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NSWNSWSC

Zhang v Zhu

[2026] NSWSC 819

Supreme Court of NSW|2026-07-13|Before: Sirtes J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-07-13

Before

Sirtes J

Catchwords

PRACTICE AND PROCEDURE – variation of freezing orders – no issue of principle – motion dismissed

Source

Original judgment source is linked above.

Catchwords

PRACTICE AND PROCEDURE – variation of freezing orders – no issue of principle – motion dismissed

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Zhang v Zhu [2026] NSWSC 819

Hearing dates: 10 July 2026

Date of orders: 13 July 2026

Decision date: 13 July 2026

Jurisdiction: Equity - Commercial List

Before: Sirtes J

Decision: See [48]

Catchwords: PRACTICE AND PROCEDURE – variation of freezing orders – no issue of principle – motion dismissed

Legislation Cited: Civil Procedure Act 2005 (NSW), s 56

Cases Cited: Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82
Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd [2013] VSC 89
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Customs and Excise Commissioners v Barclays Bank plc [2007] 1 AC 181; [2006] UKHL 28
Hewitt v McClymont (No 2) [2024] NSWSC 1453
Nova Supply Chain Finance Pty Limited v Active Capital Reinsurance Limited (a company incorporated in Barbados) [2024] FCA 1398

Category: Procedural rulings

Parties: Jing Zhang (Plaintiff/Respondent)
Wenying Zhu (Defendant/Applicant)

Representation: Counsel:
D Pritchard SC / M Bui (Plaintiff/Respondent)
H Zhao / M Zou (Defendant/Applicant)
Solicitors:
Sunfield Chambers Solicitors & Associates (Plaintiff/Respondent)
EXC Law (Defendant/Applicant)

File Number(s): 2024/00237506

JUDGMENT

The Defendant in these proceedings, Ms Wenying Zhu, seeks orders pursuant to her 26 June 2026 Notice of Motion varying freezing orders made by Hammerschlag CJ in Eq on 5 June 2026.

