Shun Sheng Pty Ltd v Lei (No 2)

In the case of Shun Sheng Pty Ltd v Lei (No 2), Shun Sheng, a partnership, sought an asset preservation order to restrain the completion of the sale of Lei’s property. This application was made in the context of a broader action where Shun Sheng sought to obtain an account from Lei. The case was heard in the Federal Circuit Court of Australia. The primary focus of the court’s decision was on the terms of an interim order that had been made, which involved Lei paying money into the court pending the outcome of the proceedings. This order was to remain in effect until further order.

The legal issues before the court included whether the interim order should be discharged or continued, particularly in light of the fact that the defendants had applied for the release of the money following the entry of judgment. The court had to consider the onus of proof in such matters, the possibility of an appeal, and the fact that accounts were still to be taken. The court needed to balance these considerations with the principle that asset preservation orders are to be used sparingly and only when necessary.

The court found that while the possibility of an appeal did not necessarily shift the onus of proof, it did warrant a cautious approach. Given that accounts were still to be taken, the court determined that the interim order should be partially discharged but continued on an interim basis only. This meant that the defendants could not immediately access the money but that the order was not to remain in place without further review. The court's decision thus reflected a balance between protecting the interests of the parties and ensuring that the court’s orders were not used in a way that was overly restrictive without justification.

The final orders of the court included a partial discharge of the interim order, with the remaining aspects to be continued on an interim basis only. This meant that Lei could not access the money until further order of the court, but the order was not to remain in place indefinitely. The court also noted that any further applications regarding the release of the money would need to be supported by appropriate evidence and submissions.