Shelby & Rylan - [2022] FedCFamC1F 281

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Shelby & Rylan [2022] FedCFamC1F 281

File number(s): LEC 701 of 2018

Judgment of: HOGAN J

Date of judgment: 29 April 2022

Catchwords: FAMILY LAW – 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 – Where the Respondent seeks a declaration that a de facto relationship never existed between the parties – Where the Court finds no de facto relationship ever existed between the parties – Application of the Applicant dismissed and declaration made as sought by the Respondent

Legislation:
Family Law Act 1975 (Cth)

Federal Circuit and Family Court of Australia Act 2021 (Cth)

Cases cited:
Fencott v Muller (1983) 152 CLR 570

Herford & Berke (No. 2) (2019) FLC 93-919

Jonah & White (2012) FLC 93-522

Lynam v Director-General of Social Security (1983) 52 ALR 128

Nevins & Urwin (No 3) [2022] FedCFamC1F 201

Ricci v Jones [2011] FamCAFC 222

Sinclair & Whittaker (2013) FLC 93-551

Division: Division 1 First Instance

Number of paragraphs: 231

Date of hearing: 15, 16, 17 and 18 February 2021; 5, 6 and 7 May 2021; 6 July 2021; 3 and 16 September 2021

Place: Brisbane

Counsel for the Applicant: Mr Hodgson

Solicitor for the Applicant: Tyndall & Co. Lawyers

Counsel for the Respondent: Mr Priestley

Solicitor for the Respondent: Family Law Solutions

Counsel for the First and Second Interveners: Mr Priestley

Solicitor for the First and Second Interveners: Family Law Solutions
ORDERS

LEC 701 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS SHELBY

Applicant

AND:
MR RYLAN

Respondent

E PTY LTD

First Intervener

C PTY LTD

Second Intervener

ORDER MADE BY:

HOGAN J

DATE OF ORDER:

29 APRIL 2022

IT IS ORDERED BY WAY OF FINAL ORDER THAT:
1.Pursuant to s 90RD(1) of the Family Law Act 1975 (Cth) and for the purposes of these proceedings, the Court hereby declares that a de facto relationship never existed between the Applicant and the Respondent.
2.The Applicant’s Further Amended Initiating Application filed 4 December 2020 is dismissed.
3.The Applicant cause the following sums to be paid to the following entities within 72 hours of being provided with the details of the bank account/s into which such payments are to be made:
(a)to E Pty Ltd: $17,550.60; and
(b)to C Pty Ltd: $116,625.

4.The injunction imposed on the Applicant by order 1 of the orders made 16 September 2021 is discharged.
5.Save for causing the payment of the sums referred to in order 3 above, the Applicant is restrained and an injunction is issued restraining her from allowing or causing the balance of her Westpac Account Number #...81 to fall below the amount of $140,000.
6.Upon payment by the Applicant of the sums referred to in order 3 above, the injunction restraining the Applicant’s use of the funds in her Westpac Account Number #...81 is discharged.
7.The Applicant make all items of stoneware bought by E Pty Ltd and previously stored at F Street, B Town until the sale of that property on 30 September 2020, available for collection by the company or its nominee within seven (7) days from the date of this order.

AND IT IS FURTHER ORDERED THAT
8.In the event that any party seeks an order that another party pay his or her costs:
(a)if thought necessary by a party, that party has leave to file a further affidavit by that party containing any evidence relevant to the issue of costs and one other affidavit in support of the same, provided that such affidavits are filed within fourteen (14) days of the date of this Order; and
(b)any such party shall file and serve any written submissions in support of such application for costs within fourteen (14) days of today; and
(c)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve any brief written submissions in answer to the submissions filed and served by the party seeking costs; and
(d)the party seeking an order for costs shall file and serve any brief further written submissions within fourteen (14) days of its service, strictly in reply to the submissions served by the party against whom an order for costs is sought,

and any such application for costs shall be considered in Chambers.

AND IT IS FURTHER ORDERED THAT
9.Save as is otherwise ordered herein, no party is permitted to use any documents provided to them in the course of this proceeding for any purpose other than this proceeding or any appeal in respect of these Orders.
10.Save as is provided above, all outstanding Applications are dismissed.

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 a pseudonym Shelby & Rylan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J

Ms Shelby, who commenced proceedings by Initiating Application filed 18 December 2018, seeks a declaration pursuant to s 90RD(1) of the Family Law Act 1975 (Cth) (“the Act”) that a de facto relationship existed between she and Mr Rylan from 2007 until 2017.[1]
[1] By Further Amended Initiating Application filed 16 October 2020.
Mr Rylan seeks a declaration (pursuant to the same section of the Act) that a de facto relationship never existed between the parties.[2] His case is that, whilst he and Ms Shelby had a casual sexual relationship for about two years from when they met in 2004 and a spasmodic sexual relationship over a further period of about three years and maintained a working relationship and a friendship simultaneously and thereafter, the nature of their relationship was not such as to amount to a “de facto relationship” as defined in the Act.
[2] By Response Filed 5 April 2019.
Mr Rylan is the sole director and shareholder of E Pty Ltd (“[E]”, the First Intervener).[3] It seeks orders that Ms Shelby:
(a)pay it the sum of $23,000[4] said to arise from an unpaid loan account; and
(b)forthwith make all items of stoneware, purchased by E Pty Ltd and previously stored at her residence at F Street, B Town (“the F Street property”) until the sale of that property on 30 September 2020, available for collection by the company or its nominated agent and pay $2,000 (being the money she said she received from the sale of some of these items; and
(c)pay its costs on an indemnity basis.
[3] Respondent’s affidavit filed 21 January 2021 at paragraph 71.
[4]Whilst the amount originally sought was $74,489.14, it was accepted during the course of the trial that this sum included the $57,000 provided to Ms Shelby to assist in the purchase of the F Street property and that to include it in the loan account would represent a double-counting; Counsel for Mr Rylan relied instead on what was submitted to be an admission against interest made by Ms Shelby (when she was cross-examined) to the effect that the amount owing was about $23,000.
Ms Shelby takes issue with the quantum claimed and denies that she is liable to repay the amount claimed.
Mr Rylan is also the sole shareholder and director of C Pty Ltd (“[C]”, the Second Intervener), which is the corporate trustee for the C Trust (“the Trust”), of which he is the sole beneficiary.[5] In reliance on the terms of a Loan Agreement between it and Ms Shelby, C Pty Ltd seeks an order that she pay it the sum of $116,625; it also seeks an order that she pay its costs on an indemnity basis.[6]
[5] Respondent’s affidavit filed 21 January 2021 at paragraph 44.
[6] Respondent’s Case Summary Outline filed 28 January 2021.
The sum of $116,625 is the total of:
(a)the original $57,000 advanced to Ms Shelby to enable her to purchase the F Street property; and
(b)the amount of $59,625, asserted to be the quantification of the percentage of the capital gain provided for by the terms of the Loan Agreement given that Ms Shelby sold the F Street property for $880,000 on 30 September 2020.[7]
[7] Respondent’s affidavit filed 21 January 2021 at paragraphs 68 and 69.
There is no dispute that Ms Shelby received the sum of $57,000 and applied it to the purchase of the F Street property; it is accepted that, absent such funds, she would have been unable to purchase the property. Ms Shelby asserted, though, that she is not liable to pay the amounts sought because the loan was forgiven or waived or the loaned funds were gifted to her. She also asserted that she was also absolved of the liability alleged to arise under the joint venture aspect of the Loan Agreement (that is, the $59,625).
Some uncontentious matters
It is accepted that Ms Shelby and Mr Rylan never owned any property together.[8] It is also accepted that they did not have a joint bank account at any time or an exclusive sexual relationship and that there has never been a domestic violence order made to which they are parties. It is accepted that Ms Shelby initially worked for Mr Rylan in the business operated through his corporate entities; it is accepted that she ceased that employment (although the manner of cessation is in dispute in that she alleged that she had ended her employment, whereas Mr Rylan asserted that he had fired her) and that, after a period of several months, she resumed doing work for the business, but as a consultant to the same. It is accepted that, when Ms Shelby started to work as a consultant to the business, she had clients other than it. It is accepted that Ms Shelby was paid for the work she did as both an employee and as a consultant, although she asserted that she was, in essence, underpaid by the business – a suggestion that Mr Rylan refuted.
[8] Applicant’s affidavit filed 8 October 2020 at paragraph 371.
Whilst it is accepted that they never had the same home address, Ms Shelby asserted at trial that she and Mr Rylan had lived together across their two individual homes in B Town – a contention denied by Mr Rylan.
It is accepted that, as part of an agreement that Mr Rylan would not cause the Interveners to institute proceedings against her in another court whilst these proceedings remained undetermined, Ms Shelby provided an undertaking on 13 November 2019 that she would not further encumber the F Street property. It is accepted that Ms Shelby subsequently sold the F Street property for $880,000 without notice to Mr Rylan and that settlement occurred on 30 September 2020. It is accepted that Ms Shelby did not advertise the sale of the F Street property and that she did not arrange for a “for sale” sign go up outside it.
It appeared accepted that all that remains of the funds received by Ms Shelby from the sale of the F Street property is the sum of $140,000, currently held by her in a Westpac bank account in her name and the subject of an injunction restraining her from allowing or causing the balance of that account to fall below that amount.[9]
[9] Order made 16 September 2021.
It seemed to be accepted that Mr Rylan learned, after the proceedings commenced, that Ms Shelby had taken a copy of all of the files of the business (operated through the entities under his control) from the server/s maintained by the business; it seemed accepted by Ms Shelby that, despite a request to return to the business all of its property (including any files), she retained a copy of these files.
Assessment of credit
It was accepted that, as the resolution of the competing contentions in this proceeding relies heavily upon the evidence given by each of Ms Shelby and Mr Rylan, an assessment of their credit was vital. Given this, it is, I think, appropriate to outline the conclusions I have reached about the evidence given by each of Ms Shelby and Mr Rylan at the commencement of these Reasons.
Whilst there were a couple of occasions on which Mr Rylan’s evidence contradicted aspects of evidence given earlier by him, I accept his explanations about how that came to be. I am persuaded that, generally speaking, he was a truthful witness – including when his evidence did not necessarily paint him and his actions in a particularly flattering light.
In contrast, I consider much of the evidence given by Ms Shelby to have been self-serving and reconstructed rather than a truthful recitation of past events. The following instances provide clear examples of why I have arrived at this conclusion and why I have approached my assessment of Ms Shelby’s evidence with significant circumspection.
The assertion that Ms Shelby and Mr Rylan lived together across two houses
Ms Shelby accepted, when cross-examined, that, prior to swearing her trial affidavit, she had never asserted that she and Mr Rylan had lived together across two houses (being the F Street property that she owned and Mr Rylan’s property at G Street, B Town). I accept that that contention was not made in either of two earlier affidavits she had sworn. Whilst her affidavit filed on 18 December 2018 contained the assertions, in essence, that she and Mr Rylan had each chosen to have their own homes and stayed regularly at each other’s homes because this was the living arrangement that best suited their lifestyles, it did not assert that they had “lived together” across those properties; similarly, whilst her affidavit sworn on 16 October 2019[10] asserted in essence that, between 2004 and 2006, she and Mr Rylan spent at least two nights per week together at either his home, the office or her home, that affidavit did not assert that she and Mr Rylan had lived together across those properties.
[10] Sworn and served however not filed with the Court.
Whilst it may well be that, in certain circumstances, two people could be regarded as being a “couple living together on a genuine domestic basis” where they lived together across a number of different residences – because, for example, they had each concluded that they could not successfully live together in the one residence all the time – such an assertion is one which I think would be much more likely to have been made from the moment the proceedings commenced, rather than emerging or, as I think highly likely, evolving in the lead up to the trial.
Given the omission from her earlier affidavits about what is clearly an important aspect of any case asserting the existence of a de facto relationship, I think it much more likely than not that the assertion that she and Mr Rylan had lived together across various properties was a reconstruction – designed to address the statutory requirement that, in order to be in a de facto relationship (as that relationship is defined in the Act), the parties to the same must be shown to have had a “relationship as a couple living together on a genuine domestic basis.”
I regard Ms Shelby’s assertion that those periods of time during which she and Mr Rylan travelled overseas together for business and holiday purposes should be regarded as them “living together” to fall into the same category. Further, I also note that aspects of Ms Shelby’s evidence appeared to me to demonstrate that she, too, appreciated the distinction between people spending a lot of time together and people who lived together: whilst her evidence included that she and Mr Rylan could never have lived together all of the time as it would not have worked for them (so they lived across two houses), she also said that when they went away together was when they “really lived together.”
Given the accepted existence of the employer/employee and business owner/consultant relationship between Ms Shelby and Mr Rylan, I am not persuaded that the mere fact that they travelled overseas together for business – even for relatively lengthy periods of time – necessarily makes it more likely than not that they were in a de facto relationship at those times. Whilst many may regard the sharing of accommodation to be an unusual feature of their business travel and, I suspect, even more unusual when the travellers are of different sexes, experience suggests that assessments of what is “normal” and what is, therefore, “unusual” is of little assistance in ascertaining whether two people are in a relationship which fulfils the statutory definition required for the same to be considered to be a “de facto” relationship pursuant to the Act.[11]
[11]See Sinclair &Whittaker (2013) FLC 93-551 where, at [55], the Full Court adopted the observations of Fitzgerald J at [131] of Lynam v Director-General of Social Security (1983) 52 ALR 128, which included that “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.”
Re various allegations about when the de facto relationship commenced
I accept that Ms Shelby signed that part of the Initiating Application which recorded that all the information contained in it was true and correct; I also accept that, in this application, it was asserted that the de facto relationship between Ms Shelby and Mr Rylan had started in 2005 or 2006. I accept that an Amended Initiating Application contained the assertion that the alleged de facto relationship had started in July 2007, whilst a Further Amended Initiating Application asserted that the de facto relationship had started in June 2007.
Whilst such differences, in what is another significant aspect of any proceedings in which the existence of a de facto relationship is asserted, may have been able to be explained, Ms Shelby was unable to say why these details had changed. Again, I was left with the very real feeling that the later asserted date of the start of the alleged de facto relationship was a reconstruction rather than a recitation of past fact.
Other aspects of Ms Shelby’s evidence, including when cross-examined
I think it much more likely than not that Ms Shelby failed to inform Centrelink of the remuneration she had received from her previous employment before she started to work for E Pty Ltd. I think it highly unlikely that she was unaware of her obligation to do so. Whilst she initially said, when cross-examined, that her sources of income before she started to work for E Pty Ltd were from social security payments and some part-time manual work, she then appeared to me to say that she had not received money for the manual work but, instead, exercise classes – before asserting, in essence, that she had been paid as well as receiving free or discounted exercise classes. I think it much more likely than not that this prevarication arose because Ms Shelby knew that she had not declared her manual earnings to Centrelink. I note her evidence included that she believed there was some income she did not declare to Centrelink in the 2004/2005 financial year; she later accepted that she had received money to which she was not entitled as a consequence of her failure to declare income which she knew she had to declare.
During an earlier part of her cross-examination, Ms Shelby asserted that everybody working in the E Pty Ltd business, other than her, had been on “incentives” and “bonuses”; however, during a later aspect of her cross-examination, she agreed that this evidence was untrue. I am unpersuaded that Ms Shelby was simply mistaken or flustered when she first spoke as she did.

