Introduction
Under s90SM Family Law Act 1975 (Cth) (the Act), the Court only has jurisdiction to make property settlement orders in relation to a de facto relationship where there has been a “breakdown” of that relationship.
This case followed an appeal from the Federal Circuit Court of Australia to the High Court of Australia. The appeal concerned the meaning of "breakdown of a de facto relationship" for the purposes of making property settlement orders pursuant to s 90SM of the Act.
Facts
In approximately 2005, Ms Fairbairn and Mr Radecki entered into a de facto relationship. In 2010, they entered into formal agreement that each party would keep their assets separate. Within this agreement the parties noted that although Mr Radecki resided in Ms Fairbairn’s home, it was to remain owned absolutely by her.
In 2015, Ms Fairbairn suffered a rapid cognitive decline. By 2017, she was formerly diagnosed with dementia and was largely incapable of making decisions. Mr Radecki had argued with Ms Fairbairn’s children regarding aspects of her welfare and had sought to overturn a power of attorney in favour of Ms Fairbairn’s children, appointing himself enduring attorney. However, NSW Civil and Administrative Tribunal (‘NCAT’) stepped in and appointed the NSW Trustee and Guardian (‘the Trustee’) as Ms Fairbairn’s guardian and financial manager, in doing so they also revoked the power of attorney in favour of Mr Radecki.
In 2018, the Trustee moved Ms Fairbairn into an aged care home and sought to sell her home where Mr Radecki was living to fund her ongoing medical care. Mr Radecki opposed the sale and, subsequently, the Trustee sought a property settlement order from the Federal Circuit Court of Australia allowing for the sale of the home. The Husband contended that the parties’ relationship remained intact and as such the Court did not have jurisdiction to make the Orders sought by the Trustee.
At first instance, the Primary Judge found for the Trustee, namely that the circumstances of the parties’ particular relationship were indicative of a breakdown of that relationship. The Husband then appealed to the High Court of Australia where he was successful.
Arguments
On appeal to the High Court, Ms Fairbairn’s primary argument was that a de facto relationship breaks down when the parties stop “living together”, as required by s 4AA of the Act, whether it was voluntary or involuntary. Accordingly, Ms Fairbairn argued that the relationship broke down upon her moving into an aged care home.
Ms Fairbairn also argued that her de facto relationship had broken down by no later than 25 May 2018, due to Mr Radecki’s conduct, which were not in her best interests.
High Court Findings
The High Court rejected Ms Fairbairn’s primary argument that a de facto relationship is considered to have broken down when the parties are no longer cohabitating. The Court held that the phrase “living together”, as contained in s 4AA of the Act, means sharing a life together as a couple and that it may take many forms.
However, the Court reinforced the primary judge’s finding that, where one party in a de facto relationship acts contrary to the interests of the other party in relation to the property of the couple, it may be possible to conclude that the mutual commitment to a shared life has ended.
Examples of such conduct identified by the Court included:
- Securing a new enduring power of attorney giving him considerable control over the wife’s assets;
- Procuring a revised will while the wife was hospitalised, which markedly favoured his interests;
- Failing to cooperate with the Trustee and wife’s children concerning her ongoing care; and
- Refusal to permit the wife’s property to be sold, even though it was to pay for her ongoing care.
After having considered all of the circumstances, the Court found that the husband’s conduct in acting contrary to and against Ms Fairbairn’s interest showed that his commitment to a shared life with her had ceased, and therefore the de facto relationship had broken down no later than 25 May 2018.
Implications
The significance of the High Court’s decision includes that cohabitation is not a necessary feature of an ongoing de facto relationship and that a loss of capacity by one party does not necessarily mean that a de facto relationship has broken down.
The case also highlights and reinforces the discretionary nature of Family Law proceedings.
It should be noted that a Binding Financial Agreement executed by the parties prior to the Ms Fairbairn’s cognitive decline may have remedied the situation, and most likely avoided the lengthy Court proceedings which ensued in this matter.
If you have any questions about how this case may apply to your circumstances, please contact one of our experienced family lawyers to arrange your first free 1-hour conference.
This is not legal advice.
