Federal Circuit and Family Court of Australia
(DIVISION 1)
Cleese & Colburn [2022] FedCFamC1F 282
File number(s): SYC 2480 of 2016 Judgment of: ALTOBELLI J Date of judgment: 2 May 2022 Catchwords: FAMILY LAW – DE FACTO RELATIONSHIP – Where the Applicant seeks a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) that she and the Respondent were in a de facto relationship during various specified periods from 1990 to 2014 – Where the Respondent concedes the parties were in a de facto relationship from 1995 to 2000 only – Where the Court finds the parties were in a de facto relationship during various specified periods from 1991 to 2014.
FAMILY LAW – JURISDICTION – De facto relationship – Whether the Federal Circuit and Family Court of Australia has the jurisdiction to vary or set aside the Agreement as to Judgment made by the Supreme Court of New South Wales – Single justiciable controversy – Finding that a de facto relationship existed following 1 March 2009 empowers the Federal Circuit and Family Court to determine whether the Agreement as to Judgment should be varied or set aside – Agreement as to Judgment set aside.
Legislation: Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth) ss 4AA, 79, 79A, 90RD
Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) s 86
Commonwealth Powers (De Facto Relationships) Act 2003 (NSW)
Property (Relationships) Act 1984 (NSW) ss 4, 5, 15, 16, 17, 19, 20, 41
Cases cited: Arnautovic & Sutherland t/as Jirsch Sutherland & Co v Cvitanovic [2011] FCA 809
Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344
Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208
Colburn & Cleese (2020) FLC 93-995; [2020] FamCAFC 278
Dupas v R (2012) 40 VR 182; [2012] VSCA 328
Gebert and Gebert (1990) FLC 92-137; [1990] FamCA 105
Jaeger v Bowden (No. 2) [2016] NSWSC 897
Kafataris v Deputy Commissioner of Taxation (2008) 172 FCR 242; [2008] FCA 1454
Kokl & Kokl (1981) FLC 91-078
McCabe and McCabe (1995) FLC 92-634; [1995] FamCA 147
Moratic Pty Ltd v Gordon [2007] NSWSC 5
Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyd’s Rep. 403
PNJ v R (2009) 252 ALR 612; [2009] HCA 6
Radecki & Fairbairn (2020) FLC 94-001; [2020] FamCAFC 307
Somerville and Somerville (2000) FLC 93-042; [1999] FamCA 958
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Taylor and Taylor (1977) FLC 90-226; [1977] FamCA 31
Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28
Division: Division 1 First Instance Number of paragraphs: 165 Date of last submission/s: 8 October 2021 Date of hearing: 2–13 August 2021 Place: Sydney (via videoconference) Counsel for the Applicant: Mr Geddes QC with Mr Stewart Solicitor for the Applicant: Dorter Family Lawyers and Mediators
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CaseChat Overview and Summary
The case of Cleese v Colburn involves the determination of whether the Applicant and the Respondent were in a de facto relationship during certain periods. The Applicant sought a declaration under the Family Law Act that she and the Respondent were in a de facto relationship, as well as an order for the costs of the proceedings. The Respondent denied that they were in a de facto relationship. The case was heard over 10 days and involved difficult questions of fact and law.
The legal issues the Court was required to decide included the definition of a de facto relationship under the Family Law Act, the factors to be considered in determining whether a de facto relationship exists, and the significance of financial transactions in establishing a de facto relationship. The Court also had to consider whether the agreement as to judgment made in 2006 should be set aside.
The Court found that the Applicant and the Respondent were in a de facto relationship during the periods contended for on behalf of the Applicant. The Court considered the composite picture of the relationship, taking into account the duration, the nature and extent of their common residence, the degree of financial dependence or interdependence, the ownership, use and acquisition of their property, the degree of mutual commitment to a shared life, and other relevant factors. The Court found that the financial transactions between the parties were significant in establishing a de facto relationship, particularly when viewed in the broader context of the relationship.
The Court made orders declaring that the Applicant and the Respondent were in a de facto relationship during certain periods, and ordered that the costs of the proceedings be paid by the Respondent. The Court also ordered that the agreement as to judgment made in 2006 be set aside.
