Imagine this: You are owed a substantial sum of money. You have a strong claim and are preparing to take the matter to court. However, you have reason to believe that the person or company you are suing is selling, transferring or moving its assets.

Even if you eventually win your case, what happens if there is nothing left to recover?

This is where a freezing order comes into play.

What is a freezing order?

A freezing order is issued by the court to prevent a person or company from dealing with or moving assets in a way that could frustrate the enforcement of a judgment.

It does not, generally, mean that the person’s assets are simply handed over to the claimant. Instead, the order restricts what the person can do with those assets while the underlying dispute is being resolved. The objective is to prevent a successful claim from becoming worthless because the assets needed to satisfy a judgment have disappeared.

In Jamaica, freezing orders can be particularly important in commercial disputes, where assets may be held through companies, bank accounts, or in different jurisdictions.

When might the court grant a freezing order?

A freezing order is an exceptional remedy. The court will not grant one simply because someone is owed money or because there is a concern that the defendant might not pay.

Generally, the applicant must demonstrate a good arguable case and a real risk that the defendant will dissipate or remove assets with the effect of frustrating enforcement of a judgment.

The court will also consider matters such as:

a. Whether the assets which are to be frozen can be identified;

b. Whether the order sought is appropriate and proportionate in light of the unique facts of the case;

c. Whether the applicant has made full and frank disclosure of material facts, particularly where the application is made without notice; and

d. Whether the applicant is prepared and able to compensate the other party for any loss or damage caused if the freezing order is later found to have been wrongly granted.

These safeguards are important because a freezing order can significantly affect a defendant’s ability to deal with their property, even though the underlying claim has not yet been finally decided. The courts have therefore stressed that freezing orders must be approached with caution.

Can a freezing order be obtained without warning the other side?

Sometimes, yes.

In certain situations, giving advance notice could defeat the very purpose of the application. For example, if there is a real risk that a person might move, hide or dispose of their assets once they learn that a freezing order is being sought, the court may allow the application to be made without first notifying them.

That does not mean the process is one-sided. When asking for a freezing order without giving notice to the other party, the applicant has a duty to be completely open and frank with the court. This means telling the court not only the facts that support the application, but also any important facts that may undermine it. Judges take this obligation seriously because the other side is not present to give their version of events.

What does a freezing order actually freeze?

Despite its name, a freezing order does not necessarily mean that every asset owned by the defendant is completely inaccessible.

Depending on the circumstances, a freezing order can apply to a wide range of assets, including bank accounts, shares, real estate, and other valuable property. At the same time, the order may allow the defendant leeway to continue paying everyday living expenses, business costs and reasonable legal fees. Obtaining a freezing order is therefore only the first step. Its effectiveness often depends on the specific terms of the order and the strength of the evidence presented to support it.

What should you do if you think assets are being moved?

Your timing is critical. If you have a substantial claim and credible information that the other party is attempting to put assets beyond your reach, waiting until after judgment may significantly reduce your prospects of recovery.

That does not mean that every suspected transfer of assets justifies an immediate application for a freezing order. These applications require careful preparation, and the court expects applicants to meet the relevant legal requirements.

If you believe that your ability to recover what you are owed is at risk, it is worth obtaining legal advice as early as possible.

A judgment, ultimately, is only as useful as your ability to enforce it.

Meghan Falconer is an associate at Myers, Fletcher & Gordon and is a member of the firm’s Litigation Department. Meghan may be contacted via meghan.falconer@mfg.com.jm or through the firm’s website at www.myersfletcher.com.

This article is for general information purposes only and does not constitute legal advice.