Dispute Resolution
Property Adjustments

It is very important to obtain advice from an experienced practitioner when determining whether you should commence or continue legal proceedings.

A recent important case of Cosola & Moretto (not the actual names) which we conducted has some telling lessons for clients.

In the case of Cosola & Moretto [2023] FedCFamC1A 61 the Court considered a property adjustment application by a de facto wife who moved into the de facto husband’s property and leased her property. While the parties were found to have established jointly a company in which both the husband and wife worked and shared expenses, including works on the de facto husband’s home, it found that as there was not an intention to share a financial future with, for example, mirror wills there was no intention to “intermingle” their finances. In this case, it was determinative that the wife had used her home to raise finances to assist her son with various loans throughout the de facto relationship without the knowledge of the de facto husband. The Court determined that this conduct demonstrated the intention of specifically not intermingling the financial resources of the parties.

This matter was challenged on appeal, however, the Full Court on appeal dismissed the appeal from Schonell J’s dismissal of her application for a property adjustment. The court cited Stanford [2012] HCA 52 and said that there is a need to identify the existing legal and equitable interests of the parties and any alteration of those interests must involve a principled application of judicial discretion.

Accordingly, in such a case proper advice to the client would have included that there was a risk that the client would not receive an alteration of property interests having regard to the provisions of s79 of the Family Law Act and Cases including Stanford. If such advice is provided by a competent lawyer to a client it is critical that this is carefully considered as one of the possible outcomes of the proceedings and to weigh that up in considering offers made during the proceedings as there is no automatic right to an adjustment and even in a long relationship such as that in Moreto where the parties had a joint financial venture the Court has discretion as to whether to adjust the property interests of the parties. Accordingly, to ignore an advice that there may be no adjustment in considering any offers made (or making offers) is ill advised.

In our practice, we always provide comprehensive advice to clients in each case, including the range of outcomes of the worst and best case if the matter were to be determined by a Judge. Generally, we are extremely accurate. This estimate may change as the proceedings evolve and there is evidence available which may change our initial advice and we update the advice. It is critical to have this advice as otherwise, a client can not properly determine the “Price” of a settlement and the range in which to settle the proceedings. Of course, all clients can take risks. The role of a lawyer is to advise as to the risks and benefits of offers made and other conduct in the legal proceedings.

The case of Moreto is also a caution to lawyers to be careful in being “real” in telling clients the good and the bad as to prospects including that the Court does not have to exercise discretion to alter property interests, even in a long marriage. While it may be unlikely that a Court in a case will not alter the interests there is an inherent risk identified in Moreto and Stanford which cant be readily ignored as simply “unlikely”

The bottom line is to make sure you get advice from an experienced Family Lawyer and get it in writing.