Xu v Cao & Du Management Pty Ltd (No. 3)

In the case of Xu v Cao & Du Management Pty Ltd (No. 3), the plaintiff sought to vacate a final hearing that had been set aside for 8 days. The plaintiff had been concerned about the second defendant potentially being declared bankrupt, which could result in the plaintiff needing leave to proceed due to a creditors' meeting scheduled for 29 August 2025. The plaintiff also planned to seek urgent leave to proceed in the Federal Court if necessary. The second defendant's new solicitor claimed to have been recently retained, though there were doubts about the accuracy of this assertion and an inadequate explanation was provided. There was also a possibility that the 29 August 2025 creditors' meeting could be adjourned to allow for further investigation by the trustee.

The court was required to determine whether the plaintiff's application to vacate the final hearing should be granted, given the circumstances. The court also had to decide whether the elements for making freezing orders were satisfied, considering the evidence of the second defendant's asset alienation and gambling activities. The court was mindful of the potential impact on the plaintiff's ability to proceed with the case and the need to protect creditors' interests.

The court found that the plaintiff's application to vacate the final hearing was not justified, as the reasons provided were inadequate. The court granted the plaintiff's application for disclosure and freezing orders, as the evidence supported an inference that the second defendant had carried out acts inconsistent with previous freezing orders, including the alienation of assets to a company run by his mother and extensive gambling activities. The court noted that the surrounding circumstances and timing of these actions supported the inference that the asset alienation was intended to defraud current and potential creditors. The court ordered that the second defendant's assets be frozen to protect creditors' interests.