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Case Study - Gillespe & Ngan [2023] – Existence of De Facto Relationship




Gillespe & Ngan [2023] FedCFamC1A 27 (20 March 2023) was an appeal of the primary judge’s decision to declare that no de facto relationship existed between the parties.


Background

In October 2021, the appellant, Mr Gillespe, initiated legal proceedings against the first respondent, Ms Ngan, seeking division of the property pool under the Family Law Act 1975 (Cth) ("the Act") following the alleged termination of his seven-year de facto relationship with the respondent in May 2021.


Ms Ngan denied that such a relationship had ever existed. The second respondent was Ms Ngan’s sister, who was questionably joined to the proceedings and the appeal for no apparent reason by Mr Gillespe, but did not participate in it.


At the commencement of the case, the main issues in dispute were the existence, start date, and end date of the de facto relationship, to determine if the court had jurisdiction to hear the case in the first place.


The primary judge referred to the criteria under s 4AA of the Act, ultimately concluding that no de facto relationship ever existed between the parties, as the composite picture did not involve the merging of the parties' lives despite their genuine affection and financial support.


As a result, the court lacked jurisdiction to consider the property settlement relief claim sought by Mr Gillespe, leading to its dismissal. Mr Gillespe then appealed this decision in Division 1 of the Federal Circuit and Family Court of Australia.


Appeal:

Counsel for Mr Gillespe set out three grounds of appeal, as follows:

  1. That the judge erred in determining that the appellant and first respondent did not own property together.

  2. That the judge erred in determining that the appellant and first respondent did not intermingle their finances.

  3. That the judge erred in determining that, pursuant to s 90RD of the Family Law Act 1975 (Cth), the appellant and respondent were never in a de facto relationship.


Pursuant to Ground 1, the appellant argued that the primary judge wrongly concluded the parties did not jointly own property, a relevant factor under s 4AA(2)(e) of the Act. The judge acknowledged the appellant's financial contribution to the purchase of the Suburb B property and weekly payments to the first respondent. However, the judge found that the first respondent controlled the purchase, benefited from the property as her primary residence, and the appellant received a payout from the sale proceeds that closely matched his contributions.


The appellant claimed on appeal that the parties in fact jointly owned the Suburb B property, arguing that his $40,000 deposit payment and subsequent mortgage payments of approximately $107,850 created an equitable interest in the property by way of a resulting trust.


Curiously, this argument was not presented at the initial hearing and was first raised only during the Appeal. Instead, the focus at the initial hearing was on quantifying the financial contributions made during the property's ownership. On Appeal, Justice Austin stated that the submission of equitable interest could and should have been addressed with more detailed evidence before the primary judge, allowing for cross-examination and further examination of the circumstances.


However, as the evidence showed in any event, the circumstances in which the appellant advanced money to the first respondent were clear. Ms Ngan alone managed the purchase and lived in the property, while Mr Gillespe provided funds without knowing their exact usage. When the property was sold, Ms Ngan repaid Mr Gillespe an amount approximating the money advanced, and not a proportional share of the sale price.


The primary judge did not find the appellant had an equitable interest in the Suburb B property, as it was not raised during the initial hearing. The relevant inquiry under s 4AA(2)(e) of the Act concerned the "ownership, use, and acquisition" of property. The judge accepted the appellant's evidence about payments made but did not equate that to an equitable interest.


Justice Austin agreed with the primary judge and accordingly, this ground of appeal failed.


Ground 2: Further, in relation to the second ground concerning the intermingling of parties’ finances, the appellant oddly argued that his own admission about not combining finances shouldn't be deemed significant. He claimed that since he provided loans to the respondent, most of which were repaid, it should be taken into account. The Court disagreed with this and stated that “such commercial arrangements between the parties are not easily passed off as an intermingling of their personal financial affairs. Rather, the loans and repayments wear the appearance of the parties keeping their financial affairs separate and at arms-length, which is the finding made by the primary judge.”


Furthermore, as the primary judge had observed, “the parties had never maintained a joint bank account, or owned joint property and the [appellant] had never been an additional card holder to an account operated by the first respondent, and vice versa.”


Accordingly, Justice Austin concluded that they kept their finances separate, which aligned with the primary judge's conclusion. This ground failed.


Ground 3: The appellant also argued that the finding of no de facto relationship was "plainly wrong." However, Justice Austin observed that decisions about the existence and duration of de facto relationships was factual, not discretionary. Therefore, the primary judge correctly acknowledged that an evaluative factual decision was required. The determination of no de facto relationship was either foreclosed by the evidence or it was not. In this case, it was not. This ground also failed.


Outcome

Accordingly, the appeal was dismissed. As the appeal was unsuccessful and the appellant did not resist the costs application due to financial circumstances, a costs order was appropriate and was fixed at $7,500.00 payable by the applicant to the first respondent.


Takeaway

De facto relationships, when they fall apart, are particularly prone and susceptible to various kinds of disputes in relation to the duration and even existence of the relationship. This is fundamentally different to a marriage where you have a clear date of marriage stated on the marriage certificate and the date of separation listed in the application for divorce.

The case of Gillespe & Ngan is a good example of the above, as the outcome would have been vastly different had the parties been married.


At Surge Legal we deal with all kinds of family law disputes involving de facto couples and are able to advise you as to your legal entitlements in the event of separation and your prospects of success in general relating to any family law claims.


You should never assume that you are living in a de facto relationship and should seek independent legal advice if you suspect foul play from your partner. Particular warning signs to watch out for are:

  • your partner refusing to take pictures with you or does not show affection to you in the photographs;

  • refusing to have joint accounts;

  • avoiding putting your name on any bills or documentation;

  • not inviting you to social events and avoiding seeing members of your family; and

  • last but not least, avoiding any talk in relation to a possible engagement or marriage!


And remember, if all fails and you are left with no option but to separate, seek legal advice! As the saying goes, divorce can be messy, but Surge Legal's your broom, sweeping away heartache, so a new life can bloom! Well technically, it is not a saying yet, but it is our mantra! Call us now on 02 8722 5021 for a free consultation.


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