Yeo (Liquidator) v J & K Cheung Investments - Freezing Orders Ex Parte

Original Word Document (119.8 KB) FEDERAL COURT OF AUSTRALIA

Yeo (Liquidator) v J & K Cheung Investments Pty Ltd, in the matter of JC & KC Investments Pty Ltd (in liq) [2026] FCA 397

| File number(s): | VID 317 of 2026 |
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| Judgment of: | O'BRYAN J |
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| Date of judgment: | 7 April 2026 |
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| Date of publication of reasons: | 8 April 2026 |
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| Catchwords: | PRACTICE AND PROCEDURE – ex parte application for freezing orders – alleged contraventions of the Corporations Act 2001 (Cth) – whether freezing orders should be made – whether ancillary disclosure orders should be made |
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| Legislation: | Corporations Act 2001 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)

Property Law Act 1958 (Vic) |
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| Cases cited: | Barnes v Addy (1874) LR 9 CH App 44

Beach Petroleum NL v Johnson (1992) 9 ACSR 404

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380

Deputy Commissioner of Taxation v Chemical Trustee Ltd (No 4) [2012] FCA 1064; 90 ATR 711

Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194

Hyder Consulting (Victoria) Pty Ltd v Transfield Pty Ltd [2002] VSC 315

National Australia Bank Ltd v Bond Brewing Holdings Limited (1990) 169 CLR 271

Ninemia Maritime Corporation v Trave Schiffahrts GmbH & Co KG [1983] 1 WLR 1412

Pearce v Waterhouse [1986] VR 603

Re Donnelly; Hancock v Porteous [2001] FCA 345

Spotlight Pty Ltd v Mehta [2019] FCA 1796 |
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| Division: | General Division |
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| Registry: | Victoria |
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| National Practice Area: | Commercial and Corporations |
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| Sub-area: | Corporations and Corporate Insolvency |
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| Number of paragraphs: | 44 |
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| Date of hearing: | 7 April 2026 |
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| Counsel for the Applicant: | A Silver |
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| Solicitor for the Applicant: | Indigo Associates |
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| Counsel for the Respondents: | The Respondents did not appear |

ORDERS

| | | VID 317 of 2026 |
| IN THE MATTER OF JC & KC INVESTMENTS PTY LTD (ACN 606 542 858) | | |
| BETWEEN: | ANDREW REGINALD YEO (AS LIQUIDATOR OF JC & KC INVESTMENTS PTY LTD ACN 606 542 858)

Applicant | |
| AND: | J & K CHEUNG INVESTMENTS PTY LTD (ACN 169 592 303)

First Respondent

MW & GRACE INVESTMENTS PTY LTD (ACN 693 375 030)

Second Respondent

CHI HO KENNETH CHEUNG

Third Respondent

(and another named in the Schedule) | |

| order made by: | O'BRYAN J |
| DATE OF ORDER: | 7 APRIL 2026 |
THE COURT ORDERS THAT:

1.    Pursuant to r 9.05 of the Federal Court Rules 2011 (Cth), JC & KC Investments Pty Ltd (ACN 606 542 858) be joined to the proceeding as the Second Applicant.

2.    On or before Thursday 9 April 2025, the Applicants file and serve an amended Originating Process that includes the Second Applicant in the schedule of parties.

3.    Costs be reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

| | | VID 317 of 2026 |
| IN THE MATTER OF JC & KC INVESTMENTS PTY LTD (ACN 606 542 858) | | |
| BETWEEN: | ANDREW REGINALD YEO (AS LIQUIDATOR OF JC & KC INVESTMENTS PTY LTD ACN 606 542 858)

Applicant | |
| AND: | J & K CHEUNG INVESTMENTS PTY LTD (ACN 169 592 303)

First Respondent

MW & GRACE INVESTMENTS PTY LTD (ACN 693 375 030)

