When dealing with financial disputes in a family law case, there may be concerns about one partner attempting to hide or get rid of assets. A Mareva Order is a legal tool designed to prevent this from happening.
In Australian family law, it plays a crucial role in ensuring fairness by freezing assets and protecting them from being moved or hidden. Let’s explore in the sections below how a Mareva Order works, the conditions for granting one, and the potential consequences of breaching such an order.
I. What Is a Mareva Order and How Does It Apply in Australian Family Law?
A Mareva Order is a court order that temporarily freezes a person’s assets to prevent them from being hidden, transferred, or sold before a legal decision is made.
The goal of this order is to stop people from moving their property or money to keep it out of the other party’s reach. It’s often referred to as a freezing order for this reason.
In Australian family law, Mareva Orders are most commonly used in cases involving financial disputes, such as during a property settlement after a divorce or separation.
If one party fears that the other will try to hide or sell off assets to avoid splitting them fairly, they can apply for a Mareva Order to protect those assets until the court decides how they should be divided.
This type of order can be incredibly useful in ensuring that both parties have an equal opportunity to receive a fair share of their marital property. Without such an order, one person could potentially walk away with far more than their fair share by moving assets out of the court’s reach.
II. Under What Circumstances Can a Mareva Order Be Granted in Family Law Proceedings?
For a Mareva Order to be granted, certain conditions need to be met. A family law court in Australia will not issue this type of order lightly, as freezing someone’s assets is a serious step. Here are the main circumstances in which a Mareva Order may be granted:
- Strong Evidence: The person applying for the order must provide convincing evidence that the other party is likely to try to move, hide, or dispose of assets. This could include past actions, suspicious financial behaviour, or evidence that the person has started selling off property or transferring money to other accounts.
- Risk of Losing Assets: The court will consider whether there is a real risk that the assets in question might be lost or hidden if no action is taken. This risk must be significant enough to warrant a Mareva Order.
- Balance of Convenience: The court will also weigh the overall fairness of issuing the order. This means they will consider how freezing the assets will affect both parties. If freezing the assets will cause severe hardship to the person whose assets are being frozen, the court may choose not to issue the order unless it’s absolutely necessary.
- Good Faith: The person applying for the Mareva Order must be acting in good faith and not using the application to harass or unfairly pressure the other party. The court takes this very seriously and will not grant an order if it believes the application is being used as a form of manipulation.
III. What Assets Can Be Frozen by a Mareva Order in Australia?
A Mareva Order can freeze a wide range of assets, depending on what the court believes is necessary to protect the other party’s financial interests. The types of assets that can be frozen include:
- Bank Accounts: The most common assets frozen by a Mareva Order are bank accounts. This stops the other party from withdrawing large sums of money or transferring funds overseas.
- Real Estate Properties: If there are concerns that a house or other property might be sold or transferred, the Mareva Order can prevent that transaction until the legal dispute is resolved.
- Shares and Investments: Shares, bonds, or other financial investments can also be frozen. This ensures that the other party doesn’t liquidate their investment portfolio to hide assets.
- Vehicles and Personal Property: Cars, boats, jewellery, and other valuable items may be subject to a Mareva Order if they are considered part of the marital assets.
- Business Interests: If one party owns a business, the court can prevent them from selling their shares or transferring control of the company as part of a Mareva Order.
By freezing these assets, the court ensures that they remain available for fair distribution at the time of property settlement.
Also Read: Property Settlement After Divorce Australia
IV. How Can a Mareva Order Protect Financial Interests During Property Settlement?
During a property settlement, it is crucial that both parties’ financial situations are fully understood and taken into account. A Mareva Order helps protect financial interests by preventing one party from undermining the process.
Without such protection, someone could attempt to move or sell assets before the court has a chance to divide them fairly. This would not only harm the other party but could also delay the settlement process.
By freezing the assets, the court can ensure that both parties have access to the same pool of property and financial resources during the settlement. This creates a level playing field, which is essential for a fair division of assets.
The Mareva Order also sends a strong message to both parties that the court is taking the protection of assets seriously, which can deter further attempts to hide or sell property.
Also Read: How Are Assets Divided In A Divorce Australia?
V. What Are the Potential Consequences for Breaching a Mareva Order?
Breaching a Mareva Order is a serious offence in Australian family law. If a person tries to sell, move, or hide their assets despite the court order, there can be significant consequences, including:
- Contempt of Court: Breaching a Mareva Order is considered contempt of court, which can result in penalties such as fines or even imprisonment. The court takes violations of its orders very seriously, and individuals who disobey may face harsh legal consequences.
- Reversal of Transactions: If the person breaches the order by transferring or selling assets, the court may reverse those transactions. For example, if someone tries to sell a house after a Mareva Order has been issued, the sale could be cancelled, and the property could be returned to the original owner.
- Damage to Reputation: Violating a Mareva Order can also harm the person’s reputation in court, as it shows a lack of respect for the legal process. This could influence other decisions the court makes, particularly when it comes to dividing assets or determining other financial matters.
- Further Legal Action: In some cases, breaching a Mareva Order may lead to additional legal action, such as claims for damages or compensation. The court may award the other party financial compensation if they can prove that the breach caused them to lose out on assets.
These consequences highlight the importance of complying with a Mareva Order. It is always better to follow the court’s instructions and wait for a fair resolution than to risk serious penalties by violating the order.
Safeguard Your Financial Future with a Mareva Order
A Mareva Order is an essential tool in Australian family law, designed to protect assets during legal disputes and ensure fairness in property settlements.
Whether you are concerned that your partner may try to hide assets or you simply want to ensure that all financial resources are accounted for, this type of order can offer the protection you need.
Facing A Complex Family Law Situation? Get in Touch with Us
If you believe a Mareva Order might be necessary, our team at Justice Family Lawyers can help. We are dedicated to protecting your financial interests and ensuring that you receive a fair outcome.
Contact us today our expert lawyers are ready to discuss your case and learn how we can assist you in navigating these challenging legal matters.
