Streeterlaw instigates urgent freezing order to recover client’s money

When we were first retained by our clients, they were small business owners, who had spent two years in legal proceedings attempting to recover money from the defendant who had failed to rectify a number of building defects and non-performance under a Contract for the Sale of Land (between the defendant vendor and our client as purchasers).

While the defendant was halfway through a bankruptcy process, our client discovered that the defendant had put his property up for sale. Our client was obviously concerned that the assets (and potentially the money owed to them) would be dissipated before the enforcement process could be completed.

Streeterlaw then proceeded with an urgent application on behalf of our clients to seize and freeze the assets in question and stop the sale of the property. The urgent application we sought for our client alleged that:

1. There was a risk of real estate assets being sold by the respondent debtor in an attempt to defraud creditors;
2. The respondent debtor failed to pay the judgment debt, despite demand, and bankruptcy proceedings were commenced;
3. The respondent debtor had a history of filing notices of motion without prospects of success and failing to pay costs orders awarded to the applicant; and
4. The behaviour of the respondent debtor indicated that there was a genuine concern that the assets may be dissipated.

As a result of the successful application, the Federal Court of Australia appointed a controlling trustee over the respondent debtor’s assets. In due course the debtor was made bankrupt but the freezing order prevented the debtor selling real estate while the application for bankruptcy was waiting to be heard in court.

The successful court application also meant costs were awarded in favour of our client, the creditor.

It is always gratifying when we are able to minimise the risk of assets being dissipated in a situation like this.

Streeterlaw Principal Mark Streeter said: “Freezing orders are an underutilised tool that is available to aid a creditor’s application for bankruptcy or an enforcement of orders.”

Are you worried that someone who owes you money may defraud you? If so, we recommend you contact one of our Streeterlaw Insolvency Team experts who can advise you on:

1. The various enforcement mechanisms available to you;
2. How to resolve your dispute efficiently and cost effectively;
3. The most appropriate form of dispute resolution (if any); and
4. Your legal rights and obligations in relation to your dispute. And whether there are prospects in relation to any urgent interlocutory relief.

Please contact Streeterlaw on 02 8197 0105 or email advice@streeterlaw.com.au.

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!