Laying Down The Law On Freezing Orders

Author:Ms Jennifer Dickson
Profession:Withers LLP
 
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In UL v BK [2013] EWHC 1735 (Fam), Mostyn J reiterated the mantra that the law to be applied in one court room must be the same as that applied in the next, whether in the High Court or a county court, the Family Division or the Chancery. This case concerned a freezing injunction which a wife had successfully obtained against her husband, without notice and, Mostyn J found, without much evidence. He refused her application to continue the freezing order. A freezing injunction (also known as a 'Mareva order') prevents a respondent from disposing of or moving his assets. It is a draconian measure: one of the court's two 'nuclear weapons' (the other being search orders, also known as 'Anton Pillar orders', which allow the applicant to enter the respondent's premises for search and seizure). Imposed against someone who has little or no knowledge of the application, and (usually) no opportunity to be heard (so lawyers should take note of the potential human rights implications under Article 6 of the European Human Rights Convention), a freezing order can be fi nancially paralysing. It is for good reason, therefore, that the hurdle for obtaining a freezing injunction is high. The applicant must have a good arguable case, prove there is a 'real risk of dissipation' and show that it would be just and convenient in all the circumstances of the case to grant the freezing order. In recent years, it has been increasingly easy to surmount that hurdle; or that hurdle has been lowering. In an earlier case, Mostyn J expressed his shock at the 'volume of spurious ex parte applications' (FZ v SZ and others [2011] 1 FLR 64) and in this recent case the Judge again deplores the 'continued widespread abuse of the principles governing ex parte applications'. Mostyn J reminds us of those principles. There must be a real risk of dissipation. Holding assets in an offshore structure is not enough. The applicant must have an appropriately strong case, supported by evidence of objective facts. Further, and importantly for practitioners, it is imperative that all the safeguards and principles the law requires are 'scrupulously applied'. Notice The applicant has a duty to give the respondent notice of the application (however short) unless it is 'essential' that the respondent must not be aware of the application. Rarely will it be acceptable to give no notice at all. There is no excuse for failing to contact a respondent, in this age of instant communication. Doing so can save...

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