CDPP - freezing order

A Freezing Order, also known as a “Mareva order”, is an order that the courts can impose to stop a party disposing of or hiding money that is suspected of being the proceeds of crime. A freezing order is normally used when authorities have reason to believe that an accused person will remove assets or money from the jurisdiction. This article will outline how freezing orders can be sought by the Commonwealth Department of Public Prosecutions (CDPP).

When Can A Freezing Order Be Made?

The Proceeds of Crime Act 2002 stipulates that a freezing order can be made when there is reason to believe that an account with a financial institution reflects the proceeds of criminal activity and there is sufficient reason for the magistrate to believe that without the order, the account balance will be reduced and the money used or hidden.

How Can A Freezing Order Be Made?

When applying for a freezing order the applicant will need to include a supporting affidavit stating the grounds for believing that the money in the account or assets are the proceeds of a serious indictable criminal offence.

A freezing order can be made in court or via the telephone if the magistrate is satisfied that:

• the order should be made urgently;
• any delay would reduce the effectiveness of the order.

If the order is made by telephone the applicant must complete the form the magistrate gives them and state their name along with the day and time the order was signed. The form needs to be returned to the magistrate within two working days of the order being made.

The magistrate must also inform the applicant by telephone, fax or another electronic method of the terms of the order and the day and time that it was signed.

What Does It Do?

A freezing order prevents a financial institution from allowing withdrawals from an account with the institution except for in limited cases specified in the order. Once the order has been made the financial institution will be sent the details of the account/s  subject to the freezing order.

If a financial institution allows a withdrawal from an account that is the subject of the freezing order, other than to meet its liabilities, then it has contravened the Act. This offence attracts a fine up to 300 penalty units and/or imprisonment for five years.

What Does the Crown Have To Prove?

In order to obtain a freezing order the Crown must show:

• that there is sufficient reason to suspect that the account’s balance is partially or wholly derived from the proceeds of an indictable criminal offence;
• that there is a risk the balance will be reduced if the order is not made.

A person does not need to be convicted of the offence for the freezing order to be made.

How Long Does a Freezing Order Last?

The order lasts from when the financial institution is given a copy of the order until the date specified in the order.

A freezing order is initially made for three working days. This period can be extended if a magistrate makes an order pending a restraining order application. An extension, if granted, can either be for a specific number of working days or until the date that the court decides the outcome of the restraining order application.

Can a Freezing Order Be Varied?

A magistrate can vary the terms of the order to allow withdrawals from the account to cover the owner’s reasonable living expenses and the living expenses of their dependents. It can also be varied to allow withdrawals for business expenses or to cover a specified debt.

The order will only be varied if:

• the account holder applies for a variation;
• the account holder has supplied a written application along with the reasons for the application to be granted; and
• the magistrate is satisfied that any expenses or debt is not related to legal costs or proceedings under the Proceeds of Crime Act 2002.

The court also has the discretion to revoke or vary a freezing order if satisfied that it is in the interests of justice to do so.

Seek Legal Advice

If you have received written notice of a freezing order against you, it is essential that you seek legal advice immediately. Contact Armstrong Legal.