Bind a third party in family law proceedings

How to bind a third party in family law proceedings.

Generally speaking, the Federal Circuit Court and the Family Court make orders that only bind the parties to the proceedings. However, the courts have the power  under section 90AE of the Family Law Act 1975 (Cth) (FLA) in relation to proceedings between married parties to make a property order or under section 90AF, FLA to issue an injunction, to bind a third party and to alter their property interests. An injunction can restrain or prevent a person from acting.

A third party is broadly defined by section 4 FLA as being any person who is not a party to proceedings. Where a person files proceedings against their former spouse, any other person who is involved in those proceedings is a third party.

A third party may include banks, children and corporate entities and trusts (for example, a family trust).

Contact our family lawyers Brisbane and our family lawyers Brisbane Northside for advice regards how to obtain an order binding third parties or regards any area of family law.  We work to help you resolve your family law issues without the need to go to court. This is our priority but if court action is necessary, we are ready to represent you effectively at Court. For further information on an order to bind a third party, you are welcome to read on…..

Some common examples of when you need to bind a third party in family law proceedings are:

  1. When you and your spouse have agreed to final property orders and you expect to receive a portion of your spouse’s superannuation, you need to bind a third party, in this case the superannuation trustee, to move funds from one super account to another.
  2. When the Court appoints a trustee to sell a property, the Court can bind a third party, ie that  trustee, by making Orders regarding the process which they must follow to sell that house.
  3. When one party is to receive as part of their property settlement assets that are controlled by an entity such as a company or family trust.
  4. When a third party solicitor, real estate agent or any other person holds funds on behalf of both parties, usually following the sale of assets, which are to be disbursed to the parties in certain proportions on final property settlement.

The legislation tells us that is it also possible to have creditors be substituted for one or both of the parties in proceedings and for the Courts to re-distribute the proportions of debt each party owes to a creditor.

However, the Court may only make an order binding a third party if certain requirements are met,  including the following:

  1. whether such an Order is reasonably necessary or reasonably appropriate to effect a division of property between parties to a marriage;
  2. if the order concerns a debt of the parties to a marriage, it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full;
  3. whether the third party has been provided with procedural fairness;
  4. whether the Order would be just and equitable;
  5. the impact of the Order in relation to taxation and social security;
  6. the administration cost of the Order; and
  7. the capacity of the third party to comply with the Order.

The Court’s powers to bind third parties in family law proceedings are worth keeping in mind when negotiating. The Court’s powers in this area can open up more creative solutions for the preservation and re-allocation of assets and liabilities between you and your former partner than you may have initially considered.  However, it is important to first obtain legal advice as to whether the requirements for the Court to make an order binding a third party will be met in your case. If not, the order will not be made.

Contact our experienced Brisbane Family Lawyers or our North Brisbane family lawyers. We can assist you in all areas of family law, including regards family law property settlement, maintenance claims and parenting arrangements.

The information set out in this blog is not a substitute for legal advice. We recommend that you obtain advice tailored to your particular circumstances from LGM family lawyers Brisbane.