Matrimonial Property Concepts And Principles
Section 114(3) of the Family Law Act relevantly provides that:
A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), 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.”
Summary of Liu v Xiao Case
In respect to the relevant legal principles in determining whether the Court should make orders or grant injunctions for the preservation of property were summarised by Hume J in the case of Liu v Xiao (2018) NSWSC 1401 at [7].
Legal Principles for Granting Injunctions of Matrimonial Property
An applicant must establish, first, a good arguable case and, second, a risk that any judgment will go unsatisfied by reason of a party dealing with their assets to place them out of the reach of the other party. It must be shown there is a risk, not a mere assertion that a party may dispose of or deal with his/her assets in such a manner as to leave any judgment unsatisfied.
It is not necessary to prove that a party has a positive intention of embarking on that course. The quantum of a freezing order ought not be fixed at a sum greater than that which Plaintiff would potentially or likely recover.
In summary, an applicant for such an order must establish, firstly, an arguable case, and, secondly, that there is a risk that, if the order is not made, a judgment will go unsatisfied by reason of the other party having dealt with their assets to place them out of the reach of the applicant.
In terms of that second element, it must be shown that there is a real risk of that occurring, rather than a mere assertion that the defendant may dispose of, or deal with, their assets in such a manner.
It is not necessary for a party to show that the other party has a positive intention of evading a judgment, and it is sufficient to show that the course on which the respondent proposes to embark is, objectively speaking, calculated to have that effect.
A party seeking the injunction must establish, by evidence and not a mere assertion, that there is a real danger that by reason of the respondent absconding or otherwise dealing with assets, the applicant will not be able to have its judgment satisfied. The mere assertion that a party was likely to put assets beyond the reach of the other party is inadequate.
The party seeking the injunction has the onus of establishing that there is a real risk that the other party will deal with the assets of the matrimonial property pool in such a manner that raises a real risk that the Court will be unable to do justice between the parties at a final hearing.
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