Mareva Injunction (Freezing Order) – How Freezing Orders Work in Australian Law

Mareva injunctions, also known as freezing orders or asset preservation orders, are powerful court orders that prevent a party from disposing of or hiding their assets.

In essence, a freezing order "is an order by the Court that the Defendant cannot deal with specific assets up to the amount claimed".

This ensures any judgment in favor of the plaintiff can be satisfied and isn't rendered hollow by the defendant having whisked assets away.

These orders originated from a famous UK case in the 1970s (Mareva Compania Naviera SA v International Bulkcarriers SA), which is why they're often called Mareva orders.

Today, Australian courts use the term "freezing order" in the rules, but the concept remains the same – restraining a potential judgment debtor's assets so they can't be dissipated before the court's process is completed.

With decades of experience in litigation and asset protection, Unified Lawyers regularly assists clients in securing and defending against Mareva injunctions.

Our team's expertise in urgent court applications ensures that your interests are protected, whether you need to freeze someone's assets or respond to an order against you.

In this guide, we explain what a Mareva injunction is, the legal framework behind freezing orders in Australia, when and why courts grant them, the step-by-step process to obtain one, evidence requirements, limits of these orders, consequences for breaching them, how to defend against a freezing order, and answer frequently asked questions.

By the end, you'll understand how freezing orders work and how Unified Lawyers can help you navigate this complex area of law.

What Is a Mareva Order (Freezing Order)?

A Mareva order (or freezing order) is a type of court injunction that stops a person (usually a defendant) from dealing with their assets.

In practical terms, it "prevents the Defendant from moving assets and funds overseas or transferring them to different entities".

The goal is to preserve the status quo of the defendant's assets until the court can resolve the dispute.

If granted, a freezing injunction can bar someone from selling property, emptying bank accounts, or otherwise dissipating assets that might be needed to satisfy a future judgment.

For example,
If a business partner is suspected of funneling money out of the company upon learning of a lawsuit, the court can issue a Mareva injunction to freeze that person's bank accounts and other assets, preventing any transfers.

Historical origin :

The Mareva injunction gets its name from the English case Mareva Compania Naviera SA v International Bulkcarriers SA (The Mareva) in 1975, where such an order was first used to stop a shipowner from moving funds out of jurisdiction.

Since then, Mareva orders have been adopted in many common law countries, including Australia. In Australian court rules and legislation, they are officially termed "freezing orders," aligning with modern terminology.

You might also hear them called asset preservation orders, emphasizing that they preserve assets until the court's process is complete.

Mareva vs Anton Piller :

It's worth noting the difference between a Mareva injunction and an Anton Piller order (another extraordinary remedy).

A Mareva or freezing order is about freezing assets so they aren't spirited away; an Anton Piller order (often called a "search order") allows a plaintiff to enter a defendant's premises to seize evidence to prevent its destruction.

Both are powerful interim orders often granted ex parte (without notice to the other side), but they serve different purposes.

In short, a Mareva injunction freezes assets, while an Anton Piller order preserves evidence.

When and Why Is a Mareva Order Granted?

Because a freezing injunction is a drastic remedy, courts grant it only in specific circumstances where it's truly necessary.

The main scenario for a Mareva order is when there is a real risk that a defendant will dispose of, hide, or remove assets before a court judgment can be enforced.

In plainer terms, it's used to prevent a defendant from "dissipating their assets" such that by the time you win your case, there's nothing left to recover.

The classic situations include :

1. Suspected fraud or misappropriation :

If the defendant is accused of fraud, embezzlement, or similar wrongdoing, and there's evidence (or well-grounded suspicion) they have already concealed money or might do so, a Mareva order is often justified.

Courts are more inclined to infer a risk of asset dissipation "where there is a history of fraud or dishonesty on the part of the respondent" or evidence of serious wrongdoing.

For example,
imagine an employee has siphoned company funds into personal accounts; upon being sued, they might quickly shift those funds offshore.

A freezing order would stop any further transfers.

2. Asset flight risk :

Cases where the defendant has assets overseas or is itself a foreign entity can warrant a Mareva injunction if the defendant might shift assets out of Australia's reach.

