North Sydney Commercial Lawyers

Maintenance LiabilitiesPrint This Post

Maintenance Liabilities

In Hayward v Scott as trustee of the Debtor Estate of Hayward [2013] FCA 421, a maintenance debt was the subject of a consent judgment of the South Australian Supreme Court.

The debtor’s former wife also applied to enforce a judgment for arrears of maintenance for the child of the union.

However, the debtor subsequently entered into a Personal Insolvency Agreement (PIA) and the extent of the debts which were released under the PIA were considered by the Court.

The argument centered around s153(2)(c) of the Bankruptcy Act which provides that discharge from Bankruptcy does not release the former bankrupt from liability for child or other maintenance obligations unless the Court otherwise orders under s153(2A). The Court held that if there is no bankruptcy or no discharge from bankruptcy, the conditions for the exercise of the power under s153(2A) do not exist.

The Court therefore concluded that the section does not empower a Court to release a debtor who has entered into a PIA from a liability to pay arrears due under a maintenance agreement or a maintenance order.