pittwater Council and Mr Lee:

Given every witness’ resolute adherence to his or her evidence under cross-examination, each party pointed to what, with no disrespect intended, might be referred to as “straws in the wind” to persuade the Court as to who should be believed. There was much parsing of particular statements and other pieces of incidental evidence. That is not unusual for a case of this kind where there is virtually no independent, contemporaneous evidence of what is said to have passed between the parties. However, the Court has ultimately come to a firm view based on the parties’ evidence and their demeanour as it emerged in the witness box.

On Libby’s side, it is Kristina’s evidence that has primarily persuaded the Court of the truth of Libby’s case. Kristina is the least interested in the sense that she is the most separated both in age and generation from the other protagonists. While clearly it cannot be said she was independent, she seemed to be most removed from the heat of events. Her evidence was delivered in a clear, straightforward manner. She appeared to want to assist the Court by telling the truth and she gave forthright answers to the cross-examiner.

One incidental piece of evidence was, to my mind, quite powerful in support of the truth of Kristina’s version of events. That emerged during Danica’s cross-examination when she volunteered, in a way that I found entirely truthful, that it was some way into the preparation of the case when the plaintiff’s side of the record even became aware that Kristina was able to give any evidence at all:

Two particular criticisms made by George of Kristina’s evidence need to be considered.

First, it was suggested that Kristina may have been somewhat distracted by her studies for the Higher School Certificate and would not have the kind of recall to which she testified in the witness box. Her evidence, which I accept, was that she was more focussed on her grandfather at that time because her ambitions, with no disrespect, did not require a high mark in her exams. Her ambition was to go into real estate, something which she has in fact done. This was to be done through TAFE. I accept, therefore, that her level of concentration on the Higher School Certificate would not have been sufficient to cast doubt on her recollection.

Second, Mr Hughes also criticised Kristina’s evidence when she said that the conversation which she did overhear was “loud”. Mr Hughes submitted this was quite unrealistic. I accept Mr McGrath’s answer to that criticism that, taken in context, what Kristina was saying was that the parties to the conversation on the balcony were speaking in Serbian (in which Kristina was fluent), a language which can give the impression of being spoken at volume, perhaps more reflective of the style and emotion of the persons speaking. I do not think that Kristina’s description of the conversation as “loud” detracts from what seems to me to be its fundamental truthfulness.

Kristina’s evidence is the point of entry into my acceptance of the plaintiff’s case. However, I have also concluded with certainty that, taking their evidence on its merits, George and Rebecca cannot be accepted as reliable witnesses.

The primary matter upon which I rely for the conclusion that George is not a reliable witness is his strange and determined adherence to his evidence of when the Instructions and Confirmation were signed. As I have said, the inference appears to be irresistible that he signed the document on 19 June 2012 and that is the finding which the Court makes. Not only is that the date which the documents are dated, but it is common sense that such documents would have to have been executed in advance of the day of the funeral. I am unable to imagine any circumstance where a funeral director would proceed to conduct a funeral where a person was to be buried in a plot without, in advance of the day of the funeral, having all relevant consents in place. So much also, I would infer, was the practice of Pittwater Council, based upon the Confirmation. Obviously enough, Pittwater Council had to give its permission in advance of the day of the funeral.

George’s stubborn adherence to his recollection and refusal to admit even the possibility that he was mistaken, suggest either that he is a determined liar or, more likely, that he has persuaded himself as to the truth of his version of the facts. Whichever it is, it bespeaks an unreliable recollection. My doubt about him as a witness generally was fortified by his extravagant explanations of why his recollection must be correct and the documents were wrong, as well as his approaches to Mr Lee which appear to have been intended, at least in part, to influence Mr Lee’s evidence. As I have noted, George came to suggest that there had been some collusion between Mr Lee and Pittwater Council and that the documents had in some way been doctored between them to “cover up” some mistake.

The next significant matter upon which I rely in coming to my conclusion as to which version of events is to be believed is the inherent likelihood of the correctness of Libby’s case: it is hard to imagine that she would have allowed Jovan to be buried in plot 33 without some guarantee that Nada could be buried next to him, particularly in circumstances where she (Libby) already had her own plots. I do not accept the argument put on behalf of George that the desire to bury Nada in the adjacent plot to Jovan emerged as an afterthought in the weeks following Jovan’s funeral.

