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Restraining orders in financial matters – Family Court restrains a party from leaving Australia and from disposing of assets

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By Amanda Humphreys, Senior Associate, MST Lawyers 

Whilst Airport Watch List orders are regularly made in parenting matters where there is a risk of a child being taken overseas without the consent of the other parent, orders are rarely made by the Family Law Courts restraining a party from leaving the Commonwealth of Australia in property and financial matters. 

In Cole & Cole [2016] FamCA 398 the Hon Justice Johns of the Family Court of Australia at Melbourne made urgent interim orders restraining the husband from disposing of assets and departing the Commonwealth of Australia, including an order to place the husband’s name on the Airport Watch List.  These orders were made on the application of the wife – her application being heard on an ex parte basis on the day it was filed, without notice to the husband. 

The parties were citizens of the USA and permanently resident in Australia.  The husband had until recently prior to the hearing been employed as chairman and CEO of an Australian company (B Pty Ltd), in which he held shares via a company based in the USA.   The husband’s position in B Pty Ltd had recently been terminated and he was unemployed.  He had been living in rental accommodation in Australia, with the lease of those premises due to end shortly.  He had made arrangements to leave Australia the following day, indefinitely, to visit the USA and Europe, including to spend time with his new partner in Europe.   He had arranged for a shipping container to be placed at his residence and had placed his motor vehicle on the market for sale.   A witness gave evidence that the husband told her he was going through a “messy breakup”, was desirous of returning the USA to live, and had recently sold his company.   Company searches in relation to B Pty Ltd showed the husband had ceased his role as director and secretary, there had been a recent change in share structure and documents had been lodged including a notice of meeting and in relation to a share buyback.  These matters had not been disclosed by the husband to the wife notwithstanding they had been participating in a collaborative family dispute resolution process for some six months prior to the hearing.   In these circumstances, the wife held grave concerns the husband would transfer assets out of Australia and beyond the jurisdiction of the Australian Family Law Courts. 

The judge hearing the case carefully considered the decision of Mullane J in Anstis & Anstis & Anor (2000) FLC 93-013 and the references in that case to the International Covenant on Civil and Political RightsIn particular, the judge considered the right recognised in article 12 that everyone shall be free to leave any country, including his own”.  Her Honour observed the requirement that freedom imposed, for due care to be exercised prior to restraining a person from leaving this country and the onus of proof that entails.  Fundamentally, the orders sought by the wife would impinge upon the husband’s freedom of movement and should not be made lightly. 

The wife offered an undertaking to the court to meet any losses sustained by the husband due to a delay in his travel arrangements, pending a short adjournment of the case.  Unlike other similar cases determined by the Family Law Courts, where such serious and restrictive injunctions of this nature were considered, the husband was not seeking to travel for business or income earning purposes – he was unemployed. 

The judge was satisfied there was a basis for the granting of the interim injunctions sought by the wife, restraining the husband from leaving the jurisdiction and also restraining him from dealing with assets.  Her Honour found the actions of the husband in taking steps to leave the jurisdiction, coupled with his apparent failure to inform the wife in the changes in the structure and ownership of B Pty Ltd, formed a sound basis for the restraining orders sought by the wife notwithstanding the restrictions which were to be imposed upon the husband’s freedom of movement.   Applying the principles relating to the granting of injunctions, the judge noted she had to balance the convenience to the parties.  Balancing the prejudice to the husband against the prejudice to the wife if the orders were not granted, the judge found that the balance of convenience on an urgent interim basis favoured the wife.   

Given the gravity of the restraining orders made without the husband’s knowledge, the judge listed the matter to return to court within a number of days, which gave the husband the opportunity to come to court to disclose the circumstances of his proposed travel and with respect to the shareholdings in B Pty Ltd. 

MST Lawyers can assist with complex domestic and international property matters, including where injunctions are required on an urgent basis. To contact our experienced Family Law team, please email family@mst.com.au or contact us by telephone: +61 3 8540 0200.