Third Parties in a Family Law Case
Can a family court make orders against a third party? Part VIIIAA of the Family Law Act gives a family court wide powers to make orders and grant injunctions against third parties. Under section 90AE of the Family Law Act, a family court can make orders against a third party:
- Directing it to do a thing in relation to a property of a party to a marriage; or
- Altering the rights, liabilities or property interests of the third party in relation to a marriage.
Third party orders in family law proceedings commonly involve:
- Related companies
- Related trusts
- Superannuation funds
- A partner or relative of a party
However, the family court can only make an order under section 90AE if:
- It is reasonably necessary, or appropriate, to effect a division of property between the parties to a marriage;
- If the order concerns a debt of a party to the marriage, it is not foreseeable that the debt will not be paid in full;
- The third party has been accorded procedural fairness;
- It is just and equitable; and
- The orders take into account any taxation effect, social security effect, administrative costs, capacity to repay any debt and any other relevant matters.
Section 90AC of the Family Law Act provides that Part VIIIAA overrides other laws, trust deeds and other instruments. Some examples of the operation of section 90AC are:
- A family law trust deed
- An employment contract that restricts non-employees from holding stock options
- A non-transferable insurance policy
- A company constitution which limits the persons who may own shares in the company.
Joinder of third parties is mandatory in some cases. Rule 6.02(1) of the Family Law Rules provides:
A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.