The legal issues the Court was required to decide included the definition of a de facto relationship under the Family Law Act, the factors to be considered in determining whether a de facto relationship exists, and the significance of financial transactions in establishing a de facto relationship. The Court also had to consider whether the agreement as to judgment made in 2006 should be set aside.
The Court found that the Applicant and the Respondent were in a de facto relationship during the periods contended for on behalf of the Applicant. The Court considered the composite picture of the relationship, taking into account the duration, the nature and extent of their common residence, the degree of financial dependence or interdependence, the ownership, use and acquisition of their property, the degree of mutual commitment to a shared life, and other relevant factors. The Court found that the financial transactions between the parties were significant in establishing a de facto relationship, particularly when viewed in the broader context of the relationship.
The Court made orders declaring that the Applicant and the Respondent were in a de facto relationship during certain periods, and ordered that the costs of the proceedings be paid by the Respondent. The Court also ordered that the agreement as to judgment made in 2006 be set aside.
Orders
Orders of the court
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Background
Background to the litigation
This case is about the relationship between Ms Cleese (“the Applicant”) and Mr Colburn (“the Respondent”) and whether they were in a de facto relationship during certain periods of their life. These reasons for judgment explain why the Court has found that they were in a de facto relationship during the periods contended for on behalf of the Applicant, and why the Court has made consequential orders flowing from that finding.BACKGROUND The Applicant is 76 years old. The Respondent is 75 years old. They both live on the far north coast of New South Wales. It is possible that they first met as early as 1974 or 1975, but they commenced dating in 1989 at a time when the Respondent was an educator. The date of the commencement of their de facto relationship is a matter in respect of which the Court has made findings, doing the best it can on the available evidence. Before their relationship they had both been married before and in the Applicant’s case, she was in a previous de facto relationship as well. They both have adult children from previous marriages or relationships, and they each now have grandchildren. The relationship between the Applicant and the Respondent became intimate at some time between 1990 and 1992. As will be seen below, there is a period when both parties agreed that they were in a de facto relationship. Their relationship, howsoever described, waxed and waned over many years. Indeed, that is one of the great complicating factors in this case. They each purchased and sold real estate, often after developing and/or improving the property. They owned property together. They borrowed funds together and lent each other money. They cohabited together in properties at various different times including during times when the Applicant does not contend that they were in a de facto relationship. On 22 November 2006 both parties signed and caused to be filed in the Supreme Court of New South Wales a document entitled “Agreement as to Judgment” (“agreement as to judgment”). In 2006 orders were made by the Supreme Court of New South Wales to reflect that document. One of the issues for the Court is, if the existence of a de facto relationship is established as at 1 March 2009, whether to set aside the orders as contended for by the Applicant. This is a complex fact-rich case that was heard over 10 days and involved difficult questions of fact and law. The delay in delivering these reasons for judgment is regrettable, but reflects the complexity and difficulty of the case.AGREED CHRONOLOGY The parties submitted an agreed chronology, which has been marked as the Court’s exhibit C1. The Court found this to be a very helpful document.THE ORDERS SOUGHT The orders sought by the Applicant are contained in her Further Amended Initiating Application filed 29 November 2018. She seeks a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Family Law Act”) that she and the Respondent were in a de facto relationship during various specified periods, and that the agreement as to judgment be varied or set aside. The Applicant also sought an order for costs.
