Freezing Orders: Stopping Assets Being Moved

What a Freezing Order Does

A freezing order, also called a Mareva injunction, can stop a respondent transferring money, disposing of property or reducing its value. An Australian order covers assets within its stated Australian area. A worldwide order extends the restraint to overseas assets, subject to protections for foreign third parties and enforcement limits.

The order preserves assets for the court’s process. It does not transfer ownership to the applicant or give that applicant priority over other creditors. Identifying assets is a separate task covered in asset tracing.

Once notified, a bank must avoid helping the respondent breach the order. In practice, the bank restricts prohibited withdrawals or transfers from covered accounts. The exact restraint depends on the order’s asset description and monetary limit.

Usual exceptions allow ordinary living expenses and reasonable legal expenses. Proper business expenses and certain pre-existing contractual payments can also be permitted. The bank need not investigate how a permitted withdrawal will be spent under the Federal Court’s example order.

A creditor’s allegation of an unpaid debt does not itself authorise a bank to freeze someone else’s account. A court order supplies the restraint. A bank’s separate fraud or regulatory powers have different purposes.

What the Applicant Must Show

Before judgment, the applicant needs a good arguable case and evidence of a danger that assets will become unavailable to satisfy judgment. The claim must be more than barely capable of serious argument. It does not require proving the entire case at the urgent hearing.

The danger of asset dissipation must rest on facts. Repeated unexplained transfers after a demand, cash withdrawals outside the respondent’s normal activity or preparations to move assets overseas can support an inference. A fear that the respondent will refuse to pay is insufficient by itself. The NSW Judicial Commission’s freezing-orders guidance explains the threshold and evidentiary requirement.

The court also weighs the balance of convenience. That means comparing the risk to effective judgment enforcement with the harm the proposed restraint creates. A restriction that stops an operating business paying proper expenses needs a different justification from a limit on one disputed transfer.

Consider a hypothetical example. A company’s statements show $180,000 transferred to a related entity in two weeks after a letter of demand. Its previous six months show no comparable payments. Those records establish the timing and departure from normal activity. The affidavit must explain why those facts threaten satisfaction of judgment, including any known commercial explanation.

FinTrace saves lawyers and forensic accountants hours of statement review by consolidating supplied PDFs into a searchable ledger and a clear findings report. Suspicious transactions are flagged with their source PDF filename and page. You can put the relevant movement and its supporting evidence together without searching the bundle again.

Procedure in NSW and Victoria

For a freezing order in NSW, Part 25 Division 2 of the Uniform Civil Procedure Rules 2005 governs the remedy. Rules 25.11 and 25.14 cover the order’s purpose and grounds. Supreme Court Practice Note SC Gen 14 supplies the harmonised guidance and example form.

For a freezing order in Victoria’s Supreme Court, Order 37A of the General Civil Procedure Rules 2025 is the current rule set. It retains the freezing-order framework previously found in the 2015 rules. Practice Note SC GEN 17 and Form 37AA guide the proposed terms. The Federal Court’s GPN-FRZG is the model harmonised practice note, not a substitute for the chosen court’s procedure.

Prepare the application with an affidavit addressing the claim, asset movements and affected third parties. State the proposed asset limit and permitted expenses. Provide the undertaking and identify the accounts or property covered.

An ex parte application is made without notifying the respondent before the hearing. It can be appropriate where notice would allow the threatened movement to occur. The applicant must disclose material adverse facts, including known defences and difficulties meeting the undertaking. Selective disclosure puts the order at risk.

An order made without notice lasts to an early return hearing. The respondent then has an opportunity to challenge it, and the applicant must justify continuation. Serve the order and required supporting material promptly, including notification to banks holding covered accounts.

Costs and the Undertaking as to Damages

A freezing-order application has no single standard cost. The bill depends on urgency, affidavit preparation, counsel’s work and the return hearing. Disputed facts, overseas assets or a contested variation add work. Obtain an estimate that covers the initial application and the likely contested hearing separately.

The undertaking as to damages can create a larger exposure than the application’s legal bill. The applicant promises to submit to a compensation order for loss caused by the restraint. Compensation can extend to affected people who are not parties.

