Freezing Orders

Grimshaw & Co recently obtained a freezing order in the High Court, in the context of a leaky building dispute involving our client’s vendor.

The Court may grant a freezing order if an applicant can demonstrate:

(a) a good arguable case; and

(b) the defendant has assets within the jurisdiction; and

(c) there is a danger that a prospective judgment will be wholly or partly unsatisfied because those assets might be removed, spent or hidden.

There are also additional requirements if a ‘without notice’ (to the defendant) freezing order is sought. If this is the case, the applicant must:

(a) sign an undertaking to pay damages for any loss caused to the defendant from the freezing orders should it not have been made; and

(b) disclose all material facts, possible defences the claimant is aware of, and any information regarding the claimant’s ability to pay the undertaking.

In our case, the vendor was planning to sell their only substantial asset in New Zealand, before leaving for Malaysia for an indefinite period. Potentially, the proceeds of sale would have been lost, with the vendor then unable to meet any judgment sum.

In the circumstances, the High Court imposed a freezing order over the net sale proceeds.

While our clients were successful in obtaining the freezing order, we must point out that the defendant was entitled to use some of the proceeds of sale to pay for ordinary living expenses and legal expenses relating to the freezing order.

If you need help with a freezing order, it pays to act quickly - please contact Grimshaw & Co.