Bowen Buchbinder Vilensky

Getting a Divorce – What happens if She Empties the Joint Account?

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

30 April 2015

A question that we family lawyers are often asked is: what happens if she empties the joint account and spends it? Does she have to give it back, or is it taken into account in some way?

When a couple separates, and emotions are often highly charged, their behaviour can be unpredictable.  What happens if she spends their money on a new car?  Or he spends it on a holiday with his new girlfriend?

First, a distinction can be made between money used to buy an asset, like a new car, versus money spent on a holiday.

In the case of the car, it is an asset to be included in the pool of matrimonial assets for division between the parties.  So no, the money hasn’t evaporated.

However, if the money is spent on a holiday with the new girlfriend, it’s gone. It is not available to for division between the parties.

What does a judge do? Can the cost of the holiday be  notionally added back to the pool of assets?  Unfortunately, there is no certain answer to that.

Up until 2012, a Family Court judge may have notionally “added back” to the matrimonial pool of assets the money spent on the holiday with the new girlfriend, treated it as an early distribution of assets and taken the money from the share the husband would otherwise have received.

But in 2012 the High Court in the case of Stanford and later in 2013 the Full Court of the Family Court in the case of Bevan dealt with the issue of (“add-backs”).

Instead of ruling that “add-backs’ should always be applied, what the Courts  said is that where the money has been spent, where an asset or property no longer exists, the judge must “take it into account” in arriving at a just and equitable outcome for both parties.  Family Court judges therefore have a wide discretion to take all the facts and circumstances of every case into account to arrive at a just and equitable outcome for both parties.

This stipulation that a judge “take it into account” introduces a level of uncertainty and unpredictability which generally did not exist previously.

The law changes constantly. Sometimes the changes bring certainty  and sometimes uncertainty. It is an unfortunate fact of life that the consequences of one party’s bad or unreasonable conduct cannot always be fairly recompensed in a settlement or court judgment.

What can we learn from this?    More than anything, that if you are considering separating, or if separation has occurred, get  prompt advice from a competent family lawyer.

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