When parties separate, one of the core questions in a property settlement is: what contributions did each person make? In Australian family law, contributions are not limited to who earned the income or whose name is on the title of real property. Contributions include financial contributions, non-financial contributions, and contributions as homemaker or parent. But what happens if one party’s conduct has reduced the property pool rather than improved it?
This can be a complex question and like many issues in family law disputes, the factual circumstances will substantially influence the answer to that question
The Full Court of the then Family Court of Australia considered the question as to whether a party can make a negative contribution in the matter of Antmann & Antmann [1980] FamCA 64. Evatt CJ, Bulley and Nygh JJ said at [32]: ‘[i]n our view there is no room for such a consideration in para. (a) or (b) of sec. 79(4).’
Furthermore, in Browne & Green [1999] FamCA 1483, the Full Court held that there is no requirement for a contribution to yield a positive result for the contribution to be taken into account.
So, if the assessment of a party’s contributions does not engage with actions or conduct that produces a negative result, what alternatives are available, if any, when one party’s conduct results in the diminution of the asset pool?
Whilst not the only avenues of inquiry, two alternatives include assessments of material wastage and family violence.
Material Wastage
In Field & Basson [2013] FamCAFC 32, Strickland J cited Antmann with approval before going on to say: ‘That is not to say though that conduct which amounts either to a deliberate diminution of the value of assets or to economic recklessness can never be taken into account …’.
Prior to the 2025 amendments, the best-known guidance for the issue of material wastage was the decision of Baker J in the case of Kowaliw & Kowaliw [1981] FamCA 70, in which Baker J stated that financial losses should be shared by parties except in the following circumstances:
- Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
- Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The assessment of waste requires a careful consideration on the facts. What is apparent from the cases that have followed Kowaliw is that it is vitally important to lead cogent evidence in support of your contentions, irrespective of whether you are the prosecuting party or the defending party.
By way of example, in the matter of C & C [2006] FamCA 528, the wife was diagnosed with depression in 1995 and, from May 1999, used matrimonial funds on gambling. The husband contended that losses exceeded $200,000; the wife conceded that her gambling activity resulted in losses of approximately $100,000. The trial judge accepted on the evidence that the wife was unable to control her compulsive gambling behaviour and was not satisfied that her conduct was sufficiently reckless, negligent or wanton. The Full Court dismissed the husband’s appeal.
This may be contrasted with Dyson & Eggers [2019] FamCA 511 in which the Court held the husband’s conduct to constitute waste. The Court considered the husband failed to prove his assertions that he had suffered a ‘pathological addiction’ to gambling and held that his expenditure of matrimonial funds on gambling constituted waste.
Notably, the 2025 amendments to the Family Law Act introduced a legislative requirement for wastage to be weighed and considered as part of the Current and Future Circumstances Assessment with the insertion of section 79(5)(d).
The Explanatory Memorandum to the Family Law Amendment Bill 2024 (Cth) (‘Explanatory Memorandum’) lists ‘common examples of the type of wastage that is intended to be considered’, which include:
- Where a party has allowed a third person to live in the parties’ property rent free for a year, with the intention, or reckless disregard, of depriving the other party of rental income or from living in the property themselves
- Excessive gambling, or
- Undermining the profitability of a business or investment, for example, by intentionally or recklessly undermining the goodwill of a business or damaging its reputation.
The Explanatory Memorandum goes on to say that ‘new paragraph 79(5)(d) will be considered as part of an assessment of the current and future circumstances of the parties … when appropriate, given the wastage may be better understood in terms of its impact on the financial future of the party, rather than as a negative ‘contribution’. It is not intended that this factor would displace existing case law concerning the treatment of wastage.’
Family Violence
The 2025 Family Law Act amendments introduced section 79(4)(ca), which provides that family violence will be relevant to an assessment of contributions.
The explanatory memorandum notes that the introduction of section 79(4)(ca) was introduced to consider the effect of any family violence on a party’s ability to make direct and indirect financial and non-financial contributions to the welfare of the family, but ‘not for the family law courts to punish or order compensation for family violence’.
The 2025 Family Law Act amendments also introduced section 79(5)(a), which, according to the Explanatory Memorandum, permits ‘the taking into account of the effect of any family violence, to which one party to the marriage has subjected or exposed the other party, when conducting a holistic assessment of the current and future circumstances of the parties. It is intended that the family law courts have a broad discretion to consider, where relevant, the economic impact of family violence on the current and future circumstances of the parties. For example, the family law courts could consider the cost of ongoing counselling due to family violence conduct that one of the parties to the marriage subjected the other.’
Material wastage and family violence are but two examples of ways that conduct that has a negative impact on the accretion of assets or welfare of the family can be considered in a family law property settlement in Australia.
It is important to get legal advice early following separation so that the relevant circumstances can be assessed and a strategy formulated to gather evidence needed to support your claim.
Written by
Matthew Fieldus
Family Law Solicitor
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