We have many family law including de facto clients that ask us to recoup money that one party has spent during the marriage or de facto relationship (or after separation but before property settlement) which is no longer in existence.
One married or de facto party may have spent a lot of money on holidays and restaurant meals on a new partner.
While there may be certain circumstances where the Court may consider that accounting for “notional” assets is appropriate in family law matters , it can be a very difficult and potentially expensive exercise to convince the Court to do so.
Usually the Court deals with property which is in existence and is able to be quantified in a family law matter. However, there have been cases when the Court is not dealing with such property. This has usually been described as “notional property” but has also been described as “add-backs” or “financial resources”. Examples of this include:
– money already spent (e.g. on legal costs);
– property disposed of or used for the benefit of one party;
– property not disclosed or accounted for; or
– an expected inheritance.
Following the High Court of Australia’s decision in Stanford v Stanford (2012) FLC 93-518, the Courts have reconsidered previous principles and have been more cautious about notionally “adding back” property which is no longer in existence. Presumably, this is because it is not an existing legal or equitable interest.
For example, in Bateman & Bowe  FamCA 253 the Court adhered to the above principles in circumstances where the parties had been separated for three years and there was a dispute about how matters which had occurred post-separation should be taken into account. The Court noted that:
– Add-backs are “the exception rather than the rule”;
– Existing legal and equitable interests in property should be valued at the date of trial save in “exceptional circumstances”; and
– Parties are not expected to go into a state of suspended economic animation after separation pending the resolution of their financial arrangements.
In Bevan & Bevan (2013) FLC 93-545 the Full Court considered Stanford. In relation to add-backs and notional property the Court in Bevan was not categorical about its view, but said that notional property is unlikely to be “property”.
The Courts have also been re-applying and upholding the principles considered in Stanford and Bevan in more recent (less notable) cases, meaning the Court’s current view is likely to be that “notional” property will not be accounted for when making property settlement orders.
Family law in marriage and de facto matters is complex with concepts such as add backs which only very experienced family lawyers may know about. This blog is not legal advice but contains information that you can seek advice on from your family lawyer either before or during your family law mediation. This may save the costs of going to court.
We encourage our family law clients to mediate their family law matter with an experienced family lawyer who is also a nationally accredited mediator as their and with their family lawyer at their side.
This means clients can have ongoing legal advice on family law issues such as add backs throughout the mediation and can have their family lawyer negotiate sophisticated family law concepts such as add backs through the use of advanced family law negotiation techniques.
We provide all of our family law clients with a complimentary pre read of of their relevant information and existing documents. This can save many hours of legal work and means we know you and your family law case before we meet you.