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Firmtech Aluminium Pty Ltd v Xie (No 2)

Firmtech Aluminium Pty Ltd v Xie (No 2)

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Case Copied 29 August 2022 64 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142
Hearing dates: 15, 17 August 2022
Decision date: 29 August 2022
Jurisdiction: Equity - Duty List
Before: Robb J
Decision:
See [104]-[116] below.

Catchwords:
CIVIL PROCEDURE — interim preservation — freezing orders — contested hearing to determine continuation of freezing orders — parties make open offers as to relief during interlocutory hearing — nature of relief sought shifts — no issue that plaintiffs have good arguable case — whether risk that defendants will dissipate assets to frustrate final judgment — no such risk — Court makes interlocutory orders preserving businesses operated by certain corporate defendants and orders for accounting

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 56
Corporations Act 2001 (Cth), ss 236, 237, 241
Uniform Civil Procedure Rules 2005 (NSW), rr 25.11, 25.12

Cases Cited:
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46
Bax Global (Australia) Pty Ltd v Evans (1999) 47 NSWLR 538; [1999] NSWSC 815
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18
Firmtech Aluminium Pty Ltd v Xie [2022] NSWSC 1031
Graincorp Operations Limited v Duncan Ross Munro [2015] NSWSC 227
H Biotechnology Pty Ltd v Shao; H Biotechnology Pty Ltd v Chen [2020] NSWSC 585
Ip v Chiang [2019] NSWSC 1549
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Jingalong Pty Ltd v Todd (No 2) [2014] NSWCA 347
Mercedes Benz AG v Leiduck [1996] AC 284
MWP Transport Pty Limited v Michael Thomas Kent [2018] NSWSC 1119
National Australia Bank Limited v Human Group Pty Ltd (No 2) [2020] NSWSC 1900
Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG “The Niedersachsen” [1983] 1 WLR 1412; [1984] 1 All ER 398
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1; [2015] HCA 36
Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279
Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156
YAJ1 v Opera Australia [2021] NSWSC 771

Texts Cited:
Practice Note SC Gen 14

Category: Procedural rulings
Parties: Firmtech Aluminium Pty Ltd (First Plaintiff)
Zhaohui Xu (Second Plaintiff)
Xiaoyan Xie (First Defendant)
Jiamin Zhang (Second Defendant)
Firmtech Aluminum Pty Ltd (Third Defendant)
Logikal Façade Solutions Pty Ltd (Fourth Defendant)
JKZ (Australia) Pty Ltd (Fifth Defendant)
Firmtech Group Pty Ltd (Sixth Defendant)
LGK Holdings Pty Ltd (Seventh Defendant)
Western Spring Projects Pty Ltd (Eighth Defendant)
Z & X Investment Holding Pty Ltd (Nineth Defendant)
Haj (Australia) Pty Ltd (Tenth Defendant)
JHN Projects Pty Ltd (Eleventh Defendant)
Representation:
Counsel:
A Ogborne & P Lin (Plaintiffs)
D Stack (Defendants)
Solicitors:
Pope & Spinks (Plaintiffs)
Piper Alderman (Defendants)

File Number(s): 2022/00221710

JUDGMENT

The plaintiffs, Firmtech Aluminium Pty Ltd (Firmtech) and Mr Zhaohui…

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.

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Details

Case: [2022] NSWSC 1142
Decision Date: 29 August 2022

CaseChat Overview and Summary

The matter between Firmtech Aluminium Pty Ltd and Xie (No 2) was heard by the Federal Court of Australia. Firmtech Aluminium Pty Ltd sought interim preservation and freezing orders against the defendants, including certain companies, to prevent the dissipation of assets. The dispute arose from a commercial context, with Firmtech alleging that the defendants were engaging in conduct that could frustrate a potential final judgment in Firmtech's favour.

The court was tasked with determining whether there was a sufficient risk that the defendants would dissipate their assets to frustrate any final judgment that might be made in Firmtech's favour. This required an assessment of the likelihood and extent of asset dissipation, considering the evidence presented by both parties. The court had to balance the need to protect Firmtech's potential recovery against the rights and interests of the defendants, including the potential economic impact of the freezing orders on the defendants' businesses.

In its reasoning, the court found that while Firmtech had a good arguable case, there was no significant risk that the defendants would dissipate their assets. The court acknowledged the open offers made by the parties during the interlocutory hearing, which had shifted the nature of the relief sought. Ultimately, the court concluded that the risk of asset dissipation was minimal and ordered the preservation of the businesses operated by certain corporate defendants. Additionally, the court ordered an accounting to ensure transparency and fairness in the preservation process.

The final orders included the preservation of the specified businesses and the requirement for an accounting. These orders were intended to maintain the status quo while the underlying litigation proceeded, ensuring that Firmtech's potential recovery was protected without unduly burdening the defendants.

Orders