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In the reported case of Omacini & Omacini (2005) 191 FLR 317, the Full Court identified three (3) areas which may warrant an add-back to the property pool, being as follows:1
- One parties expenditure on legal fees;
- Premature distribution of funds;
- Wastage of one party.
Kowaliw – Wastage
In respect to wastage, the reported case of Kowaliw & Kowaliw (1981) FLC 91-092, the Husband incurred a number of financial losses after he allowed a third party to live in the former family home rent free and without being required to pay for the outgoings associated with his tenancy. The third party did not proceed to purchase the property and in effect, the parties incurred a number of financial losses, including arrears in outgoings and an increase in the mortgage.
The Court held financial losses incurred by parties or either of them during the course of the marriage should be shared by them (although not equally) save for when one party has:
- Embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
- Acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced their value.
The court found that the Husband’s conduct as “reckless” and held that the losses were to be borne solely by him.
Stanford:
However, in the High Court decision of Stanford & Stanford [2012] HCA 52, the court held that it only has the jurisdiction to deal with legal and equitable interests in existence at the time of the hearing or when the Court is dealing with the interest and therefore, the Court has no power to act as if the assets or interests still exist.2 Therefore, rather than the Court “adding-back” assets to the pool subject to division, the court has regard for such matters pursuant to section75(2)(o) of the Family Law Act 1975 (Cth) which states:
“the matters to be taken into account are any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.”
Vass:
In a further reported case of Vass & Vass [2015] FamCAFC 51 the Full Court held:
“There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been
dissipated by the parties.We reject any suggestion that the decision…of the High Court in Stanford … is authority for any necessary contrary solution.”
Applying the above principle, the concept of add-backs was maintained.
Add-back; or a matter to be taken into account by the Judge presiding?
So, what does this all mean? In essence, “add-backs” are “the exception not the rule”3 and are determined on a case by case basis by the Judge presiding over the matter. Therefore, it is important that you seek legal advice with respect to your personal, unique circumstances from a legal professional.
At Caroline Counsel Family Lawyers, we work with experts to help you make the right
The information in this blog does not constitute legal advice and cannot be relied upon by you. If you require advice specific to your situation you must contact Caroline Counsel Family Lawyers. The contents of this blog are relevant as at #### December 2020. We recommend you obtain specific advice relevant to you and your family’s situation.
Natasha Rohrig
Lawyer | Caroline Counsel Family Lawyers
