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Freezing Orders – Don’t Get Left Out in the Cold

The Supreme Court of NSW recently refused an Application for a Freezing Order which would have prevented the sale of a property by the Defendant.

Briefly: the Plaintiff and Defendant had been involved in longstanding and hard-fought litigation.  The Defendant attempted to sell a property in Roselands.  The Plaintiff applied for a Freezing Order for an amount of $1.4 million.

Generally, Freezing Orders are available to prevent frustration or inhibition of the court process by leaving a judgment or prospective judgment wholly or partly unsatisfied because assets have been dissipated.

The real estate agent involved estimated a sale figure in the region of $1.2 million.  On settlement the Defendant needed to discharge a mortgage of $921,500.00.  There was a Writ on Title in favour of Pioneer Credit Solutions Pty Ltd in the region of $73,000.00, and the Defendant needed to pay real estate agent’s commission of $28,500.00. That left a surplus between $175,000.00 and $200,000.00.  The Defendant provided unchallenged evidence that his outstanding legal bill was in the region of $425,000.00 and following the final hearing, would increase to around $595,000.00.  Once those liabilities were paid there would be no money left to satisfy the Freezing Order. 

As there was no judgment in the case, the Judge was not satisfied that there was any real danger that a judgment would be left unsatisfied by the sale of the property.  As such, there was no utility in making the order and the application was refused.

If you would like to discuss an Application for a Freezing Order or any other civil or commercial litigation matter, please contact David Collins or Kristy Nunn for further advice.

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