Zhang v Zhang

The case of Zhang v Zhang involved two defendants, the second of whom held the proceeds from the sale of a property in Australia that had previously been owned by the foreign first defendant. The first defendant sought a freezing order over the proceeds in aid of a cross-claim for contribution against the second defendant. Subsequently, the second defendant applied to vary the freezing order, arguing that it caused hardship and that there were insufficient funds to defend the proceedings. The second defendant also claimed that there was no assurance the funds would be used for the intended purpose. The court had to decide whether the hardship alleged by the second defendant was sufficient to warrant varying the freezing order and whether the second defendant had provided adequate assurance regarding the use of the funds.

The court considered the principles surrounding the grant of freezing orders, the importance of ensuring that the assets remain available for the purpose of satisfying any judgment, and the potential hardship caused to the second defendant. The court found that the second defendant had not demonstrated sufficient hardship to warrant a variation of the freezing order. Furthermore, the court was not satisfied that the second defendant had provided adequate assurance that the funds would be used for the purpose of defending the proceedings. The court emphasised the importance of preserving the integrity of the legal process and the need to ensure that assets subject to a freezing order are not dissipated.

Consequently, the application to vary the freezing order was refused. The court maintained the freezing order over the proceeds of sale, ensuring that they remained available to satisfy any judgment that might be entered against the first defendant in the cross-claim for contribution. The court's decision underscores the stringent criteria that must be met for a freezing order to be varied and the importance of maintaining the integrity of the legal process.