LCC Property Development Pty Ltd (Receiver and Manager Appointed) v Winau Aust Pty Ltd

The plaintiff, LCC Property Development Pty Ltd (Receiver and Manager appointed) (“LCC”), seeks to extend freezing orders obtained on two motions filed in December 2025. On its first motion LCC obtained ex parte freezing orders on 5 December 2025 against the eighth defendant to these proceedings, Ms Weiqi Chen and her brother, Mr Zihao Chen (“the Chen motion”). These freezing orders were continued by orders made on 18 December 2025 to expire on 23 February 2026.

LCC was also granted ex parte relief on its second motion on 15 December 2025, against the seventh defendant, Ms Ronbgjie Yuan and a third-party respondent, Mr Guan Wen Liu (“the Yuan motion”). The freezing orders on the Yuan motion were also extended on 18 December 2025 to expire on 23 February 2026.

The respondents to each of the Chen motion and the Yuan motion contested the extension of interlocutory freezing orders on 23 February 2026. The Court made orders the following day, 24 February 2026, extending the freezing orders on both the Chen motion and the Yuan motion, indicating that it would publish short reasons for its decision later. These are those reasons.

Mr S.E. Gray together with Mr N. Li of counsel, instructed by Nicholas Parsons of W Advisers Pty Ltd appeared for the plaintiff. Mr F. Lim of Francis Lim Barristers & Solicitors appeared for the Second, Seventh and Eighth Defendants. Mr G. Zhang of Avalon Legal Pty Ltd appeared for the non-party/respondent to the Yuan motion, Mr Liu.

As this is an interlocutory contest, the Court does not make findings on contested matters of fact in these reasons, but it is merely setting out some undisputed facts and evidence which the parties might adduce at trial.

LCC commenced these proceedings by Statement of Claim filed on 22 October 2025. LCC alleges that shortly after commencing these proceedings that Ms Chen, Ms Yuan and the other respondents to the motions engaged in transactions which attract the Court’s jurisdiction to grant freezing order relief. Those transactions will be identified later but first it is necessary to examine the origins of this litigation.

The present contest arises out of almost 10 years of commercial transactions. Only a bare profile of these transactions is necessary for the Court’s decision on the two motions.

183 Eastwood Pty Ltd (“183E”), as trustee of the Eastwood Unit Trust (“the Trust”) was formed to acquire and develop identified parcels of land in the Sydney suburb of Eastwood. 183E, together with the unit holders in the Trust, entered a Unit Holders Agreement in relation to that undertaking. Under the Unit Holders Agreement, the unit holders agreed to contribute to the Trust’s development expenses in equity or debt in their respective proportions as unit holders.

LCC claims that in October 2017 it contributed to 183E’s capital requirements by loaning $4,101,254 to 183E to fund “development expenses” as defined under the Unit Holders Agreement. These LCC advances to 183E were recorded in the balance sheet of the Trust as loans by LCC to the Trust for the financial years, FY17, FY18, FY19 and FY20.

In FY17 183E raised a total of $8,961,254 from its Unit Holders. The Trust was entirely debt funded that year having a negative equity of $1,366. The Trust applied its capital to purchase three parcels of land at Eastwood in accordance with its Trust Deed. But following 183E’s purchase of this land a fraud was perpetrated on the Trustee, the circumstances of which are explained in Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9 at [3]. Consequent upon the fraud the three parcels of land in Eastwood were sold and their proceeds of sale of $6.88 million were paid into Court in January 2019: Winau Aust Pty Ltd v LCC Property Development Pty Ltd [2021] NSWSC 612. In May 2021 Rein J ordered that the said proceeds of sale be paid out of Court and returned to 183E. Consequent upon those orders, the sum of $6,974,695.69 was paid out of Court and was received by 183E on 3 June 2021.

LCC contends that when 183E received the June 2021 payment out of Court that it had substantial subsisting liabilities of at least $9,420,929 owing to creditors, including to LCC. These liabilities represented the advances LCC had made in October 2016 to 183E which had not up to that point been repaid and advances from other unit holders.

