Commissioner of Taxation v Zou

The Federal Court of Australia considered an application by the Commissioner of Taxation for ex parte freezing and restraining orders against Shuming Zou and the Registrar of Titles in Victoria. The Commissioner alleged that Zou had failed to pay substantial tax debts and was at risk of dissipating his assets to avoid judgment. The Court was required to determine whether there was a good arguable case for the application and whether there was a risk of the dissipation of property that could frustrate a prospective judgment. The Court found that the Commissioner had established a prima facie case for the orders, given the significant tax debts and the risk of asset dissipation. The Court also granted leave for service of the documents outside Australia under the Hague Convention, and allowed substituted service due to the urgency of the application and Zou's unavailability for service. The Court made a freezing order against Zou and restrained the Registrar of Titles from registering any dealing with the specified property until further order.

The Court's reasoning was based on the balance of convenience, the risk of dissipation of assets, and the need to preserve the status quo pending the hearing of the substantive application. The Court found that the Commissioner had made out a good arguable case for the relief sought, and that Zou's potential dissipation of assets could prejudice the outcome of the substantive proceedings. The Court also found that the urgent nature of the application and Zou's unavailability for service justified the use of substituted service. The Court made the freezing and restraining orders as prayed for, with liberty to apply for further relief. The costs of the interlocutory application were reserved to the Court hearing the substantive application.