Freezing Orders: How to Obtain One, and How to Challenge One
A freezing order — also called a Mareva injunction — is one of the most powerful pre-judgment remedies in commercial litigation. It stops a respondent from dealing with assets before a court has had the chance to determine the underlying dispute. Obtained urgently and without notice in the right circumstances, it can preserve the entire value of a claim. Wrongly obtained, or overclaimed, it can expose the applicant to significant liability on the undertaking. And if you are the respondent, a properly challenged freezing order can be varied or discharged before it causes further damage.
Once assets are moved, recovering them is exponentially harder.
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What a Freezing Order Actually Does
A freezing order restrains a respondent from removing assets from Australia, or from disposing of, dealing with, or diminishing the value of assets wherever they are located, up to the amount of the applicant’s claim. Under rule 260A of the Uniform Civil Procedure Rules 1999 (Qld) for Queensland proceedings, and rule 7.31 of the Federal Court Rules 2011 (Cth) for Federal Court proceedings, the order does not create a security interest or give the applicant priority over other creditors. Its purpose is to preserve the status quo so that any eventual judgment is not rendered hollow by the assets having been dissipated in the meantime.
What You Need to Establish to Obtain One
There is no single test for a freezing order, but Australian courts consistently apply a two-limb framework drawn from Cardile v LED Builders Pty Ltd (1999) 198 CLR 380.
1. A sufficiently strong underlying case
You must have a cause of action with a realistic prospect of success — not a complete certainty, but a case that goes beyond merely arguable in the most minimal sense. Courts describe this as having a good arguable case or a case of sufficient strength to engage the court’s discretion. The stronger the underlying case, the more willing a court will be to grant the order in a doubtful dissipation situation.
2. A real risk of dissipation
You must show there is a real danger that, by the time judgment is obtained, the respondent will have disposed of, concealed, or diminished their assets so that any judgment could not be satisfied. This is not merely a possibility — it must be a genuine, articulated risk based on specific evidence. Courts look for objective indicators such as a history of moving assets offshore, evidence of restructuring designed to avoid creditors, the disposal of assets shortly after litigation is commenced or threatened, or evidence of dishonest conduct in the underlying dispute.
Ex Parte Applications: Obtaining the Order Without Notice
In urgent cases where giving notice would defeat the purpose of the order, a freezing order can be obtained ex parte, without the respondent being present or even aware. This is treated as an exceptional remedy and courts impose a strict duty of full and frank disclosure on the applicant: you must put before the court not only everything that supports your application, but also any arguments the respondent would raise against it. A failure of full and frank disclosure can result in the order being set aside and the applicant being ordered to pay costs on an indemnity basis.
An ex parte order is almost always a temporary order, returnable before the court at a short hearing where the respondent can be heard. That return date is the first opportunity to challenge the order if you are the respondent.
The Undertaking as to Damages
Before a freezing order is granted, the applicant must give the court an undertaking that they will compensate the respondent for any loss caused by the order if the order is later found to have been wrongly made. This undertaking is not a formality. Where a freezing order prevents a business from operating normally, restricts access to working capital, or damages a reputation, the respondent’s loss can be substantial. Applicants who obtain a freezing order with an aggressive or overclaimed scope and then fail on the substantive proceedings can face significant liability under this undertaking.
If a Freezing Order Has Been Made Against You
The return date, typically within a few days of an ex parte order, is the primary opportunity to challenge the order before it causes further harm. The grounds on which a respondent can seek to vary or discharge the order include the following.
- Challenge the underlying case: if the applicant’s substantive claim lacks the required strength, the jurisdictional basis for the order fails.
- Challenge the dissipation risk: if the applicant cannot point to specific, objective evidence of a genuine risk of dissipation rather than a general concern about enforceability, the order should not stand.
- Challenge the scope: even where an order is properly granted, its scope may be disproportionate. A respondent can seek to reduce the maximum amount frozen, carve out specific assets needed for business operations, or allow access to reasonable living or business expenses within the order.
- Challenge the failure of full and frank disclosure: if the applicant failed to disclose material facts adverse to their application, the court may set the order aside regardless of whether the application would otherwise have succeeded.
A freezing order obtained or resisted properly requires preparation, speed, and evidence.
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Frequently Asked Questions
Q: How quickly can a freezing order be obtained?
A: In genuine urgency where assets are at immediate risk of dissipation, a freezing order can be obtained ex parte on the same day or within 24 to 48 hours of filing. The application must be fully supported by affidavit evidence, and the applicant must be prepared to give the undertaking as to damages at the hearing.
Q: What evidence do I need to show a risk of dissipation?
A: Specific, documented evidence of conduct that demonstrates a genuine risk: a history of moving assets offshore, recent disposal of assets after being notified of a claim, restructuring of corporate structures in response to threatened litigation, or conduct in the underlying dispute suggesting dishonesty. General concern about the respondent’s financial position or willingness to pay is not enough.
Q: Can a freezing order reach assets held overseas?
A: Yes. Australian courts have jurisdiction to make worldwide Mareva orders in appropriate cases, and the order can expressly extend to assets outside Australia as well as within it. Enforcing such an order against overseas assets is a separate, more complex question depending on the jurisdiction in which the assets are held.
Q: What expenses are usually carved out of a freezing order?
A: Standard freezing orders typically allow the respondent to meet reasonable legal costs of the proceedings, reasonable living or business expenses up to a specified weekly or monthly amount, and existing contractual obligations. The precise carve-outs are a matter for negotiation or court determination on the return date.
Q: What happens if I breach a freezing order?
A: Breach of a court order constitutes contempt of court. Consequences can include fines, imprisonment, sequestration of property, and adverse costs orders. Where assets are dissipated in breach of a freezing order, the court has broad powers to impose consequences and to treat the conduct as an aggravating factor in the underlying proceedings.
Q: What is a third-party freezing order?
A: In some circumstances, a freezing order can extend to assets held by a third party, not just the respondent’s own assets. This is relevant where assets are held in a discretionary trust or through a controlled entity. Following Filippini v Keystone [2026] FCAFC 71, freezing orders can reach discretionary trust assets where the respondent exercises substantial control as both beneficiary and appointor.
