LB Business Pty Ltd v Feng - [2024] ACTSC 102

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	LB Business Pty Ltd v Feng
Citation:	[2024] ACTSC 102
Hearing Date:	18 March 2024
Decision Date:	11 April 2024
Before:	Balla AJ
Decision:	(1) Pursuant to r 221(2) of the Court Procedure Rules 2006 (ACT), the plaintiff in proceedings SC 497 of 2023 is to be substituted with "Bright Property Group Holdings Pty Ltd (ACN 663 102 770) as trustee for Bright Property Group". (2) The enforcement of clauses 6 and 7 of the agreement of the parties, as noted in the orders of the Court on 8 June 2023 in proceedings SC 429 of 2022, are stayed pending further order in these proceedings. (3) The amount of $1,129,822 is to be held in an interest-bearing account by the solicitor for the plaintiff until further order of the Court or the written consent of the parties is obtained. (4) The costs of the plaintiff’s amended application in proceeding filed on 21 February 2024 are to be the parties’ costs in the cause.
Catchwords:	CIVIL LAW – PRACTICE AND PROCEDURE – Application for order relating to payment to be stayed pending the determination of separate proceedings – whether application seeks stay of orders or freezing order – consideration of Court’s power to make freezing order – consideration of legal principles applying to freezing orders – enforcement of orders stayed pending further order
Legislation Cited:	Court Procedures Rules 2006 (ACT) rr 6, 221, 230, 700, 743 Land Titles Act 1925 (ACT) s 108 Supreme Court Act 1933 (ACT) s 20 Trustee Act 1925 (ACT) s 6
Cases Cited:	Deputy Commissioner of Taxation v Gashi [2010] VSC 120; 27 VR 127 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Parties:	LB Business Pty Limited (ACN 638 883 744) as trustee for Bright Property Group ( Plaintiff) Lihua Feng ( First Defendant) Phoenix Holdings Group Limited (ACN 636 224 430) as trustee for Phoenix Investment Trust ( Second Defendant)
Representation:	Counsel D Robens ( Plaintiff) J O’Sullivan ( First and Second Defendant)
Solicitors McGilvray ( Plaintiff) Gells Lawyers ( First and Second Defendant)
File Number:	SC 497 of 2023

BALLA AJ:

Introduction

1․On 1 December 2023, the plaintiff, LB Business Pty Ltd (ACN 638 883 744) (“LB Business”) as trustee for the Bright Property Group Trust (“the Trust”), commenced proceedings against Lihua Feng as first defendant and Phoenix Holdings Group Pty Ltd (ACN 636 224 430) as trustee for the Phoenix Investment Trust (“Phoenix”) as second defendant (“the substantive proceedings”). The first defendant is the sole director and secretary of Phoenix.
2․The proceedings were listed before me for the hearing of an interlocutory application filed by the plaintiff on 21 February 2024 for various orders, the effect of which would be for the plaintiff to retain money which would otherwise be payable to Phoenix until the substantive proceedings have been finalised (“proposed Orders 1 and 2”) and an order for the…

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: [2024] ACTSC 102
Decision Date: 11 April 2024

CaseChat Overview and Summary

LB Business Pty Ltd brought an application against Feng, seeking an order relating to a payment to be stayed pending the determination of separate proceedings. The matter was heard by the Supreme Court of the Australian Capital Territory. The central issue before the court was whether the application sought to stay orders or a freezing order, and whether the court had the power to make a freezing order. The court also considered the legal principles that apply to such orders and the enforcement of orders that were stayed pending further orders. The plaintiff's application sought a stay of the enforcement of certain clauses of a contract between the parties, pending the determination of other proceedings. The application also sought an order that a sum of money be held in an interest-bearing account by the solicitor for the plaintiff until further order of the court or the written consent of the parties was obtained.

The court found that the application sought a stay of the enforcement of certain clauses of the contract, rather than a freezing order. The court considered its power to make a freezing order and the legal principles that apply to such orders. The court noted that a freezing order is an extraordinary remedy that should only be granted in exceptional circumstances. The court also considered the principle that a freezing order should not be granted if it would cause undue hardship to the respondent. In this case, the court found that the plaintiff had not demonstrated that the enforcement of the clauses in question would cause undue hardship to the respondent. The court also found that the application sought a stay of the enforcement of certain clauses of the contract, rather than a freezing order. The court held that it had the power to make an order staying the enforcement of the clauses, pending further order of the court.

The court made an order substituting the plaintiff in the proceedings with Bright Property Group Holdings Pty Ltd (ACN 663 102 770) as trustee for Bright Property Group. The court also stayed the enforcement of clauses 6 and 7 of the agreement of the parties, pending further order in these proceedings. The court ordered that the amount of $1,129,822 be held in an interest-bearing account by the solicitor for the plaintiff until further order of the court or the written consent of the parties was obtained. The court also ordered that the costs of the plaintiff’s amended application in proceeding filed on 21 February 2024 be the parties’ costs in the cause.

Orders

Orders of the court

(1) Pursuant to r 221(2) of the Court Procedure Rules 2006 (ACT), the plaintiff in proceedings SC 497 of 2023 is to be substituted with "Bright Property Group Holdings Pty Ltd (ACN 663 102 770) as trustee for Bright Property Group".

(2) The enforcement of clauses 6 and 7 of the agreement of the parties, as noted in the orders of the Court on 8 June 2023 in proceedings SC 429 of 2022, are stayed pending further order in these proceedings.

(3) The amount of $1,129,822 is to be held in an interest-bearing account by the solicitor for the plaintiff until further order of the Court or the written consent of the parties is obtained.

(4) The costs of the plaintiff’s amended application in proceeding filed on 21 February 2024 are to be the parties’ costs in the cause.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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