Zhang v Zhu [2026] NSWSC 819 | Case summary | Zoe

In support of the freezing orders, the Plaintiff filed in Court and read the affidavit of Ms Si Zhang affirmed on 2 June 2026. Ms Si Zhang is a solicitor in the employ of Sunfield Chambers Solicitors & Associates, who are the solicitors acting for the Plaintiff in these proceedings. That Affidavit was also read by the Plaintiff, as Respondent, in the motion before me.
Ms Si Zhang’s affidavit is quite detailed. It asserts that in December 2025, after these proceedings were set down for a seven-day hearing commencing on 12 October 2026, the Defendant caused Davin Investment, a company of which she is sole director and sole shareholder, to encumber certain of its assets located in Wurruk, Victoria. Those assets comprised land and a motel located upon that land. Ms Si Zhang contends that the following events occurred between December 2025 and 30 January 2026:
Davin Investment encumbered the Wurruk land and motel with a registered mortgage in favour of a company, Jessie&Fiona Pty Ltd, wholly owned by the Defendant’s daughter. That company appears to be a trustee company for a discretionary trust;
on 30 January 2026, the Wurruk land and motel were sold to Bhavsar Ventures Pty Ltd ATF Bhavsar Ventures Trust and to Aston Suites Sale Pty Ltd for $1.8 million and $1 million, respectively;
of the sale proceeds, the sum of $1,557,256.66 was paid to Jessie&Fiona Pty Ltd as registered mortgagee, with the sum of $754,006 paid to the Defendant in respect of her shareholder loan account with Davin Investment.
The detailed written submissions filed by Mr Pritchard SC, who appeared for the Plaintiff before both Hammerschlag CJ in Eq and me, address the risk of asset dissipation and also the transactions concerning Davin Investment.
The hearing before Hammerschlag CJ in Eq took place on 5 June 2026. The court book in this matter contains the transcript of those proceedings together with the orders made.
The transcript reveals that, shortly after the commencement of the application, Mr Zhao, who also appeared for the Defendant on that occasion, consented to the freezing order on a without prejudice basis subject to changes to the amounts provided for in the Plaintiff’s proposed carve-outs, namely, paragraphs 8(a) and 8(b) of the usual freezing order. On that occasion, the evidence upon which the Defendant relied was contained in her brief affidavit of 4 June 2026. In that affidavit, the Defendant described her occupation as a “director” and stated that she is the only income earner in the household, having to pay tuition for her younger daughter in the amount of $62,464 per year, as well as her monthly expenditure between January and May 2026. The Defendant also addressed her estimated legal costs. The affidavit focussed on the amount of the carve-outs that the Defendant sought. No evidence was given as to her sources of income.
The Defendant relies on further evidence prepared in support of the present motion, being affidavits dated 15 and 29 June 2026. In the 15 June 2026 affidavit, the Defendant identified that she held two accounts with the Commonwealth Bank (CBA), which contained negligible balances and a similarly insignificant sum held in an account with Bankwest. She deposes to owning shares in the three companies:
Can & Huanxiao Pty Ltd;
Davin Investment;
Hua Yuan Holdings Pty Ltd.
In the 29 June 2026 affidavit, the Defendant addresses, in greater detail, Davin Investment, deposing the following:
Davin Investment holds two bank accounts with the CBA which, in total, hold approximately $166,000;
the company has stopped operating its business and no longer carries on any commercial activity, nor will it carry on any commercial activity in the future;
the funds in the Defendant’s personal bank account were “mainly sourced from the income and proceeds of Davin Investment”;
the Defendant’s living expenses “have, in substance, been dependent on funds sourced from Davin Investment, including its bank accounts”;
on 10 June 2026 the Defendant experienced difficulty logging on to her online banking facility and then attended the Balwyn branch of the CBA, in Melbourne, and was told by bank staff that the relevant accounts, being the accounts of Davin Investment, had been frozen;
she has been advised that the accounts of Davin Investment have been restricted by court order such that the bank would not allow her to withdraw funds from that account “unless it received further notification or authorisation from the court”.
The Defendant states that there is insufficient money in her personal accounts to pay her or her youngest daughter’s ordinary living expenses and that, further, she has “no other available or viable sources of funds or monies to pay or meet those expenses”.

