Like the breakdown of a marriage, the breakdown of a de facto relationship may require court involvement to settle financial and/or parenting disputes. This is a prominent concern considering how 10.4% of the Australian population were registered as being in a de facto relationship in 2016.

When making a property settlement order in a de facto relationship, the jurisdiction of the Federal Circuit and Family Court of Australia (‘Family Court’) relies upon definitive evidence of a breakdown. This can cause disputation, as the Family Law Act 1975 (Cth) (‘Family Law Act’) does not include an exhaustive definition of a breakdown. In light of this, we explore how the Family Court determines the breakdown of a de facto relationship by reviewing the High Court decision of Fairbairn v Radecki [2022] HCA 18.

What is a De Facto Relationship?

A de facto relationship is defined in the Family Law Act as being between persons who:

  1. are not legally married; and
  2. are not related by family; and
  3. have a relationship as a couple living together on a genuine domestic basis.

In determining whether a relationship is that of a “couple” and is entitled to weight in court, the Family Court will refer to a set of circumstances appropriate to the case. These circumstances may include the following:

  1. the duration of the relationship;
  2. the extent of a sexual relationship;
  3. the degree of financial independence;
  4. the use and acquisition of their property;
  5. the degree of mutual commitment; and
  6. whether they cared for and supported children.

What is a Breakdown of a De Facto Relationship?

Section 90SM of the Family Law Act stipulates that the court may only initiate a property settlement order once there has been a ‘breakdown of a de facto relationship’. Despite this condition, the Family Law Act does not exhaustively specify what is comprised within a breakdown. As a result, the definition of a breakdown is determined by case law.

In referring to case law, however, there are various ambiguities regarding the determination of a “breakdown”. This poses a concern as the conclusive breakdown of a de facto relationship is necessary for the court to be able to determine whether they may exercise jurisdiction in property settlement proceedings.

Fortunately, the decision of Fairbairn v Radecki [2022] HCA 18 (‘Fairburn v Radecki’) on 11 May 2022 has aided in clarifying the circumstances involved in the breakdown of a de facto relationship.

Fairburn v Radecki

Chronology

2005: Fairbairn and Radecki commenced a de facto relationship.

2010: Fairbairn and Radecki executed a Cohabitation Agreement which specified that they had to ‘quarantine their respective property’. Whilst they agreed to keep their assets separate, they chose to live in a house owned by Fairbairn.

2015: Fairbairn was diagnosed with dementia.

2017: Fairbairn’s capacity to make long-term decisions was ‘largely, if not completely, absent.’

2018: In January, the NSW Civil and Administrative Tribunal appointed the NSW Trustee and Guardian (‘the Trustee’) to make health and welfare decisions on behalf of Fairbairn. In March, the Trustee decided to move Fairbairn into an aged care facility. The Trustee sought to sell the home to fund Fairbairn’s ongoing care, although this decision was opposed by Radecki. As a result, the Trustee sought property settlement orders from the Family Court which included orders for the sale of the home.

Primary Issue

To have jurisdiction over the alteration of property settlement orders, the Family Court required sufficient evidence that a de facto relationship had broken down pursuant to section 90SM of the Family Law Act.

Holding

In their Cohabitation Agreement, Fairbairn and Radecki agreed that their assets would be kept separate. In 2017, however, Radecki took various actions which contradicted this agreement.

For example, Radecki sought to create a new Enduring Power of Attorney which would give him significant control over Fairbairn’s assets. He also procured a revised Will whilst Fairbairn was hospitalised and as a result, she was unable to act in her own best interest.

It was held that Radecki was acting contrary to Fairbairn’s interests because he was no longer making decisions which benefitted her emotionally, physically or financially. As Radecki was not making the ‘necessary or desirable adjustments’ which would have evidenced a mutual commitment to a shared life, it was held that the relationship had broken down pursuant to section 4AA(2) of the Family Law Act.

Judgement

With reference to Stanford v Stanford [2012] HCA 52, the High Court held that mere physical separation is not sufficient in justifying the breakdown of a de facto relationship. A de facto relationship may continue even if the parties are residing at separate locations.

An impaired mental capacity is also insufficient in justifying the breakdown of a de facto relationship. The will or ability to make ‘necessary or desirable adjustments’ to support a shared life is not contingent upon mental capacity. Adjustments must be made in accordance with the other party’s interests to support the continuation of a de facto relationship. When these adjustments act in opposition to the interests of the other party, it may be concluded that a mutual commitment to a shared life has ceased.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you are party to a de facto relationship which has broken down and would like to have a confidential discussion, please call Etheringtons Solicitors on (02) 9963 9800 or contact us via our online contact form.