Wastage occurs where one party deliberately reduces the value or worth of assets, or where they have acted negligently, recklessly or wantonly with the assets.
Examples include gambling, alcoholism, selling assets below market price, spending money excessively and the like.
The issue is then whether the court can “add back” the value of assets that was wasted.
In the past, the court was prepared to “add back” the value of assets wasted, spent or distributed prematurely. This was achieved by adding back the value of that asset to the net pool as if it was still existing.
However in recent cases, the court has been less likely to add back the value of assets that have been wasted, spent or sold prematurely. This is because the asset is no longer owned by either parties. It is no longer in existence and property settlements should only deal with the parties’ existing legal and equitable interests in property.
Having said that, add backs are still permitted in some circumstances. The court has discretion to allow add backs, however they are considered the exception rather than the rule.
An example is legal fee paid with joint funds, may still be added back to the property pool.
Recently, the approach taken by the courts has been to take into account the wastage or premature distribution when deciding what adjustments ought to be made. The result is likely to be a greater adjustment of the existing property in favour of the non-wasting party.
“I wish to thank you for all your efforts on our behalf. Simply thanking you doesn’t cover the difference your help has made, not only to our lives, but importantly to the long term prospects for [name of child removed].
The work you have put in and, I believe, the emotion you invested, goes way beyond the solicitor-client contract. We are enormously grateful.”
[Name of grandparents in Brisbane removed, 19 June 2020]
This case involved both family law and domestic violence.
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Your dedication to clients and the hard work you’ve done for me almost daily has not gone unnoticed and will never be forgotten.
This went on for me for a long time and thank you for all the hours and work you put in to win this for me and [name of child removed].
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[Mother/Wife in Brisbane, June 2020]