After being twice-married to the same man with both marriages subsequently dissolved, Theresa Cossio was in court claiming a share of former husband Mathew’s interests in a waterproofing business based in Avondale, Auckland.
Mathew Cossio has since remarried and now lives in Australia. He is defending claims in the New Zealand courts that his business interests are relationship property. Their first marriage, in 1979, was dissolved after three years. Married again in 1985, they separated 24 years later. In dispute, is Mathew’s interests in two companies set up by his father: J Cosio Ltd (which owns business premises on Rosebank Road, Avondale) and Permathene Ltd (a business providing geosynthetic waterproofing systems for agricultural, horticultural and construction sites).
Mathew has a 51 per cent shareholding in each company; his sister Jane the remaining 49 per cent. Mathew says he ‘inherited’ his majority shareholding from his father. The High Court was told Mathew took over the business during his second marriage to Theresa. This happened when his father sold up, planning to pursue business interests in the United States. It was not an ‘inheritance’ in the sense that his father had died and left the business to two of his children in his will.
Justice Venning ruled Mathew’s interest in J Cosio Ltd was relationship property. The default rule in the Property (Relationships) Act is that all assets acquired during marriage are relationship property. Shares in the company were ‘acquired’ when Mathew agreed to buy in, paying his father later. It did not matter what was the source of funds used for payment. Dividends subsequently paid out by the company were used to pay his father.
In contrast, shares in Permathene were gifted to Mathew. Assets received by way of gift are not relationship property. Theresa’s claim to an interest in Permathene required proof she had helped ‘sustain’ the asset. Justice Venning said a $30,000 interest free loan made from household savings providing liquidity for Permathene’s operations amounted to a direct contribution which helped ‘sustain’ the business. This contribution is relationship property, he said.
The case was referred back to the Family Court to determine values for the assets ruled to be relationship property: a majority stake in J Cosio Ltd and the economic value of a $30,000 interest free loan to Permathene Ltd.
Cossio v. Cossio – High Court (26.10.18)
18.211