What happened next is at the heart of LCC’s principal claim against the defendants in these proceedings. After receiving the $6,974,695.69 paid out of Court on 3 June 2021, 183E paid $6,974,695.69 to entities other than LCC by 32 separate payments made between 10 June 2021 and 4 July 2021. These payments were authorised by Ms Yuan, Ms Chen and the ninth defendant, Mr Jian Wei Liang, who were all directors of 183E at the time.

LCC contends that these payments authorised by these defendants represented a deliberate misapplication of 183E’s capital funds away from LCC (a) to preference 183’s other creditors over LCC and (b) to make advances to entities other than 183E’s creditors. LCC contends that the funds were applied to creditors and entities associated with the defendants, not LCC.

LCC alleges all these payments were made at its expense. Of the Trust’s total financial liabilities of $9,004,929 in FY20, the sum of $4,101,254 represented LCC’s Unit Holder’s loan to 183E. No more than $5,319,675 (being $9,420,929 minus $4,101,254) was owed by 183E to creditors other than LCC. But 183E paid out $6,974,695.66 under the authority of Ms Chen, Ms Yuan and Mr Liang. The difference of approximately $1,655,020 appears to have been paid out to non-creditors. Had the $6,974,695.66 been distributed rateably among 183E’s creditors, as might ordinarily be expected if 183E were to treat its creditors equally, then LCC should have received about 43.5% of the $6,974,695.66 being $3,033,690.

Instead, LCC received nothing. Moreover, several parties associated with the respondents to the motion benefited from 183E’s payments. Ms Yuan was at all material times a director and 40% shareholder of Winau Aust Pty Ltd (“Winau”), the first defendant, and a director and shareholder of Tourmaline Australia Pty Ltd (“Tourmaline”), which 183E paid respectively $2,700,544.85 and $1,372,870.93 from the funds paid out of Court at this time. Ms Chen was also a director and the sole shareholder of Shunjiyan Investments Pty Ltd (“Shunjiyan”) which was also paid $1,014,908.32.

LCC's case is supported by material evidence that these various payments were made and authorised by the directors of 183E without them giving any prior notice to LCC that the payments would be made. The making of the payments by 183E to the various defendant entities does not seem to be actively disputed on the motion. Nor is the lack of advance notice to LCC that payment was going to be made to these other defendants apparently disputed. Ms Yuan, Ms Chen, and Mr Liang owe LCC an explanation for these apparently self-dealing preferential payments in their own interests in the exercise of their director’s duties. The material before the Court does not provide an obvious explanation of the payments. These facts found a range of claims for equitable compensation and damages against Ms Chen and Ms Yuan on behalf of LCC, including for breach of fiduciary duty, breach of directors’ duties, breaches of their Corporations Act 2001 (Cth) statutory duties as directors, and a Barnes v Addy second limb claim: Barnes v Addy (1874) LR 9 Ch App 244.

LCC’s case against these defendants, Ms Chen and Ms Yuan, goes further. They continued as directors of 183E through FY21. In the financial statements for the Trust for FY21 the Unit Holder Loan of $4,101,254 owing by 183E to LCC and recorded in its balance sheets in FY17, FY18, FY19, FY20, was reduced to nil. But LCC’s loan had not been repaid. It had not been consulted about the cancellation of its acknowledged liability recorded over many years in 183E’s financial statements. LCC says that the writing down of 183E’s obligations to LCC to nil is consistent with an intent to conceal the effect of the improper distributions.

Other parts of 183E’s financial statements are anomalous given these undisputed payments. The FY21 financial statements continued to record Winau as a creditor of 183E in the sum of $910,175 as at balance date FY20 but as a creditor of 183E in the sum of $198,091 at balance date FY21. It is a fact in need of explanation that although 183E had paid Winau $2,700,544.85 in FY21, 183E’s indebtedness to Winau apparently decreased by only $712,084 that financial year. Another fact in need of explanation is that although Tourmaline was paid $1,372,870.93 in FY21 it does not appear anywhere in 183E’s FY21 balance sheet either as a creditor or a debtor.

