If a person is in a de facto relationship, their legal rights and responsibilities are comparable to those of a married couple. However, when a de facto relationship breaks down, the Court can make orders that will change the property interests of the affected parties. The Family Law Act 1975 (Cth) does not contain an exhaustive definition of what constitutes a ‘breakdown'. Therefore, identifying if and when a relationship breakdown has occurred can be contentious.
Recently, the highest Court in the country had the opportunity to consider the matter and provide more clarity on what might constitute a breakdown. In the featured case below, the NSW Trustee and Guardian for Ms Fairbairn, the de facto wife, sought special leave to appeal against orders made by the Full Court of the Family Court of Australia.
Featured case: Fairbairn v Radecki (2022) HCA 18
Key facts
This case concerned the meaning of a breakdown of a de facto relationship for the purpose of making a property settlement.
Ms Fairbairn and Mr Radecki commenced a supportive relationship in 2005 or thereabouts. The parties agreed to keep their assets strictly separate though they both lived in a property owned by Ms Fairbairn. Cohabitation agreements put in place reflected this intention. Unfortunately, Ms Fairbairn’s mental health started to decline significantly. In 2017 she executed a power of attorney for her adult children. However, Mr Radecki arranged for this to be revoked and replaced it with one in favour of him giving control over her assets. He also arranged for her to execute a new Will, which was also more favourable to him than the previous version.
By 2018, Ms Fairbairn’s cognitive ability was such that the NSW Trustee & Guardian was appointed. Ms Fairbairn was moved to an aged care home, and the Trustee sought to sell her house to fund her care.
Mr Radecki refused to allow the Trustee to sell her house. He continued to live there, rent free, while debts accrued in her name, serving his financial interests rather than hers. In the meantime, he made meagre contributions toward Ms Fairbairn’s care.
The Trustee sought a property settlement to allow the sale. For the Court to order this, there has to have been a breakdown of the de facto relationship, which Mr Radecki did not accept. In the first appearance in Court, the judge agreed the relationship had broken down by May 2018. This decision was overturned on appeal as, notwithstanding Mr Radecki’s poor behaviour, this was not considered fundamentally inconsistent with a continuing relationship.
The case was further appealed to the High Court.
Key issues
The Court has wide discretion to determine whether a de facto relationship exists. A de facto relationship is one where the parties are not legally married to each other, are not related by family and ‘having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis’.
If the status of a relationship is ever in dispute, the Court will look at all the circumstances, including how long the couple has lived together, whether they shared finances, were committed to a life together and even how other people perceive the relationship. The absence of, or a major change in, these types of factors will indicate whether there is no longer, or there had never been, a de facto relationship.
As it happens, in this case, there was no dispute; the parties had been in a de facto relationship. The issue was whether it had broken down. Based on the evidence, was there a continued commitment to a ‘shared life’ together?
Decision
The High Court rejected an argument that the relationship had broken down when cohabitation ceased. However, it agreed with the primary judge that the commitment to a ‘shared life’ can end when one party acts contrary to the interests of the other party. An essential feature of their relationship was the separate finances, and yet by 2017, Mr Radecki had started to act as if no longer bound by this agreement, as evidenced by his conduct.
The High Court found that while there had been evidence of some commitment to a shared life, this had ended because of Mr Radecki’s ‘persistent refusal’ to make the ‘necessary or desirable adjustments’ which were required and might have evidenced a continuing relationship. The relationship had broken down but not as a result of Ms Fairbairn’s mental decline and the ‘enforced’ separation with her move to an aged care facility but rather her partner’s conduct.
What does it mean?
The recent decision in Fairbairn v Radecki has provided added clarity to what can constitute a breakdown, highlighting the multitude of factors that may be relevant to the existence and breakdown of a de facto relationship:
- Separation and incapacity are not determinative factors. A mutual commitment to a ‘shared life’ does not necessarily require cohabitation or financial interdependence.
- The conduct of the parties during the relationship needs to be considered closely in terms of recognising if a breakdown has occurred. Is one party refusing to make the necessary and desirable adjustments to support the interests of the other party to the relationship? It is not simply a case of living together but rather how the parties contribute to a shared life together.
The case is also a reminder that in the event of separation, consideration needs to be given to the impact on estate planning. Inheritance disputes often involve a de facto partner. Where such a relationship is established, the surviving partner is treated the same as a married partner for the purposes of intestacy and family provision law.
Contact our Family Lawyers in Sydney, NSW
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