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Injunctions To Preserve Matrimonial Property Concepts And Principles

Matrimonial Property
15 May 2023
  • Property Settlement Law
  • James Noble

In family law disputes, the preservation of matrimonial property is often crucial to ensure a fair and just resolution. Under the Family Law Act 1975 (Cth), courts have the power to grant injunctions that restrict parties from disposing of or dealing with assets that form part of the matrimonial property pool. This article explores the statutory basis and legal principles governing such injunctions, with reference to the decision in Liu v Xiao (2018) NSWSC 1401.

Statutory Power to Grant Injunctions

Section 114(3) of the Family Law Act 1975 provides:

Statutory Power to Grant Injunctions“A court… may grant an injunction, by interlocutory order or otherwise… in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.”

This provision grants the court broad discretion to intervene in circumstances where a party’s actions could frustrate the fair distribution of assets or obstruct justice.

Matrimonial Property and the Need for Injunctions

Matrimonial property generally refers to the pool of assets and liabilities accumulated during the relationship. When disputes arise over property division, it is not uncommon for one party to attempt to conceal, transfer or dispose of assets. Injunctions play a vital role in preventing this conduct and ensuring the Court retains the ability to make effective final orders.

Legal Principles from Liu v Xiao (2018) NSWSC 1401

In Liu v Xiao, Hume J articulated the legal framework for granting freezing injunctions to preserve assets:

  • Good Arguable Case: The applicant must first demonstrate a good arguable case for the underlying substantive claim.
  • Real Risk of Asset Dissipation: There must be a real risk, established by evidence, that the respondent will dispose of or deal with assets in a way that would render any judgment ineffectual. This risk must go beyond speculation or assertion.
  • Objective Assessment: It is not necessary to prove that the respondent intends to avoid judgment. It is sufficient to show that their conduct, objectively assessed, is likely to have that effect.
  • Burden of Proof: The onus rests on the party seeking the injunction to establish this risk with sufficient evidence.
  • Scope and Proportionality: The quantum of the injunction (such as a freezing order) should not exceed the value of the claim likely to be recovered.

Key Takeaways for Family Law Practitioners

  • Injunctions are a powerful tool under the Family Law Act to protect matrimonial assets during proceedings.
  • Courts require compelling, evidence-based applications that demonstrate both a legitimate claim and a real risk of injustice without the injunction.
  • Practitioners must carefully assess and document the factual circumstances that support the need for an injunction, especially where asset dissipation or relocation is suspected.

Conclusion

Injunctions under section 114 of the Family Law Act 1975 serve as an essential mechanism to ensure justice is preserved throughout family law proceedings. As seen in Liu v Xiao, courts exercise caution and rely on established legal principles to prevent misuse of this power while safeguarding the rights of parties involved.

If you are concerned about the protection of matrimonial property or believe assets are at risk of dissipation during a separation, it is vital to seek legal advice promptly.

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