You’d be forgiven for thinking that property settlements under the Family Law Act only concern two parties.
However, Family Law proceedings can be complex. Every case has a unique set of facts and few are black and white. So much so, that there are a few different circumstances within which third parties can be joined in proceedings and bound by Court Orders.
Some of the more common third parties that may find themselves in the midst of property settlement proceedings include corporations that one of the parties have interest in, and family members or associates who may have an interest in property subject to the proceedings. In these circumstances the parties may be joined to the proceeding as a party to be bound by the Order.
The most common third party in Family Law proceedings is the trustee of superannuation funds. If parties seek Court Orders concerning a party’s superannuation interest, the trustee of the superannuation fund must be informed of the proposed orders and be provided with the opportunity to object to the Orders sought. This is known as ‘procedural fairness’.
In circumstances where a party has disposed of property to a third party, such as a friend or a family member, the Court has the power to set aside this transaction under the Family Law Act:
The court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order. (s106B)
What this effectively means is that the court has the ability to set aside transactions or gifts a party makes to reduce their asset pool or to dispose of property that should be included in proceedings.