The practical difficulties which the Defendant contends she has encountered have been identified by Jackman J in Nova Supply Chain Finance Pty Limited v Active Capital Reinsurance Limited (a company incorporated in Barbados) [2024] FCA 1398. As his Honour noted, banks that have been notified of freezing orders do not wish to risk breaching the freezing order by permitting the ordinary process for electronic banking to operate without being able to monitor whether the transfer falls within the exceptions to the freezing orders, or by making an inadequate assessment as to whether the transfers of funds from those bank accounts fall within the particular exceptions to the freezing orders. His Honour, at [9], expressed his understanding as to why banks take this approach: the risk, albeit remote, is that a bank may unwittingly be liable for contempt of court and thereby expose the its employees to being imprisoned, or the bank’s assets being sequestrated, which is not a risk to which anyone would wish to be exposed, as noted by Lord Bingham in Customs and Excise Commissioners v Barclays Bank plc [2007] 1 AC 181; [2006] UKHL 28 at [13].
Be that as it may, the benefit to the Defendant of varying the order to make express that which the Defendant says is implied is not, according to case law, a principled basis for such a variation to be made. I consider the terms of the freezing order, as a matter of construction, do not prevent the Defendant, as an officer of Davin Investment, from using the bank accounts of that company, held with CBA, merely because of the freezing order.
The freezing order has been broadly drafted and covers all the Defendant’s assets, including her shares in Davin Investment. Equally, however, the carve-outs do not restrict the Defendant from being able to access the entirety of her assets, including the accounts of Davin Investment, so long as the Defendant does not breach the specific terms of the carve-outs, as to living expenses, legal expenses or, importantly, the carve-out I specifically referred to above, namely that in paragraph 8(c), which allows the Defendant to deal with or dispose of any of her assets “in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred”.
Even though the Defendant says, in her most recent affidavit, that Davin Investment is no longer a trading entity, that does not entitle the Defendant to withdraw money from that company in relation to the payment of the Defendant’s ordinary living expenses or reasonable legal expenses. Mr Pritchard SC submitted orally that Davin Investment can have no justifiable interest in paying the living expenses of the Defendant, whether she be a director or shareholder. It could not have been anticipated by the orders that, merely because Davin Investment was treated as one of the Defendant’s assets, she could use a company vehicle as a resource to pay her living or legal expenses.
The impression I have gained from the Defendant’s affidavit evidence, when read in totality, is that she used Davin Investment for that purpose in the past. Whether that was done via shareholder loans, the payment of dividends, or otherwise, is not identified. In any event, it is not open to this Court to sanction funds being withdrawn from a company for purposes that would, I infer, be contrary to the objects of that corporate vehicle, whether it is trading or not.
What arises from this is the following:
the orders, properly construed, do not preclude the Defendant from withdrawing money from the CBA account, as there is no prohibition within the orders from so doing; and
I do not consider it a fair and open construction of those orders that the Defendant can simply withdraw money, from whatever source, for living and/or legal expenses. Corporate expenses, withdrawn in the ordinary and proper course of the business within the confines of order 8(c), are allowed under the carve-out, but that cannot be what was contemplated by reference to either “living expenses” or “legal expenses”. It is trite to observe that “living expenses” and/or “legal expenses” are those referable to the Defendant, whereas paragraph 8(c) of the orders is concerned with business expenses and expenses associated with the ordinary and proper course of business.
I should, for completeness, acknowledge and address the arguments advanced by the Plaintiff to the variation sought in paragraph 1(a) of the motion. Shortly stated, the Plaintiff contends that the principal basis upon which it sought and obtained the freezing order was the Defendant’s conduct in stripping equity from Davin Investment through the contrivance of a mortgage in favour of a company controlled by her eldest daughter and, because of this, to permit the withdrawals now sought by the Defendant from that company would “be contrary to the purpose for which the freezing orders were made”. Reference was made to the recent decision of Rees J in Hewitt v McClymont (No 2) [2024] NSWSC 1453 (Hewitt), in which her Honour adopted the observations made by Vickery J in Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd [2013] VSC 89 at [43]:

These principles are not in dispute; however, I do not consider they provide much, if any, assistance to the Plaintiff. This is for two reasons.
First, it is difficult to discern, in circumstances where the Defendant consented to the imposition of the freezing orders (excluding the amounts for legal expenses and living expenses) on a “without prejudice” basis, that the order was made on the basis contended; all that can be said is that the freezing order was sought, rather than made, on the basis of contended corporate chicanery undertaken by the Defendant in relation to Davin Investment.
Secondly, these principles must be applied to the freezing orders holistically, and that includes not only the “freezing” part of the orders but also the carve-outs that have been allowed. The freezing orders expressly enable the Defendant to have access to her assets to enable her living and legal expenses and business expenses to be paid. There was no impediment contained in those carve-outs preventing money being withdrawn from Davin Investment. The authority in Hewitt and other cases may well assist the Defendant more than the Plaintiff if the purpose of the freezing order was to expressly allow withdrawals of money so long as those withdrawals fell strictly within the limits imposed by the carve-out provisions.
Nevertheless, for the reasons I have addressed above, I do not consider that the carve-out, properly construed, allows a “one size fits all” approach to such withdrawals. It certainly does not authorise the Defendant to engage in conduct that would, almost inevitably, amount to a breach of her fiduciary duty to Davin Investment by withdrawing money for non-business related purposes.
For these reasons, I do not accept the principal argument advanced, in writing, by the Defendant. Rather, I find greater force in the argument advanced orally by Mr Pritchard SC as to the limitations in the operation of the carve-out provisions vis-à-vis Davin Investment.

