Shared property gambled away may need to be repaid

An issue may arise as to a particular person’s conduct either during the marriage or after separation that disposes of matrimonial property. The Family Court is a Court of Equity i.e they will not permit a party to take an unfair advantage because of unilateral action for their own benefit without bringing these funds to account. This concept is often called “wastage”.

In determining whether or not a certain expenditure or disposal of asset is classified as “wastage” and attributed wholly to a particular party the Court considers the following questions (insert A/B and G/B criteria).

Examples - The most common example alleged to constitute “waste” in the context of Family Law property resolutions is gambling. Gambling in its own right is not necessarily wastage.  It has been accepted by the Courts that for some, this is a form of entertainment and it is a question of degree to be assessed in every case on its own circumstances.

The Court has also found conduct which reckless, negligent or wanton and reduced or minimised the value of the assets should also be held to account.

If a finding has been made that quantifies a “wastage” amount, these figures will be “added back” into a notional pool of assets for consideration of division.

Comment from Mark Streeter Sydney Lawyer

One of the difficulties in preparing the case in wastage is it the innocent party’s “onus” at least at the first stage to prove on the balance of probabilities, that the other party has “wasted assets”. 

This investigation, may involve quazi fraud investigation and detailed examination of betting accounts, electronic records, and may include the “reconstruction” of financial accounts.  Accordingly the process is time-consuming and if it requires forensic accounting to verify the waste the investigation process will be be expensive to present this evidence in a form that is admissible before the Court.