Trafford-Jones v Liu, in the matter of the bankrupt estate of Liu

Federal Court of Australia|2024-09-02|Before: Cheeseman J

INTRODUCTION 1 The applicants, Thyge Trafford-Jones and Gavin David King, are the joint and several Trustees in bankruptcy of the estates of the first respondent, Hua (Alysha) Liu, and the second respondent, Kei (Dennis) Kwok, (together, the Bankrupts). 2 By their Amended Interlocutory Application dated 14 August 2024, the Trustees seek freezing orders pursuant to section 23 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) and rule 7.32 of the Federal Court Rules 2011 (Cth) (the Rules) in respect of the following respondents that the Trustees believe are holding assets, including real property, on trust for the Bankrupts: (1) E & B Holdings Pty Ltd, the third respondent; (2) Hanoi Landmark Investment Pty Ltd, the fourth respondent; (3) Landmark Everest Pty Ltd, the fifth respondent; (4) E & B Business Pty Ltd, the sixth respondent; and (5) Chi Yuen Cheung, the seventh respondent. 3 These five respondents were the only active respondents on the Application. I will refer to them as the Respondents. The Bankrupts are the first and second respondents. The Bankrupts, having been served, did not appear when the matter was called on for hearing. 4 The Respondents each oppose the entirety of the relief sought in the Application. 5 The Application came before me in my capacity as Commercial and Corporations Duty Judge on 26 August 2024 and again on 29 August 2024.

EVIDENCE 6 In support of their Application, the Trustees relied on the following evidence: (1) an affidavit of Thyge Trafford-Jones affirmed 17 June 2024 and Exhibit TTJ-3 thereto; (2) an affidavit of Alexander Dennis Blackie, a solicitor for the Trustees, affirmed 25 June 2024 and Exhibit ADB-1 thereto; (3) an affidavit of Blake Joel O'Neill affirmed 8 August 2024 and Exhibit BJON-1 thereto; (4) an affidavit of Mr Trafford-Jones affirmed 22 November 2023 and Exhibit TTJ-1 thereto; and (5) an affidavit of Mr O'Neill affirmed 28 August 2024 and Exhibit BJON-2 thereto. 7 On 27 August 2024, the Court was informed of an error in Mr Trafford-Jones' affidavit affirmed 17 June 2024. The correction made was to confirm that an email from Ms Liu dated 23 September 2021, referred to in paragraph 68(h) of Mr Trafford-Jones' affidavit, does not include the specific words "my property" and that the assertion in Mr Trafford-Jones' affidavit to the contrary is incorrect. 8 In addition, the Trustees read affidavits which demonstrated that service had been effected on each of the Bankrupts. 9 The Respondents tendered a letter, described as a letter of complaint, from Ms Lou, AHD Lawyers, solicitor for the respondents to Mr O'Neill, ERA Legal, solicitor for the trustees dated 14 August 2024. The Respondents did not otherwise rely on any other evidence. 10 On 28 August 2024, the Trustees applied for leave to reopen their case to adduce further evidence. The reopening application was opposed. I granted leave to reopen and the Trustees read the final affidavit of Mr O'Neill and tender the exhibit thereto (see paragraph [6(5)] above). The reopening application is addressed at paragraph [58] below.

CONCLUSION IN SUMMARY FORM 11 On 2 September 2024, I made freezing and ancillary orders against the Respondents. At that time, I did not deliver reasons. These are my reasons for making the orders that I made on Monday.

PRELIMINARY OBSERVATION 12 The evidence relating to: (1) the establishment and operation of the corporate respondents; (2) the operation of the trust arrangements associated with Ms Liu and the Respondents; and (3) the relationships existing between the relevant companies, trusts and individuals, is complex. These complexities and interrelationships are exposed in the voluminous evidence relied on by the Trustees. Regrettably, notwithstanding the time between the bulk of the evidence being finalised and the hearing, the evidence was not addressed in a detailed and systematic way in the written and oral submissions advanced on behalf of the Trustees. 13 The Trustees' investigations into the affairs of each of the Bankrupts are continuing. The provision of information to the Trustees has been, at best, sporadic and has required the Trustees to have recourse to the compulsory processes of the Court, with those processes being directed to the Bankrupts and an array of third parties. The disclosures made by the Bankrupts in their bankruptcy questionnaires are incomplete and, in the Trustees' view, materially misleading. The Trustees' present understanding of the corporate and trust arrangements and property interests of the Bankrupts, as revealed in the affidavits of Mr Trafford-Jones, has evolved as their investigations have progressed but is still necessarily incomplete. The investigations undertaken by the Trustees have extended to the issue of examination notices and production notices. The Trustees are still in the process of conducting examinations and reviewing documents produced by various third parties. The information asymmetry that often besets the investigations of external administrators is manifestly in play here, and has clearly, affected the extent to which the Trustees are able at this stage of their investigations to lead evidence that would provide a complete picture of the relationships and dealings between the Bankrupts and the Respondents. Even so, the Trustees have adduced a large amount of evidence on this Application, that it was necessary to thoroughly review after the initial hearing. 14 As mentioned, the Respondents did not adduce any evidence other than the letter of complaint. By this letter, the Respondents, amongst other things, communicated their opposition to the freezing orders and requested a proper articulation of the relief to be sought against the Respondents and the legal basis for such relief: T28.44-47, 26 August 2024. No response was provided by the Trustees' solicitors. 15 The Respondents submitted the Trustees' ongoing failure to properly articulate the claim is fatal to the present Application: T40.14-17, 26 August 2024. 16 The Trustees submitted that in accordance with the rule in Jones v Dunkel [1959] HCA 9; 101 CLR 298 the Court should more readily draw the inferences for which the Trustees contend, based on the Trustees' evidence filed to date and the Respondents' failure to adduce any evidence to contradict those inferences being drawn: T10.19-23, 26 August 2024. The Trustees' submission, expressed in this way, somewhat conflates the rule in Jones v Dunkel - that the evidence that the Respondents may have adduced would not have assisted them - and principle in Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970 - that evidence is to be weighed according to the capacity of a party to adduce it. 17 The Respondents submitted that a Jones v Dunkel inference should not be drawn in light of the limited objective evidence proffered by the Trustees in support of the Application: T41.21-24, 26 August 2024. The Respondents submitted that the Trustees' failure to respond to the letter of complaint coupled with the scant exposure of the Trustees' case on the matters on which the Trustees bore the onus gives rise to a conclusion that there was no need for the Respondents to adduce any evidence. Further, and in the alternative, that a Jones v Dunkel inference cannot be used to fill a hole in the Trustees' case. 18 I have some sympathy for the Respondents' submission as to the scant exposure of the Trustees' case given the Delphic way in which the Trustees advanced their submissions, both in writing and orally. However, having regard to the detailed evidence relied upon by the Trustees in relation to the establishment and operation of the corporate respondents, the trusts associated with them and the relationships existing between the companies, the trusts and the relevant individuals, and taking into account the principle in Blatch v Archer, I have concluded that the absence of any substantive evidence from the Respondents is not so readily explained. 19 I do not accept that the letter of complaint should be treated as having the prophylactic effect for which the Respondents contend. Rather, I am satisfied that the proper inference to be drawn is that such evidence as each of the Respondents may have adduced would not have assisted them on this Application. That said, I accept that the Jones v Dunkel inference cannot be used to fill a hole in the Trustees' case. 20 I am satisfied that each of the Respondents was in a position to call evidence likely to be relevant to the determination of the present Application. I do not accept that the lack of response to the letter of complaint supplies an adequate explanation for the Respondents not calling any substantive evidence. Accordingly, in reaching my findings below, I have drawn the inference that such evidence as any of the Respondents may have called would not have assisted them in relation to the matters in issue on this Application.

THE PROPERTY SPECIFICALLY NAMED IN THE FREEZING ORDERS 21 It is convenient to first provide details in respect of the real property that is specifically referred to in the freezing orders sought by the Trustees. The Trustees submit that the following real property is held on trust for the Bankrupts: Defined as Owner Address Folio Identifier Jones Street Property E & B Holdings 703/280 Jones Street, Pyrmont NSW 2009 95/SP92496 Loftus Street Property Hanoi 1001/18 Loftus Street, Sydney NSW 2000 34/SP102355 Orinoco Street Property Landmark 19 Orinoco Street, C/337975 Pymble NSW 2073 Cliff Road Property Mr Cheung 309/30 Cliff Road, Epping NSW 2121 80/SP101810

The Haiye Proceeding 22 In 2017, Haiye Developments Pty Limited, Janzong He and Haiqiang He commenced proceedings in the Supreme Court of New South Wales against, amongst others, Ms Liu, Mr Kwok and Pionnier Pty Ltd, a company of which Mr Kwok was the sole director and shareholder (the Haiye Proceeding). The list of active defendants ultimately reduced to three in number being Ms Liu, Mr Kwok and Pionnier. While Ms Liu and Mr Kwok were represented in, and defended, the proceedings, neither of them gave evidence in the proceeding. 23 The plaintiffs were successful in obtaining a judgment against the Ms Liu, Mr Kwok and Pionnier: Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd [2022] NSWSC 937; with orders made on 9 September 2022. 24 The Haiye Proceeding concerned claims by the plaintiffs that Ms Liu, Mr Kwok and Pionnier were involved in a fraudulent enterprise in respect of certain transactions that caused, or played a part in causing, substantial damage to the plaintiffs. The events giving rise to the Haiye Proceeding commenced in about 2015. Kunc J described the claim against Ms Liu, Mr Kwok and Pionnier as follows (at [4]): The facts of the underlying dispute the subject of these proceedings are complex. That is often the case when allegations of fraud are involved. The primary allegation advanced against [Ms Liu, Mr Kwok and Pionnier] is that by their involvement in a fraudulent enterprise, they have caused, or played a part in causing, substantial damage to the Plaintiffs. The primary architect of the fraudulent enterprise, it is alleged, is a former Federal Parliamentarian, Mr Nickolas Varvaris; the Second Defendant in these proceedings. Although Mr Varvaris' involvement in the enterprise is undeniably central to the Plaintiffs' case, the Plaintiffs have abandoned their claims against him on account of his bankruptcy subsequent to the commencement of these proceedings. 25 The false representations in which Ms Liu, Mr Kwok and Pionnier were involved concerned the feasibility and achievability of proposed developments, willingness and capability to purchase property, true market valuations of properties and remaining silent in the face of representations made by Mr Varvaris. It is sufficient for present purposes to note that Kunc J found that Ms Liu, Mr Kwok and Pionnier had engaged in misleading and deceptive conduct and deceit: Haiye at [420] (Ms Liu), [421] (Mr Kwok), [479], [493]. His Honour was satisfied that Ms Liu, Mr Kwok and Pionnier were all part of the ruse of which Mr Varvaris was the principal architect and that they were principals in the impugned transactions and not mere intermediaries or mouthpieces for Mr Varvaris: Haiye [433], [435]. The Court was satisfied that Ms Liu, Mr Kwok and Pionnier were "inside the tent with Mr Varvaris" and not outside of it: Haiye at [439]. They each aided and abetted the other and were directly or indirectly knowingly concerned in or a party to the contravening conduct of the others: Haiye at [441]. 26 Several freezing orders were made during the Haiye Proceeding, including as against Ms Liu, Mr Kwok and Pionnier on 9 March 2017: Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd [2020] NSWSC 732 at [88]. In order to discharge these freezing orders, $3,564,000 was paid by Ms Liu, Mr Kwok and Pionnier, through their solicitors Sunlit Legal, into the court on 14 March 2017. On 23 April 2021, Kunc J made orders releasing part of the freezing order funds, reducing the total amount held by the court to $2,997,750. 27 The Haiye Proceeding was heard on 12-16, 19, 20, 22, 23, 27 April 2021 with further written submissions being filed on 7, 17 and 28 May 2021. 28 On 13 July 2022, Kunc J delivered reasons for judgment in favour of Haiye and subsequently on 9 September 2022 made orders including, amongst others, judgment against Ms Liu, Mr Kwok and Pionnier for $5,871,607.38 plus interest and costs. No appeal from this judgment has been lodged. 29 The Haiye judgment debt appears to have precipitated each of the Bankrupts taking steps to enter voluntary bankruptcy. 30 When questioned in her examination about the judgment, Ms Liu said that she recalled that reasons for judgment in the Haiye Proceeding were delivered and orders were made giving judgment against Ms Liu, Mr Kwok and Pionnier in September 2022 - before she became bankrupt. Ms Liu gave evidence that she applied to appeal the judgment as she did not think it was fair and sought to vindicate her reputation, but was not capable of pursuing the appeal because she did not have the funds to pay for legal fees. Ms Liu explained that the first defendant in the Haiye Proceeding, The Commercial Business Centre Pty Ltd, "took all the money": T86.46-47, 20 May 2024. 31 Ms Liu gave evidence that she did not think Kunc J's findings in Haiye Proceeding as to certain misleading and deceptive representations made by Ms Liu and Mr Kwok to Haiye were relevant to her bankruptcy. She gave evidence that she explained everything to her trustee and thought her trustee "would deal with Haiye": T86.5-6, 20 May 2024. 32 When questioned in his examination about the judgment, Mr Kwok similarly acknowledged that the judgment was entered against Ms Liu, Mr Kwok and Pionnier for a substantial sum and that findings were made that they had engaged in misleading and deceptive conduct: T190.23-T191.6, 21 May 2024. Mr Kwok also said that there was no appeal of the judgment because Ms Liu and Mr Kwok did not have the funds: T191.21-29, 21 May 2024. Mr Kwok gave evidence that he started to experience financial difficulties as a result of the Haiye Proceeding and the large amount of legal fees incurred defending that case: T113.5-18, 21 May 2024. 33 Both Ms Liu and Mr Kwok did not accept Kunc J's factual findings against them. They each maintained the position that they sought to advance in the Haiye Proceeding - that they were in effect just caught in the middle of the impugned arrangements: T191.35-43, 21 May 2024. That proposition was comprehensively rejected by Kunc J. 34 The Trustees relied on the decision in Haiye. They did not however provide submissions which meaningfully contextualised the relevant events in this proceeding by reference to the facts found in the detailed reasons for judgment given in Haiye. The Trustees submitted that the Haiye Proceeding was commenced in March 2017 which was about seven months after E & B Business and E & B Holdings were incorporated and about a month before the purchase of the Jones Street Property completed. The other real properties were acquired while the Haiye Proceeding was on foot. At its height, the submission advanced for the Trustees was as follows (T57.23-34, 26 August 2024): HER HONOUR: And what are you asking me to infer from that in this proceeding? MR NOTLEY: That the course of the commencement of these various transactions to purchase these properties were either entered into shortly before the proceedings were commenced or after they were commenced. That's an important background matter. And bearing in mind the steps or the evidence that the bankrupts have gone to to indicate they know nothing about these various properties in these various companies, your Honour would infer from that that all of these properties were purchased with the intention of putting them into the names of third parties or third entities or individuals for the purposes of putting them out of the reach of creditors of the bankrupts in the event ultimately that judgment was successfully obtained against the bankrupts in those proceedings. 35 The purpose of the Court's power in an application such as this is directed to protecting the processes of the Court. Those processes extend to the processes engaged by the Court's jurisdiction under the Bankruptcy Act 1966 (Cth), which informs the Trustees' proceeding in this Court. As mentioned above, the Haiye judgment debt appears to have precipitated each of the Bankrupts taking steps to enter voluntary bankruptcy. Notwithstanding the generalised submissions advanced by the Trustees, what emerges from the detailed reasons for judgment in Haiye that is presently of some contextual relevance in this Application is that in about March 2016 substantial payments were obtained from the Haiye Proceeding plaintiffs and applied under the cover of misleading and deceptive conduct and deceit to the benefit of Ms Liu, Mr Kwok and Pionnier. In March 2017, after freezing orders were made against them, Ms Liu, Mr Kwok and Pionnier paid $3,564,000 into court in the Haiye Proceeding. In their opening written submissions in the Haiye Proceeding, which I infer would have been made proximate to the start of the hearing in April 2021, Ms Liu, Mr Kwok and Pionnier accepted that (Haiye at [293]): a. Of the $3,564,000 paid by the Plaintiffs into the trust account of Varvaris & Co in respect of the Second Kogarah Property, $2,231,762.83 of that money was applied towards the purchase price of the First Kogarah Property. The Plaintiffs are entitled to ownership of the First Kogarah Property, subject to an allowance for the $233,750 contribution to the purchase of the First Kogarah Property made on behalf of [Pionnier]. b. In respect of two amounts of $400,000 that were ultimately transferred into bank accounts in [Ms Liu's] name, the Plaintiffs are entitled to a payment of $800,000 (which can be paid from the moneys paid into Court by [Ms Liu] in March 2017). 36 The misappropriation that was in issue in the Haiye Proceeding, and that was conceded (without admissions) at the outset of the Haiye hearing, was found to have occurred in March 2016, which was about seven months before both E & B Business and E & B Holdings were incorporated on 21 October 2016 and about a year before the commencement of the Haiye Proceeding. The Bankrupts did not seek to be heard on this application and no evidence was led on this issue. I will refer to these transactions as the impugned March 2016 transactions.

