Mareva orders

A mareva order (Mareva Order), also known as a freezing order or asset protection order, is a special type of interlocutory injunction which restrains a defendant from dealing with the whole or part of their assets pending the outcome of legal proceedings.  In preventing a defendant from disposing of their assets in a way which may deprive the plaintiff of an effective remedy, Mareva Orders are a tool to prevent an abuse of Court processes and protect the proper administration of justice.  In Queensland the rules that apply are contained in Chapter 8 Part 2 Division 2 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). 

What is the purpose of a Mareva Order?

Rule 260A(1) of the UCPR states that:

“The court may make an order (a freezing order) for the purpose of preventing the frustration or inhibition of the court’s process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.”

Mareva Orders may restrain a respondent from “removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets”: rule 260A(2) of the UCPR.  The Court may also make any ancillary orders it considers appropriate, including an order to obtain information about a defendant’s assets or to deliver up certain assets: rule 260B of the UCPR.

Requirements to be satisfied for a Mareva Order

Requirements under the Uniform Civil Procedure Rules (UCPR)

Rule 260D(2)-(3) of the UCPR states that to obtain a Mareva Order an applicant must establish:

• there is a good arguable case (in the case of interlocutory Mareva Orders);
• there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because:
  • the respondent might abscond from the jurisdiction; or
  • the assets of the respondent might be removed from Australia or disposed of, dealt with or diminished in value.

Requirements under the common law

Under the common law there were five (5) requirements to be satisfied for obtaining a Mareva Order, as applied by Kingham DCJ in the case of Pankhurst v Damata [2008] QSC 28:

• the applicant must have a judgment enforceable within the jurisdiction or an existing cause of action which is justiciable within the jurisdiction;
• in the case of interlocutory Mareva Orders, the applicant must have a good arguable case;
• the respondent must have assets either within the jurisdiction or outside the jurisdiction;
• there must be a real risk or danger that the respondent will remove assets from the court’s jurisdiction, or dispose of them or otherwise deal with them in such a way as to render them unavailable to satisfy any judgment that might be made in favour of the applicant; and
• if the order is not made, the applicant would be subject to a risk that a judgment in its favour would not be satisfied (the applicant does not have to prove that it was the intention of the respondent to deprive the applicant of satisfaction of its judgment provided that is the probable effect).

Guidance on Mareva Orders provided by the Supreme Court of Queensland

The Supreme Court of Queensland Practice Direction Number 1 of 2007 (Practice Direction) provides further guidance, stating that the application for a Mareva Order should be accompanied by an undertaking as to damages by the applicant, and an affidavit containing:

• information about the judgment which has been obtained, or, if no judgment has been obtained, the following information about the cause of action:
  • the basis of the claim for substantive relief;
  • the amount of the claim; and
  • if the application is made without notice to the respondent (ex parte), the applicant’s knowledge of any possible defence;
• the nature and value of the respondent’s assets, so far as they are known to the applicant, within and outside Australia;
• the matters referred to in rule 260D of the UCPR; and
• the identity of any person, other than the respondent, who, the applicant believes, may be affected by the order, and how that person may be affected by it.

Can Mareva Orders be granted against a third party?

Rule 260C of the UCPR expressly provides that a Mareva Order may be granted against a non-party, and rule 128 further provides that the order may be served on a person outside Australia.  Pursuant to rule 260D(4) to obtain a Mareva Order against a third party an applicant must generally establish that:

• there is a good arguable case;
• there is a danger that the judgment will be wholly or partly unsatisfied because the third party:
  • holds or is using, or has exercised or is exercising, a power of disposition over assets subject to the order; or
  • is in possession of, or in a position of control or influence concerning, assets subject to the order.

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Disclaimer
This page contains contains general commentary only about Mareva Orders. You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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Having exerted Blood Sweat and Years^® since April 2010 we are the team you want on your side for the long term to act as the ‘bodyguard’ for your business or to make an application for a Mareva Order.  Some of the reasons client’s choose Dundas Lawyers^® include:

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