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A recent High Court decision decided on 11 May 2022 required the High Court of Australia to consider when a de facto relationship had broken down in circumstances where one of the parties had been diagnosed with dementia and was required to be placed into an aged care facility.

It was clear the parties had commenced living together in a de facto relationship sometime in 2005/2006. They had agreed to keep their assets separate and in 2010, they had entered into a Domestic Relationship Agreement (Cohabitation Agreement) which recorded their agreement to keep their respective assets separate and quarantine them from any future claims should their relationship breakdown.

The parties lived in a home owned by the female partner who in 2015 started to suffer cognitive decline and her mental state deteriorated rapidly throughout 2016. By 2017 the parties occupied separate bedrooms.

Whilst the male partner was holidaying overseas on his own in 2017, the female partner executed a Power of Attorney in favour of her adult children. The adult children subsequently acting on that Power of Attorney had stopped her access to bank accounts.

The New South Wales Trustee and Guardian was appointed as a financial manager for the female partner in January 2018. The Trustee was of the view that the home that was owned by the female partner, and in which the male partner was still living, ought to be sold in order to fund the accommodation costs of the aged care facility for the female partner.

The male partner wanted to continue to live in the home and suggested that the accommodation costs for the female partner be funded out of her own superannuation. It was clear that the male partner was no longer abiding by the agreement that the parties would keep their assets strictly separate.

It was the male partner’s position that the relationship had not in fact broken down and that the female partner would have wanted him to continue living in her home. It was clear that the female partner’s dementia meant that her wishes and views about whether the de facto relationship was ongoing or had broken down could not be ascertained.

It was argued on behalf of the female partner that given the parties were living in separate residences that their relationship had in fact broken down as they were no longer physically living together. The High Court did not accept that argument. And found that there could be many reasons why people live in separate houses, the issue was whether they still continued to share a joint household and had a mutual commitment to a shared life together.  Separation by reasons of illness did not satisfy the High Court as evidence of the relationship having broken down. Furthermore, occupying separate bedrooms was not of itself an indication that the parties were separated, and the relationship had broken down.

The High Court found that in all the circumstances of the changes in their lives, that the male partner had not made the necessary desirable adjustments to the financial arrangements in order to care for the female partner.  The High Court found that ‘living together’ consistent with previous cases should be construed as meaning a shared life together as a couple. The High Court found that it was not the female partner’s moving to a permanent aged care facility nor her decline in her mental capacity that resulted in the relationship breaking down.

The evidence of the breakdown of the relationship was the circumstances which showed a persistent refusal on the part of the male partner to provide for her necessary and desirable adjustments in the changes in circumstances. When the male partner began to act in a way that was contrary to keeping the assets separate and preferring financial arrangements that suited his own interests, that was the point when the High Court found the relationship had broken down.