Preserving 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.