AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
order. In accordance with Part 25 Division 2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), in order to obtain a freezing order, the applicant must: • show that there is a good arguable case against the wrongdoer; • show that there is a real risk the wrongdoer is likely to dissipate the assets; • where an order is sought against a third party, show that the third party is holding, using or is otherwise in possession of the asset; and • address discretionary concerns, such as the form of the order and the value of the relevant assets. Freezing orders are classified as “in personam” orders, meaning that their operation is concerned with individuals rather than with specific assets. This distinction is significant, as it means that orders are not limited to within Australia (that is, “domestic freezing order” ) rather, the orders may also deal with assets that are located overseas (ie, “worldwide freezing order” ) provided that the court is satisfied that the order “is undoubtedly relevant to the exercise of the court’s discretion to grant the order” (Deputy Commissioner of Taxation v Huang [2021] HCA 43 [30]). There are also court fees associated with the granting of a freezing order. The court will not grant a freezing order without the applicant pro - viding the usual undertakings as to damages (Frigo v Culhaci (1988) NSWCA 88; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249), as in its absence if the proceedings were to fail, the respondents would have no remedy available to them. The court may require the applicant to make a pay - ment to the court, or to give other security for the performance of the undertaking. It should also
be noted that under Australian law, there is no need to give a cross-undertaking as to damages. In the case where a substantive respondent does not comply with the freezing order, the efficacy of the order depends upon compliance by third parties. This is due to the fact that the effect of a freezing order is not confined to the parties, but extends to include a third party where a freez - ing order has also been made against them or notice of the order is given to the third party. In the latter case, the third party is not bound by the order but will be guilty of contempt of court if it does anything to support the breach. Spe - cifically, the third party may be penalised in the form of a committal, sequestration or fine. Simi - larly, where a defendant refuses or neglects to do any act within the time specified in this order for the doing of the act, or disobeys the order by doing an act which the order requires them to abstain from doing, they will also be liable to imprisonment, sequestration of property or other punishment. 2. Procedures and Trials 2.1 Disclosure of Defendants’ Assets As outlined in Rules 25.12 and 25.13 of the UCPR (NSW), orders ancillary to a freezing order are available to assist in requiring a defendant to disclose their assets. The overarching objective of an ancillary order, similar to that of a freez - ing order, is to prevent events that would frus - trate the court’s processes. The most common form of order is that the respondent discloses the nature, location and details of their assets. By requesting that the defendant disclose the nature of their assets, this allows for the identifi - cation of third parties such as banks and financial intermediaries who have custody of the assets and enables notice of the order to be given to
20 CHAMBERS.COM
Powered by FlippingBook