The bankrupt estates 37 Ms Liu and Mr Kwok voluntarily applied for bankruptcy by way of debtor's petition on 7 November 2022 and 9 November 2022 respectively. 38 In November 2022, Mr Trafford-Jones was appointed as trustee in bankruptcy of the estate of Ms Liu and Mr Kwok. Mr King was subsequently appointed as co-trustee in bankruptcy of the estates of both Ms Liu and Mr Kwok on 24 August 2023. 39 On 24 August 2023, Kunc J made orders that the funds held in court after judgment in the Haiye Proceeding, together with any accrued interest on those funds, be distributed in three equal payments of $1,127,264.85 to: (1) the trustee in bankruptcy of the estate of Ms Liu (being at that time Mr Trafford-Jones); (2) the trustee in bankruptcy of the estate of Mr Kwok (being at that time Mr Trafford-Jones); and (3) Haiye. 40 The Trustees have not yet called for final proofs of debt in either bankrupt estate. The Trustees' investigations to date indicate that the unsecured creditors of Ms Liu's bankrupt estate include in total approximately $9,815,727.10, comprised of: (1) $7,907,776.53 owing to Haiye, being the total amount of the judgment debt plus costs and interest (pursuant to the orders made by Kunc J on 9 September 2022 referred to at paragraph [28] above) less the payment of $1,127,264.85 (pursuant to the orders made by Kunc J on 24 August 2023 referred to at paragraph [39] above) ; (2) $45,000 owing in legal fees; (3) $65,878 owing in what appear to be business expenses to an asset finance company and office equipment supplier; (4) $47,072.57 owing in credit cards with American Express, Commonwealth Bank Australia and Westpac Banking Corporation; and (5) $1,750,000 owing in personal loans to various individual creditors, some of whom the Trustees think are related parties to Ms Liu. 41 A proof of debt of $5,436,000 lodged by Tao Sun on behalf of Fantastic World Investments Limited, a company incorporated in the British Virgin Islands, which includes $3,564,000 recorded as "Loan to Hua Liu for money paid into Court for security for costs", has been rejected by the Trustees. 42 The Trustees' investigations to date indicate that the unsecured creditors of Mr Kwok's bankrupt estate include in total approximately $9,466,000, comprised of: (1) $7,791,043.50 owing to Haiye, being the total amount of the judgment debt plus costs and interest (pursuant to the orders made by Kunc J on 9 September 2022 referred to at paragraph [28] above) less the payment of $1,127,264.85 (pursuant to the orders made by Kunc J on 24 August 2023 referred to at paragraph [39] above); (2) $325,000 owing to APR Legal in legal fees; and (3) $223,000 to six other creditors.

The present proceeding 43 On 30 November 2023, this proceeding was commenced by way of an originating application seeking the issue of summonses to examine each of the Bankrupts and Jack Jacovou, a solicitor engaged by one or both of the Bankrupts and/or their related entities. The public examinations of the Bankrupts and Mr Jacovou took place on 20 and 21 May 2024. 44 During the course of the public examinations, the Trustees obtained information that led them to form the view that the Bankrupts have concealed, and are continuing to conceal, information regarding their financial affairs which is relevant to the administration of their respective estates. 45 As a result, on 27 May 2024, the Trustees filed an interlocutory application in this proceeding seeking the issue of further summonses for examination in relation to a number of individuals associated with the Bankrupts and the issue of orders for production to a number of individuals and entities. Those examinations were scheduled to take place on 29 August 2024 and were in train when the matter came back before me as Duty Judge on the reopening application. The remaining examinations are scheduled to continue on 3 and 4 October 2024. 46 The documents that the Trustees obtained after the examinations of the Bankrupts led them on 18 June 2024 to file the first iteration of the present Application and also seek orders for the issue of further examination summonses. 47 On 26 June 2024, freezing orders were made by Halley J, by consent and without admissions, against E & B Holdings, Hanoi and Landmark, which orders were originally due to expire at 6pm on 23 August 2024. On 14 August 2024, the orders against E & B Holdings, Hanoi and Landmark were subsequently extended, by consent and without admissions, by Markovic J to 6pm on 26 August 2024, subject to the continuation of the Trustees' undertakings to the Court. On 26 August 2024, I made orders further extending, by consent and without admissions, the existing freezing orders until determination of this Application. 48 The Application as amended that was argued before me was the first interparties contest in relation to the freezing orders. As such, the Trustees bore the onus of justifying that the orders they sought should be made.

Relief sought 49 The relief sought by the Trustees in their Application, as refined by the proposed short minutes of order, is in the following terms: (1) As against E & B Holdings: (a) The Trustees seek to freeze the whole of the assets of E & B Holdings up to an unencumbered value of $10,000,000. Relevantly, the only assets identified by the Trustees are the Jones Street Property and Cliff Road Property. (b) The Trustees also seek ancillary orders for the provision of asset disclosure affidavits. (2) As against Hanoi, the Trustees seek to freeze only the Loftus Street Property, or the net proceeds of sale of the Loftus Street Property. (3) As against Landmark, the Trustees seek to freeze only the Orinoco Street Property, or the net proceeds of sale of the Orinoco Street Property. (4) As against E & B Business: (a) The Trustees seek to freeze the whole of the assets of E & B Business up to an unencumbered value of $10,000,000. (b) The Trustees also seek ancillary orders against E & B Business for the provision of asset disclosure affidavits. (5) As against Mr Cheung, the Trustees seek to freeze only the Cliff Road Property, or the net proceeds of sale of the Cliff Road Property. 50 The Trustees seek to have each of the above freezing orders made on the continuation of the Trustees' undertaking as to damages and on the basis that unless further extended by the Court, the orders will expire at 6pm on 1 November 2024. 51 In the course of argument, the Trustees proffered an additional undertaking to the Court in support of the orders sought. They indicated through counsel a willingness to provide an additional undertaking in one of two alternate forms (confirmed by email from the solicitors as to the form of the undertaking): (1) The Trustees undertake to commence any proceedings against the third to seventh respondents by 1 November 2024; or (2) The Trustees undertake to commence proceedings against the third to seventh respondents by 1 November 2024. 52 On Monday when I made the orders, I did so on the basis that the Trustees had undertaken to the Court to commence proceedings against the Respondents by 1 November 2024 as well as providing the usual undertaking as to damages.

Application to reopen 53 On 28 August 2024, the Trustees applied for leave to reopen their case to adduce further evidence. The respondents opposed the reopening application. The documents sought to be adduced were produced to the Trustees in response to an order for production issued on 11 July 2024 to the real estate agency Zip Realty and included, amongst other things: (1) an "Ownership Ledger" for E & B Holdings (E & B Ledger); and (2) an "Ownership Ledger" for Hanoi (Hanoi Ledger). 54 The Trustees submit that the E & B Ledger, when read in conjunction with bank statements already in evidence, demonstrates a series of payments made between 9 September 2019 and 29 February 2024 with respect to rent received for the Jones Street Property being made into accounts in the name of Ms Liu and Mr Kwok, then subsequently transferred into the E & B Business Account (including the period after Ms Liu had ceased to be a director of E & B Business). Similarly, the Hanoi Ledger demonstrates a series of rental payments between 28 February 2022 and 27 March 2024 for the Loftus Street Property being made initially to an account in Ms Liu's name, then subsequently transferred into accounts in the name of Hanoi (noting that Ms Liu is not a director of Hanoi). The Trustees emphasise that some of these payments were made during the period 1 June 2020 and 30 September 2020, which was after the date that Ms Liu resigned as director of E & B Holdings. 55 The heart of the reopening application was that the additional evidence supports the Trustees' case. The Trustees' contention is that it is reasonably arguable that E & B Business and the E & B Business Account are, in truth, controlled and owned by the Bankrupts - the Trustees submitted that "it's their money, it's their account, they use [it]": T4.39-45, 29 August 2024. The Jones Street Property and Loftus Street Property were purchased using the E & B Business Account. The Trustees submit that the additional documents demonstrate that the rental income generated by the Jones Street Property and Loftus Street Property was similarly at the disposal of the Bankrupts. Further, that the mortgages on these properties were serviced using funds over which the Bankrupts had control. The Trustees contend that this is further evidence that the properties are held on a "bare trust" for the Bankrupts. When pressed to identify the nature of the trust allegation that they make the Trustees gave the example of a resulting trust. On this basis the Trustees submitted that the assets should vest in the Trustees. The Trustees' present formulation of the basis of a claim they may bring against the Respondents is addressed further below. 56 The Trustees submitted that the application to reopen was unlikely to cause any prejudice to the Respondents given the narrow scope of the additional evidence and the Respondents' choice not to serve any evidence in the proceeding to date in response to the evidence originally filed by the Trustees. 57 Pursuant to rule 1.32 of the Rules, the Court may make any order that the Court considers appropriate in the interests of justice. The principles relating to granting leave to a party to reopen are well established: see Frigger v Trenfield (No 7) [2020] FCA 1740 at [22]-[24] and Matson v Attorney-General (Cth) [2021] FCA 161 at [178]-[181]. In short, the power is discretionary. Prejudice to the party resisting the application is relevant. The probability that the additional evidence will affect the result is also relevant. The ultimate question is where the interests of justice lie. Broadly speaking, there are four recognised classes of cases where leave to reopen may be given, although the classes are not closed: (1) fresh evidence; (2) inadvertent error; (3) mistaken apprehension of the facts; and (4) mistaken apprehension of the law. 58 The Trustees' application falls somewhere between fresh evidence and inadvertent error. It is in respect of fairly confined additional evidence. Notwithstanding that the reopening application was opposed by the Respondents, Senior Counsel for the Respondents was in a position to make submissions on the additional evidence promptly in response to the submissions made by the Trustees. In these circumstances, being satisfied that the documents were relevant in adding to the patina of factual materials relied upon by the Trustees and would not result in undue delay, trouble and expenditure, I was satisfied that it was in the interests of justice to allow the Trustees to reopen to read a further affidavit of Mr O'Neill affirmed 28 August 2024 and tender Exhibit BJON-2. Accordingly, I was satisfied it was appropriate to exercise the discretion to make orders as sought by the Trustees.

