Property – No Error was Identified Against a Declaration of De Facto Relationship

Background

In the recent case of Cuan & Kostelac [2017] Fam CAFC 188 (12 September 2017) the Full Court of the Family Court (Strickland, Aldridge & Loughnan JJ) heard Ms Cuan’s appeal against Judge Baumann’s declaration that she and Mr Kostelac had lived together in a de facto relationship. She argued that the parties were never de facto partners, that while she lived at the respondent’s home in “Town L” she was a fly in/ fly out worker who travelled to live with her children in “City N” for 2 weeks after each 6 week block of work in Town L. She said that in Town L she lived in the respondent’s flat rent-free in exchange for her looking after him, doing his housekeeping and helping him manage his money. She said that they travelled overseas together between 2010 and 2014 but were just friends.

De Facto Relationship Considerations

Judge Baumann found that the parties lived together in a de facto relationship between April 2007 and late 2010, also granting the respondent leave to issue his property proceedings under the Family Law Act.

The primary judge found that there was a de facto relationship after taking into account the following considerations:
1. The parties shared a common residence in Town L from April 2007 to some time in 2010. The latter date was arrived at by looking at, in particular, banking records which showed withdrawals by the appellant in City N and Town L at different periods, the addresses to which those accounts were sent and the appellant’s employment history.
2. A sexual relationship existed between the parties in Town L only. The primary judge was not satisfied that sexual relations were maintained consistently after 2010.
3. Between 2007 and 2010 there was significant intermingling of funds. The appellant had authority to operate the respondent’s bank accounts. The primary judge was satisfied that substantial funds had passed from the respondent’s bank accounts to the appellant’s account and had then been used by her to reduce mortgages over two properties she owned in City N.
4. The parties travelled overseas on a number of occasions between 2010 and 2014. The primary judge regarded this as being indicative of friendship only and not of a commitment to a shared life. When travelling the parties stayed in separate rooms except for one occasion when separate beds were arranged.
5. Albeit limited, the evidence of social interaction with other persons in Town L led the primary judge to accept that those people formed the view that the parties were a couple.
6. The evidence of the appellant’s children that the parties did not appear to have a close or intimate relationship was consistent with the de facto relationship ending some time in 2010.

Further Considerations

Recently the High Court in Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 stated that a Court of Appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony” or they are “glaringly improbable” or “contrary to compelling inferences”.

In Sinclair & Whittaker [2013] FamCAFC 129 (‘Sinclair’) the Court stated that in coming to the view that a couple had a relationship as a couple living together on a genuine domestic basis the Court is to have regard to all of the circumstances of their relationship. Those circumstances may include those specified in s 4AA(2) of the Family Law Act. Sub-section 4AA(3) highlights that no particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the subject persons have a de facto relationship.

Sub-section 4AA(4) provides: “A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.” Thus, whether or not a de facto relationship, as defined, exists will depend upon an assessment of all of the circumstances of the relationship, each to be given the weight the court thinks appropriate.

Many of the submissions put by the appellant in the appeal sought to place significant, if not determinative weight, on particular circumstances. Absent the identification of an error on the part of the trial judge it was difficult for such submissions to succeed. Merely because another judge may have weighed the circumstances differently does not, of itself, demonstrate error.

Thus, if the finding of a de facto relationship is open on the evidence then no error will be identified, even if other judges may have come to a different conclusion.

Appellant’s Submission

The appellant submitted that the following 13 matters undermined both the finding as to common residence and hence the finding as to the existence of a de facto relationship:
a) When not working in Town L the appellant stayed in City N at her son’s house until late 2009.
b) In late 2009 she commenced living with her daughter in City N.
c) Between mid-2007 and mid-2008 the appellant kept only minimal personal possessions at Town L.
d) On 11 February 2008 the appellant’s employment in Town L was terminated.
e) From 10 April 2008 until 26 September 2008 the appellant received Newstart payments.
f) In July 2008 at a mediation in City N the appellant resolved the dispute with her former employer.
g) In July 2008 the appellant returned to City N to live with her son.
h) The appellant purchased a second property in City N in November 2008 in her own name.
i) The appellant returned to Town L in the latter half of 2008 and worked there from 10 December 2008 until 25 February 2009.
j) In April and May 2009 the appellant was living in City N.
k) From December 2009 until March 2010 the appellant was living in City N.
l) The appellant denied any sexual relationship with the respondent.
m) In June 2010, having retired, the respondent started to receive the aged pension at the single rate.

