Shun Sheng Pty Ltd v Lei (No 3)

Shun Sheng Pty Ltd, the plaintiff, brought proceedings against Lei, the defendant, to seek recovery of unpaid debts. The matter was heard in the Federal Court of Australia. The plaintiff sought to continue an asset preservation order to prevent the dissipation of the defendant's assets pending the outcome of the proceedings. The legal issues before the court involved the conditions under which an asset preservation order could be continued after judgment, particularly in cases where some claims were rejected but remained subject to appeal. The court also needed to determine if the order could be maintained for additional accounting claims arising from the judgment, and if there was a risk of asset dissipation, given that the defendants were individuals resident in Australia.

The court considered the nature of the asset preservation order and the principles governing its continuation post-judgment. It held that the fact that some claims were rejected but not the subject of appeal did not necessarily preclude the continuation of the order. The court also found that the risk of asset dissipation was a relevant factor, especially since the outcome of the accounting proceedings was still uncertain. However, the court determined that the order should be discharged as the defendants were individuals resident in Australia, and the risk of dissipation was not sufficiently compelling to warrant the continuation of the order.

The court's reasoning emphasised the need for a careful balance between protecting the plaintiff's interests and not unduly restricting the defendants' rights. The court acknowledged the plaintiff's concerns about asset dissipation but concluded that the defendants' residency and the nature of the claims did not justify the ongoing preservation of assets. The court ultimately decided that the asset preservation order should be discharged.