Second Respondent

CHI HO KENNETH CHEUNG

Third Respondent

(and another named in the Schedule) | |

| order made by: | O'BRYAN J |
| DATE OF ORDER: | 7 APRIL 2026 |

| PENAL NOTICE

TO: J & K CHEUNG INVESTMENTS PTY LTD (ACN 169 592 303)

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):

(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. |
TO: J & K CHEUNG INVESTMENTS PTY LTD (ACN 169 592 303) (BEING THE FIRST RESPONDENT)

This is a “freezing order” made against you on 7 April 2026 by Justice O’Bryan at a hearing without notice to you after the applicant gave to the Court the undertakings set out in Schedule A to this order and after the Court has read the affidavit listed in Schedule B to this order.

THE COURT ORDERS THAT:

Introduction

1.

(a)    The application for this order is made returnable immediately.

(b)    The time for service of this order, the interlocutory process dated 2 April 2026 and the affidavit listed in Schedule B to this order is abridged and service is to be effected by Thursday 9 April 2026.

2.    Subject to the next paragraph, this order has effect up to and including Wednesday 15 April 2026 (the return date). On the return date there will be a further hearing in respect of this order at 2.15 pm before Justice Button.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

(a) applicant, if there is more than one applicant, includes all the applicants;

(b) you, where there is more than one of you, includes all of you and includes you if you are a corporation;

(c) third party means a person other than you and the applicant;

(d) unencumbered value means value free of mortgages, charges, liens or other encumbrances.

5.

(a)    If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.

(b)    If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.

Freezing of Assets

6.

(a)    You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (Australian assets) up to the unencumbered value of AUD$1,217,700 (the Relevant Amount).

(b)    If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.

7.    For the purposes of this order:

(a)    your assets include:

(i)    all your assets, whether or not they are in your name and whether they are solely or co-owned;

(ii)    any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and

(b)    the value of your assets is the value of the interest you have individually in your assets.

Provision of Information

8.    Subject to paragraph 9, you must:

(a)    at or before the further hearing on the return date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;

(b)    within 10 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.

9.

(a)    This paragraph 9 also applies if you are a corporation and all persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i)    have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are liable to a civil penalty.

(b)    You must:

(i)    disclose so much of the information required to be disclosed to which no objection is taken; and

(ii)    prepare an affidavit containing so much of the information required to be disclosed to which objection is taken and deliver it to the Court in a sealed envelope; and

(iii)    file and serve on each other party a separate affidavit setting out the basis of the objection.

Exceptions to This Order

10.    This order does not prohibit you from:

(a)    entering into or completing a contract for the sale of the land situated at Unit 2, 2 Rutherford Road, Seaford, Victoria 3198 on two working days’ written notice to the applicant of the terms of the contract;

(b)    paying $20,000 on account of your reasonable legal expenses;

(c)    dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred;

(d)    in relation to matters not falling within sub-paragraphs (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days’ written notice of the particulars of the obligation.

11.    You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may thereafter order that the exceptions are varied accordingly.

12.

(a)    The order will cease to have effect if you:

(i)    pay the sum of AUD$1,217,700 into Court; or

(ii)    pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or

(iii)    provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.

(b)    Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.

(c)    If this order ceases to have effect pursuant to sub-paragraph (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.

Costs

13.    The costs of this application are reserved.

Persons other than the Applicant and the First Respondent

Set off by banks

14.    This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

Bank withdrawals by the first respondent

15.    No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

Persons outside Australia

16.    The terms of this order do not affect or concern anyone outside Australia.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

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

(2)    As soon as practicable, the applicant will serve:

(a)    this order;

(b)    the application for this order for hearing on the return date;

(c)    the following material in so far as it was relied on by the applicant at the hearing when the order was made:

(i)    affidavits (or draft affidavits);

(ii)    exhibits capable of being copied;

(iii)    any written submission; and

(iv)    any other document that was provided to the Court;

(d)    a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;

(e)    the originating process, or, if none was filed, any draft originating process produced to the Court.

