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Lecture 11 – Financial Contributions
AUS APPROACH: pool covers ANYTHING EVER – doesn’t matter whose name Prop is in, who
brought it into rel.
Gifts
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Factors: duration of marriage, if counter-balancing contributions erode early gift.
Prev:
o If land gifted jointly  contributions regarded as equal: Cleary (1976)
Where relative makes gift to spouses jointly, but really only to benefit the related spouse 
contribution made on behalf of that spouse: Gosper [1987]
o FACT: W’s parents gift land to H/W jointly  W’s contribution
Contribution by parent to spouse  contribution made by/behalf of that spouse, unless evidence to
show that it was to benefit more than just the child: Kessey [1994]
o FACT: W’s mother give $$ to improve matri home  W’s contribution
Applied where W’s parents give spouses rent-free accommodation  W’s contribution: Rickaby
[1995]
Does not include childcare provided by grandparents (NOT on behalf of that parent): AB and ZB
(2003)
Lottery Wins and Windfalls
Zyk [1995] – lottery during marriage?
 FACT: many years, H part of group to buy lottery tickets. Wins $94K. W not part of syndicate –
but given money to apply to H/W’s joint prop (H usually lets W handle money matters).
 HELD: counted as joint contribution
o Considered “contribution” and not “windfall” – specifically expend earnings/capital and
expect reward.
o Purchase of ticket counted as purchase from joint funds – just like any other household
purchase (eg. groceries).
Farmer v Bramley [2000] – lottery after separation?
 FACT: H win $5 mil lottery 18mths after separation, W repartnered. 12 yrs rel – 1 C + other C of
W.
 TRIAL: W get 15% of lottery – based on s75(2) needs.
 APPEAL: upheld – various reasons.
o Finn J: within Trial J’s discretion
o Kay J: W’s contributions justify 12.5% lottery (even thou no nexus btw contribution and
lottery!) + 2.5% for s75(2) needs = 15%
o Guest J (dissent): W should have got less (read down s75(2)) – if no nexus btw marriage
and the acquisition of the asset, W can only have “moral claim” if it arises directly out of
marriage + cannot be satisfied by other assets. Eg. diff earning capacity cos of div of roles
in marriage + cannot be adequate satisfied by assets during marriage  then can use postseparation asset.
CF Wall [2002] – lottery after separation
 FACT: inheritance of $1.3mil after separation.
 HELD: W make no contribution but got % from s75(2) factors.
Inheritances
Bonnici v Bonnici [1992]
 HELD: H’s inheritance not brought into account.
o Property is not merely protected because it is inherited (other spouse may still be
considered as contributing to it).
o Depend on circ of case.
 If no other assets other than H’s inheritance, but W contribute alot  get %
 If ample funds to make appropriate settlement  no/little %
 If inheritance late/after separation  no % (unless unusual circ – eg. W took care of
testaor before death etc).
Damages Awards
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Damages award for PI – same as any other prop for s79: Williams [1984]
Where damages compensation for pain/suffering or loss of future earnings  considered
contribution: Aleksovski [1996]
Zubcic v Zubcic [1995] – how can OTHER spouse contribute to the spouse’s DA?
 FACT: WC – CL damages. 10 yrs, W nurse/assist H – bathing, getting out of bed, dressing, taking
him to toilet, feeding etc.
 HELD: 40%
o W substantially contributed to conservation of DA – H’s capital (domestic role, nursing
activities etc).
o Use CL damages calculations (how much domestic services would have cost H
commercially) to calculate 10 yrs of W’s contributions.
Assets Brought Into Marriage
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FLA is silent about this – where 1 party brings substantial prop into marriage.
Prev:
o Sig of initial contribution diminishes with length of rel: Crawford [1979]
o Sig of initial contribution diminished not by time, but by offsetting contributions of other
spouse: Lee Steere [1985]
o Diverging opinions – does offsetting contributions need to exceed initial contribution?
Money [1994]
 Needs to offset (be MORE than initial): Lindenmayer
 Erosion: need not be unequal: Fogarty
Bremner v Bremner [1995] – substantial initial contributions can be diminished even if later
contributions don’t match initial
 FACT: H initial contribution – 4 acre land, now worth $220K (not improved). H/W work – W
work 18mths less. W primary carer for 2 C.
 TRIAL J: 50/50 – equal contribution + no s75(2) adjustment.
