The Interim Financial Trifecta – Spouse Maintenance, Sole Occupation, and Injunctions

Erin Shaw and Stephanie Brown

A relationship breakdown often triggers a myriad of serious, complex and emotionally-charged questions. Particularly in light of the cost of living crisis, mortgage stress and a relentless rental market, increasingly one of the most immediate questions client have is: how can we afford to run 2 households?

The answer and the options available will likely depend on the asset pool (both in terms of value and composition), the income and income capacity of both parties, the expenses of the household, and the children’s care arrangements. And of course, no two families’ circumstances are the same, so there is no one size fits all answer.

Sole Occupation of property

A natural first question (or panic) for separating parties can be “who gets to stay in the family home and who has to leave?”

It is not entirely unusual for separated couples to remain living under the same roof for a brief period following separation. This is sometimes because the couple has decided that such an arrangement is best for children in the aftermath of separation, and other times it is the only financially viable option whilst the couple liquidates assets, considers their refinancing/buy out options, or reaches a final property settlement.

For some families this is not a tenable option, and steps may need to be taken to ensure one party is able to (solely) remain living in the family home. For example, where there has been domestic violence, where there is a significant power imbalance, a high level of conflict, or someone has re-partnered, it may not be appropriate or possible for the separated couple to remain living together.

For the most part, if one party needs to leave, the separating couple can reach an agreement about who will go and who will stay. Where they cannot reach an agreement, however, it may become necessary for the Federal Circuit and Family Court of Australia to decide who will stay and who will go. This is referred to as an Order for sole use and occupation of the home (sometimes called “exclusive occupation”). It is an Order made by way of injunction pursuant to section 114 of the Act.

The Court approaches these injunctive Orders cautiously, because they may impinge upon a parties’ usual proprietary rights. In deciding an Application for sole use and occupation, the Court has the discretion to consider any factors that may be relevant, including:

The financial means of each party;
Care arrangements of the children;
The conduct of each party, and whether any particular behaviour warrants that person being excluded from the home;
The alternative housing options for both parties;
Whether there are funds available to either party to assist with their housing dilemma;
The proprietary rights (including equitable interests) the parties have in the home;
The dynamic between the parties, and whether the parties continuing to live under one roof leaves one party vulnerable to being intimidated/pressured;
The financial capacity of the parties to maintain the property/mortgage repayments.

In Valentini & Valentini [2024] FedCFamC1F 602, the parties’ net asset pool was approximately $200 million. Both parties had access to significant financial resources. The Wife sought an Order for sole occupation of the family home. The Husband opposed the Application, asserting that the parties could remain living under same roof at the home.

Earlier in the proceeds, the Court made an interim Order which provided for the Wife to essentially occupy the top level of the property, while the Husband occupied the bottom level of the same property. The Wife’s evidence was that the Husband had failed to comply with the Order, and continued to access the top level of the property, and that at times, had been intimidatory towards her.

In granting the Order for sole occupation, the Court said:

“In circumstances where one party seeks to continue an arrangement that would continue to bring the parties into contact in the knowledge that it causes the other at times to feel intimidated is unfathomable and leads me to be comfortably satisfied that it would not be reasonable, sensible or practicable to expect both parties to continue to live together in the same home and that an Order for exclusive occupation is necessary.”

Spousal Maintenance

The next question is often “how will I pay my expenses?”

This question generally arises where one party has a significant income and the other party is in limited employment (or no employment) and otherwise has caring responsibilities for children. And of course, whilst the family have been able to fund their expenses in a single household, running two households is another story.

In certain circumstances, the Court may consider it appropriate for the income earning spouse to pay or assist the other party to meet their living expenses.

Spouse maintenance commonly (but not necessarily) takes the form of:

periodic payments (e.g. a weekly or monthly payment) to the other spouse;
a lump sum payment to the other spouse;
direct payment of certain expenses/bills.

When determining whether to make an Order for spouse maintenance, the Court considers:

Whether the Applicant (i.e. the person seeking the maintenance) has the capacity to meet their own reasonable living expenses (i.e. what is their income -v- expenses? Is there a shortfall?)
Is the Applicant unable to meet their own reasonable living expenses because of their care of the children of the relationship, their age or incapacity for employment or any other adequate reason?
Does the Respondent (i.e. the other party) have the capacity to meet some or all of the Applicant’s need (i.e. what is the Respondent’s income -v- expenses? Is there a surplus?)

The Court must consider both the recipient and the payer’s reasonable living expenses when making Orders for spouse maintenance. Reasonable expenses include housing, accommodation, utilities, food, child support, clothing and other expenses. The scope of “reasonable” will, however, depend on the standard of living enjoyed by the couple during the relationship, and what expenses may be considered “reasonable” or acceptable in the context of that relationship.