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to whom the applicant has given notice of this order, or who the applicant has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.

SCHEDULE B

AFFIDAVITS RELIED ON

Andrew Reginald Yeo                2 April 2026

NAME AND ADDRESS OF APPLICANT'S LEGAL REPRESENTATIVES

The applicant's legal representatives are:

Indigo Associates

Level 35, 477 Collins Street, Melbourne VIC 3000

Telephone: +61 1300 228 752

Email: mary.nemeth@indigoassociates.law

ORDERS

| | | VID 317 of 2026 |
| IN THE MATTER OF JC & KC INVESTMENTS PTY LTD (ACN 606 542 858) | | |
| BETWEEN: | ANDREW REGINALD YEO (AS LIQUIDATOR OF JC & KC INVESTMENTS PTY LTD ACN 606 542 858)

Applicant | |
| AND: | J & K CHEUNG INVESTMENTS PTY LTD (ACN 169 592 303)

First Respondent

MW & GRACE INVESTMENTS PTY LTD (ACN 693 375 030)

Second Respondent

CHI HO KENNETH CHEUNG

Third Respondent

(and another named in the Schedule) | |

| order made by: | O'BRYAN J |
| DATE OF ORDER: | 7 APRIL 2026 |

| PENAL NOTICE

TO: MW & GRACE INVESTMENTS PTY LTD (ACN 693 375 030)

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):

(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. |
TO: MW & GRACE INVESTMENTS PTY LTD (ACN 693 375 030) (being the second respondent)

This is a “freezing order” made against you on 7 April 2026 by Justice O’Bryan at a hearing without notice to you after the applicant gave the Court the undertakings set out in Schedule A to this order and after the Court has read the affidavits listed in Schedule B to this order.

THE COURT ORDERS THAT:

Introduction

1.

(a)    The application for this order is made returnable immediately.

(b)    The time for service of this order, the interlocutory process dated 2 April 2026 and the affidavits listed in Schedule B to this order is abridged and service is to be effected by Thursday 9 April 2026.

2.    Subject to the next paragraph, this order has effect up to and including Wednesday 15 April 2026 (the return date). On the return date there will be a further hearing in respect of this order at 9.30 am before Justice Button.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

(a) applicant, if there is more than one applicant, includes all the applicants;

(b) you, where there is more than one of you, includes all of you and includes you if you are a corporation;

(c) third party means a person other than you and the applicant;

(d) unencumbered value means value free of mortgages, charges, liens or other encumbrances.

5.

(a)    If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.

(b)    If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.

Freezing of Assets

6.

(a)    You must not remove from Australia or in any way dispose of, deal with or diminish the value of any proceeds of sale of the business known as Siupak Plastic Bags (Business) or other assets used by or sold as part of the Business.

Exceptions to This Order

7.    This order does not prohibit you from:

(a)    dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred;

(b)    in relation to matters not falling within sub-paragraph (a), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days’ written notice of the particulars of the obligation.

8.    You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may thereafter order that the exceptions are varied accordingly.

9.

(a)    The order will cease to have effect if you:

(i)    pay the proceeds of sale of the Business and other assets used by or sold as part of the Business into Court; or

(ii)    pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or

(iii)    provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.

(b)    Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.

(c)    If this order ceases to have effect pursuant to sub-paragraph (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.

Costs

10.    The costs of this application are reserved.

Persons other than the Applicant and Second Respondent

Set off by banks

11.    This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

Bank withdrawals by the respondent

12.    No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

Persons outside Australia

13.    The terms of this order do not affect or concern anyone outside Australia.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

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

(2)    As soon as practicable, the applicant will serve:

(a)    this order;

(b)    the application for this order for hearing on the return date;

(c)    the following material in so far as it was relied on by the applicant at the hearing when the order was made:

(i)    affidavits (or draft affidavits);

(ii)    exhibits capable of being copied;

(iii)    any written submission; and

(iv)    any other document that was provided to the Court;

(d)    a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;

(e)    the originating process, or, if none was filed, any draft originating process produced to the Court.