 APPEAL: dismiss H’s appeal.
o LAW: Initial contributions may diminish even though later contributions of W don’t
necessarily “outstrip” H’s.
o Approved Fogarty in Money [1994]
CF Zyk [1995] – substantial initial contributions cannot be eroded into nothing.
 HELD: ordinarily just/equitable that the differential be treated as significant.
 FIVE VARIABLES to consider:
o Initial difference
o Use made of those assets
o Whether assets increase in value – if so, due to parties’ efforts?
o Length of marriage
o Other contributions
Pierce [1999] – must give significant weight to substantial initial contributions!
 FACT: cohabit 10yrs, 2C (live with H). Initial: H (260K), W (11.5K). H contribute 200K, W 10K
to matri house.
 TRIAL: 55:45 – to H (greater initial contribution, contribution of taking care of C post-separation).
 APPEAL: 75:25 – to H (70:50 for contributions + 5% for s75(2) needs).
o Not a matter of erosion – but weight to be attached to initial contribution.
 H had sig assets, made sig financial contribution, continuously worked, used
earnings to benefit F, non-financial contribution to maintaining matri home, minor
contribution as parent.
 W financial contribution minimal, employed but for lessor period, primarily in
domestic tasks and caring for C (greater than H).
o But for H’s greater initial contribution – wouldn’t have matri home!
GWH v PGH [2005]
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FACT: H - $837K commercial prop, asset of $1.6mil at separation. 18yr marriage – 3C. 3yrs after
separation – 2C still with W.
 TRIAL: 70:30 (H:W)
 APPEAL: H want more – take out commercial prop (asset/asset approach).
 HELD: upheld 70:30, but then 15% needs adj to W (55:45).
 NOTE: Cf from Pierce – children live with H instead of W.
Schirmer v Sharpe
 FACT: 9yr marriage, 4C. Rent free accom by W’s parents + $60K gift from W’s mother. W inherit
$560K after separation. H didn’t work and no child support for 8yrs post separation.
 HELD: 90:10 (W:H)
 NOTE: unusual case that would result in 90:10
Spiteri v Spiteri [2005]
 FACT: H post separation contribute to W (to C and living in matri home – Mg payments).
 ISSUE: does H have “credit” at trial?
 HELD: no credit for extra post separation contributions!
o Usually balanced by W’s care of C.
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Superannuation
Super related to employment  women (lower working income) have lower retirement incomes
o Women less likely to be in workforce
o Women earn less
o Women more likely to take substantial breaks in employment
o Women more likely to do casual or PT – no super
Divorce  deprives W of super assets that they indirectly contributed to (supported H’s work by
taking care of C etc).
Super pool is COMBINED of H and W.
FLA:
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Same provisions for DF couples
Super treated as part of employment remuneration (other spouse makes indirect contribution):
Morris [1982]
 Entitlement to super is consideration under future needs: s75(2)(f) and (j)
 Family Law Legislation Amendment (Superannuation) Act 2001 (Cth): Ct can make orders
affecting super.
o Splitting fund – give other spouse own super accn
o Flagging fund – prevent dealing with fund (soon to vest) until flag lifted.
Coghlan v Coghlan [2005]
 Super not to be included in list of property, but separately.
 Approach of Ct should:
o Value super interest
o Consider contributions (s79(4)(a-c)) to super interest (using either global or asset/asset
approach)
 Rel of duration of fund membership and cohabitation
 Actual contributions made by fund spouse at start of cohabitation
 Actual contributions made by fund spouse by separation/hearing
o Consider other factors (s79(4)(e-g))
o Ensure that orders are just and equitable: 79(2)
Valuation of Super
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2 types of super:
o Accumulation funds: employer/member makes payments that are invested cumulatively.
Value depends on level of contributions and how well investment is doing. Valuation is not
difficult – members usually get annual statement saying the value.
o Defined benefit funds: based on years with employer – calculated by formula on
employee’s salary before retirement. Valuation is difficult – can’t value many years before
retirement.
