By Stefan Chelper

5 November 2021

Help, I’m dealing with a dodgy debtor!

You are a creditor, owed a significant sum of money, and you have reason to believe that the defendant is likely to:

i.                    abscond; or

ii.                   remove, dispose of, deal with or diminish their assets

thereby putting at risk the defendant’s ability to satisfy a judgment or prospective judgment owed to you. What do you do?

One such potential course of action is making an application for a Freezing Order which, as the name suggests, freezes (i.e. prohibits) the defendant/respondent from dealing with or diminishing their assets up to a certain amount.

A somewhat unique application where the element of surprise is not only allowed but can in fact be critical to its success, an application for a Freezing Order is generally made without notice to the Defendant.

 

When is a Freezing Order applicable?

There’s a myriad of scenarios which may call for such an application to be made, and our very own office recently successfully obtained and utilised one in circumstances where a defendant (and judgment debtor) sought to sell a residential property under our very noses. Noting that the Defendant had not complied with previous court orders (including orders to pay our client a judgment debt), we obtained the Freezing Order which was instrumental in putting the defendant between a rock and a hard place and ultimately resolving the dispute.

Following resolution of the matter, the Freezing Order was lifted.

 

Undertaking as to damages

In exchange for the Freezing Order, the court will usually require the applicant to give an ‘undertaking as to damages’ which is a commitment by the applicant that they will pay compensation to any other party that suffers damage as a result of the freezing order, if the order is objected to and overturned.

 

I want to know more

If you require further information regarding Freezing Orders and/or think it may be relevant to your circumstances, please don’t hesitate to contact our office on (03) 8600 9333 and a lawyer in our litigation team would be happy to speak with you.

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