Liu v Xiao [2018] NSWSC 1401

Supreme Court New South Wales

Medium Neutral Citation: Liu v Xiao [2018] NSWSC 1401 Hearing dates: 7 September 2018 Decision date: 07 September 2018 Jurisdiction: Common Law Before: R A Hulme J Decision: The plaintiff's application for a freezing order is refused. The plaintiff is to pay the defendant's costs of the application. Catchwords: CIVIL PROCEDURE – interim preservation – freezing orders – requirements to be met before order made – where both parties Chinese nationals – where plaintiff allegedly gave defendant money for share in Chinatown restaurant businesses – where plaintiff alleges she received no share in restaurant businesses – good arguable case established on limited evidence – whether a risk of assets being placed out of reach of plaintiff – where last payment made almost a year ago – no evidence funds have since been dissipated or removed – application refused Category: Principal judgment Parties: Qiujiao Liu (Plaintiff) Yuqing Xiao (Defendant) Representation: Counsel: Mr J McGrath SC with Mr J Lee (Plaintiff) Mr H El-Hage (Defendant)

Solicitors: Shen's Lawyers Avantro File Number(s): 2018/265627

Judgment 1. HIS HONOUR: This is an application for a freezing order. 2. The plaintiff filed a statement of claim on 29 August 2018 by which she seeks judgment in the amount of $1,555,623.77 plus interest. She claims, in short, the amount represents monies given by her to the defendant between January 2017 and 5 October 2017. 3. The plaintiff and the defendant are both Chinese nationals. They met in Sydney in the context of their sons both attending the same high school. 4. The plaintiff asserts in an affidavit affirmed by her on 5 September 2018 that there were a number of conversations between her and the defendant in which they agreed that they, with others, would establish a restaurant business or businesses in Sydney. They would be the major shareholders. Pursuant to such agreements, which were never reduced to writing as I understand it, the plaintiff made the various payments to the defendant. 5. According to Ms Liu's affidavit, the defendant and her son are now shareholders in two companies that operate restaurants in Chinatown. The plaintiff says that she has not received any interest in such businesses or the companies that operate them. 6. The plaintiff filed a notice of motion yesterday upon which I made the orders sought: short service and an urgent hearing date. Today I have heard the substantive application for the freezing order. Mr McGrath SC with Mr Lee have appeared for the plaintiff and Mr El-Hage has appeared for the defendant. It was apparent that Mr El-Hage was somewhat hamstrung by the fact that his client is presently in China and so I accept that his ability to marshal evidence to meet this application at short notice was an impediment for him. 7. The principles relating to an application of this type were usefully set out in written submissions by senior and junior counsel for the plaintiff: "The Court's jurisdiction to grant a freezing order is contained within UCPR 25.14, as well as its inherent jurisdiction. An applicant must establish, first, a good arguable case and, second, a risk that any judgment will go unsatisfied by reason of the other party dealing with their assets to place them out of the reach of the Plaintiff (Tomasetti v Brailey [2012] NSWCA 6 at [14]-[15]; Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [72-[74]). It must be shown there is a risk, not a mere assertion, the Defendant may dispose of or deal with his her assets in such a manner as to leave any judgment unsatisfied (Frigo v Culhaci [1998] NSWCA 88 at p8). It is not necessary to prove the Defendant has a positive intention of embarking on that course (Finn v Carelli [2007] NSWSC 261 at [4]). Proof of risk of dissipation of assets may be established by evidence of a prior want of probity by the impugned person (Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [73]; Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG 'The Niedersachsen' [1983] 1 WLR 1412; [1984] 1 All ER 398 at p406; Frigo v Culhaci [1998] NSWCA 88 at p8.). The quantum of the freezing order ought not be fixed at a sum greater than that which the Plaintiff would potentially or likely recover (Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 428; OXC Bidco Pty Ltd v Dickson [2016] NSWSC 968 at [14])."