Background
Jing Zhang commenced proceedings on 27 June 2024 to recognize and enforce a Chinese judgment against Wenying Zhu for ¥6,969,247.70. The judgment arose from disputes concerning loan agreements with a Chinese company, with the defendant having executed multiple guarantee agreements in 2015. On 2 June 2026, the plaintiff obtained broad freezing orders restricting the defendant’s disposal of assets in Australia up to $4,747,658.91. The orders were granted on evidence of asset dissipation: the defendant, as sole director and shareholder of Davin Investment Pty Ltd, had orchestrated the encumbrance of Wurruk land and motel with a mortgage to a company owned by her daughter, followed by the sale of the property for $2.8 million in January 2026, with proceeds directed to the mortgagee and to the defendant personally.
On 5 June 2026, the Chief Judge granted freezing orders including carve-outs for reasonable living expenses (unspecified weekly cap) and legal expenses ($150,000). The defendant consented to the orders on a without-prejudice basis, negotiating only the amounts of the carve-outs. On 26 June 2026, the defendant filed a motion seeking two variations: (1) to explicitly permit withdrawal from Davin Investment’s bank accounts for living and legal expenses, and (2) to increase the legal expenses carve-out to $300,000.
Sirtes J dismissed the motion. Regarding the first variation, the court held that while the freezing order on its proper construction does not prohibit the defendant from accessing Davin Investment’s bank accounts, the carve-outs for living and legal expenses do not authorize such withdrawals. The carve-out permitting “business expenses in the ordinary and proper course of business” is limited to corporate expenses, not the defendant’s personal living or legal costs. The defendant cannot use a company vehicle to fund her personal expenses without breaching her fiduciary duty to the company, regardless of whether she holds shares or is a director. Although Commonwealth Bank’s practical freezing of the accounts reflects legitimate concerns about potential contempt liability, this provides no basis for varying the underlying order, which itself permits access but constrains its use.
The court rejected the defendant’s argument that the variation was necessary due to bank caution, finding that the bank’s prudent interpretation of the order does not justify rewriting the order’s terms. The court also rejected the plaintiff’s alternative argument that any variation would conflict with the freezing order’s purpose, holding that the order’s own carve-outs must be read harmoniously and that the defendant’s consent to the order (even on a without-prejudice basis) undermined the contention that it was made solely to prevent the particular asset dissipation at issue.
On the legal expenses increase, the court found the request premature as there had been no material change of circumstances since the Chief Judge heard full argument and set the amount. The defendant’s faint suggestion that a potential amendment to the plaintiff’s claim would justify the increase was rejected as speculative. The court also noted procedural deficiencies in the defendant’s approach, particularly non-compliance with a discovery order and late service of a notice to produce.