Part VIIIAB Division 2, Subdivision D of the Family Law Act 1975 sets out provisions for notification of application. The application is related to maintenance, declaration of property interests, and alterations of property interests. Divorcing or separating parents generally go through property settlement and even spousal maintenance proceedings.
Property settlement is the process of dividing a couple’s finances and assets in a way that is just and equitable. Most disputes arise over splitting the marital home. Spousal maintenance, on the other hand, is financial aid given to partners who are not in a good financial position. Both married couples and de facto partners can receive maintenance from their higher-earning spouses.
They can also have property interests which is the assertion of rights over a property, for instance, the marital home. The Subdivision under Part VIIIAB Division 2 sets out provisions that can help couples during property interest matters and maintenance. But how can notification of application work for these legal matters? Read on to know more.
Section 90SO: Notifying Third Parties About the Application
Financial agreements have been accessible to third parties such as creditors, family members, family businesses, and trusts since late 2008. This is common when one or more of the parties has substantial assets and wishes to protect them in the event of a relationship breakdown. According to Section 90SO, the following people must provide notification of application:
- A person who applies for an order under Part VIIIAB Division 2
- A party to a proceeding for an order under Part VIIIAB Division 2
Section 90SP: Notifying a Bankruptcy Trustee and Trustee of a Personal Insolvency Agreement
Bankrupt parties who become a party to the proceedings due to an application under the following sections must give their notice of application to the bankruptcy trustee. The same applies to a debtor subject to a personal insolvency agreement but the notice is given to the trustee of the agreement.
| 90SE | Power of court in maintenance proceedings |
| 90SL | Declaration of interests in property |
| 90SM | Alteration of property interests |
| 90SN | Varying and setting aside orders altering property interests |
Section 90SQ: Notifying Court About Bankruptcy
The court may make provisions for the following persons to notify a court about a bankrupt person. These people include:
- Party to a broken down de facto relationship
- Party to a proceeding under Sections 90SE, 90SL, 90SM, and 90SN
- Bankrupt and a debtor subject to a personal insolvency agreement before the application is finally determined.
The court may also make provisions for the following person to provide a notification of application to the court:
- Party to a broken down de facto relationship
- Party to a proceeding under Sections 90SE, 90SL, 90SM, and 90SN
- A party to a proceeding in the Federal Court or the Federal Circuit Court and Family Court of Australia before the application is finally determined. However, the Bankruptcy Act 1966 must apply in this factor as long as it relates to the person’s:
- Bankruptcy and
- Capacity as a debtor to a person subject to a personal insolvency agreement.
The court may make provision for the following person to notify a court about the making of an application:
- The bankrupt trustee of a bankrupt party to a de facto relationship that has broken down; and
- Applies under Section 139A of the Bankruptcy Act for an order under Division 4A of Part VI of that Act.
What Does Section 139A Contain?
Section 139A of the Bankruptcy Act states that a trustee of a bankrupt’s estate may apply to the Court for an order any time within 6 years after the date of the bankruptcy. The order is in relation to the property of an entity that a bankrupt controlled or derived a benefit from. An entity is either a/an:
- Individual
- Corporation
- Unincorporated body
- Government authority or body
- Court or tribunal
Notification of Application: Determined Applications
The following factors constitute a determined application:
- The application is withdrawn or dismissed
- An order is made due to the application
The following factors apply for determining an application for a declaration under Section 90SL:
- The application is withdrawn or dismissed
- An order is made due to the declaration
Section 90SR: Notifying Non-bankrupt Party
According to Section 90SR, the court may make a provision for a person who is a bankruptcy trustee of a bankrupt party. The same person must also have applied under Section 139A of the Bankruptcy Act for an order in relation to an entity. The provision orders this person to notify the other party of the de facto relationship of the making of the application. However, the bankruptcy trustee must be aware that the de facto relationship has broken down before the notification of application.
Notification of Application: Bankruptcy Case Example
In the case of husband and wife West & West & Anor (2007), they got divorced on December 22, 2004. The assets at the time of separation and at the trial were the former matrimonial home with a net value of $108,000, and a $4,000 motor vehicle. There was a Centrelink debt in the amount of $14,584 and an RACV Finance debt in the amount of $8,122 in the husband’s name.
The RACV debt resulted in the husband’s bankruptcy on August 29, 2006, despite his best efforts to pay the debt. The wife requested a 95% adjustment in her favour for non-superannuation assets. The wife She also requested a splitting order in the same percentage for superannuation assets totalling $59,000.
The trustee’s position at the time of the case was that the amount required to pay out the husband’s bankrupt estate was no less than $69,000. The amount associated with the initial debt of $8,122.38 were:
- $13,500 in petitioning creditor’s costs
- $25,750 in legal fees
- $17,568.25 for the trustee’s remuneration and disbursements
Court Conclusion
In this case of notification of application regarding bankruptcy, the court ordered that the wife:
- Receive the entirety of the interest in the former matrimonial home
- Refinance the debt subject to the mortgage debt
- Indemnify and be responsible for the RACV finance and Centrelink debts
- Receive the 95% superannuation split in her favour
Importance of Seeking Legal Advice
Bankruptcy matters in court proceedings may get out of hand without proper legal advice. This is true especially if divorcing or separating couples go through property settlement and maintenance procedures. JB Solicitors is a law firm that can aid in family law matters and financial matters. We have mediation and arbitration services for parties who want to come to an agreement on their legal disputes.
Contact us today for more information about notification of application.
