It’s not about the vibe, stupid.

Many people would consider the case of Cosola & Moretto to be unjust and many people  would consider it to be just. 

This recent case illustrates the dangers of assuming that in all cases a property claim can be  made simply because you live with someone for a long time. It also highlights the fact that  any claim must be based on law and not the “vibe”.  

The parties were in a 15-year de facto relationship. There were no children to the  relationship, although each party had children from earlier relationships. For simplicity we will  refer to the parties as “Husband” and “Wife”. 

At the start of the relationship the Wife had a property worth approximately $335,000 and the  Husband had a property worth approximately $1,000,000 (subject to debt). The Wife moved  in with the Husband and he continued to pay all outgoings for his property. The Wife retained  the other property.  

The Wife initially rented her property and kept the rent then allowed her son to live in it,  essentially rent free. From time to time she borrowed money against her house in order to  provide sums to her son. These were repaid to her.  

Throughout the relationship the Husband received income as a subcontractor through a  company in which the parties were joint shareholders. The Wife worked from time to time in  the company and otherwise worked in retail. The parties shared the housework. They kept  their finances separate without any joint bank accounts or jointly owned assets. They didn’t  jointly plan their future finances. They dealt with their own assets as they saw fit.  

At the time of the final hearing the Wife’s house had increased in value to $900,000 and the  Husband’s to $3,400,000. There were a number of other smaller assets. The Wife had more  superannuation.  

Initially the Wife sought in excess of 50% but at the hearing sought that the assets be divided  50/50. The Husband argued that there should be no Orders made and that he would simply  keep his house of greater value and the Wife keep her house even though this was a 15 year  de facto relationship.  

Guess what? The trial Judge, and the Full Court on appeal, agreed with him.  

The Full Court confirmed the approach to be taken as set out in the Family Law Act and  confirmed by the High Court as follows:  

1. Before applying the factors relevant to the division or adjustment of property the Court  must establish whether it is “just and equitable” to make any Order or adjustment. 
2. Once it is established that an Order or adjustment should be made, that adjustment  should be made according to a number of factors as set out in the Family Law Act, including factors of contribution and needs. 
3. The Court may review the factors set out in 2) when making the threshold decision in  1). In this case the trial Judge did so. He decided that no Order should be made.

The outcome in this case is a surprising one, and possibly is a new direction in such cases. Even the Husband and his solicitors considered a different result as an offer was made to the  Wife during the proceedings that the Husband pay her $350,000.  

It should be noted that the outcome of this case would apply equally to a married couple or a  same sex couple.  

As she was wholly unsuccessful and as the Husband had made a reasonable offer, the Wife  was ordered to pay a substantial amount of his costs. This will be the subject of another  paper.  

There are a number of other quirks in the case including the fact that in a sense the Court did  have to make an Order namely that the Wife transfer a motor vehicle to the Husband. The  Court indicated that the Wife held that vehicle on trust for the Husband.  

The case also gives guidance on the issue of valuations and when a second valuer can be  added to a case. That will also be the subject of another paper.  

In summary, this case highlights the following:  

1. Any claim in the Federal Circuit and Family Court of Australia needs to be based on law.
2. Simply living with someone for a long time is not enough to make a claim on their  assets. Issues of contribution and the way the parties conducted their lives matter.  
3. It is probably unlikely that this result would have occurred if there were children to this  relationship. 
4. Every case is determined on its own facts. 
5. Care must be taken when making any property claim. Experts such as Freeman  Family Law should be consulted to ensure that any claim ‘’hits the mark’’ and that  each case is argued cogently and well. Likewise, Freeman Family Law can provide  the expertise to defend against any unrealistic or inequitable claim.  
6. Great care needs to be taken when making and assessing offers of settlement.