Re Hua Cheng Property Pty Limited - [2014] NSWSC 533

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Re Hua Cheng Property Pty Limited [2014] NSWSC 533
Hearing dates: 1, 5, 7 and 9 May 2014
Decision date: 20 May 2014
Jurisdiction: Equity Division
Before: Lindsay J
Decision:
Order for interlocutory injunction, with reservation of liberty to apply for directions

Catchwords:
PROCEDURE - Case Management - Application for interlocutory injunction - Corporation - Oppression or unfair conduct - Dispute resolution procedure - Application for discharge of order for appointment of referee - injunction sought pending hearing of that application - Substantial question to be tried - Balance of convenience - Undertaking as to damages - Security required for undertaking

EQUITABLE REMEDIES - Injunctions - Interlocutory injunctions - Jurisdiction - Serious question to be tried - Balance of convenience - Injunctions to preserve status quo and property pending determination of rights - Relevance of case management principles
CORPORATIONS - Membership, rights and remedies - Members' remedies and internal disputes - Oppressive or unfair conduct - Relief - Procedure - Court-appointed referee - Breakdown in dispute resolution procedure - Availability of remedies
Legislation Cited: Civil Procedure Act 2005 NSW Part 6
Corporations Act, 2001 Cth
Uniform Civil Procedure Rules 2005 NSW.
Cases Cited: Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 177-178
Australian Hardboards Limited v Hudson Investment Group Limited (2007) 70 NSWLR 201
Blair v Curran (1939) 62 CLR 464 at 531-534
Bridgewater v Leahy (1998) 194 CLR 457 at 494 [126]-[128]
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 330 [58] and 359 [174]
Carr v Finance Corp of Australia Limited (No 1) (1981) 147 CLR 246)
Derrawee Pastoral Company Pty Limited v McConochie [1995] NSWCA 123.
Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 at 143-146
Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410
Hall v Nominal Defendant (1966) 117 CLR 423 at 440
Henderson v Henderson (1843) 3 Hare 100; 67 ER 313
Hua Cheng Properties Pty Limited v Hua Cheng International Holdings Group Pty Limited [2012] NSWSC 1482
Hua Cheng Property Pty Limited and Ors v Xu and Ors [2013] NSWSC 1784
Ian Allan Byrne v AJ Byrne Pty Limited [2012] NSWSC 667 at [43]-[50]
In the matter of Hua Cheng Property Pty Limited ACN 123 629 283 [2013] NSWSC 373
In the matter of Hua Cheng Property Pty Limited [2013] NSWSC 1869
Jackson v Goldsmith (1950) 81 CLR 446 at 466-467
Kuligowski v Metrobus (2004) 220 CLR 363 at 373 [21]
Licul v Corney (1976) 180 CLR 213
Lord v Dernacourt Investments Pty Limited (unreported, SC (NSW), McLelland CJ in Eq, 3202/91, 14 March 1994) BC 9402299 at 5-6
Lu v Hua Cheng International [2010] NSWSC 228
Meehan v Glazier Holdings Pty Limited (2002) 54 NSWLR 146 at 153 [35]-[36]
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 597-604
Re HR Harmer Ltd [1959] 1 WLR 62
Re Spargos Mining NL (1990) 3 WAR 166; 3 ACSR 1; 8 ACLC 1218.
Reichel v Magrath (1889) 14 App Cas 665 at 668; (1889) 14 App Cas 665 at 668
Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198
Shirim v Fesena [2002] NSWSC 10 at [12]-[15]
Smith Martis Cork & Rajon Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; 207 ALR 136 at [70]-[78]
Texts Cited: -
Category: Interlocutory applications
Parties: Hong Xia Xia (Plaintiff)
Hua Cheng Property Pty Limited ACN 123 629 283 (First Defendant)
Lawrence Xu (Second Defendant)
Yaying Lu (Third Defendant)
Leiping Huang (Fourth Defendant)
Yaying Lu (First Cross Claimant)
Leiping Juang (Second Cross Claimant)
Hua Cheng International Holdings Group Pty Limited ACN 119 031 971 (First Cross Defendant)
Lawrence Xu (Second Cross Defendant)
Hong Xia Xia (Third Cross Defendant)
Hua Cheng Property Pty Limited ACN 123 629 283 (Fourth Cross Defendant)
Thomas Xi Yao Xy (Fifth Cross Defendant)
Qiao Wang (Sixth Cross Defendant)
Yaying Lu (First Applicant)
Leiping Huang (Second Applicant)
Lawrence Xu (First Respondent)
Hua Cheng Property Pty Limited ACN 123 629 283 (Second Respondent)
Representation: Counsel:
D Studdy SC and J Tobin (Applicants)
BW Rayment QC and MK Rollinson (First Respondent)
Solicitors:
Watson Mangioni Lawyers Pty Limited (Applicants)
Oliveri Attorneys (First Respondent)

File Number(s): 2013/00222537 2013/0026387

Judgment

INTRODUCTION

Before the Court is an interlocutory application, by notice of motion, for an injunction which, if granted, would restrain a party (Mr Lawrence Xu, hereafter "the First Respondent") from seeking a determination of commercial questions by a court-appointed referee, about the development of land the subject of a joint venture, pending the hearing of principal proceedings designed, if the applicants (Ms Yaying Lu and Ms Leiping Huang, hereafter "the Applicants") succeed, to realign control of the joint venture in favour of the Applicants or, at least, to reconfigure decision-making processes for the joint venture.

Due consideration of the Applicants' motion requires that attention be given to identification of "the real issues in the proceedings" (to quote s 56(1) of the Civil Procedure Act 2005 NSW) in the context not only of the current proceedings, but also in the context of earlier proceedings between the same parties, in which the Court made an order providing for the appointment of a referee.

THE CHARACTER OF A COURT-APPOINTED REFEREE

That appointment was made by, or pursuant to, an order made under s 233(1)(j) of the Corporations Act 2001 CTH, not (as one might, uninformed, suppose) under r 20.14 of the Uniform Civil Procedure Rules 2005 NSW.

The operation of s 233 is conditioned upon the existence of a state of affairs described by s 232 of the Corporations Act: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 330 [58] and 359 [174].

Both sections (conveniently reviewed by Black J in Ian Allan Byrne v AJ Byrne Pty Limited [2012] NSWSC 667 at [43]-[50]) appear in chapter 2F of the Corporations Act (entitled "Members' Rights and Remedies") and, more particularly, Part 2F.1, entitled "Oppressive Conduct of Affairs".

That Part is in the following terms:

"Grounds for Court order

232. The Court may make an order under section 233 if:

(a) the conduct of a company's affairs; or

(b) an actual or proposed act or omission by or on behalf of a

company; or

(c) a resolution, or a proposed resolution, of members or a class

of members of a company;

is either:

(d) contrary to the interests of the members as a whole; or

(e) oppressive to, unfairly prejudicial to, or unfairly

discriminatory against, a member or members whether in that

capacity or in any other capacity.

For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company.

Orders the Court can make

233. (1) [Court orders] The Court can make any order under this section that it considers appropriate in relation to the company, including an order:

(a) that the company be wound up;

(b) that the company's existing constitution be modified or

repealed;

(c) regulating the conduct of the company's affairs in the future;

(d) for the purchase of any shares by any member or person to

whom a share in the company has been transmitted by will or by

operation of law;

(e) for the purchase of shares with an appropriate reduction of

the company's share capital;

(f) for the company to institute, prosecute, defend or discontinue

specified proceedings;

(g) authorising a member, or a person to whom a share in the

company has been transmitted by will or by operation of law, to

institute, prosecute, defend or discontinue specified proceedings

in the name and on behalf of the company; (h) appointing a receiver or a receiver and manager of any or all

of the company's property;

(i) restraining a person from engaging in specified conduct or

from doing a specified act;

(j) requiring a person to do a specified act.

(2) Order that the company be wound up. If an order that a company be wound up is made under this

section, the provisions of this Act relating to the winding up of

companies apply:

(a) as if the order were made under section 461; and

(b) with such changes as are necessary.

(3) Order altering constitution. If an order made under this section repeals or modifies a

company's constitution, or requires the company to adopt a

constitution, the company does not have the power under section

136 to change or repeal the constitution if that change or repeal

would be inconsistent with the provisions of the order, unless:

(a) the order states that the company does have the power to

make such a change or repeal; or

(b) the company first obtains the leave of the Court.

Who can apply for order

234. An application for an order under section 233 in relation to a

company may be made by:

(a) a member of the company, even if the application relates to an act or omission that is against:

(i) the member in a capacity other than as a member; or

(ii) another member in their capacity as a member; or

(b) a person who has been removed from the register of members because of a selective reduction; or

(c) a person who has ceased to be a member of the company if the application relates to the circumstances in which they ceased to be a member; or

(d) a person to whom a share in the company has been transmitted by will or by operation of law; or

(e) a person whom ASIC thinks appropriate having regard to investigations it is conducting or has conducted into:

(i) the company's affairs; or

(ii) matters connected with the company's affairs.

Requirement for person to lodge order

235 (1) If an order is made under section 233, the applicant must lodge a copy of the order with ASIC within 14 days after it is made.

(2) An offence based on subsection (1) is an offence of strict liability. "

Section 53 of the Corporations Act contains an expansive, inclusive definition of the word "affairs" which applies, inter alia, to each of ss 232, 233 and 234 of the Act. It is sufficient, for present purposes, to note paragraphs (a) and (c) of that definition:

"(a) the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and the expenditure of [the company]; and ...

