6.25: Preserving or protecting property or its value

Case Summary

The Plaintiff loaned money to the Defendants, his son and daughter-in-law, for the purchase of a house. The house was purchased and two mortgages were obtained. The mortgages on the house went into default, and the property was sold in foreclosure. The son and daughter-in-law separated soon thereafter. An issue arose as to whether the payments made by the Plaintiff to the Defendants were a loan or a gift. Both the Plaintiff and his son (the “Applicant”) claimed the payments were a loan. The daughter-in-law (the “Respondent”) claimed the payments were a gift.

The Applicant sought an injunction, relying in part upon the Matrimonial Property Act, to prevent the proceeds of the foreclosure sale from being distributed until the issue had been resolved. Hall J. commented on the proper Rule under which to bring such an Application, and what would be required for such an Application to be successful:

 [The Applicant] seeks a freezing order which he says is brought under the Matrimonial Property Act. That Act makes no specific provisions for a freezing order. The Court’s jurisdiction to freeze matrimonial assets arises under the Judicature Act 1980 c. J-1, s. 13(2). Rule 6.25(1) of the Rules of Court.

In order for the court to grant such an order [the Applicant] must show a strong prima facie case and a real and substantial risk that [the Respondent] is dissipating or disposing of assets other than in the normal course to provide for herself and her children.

His Lordship determined that there was not sufficient evidence to grant such an order. Justice Hall stated that no prima facie case has been made out and there was no evidence that the Respondent had been dissipating or would dissipate the funds. The Application was denied.

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