Property – injunction – freezing orders to preserve status quo…

…not to change in favour of party seeking order

In Qian & Xue [2022] FedCFamC1A 93 (21 June 2022), Aldridge J set aside a “suite of interim freezing orders”, including an order that the wife pay $850,000 to the husband’s solicitors’ trust account.

Contested property proceedings had been on foot since 2019. The husband brought an application for injunctions in anticipation of the wife receiving monies on 24 August 2021. The wife received the $850,000 on 30 August 2021, but transferred $735,000 to her brother, sister and father in China, prior to the listing of the application in November.

The wife said the transfers were to repay loans; the husband seeking injunctions on the basis that the disposition of the funds “would put them beyond the jurisdiction of the court and diminish the property pool” ([15]).

Aldridge J said (from [22]):

“A freezing order ‘operates to preserve the status quo and not to change it in favour of the party who seeks the order’ per Gageler, Keane, Gordon and Gleeson JJ in Deputy Commissioner of Taxation v Huang [2021] HCA 43; (2021) …

[23] The order made … for the payment of $850,000 exposed the wife to the risk of punishment for contempt in the event it was not complied with …

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[24] … [T]he purpose of a freezing order is … not to improve the security position of the applicant or to render the respondent liable for imprisonment for debt. The order should only have been considered if it was clear that it could be complied with (…)

[26] … [W]hilst there may have been a basis to prevent the funds from being transferred, absent an order from the Court preventing her from doing so, the wife was free to deal with her funds … (…)

[29] The fact that an injunction could have been obtained preventing … [a] person from transferring funds, but was not, does not automatically lead the proposition that, having permissibly done so, they must now reacquire the funds …”

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are accredited specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).