Review of De Facto Relationships – Fairbairn v Radecki (2022) FLC 94-083; [2022] HCA 18

July 7, 2022

For the Federal Circuit and Family Law Court (FCFCOA) to have the power to make a property settlement order pursuant to section 90SM of the Family Law Act in de facto relationships, a breakdown of the said relationship must have occurred.

The recent decision of Fairbairn v Radecki has turned a spotlight as to what constitutes a “breakdown” of a relationship.

Briefly, the facts are this:

The de facto husband and wife commenced a relationship in late 2005 to early 2006. All assets were kept separate, however the parties resided in the same property, owned by the de facto wife. In 2017, after a cognitive decline of some two years, the de facto wife was placed in an aged care facility after a diagnosis of advanced dementia.

The de facto husband remained living in the property. An attempt to sell the subject property to fund the de facto wife’s ongoing care by the Trustee and Guardian was opposed by the de facto husband, who wished to remain living in the farm property, arguing that this was reflective of the Wife’s wishes. Noting the de facto husband’s position, the Trustee commenced Family Law Proceedings on the basis that the parties’ relationship had broken down, seeking financial Orders on behalf of the de facto Wife. The husband disputed this position, arguing a continuation of the relationship, and accordingly, disputing the Court’s jurisdiction to intervene in the matter.

At first instance, the Primary Judge found in favour of the Trustee, finding that the facts of the matter suggested a breakdown of the relationship. This led to an Appeal to the Full Court by the de facto husband, which was upheld. The Full Court found that the husband’s conduct was not fundamentally inconsistent with a continuing de facto relationship – more was needed to find that the relationship had broken down.

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

High Court Findings

The High Court allowed the appeal and ultimately determined that the parties’ relationship had broken down at some stage prior to May 2018. What was particularly significant is that the Court found that an essential feature of the relationship was that the parties kept their finances sperate from each other.

Interestingly, the Court referred to Standford and held that separation, including involuntary separation is not on its own sufficient to find that a relationship had broken down. A de facto relationship may continue even if parties reside at different locations. Mental incapacity on its own is also not enough to establish the cessation of a relationship.

What was held to be significant to a finding of a de facto relationship is that the making of necessary or desirable adjustments by one party to the interests of the other supports the continuance of a de facto relationship, and when one party acts contrary to the interest of the other in relation to the property of the parties, it may be possible to conclude that the mutual commitment to a shared life has ceased, leading to a finding of a breakdown of the relationship.

In this case, the High Court found that looking at the circumstances, namely that the parties had occupied sperate bedrooms since 2017, that the de facto wife had been residing in an aged care facility from January 2018, and having regard to the conduct of the de facto husband (including securing a new Enduring Power of Attorney giving him control over the de facto wife’s assets including the home, procuring a revised will from the de facto wife whilst in hospital greatly benefiting him and generally acting against the financial interests of the de facto wife), coupled with separate financial lives as noted above, was enough for the Court to find that the de facto husband was acting contrary to the de facto wife’s interests. The Court found that the de facto husband from latest May 2018 was longer making necessary or desirable adjustments to the de facto wife, implying that there was no longer a mutual commitment to a shared life. This led to the finding that the relationship had broken down.

The High Court made orders that the Appeal be allowed and that the appeal to the Full Court be dismissed.

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