When cross-examined, Ms Shelby also accepted that her tax return for the 2007 financial year recorded her receipt of more than $2,000 by way of the single parent payment – a payment she knew she was not entitled to receive if she was then (as she now claims) in a de facto relationship.
I was unpersuaded by Ms Shelby’s attempt to explain her actions in claiming the single parent payment at the same time as she has now asserted that she had been in a de facto relationship with Mr Rylan: namely, that, whilst they were then involved on a domestic basis, she had not, in her mind, then framed it as a de facto relationship (and, hence, she claimed the single parent payment). I think it much more likely than not that Ms Shelby claimed the single parent payment because she regarded herself as being a single parent; I think her attempt to explain away the contradiction was self-serving and a further example of her reconstruction of past events through a prism intended to convey the existence of a de facto relationship.
Whilst Ms Shelby accepted during her cross-examination that she had been fired by Mr Rylan in 2011, she also accepted that, at that time, she told Centrelink that she had ceased working voluntarily. When asked, during her cross-examination, to identify which assertion was untrue, Ms Shelby’s evidence was, in essence, that as Mr Rylan had fired her and then asked her to return to the business, both assertions were “technically” true because he had asked her to return to the business. Despite later accepting that, when Mr Rylan stopped her being paid she had regarded that as her being fired (and, therefore, accepting that she had been fired) she went on to say that she guessed she felt it had been her choice in the end because (after she asserted that Mr Rylan had invited her back to work in the business) she could have gone back but she did not – and hence she told Centrelink that she had left her employment voluntarily. I consider this aspect of Ms Shelby’s evidence to be a good example of her fluidity with the truth, for whatever reason and her capacity to interpret matters to be as she seeks them to be.
Whilst Ms Shelby denied during her cross-examination that her financial position had improved significantly as a consequence of meeting Mr Rylan, it is completely clear that, absent the funds provided via the entities under his control, Ms Shelby would not have been able to purchase the F Street property in mid-2007 and, consequently, would not have received the benefit of the significant increase in its value which had occurred by the time she sold it. Her denial of financial benefit is, I consider, completely contrary to what occurred: that is, her purchase and subsequent sale of that property accorded her significant financial benefit and significantly improved her financial position.
Whilst Ms Shelby had said, in an affidavit sworn on 16 October 2019,[12] that it had not been her decision to buy the F Street property, she first said, when cross-examined about this issue, that it had been her decision to purchase the property and that, if she had said in her affidavit that it was not her decision, then that would not have been correct; she later said, when it was suggested to her that it would have been totally wrong to say that it was not her decision to buy the F Street property, that “it was a joint decision to buy the house”.
[12] Not filed with the Court.
Ms Shelby’s evidence was initially, in essence, that she only bought the F Street property because Mr Rylan suggested that she do so in order to be close to him; she said that, but for this, she would not have purchased it and would have remained living in H Town rather than moving to live in B Town. However, when cross-examined, Ms Shelby agreed that neither she nor Mr Rylan had ever said that the house she bought would have to be next door or very, very close to his house. I accept that its location was a matter for her alone.
When it was first suggested to Ms Shelby that, after September 2007, she had not left her then 12 year old son home alone overnight on two-three occasions per week while she stayed overnight with Mr Rylan at his house, she first said that she had left him home a lot by himself and was not sure exactly how much; when it was suggested to her that, for the year following her move to live in B Town, she did not spend overnight on two-three nights per week with Mr Rylan, leaving her son home alone, Ms Shelby said that she did not remember; that she did not remember how much she left him alone and whether she left him home alone for the whole night or whether she went home at midnight and that she was not sure about that. When it was put to her that she did not spend anything like two-three nights per week sleeping in Mr Rylan’s bed, Ms Shelby said “it is possible” and that she did not remember exactly – which seemed to me to contradict other aspects of her evidence to the effect that she had spent two-three nights per week overnight with Mr Rylan. Ms Shelby later said that she had so much guilt about leaving her son home alone overnight that she could not even clearly recall how much she had left him alone – which again seemed to me to contradict other aspects of her evidence to the effect that she had spent two-three nights per week overnight with Mr Rylan in the period which included September to November 2007. Ms Shelby ultimately accepted the suggestion that, given that she could not recall how often she had left her son home alone, she could not remember how many nights she had spent at Mr Rylan’s home overnight because they were the same thing. I consider that this aspect of Ms Shelby’s evidence provides a good example of the reason I have been reluctant to place significant weight upon many of Ms Shelby’s assertions unless they have been corroborated by independent evidence or accepted by Mr Rylan.
It seemed to me that, when Ms Shelby answered the questions first asked of her about the remuneration she received for her work for E Pty Ltd, she mentioned only that she received the amount of about $600/week and did not mention that, in addition to that, E Pty Ltd paid her mortgage repayments directly on her behalf to the commercial lender from which she had borrowed funds to enable her purchase of the F Street property. Whilst her evidence included the assertion that she had not intended to be misleading, I think the reality was that her evidence had that potential; I note she later accepted, in essence, that any assertion that she had only been paid approximately $600/week for all the work that she did in the business operated by E Pty Ltd was just not true because, in addition to the mortgage repayments made directly on her behalf, she also had the use of a car at no cost to herself.
During her cross-examination, Ms Shelby accepted that, in her tax returns for the years from 2007 until 2017, she had described herself as “single”. I reject her denial of the proposition that she told the ATO the truth over this lengthy period. I do not accept that Ms Shelby lied repeatedly to the ATO about her relationship status. I consider it much more likely than not that, when she described herself as “single” on her tax returns for the period from 2007 to 2017 inclusive, Ms Shelby told the truth on each occasion. If I am wrong in this conclusion, I consider her willingness to lie repeatedly to the ATO about her relationship status over a lengthy period of time to provide a further reason to approach the assessment of the truthfulness of her evidence with great caution and, generally, to regard her evidence with a significant degree of scepticism.
Given the matters outlined above, and unless I indicate otherwise, I prefer the evidence given by Mr Rylan to that given by Ms Shelby where the two are in conflict. In particular, I prefer and accept Mr Rylan’s evidence about: the frequency at which he and Ms Shelby stayed overnight together in the period from when they first met until May 2017; the locations where they stayed overnight together; the context in which any conversations between them about the acquisition of property overseas occurred; the nature of their ongoing SMS communications; their shared use of ribald and lewd language and frequent sexual innuendo in SMS communications.
I accept Ms Shelby acted as she did in relation to the sale of the F Street property because she did not want Mr Rylan to know that she was selling the house; I also accept that she knew that, if Mr Rylan had known that she was selling the property, he would have tried to prevent the sale of the same because of the agreement which underpinned the undertakings each had given.
Whilst selling her house without notice to Mr Rylan does not breach the undertaking, it is, I consider, a sharp practice: I think it highly improbable that Ms Shelby (who wanted to ensure that she was not sued in another forum by the entities under Mr Rylan’s control whilst she and he were engaged in proceedings in this court) failed to appreciate that the purpose of her providing an undertaking in the terms that she did was to ensure that, if the entitles controlled by Mr Rylan succeeded in their claims against her, there would be funds from which they could be paid whatever amount might be ordered.
Some other comments about some aspects of the evidence
I am not persuaded that those witnesses called in Ms Shelby’s case (about whose evidence more is said later in these Reasons) deliberately lied in order to further her case about the asserted existence of a de facto relationship with Mr Rylan. Instead, I think it much more likely than not that each of them honestly and genuinely believed that what they gave evidence about had happened in the manner they each recounted; however, the passage of time between the occurrence of the matters about which they each gave evidence and their representations of their recollection of the same is such as to cause me to proceed cautiously, in my determination of the weight to accord to their evidence.
Unless I indicate otherwise, I generally accept the evidence given by the witnesses called in Mr Rylan’s case. Whilst Mr J was, on occasion, inappropriately short and seemingly frustrated in responding to questions asked of him by Mr Hodgson, I am not persuaded that he was dishonest. Similarly, I consider that Ms K and Ms L each did their best to answer honestly the questions asked of them when each was cross-examined.
The emails generally
I accept that, in the course of the proceedings, Ms Shelby disclosed approximately 1.5 million emails to Mr Rylan (covering the period from about June 2009 until 9 August 2018) rather than providing him with a discrete subset of the same which touched upon the issues in dispute in this proceeding.
I accept that Ms Shelby was able to provide Mr Rylan with the emails that she did because she retained an entire copy of all of the emails sent in the course of E Pty Ltd’s operations when she ceased her interactions with it. I accept that she retained this copy despite a request made of her on 27 January 2018 to return the same to the company. I simply do not accept Ms Shelby’s evidence to the effect that she did not really realise that she had to return E Pty Ltd’s property to it when she stopped working for and with the company – especially given that the 27 January 2018 correspondence specifically asked that she return all E Pty Ltd files, including the E Pty Ltd related emails, to the company. I consider Ms Shelby’s subsequent evidence about the reason she decided to retain a copy of all of the company emails (namely, that she did so in case something went wrong with the company server/s and in case she was asked to provide a copy of all of the emails to assist) to be nothing more than a self-serving invention; I think it is much more likely than not that she retained the files that she did because she wanted to be able to use them (or aspects of the them) as evidence in these proceedings.
I accept that Ms Shelby disclosed the emails that she did despite her evidence including that the number of emails that were actually relevant was either probably less than 1,000 in number or about 2,000. Whilst Ms Shelby disagreed with the suggestion that, in acting as she did, she had deliberately attempted to make it difficult for Mr Rylan to identify those emails which contained information relevant to the issues in these proceedings, I think it highly likely that this was at least part of the reasoning underpinning the disclosure of so many documents. I am significantly sceptical about her assertion, in essence, that she was being helpful when she made the disclosure that she did.
It is, I think, clear that, irrespective of the context in which the various communications contained within them had actually occurred, Ms Shelby selected, from those emails passing between herself and Mr Rylan over the years, those emails which she regarded as supporting her contention about the existence of a de facto relationship between June 2007 and 2017. I note that, when cross-examined, she agreed that it was possible that the way the email exchanges she relied on “moved around” meant that, where they did not encompass the entirety of the chain of emails passing between the parties at the time, they were out of context.
I think there is much force in the contention advanced by Mr Priestley, who appeared for Mr Rylan, to the effect that Ms Shelby’s decision to provide the email communications as she did has meant that I cannot be confident about the context in which the communications contained within them occurred. It seems to me that to be highly likely that Ms Shelby has presented selected communications in a manner intended to promote her case that she and Mr Rylan were in a de facto relationship during the period she alleged – rather than placing them before the court in the full context in which such communications actually occurred.
I have concluded that there are such significant concerns about the absence of context in many of the email communications which Ms Shelby relied on in her case as to make it dangerous to place weight on the same. Such conclusion is, I think, further buttressed when regard is had to Ms Shelby’s evidence about the emails which had passed between her and Mr Rylan on 27 January 2018. Whilst she said there was only one email about the topic of her ceasing to work for E Pty Ltd which passed between them on that day,[13] the reality was that there were a series of emails.[14]
[13] Applicant’s affidavit filed 8 October 2020 at paragraphs 145-149.
[14] Exhibit 6.
In addition, when she was cross-examined, Ms Shelby agreed that, when she put the single email into evidence and referred to it in her affidavit, she knew, in essence, that:
(a)it was part of an email chain; and
(b)the other emails (comprising Exhibit 6) were part of the same chain; and
(c)she had knowingly failed to include the other emails which constituted the email chain in her evidence.
I reject Ms Shelby’s contention that, in acting as she did, she had not been trying to create a false impression of what had occurred that day.
My conclusion about the communications on 27 January 2018 has led me to have little, if any, confidence about the context surrounding the other email communications Ms Shelby has sought to rely on in her case.
Further, when she was first cross-examined about the issue of deleting emails from the hard drive she had provided by way of disclosure, Ms Shelby said that she had not deleted any emails from the hard drive she had provided and from which she had selected the emails that formed part of the evidence in her case; she said that she would have no explanation if there were emails that had been printed but no longer appeared on the hard drive and that she had not deleted one single email from the hard drive of files provided to Mr Rylan’s solicitor, such that the files she and Mr Rylan had were identical.
Whilst Ms Shelby denied that the emails constituting Exhibit 6 (other than the one she referred to in her affidavit) had been deleted and said that they had remained sitting in a “GST/PSD file”, it seems to me that the expert evidence established that emails other than the one Ms Shelby chose to exhibit to her affidavit had been deleted in such a manner as to prevent their retrieval by a means other than the use of specialised software.
I note, also, that Mr Rylan’s evidence included that he knew Ms Shelby had deleted emails from the company server because she told him that she had done so; he said that, for example, she had sometimes told him that she had sent him an email the night before, that she had attended his house and deleted it from the computer there and had also deleted it from the server.
The SMS messages
As is the case in relation to the email communications passing between Ms Shelby and Mr Rylan, I have concluded that there are such significant concerns about the absence of context in many of the SMS communications which Ms Shelby relied on in her case as to make it dangerous to place any significant weight on the same. Regard need only be had to the exchange I had with Mr Hodgson, who appeared for Ms Shelby, about the SMS messages said to have been exchanged on 19 June 2016.[15]
[15] Transcript at pages 687 – 689.
All that the evidence of the numerous SMS messages said to have passed between Ms Shelby and Mr Rylan at various times established, it seems to me, is that a message was seemingly sent at a specified time – without more it is, I consider, very difficult, if not impossible, to be confident enough about the context within which the text communication occurred so as to reach any particular conclusion about it.
Whilst much was sought to be made about the number of SMS messages passing between Ms Shelby and Mr Rylan, I am not persuaded that the same established anything more than that they were two people who, in the course of the casual and then sporadic sexual relationship, friendship, employer/employee and business owner/contractor relationships which it is agreed they had over time, enjoyed communicating in such a manner.
APPLICABLE PROVISIONS OF THE ACT AND SOME AUTHORITY
The court has jurisdiction to declare that a de facto relationship existed or never existed between Ms Shelby and Mr Rylan.[16] If a declaration is made pursuant to s 90RD, it has effect as a judgment of the Court.[17]
[16] See: Answer to the case stated in Nevins & Urwin (No 3) [2022] FedCFamC1F 201.
[17] s 90RE of the Act.
Section 4AA(1) of the Act relevantly prescribes[18] that a person is in a de facto relationship with another person if, having regard to all of the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
[18]It being accepted that Ms Shelby and Mr Rylan are not legally married to each other and are not related by family.
Whilst the circumstances of their relationship may include any or all of the following matters:
(a)duration of the relationship; and
(b)the nature and extent of their common residence; and
(c)whether a sexual relationship exists; and
(d)the degree of financial dependence or interdependence, and any arrangements for financial support between them; and
(e)the ownership, use and acquisition of their property; and
(f)the degree of mutual commitment to a shared life; and
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship; and
(h)the care and support of children; and
(i)the reputation and public aspects of the relationship,[19]
none of these are either collectively or individually determinative of the factual determination to be undertaken by the court; rather, in determining whether a de facto relationship exists or existed, the court is entitled to have regard to such matters and attach such weight to any of them and to any other matter as may seem appropriate to the court in the circumstances of the case.[20]
[19] s 4AA(2) of the Act.
[20] s 4AA(3), 4AA(4) of the Act.