These are substantial unexplained payments, and all made to the disadvantage of LCC. A curious feature of this case is that despite the explanations Ms Chen and Ms Yuan gave about the particular recent transactions that appear to have triggered the motion, very little has been said about how these two defendants propose to defend the claims against them in the principal proceedings. Those claims for Barnes v Addy second limb relief feature allegations that the defendants participated in a dishonest scheme to defraud the plaintiff. Ms Chen and Ms Yuan have fielded some defences to these claims so far. These defences are discussed below in the Court’s analysis. But these are technical defences which appear to have answers (as the analysis below shows) and do not seek to meet or explain the substance of the allegedly dishonest preferential payment scheme superintended by the directors of 183E in June-July 2021. These defendants may at trial give substance to their denials of the misconduct alleged by the plaintiff, by making out a substantive defence to the plaintiff’s principal claim at trial. But the Court has not yet seen the profile of that substantive defence. In contrast, there is certainly prima facie evidence of the plaintiff’s case that the defendants participated in a dishonest scheme to defraud LCC.

These facts found other causes of action in LCC’s pleading. The deed constituting the Trust and the Unit Holder Agreement among the investors in the Trust create a range of contractual and equitable duties among those investors to act fairly, reasonably inter se and in the interests of Trust. LCC alleges that these terms of the Trust Deed and the Unit Holders Agreement were breached by Ms Yuan and Ms Chen by the same conduct in excluding LCC from 183E’s June-July 2021 creditor payments. LCC’s case that these payments constituted breaches of the Trust Deed and the Unit Holders Agreement is arguable on the facts available to the Court.

LCC’s contention that 183E’s June-July 2021 creditor payments purposely excluded LCC is compounded by 183E’s failure to inform LCC (a Unit Holder to which 183E owed obligations of good faith) of the payments. This supports a contention that Ms Chen and Ms Yuan are the kind of people who would be prepared to engage in transactions to the financial disadvantage of LCC, whilst choosing to keep LCC in the dark.

On 15 August 2025 Mr Danielle O’Brien, the liquidator of 183E, notified creditors that he had accepted an offer from Dragon Property Development and Investment Propriety Limited (“Dragon”) to assign his rights under Corporations Act 2001 (Cth) s 588FE to pursue various entities (including LCC and many of the defendants to these proceedings) to set aside voidable transactions and to any person who acted as a director of 183E for breach of fiduciary duty.

But LCC relies upon two more recent other transactions to support its case on the motion. One transaction involves Ms Chen and the other involves Ms Yuan.

On the Chen motion, LCC seeks relief against both Ms Chen and her brother, Mr Chen, who is a respondent to the motion although not a defendant in the proceedings. The basis of this claim is that Ms Chen is alleged to have transferred certain real property to Mr Chen for an undervalue shortly after becoming aware of these proceedings. The real property in question was referred to in the proceedings as “the Gearin Property”, a property in Gearin Alley, in the Sydney suburb of Mascot.

The Court is satisfied that on or about 15 August 2025 Ms Chen obtained information from the liquidator of 183E that LCC was about to take steps to prosecute on behalf of 183E various assigned potential claims against Ms Chen and Ms Yuan and the entities they controlled, claims arising out of the June-July 2021 transactions. LCC says that the transactions which followed were triggered by this knowledge.

On 1 September 2025 Ms Chen, who had acquired the Gearin Property from her father for $950,000 in March 2020, obtained a valuation of the property for stamp duty purposes. Ms Chen’s father had previously acquired the property in 2017 from a developer for $1,286,000. These various intra-family transactions are not obviously arms-length transactions and represent consideration considerably below prior arm’s length market value transactions.

