AUSTRALIA Trends and Developments Contributed by: Matthew Doyle, Kate Clissold and Eleanor Lau, Lander & Rogers
property added back – primarily funds spent by each party after receiving partial property settlements, and the proceeds of two properties previously owned indi ‑ vidually by the parties. What Shinohara changes: the end of add-backs In Shinohara , the Full Court allowed the appeal against the property orders on the basis that the trial judge had denied procedural fairness by removing the agreed add-backs from the balance sheet without notifying the parties. The Court also found that the trial judge failed to consider six material factors that favoured the wife. The Full Court was then required to re-exercise dis ‑ cretion using the same evidentiary material that had been before the trial judge. In doing so, it removed the add-backs from the agreed balance sheet, find ‑ ing that the recent legislative amendments no longer permitted notional property to be included in the pool for the purposes of Section 79 of the Act. Section 79 (3) of the Act provides that: (3) in considering what order (if any) should be made under this section in property settlement proceedings, the court: (a) is to identify: (i) the existing legal and equitable rights and interests in any property of the parties to the marriage or either of them; and (ii) the existing liabilities of the parties to the marriage or either of them; and (b) is to take into account (except for the purpose of making an order with respect to the ownership of property that is a companion animal): (i) the considerations set out in subsection (4) (consid ‑ erations relating to contributions); and (ii) the considerations set out in subsection (5) (consid ‑ erations relating to current and future circumstances). [Emphasis added]
Citing the text of Section 79 (3)(a)(i) of the Act, the Full Court confirmed that only existing legal and equitable interests at the date of trial may be included. Con ‑ sequently, property that no longer exists cannot be added back and treated as property for division. The Full Court identified several subsections of Sec ‑ tion 79 (5) that may now operate to address issues previously dealt with through notional add-backs, as set out below. • Section 79 (5)(d) – Wastage: this requires the Court to consider whether a party has intentionally or recklessly wasted property or financial resources, and the impact of that conduct on the parties’ financial circumstances. • Section 79 (5)(n) – Contributions to the Other Par ‑ ty’s Current and Future Circumstances: this allows the Court to consider the extent to which each party has contributed to the other party’s property or financial resources at the time of trial. This may include interim or partial property settlements or payments made as litigation funding. • Section 79 (5)(v) – The “Catch All” Provision: for ‑ merly Section 75 (2)(o) of the Act, this broad discre ‑ tionary category can encompass circumstances previously treated as notional add-backs, such as the disposal or expenditure of property, or the use of property to pay legal fees. Consequently, the Full Court concluded the AUD592,768 that no longer existed ought to be taken into account by way of Section 79 (5) as a consid ‑ eration of the current financial circumstances of the parties.
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