Further, whether parties were or were not in a de facto relationship is a question of fact, not discretion;[21] an applicant seeking a declaration as to the existence of a de facto relationship must prove, on the balance of probabilities,[22] that such relationship existed.[23]
[21] Jonah & White (2012) FLC 93-522 at [39]; Sinclair & Whittaker (2013) FLC 93-55 at [65].
[22] S 140(1) Evidence Act 1995 (Cth).
[23] Ricci v Jones [2011] FamCAFC 222 at [23].
In deciding the answer to the question of whether parties were or were not in a de facto relationship, the court should look to the composite or whole picture, established by the evidence before it, to determine whether, in a particular case, the relationship established by the evidence satisfies the statutory test.[24]
[24]See, for example: Herford & Berke (No. 2) (2019) FLC 93-919; Sinclair & Whittaker (2013) FLC 93-551 and the reference therein at [55] to Fitzgerald J in Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131.
Whilst statements to government authorities apparently inconsistent with a party’s case may “complicate the resolution of the issue of the nature of the relationship” between two people, such statements are not determinative, but are to be taken into account as part of the circumstances comprising the whole picture of a particular relationship.[25]
THE COMPOSITE PICTURE OF THE CIRCUMSTANCES OF THE RELATIONSHIP BETWEEN MS SHELBY AND MR RYLAN
[25]Sinclair & Whittaker (2013) FLC 93-551 where, at [66], the Full Court quoted, with apparent approval, the comments of McColl J at [99] of Hayes v Marquis [2008] NSWCA 10.
What happened between April 2004 and about mid-2007?
I accept that, when Ms Shelby met Mr Rylan in about April 2004, she was studying, predominantly reliant on government benefits for her financial support and living in Town M with her children (15 year old Ms N[26] and 10 year old Mr O[27]). Her financial circumstances were strained and she had little property of value. I accept that, when he met Ms Shelby, Mr Rylan was living in an upstairs area of the offices occupied by his business, run through E Pty Ltd, in H Town.
[26] Born in 1989.
[27] Born in 1994.
I accept that Mr Rylan travelled to South Asia between about April and September 2004 and that, after he returned to Australia, he and Ms Shelby began a casual sexual relationship. I accept that his accommodation provided one of the venues at which they consummated their sexual relationship. I note that Ms Shelby said that Mr Rylan told her that he wanted to “maintain sexual freedom”;[28] I accept Mr Rylan’s evidence to the effect that he told Ms Shelby, in effect, that he did not want to become involved in a de facto relationship with her, that he had his own life and she had her own life with her children and that he just wanted them to be friends. I accept that his concept of their friendship at this time was that they were “friends with benefits” – and that the “benefits” to which this phrase refers was sexual intimacy. I accept that, at the same time she embarked on the casual sexual relationship with Mr Rylan, Ms Shelby maintained a relationship involving sexual intimacy with a man called “[Mr P]”.
[28] Applicant’s affidavit filed 8 October2020 at paragraph 9.
I accept that, by about late 2004, Ms Shelby had started doing some casual manual work for Mr Rylan and that it is much more likely than not that he paid her in cash for this work. I accept he subsequently offered her a job working in his business (beginning in the warehouse and later moving to do other tasks) and that she undertook that employment from about late 2004 until about August 2011. I am unpersuaded that Mr Rylan expressed any reluctance in having Ms Shelby start to work in the business because they were “a couple” – his evidence when cross-examined seemed to me to establish that he is someone who is perfectly capable of maintaining various types of relationships simultaneously with another person. I simply think it unlikely that, having started what I consider he regarded as a casual sexual relationship that had “no strings attached”, he would have been reluctant to offer Ms Shelby the opportunity to work for him in his business.
I accept Mr Rylan’s evidence to the effect that Ms Shelby very rarely, if ever, stayed overnight at the office when he was living there – which was from about March 2004 until 2006 when he moved into the house he bought in B Town. I accept that he did not ask Ms Shelby to stay at the office with him all of the time. I accept, as he said, that Ms Shelby had been horrified that he had been sleeping on a mattress on the floor at his office and that she arranged the purchase of a bed for him using funds he provided for that purpose.
Ms Shelby and Mr Rylan differed in aspects of their respective recounting about the amount of time they spent together (and whether it was overnight or not and where it occurred and whether it was in the context of them spending “personal” time together or was associated with their respective roles in the business – Mr Rylan as employer and Ms Shelby as employee) in the period from the start of their casual sexual relationship until Mr Rylan moved to live in a house he bought in G Street, B Town (the G Street property) in about mid-2006. They differed, for example, in their recounting of the support Ms Shelby provided to Mr Rylan when he went through a family law dispute with his ex-wife in 2006: whilst Ms Shelby sought to advance that the nature of the support she provided was indicative of what she clearly regarded as a special relationship, Mr Rylan’s view was that, whilst Ms Shelby had provided him with support, this was not in a manner that he regarded as “special”, but was in the same way that other friends had offered their support.
Given that Ms Shelby’s contention is that the alleged de facto relationship between them did not commence until about mid-2007, it seems to me that it is unnecessary to resolve specifically the differences in the accounts provided by each of Ms Shelby and Mr Rylan about how their relationship looked prior to then. It is, I think, sufficient simply to record that I accept that, in the period from when they met until about mid-2007, Ms Shelby and Mr Rylan: spent time together in the context of their employee/employer relationship; spent a significant amount of time together in the furtherance of what I consider began as a casual sexual relationship and which later involved a more sporadic sexual relationship; continued to maintain what I regard as a shared willingness to continue to engage in sexual intimacy with others – including to the knowledge of the other; did not live together in the same residence; continued not to share bank accounts or any other financial interests; maintained financial independence; continued to meet up regularly and fairly frequently to go out together for dinner (both alone and with friends); travelled overseas together for both business and personal reasons; shared a room and, more often than not, a bed when travelling overseas together; likely engaged in conversations about the possibility of future overseas arrangements for the business (including discussions about the possibility of having a villa in Southeast Asia so various staff could work from it at various times); likely communicated with each other very frequently via either text and/or email in particular; and likely engaged in communications that involved the use of nicknames and which were ribald and replete with sexual innuendo.
Such was the nature of their relationship at a time when Ms Shelby does not contend it amounted to a de facto relationship as that term is defined in the Act.
I do not accept the contention that, in working in the business Mr Rylan operated through E Pty Ltd, Ms Shelby became financially dependent on him or that her asserted financial dependence on him grew in any way: I consider that she was, at all times, free to cease her employment and take up employment elsewhere if she was dissatisfied with the conditions under which she was employed. I note that Mr Rylan accepted the suggestion that Ms Shelby was a good employee, albeit that he also said that she was not good at maintaining relationships with other employees.
I accept that, in May 2006, Mr Rylan purchased the G Street property in his own name using his own funds; there is no suggestion that Ms Shelby made any direct financial contribution to the acquisition of this, or any other, property owned by Mr Rylan. I reject any contention that, because she was an employee of the E Pty Ltd business owned and operated by Mr Rylan, Ms Shelby made some sort of indirect financial contribution to his acquisition of this, or any other, property he subsequently acquired. To conclude otherwise would, I consider, mean that any employee who, by virtue of doing those tasks they were paid to do, contributed to the successful operation and increased profitability of the business should be regarded as having made an indirect financial contribution to whatever property the owner of the business (their employer) decided to acquire using the profits generated by the business – and that simply cannot sensibly be maintained.
I accept that Mr Rylan never considered Ms Shelby living with him in the G Street property; I accept that they never discussed sharing a home together; I accept his evidence that he had never wanted to live with Ms Shelby and that he had never considered, or even entertained, that possibility at any time.
It is clear that Ms Shelby did not move with Mr Rylan to live in the G Street property; she accepted that he had not attended at her home at H Town more than twice after June 2006 and she agreed that he did not stay overnight at her house between June 2006 and June 2007, when she moved from H Town to live in the F Street property.
The F Street property and the associated Loan Agreement
I accept that Ms Shelby bought the F Street property (which is situated about 30 metres from the G Street property) for $430,000 in about June 2007 in her name alone. I accept the funds Ms Shelby used to acquire this property were sourced as follows:
(a)$8,000: her own funds; and
(b)$7,000: the First Homeowner’s Grant; and
(c)$57,000: provided by C Pty Ltd as trustee for the C Trust (the Trust); and
(d)the balance: borrowed in her name only from a commercial lender.
I accept that there was no written agreement in place between Ms Shelby and the Trust prior to her receiving the funds advanced to her. I accept Mr Rylan’s evidence to the effect that this was because he had “absolute trust” in Ms Shelby at the time the funds were provided to assist her to buy the F Street property; I also accept that the requirement for a formal loan agreement between Ms Shelby and the Trust was likely raised by Mr Rylan’s solicitor (Ms Q) after she became aware of the provision of the funds to Ms Shelby; it also seems that she was responsible for the drafting of the terms of the same.
I accept that the loan agreement was backdated. I accept that Ms Shelby freely signed it in the terms provided to her and that its terms include that:
(a)the loan was interest-free; and
(b)repayment of the $57,000 was to be made on the earlier of the sale of the property or the expiration of ten years; and
(c)in addition to repaying the $57,000 provided, Ms Shelby was to pay the Trust thirteen and one-half per cent (13.5 per cent) of any capital gain achieved on the sale of the property.
I do not accept that the $57,000 was gifted to Ms Shelby. I note that her evidence about the basis on which the Trust provided her the sum of $57,000 differed on occasions: at one stage she said that the money had been gifted to her; on another she said that it had been loaned to her but she had been told at the time the funds were provided that she would not have to repay the loan because, in essence, it represented recognition of her past efforts in the business, salary sacrifices she had already made in the course of her employment and the increased revenue she had generated for the business; on another, it was contended that the requirement for repayment of the loan had been waived by Mr Rylan.
I accept that there was discussion about the hope that, in the future, Ms Shelby may have been able to use any bonuses or incentive payments made to her by the business to repay the $57,000 loaned; I accept that she has not made any repayment of any of the $57,000 loaned to her to fund the purchase of the F Street property. I accept Mr Rylan’s evidence to the effect that he has never told Ms Shelby that she would not have to repay the funds advanced to her other than when he told her, at a later date, that if she helped him fill out an insurance claim application, he would not insist on her repaying these funds – an offer which I accept was not accepted by Ms Shelby.
The relevance of the location of the houses owned by Ms Shelby and Mr Rylan respectively
I am not persuaded that Ms Shelby’s decision to purchase the F Street property was a decision made jointly with Mr Rylan or that it was a decision made in order to enable them to live together across the two properties. I think it much more likely than not that, after the discussion about the provision of a loan to Ms Shelby to enable her to purchase a home to live in, she saw the F Street property and fell in love with it: it was, as she said, serendipitous (at least from her perspective) and not a coincidence (as it was from Mr Rylan’s perspective) that it happened to be for sale.
I accept Mr Rylan’s evidence that, from his perspective, Ms Shelby’s purchase of the F Street property was a sheer coincidence which arose from the fact that she wanted to live in B Town and that the property was for sale when she was offered the loan by the Trust. I accept his rejection of the suggestion that Ms Shelby’s acquisition of the F Street property occurred because it was considered ideal so that she could be in very close proximity to him. I accept his evidence to the effect that Ms Shelby could have bought any property at any time with his “assistance” (which I took to be a reference to the loan that I consider was advanced) and that his offer to loan funds for that purpose was not associated with any particular house. I accept his evidence to the effect that he had helped Ms Shelby to buy a house and that the one she had decided on happened to be situated 30 metres from his house.
Despite the evidence given by witnesses called in Ms Shelby’s case, I am not persuaded that Mr Rylan told Ms Shelby that he would buy her a house – other than, perhaps, in the sense of providing her with loaned funds to enable her to obtain a commercial loan in order to buy a property in her sole name. The reality here is that Mr Rylan did not buy Ms Shelby a house – she bought it herself with money borrowed from him (via the Trust) and from a commercial lender; he may well have told Ms Shelby that he wanted to help her to get her own little house – because that is what the loan of the $57,000 enabled to occur.
I accept that, whilst he had asked Ms Shelby “what about B Town?” as being a place to buy a house – because Mr R had told him, about eight to 10 months earlier, that he should buy a house in that town because it would be a good investment – Mr Rylan did not invite Ms Shelby to come and live next to him in B Town. I accept that he did not tell her that buying a property next to his property would be good. I accept his evidence to the effect that Ms Shelby’s purchase of a property so close to his property had been a bit of a shock; that it was for this reason that he had initiated the “tree” conversation (namely that there was a tree of independence, mutual respect, love) so that they could reaffirm their understanding of what their friendship was and to reaffirm that there was no de facto relationship between them.
The relevance of the way in which Ms Shelby’s mortgage repayments were made
Ms Shelby’s evidence included that the approximately $2,500/month loan repayments payable by her to the commercial lender for the funds she had borrowed to purchase the F Street property were paid directly by E Pty Ltd to her account with that lender. It appeared that she contended (at least initially) that the fact these direct payments were made should be seen as an indicia of the existence of a de facto relationship between she and Mr Rylan. In contrast, Mr Rylan’s evidence included that, whilst Ms Shelby had been excited to own her own home, she had struggled with the requirement to make monthly mortgage repayments and had told him that it would make it easier for her if she could get the business to pay her mortgage directly to the bank; he said he had agreed to do this because it was simply an accounting matter and did not result in her receiving a higher wage. I accept his evidence in this respect. Whilst Ms Shelby also appeared to assert that the arrangement that E Pty Ltd pay her mortgage repayment directly to the commercial lender on her behalf somehow also resulted in her receiving a lower wage or salary than that to which she would otherwise have been entitled, I am simply not persuaded that this is the case.
I am satisfied that the fact that E Pty Ltd made payments directly into Ms Shelby’s loan account with the commercial lender was nothing more than an administrative arrangement put into place at her request (as an employee) and direction: the money (sourced from her salary or wage) could just as easily have been paid by E Pty Ltd into her account and then transferred by her into her loan account. I consider that all that happened was that the loan repayment was paid by E Pty Ltd on her behalf (and, I conclude, at her direction) directly to the commercial lender so that what she received into her bank account was the balance of her salary or wage (nett of both tax and her mortgage repayment). I do not regard this arrangement as being an indicia supportive of a conclusion that Ms Shelby and Mr Rylan were in a de facto relationship between 2007 and 2017.
Ms Shelby’s evidence included that, when she was “fired” without warning by E Pty Ltd in 2011, the company ceased making the repayments to her loan account with the commercial lender in the manner that had previously occurred. That this happened seems to me to be more indicative of the absence of a de facto relationship between Ms Shelby and Mr Rylan than the reverse.
Mr Rylan’s evidence included that, when Ms Shelby told him, after she ceased working for E Pty Ltd, that she could not pay her mortgage repayments, he made a couple of “token” repayments on her behalf. I am not persuaded that the fact that he acted as he did is suggestive of the existence of a de facto relationship during the period from 2007 to 2017 or at all – as opposed to a relationship in which he cared for and about Ms Shelby and was in the financial position of being able to assist her as a friend.
Despite Ms Shelby’s evidence to the effect that, whilst Mr Rylan offered financial benefits to all of his staff, no-one received financial benefits comparable to those she received, I am also unpersuaded of this. I accept that Mr Rylan’s business provided loans to other employees in the period from 1 January 2010 until 29 March 2019.
I accept Mr Rylan’s denial of the suggestion that he told Ms Shelby that he was so offended that she wanted to be paid more money for her work in the business because they were “a couple” and shared everything; I also accept his evidence to the effect that he did not tell Ms Shelby that she had made the business successful, that he would provide for her or that he could or would buy her a house. As I have remarked elsewhere in these Reasons, Mr Rylan did not buy Ms Shelby a house: rather, they entered into a commercial agreement whereby he (via the Trust) provided funds to be used toward her purchase of the house and, in effect, offset the benefit of the provision of these funds on an interest-free basis and without the requirement for repayment for the sooner of 10 years or the sale of the property with the requirement for payment of the specified percentage of any nett capital gain she achieved on its sale.
The asserted “merged households”: mid 2007 until August 2011

