Introduction
Think 'add-backs' are still part of property settlements? Think again. For years, 'add-backs' have been the go-to tool to notionally reintroduce spent or wasted assets into the property pool. It was neat arithmetic, even though doing so was, according to the case authorities, always the exception and not the norm . However, following changes to section 79 of the Family Law Act 1975 (Cth), the era of mathematical add-backs is over.
Adding weight to these legislative changes is the court's decision in the recent case of Shinohara & Shinohara [2025] FedCFamC1A 126. The Full Court of the Federal Circuit and Family Court of Australia made it clear: you cannot notionally add back spent assets to the property pool. Instead, the courts must tackle dissipation through contribution or needs adjustments.
What are add-backs?
Historically, add-backs allowed parties to notionally reintroduce property that has been spent and no longer exists. Imagine it like phantom property added back into your property pool for fairness. This typically included:
- legal fees paid from joint funds or individual assets
- premature distributions of property
- wastage – reckless or negligent dissipation of assets.
Clients had a preference for this approach – it was tidy, math-driven and easy to understand.
What Shinohara determined
In Shinohara, the Full Court decided as follows:
- Add-backs cannot be included in the balance sheet under section 79(3)(a)(i). Only existing legal and equitable interests in property qualify.
- Instead, alleged dissipation must be considered under section 79(4) or (5) – within the court's broader discretionary powers, not in the property pool itself.
Put simply: if you spend it before the trial, it is gone from the pool. You can still argue that dissipation affected fairness – but as part of contribution or need, not as imaginary assets.
Why add-backs were always the exception – and why that matters now
Although add-backs featured on many balance sheets in the past, they were never the default. Prior Full Court decisions – like Omacini (2005) FLC 93-218 – allowed them only in limited circumstances: legal fees, premature distribution or wastage.
Clients liked add-backs because they allowed a quick mathematical 'fix' for perceived unfairness. Shinohara confirms that was always the exception, not the norm – and now, it is legally shelved.
What this means in practice
If assets are gone at the time of trial, courts will not treat them as part of the property pool. You will need to pivot your strategy.
If you suspect the other party might dissipate or dispose of assets, consider immediate steps: freezing orders, injunctions or interim property orders.
It is not enough to say the other party 'wasted X amount.' You must show how that dissipation affected contributions or future considerations. For example, what proportion of the total property pool do the dissipated funds represent and how does this affect the assets that would have otherwise been available for alteration?
Frame your argument around section 79(4) and (5) – not what is missing, but how it affects contributions and future considerations.
Final thoughts
Shinohara marks the end of the old add-back shortcut in property settlements. From now on, if an asset is gone by the time of negotiations, it is not coming back into the property pool. That does not mean wastage is irrelevant – it just means you will have to deal with it differently.
If you are in the middle of a separation, this case is a wake-up call to act early. Take steps to protect assets before they disappear, keep detailed records of where the money goes and be ready to show the court exactly how any missing assets have changed the financial picture. The focus has shifted from quick fixes to clear, evidence-based arguments – and the sooner you adapt, the better your chances of a just outcome.
Need help mapping dissipation into contributions or needs under the new framework? Please contact one of our experienced family lawyers.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.
