Plaintiff v First Defendant

(a) security for Jiang's costs of the proceeding up to the conclusion of the trial in the amount of $440,000;

(b) security in the sum of $241,309.87 in respect of the undertaking as to damages proffered by Daxin in support of the freezing order granted by the Court upon the making of the injunction on 24 September 2025.

(a) the expert report of John Colonna, costs consultant retained by Jiang ('Mr Colonna') dated 30 January 2026 which states that if successful Jiang is likely to recover costs on a standard basis in the sum of $459,483.85 ('Colonna report');

(b) the affidavit of his solicitor, Si Zhang ('Ms Zhang') affirmed 13 November 2025 ('Zhang affidavit');

(c) the affidavit of Linda Thai, affirmed 30 January 2026 ('Thai affidavit').

3 Daxin does not oppose an order for security but submits that the estimate provided by its retained costs consultant, Sharon Drew ('Ms Drew'), should be accepted. It contends that security should be ordered in the amount of $224,050, of which $130,000 should be paid into Court within 21 days, with the balance 14 days before trial.

4 Daxin submits that the application for an order that security be provided in support of the undertaking as to damages given on 24 September 2025 should be dismissed.

5 Daxin relies upon three affidavits affirmed by its instructing solicitor, Michael Xu ('Mr Xu'), dated 25 November 2025, 27 November 2025 and 24 February 2026. A report from Ms Drew is exhibited to Mr Xu's affidavit of 25 November 2025.

6 Before turning to the substantive issues raised by Mr Jiang's summons, it is convenient to set out briefly the background to the proceeding.

7 By a loan agreement made on 20 October 2015 between Daxin and the first defendant, Fortune New City (Yarraville) Pty Ltd ('FNC'), Daxin agreed to advance over $123 million to FNC in 2015/2016. The sums advanced were repayable on 30 October 2025. The obligations of FNC were guaranteed by the second defendant ('Han').

8 The security provided by FNC for the loan included an equitable mortgage over a property in Yarraville. On 24 August 2021, FNC entered into a contract to sell the property for $255 million and received a deposit of $19,125,000.

9 By proceedings commenced in the Supreme Court of New South Wales ('the New South Wales proceeding'), Jiang brought a monetary claim against FNC and Han claiming the sum of $5,357,297. Jiang obtained a freezing order against FNC and Han over all of their property and, in compliance with that freezing order, FNC and Han paid the sum of $5,658,262 into Court. Daxin alleges that this sum was paid from the deposit moneys paid by the purchaser pursuant to the contract of sale for the property.

10 On 5 October 2021, the freezing order was varied so as to permit the sum paid into Court being paid into a joint interest-bearing account opened by the solicitors for FNC, Han and Jiang.

11 On 30 June 2025, Jiang obtained a judgment in the Supreme Court of New South Wales against FNC and Han. By orders made by her Honour Schmidt AJ on 21 August 2025, that Court ordered that the funds which FNC and Han had paid into Court be released to Jiang.[1]

12 At short notice, on 24 September 2025, Daxin commenced a proceeding in this Court against FNC, Han and Jiang and obtained an interlocutory injunction restraining the defendants, until the final determination of this proceeding or further order, from, inter alia, removing from Australia, encumbering, disposing of, dealing with or in any way diminishing the value of the funds contained in, or representing the proceeds of, account number 06200051115381 ('Account') with the Commonwealth Bank of Australia in the name of 'Sunfield Chambers Solicitors and Associates' (being Jiang's solicitors), and Hiways Australia Pty Ltd, OBO Fortune New City Yarraville Developments Pty Ltd and Han.

13 The order was made on notice and after argument. It was opposed by Jiang, who was represented by Senior counsel from the Sydney Bar appearing by video link. The order was made upon Daxin providing an undertaking as to damages.

14 Subsequently, pleadings have been filed in this Court. In essence, Daxin and Jiang are engaged in a priority dispute concerning the funds held in the Account. Both Daxin and Jiang (the latter by counterclaim) seek declarations of trust and priority over the funds held in the Account.

15 As noted above, Daxin does not oppose an order for security. It is a foreign company incorporated in the PRC. It does not own any real property in Australia and does not have any significant real assets in Australia. An order for security for costs is designed to protect the efficacy of the jurisdiction to award costs. The Court's purpose in ordering a foreign corporation to give security for costs is to ensure that a successful defendant will have a fund of sufficient amount within the jurisdiction of the Court against which they can enforce the judgment for costs.[2]

16 Given that the grant of security for costs is not opposed, the real issue in dispute concerns the quantum of security.