While not decisive, I am also fortified in my conclusion by what might be referred to as the gold cross incident. I accept Libby’s evidence, and that of the other witnesses for her, that the Kovac family had offered to pay George for the two plots, and that he had refused. The evidence was that Rebecca’s son, Callum, in accordance with a Serbian tradition, had been invited to carry a processional cross at Jovan’s funeral. There did not seem to be any dispute between the parties that this was a considerable honour for a young boy.

After the funeral, Nada purchased two quite expensive gold crosses. One of these was given to Callum. I accept the evidence given for Libby that, at the time the cross was presented to Callum, it was explained that a particularly expensive cross had been chosen in part by way of compensation because George had not agreed to receive any payment for the two plots.

Another matter I have taken into account is that it seems inherently plausible that, in the emotion of the circumstances surrounding Jovan’s illness and death, an offer of the kind which I have found George made — including agreement to provide both plots — would be the sort of thing that one could well imagine happening, particularly in the first flush of a rapprochement between George and Jovan after some years of estrangement. No doubt it was a time of high emotion for both men and a generous and extravagant offer of the kind which I have found George made seems to me to be entirely in accordance with the probabilities of the situation.

In reaching this conclusion as to who is to be believed, I have also taken into account the possibility of a simple misunderstanding arising from the stressful circumstances in which the discussions took place. However, I am not persuaded that is a sufficient explanation to explain why the Kovac family would either have settled for, or not noticed, that all they were being offered was a right of burial for Jovan with no provision for Nada.

I have also considered the question of the Kovac family concocting their evidence together. I have been mindful of the old principle “pondero, non numero” (that one should consider the quality of the evidence rather than the number of the witnesses). My overall impression of the way in which each of the Kovac family members gave their evidence was that collusion or concoction was most unlikely.

It is therefore also necessary for me to say something about Rebecca’s evidence, which was advanced to support her father’s version of events. Three points should be made.

First, her denial of the conversation in relation to the offer of the plots, was (oddly) limited only to part of the whole conversation at which she was present (see paragraph [26] above), namely:

She did not deny the entirety of the course of the conversation.

Second, and critically, she supported her father’s version of events about when he signed the Instructions. I accept Mr McGrath’s submission that, if, as the Court has done, the Court accepted Libby’s submission as to when the Instructions (and Confirmation) were signed, Rebecca’s evidence became as unsustainable as George’s.

Third, and underlining both of the two previous points, Rebecca struck me as an unconvincing and somewhat unengaged witness. Insofar as she denied matters, I am not persuaded that she had any actual recollection one way or the other. This was well demonstrated by the exchanges, particularly in re-examination, about how much of the particular conversation with Libby she denied. Her observations in re-examination “I don’t remember a lot of it” and “At this stage I’m just having a problem remembering any of it” struck me as being far more likely to be truthful.

It is not necessary for me to conclude whether Rebecca is lying, or has come to believe her father's case. It may be that her indifferent recollection encouraged her to accept as her own recollection a version of events favourable to her father. She conceded that there had been discussion between herself and her father about the evidence.

Similarly, in relation to her denial of the particular conversation with Libby, I was left with the impression that she had no actual recollection one way or the other, but had reasoned backwards from the fact that she herself did not own any burial plots. The difficulty with this was that it was never suggested that she herself owned any burial plots. It was always the case that her father owned the plots and that, on the evidence advanced for Libby, he would be consulting with Rebecca as to whether or not she wanted to be buried in one of his plots.

The Court therefore accepts Libby’s witnesses as to what occurred. In particular, the Court finds that prior to Jovan's death, George had represented to Libby that he would give her both plots 33 and 34.

Although the argument for Libby was put in several different ways, it was primarily one of equitable estoppel and can be decided accordingly. This was the approach taken by the Court of Appeal in Arfaras at [79] and following.

The essential elements for an equitable estoppel were set out in Walton Stores v Maher (1988) 164 CLR 387; [1988] HCA 7 at 428–429:

I am satisfied that each of the elements set out by the High Court are satisfied in this case.

As to the first, I find that Libby assumed that George would transfer to her plots 33 and 34, and that George would not be free to withdraw from that offer. Having found the relevant representation was made, and accepting Libby's evidence that she acted in reliance on them, it is obvious that she did not act on the basis that this was an offer from which George would be free to withdraw. The very nature of burying a person in a plot bespeaks finality and the inability of the offeror to withdraw from the arrangement that has been proposed and accepted.

As to the second element, I have no doubt on the basis of Libby's evidence that George induced Libby to adopt the assumption or expectation that the two plots would be transferred to her.

