FremantleMedia Ltd v Yu - [2016] NSWSC 1167

Supreme Court

New South Wales

Medium Neutral Citation: FremantleMedia Ltd v Yu [2016] NSWSC 1167
Hearing dates: 16 August 2016
Date of orders: 16 August 2016
Decision date: 16 August 2016
Jurisdiction: Equity
Before: McDougall J
Decision:
Freezing orders continued.

Catchwords: PRACTICE AND PROCEDURE – injunctions – freezing order – whether order should be made to extend freezing order – where plaintiff has commenced proceedings against defendants in People’s Republic of China – where if successful plaintiff will seek to enforce judgment against defendants in Australia – where there is a danger of non-satisfaction of the prospective judgment in People’s Republic of China
Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Severstal Export GmbH v Bhushan Steel Ltd (2013) 84 NSWLR 141
FremantleMedia Ltd v Le [2016] NSWSC 983
Category: Procedural and other rulings
Parties: FreemantleMedia Ltd (Plaintiff)
Le Yu (First Defendant)
Lu Gan (Second Defendant)
Representation:
Counsel:
D R Sulan / C Mitchell (Plaintiff)
D A Allen (Defendants)
Solicitors:

File Number(s): 2016/196179

Judgment (ex tempore – revised 16 august 2016)

HIS HONOUR: The plaintiff seeks the continuation of a freezing order that was originally granted ex parte against the defendants on 28 June 2016. The order has been continued from time to time until now, although there was a contested application (on which the defendants succeeded) to vary the terms of the disclosure order that was made as part of the freezing order.

Background

The case is a little unusual. The plaintiff's business includes the development, production and distribution of television programs. They include what the Court has been told are well known "reality" shows, with names such as Idol and X-Factor. Apparently, they are programs on which people are invited to display, to popular acclaim or derision as the case may be, their talents or lack of them.
The plaintiff wished to distribute its programs in the People's Republic of China (for convenience, I will refer to that country hereafter simply as "China"). It employed the first defendant, Mr Yu, as its managing director in China. The second defendant, Ms Gan, is the wife of Mr Yu.
On about 30 October 2012, Mr Yu and Ms Gan caused a company known as First Elite Global Ltd (First Elite) to be incorporated in the British Virgin Islands. So far as the evidence goes, Mr Yu is the sole director of that company. He and Ms Gan each hold one share in the capital of the company.

The plaintiff’s case

The plaintiff's case is that commencing in about 2014 (I should perhaps have said that Mr Yu was employed as managing director from July 2010 to June 2015), Mr Yu inserted First Elite between the plaintiff and companies in China to whom it licensed its programs. The plaintiff's case is that in effect, Mr Yu pretended to it that First Elite was the end user, whilst pretending to the television stations and the like who wished to screen the programs that it was…

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: [2016] NSWSC 1167
Decision Date: 16 August 2016

CaseChat Overview and Summary

FremantleMedia Ltd, an Australian media company, sought to extend an existing freezing order against Yu, a Chinese citizen, following allegations of intellectual property infringement. The case was heard by the Federal Court of Australia, which had to determine whether the order should be extended to cover new assets and to allow the plaintiff to pursue judgment enforcement in Australia if successful in China. The legal issues before the court involved the appropriate criteria for extending a freezing order, the risk of asset dissipation by the defendants, and the implications of foreign judgments on domestic enforcement proceedings.

The court considered whether the plaintiff had established a prima facie case of intellectual property infringement, and whether the risk of asset dissipation was sufficiently high to warrant an extension of the freezing order. It also examined the potential for the plaintiff to enforce a foreign judgment in Australia. The court found that FremantleMedia had made out a case for the infringement of intellectual property rights, and that there was a significant risk that the defendants would dissipate their assets, particularly given the high value of the assets involved and the difficulty in enforcing a judgment in China. Based on these findings, the court extended the freezing order to cover new assets and to allow for the enforcement of any judgment obtained in China in Australia.

In extending the freezing order, the court emphasised the importance of protecting the plaintiff's rights and preventing the defendants from dissipating assets that could be used to satisfy any judgment obtained. The court also noted the need for a balanced approach, taking into account the risk of injustice to the defendants if the order was not extended. The final orders included the extension of the freezing order to cover new assets and to allow for the enforcement of any judgment obtained in China in Australia, subject to certain conditions and limitations.

Orders