FACTUAL BACKGROUND 59 I now turn to consider the evidence in relation to the Bankrupts, the establishment and operation of the corporate respondents, the trusts associated with them and the relationships existing between the companies, the trusts and the relevant individuals.

The Bankrupts 60 The Bankrupts have each been examined pursuant to orders made in this proceeding at the instigation of the Trustees. The transcripts of each of their examinations are in evidence on this Application. The examinations of Ms Liu and Mr Kwok are ongoing and will conclude in around October 2024. In the examinations to date, the evidence given by Ms Liu and Mr Kwok has largely been evasive, ambiguous and inconsistent with documentary evidence subsequently obtained by the Trustees. 61 Ms Liu and Mr Kwok are, or were, married. They share two sons, Ethan and Beldon Kwok. The inclusion of "E & B" in the names of two of the corporate respondents seemingly reflects the initials of the Bankrupts' children. 62 In the bankruptcy questionnaires completed by Ms Liu and Mr Kwok on 4 November 2022 and 8 November 2022 respectively, Ms Liu and Mr Kwok each responded to a question about their marital status as being "Separated / divorced / widowed". Mr Kwok said in his examination in late May 2024 that he had been separated from Ms Liu for about six or seven years, although they continue to live under the same roof. Ms Liu confirmed in her examination that she had been separated from Mr Kwok for several years, that they still lived together and had not applied for divorce. 63 The Trustees contend that the Bankrupts were (and appear still to be) in the business of property acquisition and development. 64 In her bankruptcy questionnaire, Ms Liu completed her occupation as "Education Advisers and Reviewers" in an industry described as "Higher Education". She also stated that she was not currently employed and was last employed on 1 January 2020, but did not complete the details of her employer. 65 During her examination on 20 May 2024, Ms Liu explained that she was the owner and the CEO of a registered training organisation for international students which went into liquidation as a result of the COVID-19 pandemic. Ms Liu said she then worked as a consultant on international student recruitment for other registered training organisations. She gave evidence that she was employed by Mr Xiaofeng (Eric) Cui as an international marketing officer for the finance company Ostone Financial Group Pty Ltd. Mr Cui is the sole director of Ostone - his position description is managing director. Mr Cui is the sole director of other companies referred to in the evidence in this proceeding, including Lendmark Investments Pty Ltd and V1 International Pty Ltd. Mr Cui has sponsored Ms Liu's overseas trips to Vietnam in December 2023 and to Japan in April 2024 on behalf of Lendmark and Ostone respectively. During her examination, Ms Liu could not explain why her consultancy fees or wages were being paid by Mr Cui's other company, V1 International, rather than Ostone: T70.24-T72.24, 20 May 2024. In her examination in May 2024, Ms Liu repeatedly described her employment with Ostone as current but she also referred to having "already" lost her job. 66 Mr Kwok said in his examination that he has been a house husband for several years and has not been a developer since his involvement with Haiye Developments, which was before 2017. When Mr Kwok completed his bankruptcy questionnaire in November 2022, he listed his usual occupation as 'Driver' on the basis that he had been working as an Uber driver for almost three years.

E & B Business 67 The Trustees submitted that the starting point is E & B Business. 68 E & B Business was incorporated on 21 October 2016. 69 E & B Business has been closely held and controlled by only three individuals since its incorporation: (1) Ms Liu, as sole director for the period from 21 October 2016 to 5 March 2020; (2) Ms Yuan, as director for the period 5 March 2020 to 22 February 2021; and (3) Mr Cheung, as director for the period 12 August 2020 to 30 September 2020 and as the current sole director since 22 February 2021. 70 Ms Yuan and Mr Cheung are recorded on the company searches as living at the same address. 71 E & B Business has predominantly operated with a sole director and sole shareholder, with the exception of a brief period of overlap of less than two months, between Ms Yuan and Mr Cheung as directors. The current sole shareholder is Mr Cheung. The former shareholders are Ms Liu and Ms Yuan. The evidence does not disclose the dates on which the shareholding in E & B Business changed. 72 The relationship between the relevant individuals is unclear on the evidence. Ms Liu gave evidence during her examination that Mr Cheung was a social friend but not someone that she had a business relationship with and that she did not think she knew Ms Yuan. The Trustees dispute the veracity of this evidence based on the whole of the surrounding circumstances. 73 The current registered office and principal place of business of E & B Business is the Cliff Road Property, of which Mr Cheung is the registered owner. The Cliff Road Property is addressed further below. The former registered offices and principal places of business of E & B Business include the former residential address of Ms Liu and Mr Kwok and the address of Mr Cheung and Ms Yuan. 74 Ms Liu was asked about E & B Business during her examination. Ms Liu gave evidence that she could not recall being a director and shareholder of E & B Business, why it was incorporated, why she had resigned as a director and sold her shares in E & B Business nor what E & B Business currently does. 75 Ms Liu was asked about Mr Cheung in her examination. The evidence she gave was confusing and opaque. I was left with the impression that she was resistant to exposing the extent of her relationship with Mr Cheung. She suggested that any messages, whether by text or using the WeChat application, that she may have with Mr Cheung were irrelevant to her bankruptcy. She then suggested that she had deleted such messages. I haven't kept the message with Mr Cheung because when his wife arrived here, his wife has been very, very strict with him. All the lady and women talk to him. He force - he told us delete all the messages. I didn't have any messages in my phone. … - as I mentioned to you, when his wife arrived, he request all the girls delete all the message. I only make the phone call. But I haven't called him for a very long time. … 76 Later in her examination although it is not clear, she appeared to locate some messages between herself and Mr Cheung and it appears that a production notice was issued. The Trustees did not take me in evidence to any messages or record of communications between Mr Cheung and Ms Liu. The evidence does not reveal whether Ms Liu's reference to Mr Cheung's wife is a reference to Ms Yuan. Mr Kwok has never been a director or shareholder of E & B Business. 77 When asked about E & B Business during his examination, Mr Kwok said he did not know of the existence of E & B Business, E & B Holdings, the E & B Trust or the E & B Business Account, until they were drawn to his attention. 78 E & B Business was established prior to the commencement of the Haiye Proceeding but after the occurrence of the impugned March 2016 transactions.

E & B Business Account 79 The Trustees have not identified any real property held by E & B Business. Relevantly, the only asset they have identified is one bank account in the name of E & B Business ending in 8411 as the last four digits of the account number with a balance of $1,634.11 as at 29 May 2024 (E & B Business Account). The account name is not styled as a trust account. The E & B Business Account is held with Westpac. Account statements for the E & B Business Account have been produced by Westpac in response to an order for production issued in these proceedings. The earliest statement in evidence is for the period 15 October 2020 to 15 January 2021. The latest statement in evidence is for the period 15 April 2024 to 29 May 2024. The account opening documents are not in evidence. 80 The Trustees seek to freeze the E & B Business Account. Ms Liu is a former signatory of the E & B Business Account. 81 The Trustees contend that Ms Liu and Mr Kwok have used the E & B Business Account as their own personal account with frequent deposits and withdrawals consistent with the account being controlled by them and used to meet the daily living expenses of their family. The Trustees point to the following aspects of the account history. 82 Between 12 January 2021 and 15 January 2024, 31 payments totalling approximately $592,710 were paid by Mr Kwok and Ms Liu into the E & B Business Account. Prior to their respective bankruptcies, the Bankrupts were a major source of funds deposited into the account. The other material sources of funds include cash deposits typically in suburbs in close proximity to the Bankrupts' address and deposits from individuals associated with the Bankrupts, including Mr Cheung and Mr Cui. 83 Large cash deposits of $571,181, $95,586 and $268,734.15 were also made in Gordon, Chatswood and the Sydney CBD into the E & B Business Account on 15 July 2022 and 8 August 2022. Although the Trustees have been unable to ascertain the source of these cash deposits, they were made shortly after Kunc J delivered judgment in the Haiye Proceeding and about three to four months before Mr Kwok and Ms Liu applied for bankruptcy. 84 After the Bankrupts became bankrupt, the primary sources of funds being deposited into the E & B Business Account were: (1) cash deposits (including a $170,000 deposit in Chatswood); (2) "loans" or "loan returns" from third parties, including Mr Cui (Ms Liu's employer) and his company V1 International (which Ms Liu said she could not recall during her examination, Mr Cheung (the director of E & B Business), Ms Yi Gao (described by Ms Liu as a friend and creditor of the Bankrupts); (3) payments for the transfer of shares in Sunrise Australia Developments Pty Limited pursuant to a deed of agreement between the Bankrupts, Sunrise (and its wholly owned subsidiary Wau 88 Pty Ltd) and Quanfang Ling discussed at [200] below; (4) payments from educational institutions including Royal Global Education Group Pty Ltd (which is a former employer of Ms Liu, with Mr Cheung as the sole director since incorporation on 29 June 2020) and the Australian Institute of Business Management and Aspen Higher Education (which are former employers of Ms Liu where she worked as a "education advisor and reviewer"); and (5) continued regular deposits including rent payments. 85 In evidence before me was an Excel spreadsheet prepared by or for the Trustees which sets out these payments from the E&B Business Account. Between 31 December 2020 and 13 May 2024, at least $396,551.42 was paid to Mr Kwok, Ms Liu, Huan Liu, or their sons, Ethan and Beldon Kwok, from the E & B Business Account. The evidence does not disclose who Huan Liu is or whether these entries in fact record payments to Ms Liu. Of the $396,551.42 identified, $103,439.42 is recorded as paid to 'Huan Liu'. The individual transactions are often for nominal amounts up to $1,000 and on occasion occur on the same day. 86 Regular payments to Barker College were made throughout 2021, 2022 and 2023 from the E & B Business Account. Ms Liu confirmed in her examination these payments were for school fees of the Bankrupts' sons. 87 From about January 2023, shortly after Ms Liu and Mr Kwok became bankrupt, and up until 29 May 2024, there were a large number of purchases using a debit card linked to the E & B Business Account. These included: (1) Everyday purchases for items such as Uber and Uber Eats, Flexischools, Fitness First, Amazon, Bunnings, cinemas, convenience stores, clothing stores and restaurants and cafes, many of which are located in suburbs in close proximity to where Ms Liu and Mr Kwok reside; (2) Between 17 April 2023 and 1 May 2023, several transactions in the United States of America using the debit card, being at a time when Ms Liu travelled to the United States of America; and (3) Between 20 December 2023 and 28 December 2023, several transactions in Vietnam using the debit card, being at a time when Ms Liu travelled to Vietnam. 88 The Trustees submitted that based on the Bankrupts' use of the debit card linked to the E & B Business Account for numerous purchases for the benefit of the Bankrupts or their children, an inference should be drawn that the payments were made for and on behalf of the Bankrupts: T10.47-T11.15, T54.16-20, 26 August 2024. I draw that inference. 89 In reaching this conclusion, I have had regard to the Respondents' submission that an inference based on the proximity of the location of the withdrawals and the suburb where the Bankrupts reside should not be drawn as Mr Cheung, the relevant director of E & B Business at the time, also lives near those suburbs and could have made the various transactions: T42.5-22, 26 August 2024. Further, the Respondents rely on evidence given by Ms Liu during her examination that Mr Cheung provided access to E & B Business Account to Ms Liu for the purpose of withdrawing money for daily living expenses as 'short-term loans': T31.38-45, T43.1-T44.42, 26 August 2024. 90 This is a matter on which E & B Holdings, E & B Business and Mr Cheung did not adduce any evidence. I infer that any evidence that they may have adduced would not have assisted them. In the absence of evidence from E & B Business and Mr Cheung, I do not draw the competing inference for which the Respondents contend, namely that these payments reflect loans from Mr Cheung. The amounts, timings and recipients of these transactions are inconsistent with each payment being in substance a series of loans. The more ready inference, which I draw, is that these payments reflect the Bankrupts using the E & B Business Account as their own for daily living expenses. 91 Despite the various transactions referred to above, Ms Liu and Mr Kwok gave evidence that they had little to no knowledge of the E & B Business Account. 92 During her examination on 20 May 2024, Ms Liu could not remember why she was a signatory to the E & B Business Account and gave evidence that she was no longer a signatory, although could not remember when she ceased to be a signatory. When Ms Liu was asked whether she was transferring monies to herself from the E & B Business Account, given she was a signatory to the E & B Business Account, Ms Liu denied this and gave evidence that, prior to each and every transfer, Ms Liu would call Mr Cheung and he would transfer the monies to her. During Mr Kwok's examination, he gave evidence that he did not know of the existence of the E & B Business Account, prior to it being drawn to his attention, and that, other than the creditors listed in his debtors' petition, Ms Liu was the only person he would ever ask for money. 93 I accept the submission made by the Trustees that the information provided by the Bankrupts to the Trustees, including the evidence given by the Bankrupts in the examinations, is another indicia of the Bankrupts' obfuscation and is designed to frustrate the Trustees' attempts to identify the Bankrupts' property for the benefit of their creditors, including the judgment creditor in the Haiye Proceeding. 94 The evidence also indicates that the E & B Business Account appears to have been used in order to make mortgage and loan repayments for the Loftus Street Property. Between 12 July 2021 and 28 June 2022, payments totalling $139,403,36 from the E & B Business Account appear to have been used to make repayments on the loan from the National Australia Bank (NAB) for the Loftus Street Property (see paragraph 131 below). Between 22 August 2022 and 12 March 2024, payments totalling $253,590.91 from the E & B Business Account which, together with funds from other sources, were used to make repayments on the loan from St George Bank for the Loftus Street Property. 95 Similarly, the evidence indicates the E & B Business Account appears to have been used to purchase and make mortgage repayments for the Orinoco Street Property. On 21 June 2021, being the date that the Orinoco Street Property was "sold", debits totalling $346,000 were made from the E & B Business Account in the form of a cash withdrawal and a payment to Orr & Co real estate agents. Between 15 July 2022 and 1 May 2024, payments totalling $160,500 were made from the E & B Business Account to Landmark and Ms Chen. The Trustees believe these payments may have been made as contributions towards the repayment of the loan to RAMS Financial Group Pty Ltd and for the payment of land tax for the Orinoco Street Property. Relatedly, on 15 December 2021, E & B Business Account made a payment to CBD Designer Homes with the description "Orinoco design 19 orinoco design". 96 Following a review of the E & B Ledger, the Trustees identified 28 payments between 30 October 2020 and 29 February 2024 made with respect to rent received for the Jones Street Property to the E & B Business Account which correspond with transactions recorded in the E & B Business Account statements already in evidence. 97 In drawing the inference that the E & B Business Account appears to have been used in order to make mortgage and loan repayments on the trust properties, I note that the Respondents did not adduce any evidence (including by way of documentary tender) in relation to the affairs of the corporate respondents or the trusts. These are matters on which the Respondents in the ordinary course would be expected to call evidence. The fact that they have not done so, leads me to infer that any evidence they could have led would not have assisted them on this issue and fortifies the inference I have drawn based on the evidence led by the Trustees.

