Freezing orders, often referred to as asset preservation or Mareva orders, are issued by the Supreme Court to safeguard an individual’s assets. A freezing order prevents the hiding, transferring, or spending of assets believed to have been obtained unlawfully (directly or indirectly).
The Mareva injunction is an equitable remedy that originated from Denning LJ’s interpretation in Mareva Compania Naviera SA v. International Bulkcarriers SA [1980] 1 All ER 213, which prohibited the defendants from dissipating or disposing of their assets while a legal case brought by the plaintiffs was pending. It has been referred to as
“one of the law’s two nuclear weapons”
Bank Mellat v. Nikpour (1985) FSR 87 (CA) at 92 per Donaldson LJ.
the other being the Anton Piller Order.
A freezing order is fundamentally a type of injunction that prohibits the respondent or their representatives from removing assets from the jurisdiction or otherwise dealing with those assets until further court orders are issued (for instance, until a final judgment is rendered against the respondent). This order establishes no security or interest in the applicant’s assets.
To warrant a freezing order, the court must perceive a genuine and not merely fanciful risk that, without an injunction, any assets that the respondent may possess—regardless of their location—will be dissipated or otherwise handled in a way that leaves the applicant unable to satisfy the judgment.
Practice Note SC Gen 17
In Victoria, the Supreme Court (General Civil Procedure) Rules 2015 – REG 37A.02 provide that the Court can issue a freezing order, either with or without notifying the respondent, to prevent any obstruction or hindrance to the Court’s process by addressing the risk that a court judgment or anticipated judgment may remain unfulfilled, either in whole or in part.
A freezing order may prohibit a respondent from removing any assets, whether located in Australia or elsewhere, or from selling, managing, or diminishing the worth of those assets.
A freezing order can be issued using Form 37AA. When issuing a freezing or ancillary order, the Court must consider Practice Note SC Gen 17 Freezing Orders. The affidavits supporting an application for a freezing order or an ancillary order should, as much as possible, cover the following information—
- (a) details about any judgment that has been achieved, or if no judgment exists, the following information regarding the cause of action—
- i) the grounds for the claim of substantive relief;
- ii) the value of the claim; and
- iii) if the application is made without informing the respondent, the applicant’s awareness of any potential defence;
- (b) the type and worth of the respondent’s assets, as far as they are known to the applicant, both in Australia and abroad;
- (c) the considerations mentioned in Rule 37A.05; and
- (d) the identity of any individual, other than the respondent, whom the applicant believes may be impacted by the freezing order, and how that individual could be affected.
Re Estate of Hagendorfer (Injunction) [2024] VSC 482
Tanya Brink (the plaintiff), one of four children of Claudio Hagendorfer (the deceased), was excluded from her father’s will, which left the $896,210.27 estate to Natasha Hagendorfer (executor) and Aletta Spinks (the second defendant). The executor was granted Probate on 24 March 2023, and the estate was distributed by 26 May 2023.
The plaintiff filed a claim for maintenance under Part IV of the Administration and Probate Act 1958 on 18 September 2023, within the statutory six-month period. The plaintiff submitted that the distribution was premature and sought recovery from the recipients.
In Re Estate of Hagendorfer (Injunction) [2024], VSC 482, the plaintiff applied for orders to prevent the defendants from selling or further encumbering their homes, using the distributed funds to reduce their mortgages or both. The executor opposed the application, arguing the plaintiff lacked a valid claim and that there was no risk of asset dissipation.
The decision
1. The plaintiff has an arguable case for a family provision order:
- She is the daughter of the deceased, with limited assets and no home.
- She commenced proceedings within the statutory period.
- The estate’s premature distribution may expose the executor and beneficiaries to liability.
2. A family provision order can affect distributed estate assets, per Section 97(4) of the Act, which treats such orders as a codicil to the Will.
3. The court found sufficient grounds to preserve assets, ordering the defendants:
- Not sell or further encumber their properties without court approval.
- Retain at least $150,000 in equity to satisfy potential claims.
4. The Court will address Costs and further applications following the full hearing.
This case emphasises the executor’s duty to delay distribution within the statutory claim period and the court’s ability to protect estate assets pending resolution of family provision claims.