Jiaqing Xu v Cao & Du Management Pty Ltd (No 2)

The case of Jiaqing Xu v Cao & Du Management Pty Ltd (No 2) involved a dispute where the plaintiff sought the continuation of interim preservation orders, including freezing orders, against the defendants. The case was heard in the Federal Court of Australia, with the primary focus on whether the interim measures should be continued given the circumstances of the case. The plaintiff alleged that the defendants were dishonestly dealing with assets and sought to preserve those assets pending the final determination of the case.

The legal issues before the court were whether both elements necessary for the making of a freezing order were satisfied. These elements include the likelihood that the defendants would dissipate their assets and the likelihood that the plaintiff would succeed in the substantive proceedings. Additionally, the court had to consider the matters that could be taken into account in inferring the defendants' dishonesty in dealing with their assets. The court needed to determine whether the evidence presented justified the continuation of the interim measures.

The court found that both elements for the making of a freezing order were indeed satisfied. It was determined that there was a real prospect that the defendants were dealing with their assets dishonestly, and there was a significant risk of dissipation of assets. The court considered various factors, including the defendants' financial history, their conduct during the proceedings, and the potential for dissipation of assets. Based on these considerations, the court concluded that the interim preservation orders, including the freezing orders, should be continued. The court was satisfied that the plaintiff had demonstrated a sufficient basis for inferring the defendants' dishonesty and the necessity of preserving the assets.

In conclusion, the court ordered the continuation of the interim preservation orders, including the freezing orders, against the defendants. The decision underscored the importance of demonstrating both the risk of asset dissipation and the likelihood of success in the substantive proceedings. The court's ruling was grounded in the evidence presented and the factors considered, which collectively supported the inference of the defendants' dishonest dealing with assets.