Splitting Orders
FAMILY LAW ACT 1975 - SECT 90MT
Splitting order
(1) A court, in accordance with section 90MS, may make the following orders in relation to a
superannuation interest (other than an unsplittable interest):
a. if the interest is not a percentage‑only interest--an order to the effect that, whenever a splittable
payment becomes payable in respect of the interest:
i. the non‑member spouse is entitled to be paid the amount (if any) calculated in
accordance with the regulations; and
ii. there is a corresponding reduction in the entitlement of the person to whom the
splittable payment would have been made but for the order;
b. an order to the effect that, whenever a splittable payment becomes payable in respect of the
interest:
i. the non‑member spouse is entitled to be paid a specified percentage of the splittable
payment; and
ii. there is a corresponding reduction in the entitlement of the person to whom the splittable
payment would have been made but for the order;
c. if the interest is a percentage‑only interest--an order to the effect that, whenever a splittable
payment becomes payable in respect of the interest:
i. the non‑member spouse is entitled to be paid the amount (if any) calculated in accordance
with the regulations by reference to the percentage specified in the order;
ii. there is a corresponding reduction in the entitlement of the person to whom the splittable
payment would have been made but for the order;
TYPE (A) – growth phase orders
 Growth phase: when pension still accruing.
 Applies to non % interests only (almost all types of super)
 When payable – sets aside lump sum (base amount) to other spouse.
 Ct must first value interest
 Ct must then allocate base amount.
 Base amount:
 $ amt that parties agree the other spouse will receive.
i. Global % applied to all assets; or
ii. Asset/asset to work out % of super interest
 If not received immediately, Regs set out adjustments for growth until received (adjusted base
amount).
 Example:
 FACT; H has accumulation interest – value with Reg to be $253,590. Ct decide global 55:45
split to W:H = $139,474.50:$114,115.50.
 Order: Pursuant to s90MT(1)(a) FLA, whenever splittable payment payable, W entitled to
amount calculated with regulations suing base amount of $139,474.50, and corresponding
deduction to H’s entitlement will made.
TYPE (B) – payment phase orders
 Payment phase: when retired and have pension
 Applies to non % interest only (almost all types of super)
 When payable – pay other spouse % of spittable payments
 Used for lump sum pension payments:
o FACT: H retires and takes whole super. Ct grant 15% of H’s income stream to H.
o Order: Whenever spittable payment payable, W entitled to 15% of that payment, and
corresponding deduction to H’s entitlement made.
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Used for future lump sum payments:
o FACT: H gets lump sum in 2 parts ($200K total) and also $40K/year pension. Ct give W
50% - $20K/year and 50% of lump sums.
Why not use TYPE (B) in growth phase?
 Disadvantage to spouse (who is super member).
 Use above example!
 If separate at 40yrs (growth phase) and Type (b) 50% ordered:
o Other spouse get 50% of lump $200K, even though only $75K accured during marriage
o Give other spouse 50% of ALL pension (including pension post separation!)
Flagging Orders
FAMILY LAW ACT 1975 - SECT 90MU
Flagging order
(1) A court, in accordance with section 90MS, may make an order in relation to a superannuation
interest (other than an unflaggable interest):
(a) directing the trustee not to make any splittable payment in respect of the interest without
the leave of the court; and
(b) requiring the trustee to notify the member spouse and the non‑ member spouse, within a
period specified in the order, of the next occasion when a splittable payment becomes
payable in respect of the interest.
(2) In deciding whether to make an order in accordance with this section, the court may take into
account such matters as it considers relevant and, in particular, may take into account the likelihood
that a splittable payment will soon become payable in respect of the superannuation interest.
 Balance btw:
o Splitting order is not just/equitable
o Determine financial rel between parties as far as practicable (s81 – clean break principle)
o Likelihood of splittable payment become payable.
 Used when:
o Actual value of super is unknown, but will be known in very near future  flag to defer
final decision until super known.
S79 and super
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Leg is silent re how Ct should take super into accn in s79
Coghlan v Coghlan [2005] considerations:
 Rel of duration of fund membership and cohabitation
 Actual contributions made by fund spouse at start of cohabitation
 Actual contributions made by fund spouse by separation/hearing
Divide yrs of super membership by years of cohabitation: West v Green [1993]
CF: M v M (2006)
o Shouldn’t use a formula approach
o Fail to take into accn how usually larger contributions are made in later years etc.
3rd Party Property Interests/Rights
3rd Party Interests May Arise Where:
 Debts crystallizes on separation eg. parent contributes to house (gift?), but actually loan
o Look at if it is a real commercial loan, likely to be enforced?
 Debts to private comps – not intended to be repaid unless liquidated
 Debts of 1 party secured against both eg. loan secured by matri home
 Companies and trusts entered into to decrease assets
 Stat liabilities eg. tax or debt for trading insolvent
 Failure to pay Mgee – repossession of matri home
Common Law
PREV: Ascot Investments v Harper (1981)
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FACT: Divorce – H ordered to pay W $75K and transfer his shares in AI to W (as security for
$75K). Fail – shares transferred by Ct but not reg. In AI Con, Dirs (3Cs and H) can refuse to
register. W want order that AI (3rd party) register.
