Plaintiff v First Defendant

PRACTICE AND PROCEDURE - Application for stay of execution of warrant of sale - Proposed private sale of properties rather than sheriff's execution - Adjournment to enable parties to agree on orderly sale process.

1 The first defendant, FNC, and the second defendant, Mr Han, by summons dated 22 February 2026, seek leave to file and serve a third party notice and statement of claim against the third defendant, Mr Jiang, and a stay of enforcement of Mr Jiang's judgment, dated 1 July 2025, in the New South Wales proceeding, being (proceeding No 2021/00273456), which judgment was subsequently registered in this Court on 9 July 2025.

2 The first and second defendants, rely upon the affidavits of Yun Fei Wu, dated 22 February 2026, and two affidavits, dated 5 March 2026, as well as an outline of written submissions, dated 23 February 2026. The application is opposed. Mr Jiang relies upon two affidavits of his instructing solicitor, Linda Thai, dated 30 January 2026 and 4 March 2026, together with a written outline of submissions filed yesterday. I have received considerable assistance from both the written submissions filed by counsel for both parties and from their oral submissions today.

3 In my view, the application for leave to file the third party notice should be refused. Although there is some connection between the third party claim and the existing proceeding, sufficient to fall within the scope of r 11.01(c) of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('Rules'), that connection is slight. It is essentially limited to the fact that the claim by the plaintiff, Beijing Daxin Shengyu Engineering Technology Co Ltd ('Daxin'), is founded upon an asserted proprietary interest in the funds currently held in a solicitor's trust account. The funds said to be the subject of a proprietary interest asserted by Daxin, are founded upon a loan agreement entered into by Daxin, FNC and Han. The loan agreement related to the purchase of certain property in Yarraville.

4 The connection with the proposed third party proceeding is that the second defendant, Mr Han, wishes to bring a proceeding against the third defendant, Mr Jiang, for damages arising from alleged misleading and deceptive conduct. This conduct relates to alleged representations made by Mr Jiang to Mr Han, asserting that Mr Jiang would make certain financial contributions to facilitate the purchase of the Yarraville property.

5 Those representations are said to be untrue, as a consequence of which FNC and Han are alleged to have suffered loss and damage, namely the obligation to pay interest arising under the same loan agreement which forms the basis of the proprietary claim advanced by Daxin in the proceeding.

6 The connection, therefore, between the existing proceeding and the proposed third party proceeding is limited to the fact that the loss and damage claim relates to the interest obligation under that loan agreement, while the proprietary claim brought by Daxin arises from an asserted proprietary interest under the same loan agreement. Beyond the fact that the loan agreement is relevant to both claims in that limited respect, there is no overlap between the issues raised in the current proceeding and those in the proposed third party proceeding.

7 I accept the submission made by Mr Jiang that, if the proposed third party proceeding was to go ahead as part of the existing proceeding, it would involve a significant expansion of the matters that have to be determined in the existing proceeding. On that basis alone, there would be significant reason to be sceptical of the wisdom of granting leave to file a third party notice out of time. Several other matters also militate in favour of the determination I have made to dismiss the application to file and serve the third party notice.

8 Firstly, the proposed third party claim alleges that Mr Han and FNC suffered loss and damage in reliance upon alleged representations by: (a) no later than 15 May 2016, in respect of the 'contribution representations', defined in the proposed third party notice of claim; (b) no later than 11 December 2015, in the case of the 'first variation representation' as so defined, and (c) no later than 30 March 2016, in the respect of the 'second variation representation.' A claim for damages under s 236 of the Australian Consumer Law, ('ACL'), is extinguished six years after the date on which loss and damage first occurs as a result of misleading or deceptive conduct, (see s 236(2)).

9 On the face of it, the pleaded claim appears likely to be statute-barred. While I need not make any final determination, it is sufficient to note that Mr Jiang's contentions appear, prima facie, to be of merit. Relatedly, Mr Jiang also submits that the claim sought to be advanced is closely related to matters already raised by FNC and Mr Han in the New South Wales proceeding and as such, the matters now sought to be raised would be barred by way of an Anshun estoppel or on a broader abuse of process basis.

10 Again, it is not necessary for me to make a formal and final conclusion on whether that submission is correct and that they would be amenable to being stayed or dismissed on that basis. It is sufficient to observe at this stage that there is some overlap between the allegations made in the New South Wales proceeding and those which are sought to be made in the present case. The prosecution of the allegations made in the third party notice would therefore give rise to that further complication going forward.

