Freezing Orders in Victoria: Protecting Assets Before Judgment

What a Freezing Order Is

A freezing order is a court order made against a respondent restraining them from removing assets from a jurisdiction or otherwise dealing with assets, whether located inside or outside that jurisdiction. In Victoria the principal source is the Supreme Court (General Civil Procedure) Rules 2015 (Vic), which adopt the harmonised national approach to freezing orders, together with the Court's inherent equitable jurisdiction.

The County Court of Victoria and the Federal Court of Australia also have power to grant freezing orders within their respective jurisdictions. Most substantial applications, however, are made in the Supreme Court of Victoria.

A freezing order is a form of injunction. It binds the respondent personally — and, through them, their directors, officers and agents. It does not transfer ownership or create a security interest. The applicant who later obtains judgment still has to enforce against those assets in the ordinary way.

Purpose of a Freezing Order

The purpose of a freezing order is narrow but important: to prevent the frustration of the Court's processes. The Court is not concerned, on a freezing-order application, with whether the respondent has acted wrongly in the underlying dispute. It is concerned with whether there is a real risk that, without the order, any judgment the applicant later obtains will be defeated.

That focus shapes everything about the order. It is interim and protective, not punitive. It does not give the applicant the use of the assets. It does not freeze the respondent's life — there are standard exceptions for ordinary living and business expenses and for legal costs. And it is reviewed regularly by the Court so that it does not last longer or extend further than is necessary.

Freezing Orders vs Ordinary Judgments

It is important not to confuse a freezing order with a judgment. A judgment is the Court's final determination of the dispute. It gives the successful party an entitlement to enforce against the losing party's assets — for example, by warrant of seizure and sale, garnishee order, or bankruptcy or winding-up proceedings.

A freezing order is made before judgment. It does not decide the merits of the case. It does not create any new entitlement to the respondent's assets. And it does not give the applicant priority over other creditors. Its only function is to preserve assets so that the Court's eventual decision can have practical effect.

The Risk of Asset Dissipation

The applicant must demonstrate a real risk that, without the order, the respondent will dissipate, conceal or transfer assets in a way that frustrates judgment. Bare commercial nervousness is not enough. Common evidence of risk includes:

• recent transfers of assets to related parties or offshore entities, especially after the dispute became known;
• corporate restructures that shift value out of the respondent entity;
• a history of dishonesty, fraud or non-compliance with court orders;
• concealment of assets, refusal to provide ordinary financial information, or inconsistent statements about ownership;
• the use of complex offshore structures, nominee shareholdings or family trusts that obscure the ultimate beneficial owner; and
• imminent realisation events — for example, a sale of real estate or a distribution of trust funds — that would put proceeds beyond reach.

The Court draws inferences from the totality of the evidence. The applicant does not have to prove that the respondent has already acted dishonestly; it must show that, on the material before the Court, there is a real risk of dissipation if the order is not made.

Bank Accounts

Bank accounts are the most commonly frozen asset. The order typically identifies the financial institution and account by reference to the respondent's name and any known account numbers. Once served, the bank is on notice — knowingly assisting in a breach of the order can itself amount to contempt — and will usually freeze the account up to the value specified.

Standard exceptions allow the respondent to draw specified weekly amounts for ordinary living expenses, to meet ordinary business expenses on production of documentation, and to pay reasonable legal costs. The terms are negotiated and reviewed regularly so the respondent is not deprived of the means to live and to defend the proceedings.

Real Estate

Where the respondent owns real property in Victoria, the freezing order will typically prohibit any sale, transfer or further encumbrance of the property. In appropriate cases the applicant may also lodge a caveat against the title, although a caveat requires a separate caveatable interest and is not a substitute for the freezing order itself.

For interstate real estate, the harmonised rules and the Court's worldwide jurisdiction over the respondent allow the order to extend to property outside Victoria. Where registration of a notification on a foreign title is required, a parallel application in the relevant jurisdiction is usually needed.

Company Assets and Shareholdings

Freezing orders are regularly made against company respondents and against individuals whose principal wealth sits in company structures. Typical orders restrain dealings with:

• corporate bank accounts and receivables;
• shareholdings in private companies (including a prohibition on transferring, encumbering or issuing new shares that would dilute the respondent's holding);
• units in unit trusts and beneficial interests in discretionary trusts where the respondent has effective control;
• intellectual property, plant and equipment, and stock in trade; and
• loan accounts owed by related entities to the respondent.

Where the respondent's wealth is held through a corporate group, the Court may make orders against multiple entities and require ancillary disclosure of holdings so that the freezing order is effective in practice.

Urgent and Without-Notice Applications

Freezing orders are almost always sought urgently and most commonly on a without-notice (ex parte) basis. Giving notice to a respondent who is suspected of being willing to dissipate assets would, in practice, prompt exactly the conduct the order is meant to prevent.

Ex parte applications carry strict obligations. The applicant owes the Court a duty of full and frank disclosure — every material fact, including facts adverse to the applicant and any plausible explanation the respondent might give, must be put before the Court. Failure to comply can lead to the order being set aside, an adverse costs order, and in serious cases findings of misconduct against the applicant and their lawyers.

Any ex parte freezing order is short-lived. It is made returnable within a few days on a return date when the respondent has the opportunity to be heard and the applicant must justify continuation of the order. The general framework for urgent injunctive relief is set out in our companion guide to urgent injunctions in Victoria.

Evidence Required

A freezing-order application stands or falls on its affidavit evidence. The Court will expect:

• a clear statement of the underlying cause of action and the strength of the claim — usually pitched at the good arguable case standard, which is more than a serious question to be tried but less than proof on the balance of probabilities;
• detailed evidence of the respondent's assets — what is known, what is suspected, and the basis for the applicant's belief;
• specific facts pointing to a real risk of dissipation — not generalities about the respondent's character;
• a draft order, usually based closely on the harmonised standard form, with carve-outs for ordinary expenses and legal costs; and
• the applicant's undertaking as to damages and, where relevant, evidence of capacity to honour it.

