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Case Summary [Sha & Cham [2017] FamCAFC 161]

Case Summary [Sha & Cham [2017] FamCAFC 161]

By LIV Family Law Section

Family Court Judgment 

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In Sha & Cham, Mr Sha appealed against Orders made by Johnston J declaring that the Family Court had jurisdiction to determine Ms Cham’s application for enforcement of a financial agreement (the agreement) made pursuant to s 90UC of the Family Law Act 1975 (Cth) (the Act). Mr Sha appealed the Orders on the basis that he and Ms Cham were not in a de facto relationship at the time they signed the agreement, and submitted that Johnston J:

  1. failed to follow the legislative pathway set out in s 4AA of the Act;
  2. provided inadequate reasons; and
  3. erred in his application of s 4AA of the Act.

Legislative Pathway & Adequacy of Reasons

The Full Court, comprised of Bryant CJ, Ainslie-Wallace and Cronin JJ, found that there was no obligation upon the Court, when considering each of the factors in s 4AA, to make a finding as to whether each factor favours or weighs against a finding as to the existence of a de facto relationship. To the contrary, it was held that such an approach was likely to lead a Judge into error and that the issue of whether a de facto relationship exists ought instead be considered holistically, taking into account all of the available evidence.

Error of Principle

The Full Court concluded that Justice Johnston’s finding that the parties, “…were living together on a genuine domestic basis albeit for only part of the time,” did not demonstrate an error in applying s 4AA of the Act. The Full Court also approved its earlier decisions in Clarence & Crisp and Jonah & White, finding that it was not necessary that the parties live together on a full-time basis for a de facto relationship to exist.

Existence of a De Facto Relationship

The Full Court found that the factual matrix supported the finding of Johnston J that the parties were in a de facto relationship at the time they executed the agreement. Relevantly, the Court found that:

  1. At the time the parties met in 2011, Mr Sha was married to a third party and Ms Cham was a masseuse. Mr Sha admitted that he entered into a sexual relationship with Ms Cham in around February or March 2012, and that he shortly thereafter began providing regular financial support to Ms Cham and discussed having a child with her.
  2. On 3 August 2012, Mr Sha and Ms Cham entered into a financial agreement pursuant to s 90UC of the Act. The agreement made provision for the division of assets, spousal maintenance and the support of any children both during their de facto relationship and in the event of separation. Mr Sha regularly visited Ms Cham but did not live with her on a full-time basis.
  3. On 7 September 2012, the parties conceived a child by way of IVF. In October 2012, Mr Sha and his wife separated and effected a property settlement. Mr Sha and Ms Cham’s relationship deteriorated after the birth of their child in mid-2013. Ms Cham signed a separation declaration on 18 November 2013 and subsequently sought to enforce the terms of the agreement.

The Court further concluded that there was no error in Justice Johnston’s finding that the fact that the agreement, in relation to which each had received independent legal advice, was made pursuant to s 90UC of the Act strongly supported a finding that the parties were in a de facto relationship at the time they executed the agreement. Importantly, the Full Court found that Johnston J (correctly) did not treat the execution of the agreement as an admission of a de facto relationship at law, but rather took into account the fact that Mr Sha, when signing the agreement, understood his obligations pursuant to the agreement and the content of the agreement, and that those matters supported a finding that a de facto relationship existed at that time.

The only error found by the Full Court was that Johnston J had made a declaration as to the total period of the de facto relationship when in fact he was only required to make a declaration as to whether or not a de facto relationship existed as at the date the agreement was executed. As the judgment of Johnston J also contained that particular finding, the Order made by Johnston J was only corrected in that respect by the Full Court.

Mr Sha was ordered to pay Ms Sham’s costs of the appeal.

18 October 2017

Summary prepared by Elizabeth Mathews (Barry.Nilsson. Lawyers) and members of the LIV’s Family Law Section Maintenance and Property Committee

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