E & B Holdings 98 E & B Holdings was incorporated on 21 October 2016. As above, E & B Holdings has been closely held by only three individuals since its incorporation: (1) Ms Liu, as sole director for the period from 21 October 2016 to 5 March 2020; (2) Ms Yuan, as director for the period 5 March 2020 to 26 April 2021; and (3) Mr Cheung, as director for the period 12 August 2020 and 30 September 2020 and as the current sole director since 22 February 2021. 99 The current sole shareholder is Mr Cheung. The former shareholders are Ms Liu and Ms Yuan. 100 The current registered office and principal place of business of E & B Holdings is the Cliff Road Property, of which Mr Cheung is the registered owner. The former registered offices and principal places of business of E & B Holdings include the former residential addresses of Ms Liu, Mr Kwok and Mr Cheung and Ms Yuan. 101 During Ms Liu's examination, she was first asked about her knowledge of "B & E Holdings Limited", being an inverted version of the letters in the company name, and Ms Liu answered that she did not know B & E Holdings, had never heard of it and had no documents in her possession in relation to it. In the context of subsequent references which make plain that the correct company name is "E & B Holdings Limited" and Ms Liu being shown a copy of a company search for E & B Holdings, Ms Liu continued to be evasive and gave evidence that she could not remember the extent of her association with E & B Holdings, including when she was a director and shareholder of E & B Holdings. Ms Liu denied E & B Holdings was named after her sons and gave evidence that "it doesn't mean anything". Ms Liu could not remember why E & B Holdings was incorporated, what type of business E & B Holdings intended to operate nor why she resigned as a director of E & B Holdings. 102 Mr Kwok has never been a director or shareholder of E & B Holdings. 103 E & B Holdings was established prior to the commencement of the Haiye Proceeding but after the occurrence of the impugned March 2016 transactions.

E & B Trust 104 E & B Holdings is the trustee of the E & B Property Investments Trust (E & B Trust), a discretionary trust established by trust deed on 21 October 2016. The appointor is Ms Liu. The named beneficiaries are Ms Liu and her two sons Ethan and Beldon Kwok. Broadly, the other classes of beneficiaries are defined by reference to their connection through familial (including by marriage) or corporate relationships to Ms Liu and her two sons and also include companies, trusts, charities and associations and trustees. 105 The E & B Trust was created to purchase and hold properties for Ms Liu, including the Jones Street Property, for tax minimisation purposes. The Commonwealth Bank of Australia (CBA) is the registered mortgagee of the Jones Street Property. An internal CBA document dated 27 January 2017 includes the following: Purpose: Trust application. Client is applying $879600.00 to settle an investment property at Pyrmont NSW. Client is married with 2 dependents. She lives at her own property at West Pymble, mortgage with Westpac. This Trust is only set up for purchasing and holding properties in order to generate long-term rental income. Accountant advised client to purchase under this Trust in order to have tax benefits. Purchase property is going to hold for long term purpose and will not sell. 106 The reference to the investment property at Pyrmont, NSW is to the Jones Street Property. The reference to the residential property at West Pymble is to the Orinoco Street Property. 107 The E & B Trust was established prior to the commencement of the Haiye Proceeding but after the occurrence of the impugned March 2016 transactions.

The Jones Street Property 108 E & B Holdings is the registered proprietor of the Jones Street Property. 109 The Jones Street Property was initially to be purchased by Ms Liu, pursuant to an executed contract for sale for the purchase of the Jones Street Property in her name and payment of the deposit on 16 December 2017. Prior to completion, a new contract for sale was entered into on 9 February 2017 with E & B Holdings as trustee for the E & B Trust. A deed of mutual rescission of contract between the vendor and Ms Liu dated 9 February 2017 states that the deposit paid by Ms Liu was treated as having been paid by E & B Holdings. Ms Liu corresponded with and gave instructions to Mr Cao, the solicitor acting for E & B Holdings with respect to the purchase of the Jones Street Property, to rescind the initial sale contract, simultaneously exchange a contract on the same terms with E & B Holdings as trustee for E & B Trust as the purchaser and arrange for the funds necessary for E & B Holdings to complete the purchase of the Jones Street Property. The purchase of the Jones Street Property ultimately settled on 24 February 2017. 110 As mentioned, a recent title search of the Jones Street Property confirms that there is a registered mortgage in favour of the CBA. Loan account statements have been produced by CBA for the period 24 February 2017 to 3 March 2024 for an account in the name of the E & B Trust. The loan account statement records the borrower as E & B Holdings as trustee for the E & B Trust and the security address as the Jones Street Property. Each of the repayments recorded in the loan statements from at least December 2020 to March 2024 were made from the E & B Business Account. 111 The Jones Street Property was purchased on 9 February 2017, prior to the commencement of the Haiye Proceedings on 3 March 2017 but after the occurrence of the impugned March 2016 transactions. 112 Ms Liu was previously a director and shareholder of E & B Holdings. At the time of acquisition of the Jones Street Property, Ms Liu was the sole director of E & B Holdings. During her examination, Ms Liu gave evidence that she could not remember E & B Holdings being the owner of the Jones Street Property or purchasing the Jones Street Property. 113 Mr Cheung is the current sole director of E & B Holdings. He was first appointed as a director of E & B Holdings on 12 August 2020 and ceased to be a director on 30 September 2020. He was next appointed as a director on 22 February 2021. He is also the current sole shareholder.

The Cliff Road Property, the Cliff Road Trust Deed and Mr Cheung 114 Mr Cheung is also the registered proprietor of the Cliff Road Property. 115 An undated trust deed styled as a "TRUST DEED For Purchase of Property" between Mr Cheung and E & B Holdings as trustee for the E & B Trust was put in evidence by the Trustees. I will refer to this as the Cliff Road Trust Deed. 116 The Cliff Road Trust Deed appears to have been signed by Mr Cheung in his individual capacity as trustee and also in his capacity as director of the beneficiary, E & B Holdings. I infer that the Cliff Road Trust Deed was signed sometime between 24 September 2020 (the date the sale contract for the Cliff Road Property was exchanged) and 30 September 2020, when Mr Chung resigned from his first stint as a director of E & B Holdings. The purchase of the Cliff Road Property completed on 11 November 2020. At that time, the sole director of E & B Holdings was Ms Yuan. 117 The Cliff Road Trust Deed recites that the Cliff Road Property was purchased by Mr Cheung on 24 September 2020 at the request of the beneficiary which is E & B Holdings as trustee for the E & B Trust and that the Cliff Road Property is held on trust for E & B Holdings as trustee for the E & B Trust. The Cliff Road Trust Deed does not name any settlor or appointor. The Cliff Road Trust Deed recites that: (1) the Cliff Road Property was purchased by Mr Cheung (the trustee) on 24 September 2020 at the request of E & B Holdings as trustee for the E & B Trust (the beneficiary) and that the property is held on trust for the E & B Trust; (2) prior to the completion of the contract for sale of land (the contract), Mr Cheung, at the request of E & B Holdings, obtained a loan of about $718,000 from RAMS secured by the Cliff Road Property (the mortgage); (3) upon completion of the contract on 11 November 2020, Mr Cheung "will" become the registered proprietor of the Cliff Road Property; (4) E & B Holdings as trustee for the E & B Trust has provided or will provide the deposit, stamp duty, balance of purchase money (except the amount advanced for the mortgage) and all other costs and expenses associated with the acquisition of the Cliff Road Property; and (5) following completion, E & B Holdings as trustee for the E & B Trust will be paying for all mortgage repayment and maintenance and costs of the Cliff Road Property, including but not limited to council rates, water rates and strata levies. 118 The Cliff Road Trust Deed provides that upon completion, Mr Cheung has no interest or rights over the Cliff Road Property save for the legal title. E & B Holdings has an unfettered right to call for Mr Cheung to transfer, deal with or dispose of the Cliff Road Property, including to allow any charge, lien or mortgage over the Cliff Road Property. Mr Cheung irrevocably appoints E & B Holdings as his attorney to execute any such transfers, discharge of mortgage or other instruments or documents as required to carry out the terms of the deed. Further, Mr Cheung irrevocably assigns to E & B Holdings the right to receive any and all benefit from the Cliff Road Property, including all rights to income and rights to capital. 119 On the face of the Cliff Road Trust Deed, if it establishes a trust, it appears to be a bare trust over the Cliff Road Property whereby Mr Cheung has been imposed as a bare trustee with legal title to, and appearing on the title as the registered owner of, the Cliff Road Property. Mr Cheung is required to act completely at the behest of the beneficiary, E & B Holdings. As mentioned, E & B Holding is itself a trustee of the E & B Trust and the named beneficiaries of the E & B Trust are Ms Liu and her two sons Ethan and Beldon Kwok. The relationship between the Cliff Road Property arrangement and the E & B Trust is reminiscent of Matryoshka dolls.

Hanoi 120 Hanoi was incorporated on 29 December 2019. Ms Yuan was sole director from 29 December 2019 to 17 February 2021. Mr Cheung has been the sole director since 17 February 2021. The current sole shareholder is Mr Cheung. The only former shareholder is Ms Yuan. Neither Ms Liu nor Mr Kwok has ever been a director or shareholder of Hanoi. 121 The current registered office and principal place of business of Hanoi is the Cliff Road Property. A former registered office and principal place of business of Hanoi was the residence of Mr Cheung. 122 Hanoi was established well after the commencement of the Haiye Proceeding and after the payment into court in that proceeding.