Because the application is usually ex parte, the applicant must also address — squarely — anything the respondent could fairly say in answer if they were present. The Court does not look kindly on a selective presentation.

The Undertaking as to Damages

As with any interlocutory injunction, an applicant for a freezing order must give the Court an enforceable undertaking as to damages. The undertaking is a formal promise that, if the order is later found to have been wrongly granted, the applicant will compensate the respondent — and sometimes innocent third parties such as banks or business partners — for any loss caused.

For commercial applicants, the financial scale of the undertaking can be one of the most significant practical constraints. The Court will frequently require evidence of the applicant's financial capacity and, where appropriate, security in the form of a payment into Court, a bank guarantee or a third-party undertaking from a parent entity or insurer.

An applicant of limited means who cannot realistically support the undertaking may find that a full freezing order is not available and that the Court will only make a narrower order — for example, freezing a single asset of modest value, or requiring the respondent to provide information rather than restraining dealings outright.

Interstate and Overseas Assets

The Supreme Court of Victoria can grant a worldwide freezing order against a respondent who is subject to its jurisdiction. The order binds the respondent personally. It does not by itself bind foreign banks or land registries, but a breach by the respondent — for example, by procuring a transfer in a foreign jurisdiction — is contempt of the Victorian Court and can be punished accordingly.

Where assets are located interstate, the harmonised freezing-order rules and the cross-vesting legislation allow Victorian orders to be made and enforced across Australian jurisdictions in a coordinated way. For genuinely foreign assets, a parallel application in the relevant overseas court is usually necessary if practical enforcement is to be achieved — and that step requires careful local advice in the foreign jurisdiction.

Freezing Orders in Commercial Disputes

Freezing orders are most commonly seen in commercial litigation. Typical scenarios include:

• recovery proceedings where a respondent is suspected of having moved funds following a default;
• fraud claims, including misappropriation of company funds, breaches of fiduciary duty by directors or employees, and recovery of bribes or secret commissions;
• shareholder oppression and unfair-prejudice claims where the controllers of the company are alleged to be stripping value out of it;
• insolvency-related claims by liquidators or trustees in bankruptcy seeking to preserve property that may be the subject of voidable-transaction claims; and
• high-value contract disputes where there is concrete evidence that the respondent is rearranging assets in anticipation of judgment.

In many cases a freezing order is sought in support of substantive commercial proceedings. The wider commercial litigation landscape — including options such as the Victorian Civil and Administrative Tribunal — is covered in our guide to going to VCAT and our guide to resolving a business dispute before court.

Freezing Orders in Estate Litigation

Freezing orders are less common in estate disputes than in commercial litigation, but they do arise. Typical examples include:

• orders against an executor who is suspected of having dissipated estate funds or transferred estate assets in breach of fiduciary duty;
• orders against an attorney under an enduring power of attorney who is alleged to have misused the donor's assets;
• orders against a beneficiary who has received an early distribution in circumstances where a family provision (TFM) claim is on foot; and
• orders preserving the proceeds of sale of an estate asset pending resolution of a dispute about entitlement.

Freezing orders sit alongside more common estate remedies such as injunctions restraining distribution of the estate, probate caveats and applications to remove an executor. Background on those mechanisms is in our guides to family provision claims in Victoria, probate caveats in Victoria and removing or replacing an executor in Victoria.

Costs Risks

Freezing-order applications are expensive. They are typically prepared on compressed timelines, with senior counsel briefed, multiple affidavits sworn, and substantial out-of-hours work. Costs commonly run into the tens or hundreds of thousands of dollars for a single application.

The exposure does not stop with the applicant's own costs. An unsuccessful applicant typically pays the respondent's costs of the application. Where the application has been brought without proper basis, without full and frank disclosure on an ex parte application, or as a tactical pressure device, the Court may order indemnity costs. The general framework is set out in our companion guide to costs consequences in Victorian litigation.

Many disputes that look like freezing-order cases at first glance can in fact be addressed more cheaply by a well-targeted letter of demand, an undertaking from the respondent, or focused disclosure orders. Freezing orders should be reserved for situations where those alternatives are realistically unavailable or have already failed.

Consequences of Breach

Breach of a freezing order is contempt of court and is treated with great seriousness. Possible consequences include:

• substantial fines;
• sequestration of assets — the Court appoints a sequestrator to take control of the contemnor's property until the contempt is purged;
• imprisonment in cases of serious or persistent contempt by an individual;
• personal liability of directors and officers where a company is in breach; and
• liability of third parties — including banks, accountants and other professionals — who knowingly assist in a breach.

A respondent served with a freezing order should obtain legal advice immediately. Many ordinary financial steps — paying a supplier, transferring funds between accounts, settling a property sale — can constitute a breach if taken without first considering the order. The safest course is to stop, take advice and, where appropriate, seek a variation from the Court.

Why Early Legal Advice Matters

As with all urgent injunctive relief, the quality of the work done in the first 24–72 hours largely determines the outcome of a freezing-order application. The evidence has to be marshalled, the legal test addressed squarely, the duty of full and frank disclosure honoured, and the terms of the proposed order drafted with precision.

Parke Lawyers advises business owners, creditors, directors, shareholders, executors and beneficiaries on urgent asset-protection litigation in the Magistrates', County and Supreme Courts of Victoria. Our litigation and dispute resolution practice works closely with our commercial and business law and estate litigation and TFM claims teams so that freezing-order applications are prepared quickly, accurately and with a clear strategy for the substantive proceeding that follows.

Frequently Asked Questions