HELD: cannot order.
o Sh can’t compel reg of shares  Ct cannot order Sh to do so (go beyond Sh’s powers).
o Order is inconsistent with Con.
o AI is not part of some sham.
LAW:
o FC cannot ignore 3rd party interests or conditions that limit the rights of party to own it
(deprive 3rd party of existing right or impose obligation that they don’t have):
 Eg. Ct cannot order H to assign Lease to W without Lessor’s consent
 Eg. Ct cannot order H to transfer land to W Mgless, if it is under Mg.
o Exceptions: Some circ, FC can order 3rd party (or indirectly affect 3rd party).
 Sham transactions (comp completely controlled by party to marriage).
o Rationale: P did not intend leg interests of 3rd party to be subordinate to interests of parties
to marriage
Orders/Injunctions Binding 3rd Parties
FAMILY LAW ACT 1975 - SECT 90AE – SAME FOR DF
Court may make an order under section 79 binding a third party
(1)
In proceedings under section 79, the court may make any of the following orders:
i.
an order directed to a creditor of the parties to the marriage to substitute one party for both
parties in relation to the debt owed to the creditor; [make debt of 1 party  both parties]
ii.
an order directed to a creditor of one party to a marriage to substitute the other party, or
both parties, to the marriage for that party in relation to the debt owed to the creditor;
[make debt of 1 party or both  other party]
iii. an order directed to a creditor of the parties to the marriage that the parties be liable for a
different proportion of the debt owed to the creditor than the proportion the parties are
liable to before the order is made; [adjust proportion of debt owed by each party]
iv. an order directed to a director of a company or to a company to register a transfer of shares
from one party to the marriage to the other party.
(2)
In proceedings under section 79, the court may make any other order that:
i.
directs a third party to do a thing in relation to the property of a party to the marriage; or
ii.
alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3)
The court may only make an order under subsection (1) or (2) if:
i.
the making of the order is reasonably necessary, or reasonably appropriate and adapted, to
effect a division of property between the parties to the marriage; and
ii.
if the order concerns a debt of a party to the 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; and
iii. the third party has been accorded procedural fairness in relation to the making of the order;
and
iv. the court is satisfied that, in all the circumstances, it is just and equitable to make the order;
and
v.
the court is satisfied that the order takes into account the matters mentioned in subsection
(4).
(4)
The matters are as follows:
i.
the taxation effect (if any) of the order on the parties to the marriage;
ii.
the taxation effect (if any) of the order on the third party;
iii. the social security effect (if any) of the order on the parties to the marriage;
iv. the third party's administrative costs in relation to the order;
v.
if the order concerns a debt of a party to the marriage--the capacity of a party to the
marriage to repay the debt after the order is made;
Note:
See paragraph (3)(b) for requirements for making the order in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that
party's ability to repay the debt without undue hardship.
vi. the economic, legal or other capacity of the third party to comply with the order;
Example: The legal capacity of the third party to comply with the order could be affected by the
terms of a trust deed. However, after taking the third party's legal capacity into account, the court
may make the order despite the terms of the trust deed. If the court does so, the order will have
effect despite those terms (see section 90AC).
vii. if, as a result of the third party being accorded procedural fairness in relation to the making
of the order, the third party raises any other matters--those matters;
Note:
See paragraph (3)(c) for the requirement to accord procedural fairness to the third
party.
(h) any other matter that the court considers relevant.
FAMILY LAW ACT 1975 - SECT 90AF – SAME FOR DF
Court may make an order or injunction under section 114 binding a third party
(1) In proceedings under section 114, the court may:
(a) make an order restraining a person from repossessing property of a party to a marriage; or
(b) grant an injunction restraining a person from commencing legal proceedings against a party to
a marriage.
(2) and (3)  SAME AS ABOVE.
FAMILY LAW ACT 1975 - SECT 90AK – SAME FOR DF
Acquisition of property
(1) The court must not make an order or grant an injunction in accordance with this Part if the order
or injunction would:
(a)
result in the acquisition of property from a person otherwise than on just terms; and
(b)
be invalid because of paragraph 51(xxxi) of the Constitution.
(2) In this section:
"acquisition of property" has the same meaning as in paragraph 51(xxxi) of the Constitution.