Hanoi Trust 123 Hanoi is the trustee of the Hanoi Landmark Investment Trust (Hanoi Trust). A trust deed dated 29 December 2019 executed by Ms Yuan on behalf of Hanoi established the Hanoi Trust as a discretionary trust, with Ms Liu and Ms Yuan as appointors and Ms Liu as the sole named beneficiary. Broadly, the other classes of beneficiaries are defined by reference to their connection through familial (including by marriage) or corporate relationships to Ms Liu. 124 A Deed of Amendment was executed on 15 April 2021 (Hanoi Amendment Deed). The effect of the amendment was relevantly that Mr Cheung became the sole appointor and beneficiary of the Hanoi Trust. Ms Yuan and "The Legal Personal Representative of Hua Liu (Deceased)" were retired as appointors of the Hanoi Trust and replaced with Mr Cheung. Additionally, "The Legal Personal Representative of Hua Liu (Deceased)" was retired as a beneficiary of the Hanoi Trust and replaced with Mr Cheung. It is unclear what is meant by the reference to "(Deceased)" in circumstances where Ms Liu is still alive. The trustee remained as Hanoi. 125 Neither of the Bankrupts are presently beneficiaries under the Hanoi Trust. 126 The Hanoi Trust was established after the commencement of the Haiye Proceeding. The Hanoi Amendment Deed was made proximate to the hearing of the Haiye Proceeding in April and May 2021. Hanoi and the Hanoi Trust were both established prior to judgment in the Haiye Proceeding, which was delivered on 13 July 2022.

The Loftus Street Property 127 Hanoi is the registered proprietor of the Loftus Street Property. 128 Hanoi entered into contract for the sale for the purchase of the Loftus Street Property off the plan on 17 December 2020. Settlement of the sale did not occur until 14 June 2021. 129 The Loftus Street Property was initially to be purchased in the name of Ms Liu, as Ms Liu exchanged a contract for sale for the purchase of the Loftus Street Property with the vendor's solicitors on 27 June 2017 in her name and paid the deposit. 130 On 12 January 2020, Ms Liu gave instructions to Mr Cao to "nominate my current offplan property to trust". A deed of recission and release between the vendor and Ms Liu and a new contract for sale for the Loftus Street Property, which defined the new purchaser as Hanoi as trustee for the Hanoi Trust, were exchanged on 17 December 2020. 131 The Loftus Street Property was purchased by Hanoi as trustee for Hanoi Trust with a loan from the NAB in the amount of $5,355,000. This loan was subsequently refinanced by St George on 12 July 2022. The evidence indicates that repayments on the loans for the Loftus Street Property were made by the E & B Business Account and Mr Kwok, together with funds from other sources. 132 During her examination on 20 May 2024, Ms Liu gave evidence that she could not recall Hanoi or the Hanoi Trust and did not know the Loftus Street Property. Mr Kwok gave evidence during his examination that he did not know of the existence of Hanoi, prior to it being drawn to his attention. 133 The Loftus Street Property was purchased after the commencement of the Haiye Proceeding and after the payment into court in that proceeding but prior to judgment in the Haiye Proceeding. The purchase settled shortly after the Haiye Proceeding was reserved for judgment.

The Bankrupts' relationship with Ms Yuan 134 The Bankrupts each gave evidence during their examinations that they did not know Ms Yuan, however Ms Yuan has been a director and shareholder of a number of companies to which Ms Liu has been connected, including E & B Business (between 5 March 2020 and 22 February 2021) and Hanoi (between 29 December 2019 and 17 February 2021). 135 Relevantly, Ms Yuan was the sole director of Hanoi at the time that Ms Liu directed that Hanoi become the purchaser of the Loftus Street Property. Ms Yuan has also had roles in relation to the Hanoi Trust, which is addressed at paragraph [123] above, and with which Ms Liu is also connected, including as being an appointor of the Hanoi Trust at the same time as Ms Liu was an appointor. 136 As mentioned, Ms Yuan's residential address on the company searches for two of the companies is the same as that for Mr Cheung.

Landmark 137 Landmark was incorporated on 22 July 2021. The current sole director and shareholder of Landmark is Ms Chen Chen. Ms Chen has been the sole director and shareholder of Landmark since incorporation. Neither Ms Liu nor Mr Kwok has ever been a director or shareholder of Landmark. Mr Kwok gave evidence during his examination that he did not know of the existence of Landmark, prior to it being drawn to his attention. 138 As mentioned, between 15 July 2022 and 1 May 2024, there were payments totalling $160,500 from the E & B Business Account to Landmark and Ms Chen. 139 Landmark was established shortly after the hearing of the Haiye Proceeding completed, and prior to judgment being delivered.

Landmark Trust 140 Landmark may be the trustee of the Landmark Everest Trust (Landmark Trust). There is in evidence a trust deed for the Landmark Trust described as a discretionary trust. 141 The only version of the trust deed in evidence in undated and unsigned. A version of the trust deed appears to have been attached to an email dated 3 September 2021 from Ms Liu to Mr Cao, solicitor. The email was in connection with the purchase of the Orinoco Street Property. 142 Landmark has not sought to lead any evidence at all, including on this issue. The appointor of the Landmark Trust is Ms Liu. The designated beneficiary of the Landmark Trust is Ms Chen. Broadly, the other classes of beneficiaries are defined by reference to their connection through familial (including by marriage) relationship to Ms Chen. 143 Ms Liu was a signatory of a bank account held by Westpac in the name of Landmark as trustee for the Landmark Trust, although it appears Ms Liu is no longer a signatory. 144 The Landmark Trust, if the deed was in fact signed, appears to have been established shortly after the hearing of the Haiye Proceeding completed, and prior to judgment being delivered.

The Orinoco Street Property 145 Landmark is the registered proprietor of the Orinoco Street Property. 146 The Orinoco Street Property was initially to be purchased by E & B Holdings as trustee for the E & B Trust. On or around 19 June 2021, Ms Liu instructed Mr Cao to use the same entity as "the current Pyrmont property owner", being E & B Holdings as the registered proprietor of the Jones Street Property, and arranged for the payment of the deposit of $346,000 from the E & B Business Account. The vendor and E & B Holdings entered into a contract for sale on 21 June 2021. 147 On 3 September 2021, Ms Liu instructed Mr Cao to request a mutual rescission of the contract for sale of the Orinoco Street Property and to enter into a new contract between the vendor and Landmark as trustee for the Landmark Trust. A deed of rescission of contract was executed on around 9 September 2021, which recognised that the deposit was taken to be paid under the new contract with Landmark as trustee for the Landmark Trust. 148 Relevantly, Ms Chen was the director of Landmark at the time that Ms Liu directed that the contract for the Orinoco Street Property be novated with the result that Landmark replaced E & B Holdings as the registered proprietor. 149 Ms Liu gave evidence during her examination that Ms Chen is her friend (who she refers to by the name "Cici") and that she has known Ms Chen for at least seven or eight years. Ms Liu says that Ms Chen is the landlord of the Orinoco Street Property, where Ms Liu and Mr Kwok and their sons live. The Bankrupts do not have a rental agreement for the Orinoco Street Property. Ms Liu gave evidence that the Bankrupts have not been able to meet rental payments since they became bankrupt, except for where financial support has been provided by Ms Liu's friends. Mr Kwok gave evidence in his examination that he did not know of Ms Chen or Landmark. Mr Kwok gave further evidence that he did not know how much rent was paid for the Orinoco Street Property or whether rent was still being paid. 150 There is a registered mortgage on the Orinoco Street Property in favour of Westpac. The mortgage appears to be securing a loan from RAMS, a subsidiary of Westpac. 151 The Orinoco Street Property was purchased by E & B Holdings after judgment was reserved in the Haiye Proceeding. The contract was novated on 9 September 2021 to stipulate Landmark as trustee for the Landmark Trust as purchaser and settled prior to judgment being delivered. The Orinoco Street Property settled on 21 September 2021, after the conclusion of the hearing of the Haiye Proceeding and partial release of the freezing orders but prior to judgment in the Haiye Proceeding.

Summary of interests in real property 152 On the basis of the analysis set out above, the interests in the specific real properties the subject of the freezing orders based may be summarised as follows: PROPERTY REGISTERED/ RELEVANT TRUST NATURE OF TRUST BENEFICIARIES LEGAL OWNER/ TRUSTEE Jones Street Property E & B Holdings E & B Trust Discretionary Ms Liu and her sons Exchange: 09.02.17 Current director: Mr Cheung (since 22.02.21) Settled: 24.02.17 Loftus Street Property Hanoi Hanoi Trust Discretionary Current beneficiary (since 15.04.21): Mr Cheung Exchange: 17.12.20 Current director: Mr Cheung (since 17.02.21) Former beneficiary: Ms Liu Settled: 14.06.21 Orinoco Street Property Landmark Landmark Trust (noting that the trust deed is not signed) Discretionary Ms Chen Exchange: 03.09.21 Current director: Ms Chen (since 22.07.21) Settled: 21.09.21 Cliff Road Property Mr Cheung Cliff Road Trust Deed Bare E&B Holdings as trustee for the E&B Trust Exchange: 24.09.20 Settled: 11.11.20

