Consideration
24 The affidavit material is voluminous and relates to a number of matters that are not directly relevant for present purposes, including proceedings in other jurisdictions and claims against Mr Qi in relation to other companies. I will focus on the evidence that is directly relevant to Fine China's claims in this proceeding.
25 There is a clear conflict in the evidence filed by the parties. On the one hand, Ms Mei provides evidence that supports the allegations in the amended statement of claim. On the other hand, Mr Richards gives evidence (on an "information and belief" basis from Mr Qi) that denies that Mr Qi acted as agent or trustee of Fine China. I will now refer to the evidence in a little more detail.
26 On behalf of Fine China, Ms Mei gives evidence that:
(a) Mr Qi was an agent of Fine China, responsible for managing its investments in Australia (Mei affidavit dated 15 August 2023, [7]);
(b) on 24 March 2021, the CSJH Trust Deed was entered into, with Mr Qi as trustee and Fine China as beneficiary; a copy is annexure "LM-9" to Ms Mei's affidavit dated 21 July 2023 (Mei affidavit dated 21 July 2023, [20]; and Mei affidavit dated 15 August 2023, [38]);
(c) Mr Qi purported to sell the shares in CSJH and received the sum of $4,360,000 (Mei affidavit dated 21 July 2023, [24]);
(d) on 27 February 2023, Mr Qi, without authority, applied for voluntary deregistration of CSJH (Mei affidavit dated 21 July 2023, [28]; Mei affidavit dated 15 August 2023, [61]);
(e) on 7 May 2023, Mr Qi, without authority, deregistered CSJH (Mei affidavit dated 21 July 2023, [29]; Mei affidavit dated 15 August 2023, [61]);
(f) Mr Qi has not accounted to Fine China for funds in the sum of $19,510,000 deposited in CSJH's ANZ bank account, or funds in the sum of $4,360,000 deposited in Mr Qi's account with Bankwest (Mei affidavit dated 15 August 2023, [11]);
(g) on the instructions of Fine China, Mr Qi arranged for the incorporation of Sunshine Scenery (Mei affidavit dated 15 August 203, [17]);
(h) as with CSJH, the purpose of Sunshine Scenery was to be a corporate vehicle established on behalf of Fine China for the purpose of facilitating Fine China's investments in Australia (Mei affidavit dated 15 August 2023, [20]); and
(i) on 24 March 2021, the Sunshine Scenery Trust Deed was entered into, with Mr Qi as trustee and Fine China as beneficiary; a copy is annexure "LM-4" to Ms Mei's affidavit dated 15 August 2023 (Mei affidavit dated 15 August 2023, [34], [38]).
27 In response, the evidence of Mr Qi, conveyed through Mr Richards's affidavits, is as follows:
(a) Mr Qi was never engaged by Fine China to act as its agent in establishing and managing investments in Australia (Richards affidavit dated 9 August 2023, [4], [6]);
(b) Mr Qi has never had any involvement in any way with Fine China (Richards affidavit dated 9 August 2023, [6]);
(c) Mr Qi never entered into a trust deed with Fine China (Richards affidavit dated 9 August 2023, [6]);
(d) Mr Qi never entered into any share sale agreement in respect of shares in CSJH (Richards affidavit dated 9 August 2023, [6]);
(e) Mr Qi does not recognise the signature on the execution block of the CSJH Trust Deed as belonging to him (Richards affidavit dated 9 August 2023, [6]);
(f) Mr Qi established CSJH in 2017 and held all the shares in the company, but "none of the shares issued was paid as he intended to use CSJH as an investment holding company in Australia" (Richards affidavit dated 9 August 2023, [16]);
(g) CSJH did not implement any of its investment projects; the company had no assets or equity; Mr Qi therefore caused the company to be deregistered (Richards affidavit dated 9 August 2023, [17]);
(h) Mr Qi transferred $19,747,000 from the ANZ bank account of CSJH to a bank account owned by MAWF (this appears to be a reference to MAWF Australia Pty Ltd (MAWF)) for use in other business pursuits and removed all funds from CSJH's account on 13 April 2023 (Richards affidavit dated 24 August 2023, [44]);
(i) Mr Qi, together with two other people, incorporated Sunshine Scenery; Mr Qi holds 55% of the shares in the company and is a director of it (Richards affidavit dated 9 August 2023, [11]);
(j) Sunshine Scenery purchased a farming property at Muldoolun, Queensland (Richards affidavit dated 9 August 2023, [12]); and
(k) Mr Qi never entered into the Sunshine Scenery Trust Deed (Richards affidavit dated 24 August 2023, [41]).
