Fairbairn & Radecki | High Court decision de facto relationship law

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On 11 May 2022, the High Court of Australia made orders in the case of Fairbairn & Radecki, about whether a de facto relationship had ended. It is infrequent that the High Court deals with family law matters so this is a decision of significance to family law.

The High Court's decision

The ultimate decision made by the Court was that the de facto relationship had come to an end between the two parties. The facts themselves are unique (as is the case in most family law matters) but the decision will have far-reaching implications for de facto relationships in Australia and the determination of whether they have ‘broken down’ within the meaning of the Family Law Act.

It’s also worth nothing this was a unanimous decision of the 7 judges of the High Court.

Timeline of the de facto relationship

It’s really not possible to explain this judgment without including a timeline of facts as they were so important to the Court’s decision.

Ms Fairbairn and Mr Radecki commenced living in a de facto relationship from late 2005 or early 2006.
Ms Fairbairn and Mr Radecki agreed to keep their assets strictly separate but lived in a house soley owned by Ms Fairbairn.
In 2010 Mr Radecki and Ms Fairbairn entered into a cohabitation agreement recording that they agreed to quarantine their property and Ms Fairbairn’s home was to remain solely owned by her.
In 2015 Ms Fairbairn and Mr Radecki entered into another cohabitation agreement updating the earlier agreement to include quarantining property since acquired by Mr Radecki. It was “a core element” of their relationship that they would keep their assets strictly separate.
By early 2017 Ms Fairbairn’s health had significantly declined and she had suspected dementia and Parkinson’s Disease. Despite this, Mr Radecki went ahead with his planned three-month overseas holiday, during a time when Ms Fairbairn’s health was described as “quite precarious”.
By mid-2017 Ms Fairbairn needed to go into full-time aged care. On her doctor’s advice, she signed an Enduring Power of Attorney appointing her children.
On his return from his overseas trip, Mr Radecki was very unhappy with what had occurred in his absence. He was described as having “manipulated the Appellant, while she was in a vulnerable and confused state, and accusing her children of taking her money, selling her home and putting her into an institution”. Mr Radecki arranged an email to Ms Fairbairn’s children, handwritten by him but signed by Ms Fairbairn telling her children that she loved them but expected them to support Mr Radecki in his care of her and that the Enduring Power of Attorney in their favour should be suspended.
In July 2017 Mr Radecki drove Ms Fairbairn to a courthouse and the existing Enduring Power of Attorney in favour of the children was revoked and replaced by another Enduring Power of Attorney appointing Mr Radecki and Ms Fairbairn’s brother.
By late 2017 Ms Fairbairn was in hospital following a fall at home. Mr Radecki arranged for a solicitor to prepare a new Will for her. Unsurprisingly this was more favourable to Mr Radecki than Ms Fairbairn’s previous Will, and significantly, it conferred upon him a life estate in Ms Fairbairn’s home. Her previous home gave him only a right to live in the house for six months after her death.
In January 2018 a trustee was appointed by the New South Wales Civil and Administrative Tribunal (NCAT) to make health and welfare decisions for Ms Fairbairn and later, after challenges by Mr Radecki who wanted to be appointed her financial manager, the Trustee was eventually also appointed to that role.
When Ms Fairbairn gave evidence in NCAT hearings, she could not remember attending the courthouse and was fearful and anxious about people harming her. NCAT was satisfied Ms Fairbairn was “significantly cognitively impaired” when she signed the new Enduring Power of Attorney and did not fully understand what she was signing and ordered its revocation.
In March 2018 the trustee decided to move Ms Fairbairn into an aged care facility permanently, where she resided at the time of the hearing.
There then followed a dispute between Mr Radecki and the trustee as to how the placement would be funded. A refundable accommodation deposit (RAD) was required, and the trustee wished to sell Ms Fairbairn’s home to fund this. Otherwise, the aged care facility would require a daily accommodation payment (DAP). Mr Radecki wanted to remain in Ms Fairbairn’s home (even though he owned two other properties) and claimed that this was Ms Fairbairn’s wish. He preferred that the DAP be paid from Ms Fairbairn’s superannuation and when that was depleted, he would make contributions from his own resources. He later changed that to suggest that he would pay the DAP but would be reimbursed from her estate. In circumstances where the proposal made by Mr Radecki would allow him to live at Ms Fairbairn’s home rent-free while mortgage payments, rates and other outgoings continued to accrue, the primary judge did not favour Mr Radecki’s proposals and found they favoured his financial interests.
In May 2018 Centrelink suspended Ms Fairbairn’s income support payments after Mr Radecki completed a Centrelink form in which he nominated himself as her spouse, but declined or failed to answer necessary questions about his own assets and income.
Mr Radecki did engage in some redeeming conduct towards Ms Fairbairn. Using her money, he purchased a vehicle with a wheelchair lift which he used to transport her. His evidence to NCAT was that he brought her home each week in the interest of her general wellbeing. He wanted her to return home. He regularly visited her at the aged care facility to assist at mealtimes.
By 2019 the trustee had formed the view that the de facto relationship had broken down, but Mr Radecki disagreed. He argued that Ms Fairbairn wanted him to remain living at the home and the relationship had not broken down.
In June 2019 Mr Radecki commenced making payments of $1,000 per fortnight to meet the daily accommodation payment. These did not reduce the debt but kept it at around the same level. He had paid $16,000 by January 2020.
Eventually, the Trustee applied under the Family Law Act seeking property settlement orders including the sale of the house based on a de facto relationship between Ms Fairbairn and Mr Radecki.