17 The general applicable principles are well-established and were conveniently described by Matthews JR (as her Honour then was) in Ravensthorpe Pty Ltd v Westpac Banking Corporation:[3]

(a) the amount of security is within the Court's discretion;

(b) the amount is that which the Court thinks just, having regard to all of the circumstances;

(c) in ordering security, the Court does not set out to give the defendant a complete and certain indemnity for costs; and

(d) the Court's task is not akin to a taxation of the defendant's probable costs.

18 To similar effect, in Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd,[4] Tate and Kyrou JJA articulated practical guidance and the relevant legal principles for determining what constitutes "sufficient security"':[5]

(a) the Court has a broad discretion to order an amount which it considers 'just and reasonable' having regard to all the circumstances of the particular case. Those circumstances include:

(i) the nature of the proceeding;

(ii) the nature and complexity of the steps that need to be undertaken by the party seeking security;

(iii) the likely costs in undertaking those steps;

(iv) the length of the trial;

(v) any security already provided; and

(vi) the possibility that the proceeding may settle;

(b) the purpose of security for costs is not to provide full indemnity for the estimated costs of the defendant, but rather, an estimate of an 'amount that it considers adequate in all the circumstances of the case';

(c) the amount ultimately arrived at by the Court must not be so low that it fails to provide any real protection to the defendant; conversely, it must not be so high that it is oppressive to the party required to provide the security;

(d) the quantum of security ordered is not the subject of precise mathematical calculations. Instead, the Court adopts a 'broad brush' approach to determining the appropriate quantum of security involving 'guesstimates as much as estimates'. However, that process must have an evidentiary basis. In this regard, the Court 'must have regard to the evidence adduced by the parties as to quantum - whether in the form of an affidavit by an experienced litigation lawyer or an expert report by a costs consultant - although it is not bound by the parties' estimate; and

(e) the exercise is not one of taxation.

19 As noted above, Ms Drew, the costs consultant retained by Daixin, has estimated Jiang's recoverable costs (calculated on a party/party basis) as being $224,050 (assuming the trial is concluded within three days) or alternatively, $261,100 (assuming the trial is concluded within four days). She has provided a detailed report with clear reasoning and has broken down the estimate of costs associated with the appropriate interlocutory steps.

20 Her estimate does not allow for any security for past costs, that is, costs incurred prior to the issue of the summons.

21 The estimate formulated by the costs consultant Mr Colonna, is similarly detailed and well-reasoned. Mr Colonna estimates that the recoverable costs, similarly calculated on a party/party basis, total $459,483.85, comprising an allowance for past costs of $107,100 and costs from the date of the summons of $352,383.85. Mr Colonna's estimates are premised on a trial of four days' duration.

22 It is helpful to conduct a like-for-like comparison of the estimates. This requires putting aside for present purposes, Mr Colonna's estimate of the past costs of $107,100 and using Ms Drew's estimate based on a four day trial with that of Mr Colonna's estimate, which is also based on an estimate of four days. Once this is done, the respective estimates are $261,100 and $352,383.85.

23 Further, Ms Drew's estimates have been formulated on cost estimates which are exclusive of GST, whereas Mr Colonna's are predicated on a GST-inclusive basis.

24 Mr Colonna's estimate of the costs based on a GST-inclusive figure is derived from the instruction provided to him by the solicitors for Jiang that Jiang is not registered for GST and, as such, is not entitled to claim an input tax credit on the legal costs billed to him. In those circumstances, as Mr Colonna's report recognises, the costs assessor is permitted to assess costs on a GST-inclusive basis.

25 Given that evidence, I consider that it is appropriate to fix costs by reference to a GST-inclusive assessment. On that basis, Ms Drew's estimate of costs, assuming a four day trial, of $261,100 ex GST is the equivalent of $287,210 inc GST which narrows the difference further to Mr Colonna's estimate of $352,383.85. Further, one of the items which underpins Ms Drew's estimate for the preparation of evidence has apparently been reduced by 50% on the basis that half of those costs relate to the defence of Daixin's claim and half to Jiang's counterclaim. The counterclaim is in effect a mirror of Daixin's claim. It is wholly defensive as recognised by counsel for Jiang who accepted that the form of order granting security should provide for a stay of both the claim and the counterclaim in the event that security is not provided.

26 Once this reduction to the evidence preparation costs is adjusted, the differential between the respective estimates narrows even further.