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to whom the applicant has given notice of this order, or who the applicant has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.

SCHEDULE B

AFFIDAVITS RELIED ON

Andrew Reginald Yeo                2 April 2026

NAME AND ADDRESS OF APPLICANT'S LEGAL REPRESENTATIVES

The applicant's legal representatives are:

Indigo Associates

Level 35, 477 Collins Street, Melbourne VIC 3000

Telephone: +61 1300 228 752

Email: mary.nemeth@indigoassociates.law

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

1 The applicant, Andrew Reginald Yeo, was appointed as liquidator of JC & KC Investments Pty Ltd by an order of this Court made on 3 December 2025.

2 By originating process dated 2 April 2026, the applicant, in his capacity as liquidator of JC & KC Investments Pty Ltd, seeks relief against the respondents under ss 180, 181, 182, 588FB, 588FC, 588FDA, 588FE, 588FF and 1317H of the Corporations Act 2001 (Cth) (Corporations Act), s 172 of the Property Law Act 1958 (Vic) and the common law. The proceeding is an application for breach of officer duties, relief from voidable transactions and recovery for debt and/or monies had and received and/or claims in accordance with the principles enunciated in Barnes v Addy (1874) LR 9 CH App 44. The applicant seeks the following relief:

(a)    relief pursuant to s 588FF of the Corporations Act;

(b)    damages pursuant to s 1317H of the Corporations Act;

(c)    damages; and/or

(d)    equitable compensation.

3 The bases for the applicant’s claims are set out in an affidavit made by him on 2 April 2026.

4 The respondents to the proceeding are J & K Cheung Investments Pty Ltd, MW & Grace Investments Pty Ltd, Cheung Chi Ho Kenneth (whose name is elsewhere recorded as Chi Ho Kenneth Cheung) and Wong Mun Yee Monie (whose name is elsewhere recorded as Mun Yee Monie Wong).

5 By interlocutory process also dated 2 April 2026, the applicant made an ex parte application for freezing orders and ancillary orders against the first and second respondents. The application was returnable before me as duty judge. The application was supported by written submissions dated 7 April 2026.

6 At the hearing of the interlocutory application, the applicant applied for an order under r 9.05 of the Federal Court Rules 2011 (Cth) (Rules) that JC & KC Investments Pty Ltd be joined to the proceeding as the second applicant. In my view, JC & KC Investments Pty Ltd is a necessary and proper party and it is appropriate to make that order.

7 The Court has power to make a freezing order generally under s 23 of the Federal Court of Australia Act 1976 (Cth) and Div 7.4 of the Rules. As stated in r 7.32(1) of the Rules, the purpose of a freezing order is 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. Under r 7.32(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. Under r 7.33 of the Rules, the Court may make an order ancillary to a freezing order or a prospective freezing order, including an order made for the purpose of eliciting information relating to assets relevant to the freezing order or prospective freezing order. The applicant seeks such orders by its application.

8 The principles governing the grant of freezing orders are well-established. The applicant must show that:

(a)    it has a good or reasonably arguable case;

(b)    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

(c)    the balance of convenience favours granting the order.

9 For the reasons given below, the applicant has satisfied me on each of these elements and I will make orders largely in the form sought by it.

Reasonably arguable case

10 Before a freezing order is made, the applicant must show that there is a reasonably arguable case on legal and factual matters or a sufficiently realistic prospect of success on the proceedings: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 (Cardile) at [68]; Pearce v Waterhouse [1986] VR 603 (Pearce) at 605; Re Donnelly; Hancock v Porteous [2001] FCA 345 at [9].

