It is common place, particularly in acrimonious property proceedings, that one party will seek to dispose of assets or otherwise arrange their financial affairs with a view to preventing the other person from receiving a share of an asset, or all of the assets, of a relationship.
Should this be the case, a person has the ability to apply to the Court for certain behaviour to be restrained, or, if a transaction has already taken place, to reverse that transaction in certain circumstances. Section 114 of the Family Law Act deals with injunctions in relation to property matters. The powers that the Court has in terms of restraining another party from doing a particular thing are far reaching, and include the following:
- A person can apply for an injunction to protect the property of a party to the marriage (for example, preventing a person from damaging it).
- The Court can restrain a party from entering or remaining in the matrimonial home or any other premises in which the other party to the marriage resides. The Court can even make an order preventing a party from entering a specified area.
- The Court can make an injunction preventing a party to a marriage from entering the place of work of the other party.
- The Court can make an injunction for the protection of the marital relationship (which is a rarely used order).
- The most common order is an injunction in relation to the property of a party to the marriage. That is a wide order, and is ordinarily used to prevent a person from selling or otherwise disposing of an asset of the relationship.
- Finally, the Court can make an injunction relating to the use or occupancy of the former matrimonial home.
In general terms, the Court can make an order that prevents a person from doing any act that may reduce the size of the asset pool, reduce the value of an asset or otherwise is a step designed to make obtaining an order for property adjustment more difficult.
If a transaction has already taken place that fits within one of those categories, the Court also has certain powers. Section 106B of the Family Law Act provides that a Court may set aside any transaction (defined as an instrument or disposition) of a party to a marriage, or by a third party on behalf of that party to a marriage, which is made or proposed to be made to defeat an existing or anticipated order in Family Law proceedings.
The most common example of that is if a person disposes of a property, or an interest in a company, to (most frequently) a family member. In those circumstances, an order can be sought providing for that transaction to be undone, the property or interest in the company to revert to the person that disposed of it to ensure that it is taken into account in the property proceedings.
Two important considerations with respect to power of the Court to grant an injunction is that the person seeking the injunction will often be required to give an undertaking to the Court to be responsible for any damages that may arise as a consequence of that injunction being enforced. Furthermore, the Court will give consideration to whether that injunction is necessary to ensure that the party receives their entitlements in relation to the asset pool. By way of example if, a motor vehicle worth $20,000 is disposed of and the balance of the asset pool is $1,000,000, and a person is entitled to 50% of that asset pool, then setting aside the transaction disposing of the car, or an injunction seeking that the car not be disposed of, is not necessary to ensure that the other party receives what they are entitled to by way of property adjustment.
If you have concerns that property will be disposed of or damaged, or that already occurred, please contact our Family Law Accredited Specialist: