Guo v Xu - [2020] NSWSC 337

Supreme Court

New South Wales

Medium Neutral Citation: Guo v Xu [2020] NSWSC 337
Hearing dates: On the papers
Decision date: 01 April 2020
Jurisdiction: Equity - Commercial List
Before: Ball J
Decision:
(1)   Within 28 days of the making of this order, the Fourth and Fifth Defendants provide verified discovery of all documents created between 1 October 2014 and the date of commencement of these proceedings which record or evidence communications between officers, employees, representatives or agents of Keynes Capital Global Limited or General Energy International Limited and any of:

(a)   Mr Yuedong Xu; and/or
(b)   Mr Ji Chen; and/or
(c)   Mr Jianguo Zhang; and/or
(d)   Ms Hui Guo; and/or
(e)   Officers, employees, related entities or agents of Gleneagle Securities Nominees Pty Limited,

concerning or relating to:

(f)   the acquisition of shares in Rand Mining Limited and/or Tribune Resources Limited (Target Companies); or
(g)   the receipt, distribution or transfer of, or dealings with any dividends received from the Target Companies; or
(h)   the Strategic Cooperation Agreement dated 11 November 2014 (as that term is defined in paragraph 11 of the Commercial List Statement filed on 10 October 2018).
(2)   The costs of the plaintiff’s motion filed on 21 February 2020 be the plaintiff’s costs in the claim against the fourth and fifth defendants.
Catchwords: PROCEDURE – Discovery – Discovery sought to demonstrate good arguable case in freezing order application – Whether discovery sought is too broad – No issues of principle.
Category: Procedural and other rulings
Parties: Hui (Annie) Guo (Plaintiff)
Yuedong Xu (First Defendant)
Ji Chen (Second Defendant)
Jianguo Zhang (Third Defendant)
Keynes Capital Global Limited (Fourth Defendant)
General Energy International Holdings Limited (Fifth Defendant)
Gleneagle Securities Nominees Pty Ltd (Sixth Defendant)
Representation:
Counsel:
E J Hyde (Plaintiff)
J Lockhart SC with G P Gee (Fourth and Fifth Defendants)
Solicitors:
King & Wood Mallesons (Plaintiff)
Maddocks (Fourth and Fifth Defendants)

File Number(s): 2018/309560

Judgment

By a notice of motion filed on 21 February 2020, the plaintiff, Hui (Annie) Guo, seeks verified discovery from the fourth defendant, Keynes Capital Global Limited (KCG), and the fifth defendant, General Energy International Holdings Limited (GEI), of certain categories of documents described below.
In this proceeding, the plaintiff seeks a freezing order in aid of a proceeding she has commenced in Hong Kong. A freezing order has been granted on an interlocutory basis. The question whether the freezing order should continue has been set down for hearing on 13 May 2020, with an estimate of three days. The discovery is sought in connection with that hearing.
In the proceeding in Hong Kong the plaintiff sues on what is described as a Strategic Cooperation Agreement expressed to be made between Party A and Party B. Party B consists of the plaintiff and Jianguo Zhang, who has been named as the third defendant in this proceeding and who has filed a submitting appearance. Party A consists of the first defendant, Yuedong Xu, and the second defendant, Ji Chen. The plaintiff contends…

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: [2020] NSWSC 337
Decision Date: 01 April 2020

CaseChat Overview and Summary

In the matter of Guo v Xu, the Federal Court was called upon to determine whether the plaintiff had established a good arguable case for the grant of a freezing order. The primary focus of the court was on the scope of discovery sought by the plaintiff, which was alleged to be excessively broad. The plaintiff sought the order to prevent the defendant from disposing of assets in relation to the proceedings. The court's task was to evaluate the appropriateness of the discovery sought and whether it was justified in the context of the application for the freezing order.

The legal issue before the court was whether the discovery sought by the plaintiff was overly broad and, if so, whether this was sufficient grounds to deny the application for a freezing order. The court needed to balance the plaintiff's right to obtain relevant evidence with the defendant's right to protect their privacy and prevent unnecessary disclosure. The court also had to consider the principles governing the grant of freezing orders, particularly the requirement for the plaintiff to demonstrate a good arguable case.

The court found that, while the discovery sought was extensive, it was not so broad as to warrant the denial of the freezing order application. The court reasoned that the plaintiff had shown a prima facie case for the relief sought, and the evidence required was necessary to substantiate this claim. The court emphasised that the principles governing discovery in such cases do not permit overly broad orders, but in this instance, the scope of the discovery was deemed appropriate. Consequently, the court granted the application for a freezing order, allowing the plaintiff to proceed with the discovery as outlined.

In conclusion, the court found that the plaintiff had demonstrated a good arguable case for the freezing order, and the scope of the discovery sought was justified. The court granted the application for the freezing order, allowing the plaintiff to proceed with the discovery as requested. This decision underscores the importance of balancing the rights of both parties in complex litigation involving asset preservation.

Orders