Brunswick Zhang v Australia Dayu - [2015] VSC 782

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

Not Restricted

COMMERCIAL COURT

S CI 2015 6044

BRUNSWICK ZHANG PTY LTD (ACN 608 071 996)	Plaintiff
v
AUSTRALIA DAYU TRADING PTY LTD (ACN 150 772 419)	Defendant

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 December 2015
DATE OF RULING:	16 December 2015
CASE MAY BE CITED AS:	Brunswick Zhang v Australia Dayu
MEDIUM NEUTRAL CITATION:	[2015] VSC 782

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PRACTICE AND PROCEDURE – Freezing Order – exercise of discretion – high degree of caution required – degree of risk that judgment or prospective judgment will not be wholly satisfied – effect of defendant’s conduct rather than purpose may be relevant – other elements required under Order 37A Supreme Court (General Civil Procedure) Rules 2015.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Mullen	Rigby Cooke Lawyers
For the Defendant	Mr J Evans	Madgwicks

HIS HONOUR:

Nature of the plaintiff’s application

The plaintiff/applicant, by Summons dated 10 December 2015, seeks a freezing order under Rule 37A of the Supreme Court (General Civil Procedure) Rules 2015. That Rule provides that with or without, notice to the affected party the court may make an order freezing a respondent party's assets for the purpose of preventing the frustration or inhibition of the court processes. Such orders are usually directed to seeking to meet the risk that a judgment or prospective judgment of the court will, or may, be wholly or partially unsatisfied.

To accede to such an application I need to be satisfied, approaching the application with caution as the cases indicate a court should in the exercise of such a discretion, that:

(a)
the plaintiff has a judgment in its favour, or a good arguable case establishing a reasonable prospect of success at trial.

The latter being relevant in this application;

(b)
the defendant has assets in the jurisdiction.

This is not in issue in this application;

(c) there is a danger that a judgment, or prospective judgment, will be unsatisfied due to dissipation or disposition, or the like, of the defendant's assets;

(d) the balance of convenience favours the granting of the remedy sought including on a balance of the relative risks to the parties; and

(e) that the plaintiff will provide the usual undertaking as to damages, in the event that the injunction sought is granted.

In applications of this type it is usually necessary to be satisfied that there is a reasonable possibility, not a fanciful one, that the defendant might abscond or remove or dispose of relevant assets, or in some other way render such assets inaccessible. Further, in these sorts of applications the court may look at the effect rather than the purpose of the defendant's conduct in determining whether the court's process is likely to be abused or frustrated.

Background

These proceedings were commenced by Writ and Statement of Claim dated 26 November 2015. The plaintiff seeks damages for breaches and/or repudiation of Heads of Agreement and Contract of Sale also…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brunswick Zhang v Australia Dayu

Details

AGLC: Brunswick Zhang v Australia Dayu [2015] VSC 782
Case: [2015] VSC 782
Decision Date: 16 December 2015

CaseChat Overview and Summary

In the case of Brunswick Zhang v Australia Dayu, the plaintiff sought an extension of a freezing order against the defendant. The dispute involved allegations of fraud and misrepresentation, with the plaintiff claiming the defendant had engaged in deceptive conduct. The matter was heard in the Supreme Court of New South Wales. The primary legal issue before the court was whether the plaintiff had demonstrated sufficient grounds to justify an extension of the freezing order. The court had to consider the plaintiff’s risk of losing on the merits, the degree of risk that the judgment or prospective judgment would not be wholly satisfied, and whether the defendant’s conduct warranted such an order.

The court examined the requirements of Order 37A of the Supreme Court (General Civil Procedure) Rules 2015, emphasising the necessity for a high degree of caution when exercising the discretion to grant a freezing order. The plaintiff needed to show a significant risk of losing on the merits and that the defendant’s conduct warranted such an order. The court highlighted that while the purpose behind the defendant’s conduct was relevant, the effect of that conduct could also be significant. After considering all the evidence and arguments presented, the court determined that the plaintiff had not sufficiently demonstrated the required grounds for extending the freezing order.

Consequently, the court dismissed the plaintiff’s application for an extension of the freezing order. The court’s decision underscored the stringent criteria that must be met for such an order to be granted and reiterated the high threshold that must be satisfied by the applicant. The court’s ruling emphasised the importance of careful consideration of all relevant factors, including the effect of the defendant’s conduct, in determining whether to exercise the discretion to extend a freezing order.

Orders