11 The following facts are established, on a prima facie basis, by the affidavit of the applicant.

JC & KC Investments Pty Ltd

12 JC & KC Investments Pty Ltd was incorporated on 19 June 2015. At the time of incorporation, its sole director and secretary was Siu Chuen Cheung. On 1 July 2019, Siu Cheung resigned as both director and secretary, and his son Chi Ho (Kenneth) Cheung was appointed in his place. Kenneth Cheung’s sister, Mun Yee (Monie) Wong, was also appointed as secretary. JC & KC Investments Pty Ltd has 100 shares on issue which are held by Siu Cheung (50 shares), Kenneth Cheung (20 shares), and Kit Yuen Cheung (30 shares). The relationship of Kit Yuen Cheung to Siu Cheung and Kenneth Cheung is not disclosed in the evidence. As noted earlier, Kenneth Cheung and Monie Wong are the third and fourth respondents respectively.

13 The business operated by JC & KC Investments Pty Ltd was the manufacture and supply of plastic bags and plastic packaging materials trading as Siupak Plastic Bags. The company supplied these materials to various customers including supermarkets, bakeries and other entities. The company had three employees, Kenneth Cheung, Monie Wong and Siu Cheung. Monie Wong was the administration and office manager and responsible for accounts receivable and payable, invoicing, BAS and tax returns.

14 JC & KC Investments Pty Ltd conducted its business from premises located at Unit 2, 2 Rutherford Road, Seaford, Victoria (Seaford premises). The registered proprietor of the Seaford premises is a company called J & K Cheung Investments Pty Ltd, which is the first respondent. The directors of J & K Cheung Investments Pty Ltd are Siu Cheung and Kenneth Cheung (and Siu Cheung is also the secretary). J & K Cheung Investments Pty Ltd has 200 shares on issue which are owned by Siu Cheung (100 shares) and Kenneth Cheung (100 shares).

15 JC & KC Investments Pty Ltd entered into a lease of the Seaford premises with J & K Cheung Investments Pty Ltd on or about 30 June 2025 (Seaford premises l ease). However, Kenneth Cheung has informed the applicant that JC & KC Investments Pty Ltd has been in occupation of the Seaford premises and has operated the company’s business from there since 19 June 2015. The term of the Seaford premises lease is three years with two further terms of three years each. The rent under the lease is $108,000 per annum, plus GST.

16 On 30 July 2025 the Deputy Commissioner of Taxation (DCT) issued JC & KC Investments Pty Ltd with a statutory demand in respect of tax debts accrued by the company totalling $672,383.97. The company failed to comply with the terms of the statutory demand and, on 8 October 2025, the DCT commenced winding up proceedings against the company in this Court with a hearing scheduled for 3 December 2025. As noted above, on 3 December 2025 the applicant was appointed liquidator.

17 The applicant deposed that he has conducted a solvency review of JC & KC Investments Pty Ltd to identify when it is likely the company became insolvent and was unable to pay its debts. The applicant has formed the opinion that the company was unable to pay its due and payable debts and was likely insolvent from at least 30 June 2023.

Sale of the business of JC & KC Investments Pty Ltd to a related party at an undervalue

18 On 2 December 2025, one day before it was placed in liquidation, JC & KC Investments Pty Ltd entered into:

(a)    a business sale agreement with MW & Grace Investments Pty Ltd (the second respondent) by which it sold its business and assets for a purchase price of $40,000 (Business Sale Agreement); and

(b)    a deed of transfer of lease, by which JC & KC Investments Pty Ltd transferred to MW & Grace Investments Pty Ltd its rights and obligations pursuant to the Seaford premises lease.

19 MW & Grace Investments Pty Ltd was incorporated on the day of the sale. Its sole shareholder, director and secretary is Monie Wong. As noted above, Ms Wong is a secretary of JC & KC Investments Pty Ltd and the sister of Kenneth Cheung, the sole director of JC & KC Investments Pty Ltd. The sale completed on the same day. The bank statements for JC & KC Investments Pty Ltd show two receipts of $20,000 on 2 and 3 December 2025, which appear to be the payment of the purchase price under the Business Sale Agreement.

