Family Law Practice Direction: Corporations Act proceedings

(FAM-CORPORATIONS)

1. Introduction

1.1 This Practice Direction applies to proceedings in the Federal Circuit and Family Court of Australia (FCFCOA) to which any of the following legislation applies (Corporations Act proceedings):

  1. Corporations Act 2001 (Cth) (Corporations Act 2001);
  2. Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); or
  3. Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (Corporations Act 2006).

1.2 It is to be read together with:

  1. the Family Law Act 1975 (Cth) (Family Law Act);
  2. the Corporations Act 2001;
  3. the ASIC Act;
  4. the Corporations Act 2006;
  5. the Corporations Regulations 2001 (Corporations Regulations);
  6. the Federal Court (Corporations) Rules 2000 (Corporations Rules);
  7. the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Family Law Rules); and
  8. Central Practice Direction – Family Law Case Management.

1.3 Division 1.2.4 of the Family Law Rules applies to all proceedings to which this Practice Direction applies. The Corporations Rules will generally apply to the proceeding and parties should use the forms prescribed by those rules. However, a Corporations Act proceeding must not be dismissed only because it has been made using the wrong form: see rule 1.20 of the Family Law Rules.

1.4 This Practice Direction applies to all proceedings commenced on or after 1 September 2021. This Practice Direction will also apply to all proceedings commenced prior to 1 September 2021, unless unfair or impractical to do so.

1.5 To the extent this Practice Direction is inconsistent with any act, regulation, rule or other legislative provision (whether or not expressly listed above), the act, regulation, rule or other legislative provision shall prevail.

Before a proceeding starts

1.6 Each prospective party to the proceeding must comply with the pre-action procedures in Schedule 1 of the Family Law Rules, unless an exception in rule 4.01(2) applies. Those pre-action procedures require parties to take genuine steps to resolve the dispute before proceedings are instituted. If an exception applies, this must be indicated in the application.

2. Application

Where to commence

2.1 All family law proceedings must be commenced in the FCFCOA (Division 2). An applicant wishing to seek orders available in Corporations Act proceedings in a family law proceeding must file in the FCFCOA (Division 2). The matter will then be transferred to the FCFCOA (Division 1).

2.2 A Corporations Act proceeding pending in another Court can be transferred by the other court to the FCFCOA (Division 1) pursuant to section 1337H of the Corporations Act 2001, section 12GL of the ASIC Act, or section 586.35 of the Corporations Act 2006.

Transfer to FCFCOA (Division 1)

2.3 Parties may seek to transfer the proceedings to the FCFCOA (Division 1) by seeking an order that the matter be transferred as an interlocutory order in their Initiating Application or Response to Initiating Application, or by filing an Application in a Proceeding.

2.4 A party seeking to transfer the proceedings to the FCFCOA (Division 1) must also file an affidavit setting out the facts relied on in support of the application for transfer.

Parties to Corporations Act proceedings

2.5 An application must include all necessary parties: see Part 3.1 of the Family Law Rules.

2.6 ASIC may intervene in any proceeding under the Corporations Act 2001: see section 1330 of the Corporations Act 2001.

2.7 On its own initiative or on application by a party or a person who has an interest in the Corporations Act proceedings, the Court may grant leave to a person who is not a party to the proceedings to be heard in the proceedings: see rule 2.13 of the Corporations Rules.

2.8 In the event the Court grants a person who is not a party leave to be heard, the Court may order the person to pay costs if the granting of leave causes additional costs for a party to the proceedings and the Court considers that costs should be paid by the person.

Making an application and documents to file

2.9 Unless otherwise provided by the Corporations Rules, a Corporations Act proceeding is commenced as follows:

  1. if no other related proceeding is pending before the FCFCOA, by filing an Originating Process; or
  2. if a related proceeding is pending before the FCFCOA, by filing an Interlocutory Process (whether the orders sought are final or interlocutory in nature).

2.10 The Originating Process or Interlocutory Process (application) must state:

  1. the relief sought; and
  2. if appropriate:
    1. each section of the Corporations Act 2001, the Corporations Act 2006 or the ASIC Act;
    2. each regulation of the Corporations Regulations; or
    3. each rule of Court,

    under which the application is made.

