CLGC Pty Ltd v Zhang (No 2) [2024] NSWSC 610

CLGC Pty Ltd v Zhang (No 2) [2024] NSWSC 610

Mr Zhang is guilty of criminal contempt for authorising payments of $900,000 from the SEPAM Account on 9, 11, and 13 November 2020 in deliberate and contumacious breach of clear court freezing orders, and for disposing of proceeds of sale of the Northbridge property otherwise than in accordance with an undertaking given to the Court. His explanations were false, his actions intended to hide breaches, and the substantive requirements for criminal contempt were established beyond reasonable doubt. His motion to set aside previous orders failed as he lacked standing as a bankrupt and could not establish any irregularity or illegality due to foreign 'restriction on consumption orders.'

Jurisdiction
Australia
Judgment Date
22 May 2024
Procedural Posture
Notice of Motion and Contempt Application / Decision on Interlocutory Motion and Contempt Motion
Outcome
Motion dismissed; Mr Zhang declared guilty of criminal contempt as to specified payments/orders.
Legal Topics
['criminal Contempt' 'breach of Court Orders' 'freezing Order' 'standing of Bankrupt Party' 'interpretation of Foreign Law' "company Directors' Duties in Contempt Cases" 'indemnity Costs']
['equity' 'civil Procedure'] ['criminal Contempt' 'breach of Court Orders' 'freezing Order' 'standing of Bankrupt Party' 'interpretation of Foreign Law' "company Directors' Duties in Contempt Cases" 'indemnity Costs']

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Procedural Posture

Notice of Motion and Contempt Application / Decision on Interlocutory Motion and Contempt Motion

Legal Issues

  1. 1 ['Whether Mr Zhang is guilty of criminal contempt for authorising payments from SEPAM Account contrary to freezing orders' 'Whether Mr Zhang breached an undertaking given to the court regarding proceeds of sale of property' "Whether 'restriction on consumption orders' in China equate to 'undischarged bankruptcy' under Australian law for the purposes of Corporations Act 2001 (Cth) s 206B(3)" 'Whether Mr Zhang has standing to bring motion to set aside orders']

Ratio Decidendi

Mr Zhang is guilty of criminal contempt for authorising payments of $900,000 from the SEPAM Account on 9, 11, and 13 November 2020 in deliberate and contumacious breach of clear court freezing orders, and for disposing of proceeds of sale of the Northbridge property otherwise than in accordance with an undertaking given to the Court. His explanations were false, his actions intended to hide breaches, and the substantive requirements for criminal contempt were established beyond reasonable doubt. His motion to set aside previous orders failed as he lacked standing as a bankrupt and could not establish any irregularity or illegality due to foreign 'restriction on consumption orders.'

Court Disposition

Motion dismissed; Mr Zhang declared guilty of criminal contempt as to specified payments/orders.

Orders

  • ['Declare that Mr Zhang is guilty of criminal contempt by authorising payments of $900,000 from the SEPAM Account on 9, 11 and 13 November 2020.' 'Declare that Mr Zhang is guilty of criminal contempt by using the proceeds of sale of the Northbridge property otherwise than in accordance with the Undertaking.' 'The...