If a business partner is moving money to an overseas account or a debtor is about to sell their Australian property and leave the country, a court may freeze those assets to preserve them for enforcement.

3. Imminent insolvency or hiding of assets :

If a company or individual appears to be stripping assets (for instance, selling off properties, emptying bank accounts, or transferring valuables to third parties) as a lawsuit looms, a Mareva order can halt those dealings.

The key is a well-founded fear that without the order, any judgment would go unsatisfied because the assets will be gone.

Say a company sues a former executive for taking $500,000.

They find out he's moving money into crypto and putting his house up for sale.

The company can urgently ask the court to freeze his bank accounts, crypto wallets, and stop the sale — locking assets in place while the case unfolds.

Courts grant freezing orders when there's a real risk someone will move or hide their assets to avoid paying.

They're not handed out lightly.

If a simpler fix works, the court will take it. But when there's no other option and the danger's real, a Mareva order hits pause on asset movement to stop injustice.

Types of Cases Where Mareva Orders Are Common

Freezing orders are commonly seen in a range of civil litigation contexts – essentially any situation where significant assets could be squirreled away to frustrate a legal claim.

Some typical cases include :

1. Business and commercial disputes :

Mareva orders frequently arise in business litigation, such as partnership disputes, contract breaches, or debt recovery cases.

For instance, if a company sues a contractor for a large sum and learns the contractor is transferring funds to affiliates to avoid paying, an asset-preservation injunction may be sought.

Similarly, shareholder disputes (where a majority shareholder might strip company assets) can warrant freezing orders to protect the company's value.

2. Fraud and misappropriation cases :

Perhaps the most classic use of Mareva orders is in fraud cases – embezzlement by employees, Ponzi schemes, fraudulent misrepresentation in business deals, etc.

Here, the plaintiff (or even a regulator like ASIC) may act quickly to freeze bank accounts, investment portfolios, or property acquired with ill-gotten gains.

For example, in one case an insurance company obtained a freezing order against a former employee who allegedly redirected nearly $400k of company funds to herself.

Courts recognize that in cases of prima facie fraud, it's reasonable to infer the defendant might try to hide or spend the money, so freezing orders are often granted to preserve those assets.

3. Breach of fiduciary duty or trust :

Cases involving trustees, company directors, or professionals who owe fiduciary duties often use freezing orders if there's a suggestion of wrongdoing.

For example,
if a trustee is suspected of diverting trust assets, or a director is funneling company money to a personal account, a Mareva injunction can freeze those assets.

This prevents further dissipation and maintains the trust or company's assets until the claim is resolved.

4. Divorce and family law property disputes :

In high-conflict separations or divorces, if one spouse fears the other will hide or dispose of marital assets, a Mareva-type order can be sought (usually through the Family Court or Federal Circuit Court in a family law context).

For instance,
if one party to a divorce suddenly starts transferring large sums offshore or selling properties below value, the other party can ask the court to freeze assets to ensure a fair property settlement.

Courts can and do grant injunctions to freeze bank accounts or other assets in family law proceedings to prevent "maliciously disposing or reallocating funds" by a spouse.

(Note: The family courts have their own rules for such orders, sometimes called s.114 injunctions under the Family Law Act, but the effect is similar to a Mareva order.)

5. Regulatory and enforcement actions :

Australian regulators and law enforcement bodies also use freezing orders.

For example, the Australian Securities and Investments Commission (ASIC) can apply for asset-freezing orders in cases of suspected corporate misconduct or insider trading, to prevent suspects from moving assets beyond reach.

Crime Commissions or the Australian Federal Police may seek freezing orders under proceeds of crime legislation to freeze assets of an alleged criminal (though those are technically under criminal or pecuniary penalty laws, not civil Mareva orders).

These cases often involve allegations that assets were illegitimately obtained, and the freezing order ensures those assets remain available for victims or forfeit to the state.

In all these scenarios, the common thread is the need for speed and preservation.

The parties seeking Mareva orders are often racing against time to keep assets in place.

