Shun Sheng Pty Ltd v Jun Lei - [2024] NSWCA 43

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Shun Sheng Pty Ltd v Jun Lei [2024] NSWCA 43
Hearing dates: 26 February 2024
Date of orders: 29 February 2024
Decision date: 29 February 2024
Before: Basten AJA
Decision:
(1)   Set aside the release order made by the trial judge in the Equity Division on 9 February 2024, so that the sum in the controlled moneys account remains subject to the orders made on 7 December 2023 until further order.
(2)   Grant leave to Ms Lei and Mr Kitsos, prior to the disposal of the proceedings in this Court, to apply on three days’ notice for a variation of order (1) based on changed circumstances.
(3)   Direct that a copy of these reasons be given to Parker J forthwith to allow his Honour to consider the appropriate course to be taken in relation to the matters listed before him pending hearing of the appeal on 29 April 2024.
(4)   Order that the costs of the motion be costs in the summons seeking leave to appeal.
(5)   Subject to any application for other orders to give effect to these reasons, otherwise dismiss the notice of motion.

Catchwords:
CIVIL PROCEDURE – asset preservation orders – application for discharge after judgment – claims rejected but subject to appeal – further accounting claims pursuant to judgment – risk of dissipation of assets – defendants resident in Australia – one defendant with history of misappropriating funds – findings of unreliable and untruthful evidence – no need for funds beyond those available for legal fees and daily living permitted under existing order
CIVIL PROCEDURE – stay of proceedings – vacation of further trial dates pending appeal – issues reserved for future consideration – relevance of appeal to reserved issues – application for leave to appeal and appeal listed for concurrent hearing in two months –applicants not having requested stay from trial judge

Legislation Cited:
Civil Procedure Act 2005 (NSW), Pt 6
Supreme Court Act 1970 (NSW), s 101
Uniform Civil Procedure Rules 2005 (NSW), r 51.44

Cases Cited:
Jackson v Sterling Industries Limited (1987) 162 CLR 612
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1] (1986) 161 CLR 681; [1986] HCA 84
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Shun Sheng Pty Ltd v Lei (No 2) [2023] NSWSC 1623
Shun Sheng Pty Ltd v Lei (No 3) [2024] NSWSC 72

Category: Procedural rulings
Parties: Shun Sheng Pty Ltd (First Applicant)
Sunshine Island (Aust) Pty Ltd (Second Applicant)
Xue Feng Wei (Third Applicants)
Jun Lei (First Respondent)
Theo Kitsos (Second Respondent)
Representation:
Counsel:
D B McGovern SC / D Allen (Applicants)
N D Riordan / B R Adams (Respondents)
Solicitors:
Du and Associates Lawyers (Applicants)
Lloyd & Lloyd Solicitors (Respondents)

File Number(s): 2023/00339742
Publication restriction: N/A
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Equity – Expedition List

Citation:

[2023] NSWSC 1176

Date of Decision:

29 September 2023

Before:

Parker J

File Number(s):

2021/365823

JUDGMENT

BASTEN AJA:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Shun Sheng Pty Ltd v Jun Lei

Details

AGLC: Shun Sheng Pty Ltd v Jun Lei [2024] NSWCA 43
Case: [2024] NSWCA 43
Decision Date: 29 February 2024

CaseChat Overview and Summary

Shun Sheng Pty Ltd (the applicant) sought to set aside a release order made by the trial judge, which had varied earlier asset preservation orders. The dispute concerned claims made by Shun Sheng Pty Ltd against Jun Lei and Mr Kitsos (the respondents), which had been rejected by the trial judge but were subject to an ongoing appeal. The applicant argued that despite the rejection of some claims, further accounting claims pursuant to the judgment remained, and there was a risk of dissipation of assets by the respondents, who were resident in Australia. The applicant highlighted one respondent's history of misappropriating funds and findings of unreliable evidence.

The primary legal issue before the court was whether the asset preservation orders, initially made on 7 December 2023, should continue to apply to funds held in a controlled moneys account, or if they should be discharged as per the trial judge's subsequent release order. This involved considering the risk of dissipation of assets by the respondents in light of the pending appeal and the nature of the remaining claims. A secondary issue concerned the vacation of further trial dates pending the appeal, and the relevance of the appeal to issues reserved for future consideration.