APPLICABLE PRINCIPLES 153 The Trustees rely on the Court's power to make freezing orders under s 23 of the Federal Court Act and r 7.32 of the Rules. A freezing order operates in personam and not as an attachment to property: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [50]. 154 Section 23 is a wide power. That said, orders must be framed so as to come within the limits set by the purpose which the order can properly be intended to serve: Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612 at 625. Rule 7.32 explicitly states this requirement: 7.32 Freezing order (1) The Court may make an order (a freezing order), with or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied. (2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets. 155 Under r 7.33, the Court may make an ancillary order to a freezing order or a prospective freezing order, for the purpose of determining whether the freezing order should be made. A prospective freezing order is one which is "in prospect" in the sense that it is within the bounds of expectation that it will be made in the future: Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang, in the matter of Royal Express Pty Ltd [2021] FCA 585 at [39] citing Parbery v QNI Metals Pty Ltd [2018] QSC 107; 358 ALR 88 at [68]. Whilst not made in relation to r 7.33, Bond J's summary of the authorities is nevertheless apposite: see Parbery at [70] citing Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Company Pty Ltd [2011] WASC 188 at [151], [210]-[214]; BGC Australia Pty Ltd v Minspec Pty Ltd [2015] WASC 134 at [11]; JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139; 2 All ER (Comm) 816 at [50]-[52]. 156 Rule 7.34 provides that the Court may make a freezing order against a person even if the person is not a party in a proceeding in which substantive relief is sought against the respondent. 157 The moulding of an interlocutory injunction must depend upon the circumstances of each case. As Brennan J observed in Jackson v Sterling Industries Ltd at 621: A judicial power to make an interlocutory order in the nature of a Mareva injunction may be exercised according to the exigencies of the case and, the schemes which a debtor may devise for divesting himself of assets being legion, novelty of form is no objection to the validity of such an order. 158 The High Court recognised in Deputy Commissioner of Taxation v Huang [2021] HCA 43; 273 CLR 429 that rule 7.32, in Div 7.4 of the Rules, supplements s 23 of the Federal Court Act and the Federal Court's implied power as a superior court, each of which confers power upon the Court to make such orders as are appropriate for the proper exercise of its statutorily conferred jurisdiction and powers. That relationship is emphasised by r 7.36, which provides that nothing in Div 7.4 diminishes the inherent, implied or statutory jurisdiction of the Court to make a freezing order or ancillary order: Huang at [16] (Gageler, Keane, Gordon and Gleeson JJ) and [36] (Edelman J). 159 In Huang, the relevant freezing order was made against the defendant in the proceeding pursuant to r 7.32. The principal issue before the Court was whether the Federal Court's power to make freezing orders over assets outside of Australia was conditioned on or required proof that there be a realistic possibility of enforcement of a judgment debt in each foreign jurisdiction to which the freezing order related. Although Huang did not concern freezing orders against third parties, the following observation of the plurality is of broader relevance (at [17]-[18], footnotes incorporated): The power conferred by r 7.32(1) is expressly subject to two limitations: first, the purpose of the order must be "the purpose of preventing the frustration or inhibition of the Court's process"; and secondly, the order must address that purpose "by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied". The first limitation corresponds with the established scope of the Federal Court's general powers to grant a freezing order, being the power to make such orders as the Court may determine to be appropriate to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction. [Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 32-33 [35]; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 399-401 [41]; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 243 [94]; PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1 at 18 [43]]. Rule 7.32 states explicitly the requirement, stated by this Court in relation to the Federal Court's general powers to grant a freezing order, that the power must be exercised for the purpose for which it is conferred [Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 32-33 [35]; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 399-401 [41]]. Where the order is made in proceedings in which substantive relief is sought against the defendant, that purpose is "to prevent a defendant from disposing of his actual assets (including claims and expectancies) so as to frustrate the process of the court by depriving the plaintiff of the fruits of any judgment obtained in the action" [Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 625]. More broadly, a freezing order is directed to dispositions "which are intended to frustrate, or have the necessary effect of frustrating, the plaintiff in his attempt to seek through the court a remedy for the obligation to which he claims the defendant is subject" [Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 at 276]. The second limitation, that an order made under r 7.32 must serve the specified purpose "by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied", also corresponds with the scope of the Federal Court's general powers to make a freezing order. Since Jackson v Sterling Industries Ltd, it has been accepted in Australia, as a general proposition, that a freezing order could be granted if the circumstances are such that there is a danger of the defendant absconding, or a danger of the assets being removed from the jurisdiction or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the plaintiff, if successful in obtaining a judgment, will not be able to get it satisfied. [Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623. See, eg, Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322]]. The danger must be sufficiently substantial to warrant the freezing order. [Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 325]]. The need to identify a relevant danger was first articulated in Mareva Compania Naviera SA v International Bulkcarriers SA [[1975] 2 Lloyd's Rep 509 at 510], where Lord Denning MR stated: "If it appears that the debt is due and owing - and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment - the Court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets." 160 The plurality in Huang rejected an argument to the effect that r 7.32 is to be read as subject to r 7.35, which provides: 7.35 Order against judgment debtor or prospective judgment debtor or third party (1) This rule applies if: (a) judgment has been given in favour of an applicant by: (i) the Court; or (ii) for a judgment to which subrule (2) applies - another court; or (b) an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in: (i) the Court; or (ii) for a cause of action to which subrule (3) applies - another court. (2) This subrule applies to a judgment if there is a sufficient prospect that the judgment will be registered in or enforced by the Court. (3) This subrule applies to a cause of action if: (a) there is a sufficient prospect that the other court will give judgment in favour of the applicant; and (b) there is a sufficient prospect that the judgment will be registered in or enforced by the Court. (4) The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur: (a) the judgment debtor, prospective judgment debtor or another person absconds; (b) the assets of the judgment debtor, prospective judgment debtor or another person are: (i) removed from Australia or from a place inside or outside Australia; or (ii) disposed of, dealt with or diminished in value. (5) The Court may make a freezing order or an ancillary order or both against a person other than a judgment debtor or prospective judgment debtor (a third party) if the Court is satisfied, having regard to all the circumstances, that: (a) there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because: (i) the third party holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or (ii) the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or (b) a process in the Court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment. (6) Nothing in this rule affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so. 161 The plurality said (at [21]): Rule 7.35 is not expressed to affect the operation of r 7.32 and, contrary to Mr Huang's submission, there is no reason to read r 7.32 as subject to r 7.35. Both r 7.35(6) and r 7.36 are expressly to the contrary. Rather, r 7.35 extends the scope of r 7.32, including by confirming the rule's application to cases that may have otherwise been in doubt, namely where there is a "prospective" cause of action and in relation to processes of a foreign court. Where r 7.35 applies, r 7.35(4) supplements the power in r 7.32 by identifying reasons why the Court may be satisfied, having regard to all the circumstances, that a danger of the kind specified in both r 7.32 and r 7.35(4) exists. 162 The Trustees do not rely on r 7.35 in this Application. Nonetheless, as the plurality recognised at [22]: As a practical matter, in most cases the danger required by r 7.32 will be proved because of one or more of the circumstances set out in r 7.35(4). However, r 7.35(4) does not cover the field. As already noted, both r 7.35(6) and r 7.36 explicitly contemplate that a freezing order may be made even though the applicant is unable to satisfy r 7.35(4). By way of example, r 7.32 may apply where a defendant deliberately and openly moves from Australia, leaving insufficient assets to satisfy a prospective judgment debt and stating an intention not to comply with the prospective judgment. 163 The practical interaction between the two rules is similarly reflected in the Court's Freezing Orders Practice Note (GPN-FRZG) which applies to any proceeding involving an application made in this Court for a freezing order. GPN-FRZG supplements Div 7.4 of the Rules. GPN-FRZG requires that an affidavit relied on in support of an application for a freezing or ancillary order should, if possible, address amongst other things, the matters referred to in r 7.35 (at para 2.20): (a) information about the judgment that has been obtained, or, if no judgment has been obtained, the following information about the cause of action: (i) the basis of the claim for substantive relief; (ii) the amount of the claim; and (iii) if the application is made without notice to the respondent, the applicant's knowledge of any possible defence; (b) the nature and value of the respondent's assets, so far as they are known to the applicant, within and outside Australia; (c) the matters referred to in r 7.35 of the Federal Court Rules; and (d) the identity of any person, other than the respondent, who, the applicant believes, may be affected by the order, and how that person may be affected by it. 164 GPN-FRZG also relevantly states that: (1) the purpose of a freezing order is to prevent frustration or abuse of the process of the Court, not to provide security in respect of a judgment or order (para 2.5); (2) a freezing order should be viewed as an extraordinary interim remedy because it can restrict the right to deal with assets even before judgment, and is commonly granted without notice (para 2.6); (3) r 7.35(5) addresses the minimum requirements that must ordinarily be satisfied on an application for a freezing order against a third party, who will not necessarily be a party to the substantive proceeding, before the discretion is enlivened (para 2.7); and (4) the value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant's claim, including interest and costs, though sometimes it may not be possible to satisfy this principle if the amount is not known at the time of the discovery and at the time of the approach to the Court (para 2.11). 165 A freezing order may be made against a person who is not a party to proceedings where such an order is necessary to facilitate the administration of justice, subject to qualifications. Cardile concerned asset preservation orders against third parties in respect of the plaintiff's action against the defendant. The plurality in Cardile observed that in assessing whether relief is available against non-parties, the focus must be the administration of justice ([42]). The effective exercise of the jurisdiction may call for asset preservation orders against third parties who may hold or otherwise be interested in assets of the judgment debtor or potential judgment debtor or who may be obliged to contribute to the property of such a judgment debtor to help satisfy the judgment (plurality, at [44]). The plurality went on to describe the way in which a third party may relevantly "otherwise be interested in" the assets of the judgment debtor or potential judgment debtor. The plurality referred to a passage in the speech of Lord Mustill in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334 at 362, to which Hoffmann LJ referred in Mercantile Group (Europe) AG v Aiyela [1994] QB 366 at 375-376, where Lord Mustill said in respect of a third party (wife of a party) that the right to an interlocutory injunction which is incidental to, and dependent on, the enforcement of a substantive right usually, although not invariably, takes the shape of a cause of action (at [48]). In doing so, the plurality commented that (at [48]): However, we do not think that his Lordship was suggesting that an order might be made against a non-party not amenable in some way ultimately to some coercive process requiring it to disgorge, or in some other way to participate in the satisfaction of, a judgment against a party. 166 The plurality cautioned that there is a temptation to use the term "flexible" to cloak a lack of analytical rigour and to escape the need to find a doctrinal and principled basis for orders that are made and concluded that the applicant for the freezing order against a third party had to establish a basis upon which recourse may be had to the third party to satisfy the applicant's prospective money judgment against the defendant (at [49]-[50]). As the plurality make plain there are significant differences between an order protective of the court's process set in train against a party to an action, including the efficacy of execution available to a judgment creditor, and an order extending to the property of persons who are not parties and who cannot be shown to have frustrated, actually or prospectively, the administration of justice (at [50]). 167 The plurality observed that even if the Court is satisfied as to the availability of proceedings and the risk of dissipation, the Court would not, as a matter of discretion, grant a freezing order if there has been no undertaking by the applicant to commence proceedings within a very short period of time (at [53]). Relevantly, the plurality observed at [53]-[54]: Discretionary considerations generally also should carefully be weighed before an order is made. Has the applicant proceeded diligently and expeditiously? Has a money judgment been recovered in the proceedings? Are proceedings (for example civil conspiracy proceedings) available against the third party? Why, if some proceedings are available, have they not been taken? Why, if proceedings are available against the third party and have not been taken and the court is still minded to make a Mareva order, should not the grant of the relief be conditioned upon an undertaking by the applicant to commence, and ensure so far as is possible the expedition of, such proceedings? It is difficult to conceive of cases where such an undertaking would not be required. ... .. we consider that the general proposition for which the appellants contend, that the grant of Mareva relief against a third party should be limited to cases in which the third party holds or is about to hold, dissipate or further dissipate property beneficially owned by the defendant in the substantive proceedings, is too narrowly expressed. Nevertheless, it will be a rare case in which Mareva relief will be granted if such a situation does not exist. 168 The plurality said that the availability of a proprietary remedy may, in some cases, be sufficient to constitute a substantive right in aid of which asset preservation relief in personam might lie (at [55]). 169 The plurality concluded (at [57], footnotes omitted): What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word "may", be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies", of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor. 170 That the jurisdiction of the Court to make a freezing order is not limited to circumstances in which a substantive proceeding in the Court against a prospective judgment debtor has commenced or is imminent was reiterated by the High Court in PT Bayan Resources v BCBC Singapore [2015] HCA 36; 258 CLR 1 at [43] to [48] per French CJ, Kiefel, Bell, Gageler and Gordon JJ and at [64] per Keane and Nettle JJ. The Court emphasised that a freezing order is designed to protect "a prospective enforcement process": PT Bayan Resources at [46]. Indeed, the Court repeated the description of freezing orders used in earlier authorities as the paradigm example of an order to prevent the frustration of a court's process: PT Bayan Resources at [43] and the authorities cited therein. The plurality in PT Bayan Resources rejected a submission that the inherent jurisdiction of, in that case, the Supreme Court to make a freezing order is always limited to circumstances in which a substantive proceeding in that court has commenced or is imminent (at [44]). At [47] (footnotes omitted), the plurality said: The actual holding in Cardile v LED Builders Pty Ltd illustrates that the prospective enforcement process that a court might protect by making a freezing order can be a process contingent on factors in addition to the outcome of a substantive proceeding in that court. The holding was that a freezing order can be made against a third party against whom no present cause of action exists and against whom no present proceeding has commenced. It is enough that some future legal process (which might be contingent, for example, on the appointment by another court of a liquidator or a trustee in bankruptcy) may be available pursuant to which the third party may be obliged to contribute to the funds of the judgment debtor to help satisfy the judgment against the judgment debtor. 171 The Respondents submit that there must be a legal framework comprising an accrued cause of action against which action can be taken in order to recover property or assets from the third party and r 7.32 needs to be read in that context. The Respondents submit that the plurality's summary at [47] in PT Bayan Resources elides the requirement that there be a "vested or accrued cause of action" before a freezing order will be made against the non-party. The Respondents point to the rejection by the plurality of a suggestion that freezing orders might be made against a third party who is not amenable to some coercive process requiring it to disgorge, or in some other way to participate in the satisfaction of, a judgment against a party: Cardile at [48]. The Respondents also draw attention to the observations of Kirby J, at [121], as to the grant of relief against a non-party as being preconditioned on having an entitlement to recourse to the non-party: To secure an asset preservation order in a case such as the present, it will be necessary for the party seeking it to show, in addition to the conditions ordinary to the grant of relief injunctive in nature that (1) there is a danger that the non-party will dispose of relevant assets or property in its possession or under its control; and (2) that the affairs of the actual or potential judgment debtor and the non-party are closely intermingled, and that the actual or potential judgment creditor has a vested or accrued cause of action against the non-party or may otherwise become entitled to have recourse to the non-party, its property and assets to meet the claim. … 172 With respect, acknowledging the skill with which the submission was advanced, I do not accept the Respondents' submission that there must be a "vested or accrued cause of action" before a freezing order will be made against a third party. The plurality at [47] accurately and precisely summarised the application of the principles in the context of the orders ultimately made in Cardile. As recognised in Cardile at [25]-[26], the expression "as the Court thinks appropriate" in s 23 of the Federal Court Act points to the requirement to develop principles governing the exercise of the Court's power to ensure the power is exercised to serve the purpose for which it is given, namely to prevent the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied. The Respondents' proposed limitation is not necessary to facilitate or support the need identified by the plurality in Cardile as the touchstone for the development of principles applicable to the exercise of the jurisdiction in s 23 of the Federal Court Act. 173 I also regard the limitation for which the Respondents contend as inconsistent with the express acknowledgement by the plurality in Cardile that a freezing order may lie in at least two scenarios that do not necessarily entail the applicant establishing a vested or accrued cause of action. First, the plurality recognised that a freezing order may be granted in support of a proprietary remedy that may otherwise be available. Secondly, that a freezing order may be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor (at [57]). In BCI Finances Pty Ltd (in liq) v Binetter (No 3) [2015] FCA 1336 at [31], Gleeson J noted that: Several cases have accepted the proposition that a freezing order may be made against a third party company where there was a judgment debtor or prospective judgment debtor who might be bankrupted with the consequence that his or her trustee in bankruptcy would be likely to obtain access to the assets of the third party company: Caboche v Southern Equities Corporation Ltd [2001] SASC 55 at [23] (prospective judgment debtor), Davis v Turning Properties Pt Ltd [2005] NSWSC 742; (2005) 222 ALR 656 at [42] (prospective judgment debtor), Apostolidis v Kalenik [2011] VSCA 307; (2011) 35 VR 563 at [99] (judgment debtor), footnote 80, and Rafferty v Time 2000 West Pt Ltd (No 7) [2011] FCA 405 at [58] and [72] (judgment debtor). 174 To accept the limitation urged by the Respondents would also be inconsistent with the recognition that the power extends to a "prospective" cause of action: see Huang at [21], extracted at paragraph [161] above. 175 The making of a freezing order involves a discretionary exercise of power. The Court retains a discretion to refuse relief: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322 (Gleeson CJ).