For example, significant expenditure on personal grooming or clothing may indeed be considered “reasonable” for certain relationships. In the recent case of Boyd & Logan [2024] FedCFamC2F 1716, the Wife claimed $150 per week for hairdressing and toiletries, and $200 per week for gifts. The Husband did not accept those costs and asked the Judge to discount them. The Judge did not. His Honour noted that:

“Ms Boyd explained that she attended the hairdresser regularly and as Mr Logan’s credit card statements reveal, not insignificant amounts of money were spent by the parties on personal and lifestyle items during their relationship.”

In Foley & Foley [2016] FCWA 68, the Husband was the managing partner at a law firm, whose drawings were $100,000 per month (+). The Wife did not work; she sought interim spouse maintenance of $3,000 per week, minus any child support she was to receive. In addition to other significant expenses, the Wife claimed $18,000 per annum for holidays for herself. Whilst the Court was not entirely impressed with the Wife’s claim and evidence, it ultimately awarded her interim spouse maintenance of $2,333 per week (with the Husband agreeing to pay a raft of household expenses in addition, including mortgages, utilities/outgoings, maintenance/repairs, various insurances, motor vehicle expenses, various online subscriptions, medical expenses, and so on), and said:

“I find that it is unreasonable to expect the Wife to reduce her standard of living to any significant extent on an interim basis. I am of this view because I am satisfied that the Husband has the ability to pay the quantum of spousal maintenance sought by the Wife and because the Wife appears to lack the emotional resources and support that are currently enjoyed by the Husband. She is financially and emotionally vulnerable, and the making of Orders that will have the effect of enabling her to (more or less) continue her pre-separation standard of living is unlikely to cause the Husband any significant financial discomfort in the short or medium term. I would not think it proper or reasonable – in the circumstances of the case now before me – for the Wife to have to reduce her standard of living significantly on an interim basis. Perhaps more accurately, I would not think it proper or reasonable for the Wife to have to reduce her standard living beneath the standard that I consider is appropriate…”.

Again, in Boyd & Logan, the Wife’s Application for interim spousal maintenance sought payment by the Husband in respect of a variety of not uncommon expenses. In this case, the Court made an interim Order for the Husband to pay:

The sum of $1,488 per week to the Wife by way of periodic spousal maintenance.
The mortgage repayments (principal and interest), rates, taxes, utilities and insurance on the parties’ home the Wife occupied;
The wifi and streaming service subscriptions at the home the Wife occupied;
The gardener, landscaper, house and pool cleaner (on a weekly basis) at the home the Wife occupied.

The Court will also generally consider that the Applicant for spouse maintenance has an obligation to mitigate their need for spouse maintenance, and earn an income comparable to their skill set and work history. For example, a party who declines to find employment for which they are trained/experienced, and instead pursues a career as an artist is unlikely to be eligible for maintenance.

In Taguichi & Taguchi (1987) FLC 91-836, the Wife sought spouse maintenance. The Wife’s evidence was, however, that whilst there were a number of jobs she could undertake and receive a proper wage for, if she accepted such a job, she would be unable to continue with her painting pursuit. She claimed that as a “professional artist’ she was not prepared to make this sacrifice. The Court was not convinced, and the Wife’s claim was unsuccessful.

The Court said:

“Many people in the present and the past pursue artistic bents at great economic sacrifice to themselves, and sometimes to others as well; but, this case is concerned with whether the Wife may pursue her undoubted artistic interests at the expense of her Husband”.

Property Injunctions

Unfortunately in the separation aftermath panic, we often see parties attempt (or threaten) to deal with assets in a way that they think will be beneficial to them and detrimental to their spouse. This kind of conduct can have serious consequences and quite often backfires, because the Federal Circuit and Family Court of Australia may step in and grant injunctive relief to prevent the tricky party from taking these kinds of steps (and make a costs Order to boot!).

In circumstances where a party is attempting such trickery, it may be appropriate for an injunction to be granted. Pursuant to section 114 of the Act, the Court has the discretion to Order or grant property injunctions where the circumstances and justice of the matter require those injunctions to be in place, on an interlocutory basis.

Granting injunctive relief is a serious step, and the Court does not make these types of Orders lightly; to the contrary, the Court is cautious to not impose these kinds of restraints on a party, particularly where it might impinge on a person’s ability to carry on their ordinary course of business, or where it may impact third parties (i.e. persons external to the marital relationship).