Basten AJA reasoned that the trial judge's release order should be set aside because the respondents had not demonstrated that the funds were no longer required to be preserved. The court found that the respondents' evidence was unreliable and untruthful, and that there was a real risk of dissipation of assets, particularly given one respondent's history of misappropriating funds. The court determined that the respondents had not shown that the funds held were beyond what was necessary for legal fees and daily living expenses, which were permitted under the existing order. Consequently, the court ordered that the sum in the controlled moneys account remain subject to the original preservation orders. The court also directed that a copy of its reasons be provided to Parker J to consider the appropriate course for matters listed before him pending the appeal.

Orders

Orders of the court

(1) Set aside the release order made by the trial judge in the Equity Division on 9 February 2024, so that the sum in the controlled moneys account remains subject to the orders made on 7 December 2023 until further order.

(2) Grant leave to Ms Lei and Mr Kitsos, prior to the disposal of the proceedings in this Court, to apply on three days’ notice for a variation of order (1) based on changed circumstances.

(3) Direct that a copy of these reasons be given to Parker J forthwith to allow his Honour to consider the appropriate course to be taken in relation to the matters listed before him pending hearing of the appeal on 29 April 2024.

(4) Order that the costs of the motion be costs in the summons seeking leave to appeal.

(5) Subject to any application for other orders to give effect to these reasons, otherwise dismiss the notice of motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Shun Sheng Pty Ltd v Jun Lei [2024] NSWCA 43
Hearing dates:	26 February 2024
Date of orders:	29 February 2024
Decision date:	29 February 2024
Before:	Basten AJA
Decision:	(1) Set aside the release order made by the trial judge in the Equity Division on 9 February 2024, so that the sum in the controlled moneys account remains subject to the orders made on 7 December 2023 until further order. (2) Grant leave to Ms Lei and Mr Kitsos, prior to the disposal of the proceedings in this Court, to apply on three days’ notice for a variation of order (1) based on changed circumstances. (3) Direct that a copy of these reasons be given to Parker J forthwith to allow his Honour to consider the appropriate course to be taken in relation to the matters listed before him pending hearing of the appeal on 29 April 2024. (4) Order that the costs of the motion be costs in the summons seeking leave to appeal. (5) Subject to any application for other orders to give effect to these reasons, otherwise dismiss the notice of motion.
Catchwords:	CIVIL PROCEDURE – asset preservation orders – application for discharge after judgment – claims rejected but subject to appeal – further accounting claims pursuant to judgment – risk of dissipation of assets – defendants resident in Australia – one defendant with history of misappropriating funds – findings of unreliable and untruthful evidence – no need for funds beyond those available for legal fees and daily living permitted under existing order CIVIL PROCEDURE – stay of proceedings – vacation of further trial dates pending appeal – issues reserved for future consideration – relevance of appeal to reserved issues – application for leave to appeal and appeal listed for concurrent hearing in two months –applicants not having requested stay from trial judge
Legislation Cited:	Civil Procedure Act 2005 (NSW), Pt 6 Supreme Court Act 1970 (NSW), s 101 Uniform Civil Procedure Rules 2005 (NSW), r 51.44
Cases Cited:	Jackson v Sterling Industries Limited (1987) 162 CLR 612 Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1] (1986) 161 CLR 681; [1986] HCA 84 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 Shun Sheng Pty Ltd v Lei (No 2) [2023] NSWSC 1623 Shun Sheng Pty Ltd v Lei (No 3) [2024] NSWSC 72
Category:	Procedural rulings
Parties:	Shun Sheng Pty Ltd (First Applicant) Sunshine Island (Aust) Pty Ltd (Second Applicant) Xue Feng Wei (Third Applicants) Jun Lei (First Respondent) Theo Kitsos (Second Respondent)
Representation:	Counsel: D B McGovern SC / D Allen (Applicants) N D Riordan / B R Adams (Respondents) Solicitors: Du and Associates Lawyers (Applicants) Lloyd & Lloyd Solicitors (Respondents)
File Number(s):	2023/00339742
Publication restriction:	N/A
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Equity – Expedition List Citation: [2023] NSWSC 1176 Date of Decision: 29 September 2023 Before: Parker J File Number(s): 2021/365823