In the matter of William Enterprise Group Pty Ltd ACN 140 040 419
[2016] NSWSC 1957
•6 June 2016
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New South Wales |
Case Name: | In the matter of William Enterprise Group Pty Ltd ACN 140 040 419 |
Medium Neutral Citation: | [2016] NSWSC 1957 |
Hearing Date(s): | Monday, 6 June 2016 |
Date of Orders: | 6 June 2016 |
Decision Date: | 6 June 2016 |
Jurisdiction: | Equity - Corporations List |
Before: | Brereton J |
Decision: | Refer para 6 |
Catchwords: | CORPORATIONS – interim relief – sufficiently arguable case of misleading and deceptive conduct – sufficiently arguable case of risk of dissipation – balance of convenience |
Category: | Procedural and other rulings |
Parties: | Yaohua Shi (plaintiff) |
Representation: | Counsel: |
File Number(s): | 2016/88848 |
Publication Restriction: | None |
JUDGMENT (EX TEMPORE)
HIS HONOUR: In the light of what has just transpired, this is to be an interim hearing, and not an interlocutory hearing, and the matter will require further consideration at the interlocutory stage. It is preferable that I say as little as possible in disposing of the interim application for a freezing order.
For the purposes of an interim order – which might be in place for a week or so – I am satisfied that there is a sufficiently arguable case of misleading and deceptive conduct. Essentially, the investment agreement refers to an audit report as at 30 June 2013 showing total assets of $10 million dollars, total liabilities of $7 million and net assets of $3.234 million, and in the context that follows that must have been understood as a reference to the corporate entity in which the plaintiff was being invited to invest. Based on the references in the administrator's report to the audited accounts as at that date, it is not possible to see how, even on a consolidated basis, the company could have had net assets of the amount so represented. I do not think that the "admissions" said to be contained in the letter of equity withdrawal, of careless decision-making, go so far as to deny reliance on such representations as were made.
So far as risk of dissipation is concerned, for present purposes, there is a sufficiently arguable case that there is a risk. The risk is established by the fact that the apparently undisputed contribution of in excess of $2 million by the plaintiff is not reflected in the company's accounts – as the plaintiff's shares appears to be treated as unpaid.
As to the balance of convenience, the vague references in the defendant's solicitor’s affidavit to the inconvenience an injunction will occasion are insufficient to show that there is in fact any business project or other undertaking that will be jeopardised. In any event, if there is, the order can on application be varied to ameliorate any adverse impact.
For those reasons, I propose to grant an interim injunction for a period of a week or so, until there can be an interlocutory hearing.
The Court therefore orders that:
(1)Upon the plaintiff by his counsel giving to the Court the usual undertaking as to damages, until 20 June 2016 the first defendant be restrained from by himself, his servants or agents, removing from Australia, alienating, encumbering, diminishing the value of or otherwise adversely dealing with his assets up to the unencumbered value of $2 million, provided that this order does not prevent the first defendant from:
(a)paying up to $1,500 per week on ordinary living expenses.
(b)paying up to $40,000 (or such further amount as the plaintiff's solicitor authorises in writing, such authorisation not to be reasonably withheld) on the reasonable legal expenses; or
(c)entering into any transaction or making any other payment that the plaintiff's solicitor authorises in writing, such authorisation not to be unreasonably withheld.
(2)The first defendant provide to the plaintiff's solicitors by 15 June 2016 particulars of all assets in which he has a beneficial interest whether held in his own name or not, and particulars of any encumbrances affecting them.
(3)The proceedings continue on pleadings.
(4)The plaintiff file and serve a statement of claim by 15 June 2016.
(5)The proceedings be otherwise adjourned to 20 June 2016 at 9.45am in the Corporations Judge motion list.
(6)The plaintiff serve any affidavit evidence in connection with the interlocutory application by 10 June 2016.
(7)The first defendant serve any evidence to be relied on, on the interlocutory application, by 15 June 2016.
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