Similarly, in relation to the third element, I find that Libby acted in reliance on the assumption or expectation by making the arrangements for Jovan to be buried, as he in fact was, in plot 33.

As to the fourth element, it follows that I find that George knew or intended that Libby would act in reliance on the representation. The sequence of events makes that perfectly clear.

As to the fifth element, that of detriment, I respectfully agree with and follow the Court of Appeal’s analysis in Arfaras at [107], that it is sufficient detriment for the purposes of a case such as this, that Libby, as executrix, has exhausted her right and duty in relation to determining how to dispose of Jovan’s body. I will return later in these reasons to an argument put on behalf of George as to why no detriment was suffered.

The second form of detriment which I am satisfied exists it that departure from the assumption will mean that Libby, or any other member of the Kovac family through her, does not have the certainty as to where Nada is to be buried which George’s representation led them to believe they had. There is no evidence that Libby is the executrix of Nada's estate, so that I am unable to conclude, as a matter of law, that Libby presently has lost a right which she would otherwise have had to bury Nada in plot 34. However, in a case of this kind, it seems to me that the Court must look at the matter practically. For example, as Mr McGrath pointed out, it would be very simple, if it were not already the case, for Nada to appoint Libby her executrix. One way or another, it is clear that the entire family, led by Libby in her capacity as executrix of Jovan's estate, has acted in the expectation that Nada will be able to be buried next to Jovan in plot 34.

Finally, it is clear that the sixth element has been satisfied. Despite numerous requests, George has failed to transfer the plots.

I am therefore satisfied that George is bound by an equitable estoppel arising from his promise to transfer plot 33 and plot 34 to Libby. Equity will then grant relief, which I will discuss below, to remedy George’s unconscientious failure to give effect to his promise, by requiring the plots to be transferred to Libby.

It is no criticism of Mr Hughes' industry that I do not propose to deal with all of George's extensive submissions in detail. I will, however, refer to the ones which, it seems to me, with respect, are the most essential.

At the forefront of Mr Hughes' attack on Libby's case was the submission that there was no evidence in chief of any conversation where Jovan said that he wanted to be buried next to his wife as well as next to his father. This was put as going both to the credibility of Libby's entire case, and also in relation to detriment. There are at least two answers to this submission.

First, I accept Libby and Nada’s evidence that there were such conversations. It is true that evidence emerged only in evidence–in–chief given in the witness box by leave and in cross-examination. While in some cases that consideration may be sufficient to warrant the Court approaching the evidence with some suspicion, I do not think this is such a case. The focus of the case was on conversations between George, on the one hand, and Libby and other members of her family, on the other. It was not focused on anterior conversations between Jovan and his own family members. While I accept there is some force in Mr Hughes' submission that the initial evidence that they did give of conversations with Jovan was confined to his desire to be buried next to his father, I do not regard that as being a sufficient basis to disbelieve the evidence that Libby and Nada gave in the witness box. This is because it is entirely understandable that everyone was thinking about next to whom Jovan would be immediately buried (his father, Milan) rather than next to whom he might be buried later (his wife, Nada).

Second, even if I am wrong to accept the evidence referred to in the preceding paragraph, the absence of evidence of conversations between Jovan and family members specifying that he wished to be buried not only next to his father, but also next to his wife, does not really matter. I accept Mr McGrath's submission that it is not Jovan's expectations which equity is being asked to enforce, but rather Libby's. Looking at the matter speculatively, it would make no difference to Libby's case if it was in fact her idea — that is to say, quite independently of any wish expressed by Jovan — that, in burying her father, she also wanted to ensure that he could be buried next to her mother.

Mr Hughes also relied on this absence of a conversation between Jovan and any family member about being buried next to his wife on the question of detriment. His written submission was:

With respect, I am unable to see how this argument goes to the question of detriment or, as it was later put, in relation to causation. On the contrary, it seems to me to demonstrate both detriment and causation. Libby did what she did — that is to say, bury Jovan in plot 33 and not in one of the four plots which she owned — precisely because of the representations which the Court has found George made to her.

The next significant matter which Mr Hughes called in aid was that Jovan and Nada were, by common admission, separated but living under one roof. He submitted that this made it very unlikely that anyone, whether it be Jovan or any other family member, would have insisted upon Nada being buried next to Jovan.

In many cases, taken at face value, that submission would have great force. However, the evidence disclosed that Nada and Jovan’s circumstances were more complicated. The fact that they were living under the one roof but in a separated condition was not due to the breakdown of any relationship between them. Rather, I accept the evidence that at some point during their marriage Jovan wanted to return to Serbia. This was not a course which Nada favoured. In a sense as some form of insurance, she insisted on a property settlement to ensure that she would have an interest in the family home.

