Freezing orders

A freezing order is a type of injunction that can prevent a party from selling down their assets to avoid paying a future order of the court.

It is an aggressive step in a legal proceeding, but sometimes necessary to ensure that if you are successful in proceedings, you can recover the judgment.

A freezing order (also known as an Asset Prevention Order or a Mareva Order) is an interlocutory (interim) order made by the court to temporarily prevent an individual or corporation from dealing with certain assets by way of selling, removing, disposing of or diminishing the value of those assets. A freezing order will generally last until a judgment has been made in a legal proceeding.

Freezing orders are most often sought by a party to a legal proceeding to minimise the risk of another party to the proceeding disposing of, hiding or otherwise dealing with assets in a way that could lead to a judgment being wholly or partially unsatisfied (i.e. the party against whom the judgment is made no longer having sufficient assets available to satisfy the judgment).

Freezing orders are not limited to assets that are under the direct control of a party to a legal proceeding, nor are they restricted to assets belonging to individuals. Freezing orders are capable of freezing the assets of any party that has possession, ownership, custody or another form of control over assets that are of relevance to a legal proceeding and may be made against individuals, companies and any other relevant entity or third party (such as banks). For example, a freezing order could freeze the assets of a person’s child or spouse if it is alleged that the person in question used stolen money to buy the assets.

Assets that may be covered by a freezing order include:

  • real property (for example, a person’s house)
  • bank accounts
  • motor vehicles
  • share/investment portfolios
  • term deposits
  • valuables

Typically, when a freezing order is granted, all assets belonging to the party against whom the order is made will be frozen. Once the assets have been frozen, they cannot be sold, leased, mortgaged or otherwise dealt with unless the court order specifically allows.

A freezing order is not limited to assets held or located in Australia.

Freezing orders can often carry significant implications for the party against whom the order is made. As such, there are strict requirements that must be established before the court will grant the order. An application for a freezing order may be made at any stage in the proceeding, both prior to and after the commencement of the proceeding. Generally, however, they are brought in circumstances of urgency and at the outset of a dispute, or when it is discovered that assets have been moved to another person’s name or are being sold. In order to obtain a freezing order, the applicant will need to show that there is:
  1. A good arguable case; and
  2. A real risk that a judgment might otherwise be wholly or partially unsatisfied because:
      1. the relevant assets may be dissipated in some way; or
      2. the respondent might abscond (escape or flee).
Once granted, the applicant will need to serve copies of the freezing orders on any party that controls assets belonging to the party against whom the order is made, including the respondent’s bank, to ensure that the person is not able to access their bank accounts or other assets.

Freezing orders will always have an expiry date. When a freezing order is first granted, the expiry date is usually only set a few days after the order is served. However, as each expiration date approaches, the applicant may request an extension of the order. This means that freezing orders can sometimes remain in place for several years before a resolution is reached or a final judgment is given. 

A freezing order typically expires once a judgment has been made (or another resolution has been reached) and the respondent has made payment of the required amount.

As a minimum, freezing orders will allow the party against whom the order is made to pay for reasonable living expenses (e.g. groceries, electricity bills, loan repayments). The courts will usually specify a set amount to be paid out to the respondent each week, and the respondent will be unable to withdraw more than the specified amount from their accounts until the freezing order is lifted.

If you believe a freezing order has been made against you in error, you may be able to fight the order.

The courts will commonly only lift freezing orders if one of the following factors can be established:

  1. The party seeking the freezing order did not make full and frank disclosure to the court;
  2. There is no real risk of the property being dealt with (e.g., a piece of property where there is no evidence that the owner is taking any steps to transfer or sell it);
  3. The party against whom the order is made is capable of paying the entire amount without the need for a freezing order; or
  4. The claim establishing the need for a freezing order is not a good arguable case.

If any of the above can be proven, the freezing order will generally be lifted.

Talk to a lawyer today

If you have any questions about any of our services, or just need a question answered about a freezing order, then make an enquiry and our litigation team will be in touch with you as soon as possible.

Why choose Gibbs Wright Litigation Lawyers?

Freezing orders are not granted lightly, because they impact the way a person can use their property. Not even a magistrate, who can order a person be imprisoned for up to three years, can decide an application for a freezing order. That responsibility is left to District Court and Supreme Court judges only.

With applications that are this serious, you should consider hiring an experienced litigation lawyer. A suburban lawyer, or a lawyer that takes on matters outside of litigation and dispute resolution, may not be equipped to handle such a serious application with significant consequences if it fails.

Gibbs Wright Litigation Lawyers are experienced in litigation. That is all we do.

If you need a skilled litigation lawyer to handle your case, Gibbs Wright have an exceptional and experienced team.

Do I need a lawyer?

Yes. Freezing orders are perhaps the most complicated application the court can grant. You will need a skilled lawyer to prepare your application and supporting affidavit, and weigh up the evidence.

It extremely unlikely that a self-represented litigant would be successful in obtaining a freezing order.

Freezing orders are complex and effective legal tools that may have significant implications. As such, they are not granted lightly. However, these orders can be vital in circumstances where there is a real risk that a party may deal with their assets in a way that can easily frustrate a party’s position and adversely impact the outcome of a legal proceeding.

At Gibbs Wright Litigation Lawyers, we can assist you whether you wish to seek an order, or you risk having an order made against you – we are here to help to ensure your rights are sufficiently protected.