SEEKER & SEEKER

[2012] FamCA 863

FAMILY COURT OF AUSTRALIA

SEEKER & SEEKER [2012] FamCA 863

FAMILY LAW – PRACTICE AND PROCEDURE - leave be granted to institute proceedings for property settlement out of time. Trustee joined as a party

Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth)

APPLICANT: Ms Seeker

RESPONDENT:	Mr Seeker
THIRD PARTY:	Trustee In Bankruptcy of the Estate of Mr Seeker

FILE NUMBER: MLC 3529 of 2012

DATE DELIVERED: 11 September 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 11 September 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Hamilton

SOLICITOR FOR THE APPLICANT: Thexton Lawyers

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT: N/A

COUNSEL FOR THE THIRD PARTY:	Ms Hamilton
SOLICITOR FOR THE THIRD PARTY:	Thexton Lawyers

Ms Horwood

Jones King Lawyers

IT IS ORDERED THAT

1. Pursuant to s 44(3) of the Family Law Act 1975 (Cth) leave be granted to the wife to institute proceedings for property settlement out of time.

2. Mr D the Trustee of Bankruptcy of the Estate of Mr Seeker be joined as a party to these proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Seeker & Seeker has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 3529 of 2012

Ms Seeker

Applicant

And

Mr Seeker

Respondent

REASONS FOR JUDGMENT

1. In this matter the husband and the wife were divorced on 12 February 2009.  The wife continues to live in the former matrimonial home at T Street, K Suburb, with the four children of the marriage. That property is in the joint names of the husband and the wife and is valued at approximately $540,000 and is subject to a mortgage to the Bank C of approximately $338,000.  On 12 March 2009, the husband provided a Statement of Affairs to the Official Trustee in Bankruptcy which included his interest in the former matrimonial home.  On 27 March 2009, a debtor’s petition was accepted by the Official Receiver in respect of the bankrupt estate of the husband. 

2. On 16 March 2011, a third party was appointed as a trustee of the bankrupt estate of the husband pursuant to section 181A of the Bankruptcy Act 1966 (Cth), upon which the husband’s property, including his interest in the former matrimonial home, vested in the trustee. The property vested in the trustee will re‑vest in the husband six years from the date the husband provided his Statement of Affairs to the Official Trustee in Bankruptcy. It is the trustee’s intention to realise his interest in the former matrimonial home for the benefit of the creditors of the bankrupt’s estate, subject to any orders of this Court.

3. The trustee has lodged a caveat over the former matrimonial home. The wife seeks a property settlement, she says, pursuant to section 90SM of the Family Law Act 1975 (Cth). That application should be pursuant to section 79 and not section 90SM. Irrespective of whether it should be an application pursuant to s79 it is out of time. The wife deposes that, following separation, she was left with significant joint credit card debt. She has, without success, attempted to negotiate a settlement with the husband, and she first obtained legal advice earlier this year, as a result of which she has instituted these proceedings. I note that she filed an Initiating Application on 23 April of this year, and that an Amended Initiating Application was filed on 24 July of this year.

4. Section 44(3) of the Family Law Act provides that proceedings for property settlement shall not be instituted after the expiration of 12 months after the date upon which the divorce order took effect.  The Court shall not grant leave to institute proceedings unless it is satisfied that hardship would be caused to a party or a child of the marriage if leave were not granted.  The wife in this case is clearly outside the relevant 12 month period.  The husband has been served and does not appear.  The trustee neither consents nor opposes the grant of leave.  I am satisfied that, in all of the circumstances of this case, hardship would be caused to both the wife and the children of the marriage if leave were not granted to the wife to issue proceedings for a property settlement. 

5. In her Amended Initiating Application, the wife sought leave to join the trustee. The trustee, while not formally seeking leave to intervene, has filed a Response to the Initiating Application in which he seeks orders as against the husband and the wife. Section 79(11) of the Family Law Act provides that if a party to the marriage is bankrupt at the time the application is made and the trustee applies to be joined to the proceeding and the court is satisfied that the interests of any of the bankrupt’s creditors may be affected by the making of an order, the trustee must be joined as a party to the proceedings.  The husband in this case was discharged from bankruptcy prior to the wife issuing her application, however, his property is still vested in the trustee.  Although the wife has not specified the orders she seeks, it is likely that in the circumstances of this case that she will seek orders which will have the potential to impact on the trustee’s capacity to satisfy the husband’s creditors.  In all of the circumstances, it is appropriate for the trustee to be a party to the proceedings. 

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of the Honourable Justice MacMillan delivered on 11 September 2012.

Associate:

Date:  11 October 2012