In this two-part article, we discuss the High Court’s recent decision in Fairbairn v Radecki  and what it means for de facto partners who disagree about when, or whether, their relationship has come to an end.
The Federal Circuit and Family Court of Australia (FCFCOA) has power under section 90SM of the Family Law Act 1975 (Cth) to effect a division of assets, liabilities and/or superannuation, that is, a property settlement between two parties. It only has the power to do this after the breakdown of a de facto relationship. So, what happens where one party considers that a de facto relationship has broken down and the other doesn’t? How does the court decide whether or not a de facto relationship has come to an end?
Interestingly, the Family Law Act defines what a de facto relationship is (and even includes a subsection titled ‘Working out if persons have a relationship as a couple’) but there is no definition or reference to when a de facto relationship has broken down. Many arguments before the family law courts surrounding de facto relationships centre around whether a de facto relationship actually existed in the first place. If the court finds that a de facto relationship did not exist, it cannot make any orders to divide assets or otherwise alter property interests under the Family Law Act.
The High Court’s decision in Fairbairn v Radecki is significant, as the primary argument between the parties was not whether a de facto relationship existed, but rather, whether the de facto relationship had ended.
Mr Radecki, the de facto husband, and Ms Fairbairn, the de facto wife, commenced living together in late 2005/early 2006. They lived together in a home owned by Ms Fairbairn but agreed that they would keep their respective assets separate as they were both in their 50s and each had adult children from previous relationships.
The couple entered into a ‘Domestic Relationships Agreement (Cohabitation Agreement)’ in 2010 which recorded their intention to keep their assets separate and that Ms Fairbairn would continue to be the sole owner of the home the couple lived in. They then updated this agreement in 2015 when Mr Radecki purchased a new property to provide that this property would remain Mr Radecki’s sole property.
Ms Fairbairn’s cognitive health began to decline from 2015 and by 2017 her doctors had diagnosed her with dementia. By this point, the couple were living in separate rooms in the home. Around this time, Mr Radecki went on a 3-month overseas, despite Ms Fairbairn’s condition quickly deteriorating.
While Mr Radecki was overseas and whilst she still had capacity to make decisions, Ms Fairbairn executed an Enduring Power of Attorney in favour of her children who, at her request, were then able to remove her access to her bank accounts. She also qualified to move into an aged care facility by mid-2017.
On returning from his 3-month overseas trip, Mr Radecki coerced Ms Fairbairn to undo the protective steps that she and her children had taken to isolate her assets, at a time when Ms Fairbairn was more vulnerable and easily coerced. Mr Radecki’s actions created a divide between him and Ms Fairbairn’s children.
The rift between Mr Radecki and Ms Fairbairn’s children intensified in July 2017, when Mr Radecki took Ms Fairbairn to a courthouse to have the existing Enduring Power of Attorney revoked and a new one made in favour of himself and her brother. Then, after Ms Fairbairn was admitted to hospital in late 2017, Mr Radecki arranged for a solicitor to attend Ms Fairbairn to draft an updated will. This updated will contained more favourable terms to Mr Radecki than Ms Fairbairn’s previous will. The updated will provided Mr Radecki with a life estate in Ms Fairbairn’s home, meaning that following her death, he could continue living in the home for the remainder of his life, whereas the previous will allowed him to continue living in the home for 6 months following her death. This was despite Mr Radecki owning two of his own properties.
The NSW Civil and Administrative Tribunal (NCAT) eventually appointed the NSW Trustee and Guardian (TAG) as the financial manager of Ms Fairbairn in January 2018 as neither Mr Radecki nor Ms Fairbairn’s children could co-operate in the management of Ms Fairbairn’s affairs. During the NCAT hearing, Ms Fairbairn gave evidence that she did not remember going to the courthouse to revoke her previous Enduring Power of Attorney. NCAT found that she had been significantly cognitively impaired and did not understand what she was signing.
In March 2018, TAG decided that it was in Ms Fairbairn’s best interests to move into aged care and sought to sell her home to be able to fund this. Mr Radecki was still living in the home and opposed the sale. He instead proposed that Ms Fairbairn’s superannuation be used to fund her aged care costs, or alternatively, that he initially pay for these costs but that he later be reimbursed from her estate.
TAG then commenced proceedings in what was then the Federal Circuit Court of Australia for family law property orders, as it believed that the parties’ de facto relationship had ended.
TAG sought an Order for Ms Fairbairn’s home to be sold, intending that the sale proceeds would fund her move into aged care. Interestingly, that Order could have been sought under s16G of the NSW Trustee and Guardianship Act 2009. Due to the uncooperative relationship between Mr Radecki and Ms Fairbairn’s children, TAG determined it would best serve Ms Fairbairn’s interests to commence proceedings under the Family Law Act to sever property matters between her and Mr Radecki entirely.
Stay tuned for part 2, which will reveal what the High Court ultimately decided and why!
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
 Section 4AA.
 The Federal Circuit Court of Australia and the Family Court of Australia have now merged into one court, being the Federal Circuit and Family Court of Australia (FCFCOA).
Doing Business in Australia: Your free business health check and guide to overcoming cashflow challenges
This is a challenging financial and economic climate for companies, businesses, and families. If you want to outwit, outplay, and outlast the competition (or simply survive) – cash(flow) is king.
Doing Business in Australia: Insolvency Snapshot for 2024
Corporate insolvency appointments have more than doubled since this time last year.
Can my relationship status change while awaiting the decision on my General Skilled Migration (GSM) visa?
With prolonged processing times, changes in circumstances usually happen. People get married or enter de facto relationships, or they get separated or divorced. Children are born sometimes.
Migration Overhaul – Once in a generation Migration Reform (First of a series)
According to the Australian Bureau of Statistics, the latest figures (2019-2020) showed that international education was worth AUD $37.4 billion to the Australian economy.