Whether it's a business dealing gone wrong, a fraudster on the run, or a divorcing spouse emptying accounts, the freezing injunction is the tool to "pause" the assets until the court can sort out the rights of the parties.

(It's also worth noting that a freezing order can be made against third parties in some cases – for example, freezing a spouse's bank account if it's alleged that the defendant has hidden stolen money in that account. We discuss third-party orders further under scope, but this highlights how courts will adapt the order to the situation to ensure effectiveness.)

Criteria the Court Considers for Granting a Freezing Order

To obtain a Mareva injunction in Australia, a plaintiff must satisfy the court of several key criteria.

Every case turns on its facts, but generally the court looks for the following elements before it will grant a freezing order :

1. Strong prima facie case :

The applicant must show they have a serious legal claim — one that's more than just speculative.

This doesn't mean proving the case now, just that it's solid enough to proceed.

For example, if suing for breach of contract, present the contract and how it was broken.

The court isn't deciding the full case yet — just checking that it's not baseless.

2. Real risk of asset dissipation :

You must prove there's a genuine risk the defendant will hide or move assets to avoid paying a judgment.

Courts look for red flags like unusual bank activity, low-value asset sales, or past misconduct.

It can't be just a gut feeling — you need facts suggesting the defendant might try to make assets vanish.

For foreign defendants or companies with no ties to Australia, courts may assume the risk is higher.

3. Balance of convenience :

The court weighs the potential harm to both sides.

Freezing orders restrict property use, so they're only granted if the benefit to the applicant outweighs the impact on the defendant.

Delay in applying or seeking an excessive freeze amount can weaken your case.

If the defendant offers a reasonable alternative, like putting up security, the court may accept that instead.

4. Undertaking as to damages :

The applicant must agree to pay the defendant compensation if the freezing order is later found to be unjustified.

This protects the defendant from unfair harm.

Courts may ask for proof that the applicant can afford to pay if needed, sometimes requiring funds to be held as security.

5. Full disclosure (if applying without notice) :

If the order is sought ex parte — without notifying the defendant — the applicant must tell the court everything relevant, even facts that hurt their case.

Withholding information can lead to the order being overturned later.

Transparency is essential when the other party isn't there to respond.

In summary, to convince a court to freeze someone's assets, you need to present a solid prima facie case and persuasive evidence of a real risk that the defendant will make enforcement impossible by dealing with assets.

Think of it as answering two questions:

(1) "Do you have a decent case against the defendant?" and (2) "Do you have reason to think the defendant won't sit tight and instead will try to frustrate any judgment by moving or hiding assets?"

If the answer to both is yes (and the equities favor it), the court can deploy this extraordinary remedy.

Keep in mind, even after an order is made, the court remains involved to ensure it's fair – for example, by allowing the defendant to live and do business in the meantime, and by revisiting the order if circumstances change.

Limits of a Freezing Order

Freezing orders are meant to protect assets — not punish.

They come with built-in limits :

• Asset Cap : Orders usually cover only the amount of your claim, not everything the defendant owns.
• Worldwide Scope : Can apply to assets inside and outside Australia, though foreign enforcement varies.
• No Ownership Granted : The assets aren't yours — the defendant just can't deal with them.
• Living/Legal Expenses Allowed : Orders allow funds for normal living costs, legal fees, and genuine business activity.
• Third-Party Assets : Only targets assets the defendant owns or controls. Innocent third-party assets are off-limits.
• Time Limits : Orders are often temporary and reviewed regularly. Defendants can ask to change or remove them.
• Extra Measures : Courts can also require defendants to list their assets or surrender passports.
• One important comfort : courts recognize that freezing orders are "a significant imposition" on a defendant. That's why they allow the respondent to come back to court on short notice to seek variation or discharge, and they will listen to reasonable proposals (like the provision of security) to alleviate the order. The system isn't trying to ruin defendants; it's trying to balance interests. If you are genuine and proactive in addressing the court's concerns, you stand a good chance of getting a fair adjustment. Many freezing orders are resolved by consent at the return hearing – often the parties agree to continue some form of the order with tweaks, or the defendant's undertakings are accepted in place of the order.