Outcome of the Trustee's application

The Primary Judge found that the de facto relationship had broken down.
On appeal, the Full Court found that the de facto relationship had not broken down.
Before the Full Court, the Trustee did not contend that the relationship had broken down because of her mental incapacity and living permanently in aged care. The Trustee’s submission was that more was required and that the Court should infer from the course of events that Mr Radecki had intended to separate from Ms Fairbairn.
The High Court determined that the de facto relationship had broken down by no later than 25 May 2018.

The Trustee's arguments before the High Court

The Trustee changed their submission and argued that the de facto relationship broke down when the parties stopped “living together” when she moved into aged care (despite the position before the Full Court).
They argued that “living together” requires cohabitation at some place and in some way and that the permanent cessation of cohabitation, whether voluntarily undertaken or involuntarily imposed, and for whatever reason, was set to result, in every case, in a de facto relationship ending.
The submission was that a breakdown would take place on a permanent cessation of cohabitation, regardless of any continuing genuine love or affection between the couple.
In summary, the argument was that because Ms Fairbairn had been placed into aged care permanently, and because the parties had ceased to cohabitate in the home, it followed that there had been a breakdown of the relationship for the purposes of the Act.
The alternative argument by the trustee was that the de facto relationship had broken down by no later than 25 May 2018 due to the circumstances listed in subparagraph 2 of Section 4AA of the Act and that in this context, “breakdown” does not necessarily mean “end”.

Important points from the High Court’s decision in Fairbairn & Radecki

The definition of a de facto relationship is contained in Section 4AA of the Family Law Act. Even though the definition includes the words “they have a relationship as a couple living together on a genuine domestic basis” it is not critical for the parties to live together under the one roof 100% of the time.
The High Court considered the submissions and found that

“in context of a human relationship, ‘breakdown’ refers to the ‘end’ or ‘breakup’ of what had been an enduring emotional bond. It is the ‘breakdown’ or ‘end’ of a de facto relationship that is the trigger point for the Federal Circuit and Family Court to be seized of jurisdiction to make a property settlement order under Section 90SM of the Act. It would make no sense for such a jurisdiction to arise before a de facto relationship had ended.”

The Court went on to describe other various other sections of the Act where breakdown and end were linked and reinforced. It went on to state

“it 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”.

Importantly, the Court also said as follows:

“living together for the purposes of Section 4AA(1) will often, perhaps usually, mean cohabitation of some residence by a couple for some period of time. Though cohabitation of a residence or residences is not a necessary feature of ‘living together’ that phrase must be construed to take account of the many various ways in which two people may share their lives together in the modern world. Two people, for any number of reasons, may not reside in the same residence, but nonetheless be in a de facto relationship in the sense required by Section 4AA. The fact that the Appellant was placed into an aged care facility may be relevant to the existence or breakdown of the de facto relationship under the Act, but it could not, of itself, be determinative of that issue. The same observation applies to the decline in the Appellant’s cognitive ability.”

The High Court made note of the statement in Stanford (a High Court case that also concerned a couple where one of the parties had been admitted into full-time residential care) that

“if one of the parties has become incompetent it is not to be assumed that the other party lacks the will and ability to make those necessary or desirable adjustments”.

In Stanford, the husband was providing for the wife, including placing money into her bank account to contribute to her medical needs or requirements. The Court did not consider it just and equitable to make a property settlement order requiring the sale of the residence.
The High Court in Radecki v Fairbairn found that

“where the ‘necessary or desirable adjustments’ are not made, and one party fundamentally acts 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 ceased”.

In concluding that the de facto relationship had broken down and that the appeal should be allowed, the High Court said

“the appeal must be allowed. That is not because the Appellant was obliged to move permanently into an aged care facility. Nor is it because of the Appellant's mental incapacity. While each of these matters may be relevant to the enquiry into whether the de facto relationship between the Appellant and Respondent had broken down, neither is determinative. A de facto relationship may continue even though the parties physically reside at different locations, and despite one of those parties suffering from (severe) illness. Instead, for the purposes of ss 90SM and 4AA of the Act, having regard to all of the circumstances, including the conduct of the Respondent, the de facto relationship between the Appellant and the Respondent had, by no later than 25 May 2018, broken down. Those circumstances demonstrated a persistent refusal by the Respondent to make ‘the necessary or desirable adjustments’ to use the language of Stanford which might have evidenced an ongoing relationship.”

The Court then discussed how, from 2017 onwards, Mr Radecki had acted as if he were no longer bound by the arrangement in the cohabitation agreements to keep their assets separate. They referred to the factual matters listed above as indicating that the Respondent’s actions, particularly refusing to reside elsewhere and to permit the home to be sold “served his and not the Appellant’s interests”. They went on to say

“whilst there had been a degree of mutual commitment to a shared life, that commitment ceased when the Respondent refused to make the ‘necessary or desirable adjustments’ in support of the Appellant and, by his conduct, acted contrary to her needs.”

Concluding remarks about the impact of Fairbairn & Radecki on de facto relationship decisions

The High Court has stated unequivocally that the mere fact of a party being moved to aged-care facility or losing mental capacity does not mean a de facto relationship (or marriage) is at an end. They are simply factors to consider.
In determining whether a de facto relationship has broken down/ended, particularly in cases where the parties are living physically separate, it will be necessary to consider a range of factors including the attitude to and support of the other party, adjustments made by the parties to the change in circumstances, and whether their actions show a commitment to the relationship.
Whether the argument is about the existence of a de facto relationship or whether a relationship is accepted, but contended to have broken down, comprehensive instructions and evidence will be required by both parties.
These cases have a tendency to be hotly contested and expensive. Obtain the instructions and evidence early.
In this case the Trustee had a different avenue available. I do not know if that was a less expensive route than a trial, Full Court Appeal, Special Leave Application and High Court Appeal, but always consider there may be another option to achieve your outcome.

Disclaimer: This case summary is provided for general information and educational purposes and is not to be construed as legal advice.