Is it a de facto relationship?

Last year I wrote an article on the concept of 'living apart together'. In that article I touched on the case of Sinclair and Whittaker [2013] where the Full Court said that "the ultimate decision as to whether there is a de facto relationship at any given time is a matter for the Court and not a matter for the parties". I had cause to consider the facts of that particular case recently and they caught my attention.

The parties began dating in late 2002. In August 2004 the respondent's flatmate vacated their flat and the appellant moved some personal belongings in. The appellant began to contribute $600 each month towards the respondent's rent.

In December 2005 the parties purchased a unit with the appellant providing the deposit and paying the stamp duty. The unit was put in the name of a corporate entity wholly controlled by the appellant with a 70% interest to the corporation and 30% to the respondent. The respondent and the corporate entity jointly borrowed monies from the appellant's business which was a mortgage provider.

The respondent described herself as single on forms to do with the purchase when an available option was de facto. The parties each contributed $15,000 to a fund which was used for the purchase of furniture and accessories for the apartment and they shopped for those items together.

The appellant stayed at the unit on average three nights per week but left at 4:15 AM each morning to commence work from his own premises.

The parties spent many weeks each year away together and enjoyed time with the respondent's family in Queensland between 2 to 4 times per year.

The respondent described herself as single and not in a de facto relationship on documents provided to the ATO.

On 21 December 2006 the appellant gave the respondent a 2.17 carat diamond ring which was found to have been described by the appellant as a promise ring.

The relationship broke down on 21 September 2010.

The appellant claimed to have had relations with other women during the period of the relationship however the appellants driver gave evidence that was inconsistent with this statement.

Thoughts?

The trial judge concluded, based on those facts, that the parties had been in a de facto relationship. On appeal the Full Court was satisfied that that decision was open to the trial Judge on the facts before him and no error in His Honour's reasoning was identified.

Varying existing parenting Orders - "the rule in Rice and Asplund"

The Family Court and the Federal Circuit Court of Australia have a clear principle that a Court should only hear an application to vary an earlier Order if it is satisfied that there is some changed circumstance which would justify such a serious step. This is known as the "rule in Rice and Aspland".

The rule in Rice and Asplund applies whether the earlier orders were made by consent of the parties or after a contested hearing before the Court.

The principle underpinning the rule in Rice and Asplund is that there should be an end to litigation, that is the avoidance of endless litigation between parents examining again and again the same issues and arrangements.

However, there are instances where it is necessary for a Court to revisit earlier Orders. While there is no exhaustive list of what constitutes a changed circumstance in previous cases this has included psychological and physical changes in the child, evidence of violence towards the child, a parents recovery from former mental health issues, a proposed relocation by one parent and a parents new stable relationship or marriage.

Should one parent bring an application to revisit earlier Orders and a Court be satisfied that there is a changed circumstance than the matter is considered again by the Court and new Orders may be made.

Court filing stats

The Australian Bureau of Statistics (ABS) has released its figures on the Family Law Courts. They cover the period 2004/5 to 2012/13.

The key findings were:

• Court filings in children's matters in 2012/13 reflect a 25% decrease on the 2004/5 levels.  
• In relation to property matters there has been a 17% increase in filings.

These figures are interesting as they potentially reflect two events that occurred between 2004/5 and 2012. 

Firstly, in 2006 amendments were made to the Family Law Act designed to decrease the level of parenting litigation (covering children of both married and de facto couples) and instead to encourage parties to use services such as mediation to resolve disputes. This may explain the decrease in the children's matters filing levels.

Secondly, in 2009 further amendments were made to the Family Law Act which brought the property division of separating de facto couples under the Family Law Act for the first time. This may explain the increase in property matter filing levels. 

The report can be found at: www.aifs.gov.au/institute/pubs/resreport30/index.html 

Court resources

Family law in Australia is served by two Courts, the Family Court of Australia and the Federal Circuit Court.

