Zhang v Zhao (No 2)

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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…

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Details
Case
[2025] VSC 340
Decision Date

CaseChat Overview and Summary

In the matter of Zhang v Zhao (No 2), the parties involved were Zhang, the plaintiff, and Zhao, the defendant. The dispute pertained to a freezing order, with Zhang seeking variations to the order to increase the limit for legal expenses. Zhao, on the other hand, sought to have the exceptions for living and legal expenses removed from the order. The case was heard and determined in the Supreme Court of Victoria.

The primary legal issues the court had to address were whether Zhao had discharged the onus of proving that they had no other financial resources available to cover their legal costs, and whether a variation of the freezing order would be in the interests of justice. The court also had to consider Zhang's application to remove the exceptions for living and legal expenses from the freezing order, and whether this would be justified in the circumstances.

The court found that Zhao had not successfully discharged the onus of demonstrating that they had no other financial resources to cover their legal expenses. Consequently, the application to increase the limit for legal expenses was allowed. Regarding Zhang's application to remove the exceptions for living and legal expenses, the court ruled that such a reversal of a freezing order should not be made lightly, and only when it was clearly in the dictates of justice. The court applied the principles from Vasilaras & Co Pty Ltd v Laprese [2019] VSC 56 and found that the application should be refused.

The court's decision included allowing the application to increase the limit for legal expenses for Zhao, while refusing Zhang's application to remove the exceptions for living and legal expenses from the freezing order.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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