On 25 September 2025, Ms Chen entered into an agency agreement to sell her only other real property in Australia, a property in Forster Street, Mascot (“the Forster Street property”). Then on 18 November 2025 Ms Chen contracted to sell the Gearin Property to her brother, Mr Chen for $950,000, the same price at which she had acquired it from her father five years earlier. That price was well below the price at which he had acquired it from a developer. This sale settled only three days later, on 21 November 2025. Such a shortened settlement period is commercially unusual but may be more explicable within a non-arm’s length sale between family members. But the combination of a shortened settlement period, no increase in the consideration for the property in five years, a sale between family members, and a reduction in the value of property since 2017 are nevertheless indicative of a non-arm’s length transaction. Ms Chen says there are reasons why the consideration for the property was the same in 2020 and 2025.

Ms Chen did not receive any cash from Mr Chen by way of a deposit or on account of the balance of the purchase price, another marker of a non-arm’s length transaction. The net result of the transaction was to diminish Ms Chen’s assets not long after she acquired knowledge that LCC’s current action was imminent. Between mid-October and mid-November 2025 Ms Chen also transferred cash out of bank accounts in her name into bank accounts in her mother’s name.

Ms Chen and Mr Chen say that there are offsetting transactions in relation to these transfers. But even if those offsetting transactions help to neutralise the argument that these late 2025 transactions involved a diminishment of Ms Chen’s assets, the respondent’s evidence does not neutralise the inferences that these transactions:

LCC advances similar contentions against Ms Yuan, concerning her transactions involving certain real estate referred to in the proceedings as “the Atchinson Property”, a property in Atchinson Street, in the Sydney suburb of St Leonards. Like Ms Chen, in about August 2021 Ms Yuan probably gained information about Dragon purchasing 183E’s claims under Corporations Act, s 588FE and that as a result LCC and Dragon may be enlivening 183E’s potential claims against Ms Yuan and Ms Chen.

Ms Yuan had purchased the Atchinson Property in August 2016 for $1.49 million. A little over 12 months earlier, in May 2024 Ms Yuan had entered into an Agency Agreement to sell the Atchinson Property for between $1.4 and $1.54 million. On 29 September 2025, and LCC says with knowledge of the imminence of the claims in these proceedings, Ms Yuan instructed the agent to take the Atchinson Property off the market. On 18 November 2025 Ms Yuan exchanged contracts with Mr Liu for an off-market sale of the Atchinson Property for $1.15 million. Mr Liu paid Ms Yuan the $1.15 million consideration on settlement on 12 December 2025. Three days later she withdrew $1.48 million from her bank account and deposited it with Ms Yang, her mother. Ms Yuan says that this withdrawal and deposit was in satisfaction of a debt owed by her to Ms Yang.

But as with Ms Chen, even if paying over the $1.48 million to Ms Yang in 2025 was to satisfy an offsetting debt obligation, the evidence does not neutralise the inferences that these transactions:

In addition to these transactions, on 8 October 2025 Ms Yuan applied to de-register Tourmaline. The timing of this conduct is consistent with Ms Yuan seeking to frustrate 183E’s attempts to recover funds paid to Tourmaline. Ms Yuan applied the same day, 8 October 2025, to de-register Winau, another defendant to LCC’s action in the present proceedings for the benefit of 183E.

The Court has power to grant interlocutory injunctions under Supreme Court Act 1970, s 66(4), on terms, if necessary, in any case where “it appears to the Court to be just or convenient”. The Court must consider whether the plaintiff’s case presents a serious question to be tried and whether the balance of convenience, hardship and related factors warrant the grant of an interlocutory injunction.

This is an interlocutory hearing, not a final hearing. The Court has sought to arrange the earliest possible final hearing for these parties by placing it in the expedition list. In the meantime, the Court’s task is not to undertake a preliminary trial and to give or withhold interlocutory relief upon some forecast as to the ultimate result of the factual dispute between the parties, although the relative strengths of the parties’ cases are not irrelevant to the exercise of the Court’s discretion.

