Australian Unicorn Agricultural Development Pty Ltd v Aufeng Investment Holdings Pty Ltd and Ors (Ruling)
[2017] VCC 170
•3 March 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-16-04705
| AUSTRALIAN UNICORN AGRICULTURAL DEVELOPMENT PTY LTD (ACN 165 764 947) | Plaintiff | |
| v | ||
| AUFENG INVESTMENT HOLDINGS PTY LTD (ACN 133 493 704) | First Defendant | |
| and | ||
| AUSSIE MEATS INTERNATIONAL TRADING PTY LTD | Second Defendant |
| and | |
| ZHENGGUO SONG | Third Defendant |
| and | |
| GAOMING SONG | Fourth Defendant |
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JUDGE: | HIS HONOUR JUDGE SMITH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 and 21 December 2016 | |
DATE OF RULING: | 3 March 2017 | |
CASE MAY BE CITED AS: | Australian Unicorn Agricultural Development Pty Ltd v Aufeng Investment Holdings Pty Ltd & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 170 | |
RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Freezing order
Cases Cited: Deputy Commissioner of Taxation v Karas [2011] VSC 673
Ruling: Orders sought by plaintiff made.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Booth with Mr M Garret | United Associates Barristers and Solicitors |
| For the Defendants | Mr J Snow | Australian International Lawyers & Associates |
HIS HONOUR:
1 On 23 December 2016, I made Freezing Orders against each of the four defendants in this proceeding. Those Orders reflected the orders sought by the plaintiff in its Summons dated 15 December 2016 with two exceptions.
2 The plaintiff had sought orders that were set out in Annexures A, B, C and D to the Summons which were sought against the first, second, third and fourth defendants respectively.
3 I made Orders in respect of thirteen of the fifteen orders sought against each defendant. I requested counsel for the parties to make short written submissions concerning the proposed Orders 9 and 10, as set out in the annexures to the Summons. I directed that the plaintiff file and serve any such written submissions by 3 February 2017 and the defendants file and serve any written submissions by 10 February 2017. Both parties filed such submissions.
4 The defendants submit that Orders 9 and 10 (as regards each of the defendants) ought not to be made by the Court.
5 The dispute forming the basis for this proceeding concerns the property at 60 Abattoirs Road, Pyramid Hill in Victoria (“the property”).
6 The defendants submit that the value of the property is sufficient to protect the value of any judgement that the plaintiff may obtain in the proceeding. They refer to an affidavit filed and served in support of the Summons sworn by Wenyong Huang. In it, Mr Huang provided an estimate of the market value of the property as being in the range of $2 million to $2.5 million.
7 Submissions were made on behalf of the defendants that:
“3. … An officer of the first defendant will swear an affidavit deposing to a greater current value than this. When the plant and equipment at the Property as well as the goodwill of the business operated from the Property are also considered, its overall value increases to a much greater figure than this, which amount will be particularised in the sworn affidavit which will be served on the plaintiff but is estimated as being more than $5M.
4. The first plaintiff’s (sic) affidavit will also depose to the fact that the amount outstanding on what the plaintiff’s affidavit in support defines as ‘the Mortgage’ (in favour of Lei Sun) is $1.5M.”[1]
[I assume that was intended to be a reference to the first defendant.]
[1]Defendants’ submissions - proposed orders 9 and 10, page 2 at paragraphs [3]-[4]
8 As at the date of this Ruling, no such affidavit in support has been filed with the Court.
9 In the circumstances, I pay no attention to the submissions concerning the anticipated affidavit to be filed by “an officer” of the first defendant and what its contents were predicted to be.
10 Mr Huang’s estimate does not appear to be supported by the Loddon Shire Council Rate Valuation Notices dated 18 June 2014 and 20 August 2015 respectively. Those Notices indicate that the Council assessed the capital and approved value of the property at $391,000 as at 1 January 2012 and $409,000 as at 1 January 2014.
11 In all of the circumstances, I am not prepared to accept that there is sufficient equity in the property at Pyramid Hill to satisfy the plaintiff’s claim, together with any interest and costs.
12 Even if I were to accept the estimate of the market value of the property as being up to $2.5 million, there is no satisfactory evidence before the Court as to the amount of the debt or debts secured by first mortgage, apparently in favour of Lei Sun.
13 Further, the defendants submit that the Freezing Orders made by me on 23 December last safeguard $1 million of assets of each of the four defendants; that is, $4 million in aggregate. However, the situation at present is that the plaintiff has no information as to the assets or liabilities of any of the defendants save and except that the first defendant is the registered proprietor of the property. The equity that it has in that property is unknown at present. It is, therefore, in my view, incorrect to suggest that the Freezing Orders previously made safeguard an aggregate of $4 million.
14 The plaintiff filed extensive written submissions in support of the inclusion of Orders 9 and 10 in the Orders to be made by me. I accept the submissions made by the plaintiff, in particular, noting the judgment of Bell J in Deputy Commissioner of Taxation v Karas.[2]
[2][2011] VSC 673 at paragraphs [11]-[12]
15 I have attached to this Ruling a draft of the orders that I propose to make. In the event that the parties contend that the form of the order (as opposed to the substance of it) is inappropriate for any reason, the party or parties should advise my associate of this by 4.00pm on Tuesday 7 March 2017, and I shall arrange for the matter to be listed as soon as is possible.
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