Guo v Xu [2021] NSWSC 460

Guo v Xu [2021] NSWSC 460

The freezing order, made by consent after substantial negotiation, may only be discharged on proof of exceptional circumstances. Keynes and General Energy have not established that exceptional circumstances exist to warrant discharge of the freezing order; any delay in the Hong Kong proceedings is not attributable to the plaintiff. The plaintiff has a good arguable case and the relief sought may give rise to a money judgment capable of registration in Australia. The balance of convenience favours maintenance and extension of the order to preserve the funds; the undertaking should not be discharged and must be replaced with payment of relevant dividends into court or a controlled account.

Parties
Plaintiff: Hui (Annie) Guo; First Defendant: Yuedong (Peter) Xu; Second Defendant: Ji (Jim) Chen; Third Defendant: Jianguo (David) Zhang; Fourth Defendant: Keynes Capital Global Ltd; Fifth Defendant: General Energy International Holdings Ltd; Sixth Defendant: Gleneagle Securities Nominees Pty Ltd
Jurisdiction
Australia
Judgment Date
03 May 2021
Procedural Posture
Application in Existing Equity Proceedings / Interlocutory Application (to Vacate/vary/extend Freezing Order and to Release Undertaking)
Outcome
Application to discharge/vary freezing order and release undertaking dismissed; freezing order extended; costs orders made
Legal Topics
Freezing Orders, Foreign Judgments, Enforcement of Foreign Orders, Constructive Trusts, Breach of Fiduciary Duty
Equity Civil Procedure Private International Law Freezing Orders Foreign Judgments Enforcement of Foreign Orders Constructive Trusts Breach of Fiduciary Duty

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Parties

Hui (Annie) Guo

Plaintiff

Yuedong (Peter) Xu

First Defendant

Ji (Jim) Chen

Second Defendant

Jianguo (David) Zhang

Third Defendant

Keynes Capital Global Ltd

Fourth Defendant

General Energy International Holdings Ltd

Fifth Defendant

Gleneagle Securities Nominees Pty Ltd

Sixth Defendant

Procedural Posture

Application in Existing Equity Proceedings / Interlocutory Application (to Vacate/vary/extend Freezing Order and to Release Undertaking)

Legal Issues

  1. 1 Whether to discharge or vary a freezing order made by consent in aid of foreign proceedings
  2. 2 Whether exceptional circumstances or material change in circumstances justifies discharge of a freezing order made by consent
  3. 3 Whether an undertaking given in relation to dividends should be released or funds paid into court

Ratio Decidendi

The freezing order, made by consent after substantial negotiation, may only be discharged on proof of exceptional circumstances. Keynes and General Energy have not established that exceptional circumstances exist to warrant discharge of the freezing order; any delay in the Hong Kong proceedings is not attributable to the plaintiff. The plaintiff has a good arguable case and the relief sought may give rise to a money judgment capable of registration in Australia. The balance of convenience favours maintenance and extension of the order to preserve the funds; the undertaking should not be discharged and must be replaced with payment of relevant dividends into court or a controlled account.

Court Disposition

Application to discharge/vary freezing order and release undertaking dismissed; freezing order extended; costs orders made

Orders

  • On plaintiff's undertaking as to damages, fourth and fifth defendants must pay 49% of dividends received in October 2019 (from Rand and Tribune) into court or a controlled monies account by 17 May 2021.
  • Fourth and fifth defendants restrained from disposing of 49% of October 2019 Rand/Tribune dividends.