%20can%E2%80%99t%20shape%20upby%20Matthew%20Burgess.jpg "View Legal blog - Scissors, paper, rock – Family Law v Bankruptcy Act (part II): can’t shape up**by Matthew Burgess")
There have been a number of decisions that have applied the changed regime, a summary of a few of the key decisions and outcome is set out below.
- Trustee of the Property of G Lemnos and Lemnos (2009) FLC 93-394 - the interests of unsecured creditors do not automatically prevail over the interests of the non-bankrupt spouse. The Court must balance the competing claims. Here the non-bankrupt wife was at least aware of the bankrupt husband's activities and therefore had to bear some of the responsibility owed to creditors.
- Debrossard & Official Trustee in Bankruptcy [2011] FamCA 648 - Having analysed the contributions of the spouses it was clear that the non-bankrupt wife had contributed to creation of the available assets. The appropriate division of property was held to be 60:40 to the wife's benefit as between her and the husband. As the husband was bankrupt the matrimonial property was distributed 60:40 between wife and trustee in bankruptcy respectively.
- Sutherland v Byrne-Smith [2011] FMCA 632 - a relatively complex factual matrix was further complicated by a lack of documentary evidence. Having considered the individual contributions made by the couple towards the property the court treated both parties as having contributed equally towards the property which was the main asset of the parties. Therefore 50% of property or sale proceeds from property passed to the non-bankrupt spouse with the balance 50% passing to the creditors of the bankrupt.
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** For the trainspotters, the title of today's post is riffed from the Wonder Stuff song ‘Can’t shape up’.
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