Evidence
Evidence Before The Court
Consistent with the decision of Aldridge J in Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208 I am satisfied that the Court has jurisdiction in this matter.THE EVIDENCE In support of her case, the Applicant relied on the following documents:(a)Her Further Amended Initiating Application filed 29 November 2018;(b)Her affidavit filed 21 September 2018;(c)Her affidavit filed 19 November 2018;(d)Her affidavit filed 2 July 2021;(e)Her affidavit filed 27 July 2021;(f)Affidavit of Ms E filed 21 September 2018;(g)Affidavit of Mr F filed 21 September 2018;(h)Affidavit of Ms G filed 21 September 2018;(i)Affidavit of Ms H filed 12 October 2018;(j)Affidavit of Ms J filed 12 October 2018;(k)Affidavit of Dr K filed 12 October 2018;(l)Affidavit of Ms L filed 24 October 2018;(m)Affidavit of Ms M filed 11 December 2018;(n)Affidavit of Ms N filed 21 March 2019;(o)Affidavit of Ms P filed 27 July 2021;(p)Her outline of submissions filed 9 July 2021;(q)Her list of authorities filed 9 July 2021;(r)Her closing submissions filed 20 August 2021;(s)Her submissions in reply filed 28 September 2021; and(t)Various documents tendered and marked as exhibits A1–A133. In support of his case, the Respondent relied on the following documents:(a)His Amended Response to Initiating Application filed 14 March 2017;(b)His affidavit filed 4 March 2019;(c)His affidavit filed 9 June 2021;(d)Affidavit of Ms C filed 3 March 2019;(e)Affidavit of Mr O filed 4 March 2019;(f)Affidavit of Ms D filed 4 March 2019;(g)Affidavit of Mr Q filed 4 March 2019;(h)Affidavit of Mr R filed 4 March 2019;(i)Affidavit of Mr S filed 4 March 2019;(j)Affidavit of Mr T filed 4 March 2019;(k)Affidavit of Mr U filed 5 March 2019;(l)Affidavit of Mr V filed 29 March 2019;(m)Affidavit of Mr W filed 2 August 2021;(n)His outline of case document filed 14 July 2021;(o)His list of authorities filed 14 July 2021;(p)His closing submissions filed 27 August 2021;(q)His further submissions in reply filed 8 October 2021; and(r)Various documents tendered and marked as exhibits R1–R30.Applicable Law The recent Full Court decision in Radecki & Fairbairn (2020) FLC 94-001 contains a useful summary of the law which is adopted in this case.26.A de facto relationship exists where a Court finds that the parties were “a couple living together on a genuine domestic basis” (s 4AA(1)(c) of the Act), which is to be decided by reference to the matters set out in s 4AA(2) of the Act, which are as follows:(a) the duration of the relationship;(b) the nature and extent of their common residence;(c) whether a sexual relationship exists;(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;(e) the ownership, use and acquisition of their property;(f) the degree of mutual commitment to a shared life;(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;(h) the care and support of children;(i) the reputation and public aspects of the relationship.27.In addition, the Court “is entitled to have regard to such matters… as may seem appropriate to the court in the circumstances of case” (s 4AA(4) of the Act).28.In a passage which has been frequently quoted and applied when determining the existence of a de facto relationship (see, for example, Sinclair & Whittaker (2013) FLC 93-551 (“Sinclair & Whittaker”) at [55] and Cadman & Hallett (2014) FLC 93-603 (“Cadman”) at [48]), albeit in a different legislative context, Fitzgerald J said in Lynam v Director-General of Social Security (1984) FLC 91 577 at 79,663:Financial arrangements cannot be taken in isolation and considered of particular importance in determining the nature of relationship. Their materiality, like each of the other elements of the relationship, stems from the impact which they have as part of an overall situation. Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.29.Although not expressly mentioned in s 4AA(2) of the Act, an intention to enter into a de facto relationship or to end one is powerful evidence to be taken into account under s 4AA(4) of the Act, in determining whether such a relationship exists or has ended. Whilst evidence of such intention is not required and, in many cases, is not present, where such an intention can be identified, it can be telling.30.In Hibberson v George (1989) 12 Fam LR 725 at 740, Mahoney JA said in relation to the De Facto Relationships Act 1984 (NSW):… The essence of the present relationship lies, not in law, but in a de facto situation. I do not mean by this that cohabitation is essential to its continuance: holidays and the like show this. But where one party determines not to “live together” with the other and in that sense keeps apart, the relationship ceases…31.After referring to this passage in S v B (No 2) (2004) 32 Fam LR 429, Dutney J said:48.