Insights

Being Served with a Freezing Injunction 

What happens when the respondent is served a freezing injunction? 

The applicant usually applies for the freezing injunction on an ‘ex parte’ basis, meaning that the respondent will not be told about it. The court will consider the merits of the application for the freezing injunction and if granted the respondent will be served notice immediately in person or via a letter. The order will then be effective until a full hearing takes place.  

Non-exhaustive grounds for defending a freezing injunction 

1. No serious risk of dissipation 

One of the primary grounds for defending against a freezing injunction is to demonstrate that there is no real risk that the respondent will dissipate or dispose of their assets to evade judgement. If the respondent can provide evidence showing that their assets are not at risk of being removed from the jurisdiction or that they have a legitimate reason for transferring assets, the court may be less inclined to grant the injunction. 

2. Full and Frank Disclosure 

If the applicant seeking the injunction did not provide full and accurate information to the court when applying for the injunction, this could be a basis for defending against it. The respondent can argue that the applicant has not met their duty of full and frank disclosure, which undermines the integrity of the injunction. 

3. Proportionality  

If the freezing injunction is overly broad or disproportionate in relation to the potential claim or risk, the respondent could argue that it unfairly restricts their ability to conduct normal business activities. The court may consider whether the scope of the injunction is reasonable and necessary. 

4. Change in Circumstances 

If circumstances have changed since the initial application for the injunction, the respondent can argue that those changes negate the need for the injunction. For instance, if the respondent’s financial situation has improved or the risk of dissipation has diminished, this could be used as a defence. 

What happens if the freezing injunction is discarded? 

If the freezing injunction is discharged at the hearing, then the respondent will be free to access their assets. There is also a possibility to receive compensation because the applicant may be required to provide an undertaking in damages when applying for the freezing injunction. If the court finds that that there was no reasonable cause for the freezing injunction, then the respondent may be awarded damages for stress, inconvenience and financial losses that may have been caused.  

Can a freezing injunction be varied?  

A freezing injunction can be varied. This may be the best course of action if there are no sufficient grounds to have the order discharged.  A freezing order has serious implication and is a serious intrusion to the respondent’s life. If the terms of the order are oppressive, a respondent has the right to ask for these to be amended; such amended can include greater living costs and other exemptions. For this to succeed, the respondent has to show the court that they will suffer a loss and the impact of such loss would cause unnecessary hardship.  

*This article is not legal advice but provides a general overview. The specific details of your case will determine the best course of action.