You have just suffered emotionally from a relationship breakdown, you are keen to have the property division completed so you can move on, and you find out that your ex partner is selling or otherwise disposing of an asset that would be subject to an order of the court. What can you do?
This is a problem which arises in property settlements in Family Law matters, where a partner/spouse plans the disposal of property with the intention of defeating orders made in court.
Civil litigation has long used the Mareva injunction which has the effect of stopping someone who owes money from disposing of property to avoid payment of the debt.
Given that in the commercial context, an order to stop a business from dealing could have drastic consequences, the threshold to be granted an injunction is quite high. Otherwise frivolous actions could prove popular in an attempt to hamper competitors.
In contrast, the dealings with family property could be seen as less urgent, with fairness being the ultimate goal. Unfortunately, in the past few years, the Mareva principles have been somewhat adopted into Family property disputes. There has to exist a “scheme to defeat a judgement by asset distribution”. A 2000 case saw a husband remove his wife from all positions of power in a company, telling his wife “I’ll do what I like, you will get none of it” and in addition to other evidence, was still not enough for the courts to restrain the husband from disposing of property.
Thankfully, the situation has changed in the past two years, with a decision made on appeal which essentially, makes it easier for a party to restrict the other side in disposing of assets. The “essential question” was “(is there) any evidence of any intention by the husband to dispose of any assets pursuant to any scheme to defeat any judgment”.
The Family Law Act has matured in the past few years, and this recognition by the courts of principles more in line with that Act, rather than a 1975 English case from where Mareva arose indicates the same.
It is a fairer threshold, restoring the balance needed at an already difficult time.
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This is intended for general information and does not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.