Freezing assets in matrimonial proceedings
There is a duty of full and frank disclosure in financial remedy proceedings following the breakdown of a marriage. This means that both spouses have a clear understanding of the assets and liabilities of the other before negotiating a financial settlement. But what happens if you think someone is planning to conceal or dispose of assets?
Unfortunately, in some cases a spouse will not disclose their assets or will wilfully dissipate their assets to try to defeat their spouse's claim to a share.
If one spouse thinks the other is engaging in such behaviour, it is possible to apply to the Court for an interim injunction which will effectively 'freeze' the assets of the other party preventing them from dealing with or disposing of the assets. This is a very drastic measure and not one which the Court will take lightly.
The Court has the power to make an injunction which can then be registered against assets anywhere in the world, not just in England and Wales.
The person making the application (the 'applicant') must show:
- that they have an interest in the asset;
- that the value of the asset justifies the Order being made; and
- that there is a real risk of the asset being dissipated or disposed of by the other party (the 'respondent') to defeat the applicant's claim against the asset.
The applicant's behaviour in making the application will be considered; they must have acted reasonably, with due diligence and without delay. The applicant must be willing to provide an undertaking to the Court to pay any damages to the respondent if it is later shown that the injunction should not have been made.
When considering an application, the Court will consider the potential damage that would be caused to the respondent if the injunction is granted compared to the risk of loss to the applicant if the injunction were not granted.
Freezing injunctions can be applied against money in bank accounts, land, vehicles, shares, bonds or other savings. It is possible to freeze assets that are held on trust for another party.
Freezing injunctions are not commonplace, but they are an important protective measure in certain circumstances.
If you are concerned that your ex-spouse is not disclosing all of their assets, please contact the Blake Morgan Family team.