2.11 When filing the application:

  1. in an application by a company under section 459G of the Corporations Act 2001 for an order setting aside a statutory demand served on the company, the company may file a copy of the statutory demand and a copy of any affidavit that accompanied the statutory demand with the Originating Process; and
  2. in all other Corporations Act proceedings, an affidavit must be filed with the application:
    1. stating the facts in support of the application; and
    2. for an Originating Process, annexing a record of a search carried out no earlier than 7 days before the application is filed of the records maintained by ASIC, in relation to the company that is the subject of the application.

When an affidavit is required

2.12 An affidavit is required to be filed with an application in all Corporations Act proceedings, save for an application by a company under section 459G of the Corporations Act 2001 for an order setting aside a statutory demand served on the company.

2.13 A company applying under section 459G of the Corporations Act 2001 must file and serve an affidavit supporting the application prior to the end of the statutory period: see section 459G of the Corporations Act 2001.

2.14 An affidavit to be filed by a creditor may be made:

  1. if the creditor is a corporation, by a director, secretary, or other principal officer of the corporation, or by a person employed by the corporation who is authorised to make the affidavit on its behalf; or
  2. if the creditor is a company to which a liquidator, provisional liquidator, receiver, administrator or controller has been appointed, by that person; or
  3. in any other proceeding, by the creditor or a person authorised by the creditor to make the affidavit on behalf of the creditor.

2.15 An affidavit must be filed in the proper form as outlined in rules 2.14 (Formal requirements for documents) and 5.08 (Limit on number and length of affidavits) of the Family Law Rules.

Urgent applications

2.16 If an application is urgent, the applicant must seek an order that the matter be given an urgent listing (urgent application). An urgent application must be accompanied by:

  1. an affidavit stating the facts relied on in support of the urgent application; and
  2. a cover letter as to urgency, outlining the nature of the application and the basis upon which an urgent listing is required. The cover letter should refer to specific paragraphs of the affidavit relied upon in support of the urgent application.

2.17 An urgent application should be made by filing an Interlocutory Process.

Notifying the other party/parties

2.18 The application and any supporting affidavit must be served on the following:

  1. each party to the proceeding;
  2. if the corporation to which the proceeding relates is not a party to the proceeding, the corporation; and
  3. if the application is under a provision listed in the table in rule 2.8 of the

    Corporations Rules, ASIC.

2.19 The applicant must serve the application and any supporting affidavit:

  1. for an Originating Process, at least 5 days before the date fixed for hearing;
  2. for an Interlocutory Process, at least 3 days before the date fixed for hearing; and
  3. where ASIC is served as required under rule 2.8 of the Corporations Rules, a reasonable time before the hearing of the application.

2.20 A document that is required to be served personally on a corporation must be served in accordance with section 109X of the Corporations Act 2001.

What the Court will do next

2.21 Upon filing of the application, the Court will fix a date as near as practicable to 28 days after the date of filing.

2.22 If an Originating Process is filed without compliance with the pre-action procedures and no exception is applicable, the Court may stay the application until such time as the applicant complies with the pre-action procedures: see rule 4.04 of the Family Law Rules.

3. Responding to an application

3.1 A person who intends to appear before the Court at the hearing of an application must file:

  1. a Notice of Appearance; and
  2. if appropriate, an affidavit stating any facts on which the person intends to

    rely.

3.2 If the person intends to appear before the Court to oppose an application for winding up, the person may include in the Notice of Appearance the notice of the grounds on which the person opposes the application, as required by section 465C of the Corporations Act 2001.

3.3 However, if a person does not wish to contest any of the orders sought by the applicant and will submit to any order the court may make, a Submitting Notice should be filed in accordance with rule 2.22 of the Family Law Rules.

3.4 A Notice of Appearance and any affidavit must be filed and served:

  1. for an Originating Process, no later than 3 days before the date fixed for hearing; and
  2. for an Interlocutory Process, no later than 1 day before the date fixed for the hearing.

3.5 If ASIC intends to intervene in a proceeding, ASIC must file a Notice of Intervention.

3.6 The Notice of Intervention and any affidavit upon which ASIC intends to rely must be filed and served on each other party no later than 3 days before the hearing date.

4. Further information

4.1 For information on how family law proceedings are conducted in the FCFCOA, please refer to Central Practice Direction – Family Law Case Management.

4.2 Parties should also consult the FCFCOA website at www.fcfcoa.gov.au for further information about Corporations Act proceedings.

 

The Honourable Justice William Alstergren

Chief Justice (Division 1) | Chief Judge (Division 2)

Federal Circuit and Family Court of Australia

Date: 1 September 2021

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