At Unified Lawyers, our family lawyers have extensive experience defending clients against Mareva orders.

We know how to quickly assemble the evidence to rebut a plaintiff's claims and how to negotiate pragmatic solutions (like agreed undertakings) that satisfy all sides.

If you've been served with a freezing injunction, remember that you do have options – from fighting it head-on with evidence, to finding a middle ground that protects your interests while addressing the plaintiff's.

The key is swift and strategic action to prevent an interim order from unnecessarily crippling you.

Defending Against a Mareva Order

If you are on the receiving end of a freezing order, it can be an overwhelming experience – suddenly your bank accounts are locked and assets tied up.

However, being hit with a Mareva injunction is not the end of the road.

There are several strategies and rights a respondent has to challenge, vary, or discharge the order.

Here's how you can defend against a freezing order :

1. Act quickly and get legal advice :

Upon being served, the first step is to consult experienced litigation lawyers (if you haven't already by the time of the return hearing).

The initial order will usually last only until a return date a few days away, so time is short. By moving promptly, you preserve your ability to effectively contest the order at that hearing.

The order itself will inform you of your right to come back to court to have it varied or discharged on short notice.

Courts make it clear that a respondent can "apply to the Court at any time to vary or discharge this order" – and such applications are treated as urgent. So don't hesitate to use that right.

2. Examine the applicant's evidence for weaknesses :

Your lawyers will scrutinize the affidavits and evidence that were used to obtain the order.

They will look for any gaps or misrepresentations. Perhaps the plaintiff overstated their case or omitted key facts (which they had a duty to disclose).

If you find that the applicant failed to mention something important – say, a defense you had communicated or an alternative explanation for a money transfer – you can argue the order should be discharged for nondisclosure.

Courts have revoked freezing orders when material nondisclosure is proven, without even needing to delve into the merits of the case.

Also, if the evidence of dissipation risk is speculative or outdated, highlight that. Maybe the plaintiff claimed "suspicious transfers" but you have documents showing those were legitimate payments (e.g. paying suppliers).

By undermining the plaintiff's evidence, you erode the justification for continuing the freeze.

3. Provide counter-evidence and assurances :

At the return hearing (which is inter partes), you have the chance to file your own affidavit evidence.

This is crucial. You can directly address the plaintiff's claims :

For example,
"Yes, I transferred $100k last month, but here is proof it was to purchase stock for my business, not to hide money."

If you're accused of planning to flee, maybe show evidence of strong ties to the community (like "My whole family is here, I have no foreign bank accounts, here's my surrendered passport if needed").

Essentially, show the court that the plaintiff's fear is unfounded or has been remedied.

Often, a defendant will voluntarily offer an undertaking to the court: for instance, you might undertake not to dispose of assets above a certain value, or not to take assets out of Australia, etc., pending trial.

If the court can get comfort from your promise (backed by your own reputation or security), it may decide a formal freezing order is no longer necessary.

In one case, a defendant company director provided an undertaking not to dissipate assets and even agreed to a monitoring mechanism, which persuaded the court to lift the more stringent freezing order.

Offering a reasonable undertaking can be an effective way to regain some normalcy while still assuring the court its process is protected.

4. Show there's no "real risk" (dissipation unlikely) :

Argue on the law that the threshold for the order isn't met. Perhaps the plaintiff indeed has a serious case, but if you can show that you have no intention of hiding assets and no indications of such behavior, the order might be excessive.

For example,
if all your assets are tied up in an illiquid form (like property) that you're not going to sell, or if you've been cooperating and transparent all along, make that case.

The plaintiff might have been overly cautious or misinterpreted benign actions as sinister. If you convince the court that you're not the sort to abscond or drain assets, the court may discharge the order.

Remember, the onus was on the applicant to prove the risk; at the return hearing the court re-evaluates that with both sides heard. If you, as the defendant, present a credible picture that no risk exists, the basis for the Mareva falls away.

5. Challenge the scope or terms of the order :

Even if some kind of order is justified, the one granted might be too broad or harsh.

You can ask the court to vary it.