27 That said, I accept that the estimates formulated by Mr Colonna for some of the steps such as discovery and subpoenas, general preparation and witness preparation appear to be a little high having regard to what appears to be a relatively narrow dispute likely to turn on questions of law determined in light of mainly undisputed facts. Further, it still remains entirely unclear as to what evidence Jiang intends to adduce beyond documentary evidence. Jiang's entitlement to the moneys in the account arise as a consequence of orders made in the New South Wales Supreme Court. It is difficult to conceive of any genuine dispute as to that entitlement apart from Daxin's asserted priority claim, which turns on facts which must be established by Daxin, principally by documentary evidence and otherwise from the application of principles of law to what Daxin contends are essentially undisputed facts.

28 I also consider that the trial duration is more likely to be three days than four, although I acknowledge that there is the possibility of a need for evidence of interpreters or translators which will inevitably slow matters down.

29 Putting aside for now the question of past costs, adopting a broad brush approach, I propose to allow $289,625 for costs from the date of the summons to the conclusion of the trial calculated as follows:

(a) Security for costs (including counsels' fees) - Ms Drew's estimate appears to be higher than that of Mr Colonna's. In those circumstances, I shall allow the sum of $20,384.1 assessed by Mr Colonna, including for counsels' fees.

(b) With respect to the costs of discovery and subpoenas, Ms Drew's estimate of $5,850 (exclusive of GST) is, in my view, too low. Conversely, I am inclined to think that Mr Colonna's estimate of $25,527.70 is too high given the limited evidentiary matters. I shall allow $15,000.

(c) In relation to preparation of evidence (including counsels' fees) - Ms Drew's estimate is for $42,000, again on a GST-exclusive basis, but also on a basis which at least in part appears to provide for reduction on account of the counterclaim, which I do not consider is appropriate. Mr Colonna's estimate is $58,997.40. I propose to allow $50,000.

(d) There is little difference between the parties' estimates in relation to directions hearings. I shall allow Mr Colonna's estimate which is inclusive of GST of $16,741.45.

(e) In relation to preparation for trial, Ms Drew allows $61,850 exclusive of GST, whilst Mr Colonna's estimate is $100,571.90. I shall allow $85,000.

(f) In relation to trial costs excluding disbursements, Ms Drew's estimate is $63,750 (3 days and ex GST) whilst / whereas Mr Colonna's is $107,561.30. I propose to allow $85,000 (inc GST).

(g) In relation to trial disbursements, Ms Drew's estimate is $7,800 whilst Mr Colonna's is $22,600. I propose to allow $17,500.

The total of the foregoing amounts is $289,625.[6]

30 In relation to the question of past costs, Mr Colonna records the instruction provided to him that the actual costs up to and including 21 January 2026 totalled $214,326.58 exclusive of GST. As he notes, he was not provided with copies of the invoices rendered to Jiang and his assessment of past costs was necessarily constrained by the absence of source material that would allow the work to be properly tested. He does, however, set out the disbursements in the form of counsels' fees that have been prepared. Mr Colonna applies a 50% reduction, reflecting that the incurred costs by Mr Jiang necessarily reflect a solicitor own client standard. In so doing, he describes a 50% allowance as being both conservative and appropriate in circumstances where there was an unavailability of source invoices.

31 In many cases, a party seeking security will not be able to obtain an order for security which incorporates an allowance for past costs. The rationale for past costs being denied is generally recognised as a product of a plaintiff incurring the costs of prosecuting a proceeding without being put on notice that it will be required to provide security. Because the costs might be rendered wasted if the plaintiff is unable to provide security and the proceeding is then stayed as a consequence, it is necessary for a party seeking security for costs to move promptly. If it does not, then security might be refused or limited to exclude past costs.[7] That is not the case here for two reasons. First, Jiang first requested security for costs on 25 September 2025, the day after the grant of injunctive relief, albeit that he did not identify any particular amount. As such, it cannot be said that Daxin has been under any misapprehension that it would not be required to provide security for the defendants' costs of the proceeding. In contrast, since that point, Daxin's solicitors have actively engaged with the solicitors for Jiang as to the appropriate amount of security.

32 Secondly, Daxin's evidence does not condescend to an inability on its behalf to provide security. Rather, Mr Xu's evidence is limited to the difficulty that Daxin has in providing such security in a timely manner, given the restrictions on capital outflows imposed by the PRC. In short, there is no evidence, or no sufficient evidence, of any stultification in the event that security is ordered. Among other things, there is no evidence of any impecuniosity or an inability to provide security on the part of those who stand to benefit from Daxin's success, such as its shareholders.

33 In those circumstances, there is no reason as to why the assessment of the amount of security should not extend to past costs. Mr Colonna's assessment of a 50% discount seems broadly appropriate, although recognising the disadvantage that the non-provision of invoices accords to Daxin, I will reduce that amount slightly to $95,000.