The Court’s task on an interlocutory hearing such as this one was well expressed by the English Court of Appeal in Francome v Mirror Group Newspapers Ltd [1984] 1 WLR 892; [1984] 2 All ER 408; (1984) 81 LSG 2225; (1984) 128 SJ 484 when Sir John Donaldson MR said (at 894H – 895A):

Later in the same judgment his Lordship further explained the Court’s duty in following terms (at 898E-898G):

In deciding whether to grant an interlocutory injunction the Court must consider whether there is a serious question to be tried and then whether the balance of convenience and questions of hardship and related factors warrant the grant of an interlocutory injunction. First, the plaintiff must prove a serious, not a speculative, case which has a real possibility of ultimate success and that property or other interests might be jeopardised if no interlocutory relief is granted: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [21–350] (“Equity Doctrines and Remedies”), discussing the requirements of the Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618; [1968] ALR 469; (1968) 42 ALJR 80; [1968] RPC 301 prima facie case test. Put another way, the plaintiff must show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; (2006) 229 ALR 457; (2006) 80 ALJR 1672; [2006] HCA 46 at [70] – [71].

Then, it becomes a matter of analysing if in all the circumstances of the case, considering the balance of convenience and issues of hardship, the Court should nonetheless exercise its discretion by declining to issue an interlocutory injunction: Equity Doctrines and Remedies at [21–350]; and see also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; (2001) 185 ALR 1; (2001) 76 ALJR 1; [2001] HCA 63 and Beese (Managers of Kimpton Church of England Primary School) v Woodhouse [1970] 1 All ER 769; [1970] 1 WLR 586. Other factors to which the Court will have regard include the adequacy of damages, the possibilities of alternative remedies, whether there has been any laches or delay, the strength of the grounds of defence suggested by the defendant, what, if any, undertakings the defendant is prepared to give, but hardship and the balance of convenience are very important: Equity Doctrines and Remedies [21 – 375]. If any infringement of a plaintiff’s right between writ and hearing would be properly compensated in damages, that fact alone can, but not must, be a ground for declining an injunction: McCarty v Council of the Municipality of North Sydney (1918) 18 SR (NSW) 210; (1918) 35 WN (NSW) 85.

The applicable legal principles for an application of this nature are not in doubt. Since at least Jackson v Stirling Industries Ltd (1987) 162 CLR 612; (1987) 71 ALR 457; (1987) 61 ALJR 332; (1987) ATPR 40-792; [1987] HCA 23 at 623 (“Stirling”) the law in Australia has been clear that as a general proposition a freezing order can be granted in circumstances where there is a danger of a defendant relevantly disposing of assets within the jurisdiction, or dealing with them so that there is a danger that a successful plaintiff will not be able to have a judgment satisfied, if judgment is ultimately entered in the plaintiff’s favour: see also Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; (1999) 162 ALR 294; [1999] HCA 18. The weight of authority in Australia supports the view that a plaintiff seeking a freezing order does not have to show that the purpose of the defendant’s conduct, occurring or apprehended, is to prevent recovery of the amount of any judgment which might be obtained in the plaintiff’s action: Parbert v QNI Metals Pty Ltd (2018) 358 ALR 88; (2018) 127 ACSR 582; [2018] QSC 107 at [34].

Evidence in relation to what may tend to establish a serious question to be tried can also support the inference of a risk of dissipation of assets: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 (“BTR”) a decision of the New South Wales Court of Appeal. In BTR (at 325E-G), Gleeson CJ (Rogers AJA agreeing) stated the applicable law as follows:

These principles have been regularly applied since: see for example, Samimi v Seyedabadi [2013] NSWCA 279 at [74] (per McColl JA); Re: HPACK Investments Pty Ltd (2020) 149 ACSR 303; [2020] NSWSC 1638 at [68] (per Black J); and Zhao v Bonheur Holdings Pty Ltd [2020] NSWSC 535 at [14] – [17] (per Williams J).