The Plaintiff, in addition, raises a number of discretionary reasons why the variation orders sought by the Defendant ought not be made. They revolve, largely, around alleged non-disclosure of relevant material through three pathways:
the Defendant’s failure to comply with the order for discovery made by the court on 5 June 2026;
the Defendant’s failure to respond to a notice to produce served on the Defendant on 9 July 2026, at around 3:00pm, seeking the production of bank statements; and
the Defendant’s motion to set aside a subpoena issued by at the Plaintiff’s request to a company known as Reserve View Pty Ltd (Reserve View), which received $50,000 paid to it on 4 June 2026.
Strictly speaking, on the grounds I have set forth above, I need not address these discretionary grounds. Nevertheless, for reasons of completeness, I do, at least in relation to the failure to comply with the discovery order.
The Defendant came to the hearing armed with proposed orders which sought an extension of the time for giving verified discovery, in accordance with order 3 made on 5 June 2026, to 22 July 2026. Such an extension was not consented to by the Plaintiff. The 5 June 2026 orders disclose that verified discovery was required within 21 days. No formal application has been made to extend the time for compliance with that order except at the hearing before me, and then by inserting an order seeking to extend time. The only “evidence” given to justify such an extension was statements made, no doubt on instructions, from the Bar table by Mr Zhao of Counsel that the Defendant was unable to complete discovery within 21 days. This is not the appropriate way for a party to deal with non-compliance with an order. Had it been necessary, I would have declined, as a discretionary matter, to grant the relief sought in the Notice of Motion on this basis alone.
The other two matters relied upon by the Plaintiff are less significant. The first concerns non-compliance by the Defendant with a notice to produce served on her by the Plaintiff in the afternoon of 9 July 2026. The notice to produce sought the provision of all bank statements over a 16-month period (27 February 2025–9 July 2026) in relation to five bank accounts referred to by the Defendant in her affidavit of 29 June 2026, as well as her most recent tax return and the most recent financial statements and tax return of Davin Investment.
The explanation provided for non-compliance concerned, apparently, difficulties that the Defendant has had accessing, electronically, her bank statements owing to the effect of the freezing orders. There was limited, but at least some, evidence in support of this difficulty contained in paragraph 10 of the Defendant’s affidavit of 29 June 2026.
That evidence was the subject of criticism, by the Plaintiff, as it was limited to the morning of 10 June and there was no evidence that, as of 9 July, the Defendant was unable to access her bank statements. I cannot resolve this matter one way or the other. At the same time, the Defendant’s affidavit of 29 June 2026, in support of her motion, contains much (presumably) up-to-date financial material as to amounts in her bank accounts, which I must assume she was able to access in order to populate that affidavit with such information. On the other hand, the notice to produce was served quite late prior to the hearing, which was listed for 9:30am on 10 July 2026 in the Commercial List. I am not able, in the circumstances, to make the finding, as sought by the Plaintiff, that there has been a deliberate failure by the Defendant to produce the documents and, on that basis, it would not have figured in the exercise of my discretion, had my decision ultimately been based on discretionary factors.
Finally, an issue was raised in relation to the Defendant’s non-compliance with a subpoena that has been issued at the request of the Plaintiff to a company known as Reserve View. That subpoena seeks, amongst other things, records of payments made by the Defendant to that company over a number of years, including a transfer of $50,000 to Reserve View made on or about 4 June 2026 by Davin Investment. Mr Pritchard SC stated that the sum of $50,000 happens to amount to the payment of the amount sought for living expenses, by the Defendant, from (approximately) the date of the hearing before the Chief Judge to the date set down for the trial of this matter.
The recipient of the subpoena has responded to it. There is a packet of documents which lies in the Registry. The Defendant filed a Notice of Motion on 7 July 2026 seeking to set aside that subpoena.
Mr Pritchard SC made the bold submission that, in advance of that Notice of Motion being heard, the Court should nevertheless grant access to the packet of documents submitted by Reserve View, and that, moreover, the Defendant’s Notice of Motion should be seen as a further attempt by the Defendant to obfuscate through non-disclosure. I can reach no such conclusion. This Court will need to decide whether or not that Notice of Motion should be upheld or dismissed, at which time appropriate orders, one way or the other, will be made concerning those documents. Unless and until that occurs, I cannot take that matter into consideration. It is not a matter that would bear upon the exercise of my discretion if I decided the outcome of the motion on discretionary grounds.