Asset Restraining Or Freezing Orders (NSW)

An Asset Restraining Order or Freezing Order can be made by the Supreme Court to preserve the assets of a person by preventing them from using, selling, moving or otherwise disposing of assets. This can be applied for by certain Commissions or Agencies in connection with a prosecution or investigation into potentially fraudulent or criminal acts.

In the context of investigations and prosecutions, these orders are usually sought as follows:

1. By the Australian Securities and Investment Commission (ASIC) under a general power to prohibit payment or transfer of money, financial products or other property in s 1323 of the Corporations Act; 

• By the NSW Crime Commission under the provisions relating to Asset Restraining Orders in the Criminal Assets Recovery Act 1990; or
• By the Australian Criminal Intelligence Commission (formerly the Australian Crime Commission) under the provisions relating to Freezing Orders in the Proceeds of Crime Act 2002. 

How Are the Orders Applied For?

The Commission or Agency seeking an order will file the relevant application with the Supreme Court of NSW. This is often done ‘ex parte’, which means without giving notice to the person whose assets are to be frozen. However, in the case of an application by the NSW Crime Commission for a Restraining Order the court can order that notice be provided to persons with ‘sufficient interest’ in the application.  

While there are different rules, procedures and information required depending on which type of order is being sought, generally speaking, the Commission will need to provide information about why the assets should be frozen, the criminal or financial matter being investigated or prosecuted and the need for the order to protect the assets. This is typically done (or required to be done in the case of the NSW Crime Commission Application) by way of an affidavit sworn by an authorised officer.

What Happens if the Order is Granted?

If an Asset Restraining Order or Freezing Order is granted, the assets of the person subject to the order are frozen. 

The Commission or Agency who obtained the Orders must serve copies of the Orders on the person and any person with relevant interests in the assets (such as a joint bank account holder). The orders will also be served on relevant banks, financial institutions and other asset holders to ensure that the person is not able to access their accounts. In practice, this means that no withdrawals can be made from any account, and credit cards can’t be used.

The Court will also list the Application for a mention a short time later, at which time an application may be able to be made to amend or revoke the Restraining or Freezing Orders (depending on the exact type and terms of the order).

Usually, most if not all of a person’s assets are frozen. This includes:

• bank accounts;
• term deposits;
• share portfolios;
• real property;
• valuables;
• cryptocurrency; and
• motor vehicles.

These assets cannot be sold, mortgaged, leased or otherwise dealt with unless the orders specifically allow for it. The orders are not limited to assets located or held in Australia. A person may be charged with an offence for breaching a Freezing or Asset Protection Order, depending on the laws under which Freezing or Assets Protection Order was made and the conduct engaged in.

Freezing orders are also capable of freezing the assets of someone other than the person who is alleged to have illegitimately obtained them. For example, the orders can freeze the assets of a person’s spouse, if it is alleged that the person has stolen money to buy the assets.

What Can I Spend when my Assets are Frozen?

Freezing Orders will, at a minimum, allow a person to pay for reasonable living expenses. This is usually a set amount per week and allows the person to withdraw a certain amount from their account each week to pay for things like groceries and loan repayments.

If the amount allowed in the first set of orders is insufficient, it may be able to be negotiated, or an application can be made to the court to increase the amount.

The orders may, but not necessarily, also allow for reasonable legal expenses. If the person owns or runs a business, the orders will usually allow for costs incurred in the ordinary and proper course of that person’s business.

It is possible to negotiate other exceptions to the orders, although it will be necessary to provide documentary evidence as to why the exception is necessary.

Can I Fight, Oppose or Contest the Freezing Orders?

Yes. However, the way in which the order can be opposed or contested will vary depending on the type of Order made, the relevant legal test and the circumstances of the case. 

Do Freezing Orders Mean I Will be Prosecuted?

Potentially, depending on who applied for the orders and on what basis. There are certain Commissions and Agencies who typically only apply for Assets Restraining Orders or Freezing Orders where they have evidence to suggest that criminal or regulatory offences have been committed. If this is the case and the ongoing investigation furnishes sufficient evidence to prosecute, then it’s very likely a prosecution will be commenced (if one hasn’t already). This is why legal advice at an early stage (and especially before any evidence or material is disclosed, served or filed in relation to any application).

The prospect of criminal charges is always a factor that needs to be carefully managed. The right against self-incrimination (the ‘right to silence’) is an important right.

Seeking Legal Advice

It is essential that you are represented by lawyers with experience dealing with both large complex prosecutions and freezing orders if your rights are to be properly protected.

If you require any information about freezing orders or any other legal matter, contact Armstrong Legal

Armstrong Legal does not act for private individuals seeking Asset Restraining or Freezing Orders in relation to personal debts, civil or commercial disputes.