What Is a Freezing Order?

A freezing order, also known as a Mareva injunction, is a form of interlocutory (or interim) order by a Court. It prevents an individual or corporation from dealing with their assets. Dealings it may prevent can be selling, disposing, or diminishing the value of such assets.

If an individual or company owes you a significant sum and you need to protect your interests, we can:

• advise you on whether you have good grounds to apply for a freezing order; and
• urgently bring an application on your behalf.

If an application for a Mareva order has been lodged against you, Aitken Whyte Lawyers can:

• advise you on your immediate rights, including:
  • to defend the application; and
  • steps you can take to avoid an injunction; as well as
• assist you in navigating any freezing order made and in dealing with your assets.

Purpose Of a Mareva Injunction

The purpose of a freezing order is to help ensure that a judgement can be satisfied.

If assets are dealt with prior to the payment of a judgement, this could circumvent the Court ruling.

A Mareva order preserves an individual or corporation’s assets during a dispute.

In this way, the Court is able to uphold the effectiveness of Court proceedings and judgments.

Rule 260A of the Uniform Civil Procedure Rules 1999 (Qld) states that:

“A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.”

Circumstances In Which a Freezing Order Will Be Granted

Mareva injunctions carry significant implications for the party whose assets are frozen. An individual or company will be limited in their use of certain assets, by Court order. For this reason, the Court has stringent requirements for granting a freezing order.

Chapter 8 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) deals with Mareva orders in QLD. As enumerated in rule 260D of the UCPR, to receive a freezing order an applicant must establish that:

• they have received a judgement in their favour; or
• they have a “good arguable case” in a prospective cause of action; and
• there is a danger that any judgement will be wholly or partly unsatisfied as a result of:
  • the respondent absconding the jurisdiction; or
  • the assets of the respondent being sold, disposed of, diminished in value, or dealt with in another way.

Scope Of a Mareva Order

A freezing order can apply to any assets held by an individual or corporation. This can include assets both within and outside of Australia.

The value of the assets covered should not exceed the maximum amount of the applicant’s claim. This takes into consideration interest and the applicant’s costs.

A Mareva injunction will usually exclude dealings by the respondent for certain purposes. These can include:

• payment of ordinary living expenses;
• payment of reasonable legal expenses;
• payment of expenses incurred in the normal course of the respondent’s business; and
• discharge of obligations incurred under a contract entered before the order was made.

To protect the efficacy of the freezing order, it may be granted, and continue to operate, after a judgment (see Jackson v Sterling Industries Ltd (1987) 162 CLR 612, 623).

Accompanying Ancillary Orders

A Court can also make ancillary orders to ensure that the freezing order is more effective (see Universal Music Australia Pty Ltd v Sharman Licence Holdings Ltd [2005] FCA 1587, [20]).

A Court can direct the disclosure of information about assets by the party:

• bound by the Mareva injunction; or
• the respondent to an application for a freezing order.

Obtaining such information can assist to give efficacy to the Mareva order (see Kuan Han Pty Ltd v Oceanview Group Holdings Pty Ltd [2003] FCA 1063, [45]).

Third Parties to A Proceeding

A freezing order can be made against a third party to a proceeding. It is not merely limited to the parties before an ongoing proceeding (see Cardile v LED Builders Pty Ltd [1999] HCA 18 [45]).

Reasons the Court may make Mareva or ancillary orders against a third party are:

• if a third party controls or has power over assets of the defendant or judgement debtor; or
• if a third party may have to contribute toward a judgement against the defendant.

Lifting A Freezing Order

An individual or corporation who has a Mareva injunction against them can apply to the Court:

• to discharge the freezing order; or
• to vary the Mareva order.

The Court will generally treat such an application as urgent.

A freezing order may be varied on the basis that:

• expenses for legitimate reasons regarding livelihood or business cannot be met; or
• the Mareva injunction exceeds the maximum amount of the claim.

A freezing order may be discharged on the basis that the requirements for an order under the UCPR do not apply. This may be that:

• the applicant does not have a good arguable case;
• there is no danger of the respondent fleeing;
• there is no evidence of the respondent taking any steps to deal with their meaningful assets; or
• an order is not necessary to mitigate any danger of a judgement going unsatisfied.

The respondent can also provide security for the amount of the claim through:

• payment into Court; or
• another agreed method.

Depending on when a respondent provides security, this can:

• lead to the lifting of a Mareva order; or
• prevent the granting of a freezing order.

Here To Help

Freezing order applications are complicated and carry significant ramifications. Proper experience in dealing with Mareva injunctions is essential.

Aitken Whyte Lawyers Sunshine Coast are focused on results.

Our litigation lawyers will advise you on the proper course to take if you need to protect your rights.

We can assist you to obtain an injunction or defend an application.

Aitken Whyte Lawyers can assist you with all civil and commercial disputes.

Office Location and Contact Details

Sunshine Coast

Maroochydore
Aitken Whyte Lawyers
11/8 Pikki Street,
Maroochydore Qld 4558
Ph: +617 5408 0655
Fax: +617 3211 9311
Email Us