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Cong v Shen

Cong v Shen

Case [2020] NSWSC 945 24 July 2020

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Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Cong v Shen [2020] NSWSC 945
Hearing dates: 13 July 2020
Date of orders: 24 July 2020
Decision date: 24 July 2020
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
(1)   Dismiss the first and second defendants’ notice of motion filed 9 July 2020.
(2)   Direct the parties to file within seven days agreed (or, if not agreed, competing) short minutes of order, reflecting these reasons, to put in place a regime whereby (on the plaintiffs’ usual undertaking as to damages and supported by the Deed Poll previously provided to the Court) in place of the existing freezing orders the first and second defendants are restrained from transferring, alienating, further encumbering, removing from Australia or otherwise dealing with or disposing of their respective interests in the properties the subject of the existing freezing orders without first giving the plaintiffs 14 days’ notice in writing of their intention to do so; or otherwise disposing of assets up to a limit of $6 million in the case of the first defendant or $1,700,000 in the case of the second defendant (but with a carve-out or exception, in the case of the first defendant of up to $17,000 per month for ordinary living expenses, plus school fees, or in the case of the second defendant of up to $2,000 per month for ordinary living expenses; and, together, of up to $100,000 for legal expenses for the conduct of the forthcoming hearing (and payable only to the defendants’ legal representatives for that purpose); with a view to those orders being made in chambers and the existing freezing orders being discharged.
(3)   Reserve the costs of the respective notices of motion.

Catchwords:
CIVIL PROCEDURE — Interim preservation — Freezing orders — Application for variation after breach of orders — Application for discharge of orders on basis of oppressiveness of duplicated regime of orders and otherwise

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 56
Conveyancing Act 1919 (NSW), ss 23C, 145
Succession Act 2006 (NSW), ss 57, 65, 66

Cases Cited:
Allomak Ltd v Allan [2010] VSC 187
Banks v Goodfellow (No 2) (1871) LR 11 Eq 472
Bird v McComb (No 3) [2011] FCA 697
Birketu Pty Ltd v Westpac Banking Corporation (No 2) [2018] NSWSC 494
Blueseas Investments Pty Ltd v Mitchell (1999) 151 FLR 298; [1999] FamCA 745
Brand v Monks [2009] NSWSC 1454
Bridge Property Investments Pty Ltd v Garland Lot 3 Pty Ltd [2014] NSWCA 82
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Clark Equipment Credit of Australia v Como Factors Pty Ltd (1988) 14 NSWLR 552
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Custom Credit Corporation Limited v Whitehall Holdings Pty Limited (Supreme Court (WA), 7 April 1992, unrep)
Deputy Commissioner of Taxation v Gashi [2012] VSC 401
Deputy Commissioner of Taxation v Karas [2011] VSC 673
Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008]…

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 Cong v Shen

Details

AGLC: Cong v Shen [2020] NSWSC 945
Case: [2020] NSWSC 945
Decision Date: 24 July 2020

CaseChat Overview and Summary

In Cong v Shen, the respondent sought to vary and discharge interim freezing orders made by the Federal Court in relation to the applicant’s assets. The applicant had breached the orders by transferring funds to an account held in China. The court was required to decide whether it was appropriate to vary the orders to prevent a breach in China and whether the orders were oppressive because they duplicated other remedies that were available. The court found that the orders should be varied to cover the Chinese account and that they were not oppressive. It discharged the orders on the basis that they were no longer necessary and because the respondent had failed to show that the orders were oppressive.

The legal issues before the court were whether it was appropriate to vary the orders to prevent the applicant from breaching them in China and whether the orders were oppressive because they duplicated other remedies that were available. The court considered whether the orders were oppressive in light of the fact that the applicant had already breached them and whether they duplicated other remedies, in particular the respondent’s application for an order that the applicant provide security for costs. The court found that the orders should be varied to cover the Chinese account and that they were not oppressive. The court discharged the orders on the basis that they were no longer necessary and because the respondent had failed to show that the orders were oppressive.

The court found that the orders should be varied to prevent a breach in China. The court noted that the applicant had breached the orders by transferring funds to a Chinese account and that the orders did not extend to that account. The court found that there was no reason why the orders should not be extended to cover the Chinese account. The court found that the orders were not oppressive. The court noted that the respondent had not shown that the orders were oppressive. The court found that the orders were no longer necessary because the applicant had transferred the funds back to Australia and because the applicant was subject to an order that he provide security for costs. The court discharged the orders on the basis that they were no longer necessary and because the respondent had failed to show that the orders were oppressive.

Orders