CONSIDERATION 176 The Trustees conducted this Application on the basis that, in respect of each of the freezing orders they bore the onus of showing: (1) a good arguable case; (2) that there is a danger that the prospective judgment will be wholly or partly unsatisfied because the assets of the prospective judgment debtor or another person will be removed from Australia or the assets will be disposed of, dealt with or diminished in value; and (3) the balance of convenience favours granting the order.

Good arguable case 177 A good arguable case is one which is more than barely capable of serious argument, and yet not necessarily one the Court considers would have more than a fifty percent change of success: Curtis v NID Pty Ltd [2010] FCA 1072 at [6] (Edmonds J) citing Ninemia Maritime Corp v Trave Schiffahrtsgesselschaft mbH & Co KG (The Niedersachsen) [1983] Com LR 234 at 235 (affirmed on appeal: [1983] 1 WLR 1412); Deputy Commissioner of Taxation v Greenfield Electrical Services Pty Ltd [2016] FCA 653 at [7] (Flick J). The criterion of a good arguable case is a lesser standard than a prima facie cause of action: Patterson at 325 (Gleeson CJ) and 327-330 (Rogers AJA). 178 The way in which the Trustees put their case on this issue was, unfortunately, somewhat mercurial. As far as I understood the Trustees' position as it evolved in argument, the Trustees' case is that the relevant property ostensibly held by the Respondents is "in truth" controlled and beneficially owned by the Bankrupts, or one or other of them, notwithstanding that the property is held legally in the name of one or other of the Respondents and is ostensibly subject to beneficial interests that do not directly include either of the Bankrupts. On the basis of this contention, the Trustees submit that pursuant to s 58(1) of the Bankruptcy Act, upon Ms Liu and Mr Kwok becoming bankrupt, their interest in the relevant property vested in the Trustees. 179 When pressed to explain the legal basis upon which they contend that the relevant property held by each of the Respondents is "in truth" controlled and beneficially owned by the Bankrupts, or one or other of them, the Trustees submitted that (T9-10, 29 August 2024): Firstly, your Honour, can I say this by way of a background. Firstly, obviously as the application was made and then subsequently progressed in the evidence, further and further documents have come to the attention of the trustee, which means that it follows that the application has, in some sense, evolved over time as the trustee has learned more about what has occurred. In the written submissions - I will go back a step, your Honour. In the evidence, we made it very plain that what the trustee's contention was was that assets of the bankrupts were held in the names of other individuals and/or entities. And in the written submissions, we said the assets were held on trust, and that the bankrupts were beneficially entitled to them. That is as opposed to the bankrupts being beneficiaries under a discretionary trust. In other words, the only way that the bankrupts could be beneficially entitled to the properties is if it was on effectively some form of bare trust, which is what I put to your Honour during the course of the submissions. And a resulting trust is a form of bare trust. And in particular, what the most recent affidavit that we relied upon, being the affidavit of [2]8 August of Mr O'Neill demonstrated, is that in respect of several of the properties, being Jones Street, Loftus Street and Orinoco - deposits for those properties were paid either by Ms Liu herself or were paid by E&B Business which, we contend, is effectively Ms Liu and Mr Kwok's money. That is the reason why we said, in respect of those properties in particular, they would be held on a resulting trust, or certainly there is an arguable case that they are held on a resulting trust - - - HER HONOUR: As a purchase monies trust? MR NOTLEY: Yes, but what I'm - yes, because they've - they've provided the purchase monies for the property, is the first thing. And secondly, the mortgages on those properties have continued to be met by E&B Business. In respect of E&B Business, again, we say, when your Honour looks at the facts that we've put forward, the evidence that we've put forward, being the fact that the bankrupts have treated E&B Business' bank account like their own, that that bank account and the assets of that company are effectively held by that company on their trust for the bankrupts - in other words, they have an immediate entitlement. If they say, "Give me the money," they will be given the money. But a resulting trust can also apply because the evidence shows that the bankrupts have put in, I think the evidence was, at least 500, 600 thousand dollars had been put into that bank account over time by the bankrupts, and they had taken the money back out again, because the resulting trust won't simply arise in respect of a piece of real property, but it would also arise in respect of any asset such as money in a bank account. 180 The Trustees' position as to whether there was an overarching bare trust that spanned all of the documented trusts or whether the documented trusts were from inception "in truth" bare trusts or became so as a result of the way in which they were operated was left opaque. 181 The Trustees did not ultimately allege that the trust arrangements constituted a sham in the legal sense, after briefly flirting with the idea, they submitted that while they may seek to run a case based on sham that it was not necessary to the Trustees' case that the trusts be a sham: T11, 29 August 2024. The Trustees' reticence to argue, even at this stage, that the trust arrangements are a sham in the legal sense, is understandable. In my view, the contemporaneous notation in the CBA file note as to the tax minimisation purpose for setting up the trust which seemed to be put forward at one point in the argument as evidencing a sham would suggest the opposite - that the trust was intended to take effect according to its terms and is not a sham in the legal sense: Lewis v Condon [2013] NSWCA 204; 85 NSWLR 99 at [59]-[60] (Leeming JA with whom McColl JA and Sackville AJA agreed). 182 The Respondents submitted that that the evidence does not support a prima facie case of sham because (T15.12-25, 29 August 2024): It's a very serious allegation to make, and a responsible trustee would think twice, with respect, before alleging a sham in light of the objective material before the court. But in our respectful submission, the evidence before the court doesn't even come close to a prima facie case of there being a sham. And one of the reasons for that is, take the very first acquisition through E&B Holdings. There's just simply no need for it to be a sham. If the bankrupt wanted to be a beneficiary of the value of this property, her and her family are effectively beneficiaries under the trust. So the trust structure provides effectively the same benefit to the bankrupt with the added protection of the trust structure in place … And the tax advantages and the like 183 The difficulty with that submission is that it is pregnant with an assumption that E & B Holdings (through Mr Cheung) will necessarily act in accordance with the direction of the Bankrupts in exercising the powers vested in it under the trust in deciding whether to accumulate or distribute, and in choosing to whom distributions will be made, noting that there is a broad class of beneficiaries beyond the named beneficiaries. If that unspoken assumption is correct, then it tends to support the Trustees' position that there is an arguable case that the E & B Trust in fact functions as, or as part of, a bare trust in favour of the Bankrupts. If this be so, then it may be arguable that the Bankrupts' interest in the relevant property vested in the Trustees pursuant to s 58(1) of the Bankruptcy Act upon Ms Liu and Mr Kwok becoming bankrupt. 184 When pressed to explain the basis upon which an order might be made against the Respondents as third parties such that it was arguable in the requisite sense that they are amenable in some way ultimately to some coercive process requiring them to disgorge, or in some other way to contribute to the estate of each of the Bankrupts, the Trustees sought to rely in their oral submissions in reply on Micheletto (Trustee), in the matter of the El-Debel (Bankrupt) v El-Debel [2020] FCA 1031 (appeal allowed in part, but statement of principles by Gleeson J at [78] approved: El-Debel v Micheletto (Trustee) [2021] FCAFC 117 at [7] (Markovic, Derrington and Colvin JJ)). 185 In Micheletto, Gleeson J found that a rebuttable presumption of a resulting trust arises in circumstances where one person provides the purchase price of a property which is conveyed into the name of another person. Further, that there is a further presumption that if part of the purchase price is provided by way of mortgage, the mortgage monies are treated as a contribution by the person who is liable to repay the mortgage. This presumption is rebuttable by evidence that the parties' intention at the time the property was acquired was that a resulting trust not arise: Micheletto at [78(7)] (and the authorities cited therein). 186 The Respondents submit that Micheletto is readily distinguished from the present circumstances on the basis that: first, Micheletto was a fact-specific judgment, which concerned extraordinary evidence of a deliberate plan by the bankrupt to conceal assets in the lead-up to bankruptcy, followed by an attempt to reverse the concealed position. The Respondents highlight that the bulk of the Trustees' evidence as to actual intention has focused on events post-dating the acquisition of the properties, rather than the bankrupts' purpose as at the date of acquisition, which is limited to a reference in the CBA file note (referred to in paragraph 105 above) recording that Ms Liu intends to purchase the Jones Street Property under a trust in order to take tax benefits. Secondly, the presumption of a resulting trust does not arise as the deposits for the purchase price of each of the properties, although originally paid by cheques in the name of Ms Liu, were ultimately treated as payments by the corporate trustee pursuant to contracts of rescission and new contracts of sale entered into between the vendors and the various corporate trustees. The Respondents submit that the effect is that each of the deposits are to be treated effectively as trust property. Thirdly, the deposits only constituted 10 percent of the purchase price, with the remainder being borrowed on mortgage in order to acquire the properties. The Respondents submit that to the extent that a resulting trust arises, it arises in respect of the borrower, not in respect of either of the Bankrupts. The objective material before the Court on this issue is bank statements and contracts for sale in respect of each of the properties providing for loans held in the names of the corporate trustees. 187 I accept the Respondents' submissions to the effect that the circumstances disclosed by the evidence in this Application are not on all fours with the circumstances considered in Micheletto. However, taking into account the relatively low threshold required to establish a good arguable case, I am nevertheless satisfied that the Trustees have met that threshold in relation to a claim based on bare trust, including potentially a resulting trust, on the basis of the evidence they have led on this Application when it is assessed in accordance with the principles in Blatch v Archer and Jones v Dunkel. 188 I am similarly satisfied that the Trustees have established that they may be able to establish that the assets of the Respondents that they seek to freeze are assets of the Bankrupts to which the Trustees will have access pursuant to the Bankruptcy Act. In this regard, I note that although the Trustees did not initially proffer an undertaking in relation to the commencement of proceedings against the Respondents, they yielded after the conclusion of the submissions made by Senior Counsel for the Respondents. The submission made on behalf of the Respondents was that it would be an extremely rare case where a freezing order would be made against a third party in the absence of an undertaking to commence proceedings. The undertakings offered by the Trustees as to the commencement of proceedings are extracted at paragraph [51] above. The critical feature is that the Trustees have now given an undertaking to commence any proceedings against the Respondents by 1 November 2024. 189 The evidence demonstrates that in the long shadow of the Haiye Proceeding, commencing with the impugned transaction in March 2016, the Bankrupts have arranged their affairs in a way that obscures the precise legal relationships which exist between each of them and the Respondents and the property held by the Respondents. The provision of information to the Trustees by each of the Bankrupts, both in their bankruptcy questionnaires and through their examinations, demonstrates persistent deflection and evasion directed to concealing their respective property interests. The same objective may inform the repeated process of novating contracts for the purchase of real property to remove or obscure Ms Liu's involvement. There are also the anomalies in the trust documents. The Landmark Trust deed is not signed. The Cliff Road Trust Deed on its face appears to be a bare trust which serves the purpose of distancing the interest of E & B Holdings in the Cliff Road Property on the public record. That serves to obscure the potential significance of the fact that Ms Liu is a named beneficiary of the E & B Trust even though it is ostensibly a discretionary trust. The intermingling of the Bankrupts' affairs with those of the Respondents before and after the Bankrupts became bankrupt is illustrated by the use of the E & B Business Account which appears to be used for the Bankrupts' daily living expenses and also to service mortgages on some of the trust properties including in circumstances where neither Ms Liu nor Mr Kwok were relevantly directors at the relevant time. The Respondents have not led any evidence to explain or rebut the evidence led by the Trustees. That is their right. But having regard to the extent of the evidence led by the Trustees I am satisfied that it is appropriate to draw a Jones v Dunkel inference against them that any evidence they may have led would not have assisted them. 190 In an application such as this, the Court is not required to finally determine the rights of the parties. I am conscious that it is neither possible nor appropriate to conduct a trial of the underlying case or to determine contested questions of fact: Shercliffe v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 734 (Mahoney JA (with whom Glass and Samuels JJA agreed) cited with approval by the Full Court in Warner-Lambert Company LLC v Apotex Pty Ltd [2014] FCAFC 59; 311 ALR 632 at 647 [72] (Allsop CJ, Jagot and Nicholas JJ). Rather, what is required is a "qualitative evaluation" of the evidence: Skyworks NSW Pty Ltd v 32 Drummoyne Pty Ltd [2017] NSWSC 343 at [24] (McDougall J). 191 Given the nature of this Application and allowing for the difficulty that the Trustees face as external administrators I am satisfied they have made out a good arguable case. In reaching this conclusion I am conscious that it is necessarily made by reference to evidence which is at present untested and in circumstances where any claim the Trustees may have against the Respondents has not been subject to the rigour of preparing a pleading. If the Trustees seek to obtain freezing orders that persist beyond 1 November 2024, the issue as to the existence of a good arguable case will fall to be examined in the context of the proceeding, if any, that the Trustees commence against the Respondents, or any of them. The evidence available at that time will have to be weighed with care and caution before reaching the necessary conclusion of intentional deception that appears likely to inform the Trustees' claim against the Respondents, or any of them.

