Zhang v Zhao (No 2)

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2023 00653

ZHENG CHAO ZHANG & ANOR (according to the Schedule)	Plaintiffs
v
LIN ZHAO & ORS (according to the Schedule)	Defendants

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JUDGE:	Delany J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 May 2025
DATE OF RULING:	13 June 2025
CASE MAY BE CITED AS:	Zhang v Zhao (No 2)
MEDIUM NEUTRAL CITATION:	[2025] VSC 340

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PRACTICE AND PROCEDURE — Freezing order — Application for variation to increase limit for legal expenses — Whether defendants discharged the onus of establishing they have no other financial resources available to pay costs — Whether variation in the interests of justice — Application allowed.

PRACTICE AND PROCEDURE — Freezing order — Application by plaintiffs for variation to remove exceptions for living and legal expenses — Onus — Court should not be quick to reverse a freezing order except for good reason and the dictates of justice — Vasilaras & Co Pty Ltd v Laprese [2019] VSC 56, applied — Application refused.

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APPEARANCES:	Counsel	Solicitors
For the first and third plaintiffs/defendant by counterclaim	David K Carlisle and Fatmir Badali	Murdockcheng Legal Practice Pty Ltd
For the first to fifth defendants/first to third plaintiffs by counterclaim	Nicole Papaleo and Kay Chan	Danaher Moulton

TABLE OF CONTENTS

A.. Introduction.................................................................................................................................. 1

B.. The substantive issues in the proceeding............................................................................... 3

C.. The freezing order history.......................................................................................................... 7

8 March 2023.................................................................................................................................. 7

13 April 2023.................................................................................................................................. 7

29 May 2023.................................................................................................................................... 8

9 April 2024.................................................................................................................................... 8

25 October 2024............................................................................................................................. 8

22 November 2024......................................................................................................................... 8

28 January 2025.............................................................................................................................. 9

D.. The evidence................................................................................................................................. 9

E... The principles............................................................................................................................. 10

F... The personal relationship........................................................................................................ 14

G.. The issues on the applications................................................................................................ 15

H.. The plaintiffs’ submissions..................................................................................................... 16

I.... The defendants’ submissions.................................................................................................. 17

J.... Consideration.............................................................................................................................. 20

K.. Disposition.................................................................................................................................. 28

HIS HONOUR:

A.       Introduction

1. This ruling involves a determination of two competing applications arising out of a freezing order originally made against the first to fifth defendants (‘defendants’ / ‘Ms Zhao’) on 22 February 2023 and later the subject of a number of variations (‘freezing order’).

1. The competing applications are as follows:

(a)        The defendants’ application made 6 May 2025 to vary the freezing order so as to remove the limit of $20,000 per month to pay the defendants’ reasonable legal expenses and to permit payment of:

(i)     past legal expenses owed to Danaher Moulton as at 5 May 2025 in the amount of $186,277.06; and

(ii)  reasonable legal expenses up to and including the first five days of the trial as and when those expenses fall due for payment, up to a limit of $338,770.00.

(b)       The plaintiffs’ (‘Mr Zhang’) application made 13 May 2025 to vary the freezing order to remove the following expenses exceptions:

(i)         Ms Zhao paying up to $5,000 per week on living expenses; and

(ii)  the respondents to the freezing order paying their reasonable legal expenses, to a limit of up to $20,000 per month.

1. On 14 May 2025 an Order was made requiring…