Freezing order during a divorce
- What is a freezing order and its purpose?
- What assets can be frozen by a freezing injunction?
- What are the requirements for a freezing order?
- What documents are required in order to obtain freezing injunctions?
- What directions should I consider for a family law freezing order application
- What happens once an application for a freezing order is made?
- Can freezing injunctions be challenged?
- -- Q&A SECTION --
Divorces and separations often lead to emotions running high and leave a bitter feeling between parties.
It is not unusual for there to be anger and resentment and that leading to a party trying to sell assets or spend their wealth to prevent it forming part of a divorce financial settlement claim.
If you are unsure of what assets your partner has or have concerns about whether they are being safely retained so they can be considered as part of your divorce financial settlement then you should immediately consult with our specialists to take protective steps.
At Kabir Family Law we have a strong expertise in advising and assisting on protecting matrimonial assets to safeguard our client’s interests.
What is a freezing order and its purpose?
A freezing order is an interlocutory injunction and also known as a Mareva injunction or a freezing injunction. The purpose of a freezing order is to restrain a party from disposing or dealing with an asset until a specific time or event such as a divorce financial settlement being reached.
In other words the freezing hold will stop the asset from being sold, hidden or placed away from arms reach; ultimately preventing a party from being judgement proof.
What assets can be frozen by a freezing injunction?
All types of assets can be frozen by a freezing order or a freezing injunction. The assets can either be in the UK or anywhere in the world although some jurisdictions can be challenging to secure a freezing order over.
Types of assets that can be frozen by a freezing order injunction commonly include:
- Bank accounts
- Business assets
- Boats, yachts, vehicles
- Shares and bonds
The assets may be solely owned or jointly owned. A freezing order also applies to assets which may be held by a third party on benefit for one of the parties concerned.
What are the requirements for a freezing order?
An applications for a freezing order is usually in the high court and are without notice to other party. The reason for this is to avoid the other party having advanced notice and time to dissipate or remove the asset out of easy reach.
The court has discretion to grant a freezing order under section 37 of the Senior Courts Act 1981 and will only be granted if the courts believes it is just and convenient.
The leading case of UL v BK lays out the requirements which must be met prior to the courts awarding a freezing order.
These requirements are:
- The applicant has sufficient cause of action and failure to make a freezing injunction will cause an injustice
- The applicant’s case is good and arguable (although, there is no requirement to establish that the case will definitely succeed).
- There are sufficient assets in existence to meet the claim.
- There is a real risk of the disposal or dissipation of assets prior to the court’s judgment.
- The applicant has made a full and frank disclosure to the court.
Legal advice should be taken before making a freezing order application. It is important to note that an undertaking must be provided by the party making an application for freezing orders which means they must agree to compensate the respondent if the court finds there is no reason to grant a freezing injunction.
What documents are required in order to obtain freezing injunctions?
Documents required before making a freezing injunction application typically include:
- A draft claim form
- An Application Notice setting out the nature and grounds of the application as well as parties details
- An affidavit in support of the application confirming the cause of action, details of the assets so far as they are known, potential defences that your partner may have and confirm why there is a need to apply without notice
- A draft order setting out the terms being sought from the Court in the freezing orders
If you are sure that your partner will be looking to dispose of their assets or hide their bank account contact our specialists at Kabir Family Law for a free initial consultation.
In addition to a freezing Injunction you may also want to consider any other appropriate requests such as spousal maintenance or interim payments.
What directions should I consider for a family law freezing order application
You may want to consider usual directions on the Order such as:
- An Order for cross-examination of your partner about the nature, location and or value of the assets held.
- An Order that your partner provides their passport as proof of identity
- An Order that a Receiver be appointed over your partner’s company;
- An Order for immediate delivery of assets or a payment into court
- An Order that your partner’s bank is authorised to disclose information to you in relation to their bank account
- An Order for a Search Order
- An Order requiring the disclosure of the identity of any your partner’s funders
- An Order that any party who is holding assets or documents on behalf of your partner be prevented from dealing with or disposing of the same.
What happens once an application for a freezing order is made?
Once the court has received the application for a freezing order they will consider the matter and list the matter for a hearing. If granted a freezing order is initially granted for 7-14 days.
The reason being is that most freezing orders are granted without any notice to the respondent. This is done purposely and tactfully to prevent your partner from being able to hide, spend or sell the assets in question from the applicant.
Following the expiry of the 7 or 14 days, a further hearing is listed in which all the parties concerned are in attendance. At this hearing the court has the power and option to make a number of decisions which include;
- Vary the terms of the freezing injunction itself but keep it in place until trial or further order
- Keep the freezing injunction as it is until trial or further order
- Discharge the Freezing Injunction if a successful application has been made by the Respondent for it to be dismissed.
If the matter is continued to trial or further order the freezing injunction remains in place until there is a trial of the underlying claim itself or the parties otherwise agree by consent at a later stage for the freezing order to be withdrawn. Therefore a freezing injunction can last for different periods of time depending upon the agreement or settlements.
We have assisted many people in reaching a settlement prior to a hearing and we are sure if you would like to settle your matter out of court to avoid incurring further costs our family law specialists will be able to do just that.
Can freezing injunctions be challenged?
Freezing injunctions can be challenged although this must be done in a timely manner as hearing dates are usually set fairly quickly; giving little time to prepare.
Challenging freezing orders is a complex area of law and reasons are specific to the circumstances of the case, assets involved, equitable interests, locality of those assets, ect.
At a starting point you will need to present a robust case that there is not a good arguable case against you and there is no risk or basis of you dissipating assets.
If a freezing order has already been granted against you then you may want to consider applying to setting the order aside or varying the freezing order if the terms of the Order cause you hardship, are onerous or the assets frozen are excessive in value to merit justification for them being frozen.
You must comply with the terms of any freezing order made against you because you otherwise could be held in contempt of court. Therefore open to a fine, seizure of assets or even imprisonment.
At Kabir Family Law we can work together if a freezing order has been made wrongly against you and advise you about applying to the court to discharge or vary the order and seek your legal expenses as well as any damages to you against your partner.
— Q&A SECTION —
Can a freezing order affect overseas assets?
Yes freezing orders can apply to assets abroad. However an order freezing assets held in other countries is only likely to be made where it is likely that the foreign courts will cooperate. Your specialist will be able to assist you further with this decision.
I am not yet divorced but would like to discuss my options further can you help?
Absolutely our divorce law specialist can advise you commencing a divorce as well as any other financial remedies that maybe available to you.
Arrange a free consultation today to discuss a freezing order application
If you wish to discuss making a freezing order application or have been served with one contact our divorce law specialists today on 0330 094 5880 to or arrange a call-back. We also offer Skype calls for our international client’s which can be requested in a call-back.
At Kabir Family Law we pride ourselves to have the national strength to serve family law across country with family law specialists in London, York, Manchester, Oxford and Newcastle.