Du v Li

[2025] NZHC 2073

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000962

[2025] NZHC 2073

UNDER

the Companies Act 1993 and the Contract and Commercial Law Act 2017

BETWEEN

SUFANG DU

Plaintiff

AND

JIANPENG LI

First Defendant

INITIAL POWER TRADE LIMITED

Second Defendant

LI&LI FAMILY TRUST LIMITED and

YANG LI as trustees of a family trust Non Party

On the papers

Counsel:

C Jiang for Plaintiff

S W M Piggin for First Defendant A Ho for Second Defendant

Minute:

25 July 2025

JUDGMENT OF VAN BOHEMEN J

[on application for freezing orders and appointment of interim liquidator/receiver]

This judgment was delivered by me on 25 July 2025 at 5:45 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar Date……………………………..

Solicitors:

Tompkins Wake, Auckland ESL Legal Ltd, Auckland Northern Legal Ltd, Auckland S Piggin, Auckland

DU v LI [2025] NZHC 2073 [25 July 2025]

[1]                 Sufang Du applies without notice for an order freezing the assets of Jianpeng (William) Li in New Zealand and overseas or in any place outside of New Zealand, including:

(a)Mr Li’s interest as a shareholder in Initial Power Trade Ltd (IPT Ltd);

(b)funds in Mr Li’s personal bank accounts; and

(c)the net proceeds of sale of the property at 9/30 John Jennings Drive, Oteha, Auckland sold by Li&Li Family Trust Ltd and Yang Li.

[2]                 Mr Du also applies under ss 174 and 246 of the Companies Act 1993 for an order appointing Simon Dalton and Benjamin Francis as interim liquidators of IPT Ltd or, alternatively, as receivers of IPT Ltd.

[3]                 Affidavits by Mr Du and his wife, Jiansheng (Alison) Li, have been filed in support of the application.

[4]                 Mr Du has signed an undertaking to comply with any order made by the Court for payment of damages to the respondents if it is established that the freezing order should not have been made.

[5]Counsel for Mr Du has filed a memorandum in support of the application.

[6]                 The application was filed on 18 July 2025. Because of work pressures in the Court  Registry,  it  was  not  brought  to  my  attention  until  today,  25  July  2025.  I apologise to Mr Du and counsel for the delay.

[7]                 Because of the delay, I have considered it appropriate to decide the application on the papers and without convening a telephone conference of all counsel, as I would usually have done.

Background

[8]There is a considerable litigation history to the current application.

[9]                 Mr Du says he and Mr Li had an agreement to purchase, through IPT Ltd, Wrights Outdoor Equipment Centre, a business then managed by Mr Li. The agreement was that Mr Du would hold 75 per cent of the shares and Mr Du 25 per cent. Mr Du alleges that, when incorporating IPT Ltd, Mr Li registered Mr Du as having 70 per cent of the shares and himself as having 30 per cent. Mr Du further alleges that Mr Li later caused the Companies Register to record Mr Li as sole director and shareholder. He says Mr Li asserts the $600,000 Mr Du paid to acquire shares in  IPT Ltd was a loan. Mr Du also alleges Mr Li misappropriated funds from IPT Ltd.

[10]             Mr Du commenced proceedings against Mr Li and IPT Ltd in May 2023 in which he seeks a declaration that Mr Li holds 75 per cent of the shares of IPT Ltd on trust and various other declarations that would secure his interest in IPT Ltd. By way of counterclaim, Mr Li seeks declarations if Mr Du is held to be a majority shareholder in IPT Ltd.

[11]             Orders have been made by consent as to the conduct of the proceeding, most recently on 16 December 2024. The close of pleadings date is 28 November 2025. The proceeding has been set down for hearing commencing on 4 May 2026.

[12]             Despite those orders, Mr Du says progress has been delayed by Mr Li’s failure to provide full discovery. There has been correspondence between counsel but no application for further timetable orders at this stage.

