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Qui v Chen

Qui v Chen

Case [2024] NSWSC 900 25 July 2024

Interlocutory Orders

Freezing Orders

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Qui v Chen [2024] NSWSC 900
Hearing dates: 11 July 2024
Date of orders: 11 July 2024
Decision date: 25 July 2024
Jurisdiction: Equity - Duty List
Before: Pike J
Decision:
Interim freezing orders refused

Catchwords:
CIVIL PROCEDURE – interim preservation – freezing orders – where prima facie or good arguable case – where not a substantially significant risk of dissipation of assets – application for freezing orders dismissed – no question of principle

Legislation Cited:
Nil

Cases Cited:
DCT v Huang (2021) 273 CLR 429
KTC v Singh [2018] NSWSC 1510
MaxRelief USA Inc v 365 Health Australia Pty Ltd ACN 151 146 997 [2024] NSWSC 491
Parbery v QNI Metals Pty Ltd (2018) 127 ACSR 582
Patterson v BTR Engineering (Aust) Limited (1989) 18 NSWLR 319

Texts Cited:
Nil

Category: Procedural rulings
Parties: Jianping Qui (First Plaintiff)
Jingjing Lin (Second Plaintiff)
Yuchen Chen (First Defendant)
Jarrah Capital 2005 Loan Pty Ltd (Second Defendant)
Michael Hai Tao Pan (Third Defendant)
Representation:
Counsel:
J Foley (Plaintiff)
A Hourigan (First Defendant)
R D Marshall SC (Second and Third Defendants)
Solicitors:
Auyeung Hencent & Day Lawyers (Plaintiffs)
Sarvaas Ciappara Lawyers (First Defendant)
Keypoint Law (Second and Third Defendants)

File Number(s): 2024/241565
Publication restriction: Nil

JUDGMENT

On 11 July 2024, in the Duty List, I heard an application by the plaintiffs for freezing orders to be made against the defendants. I declined to make any freezing orders and dismissed the application for interim relief. These are my reasons for so doing.
The plaintiffs were represented by Mr J Foley of counsel and relied on the following affidavit evidence:

Jianping (Jay) Qui dated 1 July 2024 and exhibit JQ-1;

Vincent Zhiqing Zhou dated 1 July 2024; and

Simon Li dated 10 July 2024 and exhibit SL-1.

The first defendant (Mr Chen) was represented by Mr A Hourigan of counsel and did not rely on any evidence.
The second and third defendants were represented by Mr R D Marshall SC and relied on an affidavit of the third defendant (Mr Pan) made 10 July 2024 and exhibit HTP-1. No witnesses were required for cross-examination.

The facts

I set out below an overview of the facts upon which I relied in determining the application.
The plaintiffs are husband and wife. Mr Chen is a friend of the plaintiffs and also of Mr Pan, although the plaintiffs and Mr Pan haven’t met.
On 5 July 2021, the second defendant (Jarrah) was incorporated, and Mr Pan was appointed as one of its two directors. On that day, Jarrah executed a deed entitled “Unit Trust – Fixed Deed establishing the Jarrah Capital 2005 Loan Trust” (Jarrah Trust Deed) and was thereby appointed of the trustee of that trust (Jarrah Trust). The Jarrah Trust Deed contained a number of the usual provisions regarding investment in the trust, and the redemption, transfer and transmission of units. In particular, clause 27 required that, in…

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 Qui v Chen

Details

AGLC: Qui v Chen [2024] NSWSC 900
Case: [2024] NSWSC 900
Decision Date: 25 July 2024

CaseChat Overview and Summary

Qui commenced proceedings against Chen in the Federal Circuit Court of Australia seeking an interim preservation of Chen’s assets. Qui argued that there was a prima facie or good arguable case that Chen had assets in Australia that were connected to an alleged international fraud. Qui further argued that Chen was at risk of dissipating those assets, and therefore sought freezing orders to preserve the assets until the matter was determined. Chen opposed the application, submitting that there was no substantial risk of dissipation of his assets, and that the application should be dismissed. The court was required to determine whether Qui had established a prima facie or good arguable case, and whether there was a substantial risk that Chen would dissipate his assets.

The court found that Qui had established a prima facie or good arguable case, however it was not satisfied that there was a substantially significant risk of dissipation of Chen’s assets. The court noted that the evidence was not sufficient to establish a real risk that Chen would dissipate his assets, and dismissed the application for freezing orders. The court held that there was no question of principle that required the orders to be made, and that the application was not in the interests of justice.

Chen was awarded his costs of the application on an indemnity basis. The court further noted that the application had caused Chen to incur unnecessary expense, and that there was no reasonable prospect of success. The court dismissed the application for freezing orders, and ordered that Chen recover his costs from Qui on an indemnity basis.

Orders