In family law property settlements, “addbacks” refer to amounts that one party asks the Court to notionally “addback” into the asset pool because money or property that previously existed has been spent or dissipated before the case is finalised.
For example, this might occur where:
- Someone has unreasonably spent substantial amounts on lifestyle expenses (including alcohol and drugs) or on gambling,
- A partner has given money or assets to family or friends after separation, or
- One party has paid legal fees from joint funds.
In the past, courts (and lawyers in out of court settlements) would sometimes treat those funds as “notional property”. In basic terms, that meant pretending they were still in the pool, so the other party was not disadvantaged. That approach has now changed.
The Shinohara Decision
On 23 July 2025, the Full Court of the Federal Circuit and Family Court of Australia (Division 1) considered a case where almost half the asset pool was made up of proposed addbacks. That is, money that had already been spent or dissipated before the trial.
Under the Family Law Amendment Act 2024 (Cth) (which came into effect as of 10 June 2025), section 79(3) of the Family Law Act 1975 (Cth) (Act) now requires the Court to identify only the existing legal and equitable interests in property at the time of assessment. The Full Court confirmed that this means:
“Only property that actually exists can be included in the pool to be divided.”
So, if money has been spent, transferred or given away, it can no longer be “added back” onto the balance sheet and into the pool for division. However, the Court made clear that the way money has been used can still matter. The judge can take that conduct into account when assessing each party’s contributions and current and future circumstances under sections 79(4) and 79(5) of the Act.
In Shinohara, the trial judge had excluded agreed addbacks without giving the parties a proper chance to argue how that should affect the outcome. The Full Court found this was unfair, set aside the orders, and adjusted the division between the parties (67.5% to the wife, 32.5% to the husband).
What this Means
- The focus is now on what still exists
Only assets that exist (bank accounts, property, vehicles, investments) can form part of the divisible pool. Once money is gone, it cannot be “recreated” by way of an artificial addback.
- Spending or dissipation still matters
If one party has used or wasted funds, the Court (and lawyers advising clients) can still recognise that behaviour by adjusting the percentage split of the remaining assets. For example, the person who depleted the funds might receive a smaller share overall.
- Good records are critical
Keeping clear evidence (such as bank statements, receipts, transfer details) can make a major difference. The Court can only take account of wastage or spending if it is properly supported by evidence.
- Early advice makes a real difference
If money has been used to pay expenses or transferred after separation, it is important to get advice early. The way those transactions are explained and documented can shape how the Court ultimately divides property.
Why Specialist Family Law Advice Helps
The end of addbacks does not mean you cannot raise issues about spending or missing funds. It just means the argument needs to be framed differently.
Lawyers at Doolan Callaghan Family Lawyers can:
- Analyse how the law applies to your circumstances,
- Trace and explain financial transactions,
- Identify whether there has been genuine expenditure or arguable waste, and
- Present your case clearly and strategically under the current law.
The Bottom Line
The Shinohara decision confirms that the Court will only divide property that still exists, but that behaviour involving the use or loss of assets can still influence the result. Getting experienced, early advice will help ensure your position is protected and your case is presented in the most effective way.
We invite you to contact Doolan Callaghan Family Lawyers for expert advice and supportive, strategic representation. Call us today on 9984 7411 or email reception@doolancallaghan.com.au to arrange a free, no-obligation 15-minute introductory call or a fixed-fee initial consultation.
