Setting aside or varying orders

In certain situations, for example, where a party has failed to disclose relevant assets or liabilities which has disadvantaged the other party, the court is empowered to set aside previous orders made by consent under s 79A of FLA. Other factors which may ground a court setting aside previously made orders include where a party has acted fraudulently, coerced the other party or there has been a “miscarriage of justice”.

Section 90K (1) of FLA enables the court to set aside a financial agreement which has been made with reckless disregard of the interests of creditors.

See Setting aside or varying orders.

Effect of bankruptcy on property settlements

Where a party is bankrupt at the commencement of proceedings or subsequently becomes bankrupt, the outcome of the settlement can be greatly influenced by the joinder of the trustee in bankruptcy or a creditor to the proceedings. The court is required to balance the competing claims of the creditors’ interests against those of the spouse especially where the family home is not protected from being sold to meet existing debts.

A court can take into account a party’s bankruptcy in a wide range of matters under the FLA: the alteration of property interests; the making of consent orders or a financial agreement; spousal maintenance or setting aside orders already made. Bankruptcy does not affect a party’s obligation to continue to pay child support and may not be sufficient to avoid a claim for spousal maintenance.

Procedures in bankruptcy cases also differ in that in most cases, one party will seek to join the trustee, or the trustee may join of their own volition to protect the interests of creditors. Parties may also be summonsed for examination about their financial affairs with the court empowered to apprehend a person who does not appear to give evidence as requested.

See also Bankruptcy in the family law context.