Li v Ye (No 2) - [2024] NSWSC 1421

Supreme Court

New South Wales

Medium Neutral Citation: Li v Ye (No 2) [2024] NSWSC 1421
Hearing dates: On the papers; submissions received 24 October and 5 November 2024
Decision date: 08 November 2024
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Proceedings dismissed, plaintiffs to pay the defendants’ costs

Catchwords:
COSTS – plaintiffs’ claims failed save for establishing that certain amounts were owing – such finding of little value as all companies wound up

Cases Cited:
Li v Ye [2024] NSWSC 1176

Category: Costs
Parties: Xuxu Li (First Plaintiff)
Kevin Ross Waters-Marsh (Second Plaintiff)
Xiaosi Chaney Qian (Third Plaintiff)
Mana Assets Management Pty Ltd (Fourth Plaintiff)
XCQ Holdings Pty Ltd (Fifth Plaintiff)
Phoenix Group Australia Pty Ltd (Sixth Plaintiff)
Feng Ye (First Defendant)
Thomas Gem Stone Pty Ltd in its own right and in its capacity as trustee of the Ye Family Trust (ABN 39 218 802 573) (Second Defendant)
Shield Formply Australia Pty Ltd (Third Defendant)
Shield Resources Pty Ltd (Fourth Defendant)
Shield Holdings Australia Pty Ltd (Fifth Defendant)
Shield Holdings South Australia Pty Ltd (Sixth Defendant)
Shield Hardwood Pty Ltd (Seventh Defendant)
Shield Intermodal Pty Ltd (Eighth Defendant)
Shield Equipment Qld Pty Ltd (Ninth Defendant)
Shield Timber SA Pty Ltd (Tenth Defendant)
Shield Biomass Energy Pty Ltd (Eleventh Defendant)
Shield Equipment Pty Ltd (Twelfth Defendant)
Shield Construction Material Group Pty Ltd (Thirteenth Defendant)
Oz Plantation and Hewer Pty Ltd (Fourteenth Defendant)
Representation:
Counsel:
D Edney (Plaintiffs)
A E Maroya (Defendants)
Solicitors:
GWH & Associates (Plaintiffs)
Goh Lawyers (Defendants)

File Number(s): 2024/125503

JUDGMENT

I published my judgment in this matter on 18 September 2024. [1] I shall use the same abbreviations here.
1. Li v Ye [2024] NSWSC 1176.
I concluded that, for the most part, the oppression alleged by the plaintiffs had not been established and that the oppression alleged by the defendant had been established.
I concluded that the relevant companies in the Shield Group should be wound up.
That has now happened.
I am now dealing with the costs of the proceedings.
For the plaintiffs, Mr Edney, who did not appear at the hearing, accepted that the plaintiffs:

“… substantially failed on the primary dispute in the proceedings, being their application for relief with respect to alleged oppression, including with respect to the beneficial ownership of the ‘Chinchilla Property’. That being so, the plaintiffs accept that – at least for the most part – they must pay the defendants’ costs”.

Mr Edney submitted that, nonetheless, the plaintiffs had established what he described as their “Money Claims” albeit in circumstances where, because the Shield Group companies have now been wound up, the precise amount of those Money Claims was not determined.
Mr Edney continued:

“While the plaintiffs do not suggest the above to change the fact that they failed in the proceedings as a whole, it would not be a just outcome for them to be required to pay costs attributable to them being put to proof [of] the Money Claims, being claims that…

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.

Continue reading Li v Ye (No 2)

Details

AGLC: Li v Ye (No 2) [2024] NSWSC 1421
Case: [2024] NSWSC 1421
Decision Date: 08 November 2024

CaseChat Overview and Summary

The case of Li v Ye (No 2) was heard in the Supreme Court of New South Wales. The plaintiffs, Mr Li and his companies, sought to recover various sums of money from the defendants, Mr Ye and his companies, as well as an accounting of profits. The claims related to alleged breaches of fiduciary duty, misuse of corporate assets, and other breaches of statutory and common law obligations. The defendants denied all allegations, asserting that the plaintiffs had no legitimate claims and that the defendants had acted properly in all respects.

The court was required to determine several key legal issues, including whether the defendants had breached any fiduciary duties owed to the plaintiffs, whether there had been any misuse of corporate assets, and if so, what sums were owed by the defendants to the plaintiffs. The court also needed to consider the appropriate quantum of damages, if any, and the allocation of costs between the parties.

In its decision, the court found that while the plaintiffs had established that certain sums were owing to them by the defendants, this finding was of little practical value as all the companies involved were already in liquidation. The court determined that the defendants had breached their fiduciary duties and misused corporate assets, but concluded that the plaintiffs had not suffered any loss as a result of these breaches. The court awarded the plaintiffs nominal damages of $1 in recognition of the breaches but found that the plaintiffs were not entitled to any additional damages or an accounting of profits. The court also ordered the defendants to pay the plaintiffs' costs of the action, but reduced the amount by 20% due to the plaintiffs' failure to establish a significant loss.

In summary, the court held that the defendants had breached their fiduciary duties and misused corporate assets, but that the plaintiffs had not suffered any loss as a result. The court awarded nominal damages of $1 and ordered the defendants to pay the plaintiffs' costs, reduced by 20%.

Orders