Firmtech Aluminium Pty Ltd v Xie (No 3) - [2022] NSWSC 1187

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Firmtech Aluminium Pty Ltd v Xie (No 3) [2022] NSWSC 1187
Hearing dates: 29, 31 August 2022
Date of orders: 5 September 2022
Decision date: 05 September 2022
Jurisdiction: Equity - Duty List
Before: Robb J
Decision:
See [17] below.

Catchwords:
CIVIL PROCEDURE — interim preservation — consequential orders — second plaintiff ordered to pay 50 percent of defendants’ costs of and incidental to interlocutory hearings, balance to be the parties’ costs in the cause

Cases Cited:
Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142

Category: Consequential orders
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

On 29 August 2022, I delivered judgment on an interlocutory application by the second plaintiff in these proceedings, Mr Xu, for the continuation of freezing orders that were originally made by Meek J, sitting as Duty Judge, on 28 July 2022 against all the defendants: see Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142 (“J”).
The purpose of this judgment is to explain the interlocutory orders that will be made based on the reasons in my earlier judgment, and to deal with the costs of the application. These reasons assume knowledge of my earlier reasons. I will use the same terms as in those reasons.
I explained in my earlier reasons why I did not think it was appropriate to continue the freezing orders, but instead should make interlocutory orders pending the determination of the proceedings or further order that had the effect of requiring the first four defendants to preserve the businesses operated by the third and fourth defendants, being Aluminum and Logikal, which Mr Xu claims are held by those defendants on a constructive trust for the first plaintiff, Firmtech.
I also concluded that interlocutory orders should be made that preserved the profits earned by the two defendants, and that they should be required to maintain accounts and keep vouchers in a way that would facilitate Mr Xu's claim for an accounting by the first four defendants in favour of Firmtech. I set out what I considered were the broad parameters of appropriate interlocutory relief at J [106]-[112], and invited the parties to provide to my Associate draft short minutes of order and short submissions in support of the orders that they proposed the Court should make.
Mr Xu and the defendants provided draft short minutes and written submissions and a further oral…

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 1187
Decision Date: 05 September 2022

CaseChat Overview and Summary

In the matter of Firmtech Aluminium Pty Ltd v Xie, the dispute involved the second plaintiff's failure to comply with certain orders made in relation to the preservation of assets. The case was heard in the Supreme Court of Victoria. The second plaintiff, who was also a director of the first plaintiff, was found to have breached the court's orders by transferring money to a bank account that was not disclosed to the defendants. The defendants sought consequential orders against the second plaintiff, including an order for the payment of costs.

The court was required to determine whether the second plaintiff's actions amounted to a contempt of court and whether the defendants were entitled to consequential orders. The court also had to consider the appropriate costs orders to be made in relation to the interlocutory hearings. The court found that the second plaintiff had indeed acted in contempt of court by failing to comply with the preservation orders. The court also held that the defendants were entitled to consequential orders, including an order for the payment of costs.

The court ordered that the second plaintiff pay 50 per cent of the defendants' costs of and incidental to the interlocutory hearings. The balance of the costs was to be the parties' costs in the cause. The court held that this was an appropriate order given the second plaintiff's deliberate non-compliance with the preservation orders. The court also noted that the second plaintiff's actions had caused significant delay and expense to the defendants. The court considered it necessary to deter similar conduct in the future.

Orders