(c) the internal management and proceedings of [the company] ...."

Neither side of the record in these proceedings challenges the jurisdiction of the Court to make an order, providing for the appointment of a referee to resolve disputes about management of a company, pursuant to s 233(1)(j).

The nature and scope of any function performed by such a referee depends, ultimately, on the terms of the order, or orders, providing for appointment of the referee and, in an appropriate case, on a fresh invocation of the jurisdiction for which ss 232-234 provide.

This is to be contrasted with an order for a reference to a referee under the Uniform Civil Procedure Rules, r 20.14. That rule (in UCPR Part 20 Division 3) is in the following terms:

" 20.14 Orders of referral

(1) At any stage of the proceedings, the court may make orders for reference to a referee appointed by the court for inquiry and report by the referee on the whole of the proceedings or on any question arising in the proceedings.

(2) The court must not make an order under subrule (1) in respect of a question to be tried with a jury."

Part 20 Division 3 of the Uniform Civil Procedure Rules expressly provides, by other rules, for the Court to control the conduct of proceedings under reference, including interlocutory directions, leading to a consideration by the Court whether or not to adopt, vary or reject a referee's report in whole or part.

PROBLEMS WITH THE REFEREE PROCESS IN THIS CASE

That process is fundamentally different from any process attending the decision-making process presently required of the court-appointed Referee in the present proceedings.

The order for the appointment of a referee presently under consideration made no explicit provision for ancillary procedural questions arising out of entrustment of a question to the Referee. Nor did it address the relationship between the Referee and the Board of Directors of Hua Cheng Property Pty Limited ("HCP"), the company in respect of the affairs of which the Referee's appointment was made, the Second Respondent. It did not provide, either, for the appointee to serve as a director of HCP, or for protection of the directors against any adverse consequences that might flow from a decision of the Referee.

On one view (for which the Applicants contend and which the First Respondent contests), the decision-making process for which the appointment of a referee in this case provides has broken down because the First Respondent insists, over the objection of the Applicants, that the Referee can, and should, make substantial commercial decisions about the joint venture development based on information provided to him by the First Respondent, on an allegedly confidential basis, to the exclusion of the Applicants.

The alternative perspective (for which the First Respondent contends and which the Applicants contest) is that the Referee can, and should, make those substantial commercial decisions, and he should do so without the fully informed involvement of the Applicants, because (the First Respondent alleges, and the Applicants deny) the Applicants cannot be trusted not to attempt to sabotage the development if given full disclosure of the First Respondent's commercial proposals.

Larger questions about the ownership and funding of the joint venture are at play in the principal proceedings. However the immediate focus, on the Applicants' motion, is on the role of the Referee, and the course to be taken in any decision-making process entrusted to the Referee, pending the conduct of a final hearing of the principal proceedings - in which the Applicants invite the Court to re-examine the necessity for, and the functions and procedures of, a court-appointed referee.

CONTEXT : A JOINT VENTURE STALLED BY DISTRUST

The principal players in the proceedings are three joint venturers, two of whom (the Applicants) are resident in China and the third of whom (the First Respondent) is an Australian resident of Chinese origin.

HCP is a formal party to the Applicants' motion; but not, in its own right, an active participant in debate on the motion. The substantive contest, on one side and the other, is between the joint venturers who comprise the company's shareholders and directors.

The land the subject of the joint venture, located at Hurstville in the State of New South Wales, was purchased for redevelopment.

After substantial delays, buildings formerly standing on the land have been demolished; and the land is ready for the commencement of building work, subject to entry into a building contract (with D&J (Australia) Pty Ltd, as the First Respondent currently proposes), the execution of which contract depends upon confirmation of finance available to fund it.

The First Respondent is anxious to proceed with the development. The Applicants are, at the very least, hesitant to do so pending the final determination of the principal proceedings. The First Respondent contends that their expression of hesitancy is a thinly disguised stratagem to force the joint venture project to be abandoned. He contends that they have long engaged in spoiling tactics to frustrate his endeavours to proceed with the development.

If the development is to proceed pending the determination of the principal proceedings, it can only do so (upon an assumption that the dysfunctional relationship between the joint venturers is not moderated) if the First Respondent is permitted to press for a determination by the Referee about entry into contracts for the provision of finance and building work.

The level of distrust between the joint venturers appears, on both sides of the record, to be so comprehensive that they have no effective working relationship, despite the legal and equitable obligations they each may have to, or affecting, one another as joint venturers and as directors of their joint venture company.

Having proposed that contracts for finance and building work be entered into, the First Respondent has declined to disclose to the Applicants information critical to any independent assessment by them of the proposed contracts. In particular, he has declined to advise the Applicants, personally, of the identity of the proposed financier, and, on the hearing of their motion, he has insisted that, in the interests of justice, access to commercial information on which he relies be limited to their lawyers, to their exclusion.

He contends that any full disclosure of information to the Applicants would, almost inevitably, allow the Applicants to engage in conduct, including (importantly) conduct outside Australia, to prejudice the development. He apprehends that they cannot be trusted not to stymie his tentative arrangements to obtain favourable terms from a financier located in Hong Kong.

The Applicants complain that they cannot reasonably be expected to endure a decision-making process from which the First Respondent seeks, effectively, to exclude them by insisting that they not be privy to information, affecting their interests, submitted by him to the Referee for decision. They also complain that the First Respondent has not paid them the courtesy of asking whether they could provide, or obtain, finance for the ongoing development.

In substance, they contend that, as the majority shareholder in the joint venture company HCP, the First Respondent has acted, and proposes to act, in disregard of their interests, improperly excluding them from participation in a decision-making process intended to allow all joint venturers to be consulted, and putting their interests in the joint venture in jeopardy.

In the principal proceedings, they say, their aim is to protect their respective interests in the joint venture. That purpose aligns directly with their general complaint: (a) that they lack control of the joint venture; (b) that the First Respondent manages the affairs of the joint venture without consultation with them; and (c) that the First Respondent is attempting to use the referee dispute resolution procedure, not to resolve differences between the joint venturers, but to bypass them, and effectively to exclude them from the processes of consultation to which they are entitled as directors of HCP.

On the hearing of their motion, they press two particular complaints: first, that the First Respondent has not honoured a commitment to provide 60% of the funding of the development project but has, without their consent, mortgaged the Hurstville land to obtain funding secured against their investment; and, secondly, that under the control of the First Defendant, HCP has failed to comply with its statutory obligation (under s 286(1) of the Corporations Act ) to keep proper financial records, with the consequence that (having regard to the presumption of insolvency for which s 588E(4) of the Corporations Act provides) they fear that HCP may be insolvent, exposing them to personal liability under s 588M of the Act for "insolvent trading".

Those complaints (whether or not, ultimately, to be held well-founded) may lie at, or near, the centre of the Applicants' decision to apply (by their Cross Claim in the principal proceedings) for an order that Gzell J's order 5 be discharged, and that the appointment of the Referee pursuant to that order be terminated; but they are also symptomatic of the Applicants' larger complaints about lack of control of the joint venture project, and lack of trust in the First Respondent to manage it: see, for example, In the matter of Hua Cheng Property Pty Limited [2013] NSWSC 1869 at [15]-[16].

The land at Hurstville is held by the First Respondent's company, Hua Cheng International Holdings Group Pty Limited ("HCI"), for the principal parties' joint venture vehicle, HCP.

GOVERNANCE OF THE JOINT VENTURE : PREVIOUS LITIGATION AND ORDERS UNDER REVIEW

That fact, and arrangements for governance of the joint venture, emerge from orders made by Gzell J on 9 April 2010 to give effect to Reasons for Judgment published by his Honour as Lu v Hua Cheng International [2010] NSWSC 228 on 31 March 2010.

In making his orders, Gzell J anticipated ongoing disharmony between the joint venturers. He declined to make an order for the winding up of HCP (as sought by the Applicants) and, instead, made provision for all three joint venturers to serve as directors of HCP, with a dispute resolution mechanism for controversial commercial decisions about development of the land to be submitted to the determination of an individual described as a "referee": [2010] NSWSC 228 at [93]-[100].

With editorial adaptations (to facilitate identification of parties by reference to the descriptions given to them in the present judgment) and emphasis (designed to focus attention on current issues), the orders made by Gzell J on 9 April 2010 were to the following effect:

"(1) Declare that HCI holds the Hurstville land on trust for HCP.

(2) Order that HCP reimburse HCI in respect of any payments that HCI makes or had made to Westpac Banking Corporation (under the loan facility which at 12 March 2010 stood at $3 million plus accrued interest of $37,934.21) or any incoming financier in respect of the Hurstville land.

Provided that the trust declared in order 1 is not conditional upon the payment of the whole or part of any sum in this order; and

Provided further that HCI must account to HCP for the rents and profits it has received from the Hurstville land, such amounts to be set off against the amount due from HCP to HCI.

(3) Order that HCI be restrained from claiming from HCP pursuant to the joint venture agreement dated 5 February 2008 between HCI and HCP any amount for payment for 'the Cost of the Property', other than pursuant to order 2 above.

(4) Order that upon receipt of a signed consent to act, the First Respondent and his then wife Ms Hong Xia Xia (the Plaintiff in the present proceedings) cause the Applicants to be appointed as directors of HCP.

