[2020] NSWSC 1193

Hu v Gu

(1) Judgment for the Plaintiffs against the First Defendant in the sum of $5,929,897.86. (2) There be no order as to costs in respect of the proceedings against the First Defendant. (3) Upon the continuation of the Plaintiffs’ undertaking to the Court as set out in (1) of Schedule A to the Summons, the freezing order initially made by the Court on 8 July 2020 (Freezing Order) continues to operate against the First Defendant until the judgment amount in order 1 is paid in full. (4) The Freezing Order against the Second Defendant is discharged. (5) The matter be listed in the Commercial List on 23 October 2020.

Catchwords

PRACTICE AND PROCEDURE – Judgment debt – Where judgment debt not paid – No issues of principle

Cases cited

Hu v Blue Whale Entertainment Pty Ltd[2020] NSWSC 562

Judgment

[1]
On 14 May 2020, I delivered a judgment in proceedings Hu v Blue Whale Entertainment Pty Ltd [2020] NSWSC 562 (the Blue Whale proceedings). Blue Whale is a company connected with Mr Menghong (Michael) Gu, who was involved with the iProsperity group of companies. Following that judgment, the plaintiffs in those proceedings entered into a deed of guarantee and indemnity with two companies in the iProsperity group and Mr Gu dated 2 June 2020. The circumstances in which that deed was entered into are explained in recitals D and E which state:
[2]
Under the terms of that deed, the iProsperity companies and Mr Gu agreed unconditionally and irrevocably to guarantee the due and punctual payment of the judgment debt on or prior to 30 June 2020 in the Blue Whale proceedings. That judgment debt was not and has not been paid and, on 8 July 2020, the plaintiffs commenced these proceedings to recover the amount owing to them under the deed.
[3]
Mr Gu was originally represented when directions were made for the filing of a list response. However, no list response has been filed and, on 30 July 2020, Mr Gu's then solicitors filed a notice of intention of ceasing to act. The notice of ceasing to act was filed on 7 August 2020. Before that happened, the matter was set down for hearing today. Mr Gu's solicitors were on notice of the hearing. Moreover, there is evidence before me that Mr Gu was informed of the hearing today in a letter sent to him on 13 August 2020 by the solicitors for the plaintiff.
[4]
The plaintiffs only seek to proceed against Mr Gu today. There was no appearance by him and, as I have said, no list response has been filed.
[5]
It seems clear on the material before me that the plaintiffs are entitled to judgment against Mr Gu under the deed of guarantee and indemnity. In addition, cls 5.1 and 5.2 of the deed of guarantee and indemnity provide:
[6]
The plaintiffs claim their legal costs of these proceedings in accordance those clauses. The evidence before me is that the legal costs are $67,520.13. Although costs remain in the discretion of the Court irrespective of any agreement reached between the parties, there is no reason in this case not to give effect to the agreement reached by the parties in cls 5.1 and 5.2 of the deed. Consequently, I accept that any judgment amount should include the amount of the costs incurred by the plaintiffs.
[7]
Finally, on 8 July 2020 the Court made a freezing order against Mr Gu. There is no reason, on the material before the Court, why that freezing order should not continue.
[8]
In those circumstances, I make the following orders:
1. (1)
  Judgment for the Plaintiffs against the First Defendant in the sum of $5,929,897.86.
2. (2)
  There be no order as to costs in respect of the proceedings against the First Defendant.
3. (3)
  Upon the continuation of the Plaintiffs’ undertaking to the Court as set out in (1) of Schedule A to the Summons, the freezing order initially made by the Court on 8 July 2020 (Freezing Order) continues to operate against the First Defendant until the judgment amount in order 1 is paid in full.
4. (4)
  The Freezing Order against the Second Defendant is discharged.
5. (5)
  The matter be listed in the Commercial List on 23 October 2020.