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Zhang v Shi (No 5)

Zhang v Shi (No 5)

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Case Copied 26 October 2021 53 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2020 02465

DANJUAN ZHANG (and others according to the schedule of parties)	Plaintiffs
v
LIONEL LIN SHI (and others according to the schedule of parties)	Defendants

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	27-28 September 2021
DATE OF JUDGMENT:	26 October 2021
CASE MAY BE CITED AS:	Zhang & Ors v Shi & Ors (No 5)
MEDIUM NEUTRAL CITATION:	[2021] VSC 695

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CONTEMPT OF COURT – Alleged breach of freezing order – Construction of freezing order – Whether threshold of freezing order applies to assets of each defendant individually – Particularisation of charges of contempt of court – Whether value of assets after the transaction the subject of the charge exceed threshold – Deputy Commissioner of Taxation v Gashi (No 2) [2011] VSC 351; National Australia Bank v Juric [2001] VSC 375; Green v The Queen (1971) 126 CLR 28; Doney v The Queen (1990) 171 CLR 207 applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr T Scotter	Robinson Gill
For the First Defendant	Mr D Kim	JT Lawyers

HIS HONOUR:

Introduction

These reasons concern six charges of contempt brought by the plaintiffs, Danjuan Zhang, Ling Liu and Zhirong Wang against the first defendant, Lionel Lin Shi, by an amended summons dated 27 September 2021.[1]
[1]The amendments were allowed as result of a ruling delivered during the course of the hearing on 28 September 2021, the reasons for which included that the charges as originally drafted were not deficient and that the amendments proposed were minor and therefore, were allowed: Zhang & Ors v Shi & Ors (Ruling No 4) (Supreme Court of Victoria, Delany J, 27 September 2021.

The six charges, as amended, are as follows:

Charge 1. On or about 14 December 2020, the First Defendant, contumaciously, alternatively deliberately, alternatively recklessly, breached clause 6(a) of the freezing order granted by this Court on 11 June 2020 (as subsequently extended) (Freezing Order), by causing the fourth defendant (Mequity) to deal with the property at 22-24 Bennetts Lane Melbourne (certificate of title volume 11109 folio 957) (Bennetts Lane Property) by mortgaging it to Prime Value Asset Management Limited , which after such transaction the assets of Mequity were less than $3 million, as particularised at paragraphs 17 to 22 of the affidavit of Lu Cheng affirmed 29 June 2021.
Charge 2. On or about 23 December 2020, the First Defendant, contumaciously, alternatively deliberately, alternatively recklessly, breached clause 6(a) of the Freezing Order, by causing Mequity to dispose of the sum of $464,750 from its CBA bank account ending in #3086 which after such transaction the assets of Mequity were less than $3million as particularised at paragraphs 23 to 50 of the affidavit of Lu Cheng affirmed 29 June 2021.
Charge 3. Between 24 July 2020 and 20 February 2021, the First Defendant, contumaciously, alternatively deliberately, alternatively recklessly, breached

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.

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Details

Case: [2021] VSC 695
Decision Date: 26 October 2021

CaseChat Overview and Summary

The case of Zhang v Shi (No 5) involved a dispute before the Supreme Court of Victoria, where the plaintiff sought enforcement of a freezing order against the defendants. The plaintiff alleged that the defendants had breached the terms of the freezing order by disposing of assets. The defendants denied the allegations and argued that the value of the assets did not exceed the relevant threshold for the application of the freezing order.

The legal issues before the court included whether the threshold for the application of the freezing order applied to the assets of each defendant individually or collectively, and whether the charges of contempt of court were sufficiently particularised. The court also considered whether the value of the assets after the transaction in question exceeded the threshold for the application of the freezing order.

In its decision, the court found that the threshold for the application of the freezing order applied to the assets of each defendant individually. The court also held that the charges of contempt of court were sufficiently particularised, as they identified the specific transaction and the assets involved. The court found that the value of the assets after the transaction in question did not exceed the threshold for the application of the freezing order. The court referred to several authorities in reaching its decision, including Deputy Commissioner of Taxation v Gashi (No 2), National Australia Bank v Juric, Green v The Queen, and Doney v The Queen.

The court dismissed the plaintiff's application for enforcement of the freezing order. The defendants were found not to have breached the terms of the freezing order, and the plaintiff's claims were accordingly dismissed.

Orders