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Mareva Order: How to Prevent Debtors from Disposing Assets

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Are you a creditor that is owed a substantial amount of money? Are you concerned that your debtor is about to dispose of their assets (sell or remove belongings or property) in an attempt to avoid payment? You may be able to obtain a Mareva Order preventing them from doing so. This article looks at what needs to be established before the Court will make a Mareva Order.

What is a Mareva Order?

A Mareva Order is an order made by the Court which has the effect of temporarily restraining an alleged debtor from disposing of some of their assets in circumstances where doing so may prevent recovery of the alleged debt. The Order can be made either

  • before debt recovery proceedings have been settled; or
  • after judgment has been entered but before enforcement.

Before making an application for a Mareva Order, you must have commenced substantive debt recovery proceedings. You cannot make an application for a Mareva Order as a ‘standalone’ cause of action.

Before a Court will make a Mareva Order, you must establish:

  • that you have a good arguable case (ie. that there is a debt owed);
  • that there is a real risk that the alleged debtor is about to dispose of their assets which will result in them being unable to satisfy any judgment debt;
  • that the damage that will be suffered by you if the Mareva Order is not granted outweighs the damage to be suffered by the alleged debtor if the Mareva Order is made.

The Court has full discretion as to whether they will grant a Mareva Order or not. There are, however, a number of factors that the Court will consider in making its decision:

  • any harm that is likely to be caused to the debtor;
  • whether there is any culpability in the applicant’s actions;
  • whether any undue hardship will result from the order;
  • whether the Court will be required to oversee any compliance with the order.

In appropriate circumstances, the Court can bind third parties to a Mareva Order. This approach may be appropriate for example, when a third party holds and is in control of goods on behalf of the debtor. In this situation, the applicant must prove to the Court that the goods are in fact, owned by the debtor.

Before the Court makes a Mareva Order they will require the applicant to provide an undertaking that they will compensate the alleged debtor for any damage they might suffer if the Mareva Order should not have been ordered (i.e., the plaintiff is unsuccessful in obtaining a judgment in the substantive proceedings).

What happens if the Mareva Order is breached?

If the Court makes a Mareva Order, which an alleged debtor fails to comply with, they will be deemed to be in contempt of Court. Contempt of Court is a very serious matter which can result in the non-complying party facing hefty fines or even imprisonment.


LegalVision’s specialised litigation lawyers have extensive experience in debt recovery proceedings. We can provide you with advice in relation to debt recovery proceedings generally as well as your prospects of obtaining a Mareva Order against your debtor.

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Vanessa Swain

Vanessa Swain

Senior Lawyer

Vanessa is a Senior Lawyer at LegalVision with a strong background in dispute resolution and litigation. Vanessa has over 10 years of experience in commercial litigation and has experience in all Court jurisdictions. She has previously worked at mid and top-tier firms where she gained invaluable experience working on both large and complex disputes as well as smaller disputes which required a commercial approach to legal advice.

Qualifications: Diploma in Law, Legal Profession Admission Board 

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About LegalVision

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