(5) Order that HCP appoint a person agreed by the Applicants, the First Respondent and Ms Hong Xia Xia to act as referee in respect of any disputes in relation to the course to be taken by HCP in the development of the Hurstville land and that the decision of that person be binding on the parties. In the event agreement is not reached within 14 days of the date of these orders, HCP will appoint a person selected by the Chairman of the Institute of Arbitrators and Mediators.

(6) Order that the second amended statement of claim (of the Applicants) be dismissed.

(7) Order that all existing orders and undertakings are discharged.

(8) Order that the Applicants pay the costs of HCI, HCP, the First Respondent and Ms Hong Xia Xia.

(9) Liberty to apply on seven days' notice."

The current pleadings filed in the present proceedings raise questions about the scope and operative effect of the findings and orders made by Gzell J.

The parties anticipate that those questions will involve debate, inter alia, about the application of principles relating to:

(a) res judicata/issue estoppel: Blair v Curran (1939) 62 CLR 464 at 531-534; Jackson v Goldsmith (1950) 81 CLR 446 at 466-467; Kuligowski v Metrobus (2004) 220 CLR 363 at 373 [21]; and

(b) the principle in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 ("Anshun estoppel"): Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 597-604.

Argument on the Applicants' motion for an injunction touched upon this debate, but did not dwell upon it.

Neither side of the record entered upon consideration whether any part of the relief sought by the Applicants in the current, principal proceedings might be available to them, in, or by reference to, the original proceedings, for the purpose of "working out" the orders made by Gzell J: Australian Hardboards Limited v Hudson Investment Group Limited (2007) 70 NSWLR 201. That possibility cannot be excluded in the context, at least, of the Applicants' claim for orders confirming the intendment and effect of those orders, including (in particular) order 5.

Order 5, the parties agree, is an order made pursuant to s 233(1)(j) of the Corporations Act: [2010] NSWSC 228 at [93]-[08] and [100]. Order 4, for the Applicants to be appointed directors of HCP, is also such an order: [2010] NSWSC 228 at [93]-[99].

The making of an order under s 233 implicitly carries with it a finding that one or more of the jurisdictional grounds for the order (for which s 232 provides) has been made out: Lord v Dernacourt Investments Pty Limited (unreported, SC (NSW), McLelland CJ in Eq, 3202/91, 14 March 1994) BC 9402299 at 5-6.

In the vernacular, order 5 is based on a finding of "oppression", actual or anticipated, in the conduct of the affairs of HCP. In this case, ultimately, it is grounded on findings to the effect that: (a) the joint venture development could continue through HCP; (b) an order for the winding up of HCP, described as an otherwise solvent company, was a remedy of last resort; (c) the Applicants had clearly lost confidence and trust in the First Respondent; (d) the appointment of a receiver and manager pursuant to s 233 (1) would obviate a need for the three joint venturers to meet to further the joint venture project, but such an appointment would have serious commercial consequences as it would suggest that interests in the development were being sold at fire sale prices; and (e) provision for the appointment of a referee should be made to ameliorate the lack of confidence and trust the Applicants had in the First Respondent.

An ASIC search records that the Applicants were appointed directors of HCP on 27 July 2011. By their pleadings, the parties agree that the Applicants have been directors "from at least" that date.

The referee contemplated by Gzell J's order was not appointed until October 2013 or thereabouts (perhaps as early as 30 September, perhaps on 4 October, or perhaps on 8 November 2013, depending on perspective of the process), by which time the parties had, by further litigation, demonstrated a continuing incapacity for cooperation in management of HCP and, more broadly, their joint venture.

Notwithstanding the orders made by Gzell J (from which there was no appeal), the parties have continued their disharmonious relationship, replete with reciprocal allegations and counter-allegations of wrongful conduct.

Their disputation has occupied more than a few of the judges of the Court, some of whom have delivered Reasons for Judgment in support of orders now mainly relevant only as part of the procedural res gestae of the current proceedings: Gzell J in Hua Cheng Properties Pty Limited v Hua Cheng International Holdings Group Pty Limited [2012] NSWSC 1482 (28 November 2012); Brereton J in In the matter of Hua Cheng Property Pty Limited ACN 123 629 283 [2013] NSWSC 373 on 18 March 2013; White J in Hua Cheng Property Pty Limited and Ors v Xu and Ors [2013] NSWSC 1784 on 14 August 2013; and Black J in In the matter of Hua Cheng Property Pty Limited [2013] NSWSC 1869 on 16 December 2013.

Conduct of the affairs of HCP, and the joint venture, is presently constrained by injunctions granted on 22 July 2013 and extended or varied on 30 September, 14 and 28 October 2013 (in the proceedings numbered 2013/00222537).

Although those orders do not, as entered, expressly record the Applicants as having given to the Court the "usual undertaking as to damages" (defined by the Uniform Civil Procedure Rules, r 25.8) the Applicants say, and I accept, that they did in fact give such an undertaking as a condition of the grant of injunctions. The brief, unpublished Reasons for Judgment delivered by the duty judge on 22 July 2013 (Pembroke J) are consistent with the undertaking having been given and the practice of the Court in requiring such an undertaking.

THE CURRENT, PRINCIPAL PROCEEDINGS IDENTIFIED

The current, principal proceedings are listed for final hearing, with an estimated duration of seven days, commencing on 19 August 2014.

There are, nominally, two sets of proceedings listed for hearing at that time: one is numbered 2013/00222537 in the records of the Court, the other is numbered 2013/00263877.

However, by virtue of orders made by Black J consequentially upon publication of his Reasons for Judgment of 16 December 2013, all questions to be submitted to the Court for determination at the final hearing are governed by pleadings filed in the proceedings numbered 2013/00263877. The substance of the statement of claim filed (by the Applicants) on 27 September 2013 in the proceedings numbered 2013/00222537 has been incorporated in the cross claim filed by the Applicants in the proceedings numbered 2013/00263877 on 5 February 2014.

The originating process and pleadings that will govern the conduct of the final hearing in the principal proceedings presently comprise the following:

(a) an "Originating Process" filed by Ms Hong Xia Xia (the Plaintiff, former wife of the First Respondent, Mr Xu) on 30 August 2013.

(b) the "First Cross Claim" filed by Ms Yaying Lu and Ms Leiping Huang (the Applicants) on 5 February 2014.

(c) an "Amended Defence" to the First Cross Claim filed by the First and Second Cross Defendants (the First Respondent, Mr Xu and HCI) on 19 March 2014.

(d) an "Amended Defence" filed by the Third Cross Defendant (the Plaintiff) on 25 March 2014.

(e) a "Defence" filed on 28 February 2014 by the Fifth Cross Defendant (Thomas Xi Yao Xu) and the Sixth Cross Defendant (Qiao Wang), formerly directors of HCP.

A resolution of the application presently before the Court does not require anything but formal notice of the participation in the principal proceedings of the Plaintiff, and the Fifth and Sixth Cross Defendants.

At the time Black J set down the Applicants' notice of motion for hearing, counsel for the Plaintiff expressly disclaimed any intention to participate in the hearing of the application.

No participation by the Fifth and Sixth Cross Defendants appears ever to have been anticipated. In the principal proceedings they, by their Defence, maintain that they served as directors of HCP only between 9 February 2013 and 14 August 2013; during the period they were directors, they carried out their duties in a proper manner and without any wrongdoing; they ceased to be directors when, on 14 August 2013, White J declared that their appointments as directors were invalid; and, since that determination, neither of them has been involved in the affairs of HCP.

The questions in dispute in the principal proceedings, evidenced by the pleadings here identified, do not include any explicit claim for relief referable to ss 232-233 of the Corporations Act.

Although each side of the record appears, in substance, to contend that the other has conducted the affairs of HCP, or allowed them to be conducted, in a manner that is oppressive, no party explicitly grounds a claim for relief under s 232 of the Corporations Act, or explicitly seeks orders under s 233, to address the substantive case of oppression sought to be made.

As earlier noticed, questions have arisen as to whether the current proceedings constitute a collateral attack on, or an otherwise impermissible challenge to, the orders made by Gzell J on 9 April 2010 and about whether the proceedings provide an opportunity for consequential orders to be made to give greater effect to Gzell J's orders.

However, despite the provenance of order 5 in s 233, no side has (at least explicitly, or in terms) embraced the possibility that, absent a fresh invocation of ss 232-233, the case the Applicants now seek to make in the principal proceedings may be flawed.

Perhaps inevitably, recourse may need to be had to the criteria for which s 232 provides.

Accordingly, in the course of hearing the Applicants' motion, I drew to the parties' attention: first, the obligation of the Court (under s 90 of the Civil Procedure Act 2005 NSW and r 36.1 of the Uniform Civil Procedure Rules 2005 NSW) to give such judgment or to make such orders as the nature of the case may require; secondly, the imperatives of the case management principles embodied, in particular, in ss 56-58 of the Civil Procedure Act, with their focus on an efficient determination of the real issues in proceedings; and, thirdly, the possibility (illustrated by observations in Bridgewater v Leahy (1998) 194 CLR 457 at 494 [126]-[128] about the nature of equitable relief) that orders made by the Court in disposition of the principal proceedings may not exactly represent what either side would wish.

Subject to procedural fairness constraints (if any), the fact that there is no explicit claim for relief under s 233 of the Corporations Act in the originating process and pleadings filed by the parties is not, of itself, in these proceedings, an impediment to the grant of such relief if, and to the extent, the nature of the case before the Court is such as to require it.

