Often Family Law property matters involve legal disputes which extend to third party creditors of one or both parties. A creditor is someone that is owed money. A classic example we often come across is when a parent of a party “loans” their child or their child’s spouse, or both of them jointly, money during the relationship, such as to purchase a home or business.

Things can get complicated when these third parties commence proceedings in state or federal courts, especially when you are trying to navigate your Family Law matter in the Federal Circuit and Family Court of Australia. It can be hard to know what to do in your Family Law matter when you also have uncertainty from a case in another Court that affects your entitlements in the Family Court. The Court’s different timetables can also cause an issue as you may feel that one matter needs to be determined to help determine the other matter.

When a matter is being litigated in one Court which is directly relevant to a matter in another Court (such as proceedings in the Supreme Court seeking enforcement of a debt and payment by way of sale of the family home), then one of those Courts may need to transfer their proceedings to the other Court in order to have the various issues litigated together. This process is known as cross-vesting, and is made possible by the Jurisdiction of Courts (Cross-vesting) Act 1987.

The Family Law Act 1975 (Cth) also contains provisions in section 46 which require courts of summary jurisdiction to transfer proceedings in relation to property of a total value exceeding $20,000.00, and where the orders sought are in dispute, to the Federal Circuit and Family Court or another court listed in that section, unless both parties agree to the dispute being heard in the summary court. The summary court can still transfer the proceedings of its own motion, notwithstanding that the parties would be willing for the Court to hear and determine the proceedings.

This cross-vesting between courts and cross over of jurisdiction can be complicated, because you may need to consider which court is more appropriate to hear both matters simultaneously. Sometimes cross-vesting is not the answer, or even a possibility, such as where a Court finds that the relevant criteria under the legislation are not met and declines to transfer proceedings to be heard together. So are there ways to protect your interests while you navigate your Family Law property matter?

In the case of Pratten & McPherson [2016] Austin J made an anti-suit injunction order restraining the Second Respondent in that matter, the Respondent Husband’s Mother, from taking any further steps to prosecute her claim for relief in Supreme Court proceedings initiated by her in relation to a parcel of land owned jointly by her and the Applicant Wife. The Second Respondent sought that the whole of the proceedings before the then Family Court of Australia be transferred to the Supreme Court pursuant to section 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987. The Judge discussed the need for the focus of attention to be on which of the courts would be the “more appropriate” forum, or alternatively, for it to “otherwise be in the interests of justice” that the matrimonial proceedings be transferred to the Supreme Court. The Judge found that the Family Court was the more appropriate Court to deal with the dispute, and felt the “justifiable and safest course” was to grant the anti-suit injunction (in essence, a restraint on the mother from further litigating her claim in the Supreme Court). The Judge confirmed the Court’s power to grant such a remedy arising from cases such as Cole & Abati [2016] and Teo & Guan [2015].

The case of Pratten & McPherson [2016] was cited in a further case, Janda & Janda (No 2) [2022], and similar anti-suit injunction orders were made in that case to restrain the continuation of Supreme Court proceedings by a third party to that matter. In this matter, the Court acknowledged at [22], “it is a serious step to injunct a party from continuing litigation. All the more so where that person is a stranger to the marriage. It is a step which will only be taken where the Court can be satisfied that all the matters in s90AF of the Act have been appropriately addressed.”

CBD Law can advise you of your rights in relation to your Family Law property settlement, and how these may be impacted by the rights of third party creditors. We can help you at every step of the process, including initial discussions and disclosure, representation in Court proceedings, and formalising property settlements, including property settlements that require notice or participation of third parties.