Ms Shelby’s evidence was, in essence, that from when she moved to live in the F Street property in about mid-2007, she and Mr Rylan lived together across their two houses and that it was from this time that theirs was a de facto relationship. She asserted that: they had shared their houses as one and moved between them freely (which they were able to do because the houses shared a back lane and were so proximate); they saw each other almost every day (before work, at work and after work) and spent many nights together; if she did not stay overnight with Mr Rylan, she would go to his home for a couple of hours and cook him dinner there or take him dinner to his house or he would attend at her house for dinner; they “continued to live” at each other’s houses about three to four nights each week, during which they slept in the same bed and continued to have a sexual relationship; they had meals together most days; Mr Rylan had paid for the two houses to be cleaned once per week and for the lawns to be mowed and that he also paid for maintenance and some renovations; Mr Rylan had bought her a washing machine, a dryer and many other personal items and also allowed her to use the E Pty Ltd credit card for personal items.
Ms Shelby also said, in essence, that, whilst she and Mr Rylan maintained separate houses, they did so because this arrangement suited them. She said that: Mr Rylan had told her that he had a lot of pornography on his computer and she did not want to risk her children being exposed to it; she had also wanted to maintain stability for her son, who was living with her for half of the time and who would occasionally clash with Mr Rylan; Mr Rylan smoked cigarettes inside – which did not sit well with her on a full-time basis. Ms Shelby also said that, whilst Mr Rylan had told her that he wanted his own independence, he had also said that he wanted her close-by to take care of all his needs.
Mr Rylan agreed that after Ms Shelby moved to live in B Town they saw each other almost every day (although he did not agree that, in the period from mid-2007 until when Ms Shelby was fired from the business, they would hang out together almost every night). His evidence included that: Ms Shelby sometimes cooked dinner at her home and he would either eat there with her or she would bring the food to his home; between 2009 and 2011, he and Ms Shelby and other friends probably went to a local restaurant two-three times per week; between 2007 and 2011 Ms Shelby almost never cooked dinner at his place but occasionally brought him food, he would cook for her and that, during this period, he often/sometimes went to her house for a meal or to watch television or talk about business –he said this occurred until she threatened to obtain a domestic violence order if he set foot on her property. Mr Rylan’s evidence also included that, from the time Ms Shelby started to live in B Town, she never stayed overnight at his home: he said she certainly did not go to his home for sex and he did not go to her place for sex. His evidence was that the sexual aspect of their relationship changed over time: they had had casual sex from 2005-2007 and spasmodic and less frequent sex from 2007-2011. He also said that he could not recall them ever having sex at the F Street property and that he could not remember staying over at Ms Shelby’s house other than when she first bought it – he said he had gone and slept in her bed with her (although they had not had sex) and they had discussed how great it was that she, the first person in four generations of her family, had bought a home.
Ms Shelby’s evidence was, initially, that after her approximately twelve year old son decided in September 2007 to stop going to see his father for half of the week and stayed with her all of the time, the arrangements changed: she said that, on most evenings, she cooked at her house and, when her son was settled in his room, took dinner to Mr Rylan at his house, where she would have a wine with him, have sex, watch TV or just hang out together. She also said that, whilst there were times when her son was with them and they would all watch TV together, Mr Rylan had not been a “good role model” for her son and their relationship had deteriorated over the years. I accept that Ms Shelby’s son did not stay overnight at Mr Rylan’s home. I am unpersuaded that Ms Shelby left her son home alone overnight in her house on two-three nights each week whilst she stayed overnight with Mr Rylan.
Funds spent on renovating the F Street property
Ms Shelby’s evidence included that, via E Pty Ltd and another business, Mr Rylan paid for multiple renovations to the F Street property; she said these renovations were his idea; that he had told her he wanted to renovate “our homes”; that, together, they had made the business a lot of money and he wanted to do the renovations as a gift to her. I do not accept her evidence about the comments she said Mr Rylan made to her. She said she thought the renovations cost well over $20,000 and that she could not afford to pay for them.
Mr Rylan agreed that he had paid for renovations to the F Street property. I accept his explanation for the reason he did this: namely, because Ms Shelby and another employee had lost $20,000 each when they followed a recommendation he made to them about making a certain investment. I accept his evidence to the effect that he repaid the other employee the $20,000 he had lost and that he repaid Ms Shelby the money she had lost by paying for the renovations, which he thought had cost about $30,000. I accept Mr Rylan’s evidence to the effect that the renovations undertaken on the F Street property did not amount to a joint project; I also accept his evidence that Ms Shelby had stayed in a bedroom at his G Street house for a short time while her home was renovated.
The car
I accept that, in about early 2010, Mr Rylan caused E Pty Ltd to buy a second-hand motor vehicle 1 for about $36,000. I accept that this vehicle was always registered to E Pty Ltd and insured by it and that it was never registered in Ms Shelby’s name or insured by her. I accept that E Pty Ltd listed the car as a company asset in its books of account. I also accept that Ms Shelby never included the car as her asset in any information she provided to a bank or credit institution and that she never declared her use of the car for tax purposes. I accept that E Pty Ltd, and not Ms Shelby, paid for the petrol used by the car and for any required maintenance or repairs.
Whilst I accept that Ms Shelby had the use of the car when she was employed by E Pty Ltd and also whilst she was engaged as a consultant to the business, I also accept that other employees used the car on occasion and that Mr Rylan also drove it. Even if, as Ms Shelby said in her evidence, Mr Rylan told her that it was “her car”, I am unpersuaded that it was ever gifted to her: I think it much more likely than not that any use of such a phrase was nothing more than a colloquial reference to the car being the vehicle which was provided for Ms Shelby’s use in the course of her involvement with the business. My conclusion that the car was never gifted to, or bought for Ms Shelby in a proprietary sense, is strengthened by aspects of Ms Shelby’s own evidence: for example, she said that, when she left the business in August 2011, Mr Rylan had asked her to return the car and she did (even though she asserted it was her property); further, she said (in essence) that, when she ceased her engagement with the business in 2018, she again returned the car to the business. Although she said she had done so “non-voluntarily” on the last occasion, she accepted that no one had threatened her into giving it back or to sue her if she did not return it; she agreed that no one had threatened to call the police before she returned it. Whilst Ms Shelby accepted that she had voluntarily returned the car because she had been told to, she rejected the assertion that she had been told to return the car because it was not hers. Despite the latter position, she accepted that she had not taken any action in any proceedings to assert ownership of the vehicle.
The joint engagement with a sex worker
It appears agreed that, during joint travel to East Asia in November 2010, Ms Shelby and Mr Rylan jointly engaged in sexual activity with a prostitute. The fact of this shared behaviour does not seem to me, in the circumstances of this case, necessarily to indicate that they were then in a de facto relationship. Whilst it may be that parties to a de facto relationship decide jointly to engage with a third person for sexual purposes, one can also envisage circumstances in which people who agree they are not in a de facto relationship – for example, members of a sporting team – have jointly decided to engaged jointly in sexual activities with a third person.
The conversation before Ms Shelby’s surgery
Mr Rylan appeared to place significance on a conversation he said he had with Ms Shelby in about 2011 after she told him that she had to have a surgery: his account was that, just before she went into hospital, she told him that she was just back from S Town from having sex with Mr P as she wanted do have her “last fuck” before she had her surgery. He said he had made some comment to her about that not being what the company car was to be used for and that, in essence, he had lost interest in continuing a sexual relationship with Ms Shelby after this.
Given the content, nature and tenor of the SMS messages passing between Ms Shelby and Mr Rylan over time (including outside the period between mid-2007 and 2017 when Ms Shelby asserted they were in a de facto relationship), I think it highly likely that Ms Shelby and Mr Rylan engaged in the conversation in the terms that Mr Rylan said they did.
Ms Shelby is fired
I accept that Ms Shelby was fired by Mr Rylan in about August 2011. Ms Shelby’s evidence was also, in essence, that the de facto relationship she asserted she and Mr Rylan had been engaged in since mid-2007 also ended at this time. Despite this, whilst Ms Shelby sought legal advice about her rights as an “employee”, she did not then seek any legal advice about any rights she may have had as a partner to a de facto relationship which had broken down.