11 Next, as noted earlier, in my initial part of my reasons, the present dispute between Daxin and Mr Jiang is of a confined nature and should be able to be completed within three to four days. As matters presently appear, the trial will largely relate to legal issues arising from what appear likely to be essentially non-controversial facts.

12 That is not to say that factual matters may not emerge in the current trial, but to the extent they are likely to emerge, given the pleadings to date and the scope of subpoenas, they are likely to be confined to issues that relate to matters such as whether Daxin can prove the loan that it asserts was made, or whether the loan is binding on FNC given the circumstances of its execution. In any case, the issues are relatively narrow.

13 In contrast, assuming in Mr Han's favour that the claim sought to be advanced in the third party notice proceeds on its merits in full, it raises all the usual questions associated with misleading and deceptive conduct claims, particularly those based on oral representations. Such claims require, among other things, hearing the party's oral evidence, assessing that evidence in light of objective circumstances evidenced by contemporaneous documents and the probabilities that arise from those documents, as well as related questions concerning reliance.

14 In short, either the submissions that have been advanced by Mr Jiang, that the claim is statute-barred or is otherwise susceptible to summary dismissal on the basis of an abuse of process or an Anshun estoppel, are correct, in which case leave ought not be granted; or, alternatively, if those submissions are incorrect, then the case that would proceed by way of the third party notice would be factually dense, extend the trial duration, and complicate the existing proceeding. Given the tenuous connection between the proceedings, leave should, in any event, be refused on discretionary grounds. Accordingly, the application for leave to file a third party notice is refused.

15 Turning to the stay application, the summons seeks orders for a stay of enforcement of a judgment of the Supreme Court of New South Wales, which was then subsequently registered in this Court, pursuant to the Service and Execution of Process Act 1992 (Cth) ('the Act'). On that basis alone, registration of a New South Wales judgment, and its Victorian registration, is not capable of being stayed by this Court under ss 105-106 of the Act, which limit the Court's powers in respect of such judgements (Atanaskovic v Robey [2014] ACTSC 187 at [33]- [35]).

16 Even if that were not the case, I would not have been minded to order a stay of execution of a properly obtained judgment. Ordinarily, special circumstances must be identified to justify a stay of execution, and none exist here.

17 All that is being asserted is an un-litigated claim for damages, which must be regarded as problematic, given limitation issues, Anshun estoppel considerations and indeed, the usual hurdles which need to be overcome in a claim which proceeds on the basis of oral representations made over a decade ago.

18 The application for enforcement of the warrant involves slightly different considerations. Unlike the application for a stay on enforcement of the judgment, there is no absolute impediment to the Court's power to stay such execution. However, during the course of argument this morning, counsel for FNC and Mr Han, for the first time, raised the possibility of some sort of attempt to sell the properties, other than by way of execution of the warrant. Counsel indicated that FNC and Mr Han would be amenable to selling the properties in an orthodox manner, via estate agents, with the proceeds of sale then to be paid to the third defendant.

19 That was, with respect, a very sensible course. When confronted with that possibility, counsel for Mr Jiang indicated that it was likely that he would able to receive instructions to the effect that this was a far more appropriate course than pressing any execution of the warrant.

20 This is unsurprising, as execution of a warrant of sale by the sheriff would only affect Mr Han's equity in the properties. That, coupled with the fact that the properties are all tenanted, including to a supported person who is provided with accommodation as part of the NDIS scheme, not only have the strong possibility of minimising the price that would be obtained by the sheriff, as compared with the sale on a more orthodox basis, but also has the potential to disrupt the legitimate interests of those presently in occupation of the property.

21 Given the sensible proposal and the equally sensible receptiveness to it, I propose to adjourn the further hearing of the application for a stay on execution of the warrant to 10 April 2026. I would be hopeful that the parties, through the assistance of their legal advisors, should be able to agree on a process for the orderly realisation of the properties concerned in a way which works to the mutual benefit of the first, second and third defendants and indeed, the current occupants of those properties.

22 That process will, no doubt, require some guardrails to be put in place, such as the timing of the sales and default mechanisms, but none of those matters should, with luck, give rise to difficulties. In the event that the parties are unable to agree on a consensual basis for the sale of the properties to occur, then I will hear further argument on the application for a stay on execution of the warrant on 10 April 2026.