Property – bankruptcy – just and equitable settlement identifiable without husband’s participation or disclosure

In Hicks & Trustee of the Bankrupt Estate of Hicks [2021] FamCAFC 19 (18 February 2021) the Full Court (Ryan, Aldridge and Kent JJ) heard an appeal by a trustee in bankruptcy from property adjustment orders made by Loughnan J in the absence of the husband.

The orders were such that the husband received $651,747, being the amount required to satisfy the husband’s proven debts in bankruptcy.

Addressing the justice and equity of the orders, the Full Court said (from [58]):

“ …[H]is Honour considered Commissioner of Taxation & Worsnop and Anor [2009] FamCAFC 4 and … other [Full Court] decisions … in expressing the conclusion that the creditors, represented by the trustee, do not have priority over the wife (…)

[89] … [F]ailure by parties to provide credible evidence relating to aspects of their financial affairs does not entitle the Court to dismiss applications or to relieve the Court of the responsibility of applying the provisions of the Act…

[90] In this case the primary judge recorded that the husband … had elected not to take part [in the proceedings] … and his Honour was satisfied that … it was appropriate to make orders on an undefended basis as against the husband

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[116] …[T]he primary judge was plainly cognisant of the … cases as to the approach to attributing responsibility as between married parties for acquired debts in the s79 process. It bears some emphasis that … [the] authorities identified guidelines for the exercise of the s79 discretion, and not binding principles constraining that exercise. (…)

[119] … [I]t was within the ambit of a legitimate exercise of s79 discretion for the primary judge to deal with the husband’s debts in the manner in which his Honour did…”

The Full Court dismissed the trustee’s appeal but no order was made as to costs.

Craig Nicol is the editor of The Family Law Book and Keleigh Robinson is the co-editor. Both are Accredited Specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).