"just terms" has the same meaning as in paragraph 51(xxxi) of the Constitution.
Other Provisions
 Orders/injunctions override any other laws/instruments etc: s90AC
FAMILY LAW ACT 1975 - SECT 90AC
This Part overrides other laws, trust deeds etc.
(1) This Part has effect despite anything to the contrary in any of the following (whether made before
or after the commencement of this Part):
(a) any other law (whether written or unwritten) of the Commonwealth, a State or Territory;
(b) anything in a trust deed or other instrument.
(2) Without limiting subsection (1), nothing done in compliance with this Part by a third party in
relation to a marriage is to be treated as resulting in a contravention of a law or instrument referred
to in subsection (1).
 A debt is “property”: s90AD
FAMILY LAW ACT 1975 - SECT 90AD
Extended meaning of matrimonial cause and property
(1) For the purposes of this Part, a debt owed by a party to a marriage is to be treated as property for
the purposes of paragraph (ca) of the definition of matrimonial cause in section 4.
(2) For the purposes of paragraph 114(1)(e), property includes a debt owed by a party to a marriage.
 3rd party is not liable for loss/damage bcos of complying with order/injunction: s90AH
FAMILY LAW ACT 1975 - SECT 90AH
Protection for a third party
A third party in relation to a marriage is not liable for loss or damage suffered by any person because
of things done (or not done) by the third party in good faith in reliance on an order or injunction made
or granted by a court in accordance with this Part.
Trans to Defeat Claims
FAMILY LAW ACT 1975 - SECT 106B
Transactions to defeat claims
(1) In proceedings under this 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.
(1A) If:
(a) a party to a marriage, or a party to a de facto relationship, is a bankrupt; and
(b) the bankruptcy trustee is a party to proceedings under this Act;
the court may set aside or restrain the making of an instrument or disposition:
(c) which is made or proposed to be made by or on behalf of, or by direction or in the interest
of, the bankrupt; and
(d) 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.
(1B) If:
(a) a party to a marriage, or a party to a de facto relationship, is a debtor subject to a personal
insolvency agreement; and
(b) the trustee of the agreement is a party to proceedings under this Act;
the court may set aside or restrain the making of an instrument or disposition:
(c) which is made or proposed to be made by or on behalf of, or by direction or in the interest
of, the debtor; and
(d) 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.
(2) The court may order that any money or real or personal property dealt with by any instrument or
disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the
payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must
be paid into court to abide its order.
(3) The court must have regard to the interests of, and shall make any order proper for the protection
of, a bona fide purchaser or other person interested.
(4) A party or a person acting in collusion with a party may be ordered to pay the costs of any other
party or of a bona fide purchaser or other person interested of and incidental to any such instrument or
disposition and the setting aside or restraining of the instrument or disposition.
(4AA) An application may be made to the court for an order under this section by:
(a) a party to the proceedings; or
(b) a creditor of a party to the proceedings if the creditor may not be able to recover his or her
debt if the instrument or disposition were made; or
(c) any other person whose interests would be affected by the making of the instrument or
disposition.
(4A) In addition to the powers the court has under this section, the court may also do any or all of the
things listed in subsection 80(1) or 90SS(1).
(5) In this section:
"disposition" includes:
(a) a sale or gift; and
(b) the issue, grant, creation, transfer or cancellation of, or a variation of the rights attaching to,
an interest in a company or a trust.
"interest" :
(a) in a company includes:
i. a share in or debenture of the company; and
ii. an option over a share in or debenture of the company (whether the share or
debenture is issued or not); and
(b) in a trust includes:
i. a beneficial interest in the trust; and
ii. the interest of a settlor in property subject to the trust; and
iii. a power of appointment under the trust; and
iv. a power to rescind or vary a provision of, or to rescind or vary the effect of the
exercise of a power under, the trust; and
v. an interest that is conditional, contingent or deferred.
Abdullah v Abdullah [1981]
 FACT: H own land as TIC with bro – sold his 1/2 after knowing re W’s s79 application. Did no
valuation, just sold for $8500 (well below market price) to Mr J. Evidence to show that Mr J
doesn’t exist, $8500 was paid from himself and was going to get prop back after 279 proceedings.
 HELD: trans to defeat W’s s79 claim  set aside trans.
 LAW:
 Ct should be reluctant to set aside trans of BF purchaser for full value.
a. If proceeds available – Ct should grant s114 inj to restrain dealings with proceeds until
s79 done.
b. If proceeds used up – Ct should not set aside (exception: matri home).