… [A] de facto relationship ends when one party decides he or she no longer wishes to live in the required degree of mutuality with the other but to live apart. It does not seem to me that it is necessary to communicate this intention to the other party providing the party that is desirous of ending the relationship acts on his or her decision…32.Thus, for a person intentionally to end a de facto relationship, that person must both make the decision to separate and clearly act on it. See the explanation of these propositions in Clarence & Crisp (2016) FLC 93-728 (“Clarence”) at [45]–[51].33.For an example of a matter where an intention to separate played a significant role, see Cadman, an appeal from Cadman & Hallett [2013] FamCA 819.34.Evidence of an intention to separate is of course not the only means by which it can be established that a de facto relationship has broken down. Some relationships simply peter out so that the concatenation of relevant factors that pointed to a de facto relationship no longer exist. Thus, where a de facto relationship has existed, an analysis of “the nature and character” of that relationship and what had changed to the extent that the relationship no longer existed is required (Herford & Berke (No 2) (2019) FLC 93-919 at [25]). The identification of the impact of the changes on the existence of the de facto relationship is key.35. As the Full Court said in Clarence:51.Ultimately, however, we consider the real test (since it conforms with the statute as a matter of logic) was that identified by Murphy JA earlier in H v P [[2011] WASCA 78]:56.… a de facto relationship is inherently terminable at any time, and continues to exist only insofar as the indicia which give the relationship its … character continue to exist.52.Looked at in this way, the task of determining whether a relationship has ended at or before a particular date is precisely the same task that must be performed when determining whether a de facto relationship exists in the first place – i.e. by reference to the indicia laid down in the legislation…(Emphasis in original)Credit Issues
Decision
Reasons for decision
Thus between 1992 and 2007 there were several loan transactions between the parties which present as being in some way referable to the relationship between them. As late as 23 July 2007, only six months after they entered into an agreement as to judgment in the NSW Supreme Court, the Respondent represented that the relationship between the parties was “family”. This is much more consistent with the Applicant’s case for the existence of a de facto relationship at that time, than it is the Respondent’s denial of the same. Even so, it is important to look at the composite picture i.e. consider the significance of these transactions in totality, and in context, and not in isolation.Tentative conclusions about financial transactions This review of the evidence of the significant financial transactions entered into by the parties during the period referred to above is complex and, when each transaction is viewed in isolation, establishes little clear, objective and unequivocal support for the contentions that the parties make as to the status of their relationship in the period covered, other than in the conceded period of 1995 to late 2000. There are a number of caveats to this tentative conclusion. It must be remembered that the task of the Court is to apply s 4AA of the Family Law Act. Thus, when the other s 4AA(2) circumstances are considered, the evidence about financial transactions may look entirely different because of the broader context. When one considers the composite picture, patterns become clearer, and themes more apparent. Section 4AA(2)(d) refers to financial dependence or interdependence. These words must be given a meaning. The evidence above creates the impression that the parties, at different times, were financially interdependent. The fact that they both made loans to each other leads to the necessary inference that they were in need of funds, and found it preferable to borrow from each other rather than from some other source. One party had need, and the other party had the ability to provide that need. Another inference is that there was a motivation to provide that need which involved at times altruism, love or affection, at other times a commercial benefit, and at times a combination of the foregoing. To that extent, and at those times, they were financially interdependent. There was often the mutuality that is inherent in interdependence and common in de facto and married relationships. In relation to the loans from financial institutions, the situation is slightly different. For example, the strong impression formed from the evidence is that but for the Respondent’s support of the Applicant’s loan applications (in the form of making available his income and assets) the Applicant would not have been successful in obtaining the loans. Certainly in relation to the B Street acquisition and proposed development, the reverse is equally true. Thus, it seems unlikely that the Respondent could have proceeded independently of the Applicant and was to that extent, dependent on her. It is interesting to observe that over the period that the Applicant and the Respondent were in some form of a relationship howsoever characterised, their respective financial circumstances waxed and waned. Thus, it would seem that early in their relationship the Applicant was in a stronger financial position than the Respondent, but towards the end he was in an overall stronger financial position than her. In all of this there is once again an apparent mutuality that is so common in de facto and married relationships.
Ratio Decidendi
Legal Principle Established
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