The two Courts both have jurisdiction under the Family Law Act but matters are divided between them in accordance with a Protocol which essentially sees the more complex matters heard by the Family Court and the vast majority of matters heard by the Federal Circuit Court. According to the available data in 2013/2014 the Family Court received 2,923 Applications for Final Orders while in 2012/2013 the Federal Circuit Court received 17,363 Applications for Final Orders.

While there may be a division of work between the two Courts both Courts deal with incredibly important issues relating to the breakdown of a relationship or marriage, including who is to care for the children and how people are to divide their assets. Delays in having the Courts determine such matters has an impact on the lives of the parties, their children and everyone in their extended families and support network.

The Courts are facing something of a predicament with both Courts facing the retirement of many Judges. The Federal Circuit Court will have, over the next year, the departure of 12 - or around a quarter of its Judges.

The Chair of the Family Law Section of the Law Council of Australia, Rick O'Brien, has said "The family courts are genuinely in crisis, and with these retirements things are going to get worse."

Chief Judge of the Federal Circuit Court has previously stated that because of a lack of funding, under staffing and an increasing workload the Federal Circuit Court is already struggling to keep up with the cases coming before it. His Honour went on to say that the replacement of Judges was "critical in ensuring that families in distress are dealt with as quickly as possible."

The President of the Law Council of Australia said "failure to adequately resource the family law system by replacing judges promptly will have a snowballing effect, the social and economic cost of which will continue to be felt by the community for years to come."

A spokesman for the Federal Attorney-General told the SMH that "In the current economic climate all areas of government, including the courts, must look for ways to work more efficiently and effectively. The Attorney-General is carefully considering all available options for any administrative and structural reform to address long-term financial sustainability of the federal courts."

This is seemingly in opposition to the views expressed by the Law Council of Australia. Duncan McConnel, told the SMH "given the significant and often traumatic emotional and financial burden on separating families, and children, the government must commit to finding additional resources to address such delays. Such a commitment requires, at the minimum, that retiring judges are replaced promptly."

What is a Case Guardian?

Generally when people separate following the breakdown of a relationship or marriage each party will seek independent legal advice to negotiate a settlement of the matters or to commence court proceedings if necessary. However from time to time questions may arise as to whether one of the separating parties has the necessary capacity to make their own legal decisions.

If someone has an illness or condition which could affect capacity and ability to provide instructions to a solicitor it is necessary to consider how instructions are to be taken and how advice is to be provided.

Sometimes it will be necessary to consult with the client's treating doctor or specialist for an opinion as to the person's capacity to understand legal advice and make legal decisions.

Should such an expert state that the person does not have capacity but the action or proceedings need to continue it will be necessary to consider whether a Case Guardian should be appointed.

A Case Guardian is appointed by the Court in accordance with the requirements set out in the Family Law Rules 2004.

Rule 6.08 provides that a person with a disability may start, continue, respond to or seek to intervene in a case only by Case Guardian.

A person with a disability is defined as a person who, because of the physical or mental disability:
a. Does not understand the nature or possible consequences of the case; or
b. Is not capable of adequately conducting, or giving adequate instruction for the conduct of, the case.

Rule 6.09 of the rules state that a person may be a case Guardian if the person is:
1. An adult;
2. Has no interest in the case it would be adverse to the client;
3. Can fairly and competently conduct the case; and
4. Has consented to act as a case Guardian.

Evidence as to these factors is presented to the Court in the form of an Affidavit.

The recent case of Crowley and Child Support Registrar [2015] reviewed the appointment of a Case Guardian.

In this matter Mr Crowley's mother sought to be appointed as his Case Guardian. Mr Crowley's mother filed an affidavit with the Court setting out evidence that as a result of a motor vehicle accident in 1992 Mr Crowley suffered a severe brain injury and that in 1994 he was classified as permanently incapacitated. Attached to the affidavit was medical evidence supporting these statements. Mr Crowley's mother also stated in her affidavit that she had been appointed his Power of Attorney, was familiar with the legal issues in relation to the proceedings and had been assisting her son for some time. Mr Crowley's mother was appointed as his Case Guardian.

Defamation and family law - WA decision

One of the questions that I get from time to time is along the lines of "what can I do to stop him/her from saying bad things about me?" In the past, and still occasionally, this relates to things said in person to friends, family or co-workers but more frequently now it is in relation to comments made on social media sights such as Facebook or Twitter.