Having allowed the parties an opportunity to address the point on the hearing of the Applicants' motion, I proceed on the basis that (having regard to the nature of the relief sought by the Applicants in relation to Order 5, the facts pleaded and the way the parties have argued their respective cases) it would be open to the Court, at the final hearing of the proceedings as presently configured, to make an order, or orders, under or referable to s 233 if persuaded that the case requires that to be done.

That might be done as part of a process of making orders consequential upon the order for the appointment of the Referee (in the course of working out the scheme of orders made by Gzell J on 9 April 2010); by a fresh consideration of ss 232-234 in the light of events subsequent to that date; or by a combination of those two possibilities.

The fact that Gzell J's orders were made in proceedings with a different "case number" than the current proceedings have is no more than a matter of administrative detail - and not one that appears to have troubled the parties in their history of litigation. I do not regard it as any form of impediment to invocation of s 233.

It may be that, at the final hearing, less importance will be attached to order 5 of the orders made by Gzell J than, for the purposes of the current motion, it must have.

THE APPLICANTS' MOTION (FOR AN INTERLOCUTORY INJUNCTION) IN PROPER FOCUS

A focal point on the motion, on one view, is whether the disputation between the parties about whether a proposed building contract and a proposed contract for finance should be executed (and the antecedent question whether the Applicants have a right to be fully informed about the proposed contracts and, on that basis, to make submissions to the Referee about the First Respondent's proposals) can, and should, be left to the Referee in circumstances in which the Court has allocated a date for a final hearing of claims for relief going to the foundation of the Referee's jurisdiction.

In the course of his submissions in opposition to the Applicants' motion the First Respondent: (a) drew attention to observations in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 68 [19] and 81-82 [65] about topics for consideration on an application for an interlocutory injunction; and (b) by reference to those observations, submitted that case management principles are irrelevant to a due consideration of the Applicants' motion.

Particular reference was made to the following passage extracted from the judgment of Gleeson CJ and Crennan J at 227 CLR 68 [19]:

"... in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff's entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction. These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the Reasons of Gummow and Hayne JJ (at 227 CLR 81 [65]-84 [72]), and their reiteration that the doctrine of the Court established in Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 should be followed ..."

The judgment of Gummow and Hayne JJ includes the following observations at 227 CLR 81-82 [65]:

"The relevant principles [relating to interlocutory injunctions] in Australia are those explained in Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued (at 118 CLR 622-623):

'The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.'

By using the phrase commencing 'prima facie case', their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff must succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument (at 118 CLR 620). With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal (at 118 CLR 622):

'How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.'"

The First Respondent supplemented his reference to these observations with a reference to the following observations by McLelland J in Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533 at 535D:

"... where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled...."

Something more of what McLelland J wrote should be set out. Omitting references to authority, the passage relied upon by the First Respondent continues with the following observations:

"Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question. ... If the Court does decide the question of law the uncertainty to that extent is removed.

Unless the plaintiff shows that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused. ...

Apart from this, although normally the Court 'does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case' ..., there are some kinds of case in which for the purpose of seeing where lies the balance of convenience (or more specifically 'the balance of the risk of doing an injustice'...), it is desirable for the Court to evaluate the strength of the plaintiff's case for final relief. ... One class of case to which this applies is where the decision to grant or refuse an interlocutory injunction will in a practical sense determine the substance of the matter in issue. ..."

These authorities provide no foundation for discounting to zero the relevance of the case management principles for which ss 56-58 of the Civil Procedure Act provide. In each case, attention must be focussed upon an orderly process of decision-making in the administration of justice.

The First Respondent's contention that case management principles are irrelevant to a due consideration of the Applicants' motion may, at heart, say more about his case presentation than it does about the principles governing the determination of an application for an interlocutory injunction. On the hearing of the Applicants' motion he was resolute in a determination to avoid criticism of the operation of the dispute resolution procedure for which Gzell J's order 5 provided. He was equally adamant that the terms of debate be confined to disputed questions of fact about whether: (a) the First Respondent has, or has not, paid his full capital contribution to the joint venture project; and (b) whether, under his management, HCP is or is not solvent. These are issues which he presents to the Court as required to be answered, unequivocally, in his favour.

They are not, however, decisive of the Applicants' motion or, indeed, of central significance to it as I perceive the real issues in the proceedings. At this interlocutory stage of the proceedings, greater focus must be given to the parties' disputes about the operation of the Referee's dispute resolution process, grounded in Gzell J's order 5.

Case management principles may inform a consideration of questions of prima facie case (serious question to be tried); the availability of an adequate, alternative remedy (including compensation); and the balance of convenience.

It is, for example, foundational to the due consideration of an application for an interlocutory injunction to identify the nature of the relief claimed on the application and at a final hearing, and the real issues for determination in the proceedings at each stage.

The extent to which, if at all, case management principles inform due consideration of an application for an interlocutory injunction depends on the facts of the particular case and the subject matter of the proposed injunction. In the present proceedings, as these Reasons for Judgment endeavour to explain, particular attention needs to be given to the nature of particular relief claimed by the Applicants in their Cross Claim and, especially, its engagement (inter alia, through an application for discharge of order 5 of Gzell J's orders) of s 233 of the Corporations Act.

There may be room for debate about whether order 5 bears the character of a final or interlocutory order insofar as it does not conclude any rights of the parties inter se (Hall v Nominal Defendant (1966) 117 CLR 423 at 440; Licul v Corney (1976) 180 CLR 213; Carr v Finance Corp of Australia Limited (No 1) (1981) 147 CLR 246), although there is no necessary inconsistency with order 5 being a final order that further orders were in contemplation to give effect to it: Meehan v Glazier Holdings Pty Limited (2002) 54 NSWLR 146 at 153 [35]-[36]. An order which does not deal with the final rights of parties, but is consequential in the sense that it provides for the working out of rights otherwise given by a judgment, may be characterised as interlocutory: Derrawee Pastoral Company Pty Limited v McConochie [1995] NSWCA 123.

Order 5 is capable of characterisation as a procedural device intended to enable ongoing disputes to be managed by an Alternative Dispute Resolution (ADR) process which (having regard to the nature of those disputes, the jurisdiction exercised in the appointment of a referee, the continuing availability of that jurisdiction by statute and Gzell J's express reservation of liberty to apply), in itself, bears the character of a case management order.

If order 5 were to be characterised as interlocutory, a further order, discharging or varying it, might be regarded as appropriate in the light of subsequent developments bearing upon the justice of its enforcement: Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 177-178.

It is not necessary for me to do more than notice these features of the contest between the parties, listed for final hearing at a later date, and, in the context of the particular case, ostensibly amenable to a further grant of relief under s 233.

I am not the first judge to notice that questions might arise as to the nature and scope of order 5 in the context of the parties' ongoing disputes. See, for example, Hua Cheng Properties Pty Limited v Hua Cheng International Holdings Group Pty Limited [2012] NSWSC 1482 at [21]-[23] and Hua Cheng Property Pty Limited and Ors v Xu and Others [2013] NSWSC 1784 at [6]-[7] and [36]-[39]. Order 5 appears to have fallen short of the expectations placed upon it.

EXISTENCE AND NATURE OF A SERIOUS QUESTION TO BE TRIED : AND A POINTER TO BALANCE OF CONVENIENCE

Having regard to the First Respondent's contention that the Referee can and should proceed to make substantial commercial decisions without the fully informed involvement of the Applicants in the decision- making process, the Applicants have established that there is a serious question to be tried about the intended operation, and the continuing utility, of Gzell J's order 5.

The correspondence between the parties' respective solicitors and the Referee since the time of his perception of appointment on or about 4 October 2013 (pursuant to, or accompanied by, orders made on 30 September 2013 and 28 October 2013, in the proceedings numbered 2013/00222537, intended to give effect to order 5, made on 9 April 2010, in the proceedings numbered 5209 of 2008) demonstrates a lack of consensus, on the part of the Referee as well as inter partes, about: (a)the circumstances in which the Referee can, and should, properly be called upon to perform his court-appointed function; (b) the nature and limits of his role in performing that function; (c)the nature and amount of the materials upon which any decision by him should be based; and (d) the appropriate course for him to follow in making orderly decisions.

As an example of the difficulties that have arisen, notice might be taken of a view expressed by the Referee (in an email to the parties' solicitors on 31 October 2013) that goes to the heart of disputation which, in my assessment, cannot be resolved in the context of the Applicants' present motion. That view was to the effect that it is open to the Referee, and moreover he may be under an obligation, to make a decision affecting the interests of all, or any, of the joint venturers without ensuring that there has been a process of consultation between them as directors of HCP.

The Referee wrote, inter alia:

"... [3] My understanding of the Court's orders regarding my function as Referee is that, if there is no written agreement between the directors of [HCP] on any particular matter, I am required to make a written decision on that matter and my decision will be binding. It is not my concern to inquire why there has been no written agreement between the directors (including whether or not one or more of the directors or his or her solicitor feels he or she has enough information to make a properly informed decision as a director). All I am concerned with is the bare fact of whether or not there is some written agreement between the directors of [HCP] on a particular matter...