But it is always to be remembered what the Court of Appeal said in Frigo v Culhaci [1998] NSWCA 88 at 6 (per Mason P, Sheller JA, Sheppard AJA), in a passage subsequently approved in Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18 at [51] (per Gaudron, McHugh, Gummow and Callinan JJ), that a freezing order:

Subsequent authorities have restated these principles on many occasions.

The parties disagreed whether the respondents bore the onus of showing that the freezing orders should be discharged or whether LCC bore the onus of demonstrating that the orders should be extended. The Court has worked on the basis that LCC bears the onus. But for the following reasons LCC has discharged that burden against all respondents to the two motions.

The parties contested issues as to (a) LCC’s standing, (b) whether there was a serious question to be tried and (c) whether the balance of convenience favoured the grant of relief.

LCC’s Standing. The respondents argued that LCC lacks the standing to sue because the claim it makes against Ms Chen and Ms Yuan should be pursued by a new trustee of the Trust. The respondents argued that the appointment of receivers and winding up of the Trust Deed means that the office of trustee has been vacated under the provisions of the Trust Deed that apply in such circumstances.

This argument is not persuasive for several reasons. First, LCC also has rights as a Unit Holder of the Trust to sue 183E for its breaches of duty as trustee and to join those alleged accessories to those breaches of trust such as Ms Chen and Mr Yuan: Young v Murphy (1996) 1 VR 279. In such an action, the trustee, as here, becomes a necessary defendant, so that any payments that are established to have been improperly made may be restored to 183E and dealt with in accordance with the Trust Deed. Moreover, 183E’s vacation of office under the Trust Deed still leaves it as a bare trustee with an obligation to preserve Trust property, to get in Trust assets and to vindicate rights associated with that property: CGU Insurance Ltd v One Tel Limited (in liq) (2010) 242 CLR 174 (at [36]).

But LCC has another answer to the respondent’s objection as to its standing. One of LCC’s pleaded causes of action is a breach of the terms of the Unit Holder Agreement. The seventh and eighth defendants are parties to the Unit Holder Agreement and are directly answerable to LCC’s claim for breach of that contract.

A serious question to be tried. As to the case against Ms Yuan and Ms Chen, the evidentiary material set out above in paragraphs [12] to [21] which will be deployed at final hearing amply demonstrates on BTR principles that there is a serious question to be tried against each of them. The factual material which has been advanced in support of LCC’s principal case against them is also sufficient to ground the inference that they are each likely to take steps to frustrate or inhibit the Court’s processes and make it likely that a prospective judgment against them would remain wholly or partly unsatisfied within UCPR r 25.11. That evidence is also available to assist the court in characterising the more recent transactions in which Ms Yuan and Ms Chen have been involved and which ground LCC’s case against Mr Chen and Mr Liu, the third-party respondents to the Chen motion and the Yuan motion respectively.

Ms Yuan and Ms Chen and the other respondents put several contentions against LCC’s case that there is a serious question to be tried. None of these contentions are ultimately persuasive. These contentions (a) attack the basis of LCC’s case and (b) attempt to show that the evidence about the more recent transactions in which the respondents to the two motions have been involved is not sufficient to ground a freezing order against those respondents.

A serious question to be tried – basis of LCC’s case. First, the respondents contend that the injunction should be discharged for material non-disclosure. The respondents say that LCC failed to disclose on the original ex parte applications in December 2025 that the defendants would claim in their defence that 183E’s payments were in payment of bona fide debts. In fact, this was disclosed. But specific disclosure may not have been necessary because the possibility that Ms Chen and Ms Yuan and the other defendants would raise such a defence is obvious from the nature of LCC’s claim.

Moreover, whether the payments made by 183E were lawfully made to bona fide creditors is a matter for trial, as is the question of whether making preferential payments is a breach of the Unit Holders Agreement. But there is certainly a serious question to be tried on the quantum of the payments made to creditors associated with the defendants, even if they were bona fide creditors. And there is a serious question to be tried as to whether Tourmaline was ever a bona fide creditor of 183E.

