Written by Despina Bouletos
In its recent decision of Fairbairn v Radecki [2022] HCA 18, the High Court provided a useful commentary on the meaning of “breakdown of de facto relationship”, as per s90SM of the Family Law Act 1975 (Cth) (‘the Act’).
The Facts:
In approximately 2005, Ms Fairbairn and Mr Radecki entered into a de facto relationship. In 2010, they entered into a formal agreement to keep their assets separate. The agreement noted that, although Mr Radecki lived in Ms Fairbairn’s home, it was to remain owned absolutely by her. In 2015, the agreement was updated to include the quarantining of property since acquired by Ms Fairbairn and Mr Radecki.
By mid-2017, Ms Fairbairn had been diagnosed with dementia and, on the advice of her doctor, executed an enduring power of attorney in favour of her children from a previous relationship. At this stage, Ms Fairbairn’s decision-making capacity was largely, it not completely, absent. Shortly thereafter, Mr Radecki took Ms Fairbairn to a courthouse whereupon the existing power of attorney was revoked and replaced by one in favour of Mr Radecki and Ms Fairbairn’s brother. Mr Radecki also arranged for a solicitor to attend on Ms Fairbairn to execute a new will more favorable to him than Ms Fairbairn’s previous will.
In 2018, the NSW Civil and Administrative Tribunal (‘NCAT’) appointed the NSW Trustee and Guardian (‘the Trustee’) as Ms Fairbairn’s guardian and financial manager. NCAT also revoked the power of attorney in favour of Mr Radecki.
In March 2018, the Trustee moved Ms Fairbairn into an aged care home and sought to sell her home to fund her ongoing 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.
Procedural History:
Under s90SM of 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.
The primary judge held that Ms Fairbairn and Mr Radecki’s relationship had broken down by no later than 25 May 2018. The primary judge noted that Mr Radecki’s conduct during the demise of Ms Fairbairn’s mental capacity was inconsistent with a “fundamental premise” of their relationship, namely, the strict seperation of assets. The primary judge pointed to the actions of Mr Radecki, including his facilitation of a new power of attorney and will and his refusal to allow Ms Fairbairn’s home to be sold.
The decision was appealed to the Full Court of the Family Court of Australia, which overturned the primary judge. The Full Court found that, although it could be classified as “bad behaviour”, none of Mr Radecki’s conduct was fundamentally inconsistent with a continuing de facto relationship.
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 voluntarily undertaken or involuntarily imposed. Ms Fairbairn sought to characterise cohabitation as the “irreducible minimum” of a de facto relationship. Accordingly, Ms Fairbairn argued that her relationship with Mr Radecki had broken down when she moved into an aged care home.
Alternatively, Ms Fairbairn argued that her de facto relationship with Mr Radecki had broken down by no later than 25 May 2018, due to Mr Radecki’s conduct.
Findings:
The High Court rejected Ms Fairbairn’s argument that a de facto relationship is considered to have broken down at the point when the parties are not 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 must be “construed to take account of the many various ways in which two people may share their lives together in the modern world”: [33].
However, the Court reinforced the primary judge’s finding that, where one party in a de facto relationship acts fundamentally contrary to the interests of the other in relation to the property of the couple, it may be possible to conclude that the mutual commitment to a shared life has ended.
The Court held that it was an “essential feature” of the Ms Fairbairn and Mr Radecki’s relationship that they keep their assets separate from one another. However, by 2017, Mr Radecki had begun to act as if he were no longer bound by this agreement. This was evidenced by the conduct which the primary judge referred to.
On this basis, the Court upheld the primary judge’s finding that the relationship had broken down no later than 25 May 2018.
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