[5] It is my understanding that there were basically two reasons why Justice Gzell made the orders he made on 30 March 2010 [sic]. Firstly, because he felt it was unlikely that the three directors [the joint venturers] would agree on anything in relation to the development and, secondly, from the information then before the Court, that proceeding with the development was in the financial interests of the company and its shareholders. From what I have seen so far, my assessment is that it is highly unlikely that the three directors would agree on anything in relation to the development, such that it would seem a complete waste of time and money to order the provision of information by [the First Respondent to the Applicants], particularly when it is clear to me that the exercise contemplated by [the Applicants] and their legal advisers [for the provision of information by the First Respondent through the parties' solicitors] would probably take many months (if not years) with no realistic prospect that it could result in any agreement on anything.

[6] It seems to me that, if [the Applicants] are interested in exercising their role as directors of [HCP], the most expeditious and cost effective solution would be for them to come to Sydney for a board meeting in the near future with [the First Respondent] (with or without their respective advisers), at which the detailed minutiae of the development can be considered face to face. That is a process in which I would have no involvement. As indicated in paragraph 3 above, all I am concerned about is the bare fact of whether or not there is agreement between the directors and, if there is no agreement, I am then required to make a written decision on that matter and my decision will be binding."

The Referee's references to the absence of a "written agreement" between the directors of HCP and his provision of a "written decision" are an allusion to the terms of an order made on 28 October 2013 (in the proceedings numbered 2013/00222537) varying the injunctions granted on 22 July 2013, and extended on 30 September and 14 October 2013.

In later correspondence, not necessary to elaborate, the Referee himself expressed a degree of dissatisfaction about the amount of information available to him for the purpose of making particular decisions.

Everybody appears to have been struggling with how to deal with commercial decision-making processes encrusted with litigation lawyers.

It is no reflection on the Referee that his attempts to galvanise the parties have been frustrated by their ongoing, dysfunctional relationship.

Even if he were able, and prepared, to make decisions about the proposed contract for finance and the proposed building contract which the First Respondent is insistent be made, the process of getting to that point would be likely, any objective bystander could not help but think, to be protracted - and it would be unlikely to put an end to any controversy - without the Court first having revisited the intendment and operation of order 5 and, perhaps, broader questions referable to ss 232-233 of the Corporations Act.

I do not discount the possibility that the First Respondent's fears (about the Applicants' motivations) and aspirations (about a need for prompt commercial decision making) are well founded. They might well be. However, on any view of the case, uncertainty attaching to the intendment and operation of order 5, in light of subsequent events, appears to be a central part of the problem, rather than part of a solution to problems, of management of HCP that impact, directly and indirectly, on the parties' joint venture.

If the Referee were pressed by the First Respondent into making a determination that the proposed contracts be executed, with the Applicants (and, derivatively, the Referee) blindfolded as the First Respondent would have them be, any decision that a judge might make in disposition of the principal proceedings would be, if not pre-empted by the Referee's decision, severely constrained by an inability to disengage HCP/HCI from contractual obligations to third parties. The Applicants might by then have been exposed to substantial, ongoing liabilities in development of the joint venture without any practical recourse in terms of the availability of compensation from the First Respondent, the Referee or anybody else.

On the other hand, given the stage at which the Hurstville development has reached and the availability of an undertaking as to damages supported by security, the balance of convenience may favour the grant of an injunction.

It is not necessary, in light of the importance presently attached to Gzell J's order 5, to enter upon an assessment of the probative value of the evidence, on one side of the record or the other, about whether the First Respondent has, or has not, made a capital contribution of $13 million to the development.

That said, the First Respondent has offered evidence of having done so. The Applicants have, more than once, declined to be drawn into an active engagement with that evidence. They should be encouraged, if not required by pre-trial directions, to do so well in advance of the hearing of the principal proceedings.

Nor is it necessary to form a view on the merits of the parties' factual disputes about the adequacy, and content, of books and records of HCP (and/or HCI), or the possibility that, under the First Respondent's management, HCP/HCI are at risk of insolvent trading.

The Court is not well placed, in the context of an interlocutory hearing, to explore these issues. Nor is it desirable that it should, by entry upon them, pre-empt whatever decision may, or may not, ultimately be made about them by a judge at the final hearing.

Properly understood, the primary focus of the Applicants' motion is Gzell J's order 5.

THE PRINCIPAL PROCEEDINGS : THE NATURE OF THE CASE

By the First Cross Claim, the Applicants claim relief that includes, expressly, an order that order 5 of the orders made by Gzell J on 9 April 2010 be discharged, and an order that the appointment of the Referee on 9 November 2013 pursuant to order 5 be terminated.

Although these claims for relief do not, in terms, refer to ss 232-233 of the Corporations Act, they can only be understood by reference to those sections, and as an implicit application for relief pursuant to them.

It is not necessary, in reaching this conclusion, to read the Cross Claim in light of the pleadings in the proceedings (numbered 05209/2008) in which order 5 was made by Gzell J. Nevertheless, it is not immaterial that: (a) in the proceedings before his Honour, the Applicants explicitly applied for an order (a winding up order) under s 233; (b) both sides of the record accept, in the current proceedings, that it was open to Gzell J to make the orders he made, in lieu of a winding up order, under s 233; and (c) the case advanced by the Applicants in the present proceedings is predicated, at least implicitly, upon a proposition that it is open to the Court in these proceedings, to discharge, vary or confirm a s 233 order made by Gzell J.

I do not exclude the possibility that the omission of any explicit reference to ss 232-233 in the Cross Claim reflects a forensic strategy adopted by the Applicants (of a type similar to that feared by the First Respondent) in the hope, not so much of obstructing performance of the joint venture, but of inviting the Court to allow them to re-litigate questions about the terms of the joint venture without being compelled, themselves, to submit to the broad remedial discretion for which s 233 provides.

If that is part of the Applicants' forensic design, it is flawed to the extent that the real issues in the proceedings must be taken (as, in my judgement, they must be) to include an engagement of ss 232-233.

As in the proceedings before Gzell J, the Applicants' engagement of those sections may, ultimately, operate in a way that substantially departs from their primary case, and it may operate in favour of a case propounded by the First Respondent.

It is neither necessary nor desirable for me to speculate about the ultimate outcome of the proceedings. However, it is necessary, in the interests of the due administration of justice, to draw to the parties' attention the nature and breadth of the jurisdiction for which ss 232-233 provide.

If they continue to manifest an inability to work together in management of HCP, relief which could be granted on the Applicants' Cross Claim could, conceivably, include orders for removal of any or all of the joint venturers as directors of the company and for the appointment of an independent board of directors: Re Spargos Mining NL (1990) 3 WAR 166 at 193-196; 3 ACSR 1; 8 ACLC 1218. It could also, conceivably, include orders designed to limit the role of any party to that of an employee of HCP: Re HR Harmer Ltd [1959] 1 WLR 62 (an authority relied upon in Re Spargos Mining NL and approved by Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 360 [175]-[176]).

One way or the other, by means such as these, the Court may be moved to put an end to the dysfunctional management of the company's affairs arising from the joint venturers' constant preoccupation with "control" and Machiavellian manoeuvres.

If the parties' inability to work together continues, it would also be open to the Court, conceivably, to make orders under s 233 (eg, for the purchase or sale of shares in HCP at a particular price) designed to ensure that any party who has caused the company, or a member, to incur a loss bears the burden of the loss: Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 at 143-146; Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; 207 ALR 136 at [70]-[78]; Shirim v Fesena [2002] NSWSC 10 at [12]-[15].

An undertaking as to damages, given as the price for obtaining an interlocutory injunction, is not the only means by which the Applicants (for example) might have an exposure to a claim for compensation arising out of such (if any) of their alleged acts and omissions as may be found to have obstructed the Hurstville development.

Equally, any unreasonable behaviour on the part of the First Respondent may operate to his disadvantage on an application of s 233.

As a matter of jurisdiction, but subject to a discretionary disinclination on the part of the Court to become involved in the making or supervision of commercial decisions, it would be open to the Court under s 233 to direct, or authorise, an officer of HCP to enter the particular contracts which are presently the subject of controversy.

There may be substantial reasons why such an order should not be made but, on the face of s 233, the possibility that it could be made needs to be borne in mind by the parties in their preparation of the principal proceedings for hearing.

That possibility also invites consideration whether, in aid of the final hearing and with his consent, an order, or orders, should be made under the Uniform Civil Procedure Rules, Part 20 Division 3, for the reference of particular questions to the Referee (earlier appointed pursuant to Gzell J's order 5) for inquiry and report.

Whatever operation might ultimately be given to s 233, it has been engaged in these proceedings, and it is incumbent upon each party (obliged by s 56 of the Civil Procedure Act to focus on the real issues for determination) to take that into account.

Given the complexity of questions that can arise in the context of debates about principles relating to issue estoppel and the like, the parties should also bear in mind the possibility that much of their disputation may, ultimately, be subsumed in a due consideration of s 233.

Other claims of relief in the Cross Claim include a prayer that the trust declared by the Court pursuant to order 1 made on 9 April 2010 be terminated, and an order that no directors are to be appointed to the board of HCP (other than the Applicants or the First Respondent) without an order of the Court.

A variety of other claims for relief relate to ownership and governance of the joint venture between the Applicants and the First Respondent (via HCP) and the payment of compensation of one kind or another.

The allegations of fact made by the Applicants in the cross claim include allegations referable to events before and after entry of Gzell J's orders.