Examples of the types of injunctions the Court may impose include restraints on a party:

accessing or using bank accounts;
selling property or further encumbering a property (e.g. further mortgaging a house);
selling a company or company assets;
operating the business/business accounts;
sending money or assets overseas;
repaying disputed loans;
disposing of assets (e.g. cars, tools/equipment).

The considerations for the Court will depend on the facts of each case, however the Court must consider:

is there a serious issue to be tried?; and
where does the balance of convenience lie?

As to whether there is a serious issue to be tried, essentially this is a question of whether the person seeking the injunction has a reasonable claim to a property settlement in the sense that it has a sufficient likelihood of success to justify the circumstances of the preservation of the status quo.

As to the balance of convenience, the Applicant must show that there is a real risk of disposition of the asset which may frustrate, compromise or defeat their substantive claim. That is, if the asset was to be disposed of, the Applicant may not be able to receive his/her property settlement entitlement.

From a practical perspective, and applying the body of case law on injunctions to restrain dealing with property, Applicants (and their lawyers) should consider the following before running off to file their Application for injunctive relief:

does the Applicant have an entitlement to a property settlement?;
what is the quantum and composition of the asset pool?;
what is the quantum of the possible loss if the injunction is not granted and the Respondent party disposes of the assets in question?;
are there any third parties that may be impacted by the granting of an injunction?;
does either party have a special interest in the item of property that is the subject of the Application?;
where does the balance of convenience lie?;
would the granting of the injunction adversely affect the other spouse in performing their duties outside of the marriage (e.g. in the running of their business), particularly where there are third parties concerned?;
who are you actually seeking to restrain? Are they a party to the proceedings?;
What evidence is there to support:
1. that there is any real risk, danger or intention to dispose of the asset;
2. the alleged outcome/impact of the disposal; and
3. any alternative to restraining the disposal that would ameliorate the impact on the Applicant’s ultimate property entitlement?

Further evidence of how seriously the Court takes these injunctive powers can be seen in the fact that the Court generally requires the Applicant seeking the injunction to provide an undertaking that they will be responsible for any damages associated with the injunction. That is, the Applicant promises to compensate the other party if the other party suffers any loss or damage as a result of the injunction being granted.

The recent case of Mandel & Duan (2024) FLC 94-211 considered these matters, including Orders for sole occupation and general injunctive Orders. In this case, the Husband owned a property in his sole name, and the Wife and child lived in the property. The Husband sold the property without notifying the Wife. The Wife became aware of the sale and lodged a caveat over the property. The purchase price was paid to the Husband by the third party purchaser, but the property was not transferred due to the Wife’s caveat. The Husband used the proceeds of sale to “repay” a loan to his Mother and transferred the money out of Australia. It transpired that the third party purchaser was known to the Husband, and that the sale was not in fact an arms-length purchase.

The Court made Orders for the Wife to have sole occupation of the property (despite the sale contract over the property). The third party purchaser was joined as a party to the Court proceedings, and the Court restrained the third party from dealing with or further encumbering the property.

Urgent Applications

As a general rule in property settlement cases, there are a number of pre-action steps that are required to be undertaken prior to commencing Court proceedings, unless certain circumstances exist, such as urgency.

There are circumstances where an Application for spouse maintenance, sole occupation of the home and/or injunctive relief is urgent, and it may be appropriate to ask the Court to dispose of the requirement to mediate or otherwise comply with all of the pre-action procedures before filing such an Application. There may also be circumstances that warrant such Applications being made ex parte (meaning without notice to and in the absence of the other party). For example, if a significant asset’s disposal is imminent, or where there are circumstances of domestic violence.

If you are seeking an urgent listing of your Application for spouse maintenance, sole occupation or injunctive relief, it is imperative that you seek the appropriate Orders and address the relevant matters in your (or your client’s) Affidavit. O’Reilly Shaw Lawyers’ Special Counsel Susan Miranda has written a helpful written article about the steps to take when seeking an urgent listing with the Court. You can access that article here Seeking an URGENT Court date when filing an application – O’Reilly Shaw Lawyers

Conclusion

If you (or your client) are considering filing an Application to the Court seeking an injunction, sole occupation of a property or spousal maintenance, it is vital that appropriate advice has been provided about prospects of success.

These are not low-risk, easy Applications. The Court exercises its discretion cautiously, and it is important that you have explored the alternative options before seeking injunctive relief. If it is the case that such an Application is the right pathway for you or your client, the evidence must be presented clearly and succinctly – you must come correct – to optimize your prospects of success (and avoid an early loss in the proceedings and a costs Order).

We are able to provide advice on these matters, and other strategies to address financial issues following separation.

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