Pflugradt v Pflugradt [1981]
 FACT: W get maintenance order, but H fail - $10K arrears. H and H’s F (JT of matri home) make
deed of trust for D. 9mths later, W start s79 + set aside trust (matri home is H’s only asset).
 ISSUE: s106B must show that trans is likely to defeat an EXISTING or ANTICIPATED order.
Can W’s s79 order be “anticipated” (9mths after trans)?
 HELD: yes – set aside trust (using foreseeability test below)
 W had obvious prima facie claim – made many expenditures herself, contributions
 Existing order not complied with  reasonable expectation that W would start proceedings
 Matri home was H’s only asset – foreseeable target of any proceedings.
 LAW:
 Anticipate NOT ordinary/dictionary meaning  tort expectation/foreseeability.
 Look at all circ at time of trans – whether application at some time (with order made) was
objectively to be foreseen/expected as being likely or reasonably probable?
 Order (not just claim) must be “anticipated”
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
3rd Party Creditors
LAW: Sec creds – always come out before valuing assets!
ISSUE: priority between s79 claim (property settlement) and unsec creds – where Prop is
insufficient to meet both needs.
Re Bailey [1990]
 FACT: H sued for negligence. W start s79 proceedings. H die. If damages awarded for negligence
– exceed assets in H’s estate.
 ISSUE: Negligence claimants want stay of W’s s79 proceedings until negligence proceedings
determined.
 HELD:
 LAW:
o Between s79 applicant (creation of fresh rights) v CL claim by Ps from transactions before
death of Dec  priority is 3rd parties.
o Question is not matter of priorities – what is property of H/W?
 Looking at property – requires ascertaining liabilities.
 Thus, if not properly ascertainable  should stay proceedings.
o Irrelevant whether liabilities are actual, contingent, out of contract or tort.
Biltoft v Biltoft [1995]
 LAW:
o Ct may not discount unsec liability from H/W property in certain circs.
 Liability is vague/uncertain, unlikely to be enforced, unreasonably incurred.
o There is no req that 3rd party/unsec cred rights before considered prior to s79 (no rule of
priority)  rights cannot be ignored, but are to be balanced with s79 rights.
o Unsec liabilities – there is no rule that Ct can’t make order that would hamper unsec
chances of recovery debt.
 Rationale: if advance monie/goods without security  own risk.
Bankruptcy
FLA Definition of Property
 Includes prop that is vested in bankruptcy Trustee: s4 FLA
Vesting of Property
 Divisible prop:
 On bankruptcy – divisible prop vests in Trustee of bankrupt’s estate: s58 Bankrupty Act 1966 (Cth)
o Exempts resources necessary to live ordinary dignified lifestyle and provide opportunity of
financial rehabilitation: s116(2)
o Exempts superannuation: s116(2)(d)
o Exempts prop that is held by bankrupt on trust for another: s116(2)(a)
o Exempts prop under FLA order that Tee is required to transfer to spouse: s116(2)(q)
 This is subject to FLA order (if Tee is ordered to transfer prop to spouse, that prop is not divisible
amongst creds): s59A BA
 THUS: FC can now alter interests of bankruptcy Trustee
Maintenance Proceedings
 Priority to pay child support and child maintenance: Div 4B BA
 Where bankrupt before maintenance proceedings conclude – vested bankruptcy prop can be subject
of maintenance orders
o Bankruptcy Trustee is joined in proceedings (in shoes of bankrupt) if Ct satisfied that creds
affected upon bankrupt’s insolvency
 Ct must consider effect of maintenance order on ability of cred to recover debt: s75(2)(ha) FLA
o BUT note that it gives no priority to this consideration: Lemnos v Lemnos [2007]
Property Proceedings
 Ct can make orders to alter interests of bankruptcy Trustee in the vested bankruptcy prop: s79(1)
FLA
o Including order for settlement of prop in substitution for any interest in the prop
o Including order for settlement/transfer of prop for benefit of either/both spouses or child.
Ct’s General Powers
 Ct can make order to bankrupt under s80(1)(d)  to do such things as necessary “to enable an
order to be carried out effectively or to provide security for the due performance of an order”:
s80(4) FLA
Lemnos v Lemnos [2007]
 FACT: Bankruptcy Tee claim W has no priority – same share of prop as any cred
 HELD:
o W’s share of prop is taken out before Tee divides amongst creditors.