20 The applicant’s investigations have revealed that, on or about 24 October 2025, JC & KC Investments Pty Ltd engaged Trident Business and Corporate Sales (Trident) to market and sell the company’s business pursuant to an exclusive authority signed by Kenneth Cheung. The asking price set by Kenneth Cheung for the business was $230,000 plus stock of the business at valuation.

21 On 17 November 2025, Rob Rankin of Rankin Business Lawyers, the solicitor for JC & KC Investments Pty Ltd, wrote to the DCT’s solicitors advising that JC & KC Investments Pty Ltd wished to have the DCT winding up hearing adjourned on the basis that the company was committed to settling the outstanding debt to the Australian Taxation Office (ATO). The letter referred to the company operating a successful and profitable business, and stated that the company was taking steps to sell its assets, noting that a business sale authority had been executed with a broker and that:

… there are currently over 20 potential buyers that have contacted the business agent, and the expected sale price, as advised by the business agent is over $275,000.

22 On 22 November 2025, the DCT’s solicitors emailed Mr Rankin advising that the DCT was not agreeable to the adjournment, noting that a significant shortfall would remain to the ATO based on the expected sale price for the company’s business and the ATO debt.

23 On 24 November 2025, Mr Rankin emailed Kenneth Cheung asking how the company intended to deal with the shortfall to the ATO. Mr Cheung replied and proposed options which included that the company could continue to trade and pay the ATO debt by making monthly payments of $30,000, or the company could continue with the sale of the business (estimated by Kenneth Cheung to be worth $250,000) and also sell the Seaford premises (estimated by Kenneth Cheung to be worth $2.4 million with bank mortgage of $600,000).

24 On 25 November 2025, Kenneth Cheung emailed Mr Rankin advising that he had received an offer to purchase the company’s business, and expected to receive a signed agreement from the buyers in the next 48 hours. On 26 November 2025, Kenneth Cheung emailed Mr Rankin a copy of the offer to purchase. The offer was dated 24 November 2025 and was made by Kenneth Cheung, Siu Cheung and Kit Yuen Cheung who, as noted above, are the shareholders of JC & KC Investments Pty Ltd. The offer price was $230,000 plus stock at value estimated to be worth $100,000. The offer was purportedly subject to a 30-day due diligence period, which is incongruous in circumstances where the purchase offer was made by the shareholders of the selling company (JC & KC Investments Pty Ltd).

25 The books and records of JC & KC Investments Pty Ltd reveal that, between 26 November and 2 December 2025, Kenneth Cheung on behalf of JC & KC Investments Pty Ltd instructed Rob Rankin Lawyers to prepare the Business Sale Agreement, incorporate MW & Grace Investments Pty Ltd and prepare the deed of transfer of lease for the Seaford premises. A copy of the final documents was sent to Monie Wong, as the sole director of MW & Grace Investments Pty Ltd, for signing at 5.18 pm on 2 December 2025. The books and records also reveal that Kenneth Cheung on behalf of JC & KC Investments Pty Ltd instructed Rob Rankin Lawyers to engage Dominion Group to provide a valuation of the company’s plant and equipment located at the Seaford premises. The valuation report values the plant and equipment on a forced liquidation value basis at $20,000 inclusive of GST. In the Business Sale Agreement, the purchase price of $40,000 was allocated to stock ($20,000) and plant and equipment ($20,000).

26 The applicant has subsequently been informed by a representative of Trident that:

(a)    the sale campaign for JC & KC Investments Pty Ltd’s business was only for a period of a few weeks given the liquidation issues facing the company;

(b)    the sale campaign gained good traction with many interested parties and three to four inspections;

(c)    the sale price of $230,000 was achievable, noting that annual turnover was approximately $1.4 million and the business had long standing relationships with clients; and

(d)    Trident has now been re-engaged by Kenneth Cheung, purportedly on behalf of MW & Grace Investments Pty Ltd, to sell the business and the Seaford premises.

