By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.
As an interim measure to recovering a debt, creditors may seek freezing orders against debtors where they feel there is a risk that the defendant will dissipate its assets so as to avoid orders. Litigants will usually be allowed limited access to frozen funds so as to fund the litigation they are involved in as well as pay for their reasonable living expenses.
In Super Vision Resources Ltd v AC Holdings Co Pty Ltd  NSWCA 244 the NSW Court of Appeal considered an application by AC Holdings to access funds that were the subject of freezing orders. AC Holdings had successfully opposed Super Vision’s claim to recoup the proceeds of a property sale as being a transfer to defeat creditors pursuant to section 37A(1) of the Conveyancing Act 1919 (NSW), in which AC Holdings was the purchaser. Super Vision was appealing that decision.