Ye v Zeng (No 3) - [2015] FCA 1279

FEDERAL COURT OF AUSTRALIA
Ye v Zeng (No 3) [2015] FCA 1279

Citation: Ye v Zeng (No 3) [2015] FCA 1279

Parties: JOHNSON YE v ZENG RONGHUO ALSO KNOWN AS ANDREW TSANG, CHUNXIANG ZENG, QINGLONG ZENG, RONGXING ZENG, FUJIAN XIANGRONG CONSTRUCTION GROUP CO LTD and FUJIAN XIANGRONG DAQINSHAN TEA INDUSTRY DEVELOPMENT CO LTD

File number(s): NSD 1123 of 2015

Judge(s): ALLSOP CJ

Date of judgment: 17 November 2015

Legislation: International Arbitration Act 1974 (Cth)

Cases cited: Ye v Zeng [2015] FCA 1192
Ye v Zeng (No 2) [2015] FCA 1243

Date of hearing: 17 November 2015

Place: Sydney

Division: GENERAL DIVISION

Category: No Catchwords

Number of paragraphs: 6

Counsel for the Applicant: Mr P E King

Solicitor for the Applicant: Zhang Shijing Lawyers

Counsel for the Respondents: Mr T Lynch

Solicitor for the Respondents: Kl International Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1123 of 2015

BETWEEN:
JOHNSON YE
Applicant

AND:
ZENG RONGHUO ALSO KNOWN AS ANDREW TSANG
First Respondent

CHUNXIANG ZENG
Second Respondent

QINGLONG ZENG
Third Respondent

RONGXING ZENG
Fourth Respondent

FUJIAN XIANGRONG CONSTRUCTION GROUP CO LTD
Fifth Respondent

FUJIAN XIANGRONG DAQINSHAN TEA INDUSTRY DEVELOPMENT CO LTD
Sixth Respondent

JUDGE:

ALLSOP CJ

DATE OF ORDER:

17 NOVEMBER 2015

WHERE MADE:

SYDNEY

ON THE APPLICANT, BY HIS COUNSEL, GIVING THE USUAL UNDERTAKING AS TO DAMAGES, THE COURT ORDERS THAT, UNTIL FURTHER ORDER:
1.Subject to compliance with these orders, in particular the provision of any mortgage or mortgages referred to in Order 2 below, each of the first to sixth respondents not sell, encumber, or otherwise deal with, in any way whatsoever, including by the obtaining of additional funding under any relevant facility, other than by the accrual of interest in the ordinary course of business, any of the following properties:
(a)3/507 Pacific Highway, Killara (Folio #3/SP86801);
(b)36/507 Pacific Highway, Killara (Folio #36/SP86801);
(c)39 Stanhope Road, Killara (Folio #1/551876);
(d)39A Stanhope Road, Killara (Folio #2/551876);
(e)109 Pitt St, Sydney (Folio #99/SP72095 & #100/SP72095);
(f)73 and 74 Belssel St, Belconnen, ACT;
(g)such interest of any kind as each may have in the Xiang Rong Management Trust or any other trust or legal structure or entity over 7 Help St, Chatswood; and
(h)such interest of any kind as each may have in the property at 7 Help St, Chatswood.

2.Stand over proceedings for recognition and enforcement to Friday 11 December 2015 at 9:30am on condition that the respondents on or before Friday 20 November 2015 execute, in registrable form, a mortgage or mortgages over the properties in 1(a)-(f) above and deliver same to the applicant. The applicant, as mortgagee, be at liberty to lodge a caveat or caveats in support of said mortgage or mortgages, but not, without leave of the court, to lodge said mortgage or mortgages for registration, up to Friday 11 December 2015.
3.Should the respondents fail to execute and deliver said mortgage or mortgages in registrable form by Friday 20 November 2015, the applicant have leave to move the Court on…

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 Ye v Zeng (No 3)

Details

AGLC: Ye v Zeng (No 3) [2015] FCA 1279
Case: [2015] FCA 1279
Decision Date: 17 November 2015

CaseChat Overview and Summary

Johnson Ye, the applicant, sought recognition and enforcement of an international arbitration award against Zeng Ronghuo, also known as Andrew Tsang, and others, collectively referred to as the respondents. The primary dispute centred on the enforcement of the arbitration award, which was rendered against the respondents in a Chinese court. The case was heard in the Federal Court of Australia, specifically in the New South Wales District Registry under General Division.

The legal issues before the court were whether to adjourn the application for recognition and enforcement due to an impending appeal in the Chinese court, and if so, what form of security should be provided to ensure the enforceability of the award. The court had to balance the applicant's need for immediate enforcement against the potential financial strain on the respondents if they were required to meet the award amount promptly. The court also needed to determine if the offer of an equitable mortgage over specific properties was sufficient security under section 8(8) of the International Arbitration Act 1974 (Cth).

In its judgment, the court acknowledged the complexity of the situation, particularly the respondents' concerns about the immediate financial impact of enforcing the award. The court found that the freezing orders in place, combined with the offer of a registrable mortgage over specified properties, would serve as adequate security for the duration of the appeal in the Chinese court. The court decided to adjourn the application for recognition and enforcement until 11 December 2015, contingent on the respondents providing the mortgage by 20 November 2015. If the mortgage was not provided by the deadline, the applicant was granted leave to seek judgment for the full amount of the arbitration award, subject to certain conditions regarding enforcement. The court also ordered the respondents to pay the costs of the application on a party-party basis, reserving the right for the applicant to argue for indemnity costs if the appeal was unsuccessful.

The court's decision reflects a careful consideration of both the applicant's rights under the arbitration award and the respondents' practical ability to meet the financial obligations without causing undue hardship to their businesses.

Orders