In the recent Family Court case of Anaya & Anaya [2019] FCCA 1048, the principle in the long-established case of Kowaliw and Kowaliw was re-affirmed that:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
- Where one of the parties has embarked upon a course of conduct designed to reduce or minimize 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 minimized their value.
In Anaya, the husband argued that investment funds (including inheritance of $1,000,000) ‘lost’ by the wife should be ‘added back’ to the asset pool and treated as an advance on her property settlement. The wife argued that the losses were a matter to be taken into account generally and to have them ‘added back’ to the asset pool would likely result in hardship for her.
His Honour held that at the time the wife decided to enter into the high-risk investment she was likely to have been depressed and angry at the husband about their separation but that her decision to do so was reckless and fell within the second category of Kowaliw. The wife’s awareness was exacerbated by the timing of her decisions – after Family Court proceedings had commenced and she had legal representation.
I often have clients ask me to seek redress for losses ‘caused’ by their former partner, for example, the reduced value of their share portfolio or investment in a now worthless time-share resort. For the majority, my answer is no, that these losses were incurred in the course of the marriage but for some, however, the answer is ‘yes’, for example, money lost due to gambling.
It is important that each significant financial ‘win’ and ‘loss’ experienced during the marriage is objectively assessed in the context of its surrounding circumstances. An emotional assessment may be misguided and result in unrealistic expectations by the aggrieved client.
I am available to assist with this task – by offering an objective and realistic assessment of your client’s complex property settlements.
Please contact me at [email protected] or at 9804 7991 if you would like to discuss your client’s situation.
Or have your client contact me to arrange a free initial 15-minute telephone consultation.
