What happens should both parties pass away during Family Court property proceedings?

Current at 18 July 2023 (originally published 10 August 2020)

The answer is simple, the Family Court has no jurisdiction to do anything when both parties pass away during Family Court property proceedings other than strike out the application.

However, not everything in life (or death) is that simple.

1. What if there are third parties to the proceedings involved?
2. Or an intergenerational family business that continues to run?

Third Parties to the Proceedings

Property proceedings cannot be commenced where one of the parties has already died.

Section 79(8) of the Family Law Act gives the Family Court power to continue proceedings after a spouse passes away but this only applies after Family Court proceedings have already been commenced but before they are completed.

The wording of s. 79(8) is relevant, as the subsection reads where "a party to the marriage dies".

There are 2 takeaways from these 6 simple words:

• Section 79(8) only applies when "a party", not "both parties";
• The proceedings cannot be survived by a third party to the proceedings, as that person is not a "party to the marriage".

In 2007, The Honourable Le Poer Trench J in Estate of Mackenzie & Estate of Mackenzie and Anor [2007] FamCA 882 considered the dictionary definition of the word "a" to reach the view that the ordinary meaning of "a" is synonymous with "one" or "single".

Business Structures

Whilst at least one party (of the marriage) is alive, the Family Court can deal with some issues to avoid further heartache for the surviving family members after both spouses die. Some things to consider are:

• Does the business' structure provide enough protection to allow the business to continue without the deceased parties?
• Does the business rely on the deceased party to exercise certain powers? If there are no successors in place, this may impact the usual conduct of the business or have tax implications.
• If the business operates through a family trust, the trust deed may allow for the deceased trustee, guardian or appointor to name another person outside of the family to succeed them. These positions may even have the power to change the class of beneficiaries.

We're Here to Help

Family law matters can be difficult and complex. If you require any assistance with a family law dispute, always contact a legal practitioner who will be able to help.