28 As indicated above, copies of the documents that Fine China contends are trust deeds relating to CSJH and Sunshine Scenery are in evidence as annexures to Ms Mei's affidavits. In addition to the evidence referred to above, Fine China relies on the evidence of Mr Bowen that he witnessed Mr Qi sign the trust deeds (Bowen affidavit, [27], [40]). Mr Bowen also gives evidence that he is familiar with Mr Qi's signature and the signatures on the trust deeds are the same as Mr Qi's signature on other documents that Mr Bowen observed Mr Qi signing (Bowen affidavit, [7], [41]).
29 In response, Mr Richards gives evidence (on an "information and belief" basis from Mr Yu Wong) refuting an aspect of Mr Bowen's evidence, namely that the trust deeds were prepared by Mr Wong (Richards affidavit dated 17 August 2023, [4]-[7]).
30 In connection with the trust deeds, Fine China also relies on the analysis of the signatures carried out by Mr Ganas. I note that Mr Ganas's analysis was based on copies, rather than originals, and that his conclusions are expressed in qualified terms.
31 Having regard to the evidence summarised above, I consider that Fine China has established a good arguable case that Mr Qi acted as trustee for Fine China in relation to CSJH, and therefore that CSJH has a claim for the sum of $19,510,000 withdrawn from CSJH's bank account before the account was closed. I note that, while there is a dispute about authenticity, Fine China has annexed a copy of the CSJH Trust Deed and has filed affidavit evidence of Mr Bowen stating that he witnessed Mr Qi signing the trust deed. I consider it appropriate to proceed, for present purposes, on the basis that the CSJH Trust Deed is genuine. There does not seem to be any issue that Mr Qi did in fact withdraw approximately $19.5 million from CSJH's bank account - that is accepted in the Richards affidavit dated 24 August 2023, at [44(f)].
32 Insofar as Fine China claims other amounts on the basis that they were received by Mr Qi as consideration for the sale of shares in CSJH (namely, an amount of $1,720,000 referred to in [20] of the amended statement of claim and $2,640,000 referred to in [21] of the amended statement of claim, making a total of $4,360,000), I am not satisfied that Fine China has established a good arguable case that it is entitled to these amounts. The evidence as a whole suggests that the shares in CSJH were not actually transferred to any purchaser; rather, CSJH was deregistered. In these circumstances, while the purchasers may have a claim to recover the consideration they paid, it is not established that Fine China has a good arguable case to recover the consideration that Mr Qi received.
33 Mr Qi contends that the evidence relating to his alleged agency should be given no weight as it comprises bare assertions and hearsay (without identifying the source of the information). It is unnecessary to resolve this point, because it is sufficient for present purposes to have regard to Fine China's claim against Mr Qi as trustee.
34 I consider that the evidence establishes a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because the assets of the prospective judgment debtor (Mr Qi) are disposed of, dealt with or diminished in value. In this case, the nature of the claim itself supports the proposition that there is a danger of dissipation of assets. If Fine China's claims are correct, then Mr Qi has: deregistered CSJH without the authority of Fine China; arranged for the closure of CSJH's ANZ bank account without the authority of Fine China; and arranged for the transfer of funds out of that bank account without the authority of Fine China. Further, Fine China has been unable to directly contact Mr Qi since December 2022 (Mei affidavit dated 15 August 2023, [82], [84]). It appears likely that Mr Qi is in Singapore. Mr Qi holds a passport from the Republic of Vanuatu and is able to travel internationally (Mei affidavit dated 15 August 2023, [80], [81]).
35 Having regard to the above, I consider it appropriate to continue the freezing order, but with the amount limited to $19,510,000 (rather than the amount appearing in the present freezing order, namely $23,870,000).
36 It is also necessary also to consider some exceptions sought by Mr Qi. Mr Qi submits that the exceptions in paragraph 10 of the freezing order should be expanded so as to expressly allow Mr Qi to pay expenses associated with the farming business run through Sunshine Scenery and expenses of MAWF. The evidence relating to this matter can be found in Mr Richards's affidavit dated 9 August 2023 at [13]-[15], and his affidavit dated 24 August 2023 at [17] and [44].
37 It is unclear to me why these expenses (which are expenses of the companies, Sunshine Scenery and MAWF) need to be paid by Mr Qi. I consider that more evidence is required to demonstrate that the companies cannot themselves pay these expenses and to explain why Mr Qi needs to pay them. I will therefore not make this an exception at this stage, but it is open to Mr Qi to apply for a variation of the freezing order on the basis of additional evidence.
38 Mr Qi also submits that the security that has been provided for Fine China's undertaking as to damages (presently, $80,000) should be increased to $250,000, relying on the evidence at [40] of the Richards affidavit dated 24 August 2023. However, this evidence does not explain with sufficient detail the possible or likely extent of any damage that may arise. Therefore, I do not consider there to be a sufficient basis to increase the amount of the security. Again, it is open to Mr Qi to apply for an increase in the amount of security on the basis of additional evidence.