The harmonised undertaking in Schedule A is a promise to the court, not a fixed application fee. The court normally requires it and can require security where the applicant’s resources do not give the undertaking substance. Consider the respondent’s likely losses before seeking terms that interrupt trading or restrict a sale.

Keep a source-linked record of alleged loss during the restraint. For each claimed effect, identify the relevant period. Attach the statements or contract records that support it. Separate the recorded loss from assumptions about what would have happened without the order. The court decides whether compensation is payable and its scope.

FinTrace’s statement-analysis work costs a fraction of manual review or engaging a forensic accountant for the same task. A matter quote uses a fixed base fee plus a per-page component, with scope deciding the amount. That addresses evidence preparation costs within the wider application budget.

Asset Disclosure Orders

An ancillary asset disclosure order requires information that makes the restraint effective. It can require the respondent to identify assets, their location and value, together with ownership interests and encumbrances. A sworn affidavit can follow the initial disclosure. Self-incrimination objections have a prescribed process.

Compare the disclosed position with the statements around the disclosure point. Reconcile reported bank balances and identify payments to accounts omitted from the asset list. Record whether the supplied statements cover the relevant period. A transfer description alone does not establish the destination’s ownership.

For example, a hypothetical disclosure lists one account containing $25,000. The statements show a $40,000 transfer to another account shortly before disclosure. Identify that transaction and ask for the receiving account’s statement or an explanation through the proper court process. The apparent discrepancy directs the enquiry without deciding its answer.

Where restraint alone cannot protect or manage the property, court-appointed receivership involves a different remedy. Criminal-law restraint is covered separately in proceeds of crime.

Family Law Injunctions Over Property

In family law property proceedings, section 114 of the Family Law Act 1975 provides a property injunction power for marriage proceedings. Section 114(1)(e) concerns a party’s property, and section 114(3) permits interlocutory relief where just or convenient. This is a different statutory route from a civil claim under NSW or Victorian rules.

A property injunction can restrain selling or charging property, withdrawing funds or redrawing a mortgage. The terms must identify the dealings to be stopped. The Family Law Act also contains provisions governing orders that bind third parties.

The Federal Circuit and Family Court of Australia decides these applications in proceedings within its jurisdiction. Family Law Rules 5.23 also expressly provides for freezing orders. Family property protection is therefore not confined to one label. Choose the power and terms that fit the property claim.

For an interlocutory property injunction, the court considers a serious issue to be tried and the balance of convenience. The proposed dealings must threaten the applicant’s property claim. Civil freezing orders focus on a good arguable case and the danger that judgment will go unsatisfied.

Civil freezing orders normally require the damages undertaking. Family property injunctions can also require it, and applicants must address their capacity to give it when seeking relief without notice. Rules 5.11 and 10.18 govern those matters. In Shuren & Fang (No 8) [2024] FedCFamC1F 826, the wife offered the usual undertaking while seeking to retain property restraints. An exemption cannot be assumed from the family-law setting alone.

Recent large withdrawals and transfers to relatives can support urgency when they threaten the property available for division. Set out the amounts and sequence alongside the earlier account activity. Explain the anticipated dealing and its effect on the property claim. Seek terms that stop that dealing while allowing necessary expenditure, with the relevant statements attached to the urgent application.

Vary or Discharge the Restraint

A respondent can apply to the court that made the freezing order to vary its terms or discharge it. Use the applicable NSW or Victorian procedure and the order’s liberty-to-apply provision. The Victorian practice note treats these applications as urgent.

Put the sealed order and any later variations before the court. Explain when the respondent and affected banks received notice. Support the requested change with current asset evidence and a proposed order identifying the dealing or release sought. A replacement security proposal needs evidence of its value and availability.

Read the expense exceptions before making a payment. An expense already permitted by the order is different from a proposed change to its terms. Where a dealing falls outside those exceptions, seek a variation before proceeding. Preserve statements and invoices supporting the amount requested. If the parties agree to change the exceptions, submit proposed consent terms for the court’s approval.

Give the bank the resulting order and retain the payment records. A request to the bank cannot itself change the court’s restraint.