What About Reckless Spending?
Is a spouse spending too much? How much is too much? Does there need to be a malicious intent behind it? Wastage of property is a common argument raised by divorcing spouses – but the legal consideration they receive and the outcomes can be quite different.
A recent appeal case looked at a trial Judge’s consideration of the wife’s argument that the husband had “wasted” some of the asset pool, or at least made poor financial decisions which had reduced the overall matrimonial property.
At trial, the wife raised two wastage arguments:
- That the husband had engaged in risky share trading, which lost the couple approximately $50,000; and
- The husband had suspended the mortgage repayments over the jointly owned house after separation (as the parties were ahead in their required mortgage repayments), which meant there was $20,000 less property available to distribute.
The trial judge found in favour of the husband in both respects and did not make any adjustment in favour of the wife on these grounds.
The wife argued that, by failing to agree to refinance the mortgage, thereby reducing the monthly repayments, the husband instead suspended the payments and used the credit balance on the mortgage account to cover those payments. The wife also argued that the husband made poor investment decisions with his share portfolio, and used equity in the investment property to fund those investments.
The Appeal Court found that there had been no error by the trial judge in the consideration of the wife’s arguments about wastage by the husband, and that it was open to the trial judge to accept the husband’s evidence in that respect.
The appeal was dismissed and the Wife was ordered to pay the husband’s costs of the appeal.
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