Re-thinking De Facto Relationships after this Month’s High Court Decision of Fairbairn V Radecki [2022] HCA 18

By Denise Foster, Special Counsel and Jack Job, Lawyer

Background

In 2005/2006, the parties commenced a de facto relationship when they were both approximately 50 years of age. During the entirety of their relationship, the parties lived in the Wife’s farm property.

Approximately 10 years later in 2015, the Wife began a cognitive decline and was subsequently diagnosed with dementia. By 2017, she was largely incapable of making decisions, and had moved into an aged care facility. The Husband remained living at the Wife’s farm property.

In early 2018, the New South Wales Civil and Administrative Tribunal appointed a Trustee to make health and welfare decisions on the Wife’s behalf. The Trustee determined to sell the Wife’s farm property in order to pay a refundable accommodation deposit to the aged care facility where the Wife was a resident.

The Trustee’s proposal was opposed by the Husband. He maintained that he ought to be able to remain living at the farm property, and he contended that this was consistent with the Wife’s wishes.

Court Proceedings

The Trustee consequently commenced Family Law proceedings on the basis that the parties’ de facto relationship had broken down, and the Trustee sought financial Orders on behalf of the Wife. The Husband contended that the parties’ relationship remained intact and on foot, and as such, that 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 cessation of that relationship. The Husband then appealed to the Full Court, where he was successful. The Full Court found that the Primary Judge had erred and that the parties’ de facto relationship had not broken down.

The Trustee subsequently obtained special leave to appeal to the High Court.

High Court Findings

The High Court found that the appeal must be allowed, and that the parties’ de facto relationship had in fact broken down at some stage prior to 25 May 2018. This was on the basis that looking at all of the circumstances, the Court could be satisfied that the parties no longer had a relationship as a couple living together on a genuine domestic basis within the meaning of s 4AA of the Family Law Act.

The Court said that the relationship had broken down not because the Wife had to move into aged care, or due to her incapacity. Those factors were relevant but not determinative. The Court stated that while there may have earlier been a degree of mutual commitment to a shared life, that commitment ceased when the Husband refused to make “necessary or desirable adjustments” in support of the Wife and, by his conduct, had acted contrary to the Wife’s needs and interests.

Relevant conduct on the Husband’s part included his refusal to cooperate with the Wife’s adult children regarding her ongoing care; his refusal to allow the farm property to be sold; and also steps taken by him to have the Wife (while her capacity was impaired) execute an Enduring Power of Attorney giving him significant control over her assets, and also a Will which prioritised his own interests to the Wife’s detriment.

Implications of the High Court’s Findings

The significance of the High Court’s decision includes that cohabitation is not a necessary feature of an ongoing de facto relationship; that a loss of capacity by one party does not necessarily mean that a de facto relationship has broken down; and that a new body of case law may develop with respect to interpretations of ‘necessary or desirable adjustments’ in the context of de facto and marriage relationships.

The case also highlights and reinforces the discretionary nature of Family Law proceedings.

It may be that a Binding Financial Agreement executed by the parties prior to the Wife’s cognitive decline would have remedied the situation, and most likely avoided the lengthy Court proceedings which ensued in this matter.

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If you require legal advice or representation with respect to your Family Law matters, please contact our highly experienced Family Law Team at MST Lawyers on (03) 8540-0200 or at familylaw@mst.com.au.