Articles

 

Header Articles

Relationship Property vs Separate Property

June 2019

“the use to which the asset was being put before the relationship ended”

 

In a recent High Court decision,H had been in a de facto relationship with Wfor over 4 years. Prior to commencement of that relationship Hhad purchased a Maserati car and retained it throughout the relationship.Hclaimed the Maserati as his separate property.

 

Wclaimed that the Maserati was relationship property as a family chattel “used wholly or principally…for family purposes”. Emphasis in the legislation is to “the use to which the asset was being put before the relationship ended”. The Court found that although the Maserati was not driven daily the car was driven about 3,000 km per year (or 60 km per week). At an earlier stage in the relationship it was the only vehicle owned. In the latter stage of the relationship the parties owned another vehicle. The Court held that although the other vehicle was “the predominant family vehicle [it] did not rule the Maserati out as a family chattel. There could be two or more cars that are family chattels”.Hargued that the Maserati was essentially a “toy” “(ie in effect little or no use)”. However, the Court considered that 60 km per week use “is not negligible”. 

 

Outgoings on the Maserati were paid out of H’s income (which was relationship property) and the car was stored in the garage of the parties’ apartment (which was relationship property). The Court considered that “the assumption of joint responsibility for outgoings and storage is relevant, along with actual use, in determining whether something is principally used for family purposes”.

 

Accordingly, the Maserati was held to be relationship property. What should H have done? H should have entered into a contracting-out agreement at the beginning of the relationship stipulating that the Maserati was his separate property.