Reasons for current application

[13]             Mr Du says that, on 11 July 2025, he and his wife were contacted by a friend who said IPT Ltd was no longer trading, and its premises were empty. On inquiring with the landlord, he was told IPT Ltd had stopped paying rent and Mr Li was not reachable. Mr Du says the previous owner of the IPT Ltd business later told him the rent for June and July 2025, totalling $20,029.45, was overdue. He also says IPT Ltd will continue to be liable to pay rent at $11,500 per month and that non-payment may result in cancellation of the lease and loss of the goodwill in the business.

[14]             Mr Du’s wife, Ms Li, says she attended the premises of IPT Ltd on Sunday, 13 July 2025, a day the store would usually be open. The store was shut and there

were no staff and no stock inside. A note on the door advised the Wrights Outdoor Equipment Centre was unable to open due to unforeseen circumstances. Ms Li said she then drove to Mr Li’s property at John Jennings Drive, Oteha. She was told by a person inside that Mr Li had sold the property and no longer lived there.

[15]Mr Du believes Mr Li has left for Australia.

[16]             Mr Du says that, unless an interim liquidator or receiver is appointed and a freezing order issued, IPT Ltd will suffer irrecoverable losses and any judgment he obtains in the proceeding will be rendered meaningless.

Decision

[17]As stated by Jagose J in Liu v Kang:1

[4]        Freezing orders may be ordered if I am satisfied, having regard to all the circumstances, there is a danger a prospective judgment in the plaintiffs’ favour will be wholly or partly unsatisfied because the value of the defendants’ assets are alienated from them in some manner.

[5]        Freezing orders are “a valuable protective measure for those commencing civil proceedings”, for which the plaintiffs must show “a good arguable case on an accrued or prospective cause of action”. By “good arguable case” is meant establishment of “a sufficiently plausible foundation” such that “the cause of action is at least tenable”. …

[6]        As to the danger of alienation, I must be satisfied assets may be removed or dealt with in a way that may frustrate the prospective judgment; that there are “circumstances from which a ‘prudent, sensible commercial man, can properly infer a danger of default’” on adverse judgment.

[7]        I then must consider where lies the balance of convenience, meaning if it bears harder on the plaintiffs to be without prospective recourse to the defendants' assets, or on the defendants to have their assets frozen, pending judgment in their respective favours.

(footnotes omitted)

[18]             Having regard to the above principles and the affidavits of Mr Du and Ms Li, I am satisfied Mr Du has a good arguable case in the substantive proceeding and there is a real risk Mr Li may alienate or dissipate assets of IPT Ltd and himself that may be secured by a judgment in favour of Mr Du.

1      Liu v Kang [2023] NZHC 1263.

[19]             I am also satisfied the balance of convenience lies in favour of making the freezing orders sought and that it is appropriate to make the orders without notice. However, I consider the orders should be for two weeks’ duration in the first instance and that the proceeding should be called in the Duty Judge list to set a date for a hearing if they are to be extended further.

[20]             However, because there is no clear information as to the circumstances of IPT Ltd, in particular, with respect to the interests of other creditors, I do not consider it appropriate to appoint an interim liquidator or receiver of IPT Ltd without notice.

Orders

[21]Accordingly, I make the following orders:

(a)Jiangpeng (William) Li is restrained from removing any of his assets in New Zealand or from outside New Zealand or from disposing of, or from dealing with, or diminishing the value of those assets, including (but not exclusive to):

(i)Mr Li’s interest as a shareholder in Initial Power Trade Ltd;

(ii)funds held to Mr Li’s order in his personal bank accounts, including (but not exclusive to) funds held in:

Account  ; and

(iii)the net proceeds of sale of the property at 9/30 John Jennings Drive, Oteha, Auckland sold by Li&Li Family Trust Ltd and Yang Li.

(b)The above freezing order shall expire on 15 August 2025 unless extended by further order of this Court.

(c)Mr Li is to serve a copy of this judgment and his application on Mr Du and IPT Ltd forthwith.

(d)This proceeding is to be called in the Duty Judge List at 10 am on     4 August 2025.

G J van Bohemen J