Applying for a Freezing Injunction Order to Stop my Ex-Partner From Selling Assets

You may need a freezing order if your estranged or ex-spouse is selling or transferring assets to try to reduce the amount of money available for distribution in planned or ongoing divorce financial proceedings.

Family law and freezing order solicitors can help you navigate the process of applying for a freezing injunction and assist you in securing a financial settlement and court order.

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 Freezing orders

There are several types of freezing orders, including Section 37 injunctions and Mareva injunctions.

These court orders can be applied for as part of a financial remedy application started by a husband, wife or civil partner. The injunction order freezes assets to prevent them from being sold or transferred before a spouse can obtain a financial court order to split the family assets fairly.

You do not need to be the applicant in the financial remedy application to apply for an injunction order. However, often the applicant for a freezing injunction starts financial remedy proceedings at the same time as their injunction application.

A spouse can also apply for a freezing order mid-way through a financial remedy application if they discover that their estranged or former spouse is intending to transfer or sell assets discovered during the financial disclosure process.

Alternative safeguards to freezing orders

The family court views freezing injunctions as a draconian measure of the last resort. Family lawyers will therefore consider the alternatives to applying for a freezing injunction. Alternatives to a freezing injunction may save money, reduce court animosity, and avoid the risk that the court will say the threshold for securing an injunction is not met.

The alternatives to a freezing order depend on the assets needing protection and the extent of the other family assets. A freezing order solicitor can carefully look at all the options, including:

1. Working out the estimated value of the family assets and non-family assets to see if an injunction application is justified.
2. Writing to the spouse explaining the potential consequences of selling or disposing of assets and the adverse inferences the court will be asked to make against the spouse in the financial court proceedings.
3. Asking the spouse to give an undertaking or promise not to sell or dispose of an asset until an agreed financial settlement is reached or the court makes a financial court order.
4. Asking a bank to freeze a bank or an investment account.
5. Asking the land registry to place a notification on the property register to help stop the owner of land from being able to sell or remortgage it.

Divorce solicitors can help you work out the most cost-effective solution to preserve assets until the final hearing of a financial settlement application.

Assets that a freezing injunction can freeze

An injunction can freeze many types of assets, provided the injunction applicant has evidence to justify the court making the order.

Freezing injunction orders are typically made to stop the sale or the transfer of:

1. Bank accounts.
2. Property or land.
3. Investments, stocks and shares.
4. Shares in a family business or company assets to prevent asset stripping.
5. Expensive items, such as gold or jewellery.

The steps to obtain a freezing order   

The procedure to obtain a freezing injunction can be broken down into five steps:

1. Injunction application and supporting statement explaining why the freezing order is being sought.
2. Ex parte or without notice hearing for the court to decide if an urgent freezing injunction is necessary without the respondent first being made aware of the application and initial court hearing.
3. Application and any interim order are served on the respondent with a hearing date (called a return date) for the respondent to attend and oppose the injunction order being made or from continuing.
4. The respondent lodges a statement if they oppose the injunction being made or continuing. The respondent may decide that they don’t object to the order freezing an asset, but they may say the wording of the order is impracticable because it doesn’t allow them to pay their reasonable living expenses or to operate their business.
5. The injunction hearing with the respondent present takes place, and the judge decides if the freezing order should be made or continue until the date of the final hearing of the financial application.

If the court makes a freezing order, the order must be served on the respondent and any other relevant persons or organisations, such as the respondent’s bank if the order relates to a bank account.

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Do you need a freezing injunction?

A freezing injunction solicitor can assess whether an application is justified and whether the court is likely to make the order in the terms sought.

Using an example is the best way to illustrate whether a freezing order application should be pursued.

The freezing injunction example

Mike has a house worth £2m, a business worth £3m, and joint bank accounts with his wife, Claire, with a balance of £2m. All the assets total around £7m.

Mike is selling his shares in his business to his brother for £2m. Claire thinks that it is a sale at an undervaluation because she thinks the shares are worth an extra £1m. She believes Mike thinks he is being clever and that he plans to get his brother to transfer the shares back to him once a financial court order is made, in the process avoiding giving her an extra £500,000, half the additional value in the shares. She wants a freezing injunction to stop Mike from selling his shares.

As the house is the family home, Claire can ask her divorce lawyers to register a notice with the Land Registry to prevent it from being sold or remortgaged. As the bank account is a joint account, the bank can be asked to freeze the account. Potentially, Claire can safeguard assets of up to £4m without applying for a freezing order, and £4m, based on Claire’s knowledge of the business, is over half the value of all the family’s assets.

Claire’s divorce solicitor can write to Mike’s financial settlement lawyer to explain that if Mike goes ahead with the transfer of shares to his brother at an undervalue, Claire will argue that Mike should be attributed as getting £3m rather than £2m for the shares, as that is the actual value of the shareholding. Therefore, Mike’s ploy won’t work, and by his actions, he will unnecessarily increase the costs of the financial remedy proceedings, risking a cost order being made against him and the freezing of the joint bank account.

Claire may still prefer to apply for a freezing order to stop the sale of the shares, but she understands her options and how she can safeguard over 50% of the family’s assets without one. The divorce lawyer’s advice on the advisability of applying for a Section 37 injunction may depend on whether Claire was married for 3 or 30 years and whether Mike and Claire signed a prenuptial agreement ringfencing Mike’s shareholding in his family business.

Do you need substantial family assets to justify applying for a freezing order?

Some people think that you can only justify a freezing injunction application if a former spouse is a high-net-worth individual who is intending to sell or dispose of assets worth more than £1m. That’s not the case.

If the family assets are modest, an injunction application may be imperative. Preventing an ex-spouse from dissipating £100,000 of family assets by obtaining a freezing injunction may make the difference between a spouse having enough money to buy a new property from their financial settlement or being stuck in rented accommodation because they do not have a large enough lump sum to put down as a deposit on a new house purchase.

Each family situation needs careful assessment, and spouses need advice tailored to their personal and financial circumstances so they can weigh up the pros and cons of applying for a freezing injunction.

Freezing orders and asset ownership

Securing a freezing order over an asset does not mean that the ownership of the asset will be transferred at the date of the injunction hearing or that the asset will be ring-marked for you in the final hearing of the financial settlement application.

A freezing order is intended to serve as a neutral, temporary measure pending a financial court order. The order freezes the asset as a holding measure. In some situations, the injunction to stop the sale or transfer of an asset or the movement of money overseas is vital if you are going to get a fair financial settlement. In other scenarios, a Section 37 injunction would be ideal but not critical.

How freezing orders work

How freezing orders work depends on the asset being frozen. For example, if Claire decides she wants to apply for a Section 37 injunction to stop Mike selling his shares in the family business to his brother, then she does not want the freezing order to have the effect of freezing the company. That would not be in her interests or those of the company’s employees, as the order could render the company’s shares valueless by the date of the final hearing of her financial settlement application.

Freezing orders can be worded so a business can still operate, or if they relate to a personal bank account, the freezing injunction can be phrased so the bank account holder can pay existing standing orders and their usual and reasonable living expenses.

Speak to freezing order solicitors in the North West

You need specialist freezing order advice if you are worried about family assets disappearing or if you are facing what appears to be aggressive tactics to secure an injunction in circumstances where you have no intention to fritter away assets, and your ex has unfounded suspicions about historical business or personal financial transactions.

At Evolve Family Law, our expert divorce and financial settlement solicitors can advise you on the grounds for a freezing order, represent you in the injunction application and financial settlement proceedings.

Get in Touch With us Today.