Revised Explanatory Memorandum
(Circulated by authority of the Attorney-General, the Honourable Philip Ruddock MP)Schedule 5 - Additional amendments relating to the interaction between family law and bankruptcy law
Item 1 - At the end of section 79
Item 1 inserts new subsection 79(10), allowing a creditor of a party to family law property proceedings, or any other person whose interests would be affected by an order in such proceedings, to apply to become a party to those proceedings.
Item 2 - At the end of section 79A
Item 2 inserts new subsection 79A(4). Section 79A sets out the circumstances in which the court can set aside a family property order. This new subsection would clarify, for the purpose of section 79A, that a third party creditor has standing in family property proceedings as a person affected by a family property order if the creditor can show that he or she may be unable to recover his or her debt owed by a party to the marriage if such an order were made.
Item 3 inserts new section 79F, to allow for Rules of Court to be made specifying the circumstances in which a party or a person applying for orders in family property or spousal maintenance proceedings may be required to notify a third party (for example, a creditor of a party) of those proceedings.
Item 4 inserts new section 90DA in Part VIIIA of the Family Law Act, dealing with binding financial agreements. This amendment requires that, if parties make a financial agreement under the Act that deals with post-separation property or spousal maintenance arrangements, the agreement cannot come into effect until the parties also make a written separation declaration. The declaration must state that the parties have separated, are living separately, and are unlikely to resume cohabitation. The agreement will have no effect, to the extent that it deals with those arrangements, if the declaration is not made.
Item 5 - After subsection 106B(4)
Item 5 inserts new subsection 106B(4AA) in the Act. Section 106B allows the court to make an order to set aside or restrain a transaction that might defeat a claim or an interest in proceedings under the Act. The amendment would clarify that an application can be made under section 106B by a party, or by a creditor of a party, or by a person whose interests may be affected by the transaction.