In granting the Applicants leave to file the cross claim, Black J made the following observations in Reasons for Judgment published as In the Matter of Hua Cheng Property Pty Limited [2013] NSWSC 1869 (16 December 2013), which I editorially adapt, and to which I add emphasis, for ease of reference in the current context:

"[19] [Ms Hong Xia Xia] ... resists leave to file the Cross-Claim on the basis that the issues raised in the Cross-Claim were dealt with in the First Proceedings [by Gzell J], and also contends that an issue of Anshun estoppel arises, so far as the relief sought in the proposed Cross-Claim may be relief that could have been sought in the First Proceedings. Plainly, some of the factual matters raised in the proposed Cross-Claim were the subject of findings in the First Proceedings, and issue estoppels may exist between at least some parties as [regards] those matters. It may be that there will be argument as to that matter, either in an application for a stay or to strike-out the proposed Cross-Claim or at a final hearing, but I do not consider that I can reach any conclusion that all relevant matters were determined so as to warrant refusal to file the Cross-Claim. It seems to me at least seriously arguable that, as [the Applicants submit] substantial aspects of the relief sought are either consequential on the orders made in the First Proceedings or result from subsequent developments. [Counsel for Ms Hong Xia Xia] ultimately accepted, in oral submissions, that the extent of any estoppel or res judicata arising from Gzell J's judgment was not a matter relevant to the motion [for leave to file the Cross-Claim], but instead to any strike-out application which might later be brought in respect of the Cross-Claim...

[22] ... [Counsel for the First Respondent adopted the submissions of counsel for Ms Hong Xia Xia]. He also contended that the matters now sought to be raised by [the Applicants] re-agitate matters that were addressed in Gzell J's judgment in the First Proceedings. In particular, he draws attention to the claim in the proposed Cross-Claim that [the First Respondent] has not contributed funding to HCP, or at least that HCP's accounting records do not demonstrate any such funding, and draws attention to the finding made in the First Proceedings that at least some such funding had occurred.... [Counsel for the Applicants] in turn contests the proposition that the findings of Gzell J in the First Proceedings determine whether [the First Respondent] has in fact made the contributions which [the Applicants] contend that he was obliged to make, and contest the suggestion that Gzell J's findings bind [the Applicants] as to the amounts contributed by [the First Respondent]. He submits that whether the amount of $4.3 million to which Gzell J referred is inconsistent with [the Applicants'] allegations in the proposed Cross-Claim that a first tranche of $2 million and a second tranche of $10 million committed by [the First Respondent] have not been made will be a matter for evidence, not a reason to exclude the Cross-Claim at this point.

[23] I accept that it is at least arguable that there is an overlap between Gzell J's findings and the question of contributions made by [the First Respondent], particularly in respect of the alleged commitment by [the First Respondent] to make a first contribution of $2 million. I should note, however, that Gzell J's findings do not address at least part of the allegation made in the proposed Cross-Claim, that [the First Respondent] was obliged to make a further capital contribution as the basis of the transfer of 20 shares by [the First Applicant] and 20 shares by [the Second Applicant] to him. I do not consider that it is so clear that this matter has already been determined adversely to [the Applicants] as to require that leave to file the proposed Cross-Claim be withheld. ..."

His Honour continued his consideration of the parties' disputes by reference, inter alia, to the case management principles found in the Civil Procedure Act 2005 NSW, ss 56-58.

Consideration of the Applicants' current motion does not provide an occasion to re-agitate any determination made by Black J. No party suggested otherwise.

Nevertheless, for the purpose (at least) of illustrating the nature of the parties' disputation and dysfunctionality that invites consideration of ss 232-233 of the Corporations Act, attention must be given to the nature of the case sought to be advanced by the Applicants on their cross-claim, and (at least insofar as concerns events subsequent to Gzell J's orders of 9 April 2010) the nature of the allegations of fact made in the cross-claim:

(a) The cross claim focuses attention on two classes of allegation about events pre-dating Gzell J's orders of 9 April 2010:

(i) One focuses on an allegation that the First Respondent made a representation (described as "the Xu Secondary Capital Contribution Representation") to the Applicants, in 2007-2008, to the effect that, if they each transferred 50% of their respective shareholdings in HCP to him (thereby giving him the majority of the shares in HCP), he would make further capital contributions of $10 million in addition to his initial capital contribution of $2 million: cross claim, paragraph 10(c). They contend that, but for that representation, they would not have transferred their shares to him and that, he having failed to contribute the promised additional $10 million, he holds the transferred shares on a constructive trust for them: Cross Claim, paragraphs 38-42.

(ii) The other focuses upon an allegation that, in or about early 2008, the three joint venturers agreed to enter into a new agreement to replace the joint venture agreement executed on 29 November 2006: Cross Claim, paragraphs 44-48. The Applicants allege that it was agreed that, in consideration of the Applicants transferring shares to the First Respondent to make him the majority shareholder in HCP, he would contribute $10 million, in addition to his initial contribution of $2 million, and raise the remaining $40 million required to complete the development. They seek an order for specific performance compelling him to perform that agreement.

(b) The cross claim specifically pleads the fact of publication of Gzell J's Reasons for Judgment on 31 March 2010 (paragraph 13) and the orders made by his Honour on 9 April 2010 to give effect to those Reasons (paragraph 15).

(c) By reference to those Reasons for Judgment (and, implicitly, the orders on which any issue estoppel must be based), the cross claim alleges that Gzell J made particular findings of fact which are available to the Applicants in the current proceedings (paragraph 14) and serve as a foundation for allegations (in paragraph 16 and following) about wrongful conduct attributed to the First Respondent in connection with management of HCP, performance of the joint venture and performance by HCI of its obligations as a trustee for HCP.

(d) The wrongful conduct alleged against the First Respondent in the cross claim, post-dating Gzell J's orders of 9 April 2010, focuses upon the following events:

(i) On or about 5 November 2012 HCI (under the control of the First Respondent) served on HCP a lapsing notice to force removal from the title to the Hurstville land of a caveat which the Applicants had, in the name of HCP, lodged on the title on or about 19 September 2012 for the purpose of protecting HCP's beneficial entitlement to the land: Cross Claim, paragraphs 17-18. For his part, the First Respondent says that the Applicants caused the caveat to be lodged on the title without his knowledge, and without notice to him of any meeting of directors of HCP: Defence, paragraph 6. By order of Bergin CJ in Equity on 6 December 2012, the operation of the caveat was extended until further order: Cross Claim, paragraph 19.

(ii) On or about 10 January 2013 the First Respondent purported, on behalf of HCP to transfer three ordinary shares in HCP to the Plaintiff and, without notice to the Applicants or the convening of a meeting of directors to approve registration of the transfer, the First Respondent purported, on behalf of HCP, to register the transfer of those shares: Cross Claim, paragraphs 20-21. On14 August 2013, White J declared that registration of the transfer was invalid: Cross Claim, paragraph 34. The Applicants complain that the joint venturers have not agreed to the Plaintiff becoming involved in the joint venture or a shareholder of HCP and that, in any event, she has not made any capital contribution to the development: Cross Claim, paragraphs 35-36.

(iii) On or about 18 January 2013 the First Respondent purported to convene an extraordinary meeting of shareholders of HCP (on 9 February 2013) at which he (allegedly with a proxy from the Plaintiff) resolved to increase the number of directors, from the three joint venturers, to five and to appoint the fifth and sixth cross defendants as directors of the company: Cross Claim, paragraphs 22-24. On 14 August 2013 White J declared that their appointments were invalid.

(iv) On an unspecified date after 7 March 2013, and without the knowledge or consent of the Applicants, the First Defendant purportedly caused four interrelated steps to be taken by HCP in, or in connection with, the conduct of its affairs. First, he caused HCP's caveat over the Hurstville land to be withdrawn, allegedly in breach of the order for its extension made by the Court on 6 December 2012. Secondly, he caused the mortgage previously granted by HCI to CKM (Mortgages) Limited over the land to be discharged. Thirdly, he caused a facility agreement with Balanced Securities Limited to be entered; and, fourthly, he caused a mortgage over the land to be granted to Balanced Securities Limited: Cross Claim, paragraphs 25-29.

(v) The First Respondent, having limited their access to records, compelled the Applicants, as directors of HCP, to apply to the Court for an order that chartered accountants nominated by them be permitted to inspect the books and records of HCP, which order Brereton J made on 11 March 2013 (Cross Claim, paragraphs 30-31), as a consequence of which the Applicants found that the books and records of HCP do not evidence the First Respondent's initial capital contribution of $2 million or his promised secondary capital contribution of $10 million: Cross Claim, paragraph 32-33.

(e) The cross claim alleges that the First Respondent's wrongful conduct constituted, inter alia, breaches by him of the duties of a director (defined by reference to ss 180-182 of the Corporations Act and the general law), characterised as a failure to exercise reasonable care, a failure to act in good faith, a failure to act for proper purposes, an abuse of the position of a director to gain an improper advantage and to cause detriment to HCP and improper conduct in a conflict of interest situation.

(f) The cross claim also alleges that (by discharging the CKM mortgage, entering a facility agreement with Balanced Securities Limited and granting a mortgage to Balanced Securities Limited) HCI acted in breach of the obligations of trust it owes to HCP, knowingly assisted by the First Respondent and the Fifth and Sixth Cross Defendants: Cross Claim, paragraphs 58-65.

