Contemplating Obtaining A Freezing Order? Here’s Why You Must Instruct An Experienced Solicitor

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Freezing orders have been described as the ‘nuclear weapon’ of family law[1].  This is because a freezing injunction is effectively punishing someone in anticipation of them committing an act which may deny their spouse a fair financial settlement following a divorce.

 

A freezing order (formerly termed a Mareva injunction or order) is an interim injunction restraining a party from disposing or dealing with assets.  They are incredibly effective in protecting assets, especially in high-net-worth divorce cases, where wealth may be dispersed amongst several corporate entities and trusts, which are spread across multiple jurisdictions.

 

If you are contemplating obtaining a freezing order, it is crucial that you take expert legal advice. An ill-conceived, badly prepared application or one that does not carefully follow correct procedure may result in wasted legal fees and an adverse order for costs.

The power of a freezing order

A freezing order is a powerful tool in a family law solicitor’s box.  Property, stocks and shares, art, cars, even bank accounts can be made subject to a freezing order.  And it is not just your spouse who may be affected.  Third-parties who deal with or benefit from the assets covered by the order; for example, trustees and business partners, may also find their ability to deal with the affected property severely curtailed.

How freezing orders are obtained

A freezing injunction is an equitable remedy which is granted at the courts’ discretion. Therefore, the usual equitable bars can apply as hurdles for an applicant to overcome, including:

  • the equitable maxim of ‘clean hands’. That is, unless the party seeking the injunction is free of wrongdoing, the court will not exercise its discretion; and
  • the doctrine of ‘laches’ (delay). An application may be barred if it is not brought within a timely manner.

 

Applications for a freezing order can be made without notifying the affected spouse (known as an ex parte application).  In fact, to ensure the injunctive relief is effective, the element of surprise may be essential.  However, your solicitor should explain to you that due to the draconian nature of a freezing order being granted without notice, the court will only deliver such a remedy in exceptional circumstances.

 

In UL v BK (Freezing Orders: Safeguards: Standard Examples) [2013] EWHC 1735 (Fam)[2] Mr Justice Mostyn summarised the principles and safeguards the courts will apply when considering an application for a freezing injunction.

a)    the court can preserve tangible assets subject to a claim ‘in specie’ (in its original form), if they are subject to a claim

b)    safeguards and principles must be meticulously applied to all freezing orders

c)    it is for the applicant to prove there is a real danger of the other party disposing of the assets in a way that would prejudice their financial settlement

d)    robust evidence of the above fact must be provided - speculation will not suffice.

e)    in cases where the freezing order is being requested without notifying the affected party, Justice Mostyn stated; “No notice at all would only be justified where there is powerful evidence that the giving of any notice would likely lead the respondent to take steps to defeat the purpose of the injunction, or where there is literally no time to give any notice before the order is required to prevent the threatened wrongful act. Cases where no notice at all can be justified are very rare indeed.”

f)     in cases where no notice is being given the ‘clean hands’ maxim will be strictly applied and any falsehoods discovered in the application may result in the injunction being immediately lifted

The recent case of Tobias v Tobias[3] illustrates how strictly the courts will insist on procedural correctness when it comes to applying for a freezing order ex parte.  In this case, the wife resided at the matrimonial home after she and her husband separated whist her husband lived elsewhere. The home was held in the wife’s sole name, but a notice of home rights under the Family Law Act 1996 had been registered at the Land Registry in the husband’s name. That registration prevented the property being sold without his consent.

 

Believing the property to have been placed on the market and to be under offer, the husband made an urgent ex parte application to an out-of-hours High Court judge for a freezing order to prevent the wife disposing of it.  The application was rejected because:

a)    it was not required because of the home rights notice; and

b)    the application had gone to the wrong court, at the wrong time, and for the wrong reasons.

The risk of adverse costs being awarded in a case like Tobias is high.  Therefore, if you believe your spouse may be contemplating disposing of certain assets to keep them outside of any impending financial settlement, contact an experienced family solicitor who understands the proper procedures for obtaining a freezing injunction.

 

Otherwise, it could be you left out in the cold.

 

Rosie Bracher is specialist family law solicitors based in Barnstaple.  We have the knowledge and expertise to advise you on all matters involving children and family law.  Please contact our office on 01271 314 904 and arrange to speak to one of our team.



[1]  (Bank Mellat v Nikpour).

[2] http://www.bailii.org/ew/cases/EWHC/Fam/2013/1735.html

[3]  [2017] EWFC 46