The recent decision of Jakobsson & Jakobsson (No 2) [2025] FedCFamC1A 137 provides guidance for separating couples and practitioners on disclosure obligations, addbacks, and appellate review limits in property settlements under s 79 of the Family Law Act 1975 (Cth).
Background of the Parties
The parties married in 2005 and separated in 2020. They had two children, aged 19 and 17, and ran a successful business overseas before relocating to Australia. After separation, the main dispute concerned the property pool. The issues included whether overseas assets and certain “addbacks” – for example, dissipation by the husband of house sale proceeds withdrawn from a SMSF – should be included and how contributions should be assessed.
The primary judge found that the husband had not provided full and frank disclosure, particularly regarding funds withdrawn from his Self-Managed Superannuation Fund (SMSF). The judge added back to the pool monies the appellant received from his SMSF that he had not adequately accounted for [14], dividing the property 60/40 in favour of the wife. She also received a 10% adjustment due to income disparity and her care of the 17-year-old child.
Understanding “Add-Backs”
Add-backs are funds that existed but were spent before trial, such as on legal fees, gambling, or risky share trading. Historically, courts could notionally include these in the property pool if doing so was just and equitable.
However, in Shinohara & Shinohara [2025] FedCFamC1A 126, the Full Court rejected notional add-backs because they do not exist and cannot be identified. Courts now focus on s 79(5) factors (e.g., future financial needs) and the parties’ contributions, using a holistic approach beyond simple add-backs.
Evidence of asset dissipation remains important. Courts still consider these assets through contributions and needs assessments. For a detailed discussion on Shinohara, see our post here.
The Appeal
On appeal, the husband raised six grounds, claiming factual and discretionary errors. Appeals from discretionary judgments face a high threshold; an appellate court will not intervene just because it might have reached a different conclusion. We first review where he succeeded.
Ground 1: Procedural Fairness to the Superannuation Trustee
The husband succeeded on this ground. The trial judge made a default superannuation splitting order without giving procedural fairness to the trustee. Justice Schonell agreed this was an error of law, referencing Naisby & Naisby (2021) FLC 94-025.
As Austin J observed in related proceedings:
“The primary judge was evidently conscious that the default superannuation splitting order was being made without the superannuation trustee first having had procedural fairness … [which] deprived his Honour of statutory power to make the order.” [28]
Justice Schonell explained that the judge should have adjourned briefly to allow notice to the trustee. Because the order was made without power, this ground was upheld.
Grounds 2–6: Addbacks, Contributions, and Factual Findings
The remaining grounds failed. The husband argued that the trial judge had impermissibly “added back” funds withdrawn from his SMSF. Justice Schonell rejected this, clarifying that once funds are withdrawn, “they are no longer a superannuation interest … and are amenable to adjustment” [35] under s 79.
Citing Omacini v Omacini (2005) FLC 93-218, Schonell J confirmed that addbacks remain discretionary, used only in exceptional circumstances. The Court also dismissed challenges to contributions assessment, noting the trial judge appropriately recognised both financial and non-financial contributions, including the wife’s early business investment, a $125,000 family loan, and her primary care of the children. Justice Schonell stated:
“Absent other error, that is insufficient to give rise to appellate intervention. It was not contended that the result was unreasonable or plainly unjust.” [40]
Addbacks After Shinohara
Since only one ground succeeded, the Court re-exercised discretion rather than remitting the case. This occurred under the amended s 79 of the Family Law Act, following the Family Law Amendment Act 2024 (Cth).
Justice Schonell emphasised that amended s 79(3)(a) directs courts to identify existing legal and equitable rights, excluding notional property from addbacks:
“By very definition, that excludes the concept of an addback … What might, pre-amendments, have been dealt with as an addback, is now to be addressed in the consideration of contributions or at the s 79(5) stage.” [62]
Consideration of Parties’ Addbacks
- Respondent:
- Mr Jakobsson sold property held by the SMSF after proceedings started and after disclosure orders. He used the proceeds without disclosure.
- Schonell J considered $87,833 spent by him under s 79(5) for adjustment.
- Appellant:
- The appellant claimed addbacks for real estate in Country E ($35,897), a motor vehicle ($19,500), funds from Country E ($98,000), and company funds ($38,000).
- Schonell J did not include these, finding the appellant did not meet the required standards.
After reviewing the financial disparity and SMSF misuse, Schonell J adjusted the property division to 63/37 in favour of the wife, ordering the sale of the family home to achieve a just outcome.
Key Takeaways
- Full and frank disclosure is critical. The Court disapproved of unilateral dealings with SMSF assets. Non-disclosure can harm credibility and lead to financial adjustments.
- Addbacks are exceptional. Courts treat addbacks cautiously, particularly after the 2024 reforms that focus on existing property rather than notional inclusions.
Post-Shinohara Property Settlements
Jakobsson & Jakobsson (No 2) highlights the importance of transparency, procedural compliance, and fairness in family property proceedings. In the post-Shinohara landscape, notional addbacks are now considered under s 79 factors.
For separating parties, this decision is a reminder that incomplete disclosure or shortcuts can carry serious legal and financial consequences.
How We Can Help
At Rowan Skinner & Associates Lawyers, we are accredited specialists in Family law. We understand how stressful and complex property disputes can be, especially with significant assets involved.
If you are struggling with your situation, call (03) 9995 9155 for a non-obligation discussion. We serve clients in Melbourne, including the Northern Suburbs (Northcote, Alphington, Carlton, Fitzroy, North Fitzroy, Kew, Heidelberg), as well as South Melbourne and South Yarra.
Case: Jakobsson & Jakobsson (No 2) [2025] FedCFamC1A 137
Rowan Skinner is a highly skilled family lawyer with over 35 years of experience across various legal roles and jurisdictions. Rowan specialises in resolving family law disputes such as divorce, financial settlements, child custody and domestic violence cases. Through his diverse and extensive experience, Rowan has a deep understanding of the complexities and nuances involved in family law. Rowan is a skilled negotiator and litigator who follows a compassionate and client-focused approach which prioritises helping you navigate what can be an emotional and challenging time.