Reasonable apprehension that assets will be dissipated 192 The risk of dissipation of assets to avoid a judgment may be established by inference: Patterson at 325-326 (Gleeson CJ). Whether an inference may be drawn will depend on the circumstances of a particular case: see Victoria University of Technology v Wilson [2003] VSC 299 at [36] (Redlich J) and Lifetime Investments Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2005] FCA 226 at [9] (Kiefel J). There is no requirement that there must be direct evidence on the risk of dissipation: Blue Mirror Pty Ltd v Pegasus Australia Developments Pty Ltd [2021] NSWSC 961 at [80] (Kunc J). 193 As summarised at paragraph [189] above, the elaborate arrangements in relation to the corporate respondents, the trusts associated with them and the relationships existing between the companies, the trusts and the relevant individuals were all created proximate to the Haiye Proceeding, which culminated in findings that Ms Liu and Mr Kwok were engaged with others in a fraudulent enterprise. It has been recognised that the nature of the underlying cause of action, at least where it involves fraudulently misappropriated assets or serious dishonesty, may provide a basis for apprehending a relevant risk: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 325 (Gleeson CJ) and 326 (Meagher JA). The following observations made Gleeson CJ are apposite in the circumstances of this case: [T]he evidence as to the nature of the scheme in which the appellant was allegedly involved, which established a prima facie case against him, was such as to justify the conclusion that there was a danger that the appellant would dispose of assets in order to defeat any judgment that might be obtained against him and that such danger was sufficiently substantial to warrant the injunction. There is no reason in principle why the evidence which is relevant to the first of the issues earlier referred to might not also have a bearing on the second, and this will especially be so where the prima facie case that is made out against a defendant is one of serious dishonesty involving diversion of money from its proper channels. The present is not a case in which a plaintiff who claims simply to be an unsecured creditor seeks to prevent a dissipation of assets which have no particular connection with the claim in question. This is a case in which the plaintiff claims that the defendant, making use of a corporation controlled by him, fraudulently misappropriated a large sum of money which, if it is still under the control of the appellant, would be quite likely to constitute, directly or indirectly, the bulk of his assets. 194 The evidence on this Application demonstrates that the Bankrupts appear to have organised their affairs with a view to defending against the claims brought against them in the Haiye Proceeding which stemmed, in part, from the impugned March 2016 transactions. The evidence also demonstrates a continuing pattern of evasion and deflection in the Bankrupts' dealings with their Trustees. I am satisfied that the evidence gives rise to an inference that unless the asset preservation orders sought by the Trustees are made, any assets in the hands of the Respondents, which may ultimately prove to be assets in which the Bankrupts have an interest, will not be preserved to ensure that they are available to the Trustees for the benefit of the Bankrupts' creditors. 195 In addition, I accept the Trustees' submission that the evidence indicates that the Bankrupts have taken steps which would have the effect of putting assets beyond the reach of their creditors, including through the sale of properties and transfer of shares, and denying or expressing uncertainty as to their connection to assets in circumstances where the Bankrupts each owe a duty to be full and frank with their the Trustees. The Trustees point to the fact that a property located at Pretoria Parade, Hornsby, owned by Ms Gao on trust for E & B Holdings as trustee of the E & B Trust, was sold in September 2024. The Loftus Street Property is presently advertised for sale. 196 Each of the property transactions referred to above occurred around the time, or shortly after, the Haiye Proceeding had commenced. Perhaps more importantly all the property transactions occurred after the Bankrupts took the benefit of the impugned transactions that gave rise to the Haiye Proceeding, and which they ultimately conceded at the beginning of the hearing in the Haiye Proceeding. The restructuring of the property purchases from Ms Liu's name to the corporate trustees occurred at a time when the Bankrupts were being pursued by the plaintiffs in the Haiye Proceeding for substantial sums of money. 197 Similar obfuscation appears to have occurred in respect of the Bankrupts' investment in Sunrise. Sunrise was incorporated on 29 April 2016. The current directors are Xian Shi and Quanfang Ling. Mr Kwok is a former director of Sunrise, for the period 29 April 2016 to 3 March 2021. During his examination, Mr Kwok confirmed that he was previously a director of Sunrise, but gave evidence that he did not know Quanfan Ling. Ms Liu has never been a director of Sunrise. A former registered office and principal place of business of Sunrise is the Bankrupts' former residential address from around March 2018 to February 2021. The account statements in evidence indicate that Mr Kwok made several payments to Sunrise between May and June 2021, after he had resigned as director. During his examination, Mr Kwok could not explain why he made these payments. 198 Mr Kwok was also a director of Sunrise's wholly owned subsidiary, Wau 88, for the period 20 May 2016 to 3 March 2021. Wau 88 was incorporated on 2 October 2015. The current directors of Wau 88 are Mr Shi and Ms Ling. It appears that Wau 88 is the registered proprietor of a property located at 5 Derowie Avenue, Homebush, which appears to be adjacent to the properties owned by Sunrise. 199 Mr Kwok was the sole director of Sunrise at the time of the property purchases for 1 Derowie Avenue, Homebush and 3 Derowie Avenue, Homebush. The Trustees' evidence includes realestate.com searches indicating that the 1 Derowie Avenue property was last sold on 6 May 2016 and the 3 Derowie Avenue property was last sold on 5 May 2017, relevantly proximate to the impugned March 2016 transactions and the commencement of the Haiye Proceeding respectively. Ms Liu gave evidence that she had not heard of Sunrise and that she was not aware if it owned any properties in New South Wales. 200 Included in the Trustees' evidence is a copy of a Deed of Agreement and Settlement dated 8 February 2024 between the Bankrupts, Sunrise, Wau 88 and Ms Ling (the Sunrise Deed). The Sunrise Deed includes a clause imposing confidentiality obligations on the parties to the deed. It is not apparent to me whether the parties to the Sunrise Deed other than the bankrupts were notified by the Trustees of the intention to adduce a copy of this deed into evidence on this application. For that reason and given that I have already reached a state of satisfaction in relation to there being the requisite risk of dissipation I will not detail in these reasons the dealings involving the Bankrupts which postdate their entry into bankruptcy that are revealed in the Sunrise Deed. It suffices to observe that based on my review of the Sunrise Deed, I am satisfied that the Trustees have established that the risk that the Bankrupts may dissipate property properly forming part of their estates is further supported by conduct that persisted into 2024. 201 Neither Ms Liu nor Mr Kwok disclosed to the Trustees that they held any beneficial interest in Sunrise, nor that they had entered into the Sunrise Deed. During the course of examinations, which took place only a few months after entry into the Sunrise Deed, Ms Liu gave evidence that she had not heard of Sunrise and did not know any of the properties owned by Sunrise. 202 The evidence to which I have referred in reaching my factual findings given by the Bankrupts during the examination is replete with inconsistencies, deflection and a preparedness to only answer questions when confronted with documents. The Bankrupts' purported inability to recall various fundamental matters is not credible. While I accept that there may be a myriad of motivations which cause a person not to tell the truth, in the context of a bankrupt being examined at the insistence of his or her trustee in bankruptcy, a likely motive is that the bankrupt wishes to conceal the entirety of their assets from their trustee. Having read the examination transcripts of each of Miss Liu and Mr Kwok, I am satisfied that in their examinations, the Bankrupts have sought to avoid disclosing information that would assist the Trustees in identifying and or recovering the whole of the Bankrupts' property. I am satisfied that the Trustees have established the requisite risk of dissipation on the evidence on this application.

Balance of convenience 203 The Trustees must show the balance of convenience favours the making of the orders: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 at 198 [13] (Kenny J). 204 In favour of making the orders is the risk that assets will be dissipated. Having regard to the nature and purpose of the dishonesty alleged as the foundation of the Haiye Proceeding and the relatively recent episodes of obfuscation during the examination of the Bankrupts, I regard the risk of dissipation to be real and in favour of granting the order. 205 Against the making of the orders is the recognition that freezing orders by their very nature are an extraordinary remedy which inevitably cause prejudice to those against whom they are made. 206 In the present case, the prejudice occasioned by the making of the freezing orders is ameliorated by the fact that the order is temporally confined. The proposed freezing orders are made for a limited duration until 1 November 2024. This is supplemented by an undertaking as to damages in the customary form and a further undertaking by the Trustees that they will commence proceedings against the Respondents by 1 November 2024. The timeframe of 1 November 2024 is appropriately confined by reference to the status of the examination program in which the Trustees are presently involved. After 1 November 2024, the issue of whether the freezing orders should be continued or renewed will fall to be assessed within the confines of any proceedings that the Trustees commence against the Respondents. If the Trustees do not commence proceedings against the Respondents within this time, then the Respondents will have a claim against the Trustees under the existing undertaking as to damages. I am conscious that it is well recognised that there can be difficulties associated with the quantification and recovery of damages pursuant to the undertakings if it should turn out the freezing order should not have been granted however in the circumstances of this Application and having regard to the limited duration of the freezing orders I do not regard that factor as swaying the balance of convenience in favour of the Respondents. 207 The absence of any evidence or submissions by the Respondents as to the inconvenience or prejudice occasioned by the continuation of the freezing orders for the confined period contemplated by the proposed orders is also relevant. The Respondents have not pointed to any specific prejudice. In making that observation I do not intend to gainsay the general prejudice which I would readily infer, given the serious interference with the individual Respondent's enjoyment of their property rights which is necessarily occasioned by the orders that I have made. 208 The prejudice that is necessarily occasioned by the freezing orders in the present circumstance is reduced to some extent by the fact that the orders are crafted to permit an arm's length sale of the properties, including the Loftus Street Property which is presently listed for sale, provided the properties are sold for fair value and the net proceeds are paid into Court. The evidence suggests that only limited funds are currently held in the E & B Business Account and no evidence of any other assets of E & B Business has been provided. In the absence of a freezing order, these assets may be dissipated. To grant and preserve the status quo in circumstances where the Court's bankruptcy processes are presently engaged and appear to have been obstructed by the Bankrupts is consistent with the purpose for which the power under s 23 and r 7.32 is conferred. On the same basis, I was satisfied that it is appropriate to grant the ancillary relief requiring asset disclosure statements as sought by the Trustees. 209 The Respondents submit, and I accept, that the strength of the Trustees' good arguable case is relatively weak and that the legal framework supporting the existence of a good arguable case is expressed at a high level of generality. I regard that as reflecting the stage that the Trustees' investigations have reached in circumstances where the Bankrupts have not been forthcoming. I am satisfied that in the circumstances of this case the appropriate balance between the relative strength of the good arguable case is appropriately offset by the temporal limitation on the freezing orders and the undertaking as to damages which will be in place for the limited period in which the freezing orders are in place. The Trustees' investigations are in an active stage that is likely to conclude towards the end of October 2024. The Trustees have given an undertaking that they will commence any proceedings by 1 November 2024 and in the absence of further order, the orders will expire on 1 November 2024. 210 In light of the matters set out above, I am satisfied that the balance of convenience presently favours making the freezing orders in the proposed form until 1 November 2024.

CONCLUSION 211 For these reasons, I made orders substantially in accordance with those sought by the Trustees. I was satisfied that to make the orders was in accordance with the purposes recognised by s 23 of the Federal Court Act and r 7.32 of the Rules and having regard to the whole of the evidence it was an appropriate exercise of discretion to make the orders substantially as sought. I certify that the preceding two hundred and eleven (211) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.

SCHEDULE OF PARTIES NSD 1437 of 2023 Respondents Fourth Respondent: HANOI LANDMARK INVESTMENT PTY LTD Fifth Respondent: LANDMARK EVEREST PTY LTD Sixth Respondent: E & B BUSINESS PTY LTD (ACN 615 482 329) Seventh Respondent: MR CHI YUEN CHEUNG

(Federal Court Act 1976(Cth)

Federal Court Act 1976(Cth)

Federal Court Rules 2011(Cth)rr 7.32, 7.33, 7.34, 7.35, 7.36

Mining Company Pty Ltd [2011] WASC 188 PT Bayan Resources v BCBC Singapore [2015] HCA 36; 258 CLR 1 Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang, in the matter of Royal Express Pty Ltd [2021] FCA 585 Shercliffe v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 Skyworks NSW Pty Ltd v 32 Drummoyne Pty Ltd [2017] NSWSC 343 Warner-Lambert Company LLC v Apotex Pty Ltd [2014] FCAFC 59; 311 ALR 632

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