27 On or about 5 February 2026, the applicant conducted a search of Trident’s website and identified the business and the Seaford premises are on the market for sale with a disclosed price of $230,000 for the business and $2.4 million for the Seaford premises.

28 On the basis of the foregoing, the applicant contends, and I accept, that there exists a reasonably arguable case that:

(a)    as at the date of the Business Sale Agreement, the value of the business of JC & KC Investments Pty Ltd was in the order of $200,000 to $250,000;

(b)    as liquidator, the applicant has a voidable transaction claim against MW & Grace Investments Pty Ltd on the basis that the sale of the business constituted an uncommercial transaction at a time when JC & KC Investments Pty Ltd was insolvent within ss 588FB and 588FE of the Corporations Act and a transaction to defraud creditors within s 172 of the Property Law Act 1958 (Vic).

29 I also consider that the evidence indicates, on a prima facie basis, that all of the respondents have engaged in dishonest conduct, by seeking to remove the assets of JC & KC Investments Pty Ltd from the company’s ownership prior to its liquidation.

30 The evidence also raises a serious question about the involvement of the company’s solicitors, Rob Rankin Lawyers, in that dishonest conduct. At an appropriate point in this proceeding, I consider that Rob Rankin Lawyers should be required to show cause as to whether their conduct in the course of the above transactions should be referred to the Victorian Legal Services Board for investigation.

Other antecedent transactions

31 The applicant has reviewed the bank statements, financial statements and income tax returns for the financial years between 2020 and 2024 of JC & KC Investments Pty Ltd. The applicant has identified a number of payments from JC & KC Investments Pty Ltd which may give rise to debt and voidable transaction claims against J & K Cheung Investments Pty Ltd and Kenneth Cheung. Those payments are as follows:

(a)    J & K Cheung Investments Pty Ltd (being the registered proprietor of the Seaford premises) received payments totalling $1,217,700 between 1 July 2020 and 30 April 2025. As noted above, the Seaford premises lease that was entered into on 30 June 2025 provided for annual rent of $108,000 plus GST. The payments made to J & K Cheung Investments Pty Ltd greatly exceed that amount. The payments appear to have been used to pay the debts of J & K Cheung Investments Pty Ltd secured by mortgage over the Seaford premises.

(b)    Kenneth Cheung received payments totalling $1,277,503.98 between 15 June 2020 and 5 May 2025.

32 I accept that the applicant has a reasonably arguable case that the payments to J & K Cheung Investments Pty Ltd made after 30 June 2023 are voidable transactions pursuant to s 588FE of the Corporations Act on the basis that they constitute uncommercial transactions.

Insolvent trading

33 As noted earlier, the applicant has formed the opinion that JC & KC Investments Pty Ltd was unable to pay its due and payable debts and was likely insolvent from at least 30 June 2023. The applicant considers that he may also have a claim against Kenneth Cheung for trading whilst insolvent.

Reasonable apprehension that assets will be dissipated

34 The applicant must also show that, unless the order is granted, there is a reasonable apprehension that assets will be dissipated so as to frustrate the action or execution: Cardile at [26], [41]-42; Hyder Consulting (Victoria) Pty Ltd v Transfield Pty Ltd [2002] VSC 315 at [15]-[16]. It is not essential for an applicant for freezing orders to demonstrate a positive intention on the part of the respondent to frustrate a judgment: National Australia Bank Ltd v Bond Brewing Holdings Limited (1990) 169 CLR 271 at 277 (Mason CJ, Brennan and Deane JJ); Cardile at [26]. Nor is it necessary for the applicant to demonstrate that the risk of dissipation is more probable than not: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 (Hua Wang Bank) at [8]-10; Deputy Commissioner of Taxation v Chemical Trustee Ltd (No 4) [2012] FCA 1064; 90 ATR 711 at 23. It is enough that the applicant establishes that, in the absence of relief, there is a danger or real risk that the assets will be dealt with in a way which would prevent the applicant from recovering judgment: Ninemia Maritime Corporation v Trave Schiffahrts G mbH & C o KG [1983] 1 WLR 1412 at 1422; Beach Petroleum NL v Johnson (1992) 9 ACSR 404 at 405-406 (Von Doussa J). As noted by Anderson J in Spotlight Pty Ltd v Mehta [2019] FCA 1796 (at [23]), “[w]here, as here, allegations made against the respondents contain allegations of serious dishonesty, evidence of that nature is capable of satisfying the Court of the existence of the requisite danger to dispose of, deal with or dissipate assets”.

