The article delves into the outcome of the case of Dunworth & Faletti where the Applicant was seeking an injunction to restrain her former partner from selling a property in circumstances where jurisdiction of the Court had not yet been established as one party was refuting the existence of a de facto relationship.
Dunworth & Falletti [2020] FamCA 178
The Applicant in the case of Dunworth & Faletti sought a property division of 65%/35% in her favour. In making such application she alleged the existence of a de facto relationship. The Respondent denied the existence of a de facto relationship and sought that her application be dismissed.
The Applicant filed an urgent interlocutory application seeking an injunction to restrain the Respondent from selling his property.
The Respondent resisted the application. The property was due to settle on the day of the Hearing to an arms length purchaser.
The facts of this case were somewhat interesting in that there were several caveats on the property (besides the bank), being in favour of Mr B (the Husband’s Father) both personally and through his company D Pty Ltd, for substantial funds alleged to have been advanced to his son over the years and also to Ms C (the Husband’s new partner) who was allegedly owed $250,000.
The sale would only proceed and those caveats would only be lifted on the proviso that each of the caveators were repaid back the money they had loaned.
Hence there was a real risk that if the sale proceeded, the proceeds would be lost and unavailable for division in a property settlement between the Applicant and the Respondent.
The question for the Court was whether the Court had the power to grant an injunction to restrain the impending sale of property where jurisdiction had yet to be established.
The power to grant an injunction in De Facto relationships is found in s114(2A) of the Family Law Act 1975 (hereinafter ‘the Act’). In previous cases, it has been determined that the court has no power to grant an injunction under s114(2A) until the jurisdictional fact (the de facto relationship) has been established.
However, the Court in this case noted that High Court authorities specifically establish that the Court has ‘inherent jurisdiction’ to grant an injunction pending determination of the relevant jurisdictional facts and those powers include the power to control its own process, for example, interlocutory injunctions necessary to preserve the status quo pending resolution of the question of jurisdiction.
The Court noted some serious evidentiary difficulties with acceptance of the loans alleged by the Husband’s father and the Husband’s new partner (who were joined to the proceedings).
In determining the matter, the Full Court in Dunworth & Faletti held that the criteria for whether an injunction can be granted is:
- whether there is a serious issue to be tried; and
- whether the balance of convenience favours the grant of the injunction.
In this case, the Court held that there was a serious question to be tried, those serious questions being:
- the existence & duration of a de facto relationship;
- whether the sale of the property will cause the proceeds of sale to be lost (as the respondent’s father said he would only withdraw the caveats if he is paid back his alleged loans in full);
- whether the respondent’s father and Ms C are valid creditors or whether the loan agreements are shams.
The court held that the balance of convenience favoured granting the injunction restraining the sale as if the injunction was not granted it would result in the Applicant suffering loss which could not be remedied by damages if the property was sold – as if the Father and Ms C were repaid from the proceeds of sale, this would have left nothing meaningful for the Applicant to claim by way of property settlement.
Learn More
If you would like more information on similar topics, check out the following information and articles:
- Why you should formalise your property settlement
- When can future inheritances be taken into account
- How do I apply for property and financial orders
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