Ms Chen and Ms Yuan also contend that they have a complete defence to LCC’s Barnes v Addy claim on behalf of 183E, because 183E’s liquidator has determined not to pursue preference claims against them. This is not persuasive. LCC’s pleaded claim does not depend on establishing a voidable transaction, or a preference, or any other claim under Corporations Act 2001 but is a Barnes v Addy second limb claim in equity for equitable compensation and a claim for breach of contract under the Unit Holders Agreement.

The respondents also contend that the fact that LCC has been funded partly by Winau should have been disclosed but was not disclosed at the time that ex parte relief was obtained. The respondents say that therefore the injunction that was granted should be discharged for non-disclosure. This contention is not persuasive - the Winau funding was disclosed.

The respondents next argue that the funds received by 183E from the payment out of Court were not assets of the Trust. This puzzling argument does not acknowledge the fundamental assumption behind the payment out of Court to 183E. If the funds were not Trust funds it is difficult to understand why they were ever paid to 183E by Court order with the apparent consent of Ms Chen and Ms Yuan, the directors of 183E. It is not clear in what other character 183E would ever have been entitled to receive them. None is suggested. Prima facie they were the proceeds of the primary undertaking of the Trust, which was to acquire and develop identified parcels of land in Eastwood, proceeds which had previously been paid into Court.

Next, the respondents contend they have a complete answer to LCC’s claim because LCC holds its property on Trust for others, including some of the defendants. This argument is unpersuasive. The funds that LCC advanced to 183E were either held on trust by LCC or borrowed by LCC from a range of persons including some of the defendants . But because LCC advanced the funds, it is prima facie entitled at law to sue in debt for their return. Whether it holds the cause of action for recovery of the funds so advanced on trust for others, or as funds to be repaid later to others is irrelevant. 183E has no standing at law to contest LCC’s rights to recover the primary debt owed to it. But in any event, this is a matter for trial and does not undermine LCC’s present case that it has raised a serious question to be tried.

Finally, the respondents raise the issue of LCC’s alleged laches. It would be a rare case indeed that a defence of laches in respect of the main claim would be an answer to a claim for interlocutory injunction. There was no alleged laches in bringing the present claim. LCC’s evidence indicates that without any positive assistance from 183E, it acted reasonably promptly in investigating the circumstances after it discovered that 183E had excluded it from the June – July 2021 payments to other creditors. LCC first came to know that the Trustee had disbursed cash from its bank accounts was in early April 2023 when LCC's solicitors read Meagher JA’s judgement in 183 Eastwood Pty Ltd v Dragon Properly Development & Investment Pty Ltd [2022] NSWCA 195 at [12] the Trustee's remaining cash at bank was a little more than $500. LCC then pursued 183E for financial documents which were not supplied. Simpson AJA's judgment in 183 Eastwood v Dragon Property Development & Investment Pty Ltd [2023] NSWCA 146 on 23 June 2023 then revealed that the funds paid out of Court to the trustee were used inter alia to repay unitholder loans. 183E was wound up in insolvency on application by Dragon on 6 November 2023. Thereafter LCC was negotiating the assignment of the claims from the liquidator, which was successful in August 2025, and these proceedings were commenced in October.

A serious question to be tried – the recent transactions. Mr Chen and Mr Liu contend that there is insufficient evidence for the Court to extend the existing freezing orders against them.

As to Mr Chen, the evidence supports the inference that he acquired the Gearin property at an undervalue in a non-arm’s length transaction, which should have been self-evident to him.

As to Mr Liu, Mr Zhang submitted on his behalf that the transaction in relation to the Atchinson Property is supported by contemporaneous valuations of similar properties that show that it was not purchased at an undervalue and that there had been decreases in value in the last decade in the unit block where it is located, due to building defects and due to the views of the property being built out. Mr Zhang also points to the lack of any competing valuation evidence coming from LCC, so that the assumption should be made to the Atchinson Property was sold for market value. Mr Zhang submitted, based on Mr Liu’s evidence that Mr Liu used his own funds to purchase the property from an amount of $2.6 million held in his bank account for some time. Mr Zhang also pointed out that the discussions between Ms Yuan and Mr Liu concerning the Atchinson Property had commenced in April 2024, long before the liquidator’s assignment of the current causes of action to Dragon.

