In Australian family law, wastage refers to the intentional, reckless, or negligent dissipation of matrimonial or de facto property by one party, resulting in a reduction of the overall property pool available for division. It encompasses conduct that unfairly diminishes the value of shared assets.
Following amendments to the Family Law Act 1975 (Cth), wastage is now addressed under sections 79(4) and 79(5) when determining contributions and current and future financial circumstances.
Types of Wastage
Wastage is not confined to one type of behaviour. The Courts have recognised several recurring categories, including intentional dissipation, reckless or negligent conduct, and gambling or risky financial behaviour.
Intentional Dissipation
Intentional dissipation arises where a party deliberately reduces the value of matrimonial assets, often motivated by vindictiveness or self-interest. Examples include transferring property to relatives for nominal consideration, draining joint accounts, or deliberately incurring excessive personal debts.
A leading case is In the Marriage of Kowaliw (1981) FLC 91-092, where the Full Court held that financial loss incurred through “wanton, reckless or negligent conduct” may justify an adjustment. The husband in Kowaliw allowed a prospective purchaser to live rent-free in the matrimonial home, resulting in significant financial loss. The Court held that the loss was attributable to his reckless conduct and should not be shared equally. Although still relevant to the definition of wasteful conduct, the remedial ‘add-back’ approach, which was implemented in this case, has been overtaken by recent reform and case law.
Reckless or Negligent Conduct
This form of wastage captures conduct that, while not intentional, demonstrates a lack of reasonable care for the preservation of matrimonial assets. Parties have a continuing obligation to responsibly maintain and protect shared property.
In Bennouna & Radnell [2023] FedCFamC1F 220, the Court found that the respondent’s reckless and wanton use of the property, including permitting it to be used as a dumping site for contaminated waste, substantially reduced the value of the asset. The Court determined that this behaviour constituted wastage and reflected negatively on the respondent’s contributions. This authority highlights that negligent or irresponsible management of property, even without a deliberate intention to cause financial harm, may justify an adjustment in favour of the other party.
Gambling and Risky Behaviour
Losses caused by gambling addictions, speculative investments, cryptocurrency trading, or risky business ventures may also constitute wastage where the behaviour is excessive, irresponsible, or contrary to the financial interests of the family. However, financial risk-taking does not automatically amount to wastage without clear evidence of recklessness.
Impact on the Property Pool and the Other Party
Recent reforms have significantly changed how wastage affects property settlements. Previously, the Court would notionally “add back” wasted assets into the property pool. However, in Shinohara & Shinohara [2025] FedCFamC1A 126, the Full Court confirmed that under the amended section 79(3)(a)(i) of the Family Law Act 1975 (Cth), only property existing at the time of trial can form part of the divisible asset pool, meaning notional add-backs are no longer permissible.
As a result, the financial impact of wastage is no longer managed by reconstructing the property pool through notional addbacks but instead becomes a relevant consideration when determining contribution and future needs adjustments under sections 79(4) and 79(5). While the Court acknowledges that financial decisions do not always produce returns, there must be a sufficient degree of intentional, reckless, or negligent conduct before an adjustment is justified. Losses such as gambling or speculative investment, which were previously addressed as notional add-backs, are now accounted for by awarding the non-wasting party a greater share of the existing assets, particularly where there is evidence of continued high-risk behaviour despite financial strain or objection from the other party. This contemporary approach ensures that a just and equitable outcome remains achievable under section 79(2), even without the use of add-backs.
Conclusion
The doctrine of wastage plays a crucial role in ensuring fairness in property settlements. Where one party’s conduct causes financial harm, whether through recklessness, negligence or intentional dissipation, the Court may intervene by adjusting contributions and future needs assessments to ensure that the other party is not unfairly impacted.
While earlier authorities provide guidance on the types of behaviour constituting wastage, the post-Shinohara framework ensures responsibility for financial misconduct is appropriately recognised through percentage adjustments of the remaining asset pool. Addressing wastage as a consideration relevant to contributions and the parties’ current and future financial circumstances streamlines the Court’s approach and removes unnecessary complexity from property settlement determinations.
How Ramsden Family Law Can Assist You
At Ramsden Family Law, we understand that financial issues arising from separation, including concerns about the misuse or dissipation of assets, can significantly affect your future security and the fairness of your property settlement. Our experienced family law team can provide clear advice on how the law responds to wastage and what options are available to ensure that irresponsible financial behaviour does not disadvantage you.
We take the time to understand the financial history of your relationship, identify any conduct that may have reduced the asset pool, and advocate for a just and equitable outcome that safeguards your financial wellbeing moving forward. You can be confident that your matter will be handled with diligence, respect and a strong focus on achieving the best possible result for you.
If you have questions about wastage or believe that assets may have been improperly dealt with before or after separation, contact Ramsden Family Law for tailored advice and guidance. We are here to support you through the process and protect your interests every step of the way.
The content of this article is intended to provide general guidance only and should not be relied upon as legal advice. You should obtain independent legal advice regarding your specific circumstances.