The court did not consider that any or all of the 13 matters relied upon by the appellant render the primary judge’s finding that there was a common residence glaringly improbable or contrary to compelling inferences. Indeed, they were largely consistent with the primary judge’s findings: that the appellant returned regularly to City N to see her children; that after 2010 the appellant lived primarily in City N; that from 2009 she had a room available to her in City N; and, importantly, that the appellant had a common residence, but not exclusive, with the respondent in Town L until sometime in mid to late 2010.

In short, the finding of the primary judge that the parties had a common residence until mid to late 2010 was open on the evidence.
It is to be recalled that the existence of a common residence is not a prerequisite for a finding of a de facto relationship. Rather, ‘the nature and extent of their common residence’ is but one circumstance which ‘may’ be taken into account. No one circumstance is determinative: Sinclair.
The appellant submitted that ‘it was incumbent upon the Court, having found a de facto relationship to have existed between the parties, to determine the date of the end of that de facto relationship and to explain that finding.

We do not agree. Section 90RD(2) provides that the Court ‘may’ declare the period or periods of the relationship or when it ended. It is not obliged to do so.

In any event, the primary judge did determine the end of the relationship as ‘late 2010’.

The Court was not satisfied that any of the matters raised by the appellant indicate that the finding of a de facto relationship was glaringly improbable or contrary to compelling inferences. The finding of a de facto relationship was quintessentially one for a trial judge. In this case, that finding was open on the evidence.

Grant of Leave and Hardship

As to the grant of leave and the Court’s finding of “hardship” pursuant to s 44(6), the Full Court said stated that the appellant’s evidence was that $93,000 passed from the respondent’s accounts to hers and that a significant part of these funds were used by her to reduce the mortgages on the two properties she owned in City N.

The primary judge was not satisfied that all of the $93,000 had been repaid and thereby concluded that the respondent at the least had a claim that the balance that had not been repaid had reduced the appellant’s mortgages. Accordingly this is a finding of a contribution to the appellant’s assets. As the respondent was entirely bereft of assets of his own, that claim could easily be described as substantial in the context of this particular matter.

Appellant’s Further Submission

The appellant also made the submission that the primary judge erred in not arriving at a precise figure for the contribution. The Court stated that in this case such a finding was not necessary. The primary judge was obliged to consider the degree of financial dependence or interdependence and any arrangements for financial support between the parties (s 4AA(2)(d)). This the primary judge did. Whilst his Honour could have found a precise figure for the contribution by the respondent to the appellant’s mortgages, the Court did not consider that on this threshold issue they were obliged to do so

The acceptance by the appellant that she received $93,000 from the respondent and had failed to give evidence satisfactory to the primary judge as to the return of all of it was capable of justifying the findings that there had been an intermingling of funds and a substantial capital contribution by the respondent. That was sufficient for the evaluation of the degree of financial dependence or interdependence or degree of financial support between the parties, and the impact of that consideration on whether or not a de facto relationship had existed. The Court agreed with the statements of the primary judge and the submissions of the respondent that there did not need to be a precise quantification of the amount of the respondent’s funds retained by the appellant for the proper determination of the jurisdictional issue, although such a precise quantification is likely to be necessary at the final property hearing.

Conclusion

The appellant did not point to any evidence which was obviously overlooked by the primary judge. Rather, the contention was that when the facts were properly analysed, a different result would have been arrived at. The Court accepted that different judges may have looked at these same facts and properly arrived at a different result. That, however, did not establish error.

Orders

The appeal was dismissed with costs.

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