I accept that the vast majority of the content of an email Ms Shelby sent to Ms Q (Mr Rylan’s solicitor) on 11 August 2011[29] related to her role as an employee of E Pty Ltd. I accept that, whilst it also conveyed her complaints about Mr Rylan’s asserted conduct toward her and that he had been intimate with her over a period of time, it did not assert that she was his de facto partner or his former de facto partner or that the two of them had been in a de facto relationship which had recently broken down. The email also contained, amongst other things, Ms Shelby’s assertion that Mr Rylan’s (alleged) “constant need” to keep her off balance in the workplace had (allegedly) become “much more intense since the intimacy and friendship stopped.” Such assertion seems to me to provide significant insight into Ms Shelby’s contemporaneous view of the relationship which had existed between her and Mr Rylan to that point in time: that is, she did not seemingly regard the end of their relationship as amounting to the end (or breakdown) of a de facto relationship – rather, she chose to describe what had happened as the cessation of “intimacy and friendship.”
[29] Exhibit 10.
In addition, I consider it much more likely than not that Ms Shelby’s reference, in the email she sent to Ms Q on 11 August 2011, to needing to focus on her financial future and not that of Mr Rylan reflected her awareness, at that time, that their respective financial futures were quite separate. I reject her evidence to the effect that she was not then financially independent of Mr Rylan. The reality, I consider, of Ms Shelby’s assertions that she was not “financially independent” of Mr Rylan was simply that, like any other employee of E Pty Ltd, she was an employee and constrained by the usual matters associated with that status. I consider her complaint really to have been that she was not remunerated as she thought she deserved and that she was not provided with the same incentives or opportunities that she perceived other employees to have been offered. No doubt such complaints contributed to her subsequent decision to work as an independent contractor, which enabled her the “financial independence” she described during her evidence – namely, the ability to work whatever hours she wanted in order to earn whatever funds she determined she wanted or needed to earn.
It also seemed to me that, whilst they disagreed about the particular nature and frequency of their interactions prior to Ms Shelby ceasing to be an employee of E Pty Ltd, both Ms Shelby and Mr Rylan agreed that, after this happened, their interactions during the following seven months were very different to those which had preceded this event: in fact, Mr Rylan’s evidence included that they did not see each other at all for the first four-five months of the seven month period. Ms Shelby and Mr Rylan agreed, though, that Mr Rylan invited Ms Shelby to attend at his mother’s birthday celebrations in Sydney – which he said he had done because his mother liked her. They also appeared to agree that Mr Rylan had told Ms Shelby that he wanted to help her keep her house and that he made a couple of her mortgage repayments (presumably to put this assertion of assistance into effect) – Ms Shelby’s evidence when cross-examined included that, when she was unable to pay her mortgage repayments at times during the seven months during which she did not do any work for E Pty Ltd, she had asked Mr Rylan whether, “as a friend”, he could pay this for her and he had done so.
I accept Mr Rylan’s rejection of the suggestion that, during this seven month period, he had asked Ms Shelby to go with him to Europe; I also accept his evidence to the effect that he did not believe that Ms Shelby had helped with any of his personal tasks, like looking after his cat, when he was overseas during this period.
What happened between about March 2012 and May 2017?
Ms Shelby said, in essence, that she and Mr Rylan were together again as a couple by March 2012. Mr Rylan completely rejected the suggestion that, by about March 2012, there had been a reconciliation of a “couple-like” relationship between him and Ms Shelby; he rejected the suggestion that their relationship had resumed where it had been left when he fired Ms Shelby. His evidence when cross-examined included that, after Ms Shelby left his employ, he had not been prepared to take on the responsibility of having her as an employee again – much less as a life partner – and, so, invited her to do work for E Pty Ltd on the basis that she was a contractor; he said E Pty Ltd became one of the clients of Ms Shelby’s business – just as “Mr P” (the man with whom she had had an ongoing sexual relationship) was.
I do not accept Ms Shelby’s evidence to the effect that she and Mr Rylan resumed a de facto relationship in March 2012. I do not accept that Mr Rylan told her, at or around when she started to work for the business as a contractor, that the loan of $57,000 which had been provided to her by the Trust to assist her to purchase the F Street property would be “wiped” or extinguished or forgiven. Whilst Ms Shelby said that she and Mr Rylan had resumed a sexual relationship after March 2012 and that this continued until about mid-2013 (at which time she said they started to retire to their own beds in the evenings because Mr Rylan had told her that he was not sexually attracted to her any longer) Mr Rylan denied that there had been any sexual intimacy between himself and Ms Shelby after March 2012, other than on one occasion in 2015 after they had consumed “dingbats” cocktails together whilst overseas in Southeast Asia. Whilst Mr Rylan’s evidence included the assertion that, at a time after March 2012 and following her being concerned about his health, Ms Shelby had started to lay “breadcrumbs” for a posthumous de facto claim (by, for example, sending him emails which he now regarded as having been sent to set him up and wanting to re-establish sexual intimacy with him), I think it highly likely that such views may be the result of him looking back at emails and communications through the prism of the assertions made by Ms Shelby in these proceedings that the two of them had been in a de facto relationship between mid-2007 and 2017.
Ms Shelby’s consultancy with E Pty Ltd
I accept that, when Ms Shelby resumed doing work for E Pty Ltd from about March 2012 onwards, she did so as a consultant via a business she had started after she was fired by Mr Rylan in about August 2011. I accept that she did work for clients other than E Pty Ltd; whilst I accept that she had a retainer agreement with E Pty Ltd, I also accept that there were a few occasions when she was paid by the business before she submitted an invoice for the work she had actually done. Whatever one may think about this as a business practice, I accept Mr Rylan’s evidence to the effect that this had happened with other consultants; I do not regard the occasional making of payments before an invoice was provided as suggestive of the existence of a de facto relationship between Ms Shelby and Mr Rylan. I also note that, when Ms Shelby had been paid on an occasion before she had submitted an invoice, the relevant employee of the business asked that she be required to supply one.
Ms Shelby’s assistance to Mr Rylan when he had trouble/buying groceries
I think it much more likely than not that it was really only after Mr Rylan had surgery in early 2014 that Ms Shelby regularly did some grocery shopping for him and that this was associated with the impact of his health issues. Ms Shelby’s evidence included that she and Mr Rylan used to ride their bikes to the shops pretty much every Sunday: she said she would wait outside with their respective dogs whilst he went in to do his shopping and he would then wait outside with the dogs whilst she went in to do her shopping. Whilst Ms Shelby followed this evidence up, when asked about Mr Rylan going into the shop to buy his own groceries, with further evidence that this happened sometimes and sometimes Mr Rylan would buy her groceries and/or she would buy his groceries, I think her initial answer was a truer account of what actually happened than her latter assertion – which I regard as being an attempt to walk-back what she realised she had said: namely that, far from buying groceries together or for each other, she and Mr Rylan had simply accompanied each other when they went to buy groceries and that each had facilitated the other’s purchase of their own groceries by taking turns minding their dogs.
I note that Ms Shelby’s evidence included the assertion that she had stopped buying groceries for Mr Rylan in 2015/2016; she also said it was possible that they never rode their bikes together after Mr Rylan’s 2014 surgery – which accorded with Mr Rylan’s evidence.
Mr Rylan’s Will
Whilst Ms Shelby’s evidence included the assertion that Mr Rylan had taken steps to make her the sole beneficiary of his Will, there is simply no evidence that this occurred. Mr Rylan said, and I accept, that he never made a Will. As I understood his evidence, the most that happened was that he wrote some notes about whom might be beneficiaries in a prospective Will and theses people included Ms Shelby, other friends and employees and various members of his family. I do not accept that Mr Rylan ever made a Will by which he nominated Ms Shelby as his sole beneficiary. I also note that Ms Shelby’s evidence, when cross-examined about the assertion that Mr Rylan had made a Will in which she was his sole beneficiary, included that the document she had seen on his kitchen table was handwritten in blue ink; she said that, whilst she did not remember exactly what was in the document, she knew what the purpose of it was “and it worked” (namely, on her account, it “calmed” her down); however, Ms Shelby also accepted that Mr Rylan had never told her what the purpose of writing a document and leaving it on the table was and that any “purpose” she had ascribed to his actions was purely speculative on her part.

