Preservation of assets — overviewSecuring assets

Where there are concerns that a respondent in matrimonial proceedings intends to dispose of assets in a way that will defeat a claim for financial provision, or has already done so, immediate action may have to be taken to secure the assets. There are various ways in which this may be done.

The Matrimonial Causes Act 1973 and Civil Partnership Act 2004

Where a respondent in matrimonial proceedings is about to make a disposition with the intention of defeating the applicant's claim for financial relief an application may be made for an injunction under MCA 1973, s 37 or the mirror provisions in the CPA 2004, Sch 5, paras 74-75. Where it has been shown that the intended disposition would defeat the claim, the court will presume that intention. The court may make such order as it thinks fit for restraining the respondent from proceeding or for protecting the claim. An application may be made ex parte in which case there are additional procedural requirements that must be complied with. The court also has the power to make an avoidance of disposition order ie an order setting aside a transaction that has already been made.

If there is no petition then one must be filed and the applicant must file a Form A together with an application notice and affidavit in support.

It is good practice to seek an undertaking, if appropriate, before going to court. The application may be resolved by giving undertakings.

Freezing orders (Mareva injunctions)

Freezing orders (formerly known as Mareva injunctions) are an interim remedy and may be made under the Supreme Court Act 1981 (SCA 1981), s 37 or the County Court Act 1984 (CCA 1984), s 38. They are generally heard in the High Court. The purpose is to prevent a party removing assets located in England and Wales or dealing with assets wherever they are located. The applicant has to show that there is a good arguable case against the respondent and a real risk that judgment will go unsatisfied because of the disposal by the respondent or that refusal of relief would involve a real injustice. In exceptional circumstances freezing orders may be made in relation to assets outside the jurisdiction, in which case there are additional requirements. Application is generally made ex parte with an affidavit in support and a draft order. The form and content of the application and an example of a draft order can be found in the Civil Procedure Rules 1998, Part 25 and the accompanying practice direction. The applicant must set out all the facts that either support or are adverse to their case.

Search orders

These orders tend to be made in conjunction with a freezing order and allow the applicant to enter the respondents premises to search and preserve evidence that may otherwise be disposed of or destroyed. The order can only be served by a supervising solicitor and is subject to very strict conditions.

Inherent jurisdiction

Only the High Court can exercise inherent jurisdiction in family proceedings to make freezing orders where the requirements of MCA 1973, s 37 (or CPA 2004 equivalent) , or SCA 1981, s 37 or CCA 1984, s 38 cannot be met. The jurisdiction can be exercised to prevent any act that would have the consequence of diminishing or curtailing the court's statutory powers to distribute capital or income to secure the financial future of the applicant or to promote the welfare of the child.

Other tools available to protect assets include the registration of restrictions in the Land Registry proprietorship register.