Your Debtor Is About to Hide Their Assets. Here’s How to Stop Them.
You have a strong legal claim. But you’ve just found out your defendant has started transferring assets offshore, emptying bank accounts, or moving property into a spouse’s name. By the time you get a judgment, there may be nothing left to enforce against.
This is precisely the scenario a freezing order — formerly known as a Mareva injunction — is designed to address. It is one of the most powerful remedies in civil litigation: a court order that prohibits a party from dealing with, disposing of, or diminishing their assets below a specified value, until further order.
This guide explains how to apply for a freezing order in Queensland, what you need to establish, the procedural steps, and the risks you need to understand before applying.
What Is a Freezing Order?
A freezing order (also called a Mareva order, after the English case Mareva Compania Naviera SA v International Bulkcarriers SA [1975]) is an interlocutory injunction that restrains a person from removing assets from Australia, or from dealing with assets in a way that would frustrate a judgment or order of the court.
In Queensland, freezing orders are governed by the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) and the common law principles developed through decades of case law. Practice Direction 2 of 2019 in the Supreme Court of Queensland provides specific guidance for applications.
The order can:
- Freeze specific assets (a bank account, a parcel of real property, a specific motor vehicle)
- Freeze all assets up to a specified value
- Extend to assets held through related entities or in the name of a third party (with appropriate evidence)
- Require the defendant to disclose all assets above a specified value
Why You Might Need a Freezing Order
A freezing order is not appropriate for every dispute. It is a drastic remedy and courts do not grant them lightly. The classic scenarios where they are sought include:
- A defendant who is dissipating or transferring assets after becoming aware of a claim against them
- Evidence of fraud or dishonesty that suggests assets may be moved or concealed
- A defendant with assets overseas and a history of evading creditors
- A company or individual who has recently transferred significant assets to related parties at undervalue
- A director who has stripped a company of assets before winding it up
- A counterparty to a contract who is known to be about to dissipate proceeds received from you
The key is that you need to demonstrate — with evidence — that there is a real risk the defendant will deal with their assets in a way that would render any judgment you obtain worthless or substantially less valuable.
The Legal Test for a Freezing Order
To obtain a freezing order in Queensland, you must satisfy the court on two fundamental requirements:
1. A Good Arguable Case on the Merits
You must have a good arguable case — a claim that is more than arguable but need not be demonstrated to the standard of proof required at trial. You do not need to prove your case at this stage; you need to show it is a serious claim that is not merely frivolous or vexatious.
At the interlocutory stage, the court will not conduct a mini-trial. The question is whether your claim has enough substance to justify the drastic remedy of restraining the defendant’s assets.
2. A Real Risk of Asset Dissipation
This is the critical requirement. You must demonstrate that there is a real risk — not a fanciful or speculative risk, but an objectively established risk — that the defendant will remove assets from the jurisdiction or deal with them so as to render a judgment against them unenforceable.
Evidence of this risk might include:
- Actual evidence of asset transfers since the dispute arose
- Evidence of fraud or dishonesty in the underlying dispute
- Evidence that the defendant has previously evaded creditors or judgments
- Evidence that the defendant is a foreign national or has strong offshore connections and is about to leave Australia
- Suspicious transactions captured in bank records or company searches
Mere concern that the defendant might dissipate assets, without supporting evidence, is not sufficient. The evidential standard for this element is the key battleground in most freezing order applications.
Which Court to Apply In
The appropriate court depends on the quantum of your claim and the nature of the proceedings:
- Magistrates Court of Queensland: Civil jurisdiction up to $150,000. Magistrates Court can grant injunctions ancillary to its civil jurisdiction, but freezing orders over large asset pools are typically not appropriate here.
- District Court of Queensland: Civil jurisdiction up to $750,000. Can grant freezing orders in matters within its jurisdiction.
- Supreme Court of Queensland: Unlimited jurisdiction. The appropriate forum for significant freezing order applications, particularly those involving large assets, offshore elements, or complex commercial disputes.
For most commercial freezing order applications of any consequence, the Supreme Court is the appropriate forum. The Supreme Court has well-developed practice directions and experienced judges who regularly deal with these applications.
The Procedure: How to Apply
Step 1: Ex Parte Application
Most freezing order applications are made ex parte — that is, without notice to the defendant. This is essential: if you give the defendant advance notice, they can move their assets before the order is made, defeating the entire purpose.
An ex parte application is brought urgently, usually by filing an application and a supporting affidavit and then appearing before a duty judge or an available judge without delay. The court’s duty judge list handles urgent applications outside normal hearing lists.
Step 2: What to File
To support an ex parte application, you will need:
- An originating application or interlocutory application (depending on whether proceedings have commenced)
- A supporting affidavit (addressed in detail below)
- A draft order in the precise form you are seeking (the court will usually work from your draft)
- An undertaking as to damages (see below)
If proceedings have not yet been commenced, you may apply for a freezing order before filing a statement of claim. However, you will be required to undertake to commence proceedings promptly.
Step 3: The Affidavit Requirements
The supporting affidavit is the heart of the application. Because the application is ex parte, the court is relying on you to put the full picture before it — including facts that might weigh against the order. Failure to make full and frank disclosure of material facts is a ground for setting the order aside.
Your affidavit must address:
- The nature of your claim and why it is a good arguable case
- The specific evidence of a risk of asset dissipation
- The nature and estimated value of the defendant’s assets (as best you can ascertain)
- The amount of your claim
- Why the application is being made ex parte (rather than on notice)
- Any facts that might weigh against the grant of the order (full and frank disclosure)
- What steps you have taken to identify the defendant’s assets
The affidavit must be sworn or affirmed. In urgent circumstances, affidavits can be filed in draft and filed formally shortly after the hearing.