As her cross-examination continued, it seemed to me that Ms AA firmed in the strength of her asserted recollection of the long-past events: she said she had a very clear recollection of telling Mr Rylan that the person to whom she had spoken about the retreat (namely Ms Shelby) had been lively and engaging and had encouraged her to attend; whilst she accepted at first that Mr Rylan might have told her that Ms Shelby was “a very good friend”, she later said that she did not believe that he had said that to her – she also denied it was possible that he had told her that or that he had said that Ms Shelby was “a” manager in the business.
Whilst Ms AA’s evidence included that, when she first met up with Mr Rylan and Ms Shelby in H Town, he had introduced Ms Shelby as his “partner” and the person responsible for the operational oversight of E Pty Ltd, Ms Shelby does not assert that she and Mr Rylan were in a de facto relationship before about mid-2007 (when she moved to live in the F Street property in B Town).
It is accepted that Mr Rylan and Ms Shelby attended the 2008 wedding of Mr BB’s (Ms AA’s partner) daughter. Ms AA said that, when she introduced them as “this is [Mr Rylan] and his partner [Ms Shelby]”, neither demurred. I accept Mr Rylan’s evidence to the effect that any failure by him to correct Ms AA’s introduction occurred out of politeness: it seems entirely plausible that a person introduced in the manner Ms AA described would not, at a wedding to which they had been invited, make a point of correcting the form of the introduction and may, instead, simply remain silent.
Mr BB
Mr BB’s evidence included that he had met Mr Rylan through Ms AA. He said that, in 2005, Mr Rylan told him that he would bring his girlfriend (Ms Shelby]) so that the four of them could have dinner or something; he said he had met Mr Rylan and Ms Shelby together for the first time on 29 October 2005 at a café in H Town and that he and Ms AA had had regular contact with them until around May 2008 (that is, a little under a year after Ms Shelby’s asserted commencement of the alleged de facto relationship between her and Mr Rylan). It seems that Mr BB ceased his contact with Mr Rylan in about June 2008.
Whilst I accept that Mr BB gave his evidence truthfully, I am reticent to place significant weight on his recollections of events that occurred so long ago. If I am wrong in this conclusion his evidence is, as already noted, restricted to observations said to have been made before June 2008.
Mr R
Mr R said he stopped having regular social contact with Ms Shelby and Mr Rylan around 2011 because of Mr Rylan’s treatment of him. Mr R said that he met Ms Shelby in around 2004 when Mr Rylan introduced her to him by using words to the effect of “this is my partner [Ms Shelby]”.[33] Even if this is correct, it seems to me to do nothing more than highlight the problems associated with ascertaining the meaning to be accorded to the word “partner” – because it is clear on the accounts of both Ms Shelby and Mr Rylan that they had only started a relationship in about September 2004.
[33] Mr R’s affidavit filed 12 January 2012 at paragraph 3.
In addition, when cross-examined, Mr R accepted that he had not included the assertion that Mr Rylan had introduced Ms Shelby to him by saying words to the effect of “this is my partner [Ms Shelby]” in an earlier affidavit he had given. He ultimately accepted, it seemed to me, that he could not be sure about the words Mr Rylan had used so many years earlier. His evidence to the effect that “no one could be” seems to me to be particularly apposite to the consideration of those aspects of the evidence given by Ms AA and Mr BB wherein they appeared reluctant to concede any fallibility about their respective recollections of comments alleged to have been made so long ago.
Mr R’s evidence was, I consider, so lacking in particularity is to make it difficult to accord significant weight to the same. Whilst it seemed to have been suggested by the manner in which his affidavit was drawn that his interactions with Mr Rylan and Ms Shelby were reasonably significant over the timeframe he described, his evidence when cross-examined was that: between 2004 and 2011 he spent time at Mr Rylan’s house at a frequency of two-three occasions per month and Ms Shelby was frequently there; the “frequent” dinners that had occurred at his home involved Mr Rylan attending once alone, Mr Rylan and Ms Shelby attending once together and the two of them attending on one-two occasions as part of the group and that the frequency with which they had run into each other was perhaps twice per year. When asked whether this meant that he had seen Mr Rylan and Ms Shelby about 17 – 20 times in the period between 2011 and 2017, his evidence was that that would probably overstate the frequency of their interactions.
The witnesses called in Mr Rylan’s case
Evidence of Ms L
I accept that Ms L, who is a consultant to E Pty Ltd, first met Mr Rylan in late 1999. I accept that she was working in the business when Ms Shelby started to work there in about late 2004 and that she resigned in late 2006 after she learned about the contents of a demeaning email Ms Shelby had written about her. I accept Ms L’s evidence to the effect that, between when she first met Ms Shelby and when she resigned in late 2006, neither Ms Shelby nor Mr Rylan told her that they were “a couple”: she said her observations led her to believe that there was a fondness and many troubles between them.
I accept Ms L’s evidence to the effect that, when Mr Rylan approached her in early 2014 to speak with her about returning to work for him, he told her, in effect, that she did not have to worry and that it was much better between him and Ms Shelby now that they were not sleeping together. I accept that, in the period between her returning to work for Mr Rylan and about 2017, Ms L did not see Ms Shelby and Mr Rylan hold hands or engage in any displays of affection for each other.
Evidence of Ms K
I accept Ms K’s evidence (noting she worked on a part-time basis from 2015 and on a full-time basis from 2017) to the effect that, on the few occasions she saw Ms Shelby and Mr Rylan together in the office at the same time (because Ms Shelby worked from home and Mr Rylan was barely in the office), she never saw them display any affection other than what she would expect from people interacting professionally. I accept that: Mr Rylan never told her he was in a relationship with Ms Shelby and that she was really not aware of the nature of the relationship between Ms Shelby and Mr Rylan; neither he nor Ms Shelby had ever told her that they were in a relationship or had ever given her that impression.
Information provided to government agencies/authorities
As noted earlier, I have rejected Ms Shelby’s evidence that, when she described herself as “single” in each of her tax returns for the years from 2007 until 2017, she was lying. I consider her evidence to this effect was an attempt to explain away the clear inconsistency between the information she provided to the ATO over a decade and her assertion in these proceedings that, during the same decade, she and Mr Rylan were in a de facto relationship. I reiterate my conclusion that, on each occasion she asserted that she was “single”, Ms Shelby was truthfully describing her situation.
Amount and nature of communications between Ms Shelby and Mr Rylan
Ms Shelby’s evidence included that she and Mr Rylan were in daily communication about personal, non-work-related and work-related matters throughout the course of their relationship. Counsel for Ms Shelby submitted that the quantity of the text and email communications and the content of the same, particularly the text communications, was such that it suggested the continuation of an intimate relationship long after when Mr Rylan said the sexual relationship between them had ended. I do not accept the contention that the volume of communications between people at any specific time necessarily persuades that they are, at that time, in a de facto relationship as that term is defined in the Act.
Mr Rylan accepted that most of the SMS messages related to personal matters. I accept Mr Rylan’s evidence to the effect that SMS messages were an important method of communication between them. I accept that the content of SMS messages passing between Mr Rylan and Ms Shelby covered matters such as them having meals together, going out to restaurants, travel arrangements and the like. I accept that they were replete with sexual innuendo on occasion. I accept that, notwithstanding the various changes to the relationship that Mr Rylan gave evidence about, the messages that passed between them continued, on occasion, to include their use of various nicknames they had for each other.
I generally accept Mr Rylan’s evidence to the effect that the sexually suggestive communications passing between Ms Shelby and him was just how they communicated and demonstrative of the way in which they had always communicated. I accept that the SMS messages passing between them over time (including when Mr Rylan said that their sexual relationship and interactions had ceased) contained many very sexually explicit and suggestive comments; that both of them engaged in what Mr Rylan described as “slutty, locker-room talk” and that they were “consenting adults engaging in smutty talk”; that the communications were replete with sexual innuendo and, to a degree, repetitive; that each took opportunities to introduce sexual innuendo into their exchanges and that such sexual innuendo was intended to be humorous. I accept that, on occasion, each of them found this style of communication to be humorous, although others may well describe it as puerile.
I am not persuaded that the sexual reference and innuendo in the communications between Mr Rylan and Ms Shelby means that it is more likely than not that they continued to be in a sexual relationship at the time of such communications. I think it much more likely than not that, as Mr Rylan said, this was simply the style of communications in which both of them engaged over time despite them not being engaged in a sexual relationship.
Whilst their communications are certainly, as was submitted in essence, indicative of a high degree of familiarity and, in one sense, intimacy, it cannot be forgotten that it is not disputed that they had had a sexual relationship for a period of time. Further, despite Ms Shelby’s case being that sexual interactions between them had ended in 2013 (other than for the one occasion in Southeast Asia in 2015), it is clear that the sexually suggestive and “smutty” communications continued well after that.
I accept Mr Rylan’s evidence to the effect that a reference in a SMS message sent on 29 August 2013 about him returning to “[B Town] family” was not him referring to only Ms Shelby and him as constituting a family but instead, a reference to him returning to the people he regarded as “family” in B Town. I also note that Mr Rylan said it would have been common or regular (but not on a daily, weekly or monthly basis) for each of them to have sent SMS to the other saying that they loved the other. Expressions of love alone do not necessarily mean that two people are in a de facto relationship.
Other tasks and interactions
I accept Ms K’s evidence about the tasks she undertakes for Mr Rylan in acting as his personal assistant and that, save for buying day-to-day food and items, she is involved in and manages nearly all aspects of his life, including organising payments of business and personal matters. Given this, the fact that Ms Shelby did many, if not all, of the same tasks when she was employed in the business does not seem to me to make it more likely than not that she and Mr Rylan were in a de facto relationship as alleged.
Mr Rylan’s financial interactions with people other than Ms Shelby
I accept Ms K’s evidence that, whilst Mr Rylan did not offer interest-free loans to all employees, it had been his consistent practice to offer such incentives to some employees, albeit that not all of them necessarily took this up.
I accept Ms L’s evidence that, in 2018, Mr Rylan loaned her money on an interest-free basis to help her pay an insurance excess; I accept she subsequently repaid him this money. I accept her evidence that, in 2018, Mr Rylan also offered to buy a property with her on a 50/50 basis so that she would eventually be able to have her own home rather than rent: I accept that, whilst she inspected the property, it was out of her price range and, consequently, she did not proceed to take up his offer.
Further discussion and conclusion about the existence or otherwise of a de facto relationship
In Sinclair &Whittaker[34] the Full Court adopted[35] the observations of Fitzgerald J in Lynam v Director-General of Social Security[36] that:
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.
[34](2013) FLC 93-551 [94].
[35] Ibid [55].
[36](1983) 52 ALR 128 [131].
I have expressed the findings I have made about various aspects of the evidence seriatim. That I have done so should not be seen as indicating that I have isolated individual factors rather than looking to the “composite picture” of these parties’ relationship as presented by the evidence before me.
In my view, the “composite picture” of the relationship between Ms Shelby and Mr Rylan, as established by the evidence, is such that I am not persuaded that they had a relationship as a couple living together on a genuine domestic basis at any time. I consider that they never “lived together”, including when they travelled overseas together; I am not persuaded that there was, really, any mutual commitment to a shared life. I am not persuaded that they were “a couple” between 2007 and 2017.
I am persuaded, to the requisite standard that Ms Shelby and Mr Rylan were never in a de facto relationship as that term is defined in the Act and a declaration will be made to that effect.
Jurisdiction in relation to the Interveners’ claims
Mr Hodgson, who appeared for Ms Shelby, submitted that, if his client failed on what he described as “the threshold issue” and the court did not make a declaration that these two people were in a de facto relationship, the court would not then have jurisdiction to make any orders in relation to whatever debts may have been established as owing to the Interveners.
I do not accept that submission.[37]
[37]See s 33 of the Family Law Act 1975 (Cth) [prior to its repeal on 1 September 2021]; s 29 Federal Circuit and Family Court of Australia Act 2021 (Cth).
In the present proceedings, the court was asked to make a declaration: either that these two people were in a de facto relationship for a specified period of time or, alternatively, that they were never in a de facto relationship. It has jurisdiction to make such declarations. Consequently, I consider that, where the facts before it are such that there is a single justiciable controversy, it also has jurisdiction to determine those causes of action advanced by the Interveners. I consider, as was submitted by Counsel for Mr Rylan, that the facts of this case are such that there is a single justiciable controversy before the court: there is, here, the requisite commonality or “substratum” of facts (judged as a matter of “impression and practical judgment”[38]) relevant to the issues joined, with the consequence that this Court has jurisdiction, however disparate the causes of action advanced by the Interveners (accepted as being completely under the control and ownership of Mr Rylan) may appear. In fact, the facts of this case are such that, in my view, it would be hard to find a case where there is greater intertwining of the factual matrices – these two people were in an intimate relationship for a period of time, they were parties to a friendship, they were in a relationship of employer and employee and then, subsequently, they were in a relationship of principal and contractor: all of their interactions occurred within the context of these various relationships.
The claims by E Pty Ltd
[38] See, for example Fencott v Muller (1983) 152 CLR 570 at 608.
The loan account
I accept that E Pty Ltd permitted some employees to put personal expenses on the company credit cards and that these personal expenses, and others paid by the company on an employee’s behalf (such as for house manual), were managed using the creation of a loan account in the name of the employee.
It was first alleged that Ms Shelby owed E Pty Ltd the sum of $74,489.14 because of personal expenses it had paid on her behalf between 28 July 2013 and 23 May 2018. This was the position when Ms Shelby was cross-examined. Her evidence included that: she did not admit that she owed any money at all; in any event, she thought that the amount was about $23,000, rather than the sum initially claimed by E Pty Ltd. Ms Shelby’s asserted “admission” needs, it seems to me, to be seen in the context that, when she was cross-examined, it had not then been conceded by Mr Rylan (as it subsequently was) that the amount of $57,000 needed to be deduced from the $74,489.14 initially sought so as to prevent double counting of the loan made to her to assist her purchase of the F Street property. The deduction of $57,000 from the $74,489.14 originally sought results in the figure of $17,489.14.
I do not accept Ms Shelby’s evidence to the effect that she had not known that she was required to repay the company the money she spent on personal expenses using her E Pty Ltd credit card or the funds it had spent on meeting her personal expenses. Whilst Ms Shelby initially asserted that she had first learned about the existence of the loan account in her name in about January 2015, she later accepted that she had emailed Mr Rylan in November 2014 with a request that he send her the loan account register and that, from about 2015, she had been given a monthly update (via a spreadsheet or some other means) of the “status” – which I infer meant the “balance” – of her loan account. Given this, I do not accept Ms Shelby’s evidence to the effect that she had never been given particulars relating to the expenses recorded in her loan account; I do not accept any assertion she made that she had very rarely seen or been told anything about what was owing on the loan account. I accept Mr Rylan’s evidence to the effect that Ms Shelby had sometimes asked for a copy of the loan account ledger and that she would have been given this at those times.
Ms Shelby’s evidence when cross-examined included that, as soon as she “found out” about the loan account, she went through it, advised Ms CC (the then accounts manager) of errors she asserted and provided her with some assistance about how to be more accurate in the creation of the account. Given this and her clear willingness to act in about late 2014/early 2015 to seek the rectification of what she regarded as errors in the calculation of the amount recorded in her loan account, I think it highly unlikely that she subsequently failed to keep herself abreast of the same thereafter. I also note that, during an email exchange in late August/early September 2018[39] Ms Shelby said, when referring to a document outlining transactions as at 30 June 2018, that “when you take off the manual & lawn maintenances entries there is $23k remaining”. I accept that Ms Shelby also asserted in her 7 September 2018 email that most of the entries relating to that amount had nothing to do with her because, in essence, they were, in fact Mr Rylan’s expenses and that whatever small amount related to her own personal expenses arose “due to a verbal agreement we had in place as a couple”.
[39] Exhibit 12.

