MHN Asset Management P/L v Yang - [2025] NSWSC 462

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: MHN Asset Management P/L v Yang [2025] NSWSC 462
Hearing dates: 13 May 2025
Date of orders: 14 May 2025
Decision date: 14 May 2025
Jurisdiction: Common Law
Before: Schmidt AJ
Decision:
See Annexure “A”

Catchwords:
CIVIL PROCEDURE – freezing orders – where default judgment has been set aside – dispute about an agreement for funding of proceedings in the Equity Division – issue as to validity and construction of parties’ agreements –good arguable case –real risk that the defendant’s assets would be disposed of and plaintiff unable to recover judgment made in its favour – freezing orders made against defendant and against non-party respondents

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Cardile v LED Builders Pty Limited [1999] HCA 18
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18
In the matter of Vaucluse 29 Pty Ltd; Bayview 66 Pty Ltd; One Lake Macquarie Pty Ltd; Point Piper One Pty Ltd [2023] NSWSC 631
Jackson v Sterling Industries Ltd (1987) 162 CLR 612; [1987] HCA 23
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1; [2015] HCA 36
Samimi v Seyedabadi [2013] NSWCA 279

Category: Principal judgment
Parties: MHN Asset Management Pty Limited (Plaintiff)
Meihong Yang (Defendant)
Representation:
S E Gray (Plaintiff)
M J Wells (Defendant)
Solicitors:
W Advisers (Plaintiff)
Snelgrove Herman Lawyers (Defendant)

File Number(s): 2024/184139
Publication restriction: Nil

JUDGMENT

In June 2023 Ms Yang succeeded in proceedings she brought in the Corporations List against her estranged husband Mr Li and various corporate defendants. Declarations and orders were then made about the shareholdings of companies including Point Piper One Pty Ltd and a costs order was made in her favour: In the matter of Vaucluse 29 Pty Ltd; Bayview 66 Pty Ltd; One Lake Macquarie Pty Ltd; Point Piper One Pty Ltd [2023] NSWSC 631.
Ms Yang’s costs in those proceedings were originally funded by Slap Pty Ltd and she later also entered another funding agreement with MHN. But despite her success in the proceedings, she has not transferred shares to MHN for which that agreement provided or paid it what it claims she had to pay under the agreement, despite its demands.
In August 2024 MHN obtained a default judgment against Ms Yang, who had not entered a defence or appearance, in the sum of $939,793.74, that reflecting the costs incurred in the Equity proceedings. It later registered a writ on Ms Yang’s Zetland property to enforce that judgment.
Ms Yang then applied to have the judgment set aside and later MHN applied to have a freezing order made against her. Ms Yang’s motion was resolved with the result that consent orders were made at the hearing of the motions. But the application for the freezing order had to be decided.
MHN’s motion was amended at the hearing to seek ex parte…

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: [2025] NSWSC 462
Decision Date: 14 May 2025

CaseChat Overview and Summary

In the case of MHN Asset Management P/L v Yang, the primary dispute was related to a funding agreement for proceedings in the Equity Division. The plaintiff, MHN Asset Management P/L, sought to enforce a funding agreement and obtain freezing orders against the defendant, Yang, as well as non-party respondents, to prevent the dissipation of assets. The matter was heard in the Federal Court of Australia. The court was required to determine several legal issues, including the validity of the funding agreement and its interpretation. Additionally, the court needed to decide whether the plaintiff had a good arguable case for the relief sought and whether there was a real risk that the defendant's assets would be dissipated, preventing the plaintiff from recovering any judgment made in their favour.

The Federal Court considered the arguments presented by both parties regarding the funding agreement's validity and construction. The court found that there was a good arguable case for the plaintiff's claims, and the risk of asset dissipation was real. Consequently, the court granted the plaintiff's application for freezing orders against the defendant and the non-party respondents. The reasoning behind this decision was based on the potential for significant prejudice to the plaintiff if the assets were dissipated and the likelihood of the plaintiff being able to recover any judgment awarded to them.

The Federal Court's decision in MHN Asset Management P/L v Yang highlights the importance of carefully considering the terms of funding agreements in litigation and the potential consequences of asset dissipation. The court's ruling emphasises the need for parties to ensure that the terms of their agreements are clear and enforceable, as well as the necessity for courts to protect plaintiffs from the risk of being unable to recover a judgment awarded to them. The court's orders ensure that the plaintiff can pursue their claims without the fear of the defendant or non-party respondents dissipating their assets, which could ultimately result in the plaintiff being unable to enforce any judgment made in their favour.

Orders