Family Law Practice Direction – Bankruptcy Act proceedings

(FAM-BANKRUPTCY)

1. Introduction

1.1 This Practice Direction sets out the procedure for family law proceedings to which sections 35 or 35A of the Bankruptcy Act 1966 (Cth) apply (Bankruptcy Act proceedings).

1.2 It is to be read together with:

  1. the Family Law Act 1975 (Cth) (Family Law Act);
  2. the Bankruptcy Act 1966 (Cth) (Bankruptcy Act);
  3. the Bankruptcy Regulations 1996 (Bankruptcy Regulations);
  4. the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (as modified by Division 1.2.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021) (FCFCOA Bankruptcy Rules);
  5. the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Family Law Rules);
  6. Central Practice Direction – Family Law Case Management; and
  7. Family Law Practice Direction – Financial proceedings.

1.3 This Practice Direction applies to all proceedings commenced on or after 1 September 2021. This Practice Direction will also apply to all proceedings commenced prior to 1 September 2021, unless unfair or impractical to do so.

1.4 To the extent this Practice Direction is inconsistent with any act, regulation, rule or other legislative provision (whether or not expressly listed above), the act, regulation, rule, or other legislative provision shall prevail.

Before a proceeding starts

1.5 Parties involved in Bankruptcy Act proceedings in the Federal Circuit and Family Court of Australia (FCFCOA) by virtue of section 35 of the Bankruptcy Act are exempt from complying with the pre-action procedures in Schedule 1 of the Family Law Rules under rule 4.01(2)(d). However, parties should take genuine steps to resolve the dispute before an application is filed.

2. Application

Where to commence

2.1 Where family law proceedings are listed in the FCFCOA (Division 1) and a party to a marriage or de facto relationship is a bankrupt, a party may seek orders under the Bankruptcy Act in relation to any matter connected with, or arising out of, the bankruptcy, if the trustee of the bankrupt's estate is:

  1. a party to property settlement proceedings or maintenance proceedings between the parties to the marriage or relationship;
  2. an applicant under sections 79A or 90SN of the Family Law Act seeking to set aside or vary property settlement orders made between the parties to the marriage or relationship; or
  3. an applicant under subsections 90K(1) or (3) or subsections 90UM(1) or (6) of the Family Law Act seeking to set aside a financial agreement of the parties to the marriage or relationship.

2.2 In proceedings that have been transferred to the FCFCOA (Division 1) from the FCFCOA (Division 2) or the Federal Court of Australia pursuant to section 35A of the Bankruptcy Act, a party may seek such orders under the Bankruptcy Act as the Federal Court of Australia could have made in the proceedings.

Parties to Bankruptcy Act proceedings

2.3 Where the Court has jurisdiction pursuant to sections 35 or 35A of the Bankruptcy Act, any party to the proceedings may seek relevant orders under the Bankruptcy Act.

2.4 An application must include all necessary parties: see Part 3.1 of the Family Law Rules.

2.5 On its own initiative or on application by a party or a person who has an interest in the Bankruptcy Act proceedings, the Court may grant leave to a person who is not a party to the proceedings to be heard in the proceedings: see rule 2.03 of the FCFCOA Bankruptcy Rules. Such leave may be granted on conditions, and may be revoked by the Court at any time.

2.6 In the event the Court grants a person who is not a party leave to be heard, the Court may order the person to pay costs, if the granting of leave causes additional costs for a party to the proceedings and the Court considers that costs should be paid by the person.

Making an application and documents to file

2.7 A party seeking final orders pursuant to the Bankruptcy Act in Bankruptcy Act proceedings must file a Bankruptcy – Application.

2.8 A Bankruptcy – Application cannot include an application for interlocutory orders. A party seeking interlocutory orders in a Bankruptcy Act proceeding or a person with an interest in the case seeking leave to be heard who is not a party may file a Bankruptcy – Application in a Proceeding.

2.9 The Bankruptcy – Application and the Bankruptcy – Application in a Proceeding must each state:

  1. the relevant sections of the Bankruptcy Act, Bankruptcy Regulations or rules under which the application is being made; and
  2. the relief sought.

2.10 The applicant must also pay the filing fee set by regulation, unless an exemption applies. A Judge or Judicial Registrar may require a party to give an undertaking to pay a filing fee before accepting a document for filing.

When an affidavit is required

2.11 An affidavit is not required to be filed with a Bankruptcy – Application.

2.12 An affidavit must be filed with a Bankruptcy – Application in a Proceeding.

2.13 An affidavit must be filed in the proper form as outlined in rules 2.14 (Formal requirements for documents) and 5.08 (Limit on number and length of affidavits) of the Family Law Rules.

Urgent applications

2.14 If an application for orders in Bankruptcy Act proceedings is urgent, the applicant must seek an order that the matter be given an urgent listing (urgent application). An application for an urgent listing must be accompanied by:

  1. an affidavit stating the facts relied on in support of the urgent application; and
  2. a cover letter as to urgency, outlining the nature of the application and the basis upon which an urgent listing is required. The cover letter should refer to specific paragraphs of the affidavit relied upon in support of the urgent application.

2.15 An urgent application in a Bankruptcy Act proceeding must be made by filing a Bankruptcy – Application in a Proceeding seeking an urgent listing.

Notifying the other party/parties

2.16 The applicant must serve the Bankruptcy – Application or Bankruptcy – Application in a Proceeding and any supporting affidavit (if applicable) on all other parties in accordance with Part 2.6 or Part 2.7 (as appropriate) of the Family Law Rules.

What the Court will do next

2.17 Upon filing the appropriate form and supporting affidavit (if applicable), the Registry Manager will fix a date as soon as practicable for a procedural hearing.

2.18 Any application made by a party for an urgent listing will be determined by a Registrar on the papers.

3. Responding to an application

3.1 A person who intends to appear at the hearing of an application, or take part in an examination, must file the form Bankruptcy – Notice of Appearance.

3.2 A person who intends to oppose an application must, at least 3 days before the date fixed for the hearing of an application:

  1. file the form Bankruptcy – Notice of Appearance;
  2. file the form Bankruptcy – Notice stating grounds of opposition to an Application or Application in a Proceeding;
  3. file an affidavit outlining the grounds of opposition; and
  4. serve the notices and supporting affidavit on the applicant and any other party.

3.3 A Notice stating grounds of opposition to an Application or Application in a Proceeding must be filed and served in accordance with Part 2.6 or Part 2.7 (as appropriate) of the Family Law Rules.

4. Further information

4.1 For information on how family law proceedings are conducted in the FCFCOA, please refer to Central Practice Direction – Family Law Case Management.

4.2 Parties should also consult the FCFCOA website at www.fcfcoa.gov.au for further information about Bankruptcy Act proceedings.

 

The Honourable Justice William Alstergren
Chief Justice (Division 1) | Chief Judge (Division 2)
Federal Circuit and Family Court of Australia
Date: 1 September 2021