I do not accept that there was ever a verbal agreement between Ms Shelby and Mr Rylan to the effect that she would not be required to repay money spent by the company on meeting her personal expenses. Similarly, I do not accept her contentions that: Mr Rylan had gifted her the items or services which were paid for by the company in the various amounts which, when combined, constitute the total of her loan account; or, alternatively, that she was, in essence, allowed to spend the amounts that she did on items or services, without the necessity of having to repay such amounts, because this represented additional payments which supplemented her salary or, when relevant, her consulting fees.
I accept Mr Rylan’s evidence to the effect that, whilst entries in Ms Shelby’s loan account ledger[40] read “[Mr Rylan] and [Ms Shelby] units, cleaning”, Ms Shelby’s loan account was not debited with the cost of cleaning his home, but only her own – that is, the $60 (or whatever other amount) shown represented only the cost of cleaning Ms Shelby’s house and not the cost of cleaning his house also.
[40] Affidavit of Mr Rylan filed 21 January 2021, Annexure “D”.
I consider the evidence given by Ms K (who, when she was the business finance manager, oversaw all aspects of business finance, including managing employee loan accounts) to support Mr Rylan’s evidence in this respect. Ms K’s evidence included her explanation that the entries in the ledger had been made in the terms of “cleaning [Mr Rylan] and [Ms Shelby] units” because this was how the invoice provided by the cleaner had read; she said, and I accept, that the amounts recorded on the invoices had been applied to each of Ms Shelby and Mr Rylan’s loan accounts and that the amount for Mr Rylan’s cleaning had not been included in Ms Shelby’s loan account. I accept her evidence to the effect that, whilst the description in the general ledger report would have come from the main description on the invoice provided by the cleaner, the costs shown on the invoice would not have been apportioned to the wrong person and, instead, would have been apportioned according to hours itemised on the invoice itself.
I accept Ms K’s evidence to the effect that: the content of the document recording Ms Shelby’s loan account details[41] was not produced from documents provided by Mr Rylan but, rather, was created using invoices sent in to the company; the dates shown in the loan account came from various invoices over time; the data recorded in the loan account ledger had been entered by her at times, as well as by other members of staff (some of whom remained as employees and some of whom had ceased working for the business); whilst she was not involved in the “creation” or “preparation” (via data entry of those details recorded on invoices) of Ms Shelby’s loan account prior to 2015 (because she was not then working in the business), she had been involved with it when she started to work as a bookkeeper, although she had not been responsible for entering the details of every invoice because this task was done by way of team effort.
[41] Affidavit of Mr Rylan filed 21 January 2021, Annexure “D”.
Despite the valiant efforts made by Mr Hodgson on Ms Shelby’s behalf, I am satisfied to the requisite standard that Ms Shelby is indebted to the company. Because I have accepted the evidence given by Mr Rylan and Ms K about the manner in which the entries in Ms Shelby’s loan account ledger were compiled, I decline to accept Mr Hodgson’s submission that any entries there that remained unverified by invoices should be removed from Ms Shelby’s asserted indebtedness.
Despite the fact that only a very limited number of invoices were provided to substantiate the existence of Ms Shelby’s debt and that the entries made in the ledger relied on to establish the existence of the same were made by various people who were not called to give evidence about the manner in which they entered the data (so that I am required to assess the same without the benefit of such evidence), I accept the thrust of Ms K’s evidence to the effect that, despite the ledger referring to matters such as cleaning for both Mr Rylan and Ms Shelby, the individual cost of the services was apportioned to the loan accounts maintained for each of Mr Rylan and Ms Shelby.
However, given Mr Rylan’s acceptance of the suggestion that that there appeared to be a number of anomalies in the loan account entries, where Ms Shelby’s account was debited for matters that referred only to him (which he agreed appeared wrong), I intend to deduct the amounts of such entered from the amount it is claimed that Ms Shelby should be ordered to repay.
Having deducted the $57,000 (as agreed) and $60 (referred to as relating to cleaning on G Street: 20 February 2017) and $180 (the total referred to as “[Mr Rylan] clean” on 19 December 2016 and 10 January 2017), $562.20 ( referred to as “[Mr Rylan] MasterCard”: 28 February 2016) and $1,136.34 (referred to as “[Mr Rylan] MasterCard”: 28 February 2015) from the $74,489.14 shown in the loan account ledger, I arrive at the amount of $15,550.60. I am satisfied to the requisite standard that Ms Shelby is indebted to the company in this amount.
The stoneware
Mr Rylan’s evidence included that the business had bought a number of pieces of stoneware in 2014 and that the same were sent to Australia over a two year period, such that the last shipment arrived in 2016. He said that, as there was insufficient space at the business premises to store these items, they were stored at G Street, the F Street property and at other locations. Ms Shelby’s evidence included that the issue of Mr Rylan or his entities paying for the items to be stored at her property had not been discussed; whilst she initially said they had never discussed where the items would be stored, Ms Shelby also said that there had been a decision made that the items could be stored at her house and that there had not been any talk about any cost associated with this storage. She accepted that, after the items had been stored at her property for about six years, she unilaterally decided that she would impose a charge for their storage there.
Mr Rylan said that, when Ms Shelby was asked shortly after she had commenced these proceedings to return the items stored at her home, she told him, in effect, that he was “not going to get a fucking thing” until the family law proceedings were completed. Given Ms Shelby’s approach to the sale of the F Street property, it seems highly likely that such a comment was made.
I accept that an email sent to Ms Shelby on 27 January 2018 raised that the items imported from Southeast Asia that were stored at her home would need to be collected; I accept her reply to this suggestion was “of course”. Despite this, her case at trial was that some of these items had been gifted to her by Mr Rylan and that some were the subject of a joint venture between them. She later said, when cross-examined, that the purchase of the items in Southeast Asia had “always been” a joint venture, despite there being no mention of this contention in earlier affidavits she had sworn.
Whilst Ms Shelby attempted to explain her January 2018 agreement to the collection of the items as having been provided on the basis that she had simply been trying to comply with Mr Rylan’s request so as to keep the peace between them and soften the situation because she knew him well, I reject that suggestion; I think it completely improbable that, if in fact she had been gifted some items and in fact there had been a joint venture about others, Ms Shelby would have failed to assert this immediately upon receiving the demand that she make the same available for collection. I also note that, whilst she said in an affidavit sworn on 16 October 2019, that some of the items had been gifted to her, there is no mention in this affidavit of the existence of an alleged joint venture in respect of the items.
Furthermore, when cross-examined, Ms Shelby agreed that she had no financial interest in the items other than what Mr Rylan might gift her. That she did so seems to me to be contrary to the assertion that some of the items were the subject of some sort of joint venture between her and Mr Rylan. Further, whilst Ms Shelby said that the asserted joint venture was “supposed to be under the [V Pty Ltd] entity , she agreed that this entity never traded and that it never even opened a bank account in its own name; she also agreed that she had not given evidence in her affidavits that her purchase of the items in Southeast Asia had anything to do with V Pty Ltd.
I am simply unpersuaded that Mr Rylan gifted some stoneware to Ms Shelby; I am also unpersuaded by the assertion that she has an interest in any such items by virtue of a joint venture – because I am not persuaded that there is a joint venture between Ms Shelby and Mr Rylan about such property.
I accept that, by correspondence dated 25 August 2020, Ms Shelby informed Mr Rylan that she had sold six of the items for $2,000. I accept that the correspondence also asserted that the quantity of items had taken up significant space, that she was unable to continue to store the items at her property at no cost and so had relocated them to a property situated at an address that was provided. I consider it much more likely than not that Ms Shelby had been required to arrange the relocation of the items because she had, without Mr Rylan’s knowledge, sold the F Street property.
Given the findings expressed above, orders will be made for Ms Shelby to pay the $2,000 she obtained from the sale of some of the items; she will also be ordered to make the remaining items of stoneware available for collection.
The claims by the Trust
As noted earlier, it is uncontentious that Ms Shelby received $57,000 from the Trust, which money she used in her purchase of the F Street property. The total quantum of the claim is $116,625, which comprises repayment of the $57,000 provided and the payment of $59,625 (being 13.25 per cent of the nett capital gain derived from the sale of the property).
Ms Shelby’s liability to pay the amounts sought is asserted to arise from the terms of a Loan Agreement, dated 1 June 2007,[42] entered into between C Pty Ltd as Trustee for the C Trust and Ms Shelby.
[42] Affidavit of Mr Rylan filed 5 April 2019, Annexure “J”.
I accept that the $57,000 was provided to Ms Shelby before the loan agreement was signed and that the same was backdated. I accept Mr Rylan’s evidence to the effect that, at the time he caused these funds to be provided to her, his level of trust was such that he did not consider that there was any need for a formal agreement about the money. I accept that Ms Shelby subsequently freely and voluntarily signed the loan agreement in the terms in which it was drawn.
I have already expressed some of my findings about Ms Shelby’s purchase of the F Street property. I accept that, when she sold the property, she received $552,761 (of which $200,000 was deposited into her solicitors’ trust account).
I do not accept Ms Shelby’s contention that the $57,000 provided to her to assist her in her purchase of the F Street property was a gift. Had it been, it seems to me that there would have been no need for a loan agreement to have been executed. I reject the evidence Ms Shelby gave in her attempt to explain the anomaly between her assertion that the $57,000 had been gifted to her and the existence of the loan agreement.
I do not accept that the $57,000 was gifted to Ms Shelby in recognition of her past efforts in the business or because she had made past salary sacrifices in the course of her employment or to compensate her in any way for her efforts in the same. I accept Mr Rylan’s evidence to the effect that at the time the $57,000 was provided to Ms Shelby, it had been hoped that, in future years, she may have been able to use bonuses or incentive payments she received to repay the loan over time; I accept his evidence to the effect that when, on occasion over the years, Ms Shelby angrily told him that he had said that she would never have to repay the loan, he had told her that she did not have to repay it “now” (being at the time of the conversations) and that he hoped that bonuses paid to her in the future would reduce the loan.
I do not accept that Mr Rylan told Ms Shelby that the $57,000 did not have to be paid back because of past salary sacrifices she had already made in the course of her employment and/or because of the increased growth and revenue she had generated in the business. I do not accept that Mr Rylan told Ms Shelby that the $57,000 did not have to be repaid because of past bonuses she had accrued. I do not accept that Mr Rylan ever told Ms Shelby that she did not have to repay the $57,000 which I consider was loaned to her; I do not accept that he ever told her that she did not have to give the money back to him.
I do not accept Ms Shelby’s evidence to the effect that Mr Rylan subsequently waived, forgave or abandoned the requirement that she repay the $57,000 provided to her or in any way absolved her from the requirement, pursuant to the “joint-venture agreement” clause of the loan agreement, that she account to him for 13.25 per cent of any nett capital gain derived from the sale of the property acquired using the funds provided (here, the F Street property).
Whatever communications occurred between these two people (including, for example, the bizarre offer by Mr Rylan that he would forgive Ms Shelby’s $57,000 loan if she helped him fill in the paperwork for an insurance claim associated with him having suffered an injury – an offer made, in essence, as a “test” for Ms Shelby and one which she did not take up), I am simply unpersuaded that Mr Rylan ever waived the requirement or right accorded under the loan agreement for the repayment by Ms Shelby of the $57,000.
I consider that the closest Mr Rylan came to releasing Ms Shelby from her obligation to repay the $57,000 was when he offered to use money he received from the insurance claim to repay her loan. However, after Ms Shelby responded that, in effect, Mr Rylan could forgive her loan (an assertion which clearly contradicts her other assertions that the funds had been gifted to her) and it did not need to be repaid – a response which I regard as a rejection of his offer – nothing further occurred. I am not persuaded that any suggestion that Mr Rylan would release his financial holding over the F Street property amounted to him forgiving the loan or waiving the right to enforce the repayment of the same,
Despite Ms Hodgson’s further valiant efforts to persuade that I should conclude, from the fact that the $57,000 loan did not appear in the financial statements until 2017, that Mr Rylan had waived Ms Shelby’s obligation to repay the same, I accept Mr J’s evidence to the effect that the asset was not recorded because he had not been told about the existence of the loan agreement and that, once provided with a copy of the same, he rectified the accounts to reflect the existence of the asset it represents. I accept that the reason the loan appeared to “spring” into existence when it was first entered into the financial statements (despite it having been in existence since 2007 – as evidenced by the loan agreement) was simply this. Whilst it may well have been that these proceedings, in a sense, resulted in Mr J being made aware of the existence of the loan, established by the terms of the loan agreement, I am not persuaded that there is anything sinister in what occurred – rather, I think the proceedings likely caused Mr Rylan to review a number of matters which had previously not received the attention they required.
I am not persuaded that Mr Rylan’s forbearance in seeking that Ms Shelby repay the $57,000 (and any other funds which may have been payable pursuant to the terms of the loan agreement) in June 2017, when repayment was required by the terms of the loan agreement, amounts to him waiving the requirement that she repay the same or that he absolved her from the requirement to otherwise abide the terms of the agreement. Whilst I accept his evidence to the effect that he had not taken any action to enforce the terms of the loan agreement out of respect for the amount of effort Ms Shelby had put into E Pty Ltd when she was employed there, it would, I think, be naïve to forget the incident which had occurred in Southeast Asia in May 2017 or to ignore the likely impact of the same on Mr Rylan’s approach to requiring Ms Shelby to comply strictly with the terms of the loan agreement.
I do not accept that Ms Shelby has no obligation to pay the amount calculated as being 13.5 per cent of the capital gain she achieved when she sold the F Street property without notice to Mr Rylan in about June 2018. I consider the fact that the loan agreement was signed after the $57,000 was provided to Ms Shelby to make no difference: she freely and voluntarily entered into the loan agreement and its terms clearly require the payment by her of 13.25 per cent of any net capital gain derived from the sale of the F Street property.

