This decision by the Full Court of the Federal Circuit and Family Court of Australia represents a shift in how financial proceedings are conducted under the post 10 June 2025 amendments to the Family Law Act.
The Full Court has made it clear that the era of “add backs” is over in the traditional sense. From now on, only actual, present property is available for division, and any issues with dissipation or misuse must be reframed within contribution assessments or future needs adjustments under s 79(5).
In short, add backs are very much the exception, not the rule. At that should not appear on a Balance Sheet. Under s 79(3), the Court is only empowered to identify and adjust existing, current property.
Items that might once have been treated as notional property to be restored to the property pool (for example, dissipated funds, extravagant spending, legal fees paid from joint funds) are no longer included in the balance sheet as “add backs.”
The traditional “categories” of add backs (like waste, premature distributions, unilateral expenditure) which were treated as exceptions to the general rule are no longer viewed as they were. The idea of “notionally adding back” such items to the pool has no place under the amended legislation.
Instead, the Court may now:
Each matter is different depending on the facts, however what is clear, is that this recent case represents a strict interpretation of the amendments and signals a disruption from some long-standing discretionary practices.
Contact South Coast Family Law Group today on (02) 4202 6644 or email admin@scflg.com.au for further information on how this case may affect your matter.
