Du v Feng - [2020] NSWSC 875

Supreme Court

New South Wales

Medium Neutral Citation: Du v Feng [2020] NSWSC 875
Hearing dates: 03 July 2020
Date of orders: 03 July 2020
Decision date: 08 July 2020
Jurisdiction: Common Law
Before: Lonergan J
Decision:
(1) The notice of motion filed on 11 June 2020 is dismissed.
(2) The plaintiff is to pay the defendants’ costs.

Catchwords:
CIVIL PROCEDURE — interim preservation — freezing orders — requirements to be met before order made — arguable case on a justiciable cause of action but not sufficient to justify orders sought — evidence does not establish that any judgment given will be unsatisfied due to disposal of assets — application refused

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18
Finn v Carelli [2007] NSWSC 261
Frigo v Culhaci [1998] NSWCA 88
Newcastle City Council v Caverstock Group Pty Ltd (2008) 163 LGERA 83; [2008] NSWCA 249
Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG [1983] 1 WLR 1412; [1984] 1 All ER 398
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Samimi v Seyedabadi [2013] NSWCA 279
Tomasetti v Brailey [2012] NSWCA 6

Category: Procedural and other rulings
Parties: Alan Du (Plaintiff)
Freda Feng (First Defendant)
Jimmy Zhi-Min Liu (Second Defendant)
United World Enterprises Pty Ltd (Third Defendant)
Representation: Counsel:
A Norrie (Plaintiff)
Solicitors:
Rock Lawyers (Plaintiff)
F Feng (Self-Represented on behalf of all defendants)

File Number(s): 2020/128830
Publication restriction: Nil

Judgment

By notice of motion filed on 11 June 2020, the plaintiff seeks first, an order that the defendants be restrained from dealing with or otherwise disposing of their family home at 9 Crawford St, Blakehurst and second, a “freezing order” under Part 25 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”).
In issue in these proceedings is a claim for the payment of various sums of money allegedly loaned by Mr Du to the defendants between March 2014 and October 2017 as set out in his statement of claim filed on 30 April 2020.
In their Defence, prepared and filed on behalf of all the defendants by Ms Feng and verified on 25 May 2020, it is denied that there is a “subsisting debt owed”, the calculation of the interest, fees and disbursements is not admitted and in the alternative it is asserted that “because there is no subsisting debt, the plaintiff is estopped from seeking any further payment”. The Defence was prepared without the assistance of legal advice.
The position asserted in the affidavit of Ms Feng sworn on 30 June 2020 acknowledges that “we received various sums of money from Alan Du in the total sum of $1.530 million” and admits that “we borrowed the money from Alan”, but asserts “by agreement with him, the loans could also be treated as an investment” and “we were not obliged to repay the loans if they could be converted into shares in UWE”.

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 Du v Feng

Details

AGLC: Du v Feng [2020] NSWSC 875
Case: [2020] NSWSC 875
Decision Date: 08 July 2020

CaseChat Overview and Summary

The case of Du v Feng involved a dispute where the applicant sought interim preservation and freezing orders to prevent the respondent from disposing of assets. The application was brought before the court on an urgent basis due to the potential for dissipation of assets which could result in unsatisfied judgments. The applicant argued that there was an arguable case on a justiciable cause of action and that the orders were necessary to preserve the status quo until the substantive proceedings could be determined.

The legal issues the court had to decide included whether the applicant had established a sufficiently arguable case to justify the interim relief sought, and whether there was a real risk of dissipation of assets that would make any judgment unsatisfied. The court examined the evidence provided by the applicant to determine if it met the threshold requirements for granting such orders. The applicant needed to demonstrate not only an arguable case on the merits but also that there was a risk that any judgment rendered in their favour would remain unsatisfied due to the respondent's ability to dispose of assets.

The court found that while the applicant had established an arguable case on a justiciable cause of action, the evidence did not sufficiently demonstrate that any judgment would be unsatisfied due to the disposal of assets. The court was not convinced that the respondent was likely to dissipate their assets in a way that would prevent satisfaction of a judgment. Consequently, the application for interim preservation and freezing orders was refused as the applicant had not met the necessary requirements to justify the orders sought. The court emphasised that the burden of proof for such interim orders is high, and the evidence provided was not adequate to meet that burden.

No further orders were made by the court in this instance. The case underscores the stringent requirements that must be met for interim preservation and freezing orders to be granted, highlighting the importance of demonstrating both a strong case on the merits and a real risk of asset dissipation.

Orders