Common points: increase the allowance for living or business expenses if it's too low (provide a budget or financial statements to show need).

Exclude certain assets that shouldn't be frozen – e.g. assets that belong to your wholly innocent spouse or a company that isn't really under your control.

If the order freezes assets beyond the claim amount, point that out; courts should not restrain more than necessary.

Essentially, ensure the order is fair and only targets what it should.

Courts are receptive to tweaking orders to avoid injustice.

The practice note even encourages that respondents be given liberty to apply on short notice to vary/discharge, acknowledging that adjustments may be needed.

6. Offer substitute security :

A very effective way to get a freezing order lifted is to provide an alternative form of security for the plaintiff's claim.

For instance, you could pay the amount in dispute (or a bond for that amount) into court or into a joint solicitor trust account.

Or provide a bank guarantee for the sum claimed.

By doing so, you essentially eliminate the plaintiff's concern – their claim amount is secured, so there's no need to freeze all your assets.

Courts often discharge or suspend freezing orders if adequate security is put up.

This can be a win-win: you regain control of your assets (minus the secured amount), and the plaintiff is protected by the security.

Of course, you need the financial ability to do this. But even partial security or a negotiated arrangement can sometimes replace a draconian freeze.

For example, if multiple properties were frozen, the court might allow you to unfreeze one for sale if you agree to put the sale proceeds in a trust account toward the claim.

7. Use the return hearing as a mini-trial (if advantageous) :

At the return date, the court isn't deciding the whole case, but it will decide whether to continue the injunction.

If you have strong evidence that the plaintiff's case is weak (no arguable case) or that they misled the court, you can push for a full discharge.

Essentially, you have to convince the judge that the stringent test for a Mareva isn't met on the merits or the balance.

Sometimes defendants succeed by showing, for example, that they have a robust defence that was not disclosed initially, or that the claim is not as valuable as plaintiff says (hence freeze is overkill), etc.

The court will weigh whether the freezing order should stand; if you tip that balance, you can be free of it.

8. Maintain strict compliance meanwhile :

As you fight the order, be sure you comply with it to the letter until it's varied or lifted. Don't be tempted to do anything in violation (like sneaking assets out).

That will destroy your credibility and ability to get relief. Demonstrating good faith – for instance, promptly providing the required asset disclosure affidavit if ordered – will put you in a better position to appeal to the court's fairness.

9. Appeal as a last resort :

If the court continues the order and you strongly believe it's wrong, you could appeal to a higher court.

However, appeals can be slow and the freezing order will likely remain in effect in the interim (unless you get a stay, which is rare).

In practice, most defendants focus on managing or varying the order in the trial court rather than appealing, unless there's a clear legal error.

FAQs : Freezing Orders in Australia

1. What is a Mareva injunction?

A Mareva injunction — or freezing order — is a court order that temporarily locks down a person's assets so they can't be moved, sold, or hidden before a court case is decided. It protects your ability to collect on a judgment. While it restricts the defendant from dealing with their assets, it doesn't give control to the other party.

2. How much does it cost?

Costs depend on urgency and complexity.

Legal fees for evidence, affidavits, and court time typically range from a few thousand to tens of thousands of dollars.

If the order is later found to be unjustified, you may have to pay damages to the other party.

3. Can you freeze a bank account?

Yes — freezing orders often target bank accounts.

Once the order is served, the bank freezes the account: withdrawals stop, though deposits may continue.

It's one of the fastest ways to prevent funds from being moved, and banks act only on valid court orders.

4. How long does a freezing order last?

Initially, orders may last a few days or weeks.

Courts often extend them through to the end of the case or until the defendant provides acceptable security (like a cash bond or bank guarantee).

Orders may also have review dates or time limits.

5. Can the order be removed?

Yes. Defendants can apply to cancel or change the order if it was granted on weak grounds or becomes unnecessary.

Courts can lift it entirely, modify its scope, or accept alternative arrangements.

If both parties agree or settle, the order can be withdrawn by consent.

Bonus tip : Freezing orders can be tailored — covering only certain accounts, properties, or asset amounts. A precise, well-supported application improves your chance of success.