Wastage in Family Law: Gambling, Spending and Proof

When Losses Count Against a Party

A wastage claim needs evidence of the conduct that caused the loss. An investment failure or disagreement about spending does not establish the applicable test.

In Kowaliw & Kowaliw (1981) FLC 91-092, ordinary financial losses during a marriage were generally shared. The exceptions concerned conduct designed to reduce matrimonial assets, or conduct that was “recklessly, negligently or wantonly” destructive of their value. Justice Brereton’s discussion of Kowaliw and later authorities explains those exceptions.

The Family Law Amendment Act 2024 put material wastage expressly into the property framework. Section 79(5)(d) of the Family Law Act 1975 requires consideration of “material wastage, caused intentionally or recklessly”. It covers the property or financial resources of either spouse or both spouses. The historic reference to negligence in Kowaliw does not replace that statutory wording.

Before the amendments, section 79(4)(e) brought the section 75(2) matters into property settlement decisions. The amended section 79 has its own current and future circumstances factors in subsection (5). Section 75(2) remains relevant to spousal maintenance. A wastage submission under the amended property framework therefore needs the section 79(5)(d) reference.

The Attorney-General’s Department’s explanation of the property reforms sets out the transition. The amended framework applies to new proceedings and unfinished earlier proceedings, except where the final hearing had already begun at commencement. Filing before commencement alone does not preserve the former framework.

These section 79 references concern married parties under Commonwealth law. Resolve the applicable statutory framework separately for a de facto matter, including the jurisdictional position in Western Australia.

When a barrister argues financial misconduct, identify the actual allegation. Deliberate dissipation and reckless wastage reduce the property available for division. Non-disclosure conceals the financial position and can support adverse inferences or other disclosure consequences. Missing statements alone do not establish that money was wasted.

Gambling, Spending Sprees and Other Wastage

Gambling and excessive spending become wastage issues when the conduct and resulting loss meet the legal test. A merchant category alone does not establish intentional or reckless depletion.

Common allegations concern repeated betting deposits, casino gambling, gifts or expenditure for a new partner, drug or alcohol spending and speculative investments. Examine the funding source and what remains after the expenditure. Money used to buy an asset still held by a party raises a different question from money permanently lost.

Ordinary household spending agreed during the relationship has a different factual basis. Mortgage payments, groceries and family holidays consume money without necessarily establishing wastage. A party’s later objection to the relationship’s spending habits does not itself prove reckless conduct.

For an investment loss, identify the decision and circumstances that made the conduct allegedly reckless. A falling market or an unsuccessful business venture is not enough by itself. Justice Brereton’s discussion of Omacini & Omacini explains why an adverse investment result required a finding about the conduct behind it.

The other party’s knowledge also affects the argument. Shared participation or acceptance can weaken a claim that one party alone must bear the loss. Knowledge needs context: discover whether the other party knew the amount and frequency, objected or lacked control over the spending.

Where spending also forms part of coercive conduct, keep the wastage calculation separate from the financial abuse argument. Each argument needs evidence of the conduct and the financial effect it relies on.

Proving Wastage From Bank Statements

Bank statements prove the movements of money behind a wastage allegation when you identify the transactions and calculate a supported net loss. Separate established expenditure from cash whose destination remains unresolved.

1. Collect the statements for each relevant account and the period surrounding the alleged spending. Include credit cards and accounts receiving betting withdrawals. Use the divorce bank-statement guide to define the statement set.
2. Identify betting merchants and repeated payments. Keep the original descriptions beside any category you assign. For wallet top-ups, obtain the wallet record before treating every transfer as a gambling loss.
3. Match returns from betting operators to the same activity. Subtract verified winnings or returned funds from the payments being assessed. An internal transfer between disclosed accounts must not increase the expenditure total.
4. Separate casino-associated cash withdrawals from other cash withdrawals. Location and timing can support the enquiry, but a withdrawal alone does not prove where cash was spent. Keep unresolved amounts in a separate schedule.
5. Report the result by period and give each transaction its source PDF filename and page. State the account and transaction date in the schedule. Preserve an explanation for each inclusion or exclusion.

Use periods that expose the pattern. A six-month relationship period and a six-month post-separation period can show whether losses accelerated after separation. Separation changes the context of consent and access to money. It does not automatically turn every later payment into wastage.

A Worked Gambling-Loss Schedule

In this hypothetical example, all figures are Australian dollars. Records show $18,000 paid to verified betting operators over six months before separation. Matching returns total $6,000, leaving $12,000 in net outflows. Over the next six months, payments total $24,000 and returns total $3,000, leaving $21,000.

The combined supported net outflow is $33,000. A further $5,000 in unexplained cash withdrawals stays outside that total until evidence connects it to gambling. Obtain operator records if funds remain in a betting wallet or bets remain unsettled. Those amounts can change the calculation of an actual loss.

Under historic add-back submissions, counsel might have proposed that $33,000 as the quantified wastage amount. Under the amended framework, the same schedule supports the material-wastage argument without treating spent money as an existing asset. The amount is evidence for the court’s assessment, not an automatic entitlement to reimbursement.

Source references let the other side trace the total to individual debits and credits. A schedule supported by those entries is harder to challenge as an estimate than a rounded allegation of gambling expenditure.

FinTrace saves hours of statement review by consolidating supplied PDFs into a searchable ledger and a readable findings report. Gambling activity and suspicious cash patterns are flagged, with each finding connected to its source filename and page. You have the supporting evidence at hand when preparing the transaction schedule or briefing counsel.

FinTrace performs this statement-analysis work at a fraction of the cost of manual review or engaging a forensic accountant for the same task. Forensic accountants also use the service to free time for interpretation and specialist work.

How Courts Adjust the Division

Courts assess proved wastage within the applicable property framework, and a spending total does not dictate a dollar-for-dollar adjustment.

Historically, two approaches appeared in wastage cases. A court could notionally add a wasted amount back against the responsible party, or reflect the conduct in its percentage assessment. The treatment of add-backs explains that distinction and its limits.

For the amended section 79 framework, Shinohara & Shinohara [2025] FedCFamC1A 126 directs attention to existing property. The Law Society of Tasmania’s account of the appellate reasons explains that spent money does not become a fictional asset on the balance sheet. Its use can affect the assessment of contributions or current and future circumstances. Material wastage belongs expressly within section 79(5)(d).

The same case notes discuss Jakobsson (No 2) [2025] FedCFamC1A 137. Money distributed by a husband from a superannuation fund to a third party was considered under section 79(5)(v). The expenditure affected the adjustment assessment alongside other circumstances.

Match the proposed adjustment to the evidence of responsibility and financial effect. Address what the other party knew and whether they accepted the spending. Give counsel the period totals, source-linked transactions and explanation for the loss. That separates the factual calculation from the legal argument about how the remaining property must be divided.