35 The evidence adduced by the applicant, as outlined above, establishes a reasonably arguable case that the respondents have engaged in dishonest conduct designed to remove the assets of JC & KC Investments Pty Ltd from the company’s ownership prior to its liquidation. In my view, the conduct engaged in by the respondents establishes a real risk that the assets, now owned by MW & Grace Investments Pty Ltd, will be dealt with in a way which would prevent the applicant from recovering judgment.

36 The applicant further contends, and I accept, that there is a real risk that J & K Cheung Investments Pty Ltd will seek to dissipate its assets to avoid meeting the applicant’s voidable transaction claim against it having regard to the facts outlined above, including particularly:

(a)    Kenneth Cheung is one of the two directors of J & K Cheung Investments Pty Ltd and was closely involved in the sale of the business of JC & KC Investments Pty Ltd in circumstances that indicate a prima facie case of dishonest conduct, seeking to remove the assets of JC & KC Investments Pty Ltd from the company’s ownership prior to its liquidation;

(b)    Kenneth Cheung is now directing the sale of the Seaford premises owned by J & K Cheung Investments Pty Ltd; and

(c)    the other director of J & K Cheung Investments Pty Ltd is Kenneth Cheung’s father, Siu Cheung.

Balance of convenience

37 The applicant must show that the balance of convenience favours the making of the order: Pearce at 607; Hua Wang Bank at [13].

38 In favour of the making of the orders is the risk that assets will be dissipated, which I consider to be a significant risk having regard to the dishonesty alleged.

39 Against the making of the order is the recognition that such an order is an extraordinary remedy and inevitably causes prejudice to the parties subject to the orders. In the present case, the prejudice is reduced by three considerations. First, the applicant is prepared to give an appropriate undertaking as to damages. Second, the order sought by the applicant on this urgent ex parte application will continue only for a short period until the return date, which I will set as 15 April 2026, at which time the respondents will have an opportunity to be heard. The applicant will then bear the onus of satisfying the Court that the order should continue. Third, the terms of the orders will permit the respondents to continue with the sale of the business formerly owned by JC & KC Investments Pty Ltd and the sale of the Seaford Premises and pay their reasonable legal expenses.

40 Weighing the foregoing considerations, I am satisfied that the balance of convenience presently favours the making of the freezing orders until the return date.

Ancillary orders

41 The plaintiff also sought ancillary orders requiring the first respondent (J & K Cheung Investments Pty Ltd):

(a)    at or before the further hearing on the return date (or within such further time as the Court may allow), to the best of its ability inform the applicant in writing of all its assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of its interest in the assets; and

(b)    within 10 working days after being served with the order, swear and serve on the applicant an affidavit setting out the above information.

42 The proposed ancillary orders were subject to the usual exemptions in respect of the privilege against self-incrimination and the privilege against exposure to a penalty.

43 I am satisfied that it is appropriate to make the proposed ancillary orders in respect of the first respondent because the orders will assist the applicant in identifying all of the assets of the first respondent, and thereby assist in preventing the dissipation of assets.

Conclusion

44 In conclusion, I am satisfied that it is appropriate to make freezing orders largely in the form proposed by the applicant at the hearing on 7 April 2026.

| I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan. |
Associate:

Dated: 8 April 2026

SCHEDULE OF PARTIES

| | VID 317 of 2026 |
| Respondents | |
| Fourth Respondent | MUN YEE MONIE WONG |
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