34 Accordingly, the total amount of security ordered will be $384,625. I do not consider that it is either necessary or appropriate for the form of order to provide that the entirety of the security should be provided in one payment in short order. It is sufficient if $130,000 of the security is provided within 21 days of the date of this order. The orders will provide for the balance of the security to be provided by 30 June 2026.

35 The trial date will be after that date, as there is now no realistic prospect of a trial before the second half of the year. Accordingly, the full amount of security will be required to be paid before the trial commences. The orders which provide for the provision of security on such a basis should enable Daxin to successfully organise its affairs so as to ensure that the necessary funds can be removed from the PRC. The orders will otherwise provide that the claim and the counterclaim will both be stayed if security is not provided.

Security in respect of Daxin's undertaking as to damages

36 Jiang also seeks security in the sum of $241,309.87 in respect of the undertaking as to damages proffered by Daxin in support of the injunction granted 24 September 2025. This figure of $241,309.87 is said to comprise the interest payable on loans taken out by two special purpose entities controlled by Jiang, Tommy Doncaster Pty Ltd, Tred Nominees Pty Ltd ATF Tred Family Trust and a debt owed by a third company, Princes Domain Pty Ltd, to the Australian Taxation Office ('ATO'), as well as interest on a loan taken out by Jiang personally.

37 According to Jiang's solicitor, Ms Zhang, Jiang intended to use the funds the subject of his judgment obtained against FNC and Han so as to repay the loans and satisfy the ATO debt. He has been unable to do so and accordingly has had to take out new loans.

38 Jiang submits that the price of an interlocutory injunction is the giving of a valuable undertaking as to damages.[8] Absent funds being in the jurisdiction, Jiang submits that the undertaking as to damages offered by Daxin is effectively worthless.

39 Jiang's written outline of submissions records that the interlocutory injunction obtained on 24 September 2025 was obtained ex parte. That was not the case. The application for injunctive relief was brought on by Daxin at short notice on 24 September 2025. However, as the orders made that day confirm, the injunction was granted on the return of a summons filed on that day. As earlier stated, Jiang was represented at the return of the summons by Senior counsel from the Sydney Bar.

40 Given the short notice, it would have been upon Jiang to seek a short adjournment so as to file material. He did not do so. Instead, Jiang made a forensic decision on that day to deal with the application for an interlocutory injunction on its merits and, to that end, filed evidence in opposition shortly prior to the hearing commencing.

41 Senior counsel for Jiang submitted that the application for injunctive relief should be denied on the basis as there was no serious question to be tried as to the asserted proprietary interest of Daxin in the moneys held in the joint account. As a further supporting factor in opposition, Senior counsel for Jiang asserted that any undertaking as to damages was worthless because of the absence of assets in the jurisdiction. In reply, Senior counsel for Daxin conceded that the apparent weakness of the undertaking for damages is a matter which was relevant to the interlocutory relief, but noted that there was no evidence that Jiang was suffering loss if the moneys were the subject of an order restraining payment to Jiang and further that the moneys were in an interest bearing account.

42 Whilst there is no doubt that a court may impose conditions upon the grant of injunctive relief, including conditions as to the provision of security, the Court did not impose any on 24 September 2025. No such condition was sought by Jiang, who instead argued that the injunction should be refused on the basis that there was no serious question to be tried, and additionally on the basis that the undertaking was not supported by assets in the jurisdiction.

43 The general rule is that once an order has been made and authenticated, the Court has no jurisdiction to review, vary or set it aside. Save for the issue which is addressed below in relation to the form of the undertaking, Jiang's application for security now, as the price of obtaining the interlocutory injunction, is a belated attempt to obtain conditions to the injunction after the strategy of resisting the injunction had failed. In effect, this is an attempt to reargue the terms on which the interlocutory relief was granted.

44 Further, as the argument on the day recognised and as the ruling made clear, the funds were frozen on the terms of the interlocutory injunction on the basis that the proceeding was one suitable for an expedited trial with a short timetable for the filing of pleadings. A prompt trial would have ameliorated any prejudice arising from any deficiency in the undertaking as to damages, particularly where the moneys frozen were in an interest bearing account and the interest would enure for Jiang's benefit if Daxin's case failed.

45 In advance of the matter returning to Court before me for scheduled directions, my chambers emailed the parties on 30 October 2025 advising of the Court's proposal to enter the proceeding in the Short Cases Expedited List and to fix the proceeding for trial on 1 December 2025 on an estimated duration of 3 days. The email further informed the parties that if they had any objection to that course, they should advise of any objection by 4pm on 5 November 2025.