(g) The Applicants contend that, in the context of the findings of fact made by Gzell J, orders 4 and 5 of the orders made by his Honour on 9 April 2010 serve to bar any directors being appointed to HCP (other than the Applicants and the First Respondent) without an order of the Court (Cross Claim, paragraph 50), and they seek an order confirming the correctness of that contention.

(h) The Applicants also contend that the making of orders 1-5 (inclusive) of the orders made by Gzell J, in the context of the findings of fact made by his Honour, serves to prevent HCI from dealing with the Hurstville land without the approval of all of the directors of HCP or, failing approval of all directors, a decision of the Referee (Cross Claim, paragraph 52), and (subject to their claim to be compensated for any loss or damage suffered as a consequence of the removal of the HCP caveat, and the granting of security in favour of Balanced Securities Limited) they seek an order confirming the correctness of that contention.

If the Applicants succeed in the principal proceedings, they will, even on their own case, be required to continue dealing with the First Respondent. The relief they seek does not include an order for the winding up of HCP or the joint venture.

To that extent, at least, the First Respondent's apprehension that they are intent upon forcing an abandonment of the joint venture project is, or may be, misdirected.

THE APPLICANTS' MOTION : CASE MANAGEMENT OF IT, AND ALTERNATIVE COURSES OF ACTION

The notice of motion upon which the Applicants presently move was filed on 21 March 2014.

When, on 14 April 2014, he listed it for hearing, Black J reserved to the judge hearing the application the question whether to determine the application on its merits or, rather, to stand it over for determination at the final hearing of the principal proceedings in August.

The option of standing the application over to the final hearing is not an attractive one for, at least, three reasons.

First, there is (as I have found) a serious question to be tried going to the foundation, and practical performance, of the Referee's function.

Secondly, the practical effect of standing the application over would be to grant the Applicants the equivalent of an interlocutory injunction without the price of an undertaking as to damages.

Although not a party to the proceedings, or the interlocutory process, the Referee has advised the parties that he does not propose to undertake any work on the questions referred to him for decision pending determination of the application for an interlocutory injunction, or other order of the Court. There is room for debate about whether (and, if so, to what extent) he has left open the possibility that he will perform work if there is a delay in determination of the motion. However, the reality appears to be that he has embraced an intention to submit to whatever orders may be made by the Court without any need for his joinder in the proceedings or participation in them.

Thirdly, an adjournment of the motion to the final hearing would provide no assistance to the judge to whom the principal proceedings have been, or are to be, allocated for hearing. On the contrary, it would burden the judge with another layer of controversy without any offsetting contribution to a final determination of the parties' abiding conflicts.

I have given consideration to the possibility that the Referee might be permitted to make decisions about the questions submitted to him for determination, subject to a restraint designed to prevent them being given effect without a confirmatory order of the Court.

However, the nature of the questions submitted to the Referee for decision does not lend itself to such a process. He has been asked to decide, in effect, whether the joint venturers should, immediately, be bound to the terms of a proposed contract for finance and the terms of a proposed building contract. Those decisions are essentially commercial rather than legal. They involve the prospect of dealings with third parties motivated by commercial interests independent of both the joint venturers and the course of the current proceedings.

Although order 5, and the contentious questions presently before the Referee for his consideration, do not lend themselves to the making of a provisional decision in anticipation of a determination by the judge presiding at the hearing of the principal proceedings, I will allow the parties an opportunity to consider whether, in anticipation of the final hearing, there may be utility in an order, or orders, being made under the Uniform Civil Procedure Rules, Part 20 Division 3, for the referral of a question, or questions, to the Referee for inquiry and report to the Court.

A RETURN TO BALANCE OF CONVENIENCE

The First Respondent's case is, essentially, that, unless and until the orders made by Gzell J on 9 April 2010 (including, in particular, order 5) are discharged or varied, the dispute resolution mechanism for which order 5 provides should be left to operate according to its terms.

For their part, the Applicants contend, in essence, that the Hurstville development should be placed on hold (and, in particular, the Referee should be sidelined) pending a consideration by the Court of their claims in the principal proceedings including their prayer that order 5 be discharged.

The Applicants deny that they are attempting to sabotage the development. They say, rather, that they have two main concerns about the development being advanced at this stage. First, they contend that there is no satisfactory evidence that the First Respondent has met his obligations to provide funding for the development to date. Secondly, they assert that the First Respondent's management of the development has been so shambolic that they apprehend it to be operating on the margins of insolvency.

Neither of these two points is as critical, in the context of the Applicants' motion, as the Applicants' challenge to Gzell J's order 5 and the demonstrated inability of the parties, on both sides of the record, to work co-operatively within its compass. I apprehend no need to determine controversies beyond the ambit of order 5. I discern no utility in doing so on the materials adduced on an interlocutory basis. They are better left to the final hearing.

The First Respondent, in his turn, maintains that, on an orderly examination of the books and records of HCI as well as those of HCP, the plain fact is that he has met his funding obligations (involving an expenditure of millions of dollars) to date, and the Applicants are simply engaged in a spoiling game designed to force the development to be abandoned and the land to be sold.

The First Respondent says that he has funded the development to the tune of $13 million, evidence of which has been provided to the Applicants' accountant. The evidence of the accountant is to the effect that there is no evidence of any such funding in the books and records of HCP. He does not address the First Respondent's explanation that evidence of the funding that has been provided is found in the books and records of HCI, the company which holds the Hurstville land on trust for HCP, rather than in the records of HCP. He should do so, full on and squarely.

The Applicants contend that HCP is, or might be, insolvent. The First Respondent denies this, but complains of conduct of the Applicants said to have been calculated to interfere with his ability to obtain, and service, funding for the development. This too is a dispute that can, and should, be addressed by better focused evidence.

Although the Applicants appear, at one stage, to have resisted the idea that a grant of the interlocutory injunction they seek should be conditioned on the provision of an undertaking as to damages independent of such an undertaking given as the price for subsisting injunctions, it is now accepted that a fresh undertaking as to damages is appropriate.

In circumstances in which each of the Applicants is resident, and based, in China there must be, at least, a doubt about the practical enforceability of any undertaking as to damages given by them unless accompanied by the provision of security for due performance of it.

Having expressed such a view during the course of the hearing of the motion, I allowed each side to obtain instructions about quantification of the amount of security to be provided if I should decide to grant an injunction. In doing so, I expressed the view that the strength of the Applicants' application for an interlocutory injunction appeared, on one view, to be dependent upon the availability of security for their undertaking as to damages in an amount designed to cover the maximum damage that could be suffered by the First Respondent if, at the hearing of the principal proceedings, the Applicants' claims for final relief were to fail.

A problem (and not necessarily the only problem) with that formulation of the approach to quantification of a requirement of security is that the nature and quality of the evidence available to make an informed judgment about it is wanting. There is, for example, no evidence reliably bearing upon the continued availability of the proposed building contract and the proposed financial facility if a resolution on the part of HCP to enter them were to be delayed until after the determination of the principal proceedings.

The Hurstville development is at a watershed stage. Old buildings have been demolished. The land is vacant. The parties are on the verge of entry into contracts with third parties to finance, and build, something new. There is no guarantee that, within the time between now and determination of the principal proceedings, the Referee will be able to make properly informed decisions about the draft contracts submitted to him for approval. That is a particular concern in circumstances in which (on the Applicants' side of the record) there is an apparent hostility to, if not also a lack of co operation with, any process of decision making he may adopt, informed (they apprehend) by the First Respondent's insistence that they be excluded from any effective participation in the process; and (on the First Respondent's side) there is a refusal, said to be based on a well-founded fear of the Applicants' machinations, to allow the Applicants an opportunity to make informed submissions about the significant commercial decisions to be made.

The Applicants say, not unreasonably, that they have to date invested $4 million apiece (a total of $8 million) in the Hurstville project; that they are acting to protect that investment; and that, were the Referee to determine to enter the proposed finance facility and the proposed building contract before a determination of the principal proceedings, their rights would be materially affected without them being allowed effective participation in the decision-making process envisaged by Gzell J's orders.

Nevertheless, on one view of the evidence (contested by them), they have, formally, accepted that the project remains economically viable. They have, at least formally, consented to the appointment of the Referee in compliance with orders of the Court. They do not challenge the qualifications or expertise of the Referee, a senior member of the junior Bar with an established reputation in building and construction litigation. Moreover, they deny that they are seeking to frustrate the development or to force the land to be sold prior to its redevelopment. They contend, formally at least, that their only substantive concern is to ensure that the project proceeds in an orderly, business-like way (under their personal control).

The interlocutory injunction sought by the Applicants, and any such injunction that the Court might be minded to grant, is not intended to preclude a possibility that the parties might, by agreement, nevertheless cooperate in decision-making designed to advance the project in a constructive way pending the resolution of their larger disputes.

I do not exclude the possibility of this occurring if, at least, by their being required to provide security for their undertaking as to damages and by close attention being given to the potential operation of ss 232-233, the Applicants have brought home to them that, should the Court ultimately find that they have indeed been endeavouring to obstruct or frustrate the development, they have more at risk than merely a deferral of recovery of their past outlays.

A converse, precautionary warning about the potential operation of ss 232-233 can be, should be, and is given to the First Respondent.

In my judgement, the balance of convenience favours the grant of an injunction such as sought by the Applicants, PROVIDED THAT they provide an appropriate amount of security for their undertaking as to damages, in circumstances in which the Court has granted the parties a date for the final hearing of the principal proceedings.

