The High Court was asked in the recent case of Fairbairn v Radecki [2022] HCA 18 to consider whether the de facto relationship between Mr Radecki and Mrs Fairbairn had broken down for the purposes of the Family Law Act 1975 (Cth). The implications of the High Court’s decision are not limited to family law and have implications also for elder law and succession law.
So what’s the story?
Mr Radecki and Mrs Fairbairn were in a de facto relationship for some time and enjoyed a supportive relationship. They kept their finances separate and the two cohabitation agreements they had put in place in 2010 and 2015 reflected this intention. Mrs Fairbairn’s health had declined significantly by 2015 and, by 2017 she had lost capacity to make decisions and moved to aged care due to dementia.
Mr Radecki had arranged for Mrs Fairbairn to appoint him as her Enduring Attorney. He also sought to have her change her will in 2016 to include more favourable terms to him.
Mrs Fairbairn’s children became increasingly concerned about the actions of Mr Radecki. This resulted in applications being made to the NSW Civil and Administrative Tribunal (NCAT) with the NSW Trustee and Guardian (TAG) being appointed in 2018 to manage Mrs Fairbairn’s affairs.
An application by TAG was then made for property settlement orders to sell Mrs Fairbairn’s home to fund her care.
What the law says
The Family Law Act covers the end of a relationship in the form of a marriage under its Part IV divorce powers. However, the end of a de facto relationship is far more murky. A relationship “breakdown” is not defined in the Family Law Act and instead, the courts must look to case law for the answer.
The High Court carefully considered the case of Stanford v Stanford [2012] HCA 52 in which: although the parties were involuntarily separated, it was not just and equitable to make a property settlement order. When both parties are competent it can be assumed that any "necessary or desirable adjustment" to their previous financial arrangements will be made consensually and if one of the parties becomes incompetent it is not to be assumed that the other party lacks the will and ability to make the necessary or desirable adjustments.
This idea of one party making “necessary or desirable adjustments” was key to deciding whether the de facto relationship had “broken down” and this same reasoning was applied in Radecki v Fairbairn.
What the High Court decided about Mr Radecki and Mrs Fairbairn’s relationship
In reaching its decision the High Court gave weight to Mr Radecki:
- securing his appointment as Mrs Fairbairn’s Enduring Attorney;
- arranging for Mrs Fairbairn to change her will to favour him; and
- refusing to co-operate with TAG and Mrs Fairbairn’s children, as well as a refusal to contribute to the cost of Mrs Fairbairn’s aged care.
Further, the Court kept in mind that Mr Radecki’s actions occurred whilst Mrs Fairbairn was to varying degrees, cognitively impaired.
Ultimately, the High Court concluded that these circumstances demonstrated a persistent refusal by Mr Radecki to make "the necessary or desirable adjustments" which might have evidenced an ongoing relationship noting that:
- separation, especially where involuntary, is not sufficient on its own, to justify a relationship has “broken down”;
- incapacity on its own is not determinative, especially where one party can make the necessary or desirable adjustments to support the other and
- where the necessary or desirable adjustments are not made by one party to the relationship (or their actions are different to the interests of the other) it is possible to infer that the mutual commitment to a shared life has ceased, or that the relationship has “broken down” for the purposes of the Family Law Act.
The decision of the first instance Court was upheld, and the relationship was deemed to have ceased on 25 May 2018. The appeal was allowed.
This decision paves the way for the property settlement sought by the TAG on behalf of Mrs Fairbairn.
What does this mean for a Will?
The extent to which the end of a de facto relationship effects a Will depends on a variety of factors including, which state has jurisdiction over the estate. In Queensland, for example, the law provides that the end of a de facto relationship revokes a Will to the extent that it provides for the former spouse. In other states, the ending of a de facto relationship does not necessarily mean an ex-partner will automatically luck out on provision from their ex’s estate.
Radecki v Fairbairn acts as a timely reminder to ensure that in the event of separation (and divorce) due consideration is given to the impact on estate planning to ensure wishes are reflected and to reduce the risk of costly litigation down the track.
If you would like further information about the issues raised in this article, please contact our Estates and Succession team.