Factsheet

Third parties in family law proceedings

By Alison Ross and Lisa Lahey / 01 May 2018

Who is a party to family law proceedings?

Usually, only two persons are parties to a dispute in the Family Court or the Federal Circuit Court. They are the spouses or de facto spouses in a property dispute, and the parents of a child or children in a parenting dispute.

In parenting proceedings, a dispute may also be between a grandparent and a parent. Both parents must still be joined to the proceedings. Further, any person concerned with the “care, welfare and development of the child” may apply for a parenting order under section 65C of the
Family Law Act 1975 (Cth).

In property disputes, a spouse may join a third party to the court proceedings if they assert, for example, that:

  • an order should be made declaring that an asset legally owned by a third party should be the property of one or both spouses;
  • a transaction has occurred which is likely to defeat an order of the court, and the spouse seeks to set aside that transaction;
  • a third party should be restrained from taking certain actions that may affect or defeat the spouse’s entitlements;
  • an adjustment should be made to the rights of a third party creditor;
  • there are insufficient assets in the pool to satisfy the property division sought by the spouse, without including the matrimonial assets held by a third party entity; or
  • an order needs to be made directed to a third party to assist in carrying out the property settlement sought by that spouse.

A frequent scenario in property proceedings is that a family trust holds assets that the court determines are, in reality, assets of the marriage. Recent case law shows that any combination of control of the trust, a beneficial interest in the trust, or the assets of the trust having
been sourced from matrimonial property, can potentially result in the assets of the trust being regarded as assets of the marriage.

A third party should seek advice about whether they need to be joined to family law proceedings if:

  • there is a significant asset legally owned by one party to property proceedings that the third party considers to be their own asset; or
  • the third party’s rights are being affected by orders sought by the spouse, and the court has not been put on notice of the third party’s rights. This is often the case if one spouse might be going bankrupt or is the subject of litigation, and there is a concern that assets may be transferred to the spouse who is not at risk, without taking into account the liability to the third party.

How do I join someone else to the proceedings? What should I do if I have been joined to the proceedings?

It is relatively easy to join a third party to proceedings. However, if you are to join a third party, the third party may bring a strike out application arguing that the application against them (as opposed to the application against the spouse) should be dismissed.

It is essential for any third party who has been joined to Family Law Act proceedings to consider immediately whether a strike out application should be brought. Continuing as a party to the proceedings may involve being forced to disclose documents, incurring legal costs, and
eventually, becoming the subject of an unwanted order. 

There has been several recent cases of spouses attempting to join third parties and being unsuccessful because they have obtained either no legal advice or poor legal advice.

Parties need to devote resources and effort to the complex area of establishing a cause of action against a third party, and establishing that the court has the jurisdiction to make the orders sought.

Joining a third party is not necessary to obtain information from that third party that is relevant to proceedings. A subpoena may be directed to a third party to obtain documents that are relevant to either a financial resource or property of a spouse. In many instances, the spouse will have a role in a third party entity, which means that they are required to produce the documents as part of their ordinary obligation of disclosure in the proceedings.

Summary

The law in relation to third parties is one of the most complex areas in family law and one that is constantly changing. It is essential that you obtain legal advice if you are affected by proceedings under the Family Law Act, if you may become a third party to Family Law Act proceedings, or if you are considering joining a third party to your Family Law Act proceedings.


The contents of this paper are not intended to be a complete statement of the law on any subject and should not be used as a substitute for legal advice in specific fact situations. HopgoodGanim Lawyers cannot accept any liability or responsibility for loss occurring as a result of anyone acting or refraining from acting in reliance on any material contained in this paper.

Authors
Alison Ross
Partner
Alison is a Partner of our Family and Relationship Law practice who works exclusively with HG Private clients.
Lisa Lahey
Partner
Lisa is a Partner in our Family and Relationship law practice with over 25 years of experience advising on all facets of family law, including complex property and children’s matters.
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