Case: Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131
Outcome: referred to
Thirdly, (in terms of the position before the Amending Act) s 35A of the Bankruptcy Act has been in the Act since 1988 and the above principles did not mean that this Court would never exercise its discretion to transfer proceedings under the Bankruptcy Act to the Family Court. The circumstances of the case might suggest that that course was appropriate even though, once transferred, the Family Court was bound to give full force and effect to the provisions of the Bankruptcy Act : Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131. I also refer to Re Boscolo; Ex parte Botany Council (1996) 62 FCR 397 as an example of a case where this Court refused to transfer proceedings to the Family Court. 26 Had this application been made under the law as it stood prior to the enactment of the Amending Act, I would have seen no reason to transfer the proceedings to the Family Court. It is true that the Family Court would have had jurisdiction to hear the trustee's claim by reason of the order for transfer and the provisions of s 35A, but the Family Court would have had no power to make orders altering the ownership interests in the freehold property, leasehold property and speedboat if and once the trustee had brought the transfers within the provisions of s 120 or s 121 of the Bankruptcy Act . If he was unsuccessful in doing that then the ownership interests would remain as they are. Furthermore, there is no existing order of the Family Court that might suggest, as it did in Re Sabri; Ex parte Sabri v Brien , that to avoid the appearance of conflict between orders, the proceedings should be transferred to the Family Court. 27 For the purposes of this case, the important change introduced by the Amending Act is that it gives the Family Court the power to make such orders as it considers appropriate, altering the interests of the bankruptcy trustee in what is referred to as 'the vested bankruptcy property'. It is necessary to examine the amendments in some detail because, as the submissions developed, counsel for Mrs Edge submitted that in pursuing a matrimonial cause the trustee 'had simply issued in the wrong court'. 28 The starting point is the introduction into the Family Law Act of two new paragraphs in the definition of 'matrimonial cause'. For present purposes, paragraph (cb) is the relevant paragraph and it is in the following terms: '(cb) proceedings between: (i) a party to a marriage; (ii) the bankruptcy trustee of a bankrupt party to the marriage; with respect to any vested bankruptcy property in relation to the bankrupt party, being proceedings: (iii) arising out of the marital relationship; or (iv) in relation to concurrent, pending or completed divorce or validity of marriage proceedings between the parties to the marriage; or (v) in relation to the divorce of the parties to the marriage, the annulment of the marriage or the legal separation of the parties to the marriage, being a divorce, annulment or legal separation effected in accordance with the law of an overseas jurisdiction, where that divorce, annulment or legal separation is recognised as valid in Australia under section 104 ;' 29 The term 'vested bankruptcy property' is defined in s 4 of the Family Law Act as follows: '"vested bankruptcy property" , in relation to a bankrupt, means property of the bankrupt that has vested in the bankruptcy trustee under the Bankruptcy Act 1966 . For this purpose, property has the same meaning as in the Bankruptcy Act 1966 .' 30 By reason of the Amending Act, s 79(1) of the Family Law Act (which is in Part VIII) now reads: '(1) In property settlement proceedings, the court may make such order as it considers appropriate: (a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or (b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property; including: (c) an order for a settlement of property in substitution for any interest in the property; and (d) an order requiring: (i) either or both of the parties to the marriage; or (ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.'