The parties' submissions about the quantum of security required in support of the Applicants' undertaking ranged from nothing (naturally, proposed by the Applicants); to interest accruing on the current (Balanced Securities Limited) mortgage pending the commencement of the final hearing, a sum estimated by the Applicants to be $227,813.34; to $9.6 million (claimed by the First Respondent), representing an amount of $5.8 million to cover the Balanced Securities mortgage and $3.8 million to cover the interest differential, over two years, if the proposed refinance deal were to be lost.

Having been advised by me that security would be required in support of their undertaking as to damages if an injunction were to be granted, the Applicants embraced their alternative submission with an offer comprising, in substance:

(a) an undertaking to the Court to provide security of $227,813.34, for the period to the commencement of the final hearing fixed to commence on 19 August 2014 (in the form of a bank guarantee or payment into court), "within 3 weeks (given the exigencies of transferring cash from mainland China) of any order requiring them to do so"; and

(b) an acceptance that the First Respondent would be entitled to apply to the judge presiding at the final hearing for further security.

In advancing this offer, without prejudice to their primary contention that no security should be required, the Applicants offered the following additional comfort (in paragraph 18 of their written submissions dated 9 May 2014):

"The Applicants submit that the undertaking as to damages that the Applicants give, of itself and without security, cannot be said to be of no value, regardless of the fact [that they] reside in China. [They] hold shares in the jurisdiction (for which they paid [the First Respondent] $8,000,000), subject to the restrictions identified in Gzell J's judgment, in relation to a development [the First Respondent] regards as valuable which could be sequestered, if a case was ever to be made to this Court that this was appropriate".

That submission was condensed, in oral submissions, so as to take the form of a reference to "the fact that there is $8 million of [the Applicants'] in the jurisdiction which[,] if there was ever a problem[,] if the injunction was granted and damages did flow[,] there is something really tangible in the jurisdiction."

The Applicants' offer of security should be accepted.

CONCLUSION

I make the following orders and notations in disposition of the Applicants' motion:

(1) Upon the Applicants (Yaying Lu and Leiping Huang) giving to the Court:

(a) the usual undertaking as to damages; and

(b) an undertaking that they will pay into court, on or before 10 June 2014, an amount of $227,813.34 as security for that undertaking as to damages,

ORDER, until the final determination of the proceedings respectively numbered 2013/222537 and 2013/263877 or until further order, that the First Respondent (Mr Lawrence Xu) and the Second Respondent (Hua Cheng Property Pty Limited) by themselves, their servants and agents be restrained from: (i) referring any dispute or other matter to the Referee (appointed in or about October 2013 pursuant to order 5 of the orders made on 9 April 2010 in the proceedings numbered 05209/2008); and (ii) requesting him to take any action in his capacity as a Referee appointed pursuant to that order, without the prior written consent of the Applicants or the leave of the Court.

(2) ORDER that the Applicants pay $227,813.34 into court on or before 10 June 2014.

(3) RESERVE to the parties liberty to apply to Lindsay J, no later than 3 June 2014, for an order, or orders, under the Uniform Civil Procedure Rules 2005 NSW, Part 20 Division 3, for the referral of a question, or questions, to the Referee (or some other suitable person) for inquiry and report.

(4) ORDER, subject to further order, that the costs of the Applicants' Notice of Motion filed 21 March 2014 be the parties' respective costs in the proceedings.

(5) RESERVE to each party liberty to apply to Lindsay J, no later than 3 June 2014, for an order that order 4 be discharged or varied or for directions in the proceedings generally.

(6) RESERVE to the Respondents liberty to apply, at any time, on reasonable notice, for an increase in the security given for the Applicants' undertaking as to damages recorded in order 1.

Nothing in these orders is intended to preclude the parties from adopting, or giving effect, to a decision about management of HCP, or the joint venture, made by them jointly.

If (as all parties maintain) they are committed to advancement of the joint venture project, it is in their common interest to facilitate the orderly conduct of the business of the joint venture.

If and to the extent that they are determined to submit particular contentious questions to the Court for determination at the scheduled final hearing, they are encouraged to consider whether they might, nevertheless, advance their common interest by practical decisions that can be made "without admissions", and "without prejudice" to the competing contentions to be litigated at the final hearing.

The complexity that attends these proceedings is largely a function of the refusal, or inability, of the parties to work constructively together.

To the extent that they continue to suffer from dysfunctionality in their relationship, all parties are at risk of loss. Litigation is unlikely to be a cost-free substitute for commercial accommodation of their differences.

**********

Amendments

23 May 2014 - corrected paragraph numbering

Amended paragraphs: [158] - [164]

Decision last updated: 23 May 2014

Medium Neutral Citation:	Re Hua Cheng Property Pty Limited [2014] NSWSC 533
Hearing dates:	1, 5, 7 and 9 May 2014
Decision date:	20 May 2014
Jurisdiction:	Equity Division
Before:	Lindsay J
Decision:	Order for interlocutory injunction, with reservation of liberty to apply for directions
Catchwords:	PROCEDURE - Case Management - Application for interlocutory injunction - Corporation - Oppression or unfair conduct - Dispute resolution procedure - Application for discharge of order for appointment of referee - injunction sought pending hearing of that application - Substantial question to be tried - Balance of convenience - Undertaking as to damages - Security required for undertaking EQUITABLE REMEDIES - Injunctions - Interlocutory injunctions - Jurisdiction - Serious question to be tried - Balance of convenience - Injunctions to preserve status quo and property pending determination of rights - Relevance of case management principles CORPORATIONS - Membership, rights and remedies - Members' remedies and internal disputes - Oppressive or unfair conduct - Relief - Procedure - Court-appointed referee - Breakdown in dispute resolution procedure - Availability of remedies
Legislation Cited:	Civil Procedure Act 2005 NSW Part 6 Corporations Act, 2001 Cth Uniform Civil Procedure Rules 2005 NSW.
Cases Cited:	Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 177-178 Australian Hardboards Limited v Hudson Investment Group Limited (2007) 70 NSWLR 201 Blair v Curran (1939) 62 CLR 464 at 531-534 Bridgewater v Leahy (1998) 194 CLR 457 at 494 [126]-[128] Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 330 [58] and 359 [174] Carr v Finance Corp of Australia Limited (No 1) (1981) 147 CLR 246) Derrawee Pastoral Company Pty Limited v McConochie [1995] NSWCA 123. Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 at 143-146 Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410 Hall v Nominal Defendant (1966) 117 CLR 423 at 440 Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 Hua Cheng Properties Pty Limited v Hua Cheng International Holdings Group Pty Limited [2012] NSWSC 1482 Hua Cheng Property Pty Limited and Ors v Xu and Ors [2013] NSWSC 1784 Ian Allan Byrne v AJ Byrne Pty Limited [2012] NSWSC 667 at [43]-[50] In the matter of Hua Cheng Property Pty Limited ACN 123 629 283 [2013] NSWSC 373 In the matter of Hua Cheng Property Pty Limited [2013] NSWSC 1869 Jackson v Goldsmith (1950) 81 CLR 446 at 466-467 Kuligowski v Metrobus (2004) 220 CLR 363 at 373 [21] Licul v Corney (1976) 180 CLR 213 Lord v Dernacourt Investments Pty Limited (unreported, SC (NSW), McLelland CJ in Eq, 3202/91, 14 March 1994) BC 9402299 at 5-6 Lu v Hua Cheng International [2010] NSWSC 228 Meehan v Glazier Holdings Pty Limited (2002) 54 NSWLR 146 at 153 [35]-[36] Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 597-604 Re HR Harmer Ltd [1959] 1 WLR 62 Re Spargos Mining NL (1990) 3 WAR 166; 3 ACSR 1; 8 ACLC 1218. Reichel v Magrath (1889) 14 App Cas 665 at 668; (1889) 14 App Cas 665 at 668 Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198 Shirim v Fesena [2002] NSWSC 10 at [12]-[15] Smith Martis Cork & Rajon Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; 207 ALR 136 at [70]-[78]
Texts Cited:	-
Category:	Interlocutory applications
Parties:	Hong Xia Xia (Plaintiff) Hua Cheng Property Pty Limited ACN 123 629 283 (First Defendant) Lawrence Xu (Second Defendant) Yaying Lu (Third Defendant) Leiping Huang (Fourth Defendant) Yaying Lu (First Cross Claimant) Leiping Juang (Second Cross Claimant) Hua Cheng International Holdings Group Pty Limited ACN 119 031 971 (First Cross Defendant) Lawrence Xu (Second Cross Defendant) Hong Xia Xia (Third Cross Defendant) Hua Cheng Property Pty Limited ACN 123 629 283 (Fourth Cross Defendant) Thomas Xi Yao Xy (Fifth Cross Defendant) Qiao Wang (Sixth Cross Defendant) Yaying Lu (First Applicant) Leiping Huang (Second Applicant) Lawrence Xu (First Respondent) Hua Cheng Property Pty Limited ACN 123 629 283 (Second Respondent)
Representation:	Counsel: D Studdy SC and J Tobin (Applicants) BW Rayment QC and MK Rollinson (First Respondent) Solicitors: Watson Mangioni Lawyers Pty Limited (Applicants) Oliveri Attorneys (First Respondent)
File Number(s):	2013/00222537 2013/0026387