Martin & Martin and Ors

In the Family Court of Australia, Ms Martin (the wife) and Mr Martin (the husband) were the primary parties to property proceedings. The dispute before the court concerned an application by the husband for the discharge of an existing injunction, unless two third-party intervenors, X Firm and QF Pty Ltd, provided an undertaking as to damages. The intervenors, who were creditors of the wife, opposed the discharge of the injunction and resisted providing an undertaking.

The court was required to determine whether the existing injunctive orders, originally made between the husband and wife, should continue to bind the husband in circumstances where the intervenors sought to rely on those orders but refused to provide an undertaking as to damages. A key legal issue was whether the principles governing undertakings as to damages in commercial litigation applied equally to family law proceedings, particularly when third-party creditors intervened. The court also considered the relevance of the "clean hands" principle in this context.

Justice Cronin reasoned that the injunctive principles applicable in family law financial disputes should be treated similarly to those in commercial disputes. The court noted that while injunctions are discretionary remedies under the *Family Law Act 1975* (Cth), they are not unfettered and must be exercised according to law. The judge found that the requirement for an undertaking as to damages is a fundamental equitable principle designed to protect a restrained party from potential losses if an injunction is later found to have been wrongly granted. The court rejected the intervenors' arguments that the husband's conduct or the specific history of the proceedings negated the need for an undertaking, stating that the clean hands principle was not relevant to the question of whether an undertaking should be required.

The court ordered that paragraph 8 of the orders made on 10 December 2010, as subsequently varied, be discharged unless QF Pty Ltd and X Firm provided an undertaking as to damages in the usual form by a specified date. All other interim applications were dismissed.