Injunctions to Preserve Property in Family Law

Injunctions are a type of court order usually prohibiting a person from doing something at risk of being charged with the offence of contempt of court.

The court’s power to make an injunction is found in section 114(1) of the Family Law Act which provides:

‘(1)  In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

An injunction might be sought in Family Law property proceedings where there is evidence that one of the parties is going to dispose of property in order to try and defeat the substantive application of the other.

The injunction will generally prohibit the person from dealing with the property pending the resolution of the substantive proceedings. This type of injunction is known as a ‘freezing order’ or ‘Mareva Order’ (coming from the case in the English Court of Appeal of Mareva Compania Naviera SA v International Bulkcarriers SA).

This was the situation in Waugh [2000] FamCA 1183. In that case the wife applied for an injunction restraining the husband from dealing with dealing with his business assets in order to preserve them pending the final hearing of her application where she sought, among other things, a payment to her from the husband.

At first instance the injunction was granted however it was set aside on appeal because [at 61]:

1. The Judge at first instance erred in principle.
2. The orders worked a substantial injustice to the husband in that they unduly and unnecessarily fettered his capacity to conduct his business in the way that he always had.
3. The orders caused significant inconvenience and at least a potential for significant losses in the husband’s business.

The general elements to establish to get a freezing order in family law proceedings are:

1. There is serious question to be tried (Does the applicant have a prima facie case?); and
2. The balance of convenience supports the making of an order (Blueseas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856 (FC) at para 56).
3. The restraints sought be reasonably necessary in the sense that if the restraining orders sought are not made there would be a real risk of the defeat of the applicant’s claimed interests (Waugh at paras 32-33).

On the question of whether the balance of convenience supports the making of an order the court must ‘balance the hardship to each party of granting or refusing an order and frame its order in such a way as to impose no further restriction that is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.’  (Sieling & Sieling [1979] FamCA 23).

In stating the above elements, it is important to note that a freezing order is a drastic remedy which should not be granted lightly.

It was highlighted in Waugh that the purpose of a freezing order is to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction [at 35]. Therefore, when considering making a freezing order the court will not make an order that goes further than is necessary to prevent an abuse or frustration of its process.

A freezing order cannot be made merely because the applicant fears there will be nothing against which to enforce their judgment nor can the applicant be given a secured position against other creditors [at 40].

A few situations where an injunction may not be ordered:

1. If there is enough other property available to satisfy the applicant’s claim, should they get judgement in their favour.
2. It cannot be shown on the evidence that there is a real risk of the respondent disposing of the property.
3. It cannot be shown on the evidence that there is a real risk of the respondent disposing of the property pursuant to any scheme to defeat judgement which the applicant might obtain in the substantive proceedings.
4. The applicant has not provided the respondent with an ‘undertaking as to damages’ (although there is more flexibility in the Family Courts, see VAIL & VAIL (NO. 2) [2020] FamCA 1070). This is a promise by the applicant that they will pay compensation to any person negatively affected by the injunction.

If you need any assistance with injunctions or family law, please contact our team today.