When someone has your money and you’re facing the real possibility they might disappear with it, the legal system offers a powerful tool to help protect your interests. Whether you’re dealing with fraud, breach of contract, or other commercial disputes, understanding freezing orders could be crucial to recovering what’s rightfully yours.
What Is a Freezing Order?
A freezing order (also known as a Mareva injunction) is a court order that prevents a party from disposing of, dealing with, or reducing the value of their assets. Think of it as legal handcuffs for someone’s bank account and property. The court makes this order to ensure that if you win your case, there are still assets available to satisfy your judgment.
The primary purpose is simple: to stop someone from making your potential court victory meaningless by hiding or spending everything before you can recover it.
When Might You Need a Freezing Order?
Consider this scenario: You meet someone at a social gathering who claims they can source high-quality diamonds from Europe at half the Australian price. After a small successful test purchase, you decide to invest your life savings of $500,000 for what seems like a guaranteed profit.
Weeks pass, the diamonds never arrive, and suddenly your contact stops returning calls. You discover other people at the same gathering have been similarly scammed. In this situation, you have no idea where your money is, you haven’t received what was promised, and there’s strong reason to believe you’ve been defrauded.
This is exactly when a freezing order becomes invaluable. While it can’t bring back money that’s already gone, it can prevent any remaining funds or other assets from disappearing while you pursue legal action to recover your losses.
The Requirements for Obtaining a Freezing Order
Courts don’t grant freezing orders lightly. As these orders significantly restrict someone’s financial freedom, you must demonstrate two key elements:
A Good Arguable Case
You need to show the court that you have solid grounds for your claim against the person whose assets you want frozen. This means presenting evidence that supports your case, whether it’s for fraud, breach of contract, or another legal wrong.
Real Risk of Asset Dissipation
You must convince the court there’s a genuine risk the person will dispose of their assets to avoid paying any judgment you might win. Evidence might include:
- Previous attempts to hide assets
- Unusual financial transactions
- Statements indicating intention to avoid payment
- A history of similar conduct with other parties
How Freezing Orders Work in Practice
Once granted, a freezing order typically:
- Prevents the restrained party from dealing with specified assets up to a certain value
- May require disclosure of all assets above a certain threshold
- Often includes exceptions for reasonable living expenses and legal costs
- Remains in place until the underlying legal dispute is resolved
The order is serious business. Breaching a freezing order can result in contempt of court proceedings, potentially including imprisonment.
Protecting Yourself: Prevention and Action
While freezing orders are powerful tools, prevention remains the best protection. Always:
- Document agreements in writing
- Conduct proper due diligence before significant investments
- Verify credentials and references
- Trust your instincts if something seems too good to be true
If you find yourself in a situation where you believe someone may dissipate assets to avoid paying you, time is critical. The sooner you act, the better your chances of preserving assets for potential recovery.
Need Legal Protection for Your Assets?
If you’re facing a situation where someone owes you money and you’re concerned about asset dissipation, don’t wait. Freezing orders are time-sensitive applications that require immediate legal expertise to be effective.
Contact Complete Legal today to discuss your situation. Our experienced litigation team can assess whether a freezing order is appropriate for your circumstances and guide you through the process to protect your interests. Book a consultation to ensure you have someone in your corner when it matters most.