Last week the media reported on a case from Western Australia in which a husband was awarded $12,500 in damages against his estranged wife after she posted comments about him on her Facebook profile.

The post, which read "Separated from Miro Dabrowski after 18 years of suffering domestic violence and abuse. Now fighting the system to keep my children safe." was posted in December 2012. Ms Greeuw removed the post in February 2013 following a letter from Mr Dabrowski's lawyer. 

In a 10 day trial before the West Australian District Court Ms Greeuw argued that the statement was not defamatory or if it was it fell under the justification defence found in section 25 of the Defamation Act 2005 (WA) in that it could be proved to be substantially true.

Judge Bowden said "Domestic violence and abuse by its very nature usually occur in the matrimonial home and in the absence of independent witnesses. I accept that defamation findings can be made solely on the evidence of one partner against the other."

Evidence was given as to the nature of the relationship between Mr Dabrowski and Ms Greeuw - including contemporaneous letters between the pair alluding to holidays being ruined. Mr Dabrowski argued that the letters went to his state of mind. Ms Greeuw argued that she was the victim of years of emotional and occasionally physical violence.

While Judge Bowden found Mr Dabrowski's evidence about the nature of the relationship to be lacking credibility he found that Ms Greeuw could not establish on the balance of probabilities that she had been subject to domestic violence.

Judge Bowden stated that Ms Greewu's claim that while she had written part of that statement she had not published it and her Facebook profile had been hacked to create the screenshot of the post that was used in the trial was "implausible" and it undermined her credibility. His Honour said "... Ms Greeuw's credibility is so badly affected by the matters to which I have referred  that it leads to the conclusion that she is prepared to say or write whatever she thinks will suit her case and I would not be prepared to accept her evidence unless it is supported by independent evidence or documents contemporaneously made with the events she now complains of."

His Honour said he had "no doubt that the post caused Mr Dabrowski personal distress, humiliation and hurt and harm to his reputation and it did cause people to 'look at him twice' and be more reserved about their contact with him." and "He is an experienced educator and is entitled to public vindication."

Judge Bowden came to the amount of $12,500 (plus interest and costs) by taking into account the fact that the comment was read by a limited audience and was deleted about six weeks later. 

It will be necessary to see if there are any decisions in NSW regarding this issue. In the meantime this remains a complex issue, and this case alone will not change that.

Self Managed Super Funds - trustee penalties

Self managed superannuation funds (SMSFs) are ever on the rise in Australia and with that they are more and more frequently part of family law property settlements.

In 2014 a new administrative penalty regime came into effect giving the Australian Taxation Office (ATO) a wide range of enforcement powers to ensure SMSFs do not breach the relevant superannuation legislation.

The commentary on these changes indicates that the intention is to ensure that trustee's are vigilant in their record keeping and compliant with their duties.

The breaches covered include but are not limited to the provision of financial assistance to a member or relative, the failure to maintain adequate minutes and records and exceeding the in-house asset investment limit.

The new penalties fall into three categories:

• Administrative penalty notice; 
• Rectification directions; and
• Education directions. 

The penalty notices are fines ranging from 5 penalty units (i.e. $850) to 60 penalty units (i.e. $10,200). Penalties are paid by the trustee personally and cannot be reimbursed by the SMSF - and it is important to note that where a SMSF has individual trustees the penalty will be paid by each trustee but where there is a corporate trustee it will only be paid once. The ATO does not have discretion to reduce or withhold the penalty meaning that even inadvertent errors will attract a penalty.

Rectification directions require the trustee to take specified actions to rectify the contraventions and provide the ATO with evidence of compliance within a specified time frame.

Education directions require the trustee to undertake a specified course of education and provide the ATO with evidence of compliance of the course. Any cost for the trustee in undertaking the course is to be paid for by the trustee and cannot be paid for or refunded by the trustee. The trustee will be required to sign a declaration within 21 days of completion of the course stating that they understand their duties as a trustee of a SMSF.