I certify that the preceding two hundred and thirty-one (231) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan.
Associate:
Dated: 29 April 2022

File number(s):	LEC 701 of 2018
Judgment of:	HOGAN J
Date of judgment:	29 April 2022
Catchwords:	FAMILY LAW – 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 – Where the Respondent seeks a declaration that a de facto relationship never existed between the parties – Where the Court finds no de facto relationship ever existed between the parties – Application of the Applicant dismissed and declaration made as sought by the Respondent
Legislation:	Family Law Act 1975 (Cth) Federal Circuit and Family Court of Australia Act 2021 (Cth)
Cases cited:	Fencott v Muller (1983) 152 CLR 570 Herford & Berke (No. 2) (2019) FLC 93-919 Jonah & White (2012) FLC 93-522 Lynam v Director-General of Social Security (1983) 52 ALR 128 Nevins & Urwin (No 3) [2022] FedCFamC1F 201 Ricci v Jones [2011] FamCAFC 222 Sinclair & Whittaker (2013) FLC 93-551
Division:	Division 1 First Instance
Number of paragraphs:	231
Date of hearing:	15, 16, 17 and 18 February 2021; 5, 6 and 7 May 2021; 6 July 2021; 3 and 16 September 2021
Place:	Brisbane
Counsel for the Applicant:	Mr Hodgson
Solicitor for the Applicant:	Tyndall & Co. Lawyers
Counsel for the Respondent:	Mr Priestley
Solicitor for the Respondent:	Family Law Solutions
Counsel for the First and Second Interveners:	Mr Priestley
Solicitor for the First and Second Interveners:	Family Law Solutions

LEC 701 of 2018
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS SHELBY Applicant
AND:	MR RYLAN Respondent
E PTY LTD First Intervener C PTY LTD Second Intervener

ORDER MADE BY:	HOGAN J
DATE OF ORDER:	29 APRIL 2022