Millie, a homeowner in Australia, lost her house and business to her ex-partner's tax debt in a heartbreaking family court ruling. Despite not being listed on the mortgage, the court considered her responsible for her ex-partner's financial obligations due to their de facto relationship.
As she looks down at the deed to her house, sobbing and shaking, she inks her signature on the final page.It's an occasion that would normally call for celebration, but for Millie, it's a day marked with feelings of betrayal, defeat and grief. 'My house is not a commodity,' Millie says through tears. Millie's home has become collateral in a nasty family court battle initiated by her ex-de facto partner.
The court battle revealed her ex had racked up a tax debt of more than $300,000 — and her home was put on the line to pay for it. If the walls of Millie's home could talk, they would speak of a lifetime of memories. It's the place where birthdays were celebrated in the backyard, and the loss of loved ones mourned in the lounge room. It's her place of business and sole source of income. A developer bought her property at auction and she was helpless to do anything to stop it. The ABC has been following Millie's story for nearly a year as she desperately fought to keep her home. Millie had come out of a 10-year marriage, and she shared a son with her ex-husband. She said her relationship with Paul started as a friendship, and they dated casually on-and-off for several years. While they were friends, he came to her asking for her help to draft a letter to the Australian Tax Office (ATO). He'd accumulated a tax debt of over $50,000 and wanted to use Millie's computer, asking for her help to write a letter to the ATO to be put on a payment plan. She did so and thought nothing more of it — but this small act of kindness would become a ruinous error. In 2012, Millie received a devastating health diagnosis and Paul moved in. Millie said Paul assured her multiple times throughout their relationship that he had paid off his debt. She said their relationship was tumultuous and their financial situation quickly became a sticking point. 'During the first half of our relationship, I was financially supporting him — that caused a lot of tension in our relationship,' she said. Court documents show he received hundreds of thousands of dollars when he sold it, spending some of the money on overseas holidays with Millie and her son, alongside living expenses and two cars, one of which Millie used. He also put money and free labour towards building a carport at Millie's home and paid for some of her son's school fees, with his lawyers submitting he made financial contributions to the asset pool. Millie said this was in lieu of him paying rent or board for several years, adding that she paid for her and her son's half of the holidays. 'He refused and that's when he threatened to take my home and my business if I made him leave,' Millie said. Millie thought that was the end of that chapter in her life, until she was served with a family court order in 2021. Millie understood that the relationship was classified as a de facto partnership, but believed her home would be protected as she never included Paul on any of her bills, and he wasn't listed on the mortgage. During court proceedings, Millie discovered that in family law, taxation debts can be considered a joint liability, despite often being accrued in one person's name. Court proceedings revealed Paul, a sole trader, had not been filing his tax returns. Two years after Millie ended their relationship, Paul filed over a decade of returns in one hit, dating back to four years before he moved in with Millie. A nasty family court battle ensued — court documents show Paul attempted to extend the period they were considered de facto for. The court battle ended with a 'shattering' judgement. A family court judge ruled Paul's tax debt be factored into the property settlement, including the amount he incurred four years before their de facto relationship began. Millie was ordered to pay him nearly half a million dollars within 90 days, or her home would be sold in order for those funds to be distributed. The judge stated Paul was not a credible witness and had given conflicting answers during cross-examination, while Millie was declared a credible witness. Despite this, the judge determined she was aware of Paul's tax debt, or at least his reluctance to file tax returns. The letter she had helped draft years before her de facto relationship with him began was a piece of evidence that worked against her. The judge said Millie would have benefited from his non-payment of tax, because Paul would have had more income. However, the judge made a 15 per cent adjustment on the proceeds of the property pool in Millie's favour, recognising that Paul had accumulated an 'unnecessary' tax debt and made almost no attempt to reduce it. 'By assigning his debt, including fines, interest, and penalties, the courts effectively deemed it my responsibility as his de facto partner to manage not only his affairs, but also his dishonest behaviour,' she said
De Facto Relationship Tax Debt Family Law Property Settlement Court Ruling
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