Application to vacate freezing order and release undertaking refused with costs; freezing order extended.
Catchwords:
CIVIL PROCEDURE – interim preservation – freezing orders – shares purchased by Chinese investors in Australian mining companies with assistance of plaintiff – plaintiff sues in Hong Kong for 49% profits under contract – plaintiff seeks equitable relief in respect of shares, dividends and capital gains – ex parte freezing order in 2018 – freezing order extended by consent in 2019 until end of Hong Kong proceedings – $22.7M frozen – defendants hold further $1M dividends on their undertaking – plaintiff seeks to extend freezing order while defendants seek to have freezing order discharged and release from undertaking.
FREEZING ORDERS – by consent after negotiation – whether freezing order in aid of foreign proceedings is final or interlocutory – whether exceptional circumstances or material change in circumstances sufficient – principles at [161]-[172]– exceptional circumstances required and not present.
PRIVATE INTERNATIONAL LAW – foreign judgments and orders – whether an account of profits is a “money judgment” within s 3 Foreign Judgments Act 1991 (Cth) – see [203]-[210].
[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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AGLC
Guo v Xu [2021] NSWSC 460
Case
[2021] NSWSC 460
Decision Date
CaseChat Overview and Summary
The case of Guo v Xu was heard by the Federal Court of Australia. The plaintiff, Mr. Guo, had assisted Chinese investors in purchasing shares in Australian mining companies. He claimed a contractual entitlement to 49% of the profits from these investments. Mr. Guo initiated proceedings in the High Court of Hong Kong to claim these profits, as well as seeking equitable relief in respect of the shares, dividends, and capital gains in Australia. In 2018, an ex parte freezing order was granted, freezing $22.7 million in assets held by the defendants, Mr. and Mrs. Xu. This order was later extended by consent until the conclusion of the Hong Kong proceedings, with the Xus additionally holding $1 million of dividends on their undertaking. Mr. Guo sought to extend the freezing order, while the Xus sought its discharge and release from their undertaking.
The primary legal issues before the court were the nature of the freezing order, whether it was final or interlocutory, and whether there were exceptional circumstances or a material change warranting its discharge. The court considered the principles articulated in previous cases, which required exceptional circumstances for discharging a freezing order in aid of foreign proceedings. The court also considered whether an account of profits in the Hong Kong proceedings could be regarded as a "money judgment" under the Foreign Judgments Act 1991 (Cth), which would affect the enforceability of any foreign judgment in Australia.
The court held that the freezing order was interlocutory, in aid of the foreign proceedings, and not a final order. It found that exceptional circumstances were required for its discharge, and that these were not present in this case. The court did not find it necessary to determine whether an account of profits was a "money judgment" under the Foreign Judgments Act, as it was sufficient to find that the order could not be discharged based on the other grounds argued. Consequently, the Xus' application to discharge the freezing order and release them from their undertaking was dismissed.
The court did not make any orders regarding the final outcome of the case, as this was to be determined by the Hong Kong court. The freezing order and the Xus' undertaking remained in place until the conclusion of the Hong Kong proceedings.