Liu v Lin - [2023] NSWSC 750

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Liu v Lin [2023] NSWSC 750
Hearing dates: 24 April, 11 May 2023
Date of orders: 30 June 2023
Decision date: 30 June 2023
Jurisdiction: Equity
Before: Slattery J
Decision:
Freezing order continued against the defendant. The parties’ costs of the application for freezing orders are each party’s costs in the proceedings.

Catchwords:
EQUITY – interlocutory injunctions – application for freezing order – the plaintiffs bring proceedings against the defendant for misleading and deceptive conduct – the plaintiffs claim the defendant misled them into investing money in a foreign exchange investment scheme which the plaintiff claims was fraudulent – the plaintiffs allege the defendant benefited from the scheme – the defendant claims she was also a victim of the scheme, and was not an actor on its behalf – whether the circumstances are such that there is a danger of the defendant absconding or removing her assets out of the jurisdiction or disposing of them within the jurisdiction, or otherwise dealing with so that there is a danger that the plaintiffs, if successful, will not be able to have their judgment satisfied – whether a freezing order should be granted over the defendant’s assets and if so in what terms.

Category: Procedural rulings
Parties: First Plaintiff: Dehong Liu
Second Plaintiff: Minghui Wang
Third Plaintiff: Ly Houy Lay
Fourth Plaintiff: Penny Chen
Defendant: Biyu Lin
Representation:
Counsel:
Plaintiffs: E. Cox SC; A.L. Oakes
Defendant: D. Pritchard SC; A. Lim
Solicitors:
First, Second and Fourth Plaintiffs: Xiang Li, Broaden Legal
Defendant: Ian Victor Reagan, BY Associates Lawyers

File Number(s): 2022/282622
Publication restriction: No

Judgment

The three plaintiffs in these proceedings seek freezing orders against the defendant. The defendant resists the plaintiff’s application on the basis that the plaintiffs have not established that there is any likelihood she will remove assets from the jurisdiction or dissipate assets within the jurisdiction.
The matter was heard in the Equity duty list on 24 April and 11 May 2023. Mr E Cox SC and Mr A. Oakes of counsel instructed by Broaden Legal appeared for the plaintiffs. Mr D. Prichard SC and Mr A Lim instructed by BY Associates Lawyers appeared for the defendant. The Court reserved judgment and in the interim continued the existing interlocutory freezing orders pending the delivery of judgment.

The Plaintiffs Invest with the Assistance of the Defendant

In early 2021, the first plaintiff Ms Dehong Liu, the second plaintiff Ms Minghui Wang, and the fourth plaintiff Ms Penny Chen (collectively known as ‘the plaintiffs’) invested in what they understood to be a foreign exchange investment platform called “Haihui International Group (“Haihui”), which is also sometimes referred to in the evidence by the acronym “DRC”.
Ms Liu, Ms Wang, and Ms Chen claim that the defendant, Ms Biyu Lin, fraudulently misled them into investing in Haihui, which they say was conducting a sham investment scheme, and as a result they have lost their investments. The plaintiffs contend that Ms Lin should compensate…

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: [2023] NSWSC 750
Decision Date: 30 June 2023

CaseChat Overview and Summary

The case of Liu v Lin involved proceedings brought by the plaintiffs against the defendant for alleged misleading and deceptive conduct. The plaintiffs sought to recover money they had invested in a foreign exchange investment scheme, which they claim was fraudulent. The plaintiffs further alleged that the defendant had benefited from the scheme. The defendant, in turn, asserted that she was also a victim of the scheme and not involved in its operation. The matter before the court was an application by the plaintiffs for a freezing order over the defendant's assets, pending the outcome of the substantive proceedings. The primary legal issue was whether the circumstances warranted the grant of a freezing order to prevent the defendant from disposing of her assets, which might otherwise render the plaintiffs' potential judgment unsatisfied.

The court considered the principles governing the grant of interlocutory injunctions, specifically focusing on the need to balance the risk of potential prejudice to the defendant against the risk of potential prejudice to the plaintiffs if the order were not granted. The plaintiffs needed to demonstrate that there was a serious issue to be tried and that there was a real risk that the defendant might abscond or dissipate her assets if the order was not made. The court examined the evidence provided by the plaintiffs regarding the defendant's financial situation and the likelihood of her removing assets from the jurisdiction or disposing of them in a manner that would frustrate the enforcement of any future judgment. The court also considered the defendant's position, including her claims of victimisation and lack of involvement in the scheme.

The court found that the plaintiffs had made out a compelling case for the grant of a freezing order. The evidence supported the conclusion that there was a real risk that the defendant might dissipate her assets, which could prejudice the plaintiffs' ability to recover any judgment debt. The court determined that the balance of convenience favoured the grant of the order, and that the plaintiffs had established a serious issue to be tried. Consequently, the court granted the plaintiffs' application for a freezing order, directing that the defendant's assets be restrained from disposal or removal from the jurisdiction until further order.

Orders