Litigation | 5 October 2021 3 min read

Freezing Order – Avoid dissipation of assets

Brief Facts on Freezing Order

Winning a litigation is one thing but getting paid can be a different thing. If there is a reasonable risk that the other party may dissipate its own assets to avoid meeting the judgement (i.e. transferring its assets and funds to another party or even overseas), you may consider seeking a freezing order to freeze the other party’s assets and funds until resolution of the dispute.

Freezing order, also known as Mareva Injunction, is a court order to preserve the disputed assets of the ongoing proceedings (Freezing Order). The Freezing Order can restrain a party from dealing with certain assets, e.g. disposing, hiding or removing assets. 

Freezing Orders may be considered in two situations where there is a risk that the removal or disposal of assets will frustrate an existing or prospective judgement or order. 


What are covered under a Freezing Order?

In general, all personal and real assets can be frozen. This includes, but is not limited to, the following:

  • Bank accounts; 
  • Real property (land or buildings); 
  • Motor vehicles; 
  • Share portfolios; 
  • Term deposits; and 
  • Valuables.

These assets cannot be sold, leased, mortgaged, or otherwise dealt with unless expressly authorised by the Freezing Orders. The orders do not apply only to assets held or located in Australia, it can include the defendant’s overseas assets.However, the following are excluded from the Freezing Order:

  1. payment of the respondent’s ordinary living expenses;
  2. reasonable legal expenses;
  3. business expenses;
  4. meeting its contractual obligations under a contract entered into before the order was made.


How to apply the Freezing Order?

A successful application of Freezing Order in New South Wales requires the applicant to clearly demonstrate that:

  1. there is a good arguable case; and
  2. there is a risk that assets will be dissipated, or that the respondent will abscond.

To avoid ‘tipping off’ the respondent and result in dissipation of its assets, Freezing Orders are heard and made without notice to and present of the respondent.  A freezing order is intrusive and does not provide the respondent with prior notice before the order is issued. This is clearly an attempt to avoid a situation in which the affected party disposes of or removes the assets before the application is heard in court. It is also frequently regarded as a harsh remedy, which is reflected in how the Court exercises its discretion. The courts in Australia have the discretion to make Freezing Orders but they courts are cautious in making them due to the nature of the Freezing Orders (i.e. preventing the respondent from dealing with its own assets).

In order to successfully obtain a Freezing Order, the applicant must demonstrate that:

  1. there is a serious question to be tried (i.e. a reasonable prospect to success); and
  2. on the balance of convenience the Freezing Order does not cause any inconvenience.

(See Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264.)


Can I place a Freezing Order against a third party?

A Freezing Order may be granted against a non-party.


Can I place a Freezing Order against a party who is outside Australia?

A Freezing Order may be granted on a person who is outside Australia (whether or not the person is domiciled or resident in Australia) if any of the assets to which the order relates are within the jurisdiction of the court.


What is the limitation of a Freezing Order?

A Freezing Order does not give the applicant any proprietary rights over the assets or give an application of preference over the creditors of the defendant. A Freezing Order should preserve the liberty for the defendant to apply on short notice to have the order varied or discharged. It also stated that the value of assets covered by the Freezing Order should not exceed the likely maximum amount of the applicant’s claim, including the costs and/or interest and should exclude the dealings by the defendant for legitimate purposes such as living expenses and legal costs.


How long can you freeze the assets for?

It depends on the Freezing Order. However, an ex parte Freezing Order (order made without the present of the respondent) generally lasts for a short period of time pending resolution of the matter inside or outside the court.


Applying for a Freezing Order is a complicated process and requires significant litigation experience to ensure a favourable result. If you wish to explore further, please do not hesitate to contact us.

Contact us to get more information.

Contact Us

Related stories

  • Frequently Asked Questions (FAQs) for Queensland Property Purchaser

    Frequently Asked Questions (FAQs) for Queensland Property Purchaser.... According to CoreLogic’s report in September 2021, Brisbane's dwelling values have risen 10.6% in the last year and are now at new highs. Queensland’s property market is now experiencing a massive surge in price and popularity in Australia and is attracting overseas investors as well.
    Property | 7 October 2021
  • What is a Building Information Certificate? When should I get one?