The Undertaking as to Damages
This is a critical concept that many applicants underestimate. When you obtain a freezing order, the court will require you to give an undertaking in damages: a promise to compensate the defendant for any loss they suffer as a result of the order if it turns out the order was wrongly made.
This means: if you obtain a freezing order, the defendant is prevented from dealing with their assets, and you ultimately lose your case (or the order is set aside), you may be required to pay the defendant’s losses caused by the freezing order. These losses can be significant — lost business opportunities, inability to complete transactions, costs of litigation.
Before applying for a freezing order, consider carefully:
- How strong is your underlying claim?
- Can you satisfy any damages award if the order is set aside?
- Does your organisation have the financial capacity to back the undertaking?
Courts sometimes require applicants to provide security (a bank guarantee or payment into court) to fortify the undertaking in damages, particularly where the applicant’s financial capacity to satisfy an award is uncertain.
Third-Party Freezing Orders
Freezing orders can extend beyond the defendant’s own assets to assets held by third parties — for example, banks holding the defendant’s accounts, or related entities that hold assets beneficially for the defendant.
A third-party order requires specific evidence that the third party holds assets for the defendant or is likely to dissipate assets on the defendant’s instructions. Banks, for example, are typically served with a copy of a freezing order affecting accounts at that institution and are required to comply or risk being in contempt of court.
Obtaining a freezing order over assets held by third parties adds procedural complexity and requires careful drafting of the order to define precisely what is caught.
How Long Does a Freezing Order Last?
An ex parte freezing order is typically made on an interim basis — until a “return date”, usually a few days to two weeks later, at which the defendant has the opportunity to appear and oppose the continuation of the order.
At the return date, the court will consider whether the order should be:
- Continued on an interlocutory basis until trial or further order
- Varied (for example, to allow the defendant access to a defined amount for living expenses or business operations)
- Discharged (if the defendant successfully argues the order should not have been made)
An interlocutory freezing order continues until the trial or further order of the court. It does not automatically become permanent at trial — if you succeed at trial, you will need to apply to make the order permanent or enforce your judgment by other means.
How to Make a Freezing Order Permanent
A freezing order is an interlocutory remedy, not a final order. To make it permanent, you must:
- Obtain judgment in your favour at trial (or by summary judgment or default judgment)
- Seek a final order from the court (which may convert the freezing order into a charging order, a caveat over property, or another enforcement mechanism)
- Alternatively, enforce the judgment against the frozen assets through the court’s enforcement processes
Once you have a judgment, the freezing order acts as a holding mechanism while you take the steps necessary to enforce — for example, applying for a writ of execution over real property, a garnishee order over a bank account, or a charging order over shares.
Risks and Costs If the Order Is Set Aside
Freezing orders that are improperly obtained or that are set aside at the return date carry significant consequences:
- Costs orders: The court is likely to order you to pay the defendant’s costs of successfully opposing the order, often on the indemnity basis (a higher costs standard that approximates full recovery).
- Damages under the undertaking: You may be required to compensate the defendant for losses caused by the order.
- Adverse inferences: If you failed to make full and frank disclosure, the court may take a dim view of your conduct in the underlying litigation.
- Reputational damage: In commercial disputes, being seen to have improperly sought a freezing order can damage business relationships and credibility.
This is why freezing order applications must be prepared with great care, on solid evidence, with proper legal advice, and with full disclosure to the court.
Freezing orders are particularly valuable where a judgment debtor is facing financial difficulty or potential insolvency. Our insolvency lawyers Brisbane advise creditors on combining freezing orders with statutory demands and winding up applications for maximum enforcement effect. Call 1300 267 711.
Frequently Asked Questions
Can I apply for a freezing order before I commence proceedings?
Yes. Courts in Queensland have jurisdiction to grant freezing orders before proceedings are commenced, provided you undertake to commence proceedings promptly. This is sometimes necessary where the risk of dissipation is immediate and there is no time to file a statement of claim first. The court will typically give you a short period — often 48 hours to a week — to file your originating process before the ex parte order expires. Be prepared to act quickly.
My debtor is in another state. Can I still get a freezing order in Queensland?
Yes. The Supreme Court of Queensland has jurisdiction to grant freezing orders over assets located within Queensland regardless of where the defendant is based, and can also grant orders with national effect. For interstate matters, consider whether a single proceeding with service under the Service and Execution of Process Act 1992 (Cth) is appropriate, or whether proceedings in a federal court (which has national jurisdiction) might be more efficient if the assets are spread across multiple states.
The defendant is arguing the freezing order is too broad and wants it varied. What happens?
Defendants regularly apply to vary freezing orders to allow access to funds for living expenses, legal fees, and ordinary business operations. Courts will often allow a “carve-out” of a reasonable weekly or monthly amount for living and legal expenses. Courts will not, however, allow variations that defeat the purpose of the order — for example, allowing the defendant to sell property that is the subject of the freezing order. The balance of convenience between the parties’ interests is the key consideration, and the court retains full discretion to shape the order to the circumstances.
This article is general information only and does not constitute legal advice. You should obtain professional advice specific to your circumstances before taking any action.
Speak to a Boss Lawyers Litigation Lawyer Today
If you are concerned that a defendant will dissipate assets before you can enforce a judgment, time is critical. Our commercial litigation lawyers in Brisbane regularly apply for freezing orders and injunctions in urgent commercial disputes. We move fast, know what courts need, and understand the risks as well as the strategy.
Call 1300 267 711 or contact us online.
Mark Harley, Principal Solicitor
Boss Lawyers
Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000
1300 267 711
