Shirota v Liu (No 2) [2024] FCA 187

Shirota v Liu (No 2) [2024] FCA 187

The applicants had a good arguable case that they invested $5 million on 23 December 2015, that repayment with 10% interest was personally guaranteed by Mr Liu and Mr Zhou, and that they had not been repaid. Both alternatives in r 7.35(5) were satisfied because there was a danger that any prospective judgment would be wholly or partly unsatisfied if surplus sale proceeds of the Lindfield Property were paid to Pachira without restriction, and a Court process might ultimately require Pachira to disgorge assets or contribute to satisfaction of the prospective judgments. The balance of convenience favoured relief because the orders did not prevent the sale or Prime's recovery under its...

Jurisdiction
Australia
Judgment Date
29 February 2024
Procedural Posture
Interlocutory Application for Freezing Orders / Interlocutory Application Heard and Determined
Outcome
Interlocutory application successful; freezing and ancillary orders made, with costs in the cause.
Legal Topics
['freezing Orders' 'ancillary Orders' 'third Party Assets' 'mortgagee Sale' 'commercial Contracts']
['practice and Procedure' 'commercial and Corporations'] ['freezing Orders' 'ancillary Orders' 'third Party Assets' 'mortgagee Sale' 'commercial Contracts']

Case Brief

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Procedural Posture

Interlocutory Application for Freezing Orders / Interlocutory Application Heard and Determined

Legal Issues

  1. 1 ['Whether the applicants had a good arguable case on an accrued or prospective cause of action justiciable in the Court.' 'Whether grounds existed for a freezing order against a third party under r 7.35(5) of the Federal Court Rules 2011 (Cth).' 'Whether the balance of convenience favoured making orders concerning the net proceeds of sale of the Lindfield Property and ancillary restrictions on interests in Pachira and the Pachira Unit Trust.' 'Whether Prime should provide information concerning any sale contract and settlement of the Lindfield Property.']

Ratio Decidendi

The applicants had a good arguable case that they invested $5 million on 23 December 2015, that repayment with 10% interest was personally guaranteed by Mr Liu and Mr Zhou, and that they had not been repaid. Both alternatives in r 7.35(5) were satisfied because there was a danger that any prospective judgment would be wholly or partly unsatisfied if surplus sale proceeds of the Lindfield Property were paid to Pachira without restriction, and a Court process might ultimately require Pachira to disgorge assets or contribute to satisfaction of the prospective judgments. The balance of convenience favoured relief because the orders did not prevent the sale or Prime's recovery under its...

Court Disposition

Interlocutory application successful; freezing and ancillary orders made, with costs in the cause.

Orders

  • ['Upon the applicants giving the undertakings in schedule A to the interlocutory application dated 26 February 2024, freezing and ancillary orders were made concerning the Lindfield Property, Pachira, Prime, Mr Liu and Mr Zhou.' "Pachira must not enter into an agreement for sale of the Lindfield Property, cause or...