But the relationship between the pair was more complex. Mr Liu had received $190,000 from Ms Yuan on 14 November 2025, shortly before the transaction took place. He says that was the repayment of a loan he had previously made to Ms Yuan. Mr Liu has sought in his evidence to make a case that he met Ms Yuan in around May 2022 at a gathering in Chatswood and thereafter they occasionally exchanged greetings on dates of cultural significance but he says “I did not have much interaction with Ms Yuan in my daily life and I would not describe Ms Yuan as my close friend”. But his affidavit of January this year explaining his involvement of the purchase of the property says nothing about having made a loan of $190,000 to explain the receipt of these monies from her. This together with the favourable price are sufficient to ground a potential claim against him under Conveyancing Act 1919, s 37A and warrant the current interim restraint by freezing order.

Balance of convenience. Finally, on the balance of convenience the respondents to both motions challenge the quality of LCC’s undertaking as to damages. A receiver or manager has been appointed to LCC so prima facie its undertaking as to damages would need to be externally supported. This has occurred. Aquamore Credit Equity Pty Ltd (“Aquamore”) is funding this litigation. It has offered to secure its undertaking as to damages by any means which are found acceptable to the Court.

LCC has requested that the respondents nominate in what quantum the respondents’ requests Aquamore to give such security. During submissions no clear figure was provided, as to what security was wanted. It is not disputed that Aquamore has assets available to be used as security. The practical onus is now on the respondents to indicate how much security should be reserved. That will involve the respondents formulating a theory of the potential loss they face should LCC be unsuccessful in the proceedings and should the injunctions granted here be dissolved.

The respondents have not yet identified quantum of the security which they seek, despite invitation from LCC. This issue does not weigh against the continuation of these injunctions.

Finally on the balance of convenience the third-party respondents to the motions did not indicate any immediate need to deal with the real estate that would be under restraint. The Court expressly enquired about this. If that changes then the orders made can be adjusted to accommodate any such future transactions.

One footnote should be mentioned. After the proceedings were concluded on 23 February Ms Chen communicated directly with the Court in the form of written submissions, which the Court then distributed to all the parties. Mr Lim had properly warned her that communicating directly with the Court after the argument had been reserved was not appropriate.

But one of the matters that she raised was the extent to which the freezing orders were overreaching their proper intent and were affecting her ordinary day-to-day bank accounts and interfering with her daily living expenses being paid. As the Court pointed out during the hearing it was not the intention of orders such as this to prevent ordinary daily living expenses being paid and it was not in the interests of the plaintiff (in terms of its liability on the undertaking as to damages) for the orders to operate this widely. Should Ms Chen’s day-to-day financial affairs be unnecessarily inconvenienced by the orders made below, then she should be able to apply to have them varied due to the evolving circumstances affecting her. This is something which the plaintiff itself should facilitate.

Ms Chen’s submission also pointed out that the Forster Street property was being impacted by the freezing order. The order should not interfere with the sale of that property and the discharge of any arm’s length first mortgage security over the property. What happens to the balance of the proceeds of sale is a different question. LCC’s concern is that funds received over and above the first mortgage may be dissipated. In the short term they should probably be frozen rather than applied to satisfy unsecured debts to family members. That is no reason why the sale transaction cannot proceed to the third party as it does not appear to be at an undervalue. Adjustments to the orders may be required to achieve this.

For these reasons the Court will extend the existing injunctions but will leave open to the parties to reach agreed arrangements for the provision of security for LCC’s undertaking as to damages and will only intervene if agreement cannot be reached.

Accordingly, the Court makes the following orders, directions and notations: