Cantu & Galloway
[2023] FedCFamC1F 993
•22 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cantu & Galloway [2023] FedCFamC1F 993
File number: NCC 2173 of 2023 Judgment of: AUSTIN J Date of judgment: 22 November 2023 Catchwords: FAMILY LAW – DE FACTO RELATIONSHIP – Where the applicant seeks a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) – Where the applicant alleges the parties were in a de facto relationship between mid‑2019 and late 2022 – Where the respondent denies the existence of a de facto relationship – Where the respondent asserts the parties only maintained a “business partnership” based on a “verbal agreement” – Where the applicant bears the burden of proving the existence of a de facto relationship as defined by s 4AA of the Act – Where the respondent affirmed the parties had a sexual relationship – Where the parties exhibited a mutual commitment to a shared life – Where the parties had a relationship as a couple living together on a genuine domestic basis – Where the court finds a de facto relationship existed between the parties. Legislation: Family Law Act 1975 (Cth) Pt VIIIAB, ss 4AA, 90RD, 90SB, 102NA
Real Property Act 1900 (NSW)
Cases cited: Fairbairn & Radecki (2022) 400 ALR 613; [2022] HCA 18
Jonah & White (2011) 45 Fam LR 460; [2011] FamCA 221
Lennon & Sanil (2020) FLC 93-962; [2020] FamCAFC 109
Owens & Benson [2014] FamCAFC 243
Division: Division 1 First Instance Number of paragraphs: 53 Date of hearing: 9 November 2023 Place: Newcastle Solicitor for the Applicant: Julia Clarke Solicitor The Respondent: Litigant in person ORDERS
NCC 2173 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CANTU
Applicant
AND: MR GALLOWAY
Respondent
ORDER MADE BY:
AUSTIN J
DATE OF ORDER:
22 NOVEMBER 2023
THE COURT ORDERS THAT:
1.Declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) that a de facto relationship existed between the parties from mid-2019 until late 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cantu & Galloway has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN J:
The applicant commenced these proceedings in July 2023 seeking property settlement orders under Pt VIIIAB of the Family Law Act 1975 (Cth) (“the Act”), premised upon an allegation she once shared a de facto relationship with the respondent, which he denies.
The parties’ preliminary dispute about the existence, duration and termination of their alleged de facto relationship was separately listed for hearing to determine whether or not the Court is seized of jurisdiction to make orders adjusting the parties’ property interests.
For the reasons which follow, it is declared the parties were in a de facto relationship between mid-2019 and late 2022.
There is no dispute about any other jurisdictional fact and so, as a result of the declaration, jurisdiction to grant financial relief between the parties under Pt VIIIAB of the Act is enlivened.
BACKGROUND
The parties first met in mid-2019.
At that time, the applicant owned an encumbered parcel of rural real property at Town B, NSW (“the property”), which she purchased in 2006 for $650,000.[1]
[1] Applicant’s affidavit at [4]
The applicant alleged the parties began a de facto relationship immediately after they met, but the respondent deposed he told the applicant he no longer wanted to be “romantically involved” only a month or so after they met.[2] Nonetheless, they remained acquainted in one form or another. The applicant said they remained de facto partners, but the respondent asserted they only maintained a “business partnership” based on a “verbal agreement”.[3]
[2] Respondent’s first affidavit at [2]
[3] Respondent’s first affidavit at [5]
When the parties met in 2019, the applicant was interested in selling the property to clear her debt.[4] The respondent admitted the applicant found a buyer for the property at a price of $795,000, but the parties instead decided the respondent would acquire proprietary interest in the property and so the prospective purchaser was gazumped.
[4] Applicant’s affidavit at [10]-[11]
The parties initially intended the respondent would acquire a one-half interest in the property and they would jointly re-finance the applicant’s existing mortgage, but the new financier they approached refused the parties’ joint re-finance application due to the applicant’s default in repayments on her existing loan.[5] In cross-examination the respondent said he had no knowledge of the joint finance application, but he did not expressly deny it. As it transpired, the respondent instead acquired exclusive proprietary interest in the property and he took on sole responsibility for the debt secured against it by re-financing the existing loan alone. The parties intended embarking upon some joint business venture, to which the property and the applicant’s farm animals were an integral part.
