Better care requires sharper approach

Family dynamics are complicated at the best of times.

Throw in a second marriage/de facto relationship, some assets, a little frailty, a loss of capacity and the subsequent power imbalance, and things can become fraught.

As our population ages, we are seeing an increase in disputes involving families of elderly people who have lost capacity.

Difficult decisions need to be made around where the person will live and how they will be cared for, adding another dimension of complexity to familial relationships already ripe for dispute.

Recently, the High Court considered a dispute between an elderly couple, Ms Fairbairn and Mr Radecki, who were in a de facto relationship of 20 years with adult children from previous marriages.

The parties had agreed to keep their assets strictly separate during the relationship but lived in a house owned by Ms Fairbairn.

When Ms Fairbairn developed dementia, she moved into an aged care facility.

Mr Radecki, however, refused to sell the house to pay for her care.

As Ms Fairbairn had lost capacity, the Public Trustee launched family law property proceedings on her behalf in the Family Court, arguing that the parties had separated (and that Ms Fairbairn was therefore entitled to sell the house).

The High Court agreed separation had occurred, but not because the parties were living separately or because Ms Fairbairn had lost capacity.

Instead, they said Mr Radecki’s “parsimonious” financial support and persistent refusal to make “necessary or desirable adjustments” for Ms Fairbairn signified the breakdown of their mutual commitment to a shared life together.

The case touches upon a question many children consider when their ageing parents find new partners, namely who will (or should) pay for aged care?

It highlights the need for older Australians in de facto relationships to obtain family law advice early to secure financial arrangements for future care (and save their families the heartache and expense of litigation).

However, it leaves us with the question of whether the Family Court is really the appropriate forum for resolving issues such as these.

From a practical perspective, the court’s decision was effective in securing financial arrangements for care for an elderly mother suffering from dementia.

But to achieve that outcome, her family, partner, and the public trustee were forced to litigate the matter through the family law system up to the country’s highest court.

One also must wonder whether the decision constitutes social engineering beyond the intended purpose of the Family Court and whether it raises the spectre of the court making ‘moral’ judgements about the behaviour of individuals.

Arguably, family law is not the appropriate forum to penalise selfish behaviour in private relationships.

Family law in Australia has developed as a no-fault jurisdiction, and the way people treat each other in their relationship has been deliberately excluded from the legislative factors the court must consider when determining disputes about the existence or breakdown of a relationship.

Effectively, the approach taken by the High Court also creates uncertainty for all family law litigants, whose financial future may now hinge upon a subjective character assessment by a trial judge empowered with a very broad discretion.

It also raises broader questions such as, if someone has always been a selfish partner, at what point does that behaviour indicate the relationship has broken down?

Mr Radecki had provided some financial support to his partner, but not the level sought by the Public Trustee or her children.

Would the outcome have been different if Mr Radecki been more generous?

Unfortunately, it remains unclear as to what the threshold is for “necessary or desirable adjustments”; a highly subjective phrase that doesn’t appear in family law legislation.

Many would agree that the outcome (for Ms Fairbairn at least) was the right one.

The Family Court is a blunt instrument for dealing with what are generally very nuanced and time-sensitive issues around the provision of care and the cost of care.

As our population ages, we will need to continually ask difficult questions around who will (or should) pay for aged care.

Not just at a system level but also at a familial level, in a world where life is long, re-partnering is common and early inheritance impatience is, unfortunately, all too prevalent.

The author would like to acknowledge the significant contribution of Rachel Harkness, family lawyer, in the preparation of this article.

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.