Addbacks in Property Settlements: Shinohara v Shinohara [2025] FedCFamC1A 126

The Full Court of the Federal Circuit and Family Court of Australia recently confirmed in Shinohara v Shinohara [2025] FedCFamC1A 126 that 'addbacks' are to no longer form part of the balance sheet in property proceedings. This results from the Family Law Amendment Act 2024, which came into effect in June 2025.

Previously, Courts could notionally “add back” assets that no longer existed at the time of a hearing, for example, money that has been wasted or spent by one party on legal fees. Even though the asset no longer existed, its value could still be included in the asset pool for division.

The Court has now confirmed that only existing property at the time of trial is to be included in the balance sheet for division. Williams, Altobelli and Campton JJ state at [121] “The text of s 79(3)(a)(i) is clear. Only the existing property of the parties is to be identified, and only that existing property is to be divided or adjusted.”

Notwithstanding the above, the principles underpinning the existence of addbacks have not been disregarded entirely. Williams, Altobelli and Campton JJ continue at [125]: “s79 now directs that the categories identified in Omacini pre-amendment that were notionally added back are to be considered in ensuring a just and equitable outcome, either by way of historical contributions, or by way of their relationship to and impact upon the current and future circumstances at the s 79(5) stage.”

The Full Court further noted: “The holistic approach in assessing and determining contributions and adjustments thereto…remains applicable. Each of the considerations, by either s 79(4) or s 79(5), requires engagement with the circumstances of the disposal of property, the value it achieved, and its use and application being considered and weighed to achieve the mandate of justice and equity that permeates s 79 of the Act” [126].

The conclusion reached by the Court in Shinohara suggests the approach taken to the disposal of assets in property proceedings will need to change. Parties can no longer rely on assets being notionally added back to the property pool and will instead need to seek that these matters form part of the Court’s holistic assessment of the parties’ current and future circumstances.

You may wish to seek specialist family law advice about your circumstances, particularly if you are concerned your ex-partner is reducing your combined property pool. If you would like to discuss your matter and how we can assist you, please contact us today on (02) 6225 7040 by email info@rmfamilylaw.com.au or get started now online.