[5] Applicant’s affidavit at [13]
In early 2020, the applicant wrote a note confirming she was “gifting” her property, said to be worth $400,000, to the respondent, which gift he accepted. Evidently, the sum of $400,000 was not the gross value of the property, but rather equated to the estimated net equity the applicant enjoyed in the property, allowing for the mortgaged loan secured over it.[6]
[6] Applicant’s affidavit at [13]–[14]
The property was transferred by the applicant to the respondent in mid-2020. Despite the transfer document representing consideration of $420,000 was paid,[7] the respondent confirmed that was not so. No money changed hands in the transaction. The respondent re-financed the mortgage in his own name for $560,000, which was much more than was necessary to pay out the applicant’s loan of $403,000.[8]
[7] Exhibit A1
[8] Applicant’s affidavit at [18]; Respondent’s second affidavit at [8]
The transfer of the property by the applicant to the respondent was registered under the Real Property Act 1900 (NSW), the respondent assumed exclusive legal title to the property, and the respondent’s new mortgage was registered as an encumbrance. The parties mooted their execution of a binding financial agreement at the time to accommodate their future financial affairs in light of the transfer, but that did not come to pass.[9]
[9] Applicant’s affidavit at [17] and [19]
The parties lived in separate homes initially. The applicant continued to live at the property and paid rent to the respondent after it was transferred to him, whereas he lived elsewhere in rented premises and contended he ran the property as a “primary producer”.[10]
[10] Respondent’s first affidavit at [7]
Some months later, in late 2020, the respondent relinquished his separate rental accommodation and moved to live at the property. The respondent deposed he initially slept in a swag at the property,[11] but in cross-examination he conceded the parties shared a bed and engaged in a sexual relationship up until late 2022.
[11] Respondent’s first affidavit at [7]
The respondent contends the business relationship was terminated in or about late 2022,[12] which is when the applicant alleges their de facto relationship failed.[13]
[12] Respondent’s first affidavit at [12]
[13] Applicant’s affidavit at [3]
The respondent departed and returned to the property at indistinct times over the ensuing few months,[14] but has apparently not lived at the property since mid-2023.[15]
[14] Respondents first affidavit at [12]
[15] Applicant’s affidavit at [46]
The applicant still lives at the property, but the respondent is no longer servicing the mortgaged loan and the mortgagee has given formal notice requiring the applicant to vacate the property in advance of the mortgage foreclosure and the exercise of its power of sale.
The applicant commenced proceedings seeking financial relief under Pt VIIIAB of the Act in July 2023 and, by an Amended Initiating Application filed on 1 November 2023, seeks this preliminary relief:
1.Pursuant to section 90RD(2)(a) of the Family Law Act 1975 this Court declares a de facto relationship existed between [the applicant] and [the respondent] from [mid] 2019 until [late] 2022.
2.Pursuant to section 90RD(2)(c) of the Family Law Act 1975 this Court declares that [the applicant] made a substantial financial contribution to the relationship.
The orders are not sought as alternative forms of relief, yet Order 2 is unnecessary if the parties were in a de facto relationship of at least two years’ duration (s 90SB(a)).
THE EVIDENCE
The applicant relied upon:
(a)her affidavit filed on 31 October 2023;
(b)the affidavit of her adult son, Mr C, filed on 1 November 2023; and
(c)two documents tendered in evidence as exhibits.[16]
[16] Exhibits A1 and A2
The respondent relied upon his two affidavits filed on 12 September 2023 and 7 November 2023.
At the hearing, the respondent said he wished to rely upon another witness, but the witness had not sworn or affirmed any affidavit and the respondent conceded the witness declined to attend court to give oral evidence. As the witness had not been served with a subpoena, she could not be compelled. The respondent acknowledged he would have to proceed without her evidence.
The parties’ affidavits were prepared with scant regard for the provisions of the Evidence Act 1995 (Cth). Although no evidentiary objections were taken, much of the evidence adduced by the parties carries very little probative weight as it largely comprises hearsay, conclusions and opinions.
The respondent was not legally represented and could not cross-examine the applicant in person due to the prohibition imposed by s 102NA(1) of the Act. For a period of 12 months, the respondent is bound by a final family violence order made in mid-2023 by a State court for the applicant’s protection.[17] The respondent was informed of the prohibition multiple times in advance of the trial by notations endorsed upon sealed procedural orders,[18] and so cannot complain of any procedural unfairness.
[17] Applicant’s affidavit at [50] and Annexure S
[18] Orders made on 5 September 2023, 19 September 2023, 22 September 2023
LEGAL PRINCIPLES
The declaration as to the existence of a de facto relationship under s 90RD of the Act does not involve an exercise of judicial discretion (Jonah & White (2011) 45 Fam LR 460 at [39]). Rather, it is an evaluative factual determination, taking into account the criteria set out within s 4AA of the Act (Lennon & Sanil (2020) FLC 93-962 at [8]).
The essential test is whether or not the parties had “a relationship as a couple living together on a genuine domestic basis” (s 4AA(1)).
The applicant who seeks the declaration bears the burden of proving, to the requisite civil standard, the existence of all facts about the de facto relationship which are essential to the existence of the Court’s jurisdiction and the exercise of power under Part VIIIAB of the Act (Owens & Benson [2014] FamCAFC 243 at [1] and [28]).
FINDINGS
Section 4AA(2)(a)
There is no dispute the parties’ relationship began in mid-2019 and ended in late 2022. Only the characterisation of their relationship during that period is contentious.
Section 4AA(2)(b)
Between mid-2019 and late 2020, the parties lived in different homes but spent nights together at one another’s home.[19] Cohabitation is not an essential ingredient for the existence of a de facto relationship (Fairbairn & Radecki (2022) 400 ALR 613 at [32]–[36]), so their maintenance of separate households during that period does not preclude their overall de facto relationship being found to incorporate that period.