46 Jiang, but not Daxin objected to the proceeding being fixed for trial on such an expedited basis. Instead, when the matter returned to Court on 14 November 2025, Jiang pressed for relatively standard directions including a timetable for the making of an application for security for costs and in respect of Daxin's undertaking as to damages. The directions made that day listed the matter for further directions on 5 December 2025, at which time Jiang again maintained that the proceeding was not yet ready for trial and that he needed to serve subpoenas seeking verification of the flow of funds from Daxin to FNC and associated entities. These subpoenas had been the subject of objection from Han, but not FNC, and I determined the objection in Jiang's favour on 27 February 2026. Jiang made no request for earlier determination.

47 Daxin has supported the expedited, prompt and timely disposition of the proceeding, which has not been acceded to by Jiang. To this extent at least, any ongoing damage to Jiang's interest has been caused by the forensic decisions that he continues to make, which include his continued efforts to identify further evidence to respond to Daxin's claim.

48 In circumstances where Jiang now asserts ongoing prejudice arising from the interlocutory order, his unwillingness to embrace an expedited hearing was somewhat surprising. This is particularly so given that on 24 September 2025, he made submissions through his counsel that the position was so clear that Daxin could not even establish that there was a serious question to be tried with respect to its assertion as to a priority interest in the funds held in the account. There is a tension between Jiang's submissions on that day to the effect that Daxin's case was hopeless and the subsequent position taken by him that he needs time to properly respond to Daxin's case.

49 Whilst Jiang is entitled to a reasonable opportunity to meet the case brought against him, it is apparent that some of the prejudice which he now asserts results from forensic decisions he has made.

50 Accordingly, I do not consider that it is appropriate to now effectively revisit the interlocutory injunction granted on 24 September 2025 by imposing conditions to support the undertaking as to damages.

51 It emerged during the argument concerning security that there is a deficiency in the form of the undertaking as to damages which appears inadvertently to only refer to damage suffered by the defendants and not any other persons, as is standard - a point which Daxin readily accepts. It is not entirely clear how this occurred, but it appears to be a product of the haste with which the matter came on before hearing, the fact that Senior counsel for Daxin attended the hearing in person with a hard copy of the proposed order, and that Senior counsel for Jiang appeared remotely by audio-visual link.

52 Whilst this omission does enliven the opportunity to re-open the orders made 24 September 2025, I do not consider that it is an appropriate exercise of discretion to allow Jiang to do that which he did not do on 24 September 2025, for the reasons earlier set out. I do, however, propose to make a further order that the injunction will be discharged unless Daxin provides a signed undertaking as to damages, which extends to loss suffered by third parties, within 7 days.

53 Accordingly, the orders that will be made are as follows:

1 The plaintiff provide security for the third defendant's costs of the proceeding from its commencement until the conclusion of the trial in the sum of $384,625.

2 The security shall be provided by way of payment into Court in two instalments as follows:

(a) the sum of $130,000 on or before 27 March 2026;

(b) the sum of $254,625 on or before 30 June 2026.

3 In the event that the security is not provided by the dates referred to in paragraph 2, the plaintiff's claim and the third defendant's counterclaim shall be stayed.

4. The summons filed 14 November 2025 is otherwise dismissed.

5. The costs of the plaintiff and the third defendant of the summons filed 14 November 2025 shall form part of their respective costs of the proceeding.

6. The plaintiff shall provide to the solicitors for the third defendant and to the Court a signed undertaking as to damages in the following terms on or before 13 March 2026:

The plaintiff undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

7. In the event that the plaintiff does not comply with paragraph 6, paragraph 1 of the order made 24 September 2025 shall be discharged.

8. Liberty to apply.

[1] Jiang v Han (No 5) [2025] NSWSC 948.

[2] Fine China Capital Investment Ltd, Re , [2024] FCA 1523, [18] (Neskovcin J).

[3] [2017] VSC 362, [56] (authorities omitted) (JR Matthews).

[4] [2017] VSCA 293, [63]-[65].

[5] As substantially reproduced in the submissions extracted in the oft cited case of Jabiru Satellite Ltd (in liq) (recs and mgrs appt) v Societe Generale [2022] VSC 521, [97] and following (Irving AsJ).

[7] See inter alia Oswal v Australia and New Zealand Banking Group Ltd [2016] VSC 52, [44] (Sifris J).

[8] Bensons Funds Management Pty Ltd v Body in Balance Chiropractic Pty Ltd [2015] VSC 280.