The recent High Court decision of Fairbairn v Radecki ((2022) FLC ¶94-083; [2022] HCA 18, 11 May 2022) considered the question of whether a de facto relationship had ceased in circumstances where the term “breakdown” has no exhaustive definition under the Family Law Act 1975 (“Family Law Act”).
This is a pivotal case. In marriages, the breakdown of the relationship is not a necessary requirement for the Court to have jurisdiction to make orders regarding the adjustment of property interests. However it is necessary to demonstrate that the relationship has broken down before the Court can make any property orders for a de facto relationship, which are increasingly common these days.
In this case, the parties commenced a de facto relationship in late 2005/early 2006. Their financial relationship was unusual insofar as they retained separate finances, and investments, but resided together in a house owned by the appellant.
The appellant was subsequently diagnosed with dementia and by 2017 her capacity to make long-term decisions was largely, if not completely, absent.
In January 2018 a trustee was appointed to make health and welfare decisions on behalf of the appellant and decided to move the appellant into an aged care facility, where she has since resided.
By 2019, the trustee had formed the view that the de facto relationship had broken down and commenced proceedings in the Federal Circuit Court of Australia on behalf of the appellant seeking property settlement orders pursuant to s90SM. In particular, the trustee sought an order for the sale of the home.
The primary issue before the Court was confined to whether the de facto relationship had broken down.
The appellant argued that a de facto relationship can be taken to have broken down when parties stop residing together, as required by section 4AA(1)(c) of the Family Law Act. In this case, that would have occurred when the appellant moved into the care facility. However the High Court rejected this argument finding that it was contrary to “real-world considerations” and would be “productive of injustice if two people who live apart (including for reasons of health) were incapable of remaining in a de facto relationship” [32].
The High Court allowed the appeal after concluding that, having regard to all of the circumstances, the de facto relationship between the appellant and the respondent had broken down by 25 May 2018. The considerations included the fact that the parties were occupying separate rooms and that the appellant lived at an aged care facility, but these were not determinative features. The “essential feature” was that the appellant and respondent kept their assets separate from each other but by 2017 the respondent had begun to act as if he were no longer bound by this arrangement.
For further assistance or information please do not hesitate to contact a member of our Family Law team on (03) 9663 9877.
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