    Building Information Certificate A Building Information Certificate (formerly known as building certificate) is a certificate issued by the local Council promising not to take any legal actions or issue any orders concerning the improvements (e.g. house, shed, garage, building etc) on the property for a period of 7 years from the date of the certificate. […]
    Property | 22 September 2021
  • Why should property purchasers obtain a survey report?

    Why should property purchasers obtain a survey report? A survey report is a report prepared by a registered surveyor. The report usually includes a plan which identifies the land’s measurements and boundaries. The report will also reveal whether the improvement(s) on the land (e.g. a shed, garage, house, etc) and the fences have encroached onto the neighbour’s land.
    Property | 22 September 2021
  • What is General Skilled Migration (GSM)?

    General Skilled Migration (GSM) The General Skilled Migration Visa is an Australian work visa program for skilled migrants that primarily benefit skilled workers who wish to live and work in Australia on a permanent basis. This visa is also available to those who may obtain sponsorship from an Australian employer.   There are four types […]
    Migration | 6 August 2021
  • Recent changes to Subclass 188 Visa and the new Business Innovation and Investment Program (BIIP)

    Business Innovation and Investment (Provisional) Visa (Subclass 188) Business Innovation and Investment (Provisional) Visa, also known as Subclass 188 Visa allows you to own and manage a business in Australia, conduct business and investment in Australia, and engage in entrepreneurial activity in Australia.   Recent changes to Subclass 188 Visa The Australian government has made […]
    Migration | 5 August 2021
  • Business Visa Reform on Business Innovation and Investment Program from 1 July 2021

    Business Visa Reform on Business Innovation and Investment Program In general, the Australian business skills migration scheme will undergo a number of significant changes beginning on 1 July 2021. The following are the significant changes: The program will be reduced from nine (9) to four (4) streams, with the elimination of the two (2) streams […]
    Migration | 4 August 2021
  • What is Business and Investment Visa (Subclass 188 Visa)?

    Business and Investment (Provisional) Visa[1] The Business and Investment (Provisional) Visa Subclass 188 is a provisional visa for people with business skills, which allows you to operate a new or existing business, conduct business and investment activity in Australia. The Visa Subclass 188 is a provisional visa that allows the applicant to stay in Australia […]
    Migration | 3 August 2021
  • What is Global Talent Independent Program (GTI Visa)?

    Global Talent Independent Program (GTI Visa) The Global Talent Visa Subclass 858 is a special Australian visa for applicants who have an internationally excellent record of brilliant and outstanding achievements in a specific field. Visa subclass 858 is a permanent visa that allows the applicant to enter and stay in the country for an indefinite […]
    Migration | 2 August 2021
  • Tax-related matters in purchasing a property in New South Wales

    Purchasing a property in New South Wales requires you to pay several taxes which include transfer duty, (also known as stamp duty) for residential property, Premium Property Duty (for property over $3 million), surcharge purchaser duty (for foreign purchasers) and Goods and Services Tax on commercial and industrial property.
    Property | 29 July 2021
  • Defer stamp duty payment for eligible off-the-plan purchasers

    Off-the-plan purchasers may be able to defer paying for the stamp duty for up to 12 months after signing the contract, or until the property is completed or handed over, whichever comes first, on the basis that the property will be used as a principal place of residence.
    Property | 26 July 2021
  • Buying a property in NSW as a foreigner

    Buying a property in Australia as a foreigner is subject to additional restrictions. We discuss these restrictions below. Definition of a foreign person It is important to know if you are classified under the key term ‘foreign person’ under the current legislation as a foreign person is subject to a number of obligations under the […]
    Property | 7 July 2021
  • NSW Government Assistance for First Home Buyers

    If you are a first home buyer in New South Wales, you may be eligible for government assistance to own a home with duty exemption (or concession) and/or a one-off grant of $10,000.
    Property | 7 July 2021