Clearly, for a time, things were difficult between Nada and Jovan as a result of this. However, for reasons which it is unnecessary for me to set out, Jovan ultimately abandoned his desire to return to Serbia. I infer from the evidence that thereafter, while living separately under the same roof, there remained some bonds of affection and mutual support which were clearly evidenced by the way in which Jovan ultimately was cared for to the point of death in the family home. So it is that in this case the assertion of legal separation between Jovan and Nada does not falsify the proposition that, at the end of their respective lives, they would wish to be buried together.

The next matter to which Mr Hughes drew attention was that the affidavit evidence advanced by Libby herself and her other witnesses was not always precise as to the use of the word "plot" as opposed to "plots". It was submitted that in a case where the question of the transfer of plots was at the heart of the allegation, it was to have been expected that attention would have been given to ensuring that the singular and the plural were used consistently. Insofar as from time to time one or other of Libby’s witnesses sometimes referred to a "plot" it was submitted for George that this demonstrated that there had never been any discussion of "plots".

There was some inconsistency from time to time in the evidence on this point. However, I do not find it persuasive for three reasons. First, evidence of the critical conversations was consistent in its use of the plural. Second, it is to be remembered in the case of Nada, that English was not her first language and that, it appears, some of these conversations were in Serbian or changed from one language to the other. I interpose by way of observation and not criticism that the evidence did not always make clear what language had been used for particular conversations. Finally, insofar as the word "plot" was used in some of the evidence, it seems to me generally consistent with the context in which it was used, namely that what was being discussed was where Jovan was to be buried. In that circumstance, the use of the singular is appropriate.

Finally, it was submitted that Libby's case should not be accepted in the absence of some explanation as to why George might have changed his mind. George's own evidence was that he could be somewhat volatile and was a man who bore grudges. That was demonstrated, at least in part, by the admitted period of estrangement between him and Jovan. I formed the impression, with no disrespect intended, that George was someone who could quite easily be offended.

The evidence offered two possible explanations as to why George might have changed his mind. One of these was the inclusion of Australian Tax Office documents in the transfer form (see paragraph [23] above). I accept that he found that confronting and it may have, at least, started some thought in his mind of not wanting to be involved in the process of the transfer. Libby took some steps to try to have this clarified by Pittwater Council in the letter which is set out in paragraph [25] above, but it was to no avail.

The second matter in the evidence was an occasion after Jovan's death when George was going to visit the Kovac family home, but the visit was postponed due to what was said to be Nada's indisposition. It was said that when George visited the next day he became aware that Nada, at least as far as he was concerned, had not been ill and that he had been upset or offended by this.

It is not necessary for me to resolve finally why George might have changed his mind. I do not accept the submission that Libby's case is inherently weakened by the fact that there is no explanation for George's change of mind. Family emotions run deep. Just as the emotion of the moment, in my view, may well have encouraged George to make the offer which I find that he did, other events and emotions in the months after Jovan's death could have created an equal and opposite reaction. I do not regard the absence of an explanation for the change of heart as being sufficient to overcome the weight of the evidence as I have found it.

There was no dispute between the parties that the scope of equitable relief is discretionary. Mr Hughes submitted that if, as the Court has done, it reached the conclusion that the representations to give the plots had been made and relied upon, all that should be done would be to transfer plot 33. I do not accept that submission. The Court has found that George clearly represented to Libby that he would give her both plots. It was integral to that offer and to her understanding encouraged by that representation that she was to receive both plots, one in which Jovan was to be buried and the other for Nada. In the present case it is unnecessary to be diverted into a discussion about the current jurisprudential status of the notion of a "minimum equity". In this case it is clear that the unconscientious conduct to be remedied is George’s failure to transfer both plots.

There is no countervailing consideration in favour of George. There is no suggestion that Rebecca and her son want to be buried there (as opposed to what George says he might want for his daughter and grandson). Furthermore, George said in evidence that he was content to be buried with Milica in plot 35.

The parties will be given an opportunity to bring in short minutes to give effect to these reasons, in particular for the transfer of the Licence. Subject to hearing the parties, it is the Court's preliminary view that George should be ordered to pay Libby's costs of the proceedings. Kovac v Chanak - Schedule 1 (73.9 KB, pdf) Kovac v Chanak - Schedule 2 (73.3 KB, pdf)