When You Can’t “Let It Go” – The Elements of a Freezing Order

When it appears that an opponent in Court proceedings may be about to get rid of assets in order to avoid an existing or future Court Judgment, then a Freezing Order may be appropriate.  A Freezing Order literally “freezes” assets to prevent the other party from using them.  It is an extreme measure with a high bar for the Applicant to prove it is required to prevent the frustration or abuse of a process of the Court.  In other words, it is not a mechanism to inconvenience your opponent and is not there to provide security in respect of a Judgment or Order.

The scope of a Freezing Order can be very wide.  That said, the value of the frozen assets should not exceed the amount being claimed plus interest and costs.  Additionally, the Order needs to exclude legitimate dealings to allow the opponent to pay:

• Living expenses;
  • Reasonable legal expenses; and,
  • Genuine business expenses.

It is normally a condition of a Freezing Order that the Applicant makes the usual undertaking to the Court as to damages.  That means the Applicant will submit to any Order the Court considers just for payment of compensation.

The Applicant is also under a duty to make full and frank disclosure of all material facts to the Court including any known defences or information which may impact on the Applicant’s ability to meet the usual undertaking as to damages (such as insufficient assets within Australia).

The Applicant will need to provide an affidavit in support of the application that includes the following information:

1. Details of an existing or future Judgment:
   1. The basis of the claim;
      1. The amount of the claim; and
      1. Where appropriate: the Applicant’s knowledge of any possible defence.
   1. The nature and value of the Respondent’s assets, to the extent they are known, within and outside Australia.
   1. Evidence to support the belief there is a danger that the Judgment Debtor or prospective Judgment Debtor may abscond or remove assets to a place outside of Australia or to dispose of or diminish the value of any such assets.

In the right circumstances an Application for a Freezing Order is both aggressive and effective to prevent a Judgment Debtor or prospective Judgment Debtor from diminishing or removing assets to avoid paying a Judgment. 

For further information about Freezing Orders or civil litigation, contact David Collins by email david.collins@mullanelindsay.com.au or Kristy Nunn by email kristy.nunn@mullanelindasy.com.au, telephone (02 4928730) or online application on our website:  https://www.mullanelindsay.com.au/

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