The end of a marriage can prompt some people to act irrationally and spitefully. Quite often they feel aggrieved that everything they have worked hard for should not be shared with their spouse as they do not deserve it. Most do not act upon these feelings, however there are the rare occasions when a husband (as it quite often is the husband) will seek to reduce the asset base either by dissipating assets or by selling or disposing of assets so as to reduce their wealth and lower the wife’s award. In order to prevent such an occurrence, you can apply for a Freezing Order.
What is a Freezing Order?
As the name suggests, it is an order that freezes assets therefore preventing their disposal by the other spouse. This can apply to monies in a bank account, property etc. It can extend to any type of assets whether it be a shareholding in a company, compensation in a civil claim etc. Quite often an order will not in fact freeze the asset but merely place the respondent on notice that he is not permitted to deal with that asset. Once a Freezing Order has been made it can be served upon banks thus preventing the respondent from removing monies from the account.
How can I satisfy the court that a Freezing Order should be made?
It is fair to say that in the past the courts have taken a laissez faire approach to the granting of a Freezing Order, being satisfied on the flimsiest of evidence where no prejudice would be suffered by the husband and where in a short space of time he could apply to vary or discharge the order.
Such a practice came to an abrupt end following the case of UL v BK . From this case the following principles were derived: -
It must be shown that there is a good, arguable case that refusing to make such an order would create a real risk of injustice.
There must be solid evidence of an intention to dispose of assets, mere hearsay is insufficient.
If the application is made without notice to the other party then the order should on the face of it set out why notice was not given. In most cases even short informal notice should be given unless it is essential that the other party should not be made aware of the application.
The application will have to be supported by an ‘undertaking in damages’ by the applicant that they will be responsible for any costs incurred either by their spouse or any third parties affected by the order. This can include compensation for anyone else who experiences a financial loss as a result of the application.
The order should include provision for the other party to meet their own living expenses and legal costs.
The order should only seek to freeze assets up to the value of the claim (in most big money cases limited to 50% of the assets).
The Applicant has a high duty of candour to the court. A failure to comply with this duty can lead to the dismissal of the application and an order for costs being made.
When should I make the application?
The application must be made as soon as you are aware of the risk of dissipation, so time is very much of the essence. A Freezing Order application is not freestanding and therefore to obtain such an order you must first have issued a Divorce Petition and a Financial Remedy Application (Form A).
Where can I issue my application?
Freezing Orders are usually made by a High Court Judge, but District Judges and Circuit Judges also have jurisdiction to make them.
What is the duration of the Freezing Order?
If the application is made without notice, then it will last until the return date hearing. By the return date the Husband is required to file a statement of means setting out his assets and any other evidence he wishes to rely upon. At the hearing the court will consider whether the injunction should continue. If so, it will generally last until the conclusion of the financial remedy proceedings or for any such other period as the court considers just.
Can you freeze assets held outside of the UK?
Yes, The High Court has jurisdiction to make worldwide Freezing Orders, however some countries will not accept that an order made in this jurisdiction will bind them.
What happens if a party breaches the order?
A Freezing Order carries severe penalties for a party in breach. This includes a fine, seizure of assets and/or imprisonment.
If you are considering applying for a Freezing Order, then why not discuss this with one of our team in confidence, please contact us to book your appointment.