[19] Affidavit of Mr C at [5]
The parties had a common residence in the period between late 2020 and late 2022, as they both lived at the property.
Section 4AA(2)(c)
The parties had a sexual relationship between mid-2019 and late 2022, which the respondent ultimately affirmed.
The respondent deposed that, by about late 2019, he discerned no “spark” in the parties’ relationship and told the applicant he no longer wanted to be “romantically involved” with her,[20] but even if he did feel that way and even if he did tell her that, it is not evidence denying the existence of a sexual relationship between them thereafter.
[20] Respondent’s first affidavit at [2]
The respondent confirmed during his cross-examination that he and the applicant had a sexual relationship and shared the same bed up until late 2022. He could hardly have denied it as, in the previous month, he sent a text message to the applicant summoning her to bed.[21]
[21] Applicant’s affidavit at [34] and Annexure Q
Section 4AA(2)(d)
The applicant willingly transferred all legal title in her property to the respondent in 2020. Thereafter, until late 2022, she paid rent to the respondent for her continued occupation of the property, which funds he used to defray the repayments on the loan he secured by mortgage against the property.
Between late 2020 and late 2022, while both parties lived at the property, they each financially contributed to household expenses, though there is no evidence of their finances being intermingled in joint bank accounts.
The respondent confirmed in cross-examination that, while he conducted business as a primary producer upon the property, the applicant undertook all of the administration work for the business, for which she was not remunerated.
Section 4AA(2)(e)
By reason of the applicant’s transfer of legal title in her property to the respondent, he acquired exclusive legal interest in an asset with net equity of around $400,000, without paying her any consideration for it. Despite relinquishing her legal title in the property to the respondent in mid-2020, the applicant still lives in the dwelling upon the property.
When the respondent acquired the property, he re-financed the existing mortgage by borrowing $560,000 to pay out the existing loan of $403,000. The extra $157,000 was used by him (at least in part) to pay out his existing personal debts, buy a motor vehicle, and render some minor improvements to the property.[22]
[22] Applicant’s affidavit at [18], [21]
The property was affected by weather events in mid-2022, from which event the respondent received an insurance payout of $81,000.[23]
[23] Applicant’s affidavit at [32]
The respondent confirmed in cross-examination that he has since spent all of the extra $157,000 acquired through the re-finance and all of the $81,000 insurance money. The applicant did not receive any of it.[24]
[24] Applicant’s affidavit at [20] and [32]
The respondent used the property as a “primary producer” from the time he acquired ownership of it. He also used the property as his residence from late 2020 until about mid-2023.
Section 4AA(2)(f)
The parties exhibited a mutual commitment to a shared life in the period between mid-2019 and late 2022.
They attended social events as a couple, including dinners, lunches, birthdays, and outings with friends.[25] The respondent also accompanied the applicant to intimate family events, such as the birth of her grandchildren,[26] and was acknowledged by the applicant’s grandchildren as their putative grandfather.[27]
[25] Applicant’s affidavit at [15] and Annexure C, [22] and Annexure F, [23] and Annexure G, [24] and Annexure H, [26] and Annexure J, [28] and Annexure L, [31] and Annexure N
[26] Applicant’s affidavit at [25] and Annexure I
[27] Applicant’s affidavit at [28] and Annexure L
Apart from being inculcated into the applicant’s family, the respondent admitted he took the applicant with him to South Australia on a holiday to meet his family in late 2019. He also admitted the applicant performed domestic duties for them both, he bought her gifts, and they enjoyed social activities together. He agreed he supported the applicant emotionally when her mother died.
The applicant exhibited photographs of the parties together, at various times throughout the period between mid-2019 and late 2022, depicting them embracing or otherwise in poses suggesting emotional intimacy.
In late 2022, the respondent sent the applicant a text message saying this:[28]
I’m sure if you had a dildo up your arse and my dick down your throat, you’d be in the moment
[28] Applicant’s affidavit at [36] and Annexure R
The respondent was impelled to admit in cross-examination it seemed “a bit odd” that he would send a text message of that sort to someone whom he alleged was no more than a “business partner”. In fact, it is inconceivable.
Section 4AA(2)(g)
The parties did not register their relationship as a prescribed kind of relationship under State law.
Section 4AA(2)(h)
The parties had no children together. The applicant’s children are adults and the respondent did not care for or support them.
Section 4AA(2)(i)
The respondent introduced and represented himself to the applicant’s family as her “partner”.[29] The parties had a public reputation as a couple until late 2022.
[29] Affidavit of Mr Grothen at [2] and [11]
CONCLUSION
The parties formerly had “a relationship as a couple living together on a genuine domestic basis”. That evaluative factual finding emerges from the conglomeration of considerations prescribed by s 4AA(2) of the Act.
It is impossible to be precise about the dates upon which the de facto relationship started and ended, which the applicant’s lawyer accepted, but it started sometime in mid-2019 and ended at some point in late 2022.
The registrar will make procedural directions to bring the remainder of the cause to trial.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 22 November 2023
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